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3a. Special Assessment Assistant for Empak/Instant Web Companies Regarding Cty. Rd. 17 Improvements 690 COULTER DRIVE. P.O. BOX 147'. CHANHASSEN, MINNESOTA 55317 (612) 937-1900 -FAX (612) 937-5739 CITY OF CH:1IH1SSIH... MEMORANDUM TO: Don Ashworth, City Manager Todd Gerhard~ Assistant City Manag~ · November 19, 1997 FROM: DATE: SUBJ: Special Assessment Assistant for EmpaklInstartt Web Companies Regarding County Road 17 Improvements Staffwas directed by the city coqncil to review the contractual obligations between the HRA, Empak, and Instant W~b Companies. Attached is a letterfrom John Dean, the EDA's attorney, providing an opinion regarding whether.the proposed assessments for COqnty Road 17 would qualify for the city's special assessment reduction program and meet state statutes. In summation, Mr. Dean's letter states that Empak and Instant Web should be excluded from the assistance based on the agreements betWeen Instant Web and Empak., which contained no provision for assistance regarding the County Road 17 project. However, in regards to United Mailing, Victory Envelope, and the outlot, there is an agreement which entitles them to participate in the program based on two factors: 1. Only special assessments that relate to project expenditures which are described in Tax Increment Financing Plan Modification No.5 would be considered qualified expenditures (see Attachment #2). Modification No.5 calls for matching grades of County Road 17 and Highway 5, at a cost of $2.5 million. Thus, this project would be an acceptable project under state statute. 2. The curre.nt agreement has "caps" on the dollar. amount of reduction assistance that can be provided. The table below calculates assistance received and credit available. Credit Available Credit Available Based on the Agreement $262,451.00 = $138,698.00 = Total Assessm~nt Assumed by the BRA $82,800.00 ~ $86,560.13 ~ $179,651.00 $ 52,137.87 United Mailing Victory Envelope/Outlot $231,788.87 Total Credit Available * For Project 78-3 and Trunk Water 3Cc- - -- Mr. DOD ASIlWO~J? November 19, .,,1f Pagel' , , . ." . ',.. ,-'-', .... -. . , Based on my research and J~hn Dean's opini~StaffwQuld recqnunendthat the city council direct staff to prepare PriYl.'te R~A. " . ,.., for the EDA's approval at their next meeting in January ot/l99B~ .Th.~enta i. , "9n>viding specia1~ss.essment credit for United Mailing in the amount$fj:t",651~ :VictOry Envelope/outlot ir1 the amount of $52,137.87. . ',' .' '",' ATTACHMENTS 1. Letter from John Deari. 2. Modification NO..5/~~~PlaI) 3. Assessment Agt'eem~Yj9ttl~;Envel~ 4. Assessment Agreement, ~~<J,~il~C . g:\admin\tg\empakiwassmts:doe II am assuming for the purposes of this letter that the referenced documents proYid~d me have not been subsequently modified remain in effect and constitute the entire written c:tgreement ;lt1j I . -/ 1'5QP, ~/"J1,1'1tet,.f. ~/ Q:6~. " I ':::_~o_~.__,::~:_~."~ ~~r^a3-NN3i~'wo~~ 9S:€l 16-6l-AON 470 Pillsbury Cent\:'t 200 .south Sixth .street Minneapoli~ MN 55402 (612) 337.9300 telephone: (GI2) 337-9310 fax e-mail;atty.~@kennedy-grav\:l1.com CHARTERED JOHN B. DEAN Allomey at Law Diree! nial (612) 337-9207 November 19, 1997 BY FACSIMILE & U.S. MAIL Mr. Todd Gerhardt Assistant City Manager City of Chanhassan 690 Coulter Drive P.O. Box 147 Chanhassen, MN 55317 Re: Special Assessments/or County Road 17 Improvemel1t Project No. 93-29 Dear Mr. Ge,rhtlrdt; At a recent meeting to consider the levy of special assessments for the referenced project, the City Council requested th~t thi." office provide it with an opinion regarding whether the proposed assessments on certain of the subject properties would qualify for treatment under the Chanhassen HRA ~s special assessment reduction program. The properties which are of primary consideration are the Victory Envelope Property, the United Mailing Property the Instant Web Property and the Empac Property. Each of these properties lies within the boundaries of the Chanhassen Downtown Redevelopment Project; and, from the early stages of the Project, the use of tax increment to write down special assessment..~ was applied as a tool to attract development to property within the Project Area. Modification No. 5 to the Chtlnhassen R~development Project, which was approved on March 18, 1982, specifically made the sites which were later developed by United Mailing, Victory Bnvelope and Instant Web and Empac eligible for the special assessment reduction program. Thereafter, on July 26, 1982. the United Mailing Assessment Reduction Program Agreement was entered into and on May 21, 1987. a similar agreement for Victory Envelope was made. Also. on September 22, 1989, Empac (County 17 General Partnership) entered into a redevelopment contract with the HRAI S€l-qor SO/20'd 190-1 Ol€61€€2l9 Todd Gerhardt November 19, 1997 Page 2 No similar agreement was ever made with regard to Instant Web's development for its site within the project area. A possible explanation may be found in the following provision which was placed in Modification No.5.: "NO assessment reduction payments shall be made in respect of any private improvements which are constructed by. or on behalf of. or for the occupancy of any person, corporation or other entity which (a) has been displaced liS a result of the acquisition by the Authority of said persons', said corporation's, or said entity's place of business and (b) has received from the Authority relocation benefits in excess of the fair market value of the acquired property and in excess of the value of any relocation benefits paid by the Authority pursuant to Chapter 117 of Minnesota Statutes." Although I am not familiar with all of the details of the Instant Web transaction, the description above does at least seem to apply to Instant Web; and, I would suggest that you review the matter to determine whether the HRA did have Instant Web in mind when the quoted language was inserted into Modification No.5. I also note that the Instant Web transaction was governed by a document entitled: Contract for Ac.quisition and Development which was dated May 20, 1981. That contr::lct contained no suggestion that Instant Web was either expecting or was entitled to participation in the HRA's assessment reduction program (which was clearly up and running at the time the, contract was made). Instead. it seems rather clear from the contract that the payments made by the HRA under the contract were the consider for Instant Web's redevelopment. It is, therefore, my opinion that here was no agreement in place at the time of the Instant Web transaction, nor is there any agreement in place at this time by which Instant Web would be entitled to participate in the HRA's Special Assessment Reduction Program. Tn contr6l~t to the Instant Web situation, both United Mailing and Victory Envelope do have agreements which entitle them to participate in the program. Whether or not tax increment from their individual developments can be used to reduce the Project 93-29 assessment., will turn on several factors: 1. Only special assessments which relate to project expenditures which are described in Modification No.5 will be eligible. You will need to determine whether the proposed assessments against United Mailing and Victory Envelope involve of the parties. .)8::'13 3Sge C:i 130 - ~5 01€61€€ZI9 N3^V~~ , Aa3NN3~:waj~ 19:€1 16-6l-^ON 9€l-qar 90/€O'd 190-1 Todd Gerhardt November 19, 1997 Page 3 improvement work which was described in Modification No.5. 2. Both agreements place "caps" on the dollar amount of reduction assistance which can be provided to reduce eligible assessments. So even if the 93-29 assessments are eligible, the amount which the HRA is obligated to pay is still limited to the unexpended amount, if any remaining under the CAP contained in the two agreements. The amount of the assessment in excess would remain the responsibility of the property owner. Again, you will need to calculate how much assistance remains available to reduce eligible assessments under these two agreemel1t~. The contract for development of the Empac Property provides for tax increment assistance in the form of land writedown. The Agreement alRo made clear that Empac would be assessed for the cost of public improvements which would benefit its property. Empac specifically agreed that it would not challenge any special assessments which in the aggregate were less than $176,945.78. The agreement also made it clear that the City's right to assess higher amounts was preserved. Consequently. in contrast to the Victory Envelope and United Mailing transactions, there was re:lativc;ly dear understanding in Empac that assistance would be in the form of a land writedown and that 1!Q. assessment reduction assistance was to be provided. The foregoing analysis is based upon the written agreements between the HRA and the developers of the four sites which were made to induce development of land within the Downtown Redeve.1opment Project Area. The second question posed is whether new agreements can be made which, in the case of Empac and Instant Web, provide for the use of tax increment to make special assessment reduction payments; and in the case of Victory Envelope and United Mailing would use tax increment to extend the amount of assistance previous.ly made available. Based upon the information which you have provided, it is my opinion that such payments would not be an appropriate use of tax increment. One of the underlying principles of tax increment financing is that it is a tool which is available for use only in circumstances where development or redevelopment of property is (i) a desirable public objective; (ii) and could not reasonably be expected to occur is tax increment assistance if not made available. This concept is generally referred to as the "but for" test. The statement of the test if found at Minnesota Sta~utes. Section 469.175, subd. 3.(2). In each of the situations under consideration the development look place long ago, the parties agreed to the form and level of assistance which was necessary to induce the development. that assistance was made available at the time the developments were undertaken. and there was no other or additional tax increment as!tisUince pledged, promised or offered. Consequently. in none of these situations can it be said that the development would not have taken place unless assistance in excess of the assistance previously agreed to was made available. In. other word~, 9El-qor 90/tO.d 190-1 0lE6LEEZl9 N3AV~~ , ^a3NN3~:wOJd e9:EI L6-6l-AON Todd Gerhardt November 19, 1997 Page 4 the required "but for" test cannot be satisfied in these instances and the expenditure as tax increment to reduce special assessments beyond the reductions previously bargained for would not be authorized. I hope that my response to you, together with your determination on the polms mentioned above will assist the city council in its review of this matter. Respectfully youff., ~.k ,~oD133S98 CH 1] 0 - 6 5 S€l-qor SO/SO d 190-1 o l€61€€Z 19 N3AV~~ ~ ^a3NN3~:W01~ eS:€l 16-6t-AON I I I I /,1/ ' /z,I/-.../ ~' ./ ~---- 29 TABLE 5 PROJECT EXPENDITURES LONG-RANGE COSTS (BUSINESS PARK AREA) Item Amount Phase I I - Business Park Development (South of rai Iroad tracks and west of New County Road 17) 1. Streets and Uti Ilties / $1,250,000 2. Pedestrian/Bicycle Trai Is and Lake Susan Park Improvements $ 250,000 3. Public Works Facility $1,000,000 Phase I I I - Business Park Development (South of rai Iroad tracks/ Highway 5 and east of New CountylRoad 17). 4. Streets and Uti I ities $2,400,000 ; . J5. Grade Separated Intersection at New County Road 17 and Highway 5 and Upgrading of Highway 5 $2,500, 000.- .~. 6. Reconstruction of Highway 101 South of Highway 5 $ 500,000 7. Pedestrian/Bicycle Trai Is $ 100,000 TOTAL LONG-RANGE COSTS = $8,000,000 . A y;/~ ",.", ~I CF. _"_ . '. . ...~~.. ~ ... 80/0 ,-----\ ASSESSMENT AGREEMENT / THIS AGREEMENT, made on or as of the 26th day of July , 19 82 , bv and between The HOusing and Redevelopment Authority in and for the C1ty ~f~Chanhassen, a 'public body corporate and politic (the .Agency~}~ established pursuant to Laws of Minnesota 1947, Chapter 487, ,as amended, bei.ng Minnesota Statutes, Sections 462.411-462_7il' (the ""Act"), and Frank Bedd::>r Jr. Maril A. Beddor:, E. Jerane carlson ana Juliana M. Carl (the "Redeveloper"). WITNESSETH: WHEREAS, the Agency was created pursuant to the Act and was authorized to transact business and exercise its powers by a resolution of the City Council of the City of Chanhassen (the .City"); and WHEREAS, in furtherance of the objectives of the Act, the Agency has 'undertaken a program for the clearance and reconstruction or rehabilitation of blighted, deteriorated, deteriorating, vacant, unused, underused or inappropriately used areas of. the City, and in this connection is engaged in ca~ryinS out a redevelopment project known as the Chanhassen Downtown Redevelopment Project (the .'project"), in an area (tll.e "Project. Area~), located in the City; and WHEREAS, as of the date of this Agreement. there has been prepared and approved by the Agency and the City a ~edevelopment plan for the Project; and h~EREAS, the Agency requested the County of Carver (the "County") to certify the current assessed value of the ~eal .property within the Project Area pursuant to Section 462.585 of the Act thereby establishing the Project as a tax increment financing district; and WHEREAS, the major objectives of the Redevelopment Plan are to: acquire for rehabilitation economically or functionally obsolete or underutilized buildings and land; provide a redevelopment site of a character that will encourage future development of the area and improve sources of public revenue; elimiate blighting influences which impede potential development within the aforementioned redevelopment project; provide ,maximum opportunity for redevelopment by private enterprise; consistent wit..'1 the needs of the City as a whole; encourage private rehab11itation of structures within the redevelopment pn,?ject; and . , 4~' ,,;.-- t ,.., I .;...-.> ,;' t){J!!~~~_ .... -- .....~-~ <,~....-""'-""" ~- .... 3:::J'u'd N3^'u'~:::J ~ ^03NN3~'WO~d 0t'St L6-v0-AON 0t86L880tS'OI WHE~ASI in order to achieve the objectives of the Redevelopment Plan and particularly to make the land in the Project Area available for redevelopment by private enterprise for and in accordance with the uses specified in ~~e Redevelop- ment Plant the Agency has determined to provide substantial aid and assistance to the Project through the sale of bonds to finance the public costs of the redevelopment of the Project Area; and WHEREAS, the Agency believes that the r~deve16pment of a portion of the Project Area pursuant to ~is -Agreement, and fulfillment generally of the Agreement, are in the vital and best interests of the City and the health, safety, morals, and welfare of its residents, and in accord with the public purposes and.provisions of the applicable state and local laws and requirements under which the Project has been undertaken and is being assisted; and WHEREAS; the Agency has concluded agreements for ~~e redevelopment of the various properties to be acquired in further- ance of the projecti and WHEREAS, said agreements provide recourse for the Agency should such redevelopment not be completedi and WHEREAS, Section 273.76(Subd.8) of Minnesota Statutes empowers .the Age~cy to enter into written assessment agreements with redevelopers of properties within the Project Area; and WHEREAS, it is contemplated that pursuant to this Agreement, the Redeveloper will construct certain minimum improvements upon the Redevelopment Property; and WHEREAS, the Agency, and the Redeveloper desire to establish a Minimum Market Value for the Redevelopment Property anc the Minimum Improvements to be constructed thereon pursuant to Minnesota Statutes, S273.76, Subd. 8, and 5462.445, Subd+4 (1, and 16); and . WHEREAS, the Agency and the Assessor have reviewed the Construction Plans for the Minimum Improvements; and WHEREAS, the Assessor, acting pursuant to S273.76, Subd. 8 of Minnesota Statutes, has executed a Certification By Assessor as to the Redevelopment Property and the Minurnum Improvements to be constructed thereon; and WHEREAS, the original copy of said Certification By Assessorl or a true and correct copy thereof is attached to this Agreement as Exhibit C and made a part hereof: -2- 0/8 3~~d 0t86~880t9'aI N3^~~~ ~ Aa3NN3~'WO~d 8t'5t ~6-v0-^ON , 9(,,;/v NOW, THEREFORE, in consideration of the premises and the-mutual obligations of the parties hereto, each of them does hereby covenant and agree wi~~ the other as follows: ?>.RT!CLE !. DEFINITIONS. Section 1.1 Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means the Mun:icipal Housing anc; Redevelopment Act, Minnesota Statutes, Sections 462.411 et seq., as amended. nAgency" means the Housing and Redevelopment Authority in ~nd for the City of Chanhassen. "Agreement II means this Agreement, as the same may be from time to tim~ modified, amended, or supplemented_ "Assessment Agreement" means any agreement substantially sL~ilar to this Agreement providing for payment by the Agency of eligible assessments from the tax increments received by the Agency in"connection with the Project. "Assessment Reduction Payments" means payments made by the Authority to either the City or to the County's auditor, as a credit"against.eligib1e assessments, pursuant to Article IV of this Agreement or pursuant to agreements similar to this Agreement with other redevelopers of land in the Project Area. "Assessed Value" or "Assessed Valuation" means the value of real property as determined by the asseSSOr in accordance with Minnesota Statutes, Section 273.13 (or as finally adjusted by any assessor, board of equalization, commissioner of revenue, or any court) against which the real property tax is imposed. "Asses sort. means the Carver County Assessor or a City Assessor having the powers of the Carver County Assessor as to properties within the Project Area. "Bonds It means the general obliga tion bonds or obligations issued by the City or the Agency to finance ~~e costs of the Project including but not limited to the Assessment Reduction Payments made by the Authority pursuant to Modification No. 5 to the Plan_ The term "Bonds" Shall also include any general obligation bonds or obligations issued to refund any Bonds. "Certification 3y Assessor!l means the AssessQr' s certification pursuant to Section 273.76, Subd. 8 of Minnesota Statutes, and Section 3.3 of this Agreement that he has reviewed the Construction Plans for the Minimum Improvements and ~~e -3- 3~'u'd 0tE:61.E:E:(";t9'GI N3A'u'~~ ~ ^G3NN3~'WO~d vt'St 1.6-v0-AON -, --" -- Rev. 5/11/82 Market Value previously assigned to the Kedevelopment Property, and ,that upon completion of said Minimum Improvements the market value assigned to the Redevelopment Property shall not be less than a specified dollar amount stated therein, and that the Market Value of the Redevelopment ~roperty as of the date of execution of such certification is a specified dollar amount stated therein. "Certificate of Occupancy" means the certification provided to the Redeveloper, or the purchaser o,f- any part, parcel or unit of the Redevelopment Property, pursuant to Section 4.2 of this Agreement. "City" means the City of Chanhassen. "Construction Plans" means the plans, specifications, drawings and related documents on the construction work to be performed by the Redeveloper on the Redevelopment Property which (a) shall be at least as detailed as the plans, specifications, drawings and related documents which are submitted to the building inspector of the City, and (b) shall include at least the following for each building: (1) site 'plan, (2) foundation plan; (3) basement plan; (4) floor plan for each floor; (5) cross sections of each (length and width); (6) elevations (all sides)j (7) landscape plan. "County" means the County of Carver. "Da te of Execution II means the date on which t.'le Redeveloper signs this Agreement or the date on which the Agency signs this Agreement, whichever is later. "Eligible Assessments" means those special assessments (and those unlevied lateral unit charges and trunk unit charges) which are more particularly described in Modification No. 5 to the Plan, and which have been imposed by the City on tracts of lands contained within the plats of Chanhassen Lakes Business Park and Park II in connection with either City of Chanhassen Improvement Project 78-3 or in connection with~any other City public improvement project which specially benefits said tracts of land 'Within said plats. The term "Eligible Assessments II does not include any building permit fees, any park charges owing to the City under applicable ordinances, or any availability Or connection charges owing to the City pursuant to Section 444.075 of Minnesota Statutes or other applicable statutes or pursuant to applicable City Ordinances, or any sewer availability charges or similar charges imposed by the Metropolitan Councilor Metropolitan Waste Control Co~~ission or similar governmental unit. The term "Eligible Assessments" does not include any interest imposed by the City in connection with special assessments, unleviea lateral _ un~t charges, or unlevied trunk unit charges. ItEvent of Default" means an action by the Redeveloper listed in ~rticle VI of this AgreernentA -4- c:/s 3:J'dd 0186L.88C:18'OI N3n'd~:J ~ ^03NN3B'WO~d ~1'SI L.6-~0-nON " 9<::/9 --. - -, --, v... "Market Value" or Market Valuation" means the estimated fair.market value of real property as determined by the Assessor in accordance with Minnesota Statutes, Section 273.11 (or as fina11y adjusted by any assessor, board of equa~tion, commis- sione~ of revenue, or any court). ~Maturity DateR means the date when the, principal of, premium (if any), and interest On the Bonds are pa~d ~n fu11_ "Minimum Improvements" means those improvements 'Which are more particularly described on Exhibit A attached hereto and made a part hereof_ "Minimum Market Value" means Market Value established pursuant to Section 3_3 of this Agreement. "Modification No_ 5" means the fifth amendment to the Plan adopted by the Agency establishing a program of Assessment Reduction P~yments and the resolution adopting the same. "Plan" means the Chanhassen Downtown Redevelopment Plan as described in the "Chanhassen Downtown Redevelopment Project &~ended Plan, February, 1980, Revised March 20, 1980" booklet, as further amended from tL~e to time by the Agency. "ProjeQt" means the Chanhassen Downtown Redevelopment Project as described in the Chanhassen Downtown Redevelopment Project ~~ended Plan, February 1980, Revised March 20, 1980" booklet, as further amended from time to time by the Agency_ "Project Area~ means the real property located within the boundaries of the entire redevelopment district as described in Figure 1 contained in the NChanhassen Downtown Redevelopment Project Amended Plan, February, 1980, Revised March 20, 1980" booklet. "Project 78-3 Assessments" means the costs of City of Chanhassen Improvement Project 78-3 whiCh were specially assessed a~ainst benefited real property pursuant to Chapter 429 of' M~nnesota Statut~s_ ~Real Estate Taxes" means ad valorem " taxes on real property pursuant to Chapter 273 of Minnesota Statutes and not including any special assessments levied pursuant to Chapter 429 of Minnesota Statutes. "Redeveloper- means (see addendum to Assessment f'.qreenentl or its successors and assigns. ~Redevelopment Property" mean~ the real property whiCh is mo~e particularly described on Exhibit B attached hereto and made a part hereof_ "Redevelopment Plan~ means the Plan. -5- 3~U'd N3AU'~~ ~ ^03NN3~'WO~d 51'51 L6-v0-AON 0186L88<::19'OI . "State" means the State of Minnesota. Ii Substantial Completion ii means sufficiently complete, in accordance with the Construction Plans for the Minimum Improvements, so that the Redeve~oper (or his successors and assigns) may occupy the work for the use for which the Minimum Improvements are intended_ "Tax Officia~" means any City or County assessor, county auditor, City, County or State board of .equalization, the commissioner of revenue of the State, or any state or federal district court, the tax court of the State, or the Sta~e Supreme Court. AR1'ICLE: II. REPRESENTATIONS AND WARR~~TIES Section 2.1 Representations by the Agencv. The Agency makes the following representations as the basis for the undertaking on its part herein contained: (a) The Agency is a housing and redevelopment authority duly organized and e~isting under the laws of the State. (b) The Project is a "redevelopment project" within the meaning of the Act and was created, adopted and approved in accordance with the terms of the Act. (c) The Project is a "tax increment district" created, adopted, certified and approved pursuant to Minnesota Statutes, Section 462.585. (d) The Agency has established the Project Area as a "tax increment district" and has requested that t.1j.e County auditor of the County certify the Assessed Valuation of all taxable re~l property in the Project Area pursuant to Minnesota Statutes, Section 462.585~ (e) The activities of the Agency are undertaken for the purpose of removing, preventing or reducing blight, blighting factors, or the causes of blight, and for the purposes of eliminating or preventing the development or spread of deteriorated or deteriorating areas. (f) To finance the cost of the activities to be undertaken by the Agency, ~~e Agency proposes to use the proceeds of Bonds issued either by the City or the Agency and to pledge tax increment generated by the Project Area to the payment of the principal of and interest on the Bonds. -6- /L 3~'ltd 01E:6LE:E:C::18'OI N3A'It~~ ~ A03NN3~'WO~d 51'51 L6-v0-AON " 9(:;/8 3~'u'd Rev. 5/20/8 Section 3.2 Amount of Assessment Reduction Payment. The a~Ount of any assessment reduction oayment made pursuant to t)his Agreement sh~ll be S (See Addenaum to Assessment Agre~~ent which amount. is computed as the lesser of the following amounts: (a) 0< (b) , the sum of the principal balance of the eligible assessments imposed on the Redevelopment Property, together with accrued interest thereon, both princi;>al and int.er'~st being computed as of the date of execution of this Agreement; or seven percent (7%) of the excess of the Minimu~ Market Value of the Redevelopment Property and the Minimum I~provements constructed thereon- as established pursuant to Section 3.3 of ~~is Agreement over the Market Value of the Redevelopment Property as of the date of execu- tion of the Certification By Assessor, and as ce~tified in said c~rtification. -8a- 01EBl.EE(:;19'OI N3A'u'~~ ~ ^03NN3~'WO~d 91'SI l.B-v0-AON Section 3.3 Minimum Market Value to Re Used In Com~utin~ Real Estate Taxes. Upon completion of the Minimum Improvements by the Redeveloper, the Minimum Market Value which shall be assessed for the Redevelopment Property and the Min~um Improve- ments thereon shall be (See Addendum to Assessment Agreement) . Dollars ($ diere:i.nafterthe Minimum Market Value) _ The Minimum Market Value estab~ished in this section shall be of no ..further force .and effect and this Agreement shall terminate on the ~ater or ~~e two fo~lowing dates: " '( a) the da te on which the Bonds are retired, or (b) the date on which all assessment reduction payments due the Redeveloper (or his successors and assigns> pursuant to this Agreement have been made. In any event this Agreement shall terminate no later than November 28, 2007. Provided, however, that nothing in this Agreemen~ shall limit the discretion of the Assessor to assign a market value to. the Redevelopment Property in excess of the Minimum Market Value set forth in this section, nor prohibit the Redeveloper from seeking, through exercise of administrative, a~d legal remedies, a reduction in market value for property tax purposes; sUbjec~, however, to the restriction that the Redevelo?er shall not seek any reduction in said market value below the Minimum Market Value, as set forth in this section, during the term of this Agreement regardless of actual market value which may result from incomplete construction of the Minimum Improvements, destruction or diminution by any cause, insured or uninsured, except i~ the case of acquisition or reacquisition of the Redevelopment Property by a public entity. Section 3.4. Termination of Entitlement to Pavrnent. Notwith- stand~ng any language in this Agreement to the ~ontrary, the obligation of the Agency to make any assessment reduction payment to the Redeveloper (or his successors and assigns) shall become null and void on January 26th, 1984, unless the Redeveloper has obtained a Certificate or-Occupancy on or before said date. ARTICLE IV. CONSTRUCTION OF MINIMUM IMPROVEMENTS Section 4.1 Construction of Minimmn ImDrovements. The Redeveloper agrees that it W'il~ construct~ the Minimunt Improvements on the.Redevelopment Property and at all times prior to Mat~ity ?ate w~ll not cause a reduction in the real estate taxes pa~d lon respect of the Redevelopment Property through: (a) willful destruction of the Minimum Improvements Or any part thereof, and/or (b) willful refusal to reconstruct the Minimum Improvements if or damaged or destroyed property. -9- /6 ::r~\:id 0t861088c;t9'OI N::rA\:i~~ ~ ^O::rNN::r~'WO~d lot'St 106-v0-AON :-- Section 4.2 Certificate of Occupancyw (a) Promptly after completion of the Minimum Improvements in accordance with the provisions of this Agreement the Agency, upon the ~ritten application of the Redeveloper, will furnish the Redeveloper with an appropriate Certificate of occupancy executed by the Cityts Building Official'and by ~~e Agency's Executive Director SO certifying. Such'Ge~tification by the Agency shall be a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement to construct the Minimum Improvements. Such certification and such determination shall not constitute evidence of comnliance with or satisfaction of any of the Redeveloper's obligations to any holder of a mortgage or to any insurer of a mortgage, securing money loaned to finance the Minimum Improvements, OL any part thereofw (b) . If the Agency shall refuse or fail to prov~ae anv certification in accordance with the provisions of this Section 4.2 of this Agreement, the Agency shall, within thirty (30) days after written request by the Redeveloper, provide the Redeveloper with a written statement, indicating in adequate detail in what respects the Redeveloper has failed to complete t.","J.e !-1inirrrum Improvements in accordance with the provisions or this Agreement, or is otherwise in default, and what measures Or acts it will be necessary, in the opinion of the Agency, for the Redeveloper to take or perform in order to obtain such certification. (c) ~he construction of the Minimum Improvements shall be deemed to be completed when such Minimum Improvements a~e in a state of Substantial Completion as defined in Section 1.1 of this ~greement. ARTICLE. V. . REAL ESTATE TAXESw Section 5.1 Real Estate Taxes. The Redeveloper agrees that, upon completion of the Minlm~~ Improvements and prior to the termination date stated in Section 3.3 of this Agreement, it will not cause a reduction in the Market Value of the Redevelopment Property and the Minimum Improvements below the amount of the Minimum Market Value and that it will not seek a reduction in the value of the Mini~um Improvements belOW the Minimum Market Value (1) By seeking administrative review or judicial review of the applicability of any tax statute determined by any Tax Official to be applicable to the Project or the Redeveloper or raising the inapplicability of any such tax statute as a defense inpany proceedings, including delinquent tax proceedings; (2) by seeking administrative review or judicial review of the constitutionality of any tax statute determined by any Tax Official to be applicable to the Project or the Redeveloper or ~a~sing the unconstitutionality of any such tax statute as a derense in any proce~dings, including delinquent tax proceedings; -lO~ 80/01 3~'l:id 01E61oEE018'OI N3A'I:i~~ ~ ^03NN3~'WO~d 1o1'SI 106-v0-AO /L L 3~'Ud o IE: 61. E: E:?; L 8 ' a I N3A'U~~ ~ ^a3NN3~'WO~d SL'SL 1.6-v0-AON (3) by willful destruction of the Redevelopment Prope~ty or any part thereof; (4) by willful refusal to reconstruct damaged or destroyed propertYi (5) by requesting the Assessor to reduce the Market Value or Assessed Value of all or any portion of the Redevelopment Property; (6) by petitioning the board of equalization of the City or the board of equalization of the County to reduce the Market Value or Assessed Value of all or any portion of the Redevelopment Property'; (7) by pet,itioning the board of equalization of the State or the commissioner of revenue of the State to reduce the Market Value or Assessed Value of all or any portion of the Redevelopment PropertYi (8) 'by maintaining an action In the District Court of the State or the Tax Court of the State pursuant to Minnesota Statutes, Chapter 278, seeking a reduction in the Market Value or Assessed Value of the Redevelopment Property; (9) by applying to the commissioner of revenue of the State requesting an abatement of real property taxes pursuant to Minnesota Statutes, Chapter 270; and (lO) by maintaining any other proceedings, whether administrative, legal or equitable, with any administrative body within the City, the County, or the State or ~ith any court of the State or the federal government. The Redeveloper shall not, prior to the Maturity Date, apply for a deferral of property tax on the Redevelopment Property pursuant to Minnesota Statutes, Section 273.86. Nothing in this Agreement shall limit the discretion of the Assessor to assign to the Redevelopment Property a Market Value to the Redevelopment Property in excess of the Minimum Market Value established pursuant to Article V of this Agreement. aowever, the Redeveloper is free to contest said Market Value to the eAtent that it exceeds the Minimum ~~ar)~et ~]ali;.C established in 53.3 of this Aqreernent. .l\R'I'ICLE VI. EVENTS OF DEFAULT. Section 6-1 Events of Default Defined- The following shall be "Events of Default" under this Agreement and the term "Event of riefault" shall mean, whenever it is used in this Agreement (unless the context otherwise provides) f anyone or more of the following events (and the term "default" shall mean any event which would with the passage of time or giving of notice, or both, be an "Event of Default" hereunder): (a) Failure of Redeveloper to pay when due any real estate taxes on the Redevelopment property; (b) Failure of the Redeveloper to complete the Minimum Improvements on or before the date stated in Section 3.4 of this Agreement. (c) Failure by the Redeveloper to observe and perform any covenant, condition, obligation or on its part to be observed or performed hereunder, within thirty {30} days after written -11- notice to the Redeveloper specifying such failure and requesting that it be remedied (or within such other period as otherwise expressly provided in this Agreement); or if the failure is by its nature incurable within such thirty (30) days, failure by the Redeveloper to furnish to the Agency satisfactory assurances that the Redeveloper can and will cure such failure or failures within reasonable time. {d) If the Redeveloper shall admit in writing its inability to pay its debts generally as they become due, or shall file a petition in bankruptcy or shall make an assignment for the benefit of its creditors, or shall consent to the appointment of a receiver of itself or of the whole or any substantial part of the Redevelopment Property. (e) If the Redeveloper shall file a petition or . answer seeking reorganization or arrangement under the federal bankruptcy laws. (f) If the Redeveloper, on a petition in bankruptcy filed against it, be adjudicated a bankrupt, or a court of competent jurisdiction shall enter an order or decree appointing, without the consent of the Redeveloper, a receiver of the Redevelope~ or of the whole or substantially all of its property, or approve a petition filed against the Redeveloper seeking reorganization or arrangement of the Redeveloper under the federal bankruptcy laws, and such adjudication, order or decree shall not be vacated or set aside or staved within sixtv (60) days from the date of ent~ thereof. - Section 6.2 Remedies on Default. Whenever any Event of Default referred to in Section 9.1 of this Agreement occurs, the Agency may make anyone or more of the following actions: (a) Cancel and rescind this Agreement. (b) Withhold the Certificate of Occupancy_ (c) Cancel any pending Assessment Reduction Payments due under the terms of this Agreement, causing a forfeiture of such payments in favor or the Agency. (d) Take whatever action at law or in equity may appear necessary or desirable to the Agency to collect from the Redeveloper full reimbursement for any Assessment Reduction Payments previously made pursuant to this Agreement. -12- 9(';/<:'1 :=I~'dd 01861.88C::19'QI N:=I^'d~~ ~ ^Q:=INN:=I~'WO~d 61'S1 1.6-v0-^ON Section 6.3 No Remedy Exclusive. No.remedy herein conferred upon or reserved to the Agency is intended to be exclusive of any'other available remedy or remedies, but each and every such remedv shall be cumulative and shall be in addition to everY other-remedy given ~~der this Agreement or now or hereafter- existing at law or in equity or by statutes. No delay or omission to exercise any right or power accruing upon any default shall imoair any such right or power or shall be construed to be a waiver thereof, but any such right and power may'be exercised' from time to time and as often as may be deemed expedient. In order to en ti tIe 'the Agency to exercise any remedy reserved to it, it shall not be necessary to give notice. Section 6.4 No Additional Waiver 1m lied bv One Waiver. In the event any agreement conta~ne ~n t ~s Agreement should be breached by either party and thereafter waived by the other ~ party, such waiver shall b~ limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. ARTICLE VII. ADDITION;~ PROVISIONS Section 7.1 Conflict of Interest; Agency Representatives Not Individually Liable. No member, official or employee of the Asency 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 this 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 Agency shal be pe~sonally liable to the Redeveloper or any successor in interest, in the event of any default or breach by ~~e Agency or for any Assessment Reduction Paymen~s which may become due under the terms of this Agreement. Section 7.2 Duty of Agency to Act Reasonably. Wherever this Agreement requires the Agency to approve any action of the Redeveloper, it is understood and ag~eed that the Agency will not unreasonably withhold or delay such approval. Section 7.3 Titles of Articles and Sections. Anv titles of the several parts, Articles, and Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 7.4 Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other co~~unication under this Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt ~eguested, or delivered personally and -13- /SI 3~'dd 0IS81..SS<::IB'OI N3A'd~~ ~ ^03NN3~'WO~d 81'SI 1..8-v0-AON Rev. 5/11/82 (a) ~n the case of the Redeveloper, is addressed to or delivered personally to the Redeveloper at C/O Mr. E. Jerane Carlsen Instant Web. Inc. 571 W~ 78J;h Street ChanhasSen. MN 55317 (b) in the case of the Agency is addressed ,to or delivered personally to the Agency "'atChanhassen City Hall or at such other address'~ith respect to either such party as that party may, from time to time, designate in writing and for~ard to the other as provided in this Section. Section 7.5 Counterparts. This Agreement is executed in any number of counterparts: each of which shall constitute one and the same instrument. Section 7.6 Covenants Running With Land. The recording or filing of this Agreement with the County Recorder or County Registrar of Titles shall constitute notice of ~~is Agreement to any subsequent purchaser or encumbrancer of the Redevelopment P~operty, or any part thereof, whether voluntary or involuntary, and shall be binding upon them. The Redevelo~er agrees to su?ply the applicable owner's duplicate certificate of title, if a~y, so as to permit the recording of a copy of this Agreement in the office of'the Carver County Recorder. It is intended and agreed that the covenants and ag=eements set forth in Article V of this agreement shall be covenants running with the land and that they shall, in any event, and without regard to technical classification or designation, legal or otherwise, be binding to the fullest extent permitted by law and equity, for the benefit and in favo~ of, and enforceable by the Agency, its successors and assigns. In the event that any transferee or assignee of the Redeveloper (including without limitation any mortgagee taking poss,ession of or title to the Redevelopment Property as a result of any default in the terms of any mortgage to which the Redevelopment Property is now subject or may be subject in the future) b;!::eaches anyone of the covenants and agreements set forth in said Article v, the Agency may treat such breach as an Bvent of Default as provided in Article VI of this agreement and mQY exercise anyone or more of the remedies set forth in S6.2 of this agreement. IN WITNESS WHEREOF, the Agency has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed, and the Redeveloper has caused this Agreement to be duly executed in its name and behalf and its cor?or~te seal to be hereunto duly affixed, on or as of the date f~rst above written. . THE HOUSING AND REDEVELOP~NT AUTHORIT IN . O~HASSEN ,~~~ , (Seal) And its -14- !), pL' ~ J-Y( A G'xtc. "\. 1-, ..Ie.- D,r.u.t<:>fl- SC:/vl 3~'dd 0186L.88C:19'GI N3A'd~~ ~ ^G3NN3~'WO~~ 0C:'51 L.6-v0-AO t.'1is 26th day .............. - ""',... ""'/ .",... ( Sea. 1 ) Juliana M. Carlson By Lawrence B. her attomey in fact STATE OF MINNESOTA) ) 55. COUNTY OF CARVER ) ~he fore9~ instrument was acknowledged before ~~ this 2<; day of ZJ(.( 4, , 19 ~2-, bv ~,//,-+_~~ C.....//,CkS~d/ / -afi~d~ -- ~ ~ ;r- t e V. A'L^1~ ~ anu.- of the HouSlng and Redevelopment Author1~Y of the Ci~y of Chanhassen, Minnesota. ~-a- - .:;~ ~~~-~.:----~~ ~ .,-r.......A,.....\.... .u~.~ CA' } v~~;::: ~"!c.)",~",....OJ "-""-............. .~,' ~ .-- ~ 'J - ,..,. ~ . ;.. t... ..._..='1 . . .............-- N~lLC7n 7h,.;' ~ Count.y: My Commission cx?i~es: ST.~TE OF MINNESCY.rA CCXIN'IY OF CARVER The foregoing instrument was of July, 19821. by Frank 55. dU'L ........-....--..................-~ of July, in fact, S'r.a.TE OF MINNESOI'A ) ) ssw CCUNIY OF CARVER ) The foregoing instrument was ack.no\.;ledged before me this 26Ul day 1.982, by E. Jercme Carlson and Juliana M. Carlson by their attorney Lawrence B. Carlson. , /~ 0 BORA:-l ANN L:;::;:';:;R ~ ~~4.;i;;~-.' t-l-N'j--;O-m c~.;,;rl-:''f } ......::;.....,....; .1Mo. . c...... \ ...." NOTA;'<Y ......:<:n.'c- ('i1~~~::3?"!"'" ( NY CO,..",'''9J0!'4 "XPI,,~9 .Jl"Il.. Y 9, t 'a~ S - 'i'h;s Instrument LARSO)l & MER'!":?: 1900 First :Bank Minnea?Olis, MN (612) 333-1511 Drafted By: bL:-t-LCl. (J~lu~ OJ., Notar PUbl' V y ~AJUl~~'AA.a.~A~. ~. - - ~-W~~~""U4...H.UA.u : ~ SomrA J. CADWEL ~ j~~NjR .. > ~J.i 0 A Y pual.lC . MINN!:::>.._!. 1= ~ ..NOXA. COUNTY ~ ..e r.!YCOmmi:t1ionupirtsD!c 121'" > Xyyh'n"'I''HJ'Hnn..... '_ . ..It ~'TY~y.~.'rtw..;( Place tvest. 55402 -15- /51 3~'\:td 0IE:61.E:E:<:::I8'OI N3A'\:t~~ ~ ^03NN3~'WO~d 1<:::'51 1.6-v0-AON STATE OF MINNESOTA ) ) 55 COUNTY OF CARVER ) The foregoing instrument was acknowledged before me, a notary public, on this 28th day of July, 1982, by Donald W. Ashworth, Deputy Director of the Housing and Redevelopment Authority of the City of Chanhassen. r;j~/~~ - N Y l~c ~~-""#~I#"'~"~'###"'.#~"'" .F..~;;;:;"'. KAAEN J. ENGELHARO~ ~ ~~ .!..ij':.. NOTARY Fuaue . l.nNfl/ESOTA l \~ n' CARVER COUNTY 1 ~...." My ~11''''r''I'''''Qn c:..~,,- 0e'L 11, ,M$ ##,,;~ '#'#14i...,I....".'~~... #4 ,#~;,,_ ........._ 90/91 3~'dd 01E:6L,E:E:(;;19'OI N3A'd~~ ~ ^03NN3~'WO~~ 1(;;'51 L,6-v0-AO Exhibit A "Min:UnUffi Improvements" means a two-story Office, Warehouse, and manufacturing building consisting of approx~ately 184,600 sq. ft. in gross floor area, constructed primarily of concrete panel exterior walls, and includes all .on-.si te parking, access drive, and landscaping improvements, on a site containing 10.05 acres more or less. /Lt 3~'dd 0t8BL88(jtS'OI N3A'd~~ ~ ^03NN3~'WO~d (j(j'St LB-v0-AON Exhibit :a Lot 1, Block 2, Park T\vo, according to the plat thereof on file and. of record in the office of the county" "Recorder, in and for Carver County, Minnesota. 90/81 3~'ltd 01E:BloE:E:019'OI N3A'It~~ ~ ^03NN3~'WO~d 00'51 loB-v0-AO CERTIFICATION BY ASSESSOR United Mailing, Inc. Building Tax Parcel No. Street Address 1001 Park Road Chanhassen~ MN 55317 The undersigned having reviewed the Construction Plans fOr the Minimum Improvements and the Market Value assigned .to the Redevelopment Property upon which the Minimum Improvements are to be constructed pursuant to the attached assessment agreement, and being of the opinion that a "Minimum Market Value" set forth in this Certification appears reasonable, hereby certifies as fol.lows: The undersigned Assessor, being legally responsible for-the assessment of the Redevelopment Property (more particularly described in Exhibit B to the attached assessment agreement) hereby certifies that the market value assigned to such land (the Redevelopment Property) and improvements (the Minimum Improvements) upon completion of construction thereon shall be not less than as follows until termination of the attached assessment agreement: valuation Date Minimum Market Value January 2, ;"983 Januc.ry 2, 1984 January 2, 1985 January 2, 1986 and years thereafter 1,657,900 1,965,200 2,272,500 2,579,900 The undersigned further certifies that the market value of the Redevelopment Property as of the date of execution of this certification is $137,500.00 (One Hundred Thirty~seven Thousanc Five Hundred and nojlOOths Dollars) . For the pur?oses of this certification, the words used herein have the definitions the attached Assessment Agreement- STATE OF MINNESOTA) COUNTY OF CARVER ) 55. The foregoing instrument was acknowledged before me this /Ir:ft day of '"111ALA....- , 1982, by -,;:-~ ~ ~ , the Assessor for the city of Ch~~ha.k sen. ,,;;;.:::~ KAREN J. ENGELHARDT $. ~..:.t.. NOTARY PuSI.IC' M1NNE:!IO'D. \ ~ NJ CARVER COUNTY '\~'l.. t-ty COmmt~' ~,.. O;t. '1. 11166 ~LJ;4J~Lr- Notary 1(>1pliV County: ~ My commission expires: &~v /11 i'if-='....-' 3~'Ud 018Slo88;:;18'GI N3A'U~~ ~ ^G3NN3~'WD~d ;:;;:;'51 loS p0 ADN 9<:;/0<:; 3~'u'd ADOENDUM TO . ASSESSMENT AGREEMENT The undersigned parties to an Assessment Agreement dated Ju1Y 26th , 19 82 , on property 1egally descrioed as Lot 1, BLock 2, according to the pl~t of ~ark ~~o dated January 11, 1982, all of which is in Carver County, Minnesota, hereby mutually agree to amend said.Contract as follows; 1. It is intended and a9reed that the covenants and agreements set forth in Article V of the above described assessment agreement shall be covenants running with the land and that they shall, in any event, and without regard to - technical classification or designation, legal or otherwise, be binding to the fullest extent permitted by law and equity, for the benefit and in favor of, and enforceable by the Agency, its successors, and assigns. In the event that any transferee or assignee of the Redeveloper (including without limitation any mortgagee tak~ng possession of or title to the Redevelopment Property as result of any default in the terms of any mortgage to which the Redevelopment Property is nOw subject or may be subject in the future) breaches anyone of the covenants anc agreements set forth in said Article V, the Age~cy may treat s~ch b~each as an event of Default as provided in Article VI of said assessment agreement and may exercise anyone or more of the remedies set forth in 56.2 of said assessment agreement_ 2. Section 3.2 of the above described assessment ag~eement is amended to read as follows: Section 3.2. Amount of Assessment Reduction Payment. The amount of any assessment reduct~on payment made pursuant to this Agreement shall be $138.698.00, which amount is computed as the les.se::::- of the following amounts: (a) the sum of the principal balance of the eligi~le assessments imposed on the Redevelopment Property, together with accrued interest thereon, both principal and interest being computed as of the date of execution of this Agreement; or (b) seven percent (7%) of the excess of $2,118,900+00 over $137,500.00. The foregoing $2,118,900 amount is the average of the MinimUm Market Values set forth in Section 3.3 below, and the foregoing Sl)7,500 amount is the Market Value of the Redevelopment ?rooertv as of the date of execution of the Certification Bv ASS~SSO~, as certified in said certification. Levied eligible assessments on the Redev~lopment Property total $128,483.34. U~levied eligible assessments on said property exceed S20,000.00 0t8SL.88<:;t9'aI N3^'u'~~ ~ ^a3NN3~'WO~d 8<:;'St L.S-V0-^ 3. Section 3.3 of the above desc~ibed Assessment Agreement is amended to read as follows: Section 3.3. Minimum Market Value to Be Used In Comouting Real Estate Taxes. upon complation of the Minimum Improvements -by the R~developer, the Minimum Markat Value which shall be assessed for the Redevelopment Property and the Minimum Improvements thereon shall be as follows: Valuation Date Minimul11 Market Value January 2, 1983 (Taxes payable in 1984) 1,657,900 January 2, 1984 (Taxes payable in 1985) 1,965,200 January ? 1985 (Taxes payable in 1986 ) 2,272,500 -, January 2, 1986 and years there- after (Taxes payable ln 1987 and thereafter) 2,579,900 The Minimun Market value established J..n this section shall be of no further force and effect and this Agreement shall teJ..>TIi- nate on the later of the two following dates: (a) the date on which the Bonds are retired, or (b) the date on which all assessment reduction payments due the Redeveloper (or his successors and assigns) pursuant to this Agreement have been made. In any event this Agre€ment shall terminate no later than Nove~ber 28, 2007. Provided, however, that no~nlng in this Agreement shall limit the discretion of the Asses~or to assign a market value to the Redevelopment Property in excess of the Minimum Market Value set forth in this section, nor prohibit the Redeveloper from seeking, through exercise of administrative, and legal remedies, a reduction in market value for propert;- ta;< purposes; subject, however, to the restriction that the ~ecevelo?e~ shall not seek any reduction in said market value belo~ the Minimum Market Value, as set forth in this section, during the term of this Agreement regardless of actual market value which may result from incomplete construction of the Minimum Improvements, destruction or diminution by any cause, insur~d or uninsured, except in the case of acquisition or reacquisition of the Redevelopment Property by a public entity. -2- 3~'ttd 018B1..88C;18'OI N3A'tt~~ ~ ^03NN3~'WO~d vC;'51 l..B-v0-AON 4. subparag~aph (a) of Section 2:2 of the above described assessment agreement is amenced to read as follows: "(a) the Redeveloper has power to enter into this agreement.~ 's. The definition of ~RedeveloperH in Section 1_1 of t..."le zbQve described assessment agreement is amended to I:"ead as follows: . I ~Redeveloper~ means Frank Beddor, Jr., and ~rilyn A. Beddor, husband and wife; and E. Jerome Carlson and Juliana M. Carlson.. husband and wife." 6. All other terms and conditions of the Assessment Agreement remain the same. Dated this 26th day of July .. 1982. TEE HOUSING AND ~DEVELOPMENT AUTHORlr IN AND FOR THE CITY OF CHANa~SSEN (Hereinabove the "Agency") BYit~/f~(;./IL And -A (l WLCff:J- its DLp'^+, t-l~p.. ';"J.\'c.....+-:k h'f r 11kii~d!/:; g..lbu ;~~/fi~ f!? ~L-- r Jerome Carlson, by Lawrence B. Carlson hi mey rn fact Drafted By This Instrument LARSON & MERTZ 1900 First Bank Minneapolis MN (612) 333-1.511 Place West 55402 -3- 9G:/G:G: 3~'Ud 01861.88G:19'OI N3A'U~~ ~ ^03NN3~'WO~d vG:'51 1.6-v0-A STATE OF ~INNESOTA) ) 55. COtJ"NT't OF CARveR ) _ ~The foregoi~ ~strument was acknowledged before me 'this 2J? day of " '1 r 1982, by W./7. ...__ Gt-II. -,4 .s.";"; ~ the C.A..,,~~ ",..,; and of the Housing and .Redevelopment Authority of the".-City of Chanhassen, Minnesota. !-G~--;--~~:r;~~~~:~; =z r.;;.. IWU~' ~. .,tc:'. .,.;':~~:(;7... " C-,,, -; .;;::, ~;!....~:i.' f . MJCl')2'I"~~....., _ .'1:l'..~""'.:it2.4.1 ~-'....-"" r ~ ~ l~c STATE OF MINNESOTA} ) S5. COUNTY OF CARVER ) The foreging instrument was acknowledged before me this 26th day of Jul I 1982 t by Frank Beeco:::, Jr. STATE OF MINNESOTA) )ss. COUNTY OF CARVER ) The fo~egoing instrument was akcnowledged before me this 26th day of July I 1982 r by ~1arilyn A_ Reddor. ~. L/'L> ~1.0l. ~~ORA;-{ ANN !..i~; ;;; ~.:.'~Z'~\" ~ HEN~..c:PJN COL:~D' ; ,.:-:::.;~ ~~tj . ~ NOTARY ~t.;el..L<;:-t~;S"::;;o..>.: NY co.....,.,.,Q,. <X"lll~ .JUL. Y 9, 1 gB:5 ~ ~~~--J-~---:W:--~~~__~~~~ STATZ OF MINNESOTA) )S8. COUNTY Of CARvER ) The foregoing instrument was acknowledged before me this 26th day of July , 1982, by E. Jerome Carlson , by Lawrence B. carlson, his attorney in fact. 18 "O':~::~:;'~~:~~~A f 61( 'ct IJ.,--/). f .J UN Oil ." MYCl:lmmi~iM~:I;D"~$Dec. 12 1986:10 Notary PUbl.l..C~ '-.. X~Thh'1' ,'nnhhf"'-, 'h 7 .rtVl'."r,.~ STATE OF M!NNESOTA) x . )ss. COtJNTY OF CARvER ) this The foregoing instrument ~as acknowledged before me 26th day of July r 1982, by JuliamM. e B. ~lsOO. hm~ BONITA J. CAl.iW~LL = / J j ; NOTA.::;~g;,,~~N=A ~ ~M '"~ ;',,;' 1 i ~ ".(!&.~ Lz <{? 00 0t88~88~t8'aI N3^~~~ ~ ^a3NN3~'WO~d s~'st ~8-v0-^ON "~k~ __ . $.-..;1. . -V^ :; ~J;j'.1...lt~ ..~ \ ~~~~)Jf 3~'ltd STATE OF MINNESOTA ) ) ss COUNTY of CARVER ) The foregoing instrument was acknowledged before me, a notary public, on this 28th day of July, 1982, by Donald W. Ashworth, Deputy Director of the Housing and Redevelopment Authority of the City of Chanhassen. ~~~ N' Y lic K -,- I J ' ".EL.....AD01' ,~.._.' - AR,:" . .;..'; ~, ;:.- "'. .'.-' I" . ,..' - M\NNESOTA . ~ I"'~U'" f"'....... I .w.... t ,~;-N~ c : COUNTY .. L~'~"~ My cv" . ..': :.' ....."'& C<:l.. 11. ':3 ,( 1-1''-'' .,,..,,~. ."....~~'-..-. 80/170 3~'u'd 01E:BloE:E:018'GI N3^'u'~~ ~ ^G3NN3~'WO~d 50'51 loB 170 ^ Section 2&2 Representations and Warranties by the Redeveloper & ~~e Redeveloper represents and warrants that: (a) The Redeveloper is a corporation duly organized and in good standing under the laws of the State of Minnesota, is not in violation of any provisions of its certificate of incorporation, its by-la~$, or the laws of the State ~f Minnesota, has power to enter into this Agreement and has duly authorized the execution, delivery and performance of this Agreement by proper corporate action. . . (b) The Redeveloper will construct the Minimum Improvements in accordance with the terms of this Agreement, the'Plan and all local, state and federal laws and regulations (including, but not limited to, en~ironmentalJ zoning, build~~g code and public health laws and regulations), and in accordance with the Construction Plans which have been approved by the Agency. (c) The Minuroum Improvements constitute a permitted use under the zoning ordinance of the city, a permitted use under the plan and the Act. Cd) That at such time or times as may be required by law, the Redeveloper will have complied with all local, state and federal environmental laws and regulations, will have obtained any and all nec89sary environmental reviews, licenses or clearances as to the Redevelopment Property, and that Redevelope~ has received no notice or communication from any local, state or federal official that the activities of the Redeveloper in the Project Area may be or will be in violation of any environmental law or regulation (other than those notices or co~~unications of which the Agency is aware) ~ The Redeveloper is aware of no facts the existence of which would cause it to be in violation 0: any local, state or federal environmental la~, regulation or review procedure or which would give any person a valid claim under state envirbnmental rights statutes. (e) The Redeveloper will use its best efforts to construct the Minimum Improvements in accordance with all existing local, state or federal energy-conservation laws or regulations. (f) The Redeveloper ~ill obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all local, state and federal laws and regulations ~hich must be obtained or met before the Minumum Improvements may be lawfully constructed. (g) The real estate taxeS and any installments of ~pecial assessments levied against the Redevelopment Property are not in default and that future real estate taxes ~ill be paid when due~ -7- 3~'ttd 0t8BL.88C;tS'OI N3^'tt~~ ~ ^03NN3~'WO~d sc;'st L.B v0 ^ON ARTICLE III. ASSESSMENT REDUCTION PAYMENTS~ section 3.1 Obligation of Agency to Make Assessment Reduction Payments. Upon completion of the Minimum Improvements and issuance of the Certificate of Occupancy, the Agency, from the ~ax increment generated by the Project shall make payments (i~ the manner and in the amount provided hereinafter) in reduction of the eligible assessments which have been imposed on the Redevelopment Property and which were unpaid upon ,the .date of execution of this Agreement. The Agency, at its option, may satisfy its obligations to make assessment reductions payments under this Agreement by either making one lump sum payment or by making a series of semi-annual payments as individual installments of eligible assessments become due and owing to the City. In the event that the Agency elects to make said assessment reduction payments in the form of a series of semi-annual payments as individual installments of eligible assessments become due and owing to the City, the Agency shall also pay the interest imposed thereon by the City; but only that portion of such interest which is attributable to that portion of an~ such installment which the Agency is obligated to pay under this Agreement. Any such payments of interest shall not be a credit against the amount of any assessment reduction payment which the Agency is obligated to make ~nder this Agreement. I In the case of eligible assessments which have ~~en already been certified to the County's auditor for collection with real estate taxes, said assessment reduction payments, together with any interest which the Agency is obligated to pay under this ~3.l, shall be made directly to the County's auditor in full or partial satisfaction, as the case may be, of said eligible assessmentS. 80/80 3:J'u'd 01861.88018'GI N3A'u'~:J ~ ^G3NN3~'WO~~ 80'51 1.6-v0-A In the case of eligible assessments which have not then been certified to the Countyts auditor for collection with real estate taxes, said assessment reduction payments, togethe~ with any interest which ~~e Agency is obligated to pay under this 53.1, shall be made to the City1s treasurer in full or partial satisfaction, as the case may be, of said eligible assessments. In the case of eligible assessments which have been paid by the Redeveloper subsequent to the date of execution of this Agreement, said assessment reduction payments, together with any interest which the Agency is obligated to pay under this 53.1, shall be made directly to the Redeveloper or his designated successors and assigns. -8- , ;/.'4 ( A"" ) .J4 , I .~ I, ,I I ~ f- ~l \/ ASSESSMENT AGREEMENT CHANHASSEN HRA SPECIAL ASSESSMENT REDUCTION PROGRAM sF THIS AGREEMENT, made on or as of the c2..J-- day of I~~ .' 19~, by and between The Housing and Redeve10pement Authority in and for the City of Chanhassen, a public body corporate and politic (the "Agency"), established pursuant to Laws of Minnesota 1947, Chapter 487, as amended, being Minnesota Statutes, Sections 462.411 - 462.711 (the "Act"), and E. Jerome Carlson, Frank Beddor, Jr. and Marilyn A. Reddor (collectively referred to as the "Redeveloper") 7951 Powers Boulevard, Chanhassen, Minnesota 55317, (the "Redeveloper"). WITNESSETH: WHEREAS, the Agency was created pursuant to the Act and was authorized to transact business and exercise its powers by a resolution of the city Council of the City of Chanhassen (the"City"): and WHEREAS, in furtherance of the objectives of the Act, the Agency has undertaken a program for the clearance and reconstruction or rehabilitation of blighted, deteriorated, deteriorating, vacant, unused, underused or inappropriately used areas of the city, and in this connection is engaged in carrying out a redevelopment project known as the Chanhassen Downtown Redevelopment project (the "project"), in an area (the "project Area"), located in the City: and WHEREAS, as of the date of this Agreement there has been prepared and approved by the Agency and the City a redevelopment plan for the project; and WHEREAS, the Agency requested the County of Carver (the "county") to certify the current assessed value of the real pro- perty within the project Area pursuant to Section 462.585 of the Act thereby establishing the project as a tax increment financing district: and WHEREAS, the major objectives of the Redevelopment Plan are to: acquire for rehabilitation economically or functionally obsolete or underutilized buildings and land: provide a redevelop- ment site of character that will encourage future development of the area and improve sources of public revenue; eliminate blighting influences which impede potential development within the aforementioned redevelopment project; provide maximum oppor- tunity for redevelopment by private enterprise, consistent with the needs of the City as a whole; encourage private rehabilita- tion of structures within the redevelopment project: and ___..".......-"'fl_._.."'-' ~dERf.AS, in order to _,. I) l(.ve tne objectives of the R~~evelopment Plan and particulallJ ! ~ make the land in the project Area available for redevelopment by private enterprise tor and in accordance with the uses specified in the HeJevelopment Plan, the Agency has determined to provide substantial aid and assistance to the Project through the sale of bonds to finance the public costs of the redevelopment of the project Area; a?d WHEREAS, the Agency believes that the redevelopment of a portion of the Project Area pursuant to this Agreement, and fulfillment generally of the Agreement, are in the vital and best interests of the City and the health, safety, morals, and welfare of its residents, and in accord with the public purposes and provisions of the applicable state and local laws and requirements under which the Project has been undertaken and is being assisted; and WHEREAS, the Agency has concluded agreements for the redevelopment of the various properties to be acquired in furtherance of the project; and WHEREAS, said agreements provide recourse for the Agency should such redevelopment not be completed; and WHEREAS, Section 273.76 (Subd.8) of Minnesota Statutes empowers the Agency to enter into written assessment agreements with redevelopers of properties within the Project Area; and WHEREAS, it is contemplated that pursuant to this Agreement, the Redeveloper will construct certain minimum improve- ments upon the Redevelopment Property; and WHEREAS, the Agency, and the Redeveloper desire to establish a Minimum Market Value for the Redevelopment Property ilnd the Minimum Improvements to be constructed,thereon pursuant to Minnesota Statutes, ~273.76, Subd. 8, and ~462.445, Subd. 4 (l and 16); and WHEREAS, the Agency and the Assessor have reviewed the Construction Plans for the Minimum Improvements; and WHEREAS, the Assessor, acting pursuant to S273.76, subd. 8 of Minnesota Statutes, has executed a Certification By Assessor as to the Redevelopment Property and the Minimum Improvements to be constructed thereon; and WHEREAS, the original copy of said Certification By Assessor, or a true and correct copy thereof is attached to this Agreement as Exhibit C and made a part hereof: . . -2- NO~ THEReFORE, in consid~rtion of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: ARTICL8 1. DEFINI'frONS. Section 1.1 Qefinitions. In this Agreement, unless a dif~ ferent meaning clearly appears from the context: "Act" means the Municipal Housing and Redevelopment Act, Minnesota Statutes, Sections 462.411 et ~, as amended. "Agency" means the Housing and Redevelopment Authority in and for the City of Chanhassen. "Agreementll means this Agreement, as the same may be from time to time modified, amended, or supplemented. lIAssessment Agreement" means any agreement substan- tially similar to this Agreement providing for payment by the Agency of eligible assessments from the tax increments received by the Agency in connection with the Project. "Assessment Reduction payments" means payments made by the Authority to either the City or to the county's auditor, as a credit against eligible assessments, pursuant to Article IV of this Agreement or pursuant to agreements similar to this Agreement with other redevelopers of land in the project Area. "Assessed Value" or "Assessed Valuationll means the value of real property as determined by the assessor in accor- dance with Minnesota Statutes, Section 273.13 (or as finally adjusted by any assessor, board of equalization, commissioner of revenue, or any court) against which the real property tax is imposed. lIAssessorll means the Carver County Assessor or a city Assessor having the powers of the Carver County Assessor as to properties within the project Area. lIBondsll means the general obligation bonds or obliga- tions issued by the City or the Agency to finance the costs of the project including but not limited to the Assessment Reduction Payments made by the Authority pursuant to Modification No.5 to the Plan. The term lIBonds" shall also include any general obliga- tion bonds or obligations issued to refund any Bonds. lICertification By Assessorll means the Assessor's cer- tification pursuant to Section 273.76, Subd. 8 of Minnesota statutes, and Section 3.3 of this Agreement that he has reviewed the Construction Plans for the Minimum Improvements and the t.l;ll i(l~t Value previously Ll.;~5ign0t1 to tl1~ Hcdcvelopmcnt Property, anti that upon completion of said Minimum Improvements the market value assigned to the Redevelopment Property shall not be less th~n a specified dollar amount stilted therein, and that the Market Value of the Redevelopment Property as of the date of eX0cution of such certification is a specified dollar amount stated therein. "Certification of Occupancy" means the certification provided to the Redeveloper, or the purchaser of any part, par- cel or unit of the Redevelopment Property, pursuant to Section 4.2 of this Agreement. "City" means the City of Chanhassen. "Construction Plans" means the plans, specifications, drawings and related documents on the construction work to be performed by the Redeveloper on the Redevelopment Property which (a) shall be at least as detailed as the plans, specifications, drawings and related documents which are submitted to the building inspector of the City, and (b) shall include at least the following for each building: (1) site plan: (2) foundation plan: (3) basement plan (if any): (4) floor plan for each floor; (5) cross sections of each (length and width): (6) elevations (all sides); (7) landscape plan. "County" means the County of Carver. "Date of Execution" means the date on which the P~Jeveloper signs this Agreement or the date on which the Agency slqns this Agreement, whichever is later. "Event of Default" means an action by the Redeveloper listed in Article VI of this Agreement. "Eligible Assessments" means those special assessments (and those unlevied lateral unit charges and trunk unit charges) which are more particularily described in Modification No. 5 to the Plan, and which have been imposed by the City on tracts of lands contained within the plats of Chanhassen Lakes Business Park and Park II (including the replat of part of Park II as Park II, Second Addition) in connection with either City of Chanhassen ~ Improvements Project 78 - 3 or in connection with any other City ~ public improvement project whether heretofore or hereafter constructed which specially benefits said tracts of land within said plats. The term "Eligible Assessments" does not include any building permit fees, any park charges owing to the City under applicable ordinances, or any availability or connection charges owning to the City pursuant to section 444.075 of Minnesota Statutes or other applicable statues or pursuant to applicable City Ordinances, or any sewer availability charges or similar charges imposed by the Metropolitan Councilor Metropolitan Waste Control Commission or similar governmental unit. The term IIEligible Assessments" does not include any interest imposed by the City in connection with special assessments, unlevied lateral unit rh~rqcs, or unlevied trunk unit chilrgcs. "Market Value" or "~arket Valuation" means the esti- mated fair market value of real property as determined by the Assessor in accordance with Ninnesota Statutes, Section 273.11 (or as finally adjusted by any assessor, board of equalization, commissioner of revenue, or any court). "Matqrity Date" means the date when the principal of, premium (if aQY>, and interest on the Bonds are paid in full. "Minimum Improvements" means those improvements which are more particularly described on Exhibit A attached hereto and made a part hereof. "Minimum Market Value" means Market Value established pursuant to Section 3.3 of this Agreement. "Modification No.5" means the fifth amendment to the Plan adopted by the Agency establishing a program of Assessment Reduction Payments and the resolution adopting the same. "Plan" means the Chanhassen Downtown Redevelopment Plan as described in the "Chanhassen Downtown Redevelopment Project Amended Plan, February, 1980, Revised March 20, 1980" booklet, as further amended from time to time by the Agency. "Project" means the Chanhassen Downtown Redevelopment Project as described in the "Chanhassen Downtown Redevelopment project Amended Plan, February 1980, Revised March 20, 1980" booklet, as further amended from time to time by the Agency. "project Area" means the real property located within the boundaries of the entire redevelopment district as described in Figure 1 contained in the "Chanhassen Downtown Redevelopment Project Amended Plan, February, 1980, Revised March 20, 1980" booklet. "Project 78-3 Assessments" means the costs of City of Chanhassen Improvement Project 78-3 which were specially assessed against benefited real property pursuant to Chapter 429 of Minnesota Statutes. "Real Estate Taxes" means ad valorem taxes on real pro- perty pursuant to Chapter 273 of Minnesota Statut~~ and not including any special assessments levied pursuant to Chapter 429 of Minnesota Statutes. "Redeveloper" means E. Jprome Carlson, Frank Beddor, Jr. and Marilyn A. Beddor, their heirs and ~ssigns. "Redevelopmen t property." means the rea 1 property wh ich is more particularly described in Exhibit B attached.hereto and made a part hereof. "Redevelopment plan" means the Plan. "State" means the State of Minnesota. ".3ubstantial Comph~tion" ,0(';'10:3 :::u[tici~ntly complet'~, 1.n (l'..:cordance l.;ith the Construction Pl,)n.3 Cor the ~1inimum II~lrrovemcnts, so that the t1edevclo(Jer (or his successors and assigns) may occupy the work tor the use for which the Minimum Inlprovements are intended. If the i'iinimum Improvements are to be occupied by one or more tenants rather than tbe Redeveloper and no leases have been entered into with any tenants that would serve as the basis for constructing and installing interior improvements in \he Minimum Improvements, then "Substantial Completion" shall mean that the structure, common building systems and utilities are substantially complete so that a cortificate of Occupancy may be obtained hj Redeveloper upon completion of the construction and installation of normal and customary interior improvements for the benefit of tenants occupying space in the Minimum Improvements. "Tax Official" means any City or County assessor, county auditor, City, County or State board of equalization, the com- missioner of revenue of the State, or any state or federal district court, the tax court of the state, or the State Supreme Court. M\TICLE II. REPRESENTATIONS AND wARRA~TIES. Section 2.1 Representations by the Aqency. The Agency makes the following representations as the basis for the undertaking on its part herein contained: (a) The Agency is a housing and redevelopment authority duly organized and existing under the laws of the State. (b) The Project is a "redevelopment project" within the meaning of the Act and was created, adopted and approved in accordance with the terms of the Act. (c) The project is a "tax increment district" created, adopted, certified and approved pursuant to Minnesota Statutes, S0.ction 462.585. (d) The Agency has established the Project Area as a "tax increment district" and has requested that the County audi- tor of the County certify the Assessed Valuation of all taxable real property in the Project Area pursuant to Minnesota Statutes, section 462.585. (~) The activities of the Agency are undertaken for the purpose of removing, preventing or reducing blight, blighting factors, or the causes of blight, and for the purposes of elimi- nating or preventing the development or spread of deteriorated or deteriorating areas. (f) To finance the cost of the activities to be under- t~ken by the Agency, the Agency proposes to use the proceeds of 80nds issued either by the city or the Agency and to pledge tax increment generated by the Project Area to the payment of the principal of and interest on the Bonds. -6- -7- S~ction 2.2 Representation3 ~nd W~rrnnties by the Redeveloper. The Redeveloper represents and warr~nt.3 that: (a) The Redeveloper ann each of them, is under no disability, and has the legal capacity to enter into this Agreement, an~ to carry out the covenants herein contained. (b) The Redeveloper will construct the Minimum Improvements in accordance with the terms of this Agreement, the Plan and all local, state and federal laws and regulations (including, but not limited to, all known applicable environ- mental, zoning, building code and public health laws and regulations), as such laws and regulations are enacted and enforced during the period the Minimum Improvements are being constructed, and substantially in accordance with the Construction Plans which have been approved by the Agency. (c) The Minimum Improvements constitute a permitted use or authorized conditional use under the zoning ordinance of the city, a permitted use under the Plan and the Act. (d) That at such time or times as may be required by law, the Redeveloper will have complied with all known applicable local, state and federal environmental laws and regulations, will have obtained any and all know applicable environmental reviews, licenses or clearances as to the R0development Property, and that Redeveloper has received no notice or communication from any local, state or federal official that the activities of the Redeveloper in the law or regulation (other than those notices or communications of which the Agency is aware). The Redeveloper is aware of no facts th~ existence of which would cause it to be in violation of any local, state or federal environmental law, regu- lation or review procedure or which would give any person a valid claim under state environmental rights statutes. (e) The Redeveloper will use all reasonable efforts to construct the Minimum Improvements in accordance with all existing local, state or federal energy-conservation laws or regulations. (f) The Redeveloper will obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all local, state and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. (g) The real estate taxes and any installments of spe- cial assessments levied against the Redevelopment property are not in default and that future real estate taxes will 'be paid when due. ARTICLE III. ASS ESSlY1EL~!-:<.t.DUC'l'IO"1 PA YHEN'rS . Section 3.1 Obligation of Agency to Make Assessment Reduction Payments. Upon completion of tne Minimum Improvements and issuance of the Certificate of Occupancy, the Agency, from the tax increments generated by the Project, shall make payments (in the manner and"in the amount provided hereinafter) in reduction of the e1igib1e assessments which have been imposed on Parcel One and Two of the Redevelopment Property and which were unpaid as of December 31 1986* , and in reduction of eligible assessments which may' be hereafter imposed on Parcel One and Two of the Redeve10pement Property prior to the termination date of November 28, 2007. The Agency, at its option, may satisfy its obligations to make assessment reduction payments under this Agreement by either making one lump sum payment or by making a series of semi- annual payments as individual installments of eligible assessments become due and owing to the city. In the event that the Agency elects to make said assessment reduction payments in the form of a series of semi-annual payments as individual installments of eligible assessments become due and owing to the City, the Agency shall also pay the interest imposed thereon by the City; but only that portion of such interest which is attri- butable to that portion of any such installment which the Agency is obligated to pay under this Agreement. Any such payments of interest shall not be a credit against the amount of any assessment reduction payment which the Agency is obligated to make under this Agreement. In the case of eligible assessments which have then already been certified to the County's auditor for collection with real estate taxes, said assessment reduction payments, together with any interest which the Agency is obligated to pay under this Section 3.1, shall be made directly to the County Auditor in full or partial satisfaction, as the case'may be, of said eli- gible assessments. In the case of eligible assessments which have not then been certified to the County's auditor for collection with real estate taxes, said assessment reduction payments, together with any interest which the Agency is obligated to pay under this Section 3.1, shall be made to the City's treasurer in full or partial satisfaction, as the case may be, of said-eligible In the case of eligible assessments which have been paid by the Redeveloper subsequent to December 31, , 1986,* said assessment reduction payments, together with any interest whicn the Agency is obligated to pay under this Section 3.1, shall be made directly to the Redeveloper or its heirs and assigns. -8- *Those amounts to be paid in 1987 together with real estate taxes to be reimbursed. Section 3.2 Amount of Assessment Reduction Payment. The amount of any assessment reduction payment made pursuant to this ~greement shall be seven percent (7%) of the excess of the Minimum Market Value of the Redevelopement Property and the Minimum Improvements constructed thereon as established pursuant to Section 3.3 of thjs Agreement over the Market Value of the Redevelopment Property as of Jvnuary 2, 1985, and as certified in said certification. Section 3.3 " Minimum Market Value to Be Used In Computing Real Estate Taxes. Upon completion of the Minimum Improvements by the Redeveloper, the Minimum Market Value which shall be assessed for the Redevelopement property and the Minimum Improvements thereon shall be Three Million Eight Hundred Sixty Thousand Seven Hundred and No/lOath (Dollars) ($3,860,700.00) (hereinafter the Minimum market Value). The Minimum Market Value established in this section shall be of no further force and effect and this Agreement shall termin~te on the later of the two following dates: (a) the date on which the Bonds are retired, or (b) the date on which all assessment reduction payments due the Redeveloper (or his successors and assigns) pursuant to this Agreement have been made. In any event this Agreement shall terminate no later than November 28, 2007. Provided, however, that nothing in this Agreement shall limit the discretion of the Assessor to assign a market value to the Redevelopment Property in excess of the Minimum Market Value set forth in this section, nor prohibit the Redeveloper from seeking, through exercise of administrative, and legal remedies, a reduction in market value for property tax purposes; subject, however, to the restriction that the Redeveloper shall not seek any reduction in said market value below the Minimum Market Value, as set forth in this section, during the term of this Agreement regardless of actual market value which may result from incomplete construction of the Minimum Improvements, destruction or diminution by any cause, insured or uninsured, except in the case of acquisition or reacquisition or the Redevelopment property by a public entity. ARTICLE IV. CONSTRUCTION OF MINIMUM IMPROVEMENTS Section 4.1 Construction of Minimum Improvements. The Redeveloper-has constructecl the ~1i nimum Improvements on Parcel One of the Redevelopment Property nnd at all times prior to the Maturity Date will not cause a reduction in the real estate taxes paid in respect of the redevelopemen~ Property below the, :eal estate taxes that would be assessed WIth respect to the MInImum Market Value through: (a) willful destruction of the Minimum Improvements or any part thereof; or (b) willful refusal to reconstruct the Minimum Improvements if the Minimum Improvements are damaged or destroyc~. -9- Section 4.2 Certificate of Occupancy Execution of this Agreement by the Agency shalr-constitute a certification by the Agency that the Redeveloper has satisfied all covenants herein contained to construct the Minimum Improvements. Such certification and such determination shall not constitute evidence of compliciamce with or satisfaction of any of the Redeveloper's obligations to any holder of a mortgage or to any insurer of a mortgage, securi.ng Money loaned to finance the Minimum Improv~ments, or any part t.lwreof. AR'l'ICLE V. REAL ESTATE TAXES. Section 5.1 Real Estate Taxes. The Redeveloper agrees that, upon completion of the Minimum Improvements and prior to the ter- mination date stated in Section 3.3 of this Agreement, it will not cause a reduction in the Market Value of the Redevelopment Property and the Minimum Improvements below the amount of the Minimum Market Value and that it will not seek a reduction in the value of the Redevelopment Property and Minimum Improvements below the Minimum Market Value: (1) By seeking administrative review or judicial review of the applicability of any tax statute determined by any Tax Official to be applicable to the Project or the Redeveloper or raising the inapplicability of any such tax statute as a defense in any proceedings, including delinquent tax proceedings; (2) by seeking administrative review or judicial review of the constitu- tionality of any tax statute determined by any Tax Official to be applicable to the Project or the Redeveloper or raising the unconstitutionality of any such tax statute as a defense in any proceedings, including delinquent tax proceedings; (3) by willful destruction of the Redevelopment Property or any part thereof; (4) by willful refusal to reconstruct damaged or destroyed property; (5) by requesting the Assessor to reduce the Market Value or Assessed Value of all or any portion of the Redevelopment Property; (6) by petitioning the board of equalization of the City or the board of equalization of the County to reduce the Market Value or Assessed Value of all or any portion of the Redevelopment Property; (7) by petitioning the board of equalization of the State or the commissioner of revenue of the State to reduce the Market Value or Assessed Value of all or any portion of the Redevelopment Property; (8) by maintaining an action in the District Court of the State or the Tax Court of the State pursuant to Minnesota Statutes, Chapter 278, seeking a reduction in the Market Value or Assessed Value of the Redevelopment property; (9) by applying to the commissioner of revenue of the State requesting an abatement of real property taxes pursuant to Minnesota Statutes, Chapter 270; and (10) by maintaining any other proceedings, whether administrative, legal or equitable, with any administrative body within the City, the County, or the State or with any court of the State or the federal government. The Redeveloper shall not, prior to the Maturity Date, apply for a deferral of property tax on the Redevelopment Property pursuant to Minnesota Statutes, Section 273.86. , ,,-- Nothing in this I..grccmcn t 'jhall Urni t the discretion of tho Assessor to assign to the Redcv010pment Property a Market Value to the Redevelopment Property in excess of the Minimum Market Value established pursuant to Article V of this Agreement. However, the Redeveloper is free to contest said Market Value to the extent that it exceeds the Minimum Market Value established in Section 3.3 of this Agreement. Section 6.1 Events of Default Defined. The following shall be "Lvents 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), anyone or more of the following events (and the term "default" shall mean any event which would with the passage of time or giving of notice, or both, be an "Event of Default" hereunder): ARTICLE VI (a) (b ) EVENTS OF DEFAULT. Failure of Redeveloper to pay when due any real estate taxes on the Redevelopment Property; Failure by the Redevp.loper to observe and perform any covenant, condition, obligation or on its part to be observed or performed hereunder, within thirty (30) days after written notice to the Redeveloper specifying such failure and requesting that it be remedied (or within such other period as otherwise expressly provided in this Agreement); or if the failure is by its nature incurable within such thirty (30) days, failure by the Redeveloper to furnish to the Agency satis~ac- tory assurances that the Redeveloper can and wlll cure such failure or failures within reasonable time. (d If the Redeveloper shall admit in writing its ina- bility to pay its debts generally as they become due, or shall file a petition in bankruptcy or shall make an assignment for the benefit of its creditors, or shall consent to the appointment of a receiver of itself or of the whole or-any substan- tial part of the Redevelopment Property. If the Redeveloper shall file a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws. ( d) -11- (1) 1L LlI~ l{clkv,:lulJ<.:i, Ull d lA:tiLiull i.l banK.ruptcy filed against it, be ~djudicated a bankrupt, or a court of competent jurisdiction shall enter an o~der or decree appointing, without the consent of the Redeveloper, a receiver of the Redeveloper or of the whole or substantially all of its property, or approve a petition filed against the Redeveloper seeking reorganization or arrangement of the Redeveloper under the federal bankruptcy laws, and such adjudication, order or decree shall not be vacated or set aside or stayed within sixty (GO) days from the date of entry thereof. Section 6.2 Remedies on Default. Whenever any Event of Default referred to in-Section 6.1 of this Agreement occurs, the Agency may make anyone or more of the following actions: (a) Cancel and rescind this Agreement. (b) Cancel any pending Asses5ment Reduction payments due under the terms of this Agreement, causing a forfeiture of such payments in favor of the Agency. (c) Take whatever action at law or in equity may 'appear necessary or desirable to the Agency to collect from the Redeveloper full reimbursement for any Assessment Reduction Payments previously made pur- suant to this Agreement. section 6.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to the Agency 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 statutes. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed ex~~dient. In order to entitle the Agency to exercise any remedy reserved to it, it shal~ not be ne~essary to give notice. -12- -11- ~~ction 6.4 No Additional ~aivcr Implied by One Waiver. In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, pre- vious or subsequent breach hereunder. !\R'l'lCLE VII. . ADDITIONAL PROVISIONS. section 7.1 conflict of Interest; Agency ReQresentatives Not I~dividuallY Liable. No member, official or employee of the Agency 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 this Agreement which affects his personal interests or the interests of any cor- poration, partnership, or association in which he is, directly or indirectly interested. No member, official, or employee of the ^gency shall be personally liable to the Redeveloper or any suc- cessor in interest, in the event of any default or breach by the Agency or for any Assessment Reduction payments which may become due under the terms of thi3 Agreement. Section 7.2 Duty of Aqency to Act Reasonably. Wherever this Agreement requires the Agency to approve any action of the Redeveloper, it is understood and agreed that the Agency will not unreasonably withhold or delay such approval. section 7.3 Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections ot this Agreement are inserted for convenience of reference only and shall be disre- garded in construing or interpreting any of its provisions. Section 7.4 Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under this Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personallY and (a) in the case of the Redeveloper, is addressed to or delivered personally to the Redeveloper at 7951 Powers Boulevard Chanhassen, Hinnesota 55317 Attn: E. Jerane Carlson (b) in the case of the Agency is addressed to or delivered personally to the Agency at Chanhassen city Hall 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 as provided in this Section. ~,~ction 7.5 Counter!?C1rts. 'rhi.=:; !\qrecment is e)~2cuted in any number of counterparts, each ot ".;l1ich shall consti tute one and the same instrument. Section 7.6 Covenants Running ~ith Land. The recording or filing of this Agreement with the County Recorder or County Registrar of Titles shall constitute notice of this Agreement to any subsequent purchaser or encumbrancer of the Redevelopment property, or any' part thereof, whether voluntary or involuntary, and shall be binding upon them. The Redeveloper agrees to supply the applicable owner's duplicate certificate of title, if any, so as to permit the recording of a copy of this Agreement in the office of the Carver County Recorder. It is intended and agreed that the covenants and agreements set forth in Article V of this agreement shall be covenants running with the land and that they shall, in any event, and without regard to technical classifica- tion or designation, legal or otherwise, be binding to the fullest extent permitted by law and equity, for the benefit and in favor of, and enforceable by the Agency, its successors and assigns. In the event that any transferee or assignee of the Redeveloper (including without limitation any mortgagee taking possession of or title to the Redevelopment property as a result of any default in the terms of any mortgage to which the R~development property is now subject or may be subject in the future) breaches anyone of the covenants and agreements set forth in said Article V, the Agency may treat such breach as an Event of Default as provided in Article VI of this agreement and may exercise anyone or more of the remedies set forth in Section 6.2 of this agreement. section 7.7 Limitation of Liabili~. The Redeveloper and its successors in fee title ownership of the Redevelopment property shall be responsible for performing and observing the covenants and agreements set forth in this Agreement only during the time that the Redeveloper or a successor is the fee title owner of the Redevelopment property. In the event fee title to the Hcdevelopment property is conveyed to a successor in interest, the grantee shall be automatically responsible for performing and observing the covenants and agreements herein contained and then the grantor shall be automatically [reed and relieved from and after the date of such conveyance of all obligation and liability in connection with the performance and observance of such cove- nants and agreements. ~cction 7. 8 Dischar~rom Land_!~ecords. The Agency agrees promptly upon request by Redeveloper or its successors and assigns, after the expiration or termination of this Agreement and the satisfaction of the covenants and agreements contained herein required to be performed by Redeveloper, to execute a termin(l- tion agreement or other similar document in recordable form that shall serve to release and discharge the provisions of the ^greement as a lien or encumbrance of the Redevelovment property from the records of the office of the Regidtrar of Titles of Carver County, Minnesota. -14- 1 r- IN wITNESS ~Hb~~Of, the Ag(OCY has caused this Agreement to be duly executed in it~ name and benali and its seal to be iwrcunto duly affixed, ana the ,<.cckvcloper has caused this Agreement to be duly executed in its name and behalf and its cor- porate seal to be hereunto auly affixed, on or as of the date first above written. , , ~HE HOOSING AND REDEVELOPMENT AU'rHDHI1'Y L; AND FOR TH:0E CITY . OF' CHANHASSE~~ . / ;' By* (5K~~~ Its '!l1autA1< 'w And 4, ~;;;- Its &f'A.'~U...:i:(--~-.( j LJi/lLI' 'rr ) (S eal ) REDEVELOPERS: ;:;.-- I /,1 // '7 / /'>.~ --...' -:::-. /":,........,'.:1.,..1: /' {{.P.;p.../ )fk;:r~ ~l? t&/dc<1/ ~1arily A. Beddor STATF.; OF i>lINL~t..SGT!\) ) 55 . CGU~T~ OF CARVhR ) \.;as .J.ckno'wled , 19 ~ , by the ... ("- of the Housing ana the city of Chanhassen, Minnesota. ~VKlfOlIA~ ~ _~. NOT~VER ~~.. ~ ~ .. My gOI1l..~ 111ft , ------------- --" tJu Jfu~e t?l&ll y?,;1;i /l /J. Notary Public C ou n t y : l..XA.A.,~-~---'L My commission Expires: y~ 7~C;2) STATE OF MINNESOTA SSe COUNTY OF CARVER was acknow1eoged before me this 19,j/7, by E. Jerome Carlson and Marilyn A.I3eddor. A--~) /~ ' '/" / - ,1/ 0~, ,Jj, The foregoing d.../ ~ day of ~nd Frank Beddor, instrument f.AA ,-' Jr. " r .....Ai'..... "~".. \/../1........ \''''/'_. \:,./,.:,,/.!'..'\.--, f'.,"\ \...,01..'.':\."",/.... "-"i'./\ ~ .. -, ,.. ji~~ i~j:~ l'~. S;,-,:;-;H - i(~b:~ ':':";,:,~;;::';)';:;;t':"\, , ~ <; i~lY ,",'Jd~L.L""Jil l....;JJ.t..,) 1\1-01. 2.... 1...!9~ >- ~ > ).J "'/'vV'^'V\ "i\/\' \i'.:\~.lV',,;/'l.^ ,/,/'/'/'"-,/\"/'/,, v./.1 tJ.. v c THIS INSTRUMENT DRAFTED BY: Chanhassen Housing and Redevelopment Authority P.O. Box 147 Chanhassen, MN 55317 (612) 937-1900 -16- Assessment Agreement dated City of Chanha~sen and E. Marilyn A. Beddor. EXHIBIT A to l~ ~/ , 1987, between Jerome Car1Sdri, Frank Beddor, Jr. and office/ "MINIMUM IMROVEMENTS" means a 147,264 square foot constructed of Dryvit, built on PARCEL ONE of the "REDEVELOPMENT PROPERTY" described in Exhibit B hereof. manufacturing/ warehouse precast, tip-up panels, concrete building constructed of except the office area which is EXHIBIT B to fl1 c;:f- ~ I Jerome; Carlson, , 1987, Frank Beddor, ^ssessment Agreement dated between City of Chanhassen and E. Jr. and Marilyn A. Reddor. PARCEL ONE Lot 1, Block 1, PARK TWO SECOND ADDITION, according to the plat thereof on file and of record in the office of the County Recorder, Carver County, Mi~nesota, and PARCEL TWO Lot 2, Block 3, PARK TWO, file and of record in the Carver County, Minnesota. according to the plat thereof on office of the County Recorder, 2 For the purposes of this certification, the words used herein have the definitions utilized in the attached Assessment lIgreement. h l/4/l.'l.-~ r. the City of Chanhassen EXHIBIT C CERTIFICATION BY ASSESSOR Tax Parcel No. 25-5660010 and 25-5650090 Street Address 1000 Park Road Chanhassen, MN 55317 . The undersigned having reviewed the Construction Plans for the Minimum Improvements and the Market Value assigned to the Redevelopment Property upon which the Minimum Improvements are to be constructed pursuant to the attached assessment agreement, and being ofj the opinion that a "Minimum Market Value" set forth in this Certification appears reasonable, hereby certifies as follows: The undersigned Assessor, being legally responsible for the assessment of the Redevelopment Property (more particularly d8scribed in Exhibit B to the attached assessment agreement) hereby certifies that the market value assigned to such land (the Redevelopment Property) and improvements (the Minimum Improvements) shall be not less that Three Million Eight Hundred fifty Four Thousand Seven Hundred Dollars ($3,854,700.00) until termination of the attached assessment agreement. The undersigned further certifies that the market value of the Redevelopment Property as of January 2, 1985, was One Hundred Five Thousand Four Hundred Dollars ($105,400.00). STATE OF MINNESOTA) ) ss. COUNTY OF CARVER ) t-) .../ The forego~,ng instrument wu. s acknowledged before me this o<~~ day of 7:ni ' .19 (2., by $~TI wl;{/rc?'/~J _ ' the Assessor for the CIty of Chanhassen. ~ f2~7IedL NoUry Public County: My Commission Expires: ~~"''''/\'''t.f'\I\"W'1iil ~ /~~;;;;i.;;;;;';,. E. JOANN HECKLlN .. !-~~6' NO~~~~/U:~I~~~~~~TA ~..... My C()mrr.I?~lr,. :):;Jires Oct. 22. 1990 '.~:"..."\"'. ~ ".. ' -.... ,,,,,,....., v....'\,I'\,~...1< 3