1k Approve Private Redevelopment Agreement with Paul Starr1k.
CITY OF
CHANHASSEN
690 COULTER DRIVE 0 P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
(612) 937 -1900 • FAX (612) 937 -5739
TO: Don Ashworth, City Manager
FROM: Todd Gerhardt, Assistant City Manager —F& ! k.,
DATE: May 5, 1997
SUBJ: Consider Approval of a Private Redevelopment Agreement, Paulstarr Enterprises, Inc.
Attached for the city council's review is a Private Redevelopment Agreement between the City of Chanhassen and
Paulstarr Enterprises, Inc. (see Attachment #1). The city council created TIF District No. 2 -2 on March 9, 1992 (see
Attachment #2). In conjunction with the creation of this district, the Tax Increment Plan incorporated the city's
current three year incentive program for businesses meeting one of the following qualifications:
I. Discourage business from moving to another state or municipality;
2. Increase employment in the state;
3. Preserve and enhance the tax base of the state.
Paulstarr Enterprises meets two of the three qualifications. They will be enhancing the tax base by approximately
$81,577.50 per year; and creating at least 5 new jobs to the existing employee base of 30 in 1996. Paulstarr
Enterprises, Inc., is proposing to construct a 35,000 sq. ft. multi -tenant office /manufacturing facility.
The estimated amount of incentives available total $122,366.25 based on the city's policy of three years worth of
taxes minus fiscal disparities and school aid contributions (see Attachment #3). The city would make payment back
to Paulstarr Enterprises, Inc. in the following years based on the new taxes generated from their facility:
1998 $ 40,788.75
1999 $ 40,788.75
2000 $ 40,788.75
Total Incentives: $122,366.25
RECOMMENDATION
Staff recommends approval of the Private Redevelopment Agreement with Paulstarr Enterprises, Inc. and their
request for $122,366.25 in city assistance.
ATTACHMENTS
1. Private Redevelopment Agreement
2. Location map of District
3. Estimated Taxes/Incentives
g:\admin \tg�paulstaff l .doc
MEMORANDUM
Kennedy & Graven, Chartered
May 6, 1997
CONTRACT
FOR
PRIVATE REDEVELOPMENT
1:1 11 0.1 117:3 B111`.`/ 01 040
THE CITY OF CHANHASSEN
AND
PAULSTARR ENTERPRISES, INC.,
a Minnesota corporation
, 1997
This document was drafted by:
KENNEDY & GRAVEN, CHARTERED (JBD)
470 Pillsbury Center
200 South Sixth Street
Minneapolis, MN 55402
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TABLE OF CONTENTS
ARTICLE I
Definitions
Section 1.1. Definitions ......... ............................... 2
ARTICLE II
Representations and Warranties
Section 2.1. Representations by the City ............................. 4
Section 2.2. Representations by the Redeveloper ........................ 4
ARTICLE III
Sale and Purchase of Land
Section 3.1.
Acquisition of Redevelopment Property ..................... 6
Section 3.2.
Conveyance of the Redevelopment Property .................. 6
Section 3.3.
Time of Acquisition and Conveyance ...................... 6
Section 3.4.
Title .............. ............................... 6
Section 3.5.
Soil Conditions ...... ............................... 7
Section 3.6.
Purchase Price ....... ............................... 7
Section 3.7.
Taxes and Special Assessments ........................... 7
Section 3.8.
Other Costs ......... ............................... 7
Section 3.9.
Property Reconveyed As Is ............................. 7
Section 3.10.
Termination ......... ............................... 8
Section 3.11.
Hearing Prior to Sale .. ............................... 8
Section 3.12.
Assessment Agreement . ............................... 8
ARTICLE IV
Public Assistance
Section 4.1. Construction of the Minimum Improvements ................. 9
Section 4.2. Form of Public Assistance .............................. 9
ARTICLE V
Tax Increment
Section 5.1. Tax Increment Certification ............................ 10
Section 5.2. Real Property Taxes; Special Assessments .................. 10
Section 5.3. Real Property Assessment ............................. 10
Section 5.4. Receipt of Tax Increment; Proof of Payment ................ 10
Section 5.5. Effect of Legislative Changes ........................... 10
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ARTICLE VI
Additional Provisions
Section 6.1.
Equal Employment Opportunity .........................
11
Section 6.2.
Restrictions on Use ... ...............................
11
Section 6.3.
Provisions Not Merged With Deed .......................
11
Section 6.4.
Notices and Demands . ...............................
11
Section 6.5.
Disclaimer of Relationships ............................
11
Section 6.6.
Covenants Running with the Land ........................
11
Section 6.7.
Modifications ....... ...............................
11
Section 6.8.
Counterparts ....... ...............................
11
Section 6.9.
Assignment ........ ...............................
12
SIGNATURES
TESTIMONIALS
SCHEDULE A REDEVELOPMENT PROPERTY LEGAL DESCRIPTION
SCHEDULE B ASSESSMENT AGREEMENT AND ASSESSOR'S CERTIFICATION
SCHEDULE C [Blank]
SCHEDULE D LIMITED REVENUE TAX INCREMENT NOTE
SCHEDULE E PRELIMINARY PLANS
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CONTRACT FOR PRIVATE REDEVELOPMENT
THIS AGREEMENT, made on or as of the day of , 1997, by and
between THE CITY OF CHANHASSEN, a Minnesota municipal corporation (hereinafter referred
to as the "City ") and PAULSTARR ENTERPRISES, INC., a Minnesota corporation (hereinafter
referred to as the "Redeveloper "),
WITNESSETH:
WHEREAS, the City has created and established Development District No. (the
"District ") pursuant to Minnesota Statutes §§ 469.124 through 469.154 (the "Act ") and has
created within the District, Tax Increment Financing District No. (the "Tax Increment
District ") also pursuant to the Act; and
WHEREAS, the City has further adopted its development district program (the 'Program ")
for the District describing the objectives of the Program and the public assistance needed within
the District to carry out the objectives of the Program; and
WHEREAS, there has been presented by the Redeveloper to the City for its consideration
a proposal for the development of a office /warehouse facility within the District on property
located within the Tax Increment District; and
WHEREAS, the City has reviewed the Redeveloper's development proposal and has
determined that the development, if completed, would serve to accomplish the objectives of the
Program.
WHEREAS, in order to achieve the objectives of the Program the City will acquire certain
real property in the District, more particularly described in Schedule A annexed hereto and made
a part hereof (which property as so described is hereinafter referred to as the "Redevelopment
Property "), and is prepared to convey the Redevelopment Property to the Redeveloper in order
to bring about redevelopment in accordance with the Program and this Agreement; and
WHEREAS, in order to achieve the objectives of the Program the City has determined
to provide aid and assistance to the Redevelopment Property in the form of land write down
expenditures and other redevelopment costs; and
WHEREAS, the City intends to fund the land write down expenditures and other
redevelopment costs by using tax increments generated from the Redevelopment Property and the
improvements to be constructed thereon; and
WHEREAS, the City believes that the redevelopment of the District pursuant to this
Agreement, and fulfillment generally of this Agreement, are in the vital and best interests of the
City and the health, safety, morals, and welfare of its residents, and in accord with the public
purposes and provisions of the applicable state and local laws and requirements under which the
Program has been undertaken and is being assisted.
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NOW, THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the other as follows:
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ARTICLE I
Definitions
Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears
from the context:
"Act" means Minnesota Statutes, Sections 469.001- 469.154 (formerly Municipal Housing
and Redevelopment Act, Minnesota Statutes, Sections 462.411- 462.711), as amended.
"Agreement" means this Agreement, as the same may be from time to time modified,
amended, or supplemented.
"Assessed Market Value" or "Assessed Market Valuation" means the market value of real
property as determined by the county assessor of the county in accordance with Minnesota
Statutes, Section 273.11 (or as finally adjusted by the assessor, board of equalization,
commissioner of revenue, or any court).
"City" means the City of Chanhassen, a Minnesota municipal corporation and statutory
city according to the laws of the State of Minnesota.
"Closing" means the completion of the transaction contemplated in this Agreement
between the parties hereto.
"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
shall be at least as detailed as the plans required to be submitted to the building inspector of the
City.
"Limited Revenue Tax Increment Note" or 'Note" means the limited, special obligation
of the City to pay to Redeveloper, from tax increments generated from the Redevelopment
Property, an annual dollar amount, as provided in Section 4.2 of this Agreement and the Note
attached as Schedule D.
"Minimum Improvements" means the improvements described in the Preliminary Plans
containing a office /warehouse facility of approximately square feet.
"Preliminary Plans" means those plan sheets and other descriptive material which are
identified in the attached Schedule E.
"Redeveloper" means Paulstarr Enterprises, Inc., a Minnesota corporation, or its successors
and assigns.
"Redevelopment Property" means the real property, a legal description of which property
is contained on the attached Schedule A.
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"Tax Increment" means that portion of the real property taxes paid with respect to the Tax
Increment District which is remitted to the City as tax increment pursuant to the Tax Increment
Act.
"Tax Increment Act" means Minnesota Statutes, Sections 469.174 -.179, as the same may
be amended from time to time.
"Termination Date" means the date when the City has paid the full amount due under the
terms of this Agreement and the Limited Revenue Tax Increment Note.
"Tax Official" means any city or county assessor; county auditor; city, county or state
board of equalization, the commissioner of revenue of the state, any state or federal district court,
the tax court of the state, or the State Supreme Court.
"Unavoidable Delays" means delays which are the direct result of acts of God, unforeseen
adverse weather conditions, labor disputes, fire or other casualty to the Minimum Improvements,
litigation commenced by third parties which, by injunction or other similar judicial action causes
delays, acts of any federal, state or local governmental unit (other than the City in enforcing its
rights under this Agreement), City defaults as to the Redeveloper's delays, Redeveloper defaults
as to the City's delays, or other matters which are not within the control of the Redeveloper as
to the Redeveloper's delays or not within the control of the City as to the City's delays.
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ARTICLE II
Representations and Warranties
Section 2.1. Representations by the Citv. The City makes the following representations
as the basis for the undertaking on its part herein contained:
(a) Subject to matters described in Section 5.5 of this Agreement, the City has the
right, power and authority to execute, deliver and perform its obligations according to this
Agreement and all other documents to be executed by the City pursuant hereto. The City assures
the Redeveloper that the individuals who execute this Agreement and all other documents
executed by the City or on behalf of the City are duly authorized to sign the same on behalf of
the City and to bind the City thereto.
(b) Subject to satisfaction of the terms and conditions of this Agreement, the City will
convey the Redevelopment Property to the Redeveloper for development in accordance with the
terms of this Agreement.
(c) Neither the City, nor, to the best of the City's knowledge, any entity or person has,
at any time (i) "released" or actively or passively consented to the "release" or "threatened
release" of any Hazardous Substance (as defined below) on or under or that would affect the
environmental condition of the Redevelopment Property; or (ii) taken any action in "response"
to a "release" in connection with the Redevelopment Property; or (iii) otherwise engaged in any
activity or omitted to take any action which could subject the City or Redeveloper to claims for
intentional or negligent torts, strict or absolute liability, either pursuant to statute or common law,
in connection with Hazardous Substances (as defined below) located in or on the Redevelopment
Property, including the generating, transporting, treating, storage, or manufacture of any
Hazardous Substance (as defined below). The terms set within quotation marks above shall have
the meaning given to them in the Comprehensive Environmental Response and Liability Act, 42
U.S.C. § 9601 et sea ., as amended ( "CERCLA ") and any state environmental laws. "Hazardous
Substances" means hazardous waste, toxic substances, formaldehyde, urea, polychlorinated,
biphenyls, asbestos, petroleum, natural gas, synthetic gas usable as fuel or mixtures thereof, any
materials related to any of the foregoing, and substances defined as "hazardous substances ", "toxic
substances ", "hazardous waste ", "pollutant ", or "contaminant" in CERCLA 42 U.S.C. § 9601 et
SeMc ., the Resource Conservation and Recovery Act as amended, the Hazardous Materials
Transportation Act, 49 U.S.C. § 1801 et sea ., the Clean Water Act, 33 U.S.C. § 1251 et se4 ., any
state laws regarding environmental matters, or any regulations promulgated pursuant to any of
the foregoing statutes.
(d) The City does not know of any wells on the Redevelopment Property within the
meaning of Minnesota Statutes, Section 103I.
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Section 2.2. Representations by the Redeveloper. The Redeveloper represents that:
(a) The Redeveloper has the right, power and authority to execute, deliver and perform
its obligations according to this Agreement.
(b) If Redeveloper is successful in obtaining any variances required by the City, and
if the Redeveloper constructs the Minimum Improvements on the Redevelopment Property, it will
do so in accordance with the terms of this Agreement, and all local, state and federal laws and
zoning, building code and public health laws and regulations.
(c) If constructed, the Minimum Improvements will have a market value of not less
than $1,225,000 inclusive of the value of the Redevelopment Property but exclusive of the value
of any improvements currently located on the Redevelopment Property.
(d) As of this date, the Redeveloper has received no notice or communication from
any local, state or federal official that the activities of the Redeveloper or the City in the Project
Area may be or will be in violation of any environmental law or regulation. The Redeveloper
is aware of no facts the existence of which would cause it to be in violation of any local, state
or federal environmental law, regulation or review procedure. In the event that the City is
required to take any action to obtain any necessary permits or approvals with respect to the
Redevelopment Property under any local, state or federal environmental law or regulation, the
Redeveloper will cooperate with the City in connection with such action.
(e) If the Redeveloper constructs the Minimum Improvements, it will use its best
efforts to do so in accordance with all applicable local, state or federal energy conservation laws
or regulations.
(f) Neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of,
the terms, conditions or provisions of any restriction or any evidences of indebtedness, agreement
or instrument of any evidences of indebtedness, agreement or instrument of whatever nature to
which the Redeveloper is now a party or by which it is bound, or constitutes a default under any
of the foregoing.
(g) Redeveloper agrees to provide the City with the appropriate certificate, statement
or deed provision relating to any wells located on the Redevelopment Property.
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ARTICLE III
Acquisition and Conveyance of Property
Section 3.1. Acquisition of Redevelopment Pronertv. The Redeveloper represents that
it has as of the date of this Agreement obtained title to or options to acquire title to the
Redevelopment Property. Subject to the terms of this Agreement, the City agrees that it will,
subsequent to the Redeveloper's acquisition of title to the Redevelopment Property, acquire the
Redevelopment Property from the Redeveloper. The conveyance from the Redeveloper to the
City shall be by a standard quit claim deed. Immediately after the City's acquisition of the
Redevelopment Property, the City shall, by quit claim deed, reconvey such property to the
Redeveloper for development in accordance with the terms of this Agreement. The cost to the
City of acquiring the Redevelopment Property and conveying such property to the Redeveloper
shall be paid in accordance with the terms of Section 3.6 of this Agreement.
Section 3.2. Convevance of the Redevelopment Pronertv. The City shall reconvey title
to and possession of the Redevelopment Property to the Redeveloper under a quit claim deed.
The conveyance of and the Redeveloper's use of the Redevelopment Property shall be subject to
all of the conditions, covenants, restrictions and limitations imposed by this Agreement. The
conveyance of title to and the Redeveloper's use of the Redevelopment Property shall also be
subject to building and zoning laws and ordinances and all other applicable local, state and
federal laws and regulations.
Section 3.3. Time of Acauisition and Convevance.
(a) The City shall, subject to all applicable provisions of law and preconditions to
closing contained in this Agreement, if the Redeveloper is not then in default under the terms of
this Agreement, acquire the Redevelopment Property from the Redeveloper and simultaneously
reconvey the Redevelopment Property to the Redeveloper within ten (10) days after (i) the City's
approval of the Preliminary Plans; and (ii) the Redeveloper having obtained all governmental
permits and approvals, necessary to be obtained in order to permit conveyance of the
Redevelopment Property to Redeveloper and construction of the Minimum Improvements, or on
such other date as the City and the Redeveloper shall mutually agree in writing. The Redeveloper
shall take possession of the Redevelopment Property the day of execution and delivery of the
deed by the City.
(b) Unless otherwise mutually agreed by the City and the Redeveloper, the execution
and delivery of all deeds shall be made at the principal office of the City.
Section 3.4. Title.
(a) Prior to and as a condition to the City's obligation to acquire the Redevelopment
Property, the Redeveloper shall obtain and furnish to the City a commitment for the issuance of
a policy of title insurance. The City shall have twenty (20) days from the date of its receipt of
such commitment to review the state of title and to provide the Redeveloper with a list of written
objections to such title. No objection may be made by the City to any defect or encumbrance
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on the title unless and to the extent that such defect or encumbrance would, if uncured, have the
effect of precluding Redeveloper's request to convey marketable title or the construction of the
Minimum Improvements. Upon receipt of the City's list of written objections, the Redeveloper
shall proceed in good faith and with all due diligence to attempt to cure the objections made by
the City. Within ten (10) days after the date that all such objections have been cured, to the
reasonably satisfaction of the City, the City shall proceed with its acquisition and reconveyance
of the Redevelopment Property. The City shall have no obligation to take any action to clear
defects in the title to the Redevelopment Property.
(b) The City shall take no actions to encumber title to the Redevelopment Property
between the moment the City acquires to the moment on which the City's Deed is delivered to
the Redeveloper, it being understood that such conveyances will occur simultaneously.
Section 3.5. Soil Conditions. The Redeveloper acknowledges that the City makes no
representations or warranties as to the condition of the soils on the Redevelopment Property or
its fitness for construction of the Minimum Improvements or any other purpose for which the
Redeveloper may make use of such property. The Redeveloper further agrees that it will
indemnify, defend, and hold harmless the City, its governing body members, officers, and
employees, from any claims or actions arising out of the presence, if any, of hazardous wastes
or pollutants on the Redevelopment Property.
Section 3.6. Purchase Price.
(a) The City shall pay the Redeveloper as purchase price for the Redevelopment
Property the aggregate principal amount of $122,366.25. Such payment shall be made entirely
and exclusively in accordance with the terms of a Limited Revenue Note ( "Note ") in substantially
the form of the attached Schedule D. This Note is to be executed by the City and delivered to
Redeveloper at Closing.
(b) The purchase price to be paid by the Redeveloper for the reconveyance of the
Redevelopment Property from the City shall be $1.00.
Section 3.7. Taxes and Special Assessments. Redeveloper shall pay all taxes and
installments of special assessments due and payable in years prior to the year of closing.
Redeveloper shall pay all installments of taxes and special assessments due and payable in the
year of Closing. Installments of special assessments due and payable in future years shall be
responsibility of Redeveloper.
Section 3.8. Other Costs. No cost, fee or other payment relating to any real estate
transaction of any nature shall be payable by the City to any person or entity; and except as
otherwise set forth in this Agreement, the City's entire obligation in connection with the purchase
and sale of the Redevelopment Property shall be payment of the purchase price and reconveyance
of the Redevelopment Property as provided in this Agreement.
Section 3.9. Propertv Reconvened As Is. Redeveloper acknowledges that the City shall
have no obligation to perform any site work in connection with the proposed transaction or
otherwise. The City's only obligation hereunder is to reconvey the Redevelopment Property to
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the Redeveloper in the condition in which it was conveyed to the City. All site work, including,
without limitation, grading, soil preparation and demolition of all structures and improvements
shall be done by the Redeveloper at Redeveloper's cost.
Section 3.10. Termination. In the event that all the preconditions to Closing have not
been satisfied or waived by the party in whose favor the precondition runs, either party may give
the other party ten day written notice of such defaults. If the other party does not cure such
default within such ten day period, this Agreement may be declared null and void by either party
and thereupon, neither party shall have any obligation or liability to the other hereunder.
In the further event that the closing does not occur on or before , unless
such date is extended by mutual written agreement of the parties, this Agreement shall
automatically become null and void and thereupon neither party shall have any obligation or
liability to the other hereunder.
Section 3.11. Hearine Prior to Sale. As a further precondition to the City's obligations
hereunder, the City shall hold all hearings and make all findings as may be required by law as
a precondition to the transaction contemplated herein.
Section 3.12. Assessment Agreement. At Closing, and as a precondition to the City's
obligations, the parties shall execute an Assessment Agreement and the City shall secure the
Assessor's Certification all in substantially the form of the attached Schedule B. At the time of
execution, the instrument must have been executed by the county assessor. Subsequent to
execution by the parties, the instrument shall be recorded as provided for in the instrument.
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ARTICLE IV
Public Assistance
Section 4.1. Construction of the Minimum Improvements. Subject to the terms and
conditions of this Agreement, the Redeveloper agrees to purchase the Redevelopment Property
and if it constructs the Minimum Improvements on the Redevelopment Property, it will do so
substantially in accordance with the Construction Plans. Should the Redeveloper construct the
Minimum Improvements, it agrees to maintain, preserve and keep them in good repair and
condition, subject to reasonable wear and tear and casualty excepted. Notwithstanding anything
to the contrary set forth in this Agreement, the Redeveloper has no obligation to construct the
Minimum Improvements. The Construction Plans must reasonably conform to the Preliminary
Plans unless such nonconformity is approved by the City. The City agrees that it will promptly
consider any proposed amendment to the Construction Plans, will not unreasonably withhold its
approval of such proposed amendments and will approve the same if the amended plans: i) do
not indicate a reduction in the market value of the improvements; and ii) in the reasonable
judgment of the City, such amendment is in conformity with the applicable land use regulations
of the City.
Section 4.2. Form of Public Assistance. In order to facilitate the financial feasibility of
the redevelopment of the Redevelopment Property and in consideration for the Redeveloper's
fulfillment of its covenants and obligations under this Agreement, the City will provide to the
Redeveloper a land -write down from the tax increments. The public assistance will be payable
by the City in the form of a land -write down in an amount of $122,366.25 which shall be paid
to the Redeveloper out of and only out of Available Tax Increment (as such term is described in
Schedule D) generated by the Minimum Improvements constructed on the Redevelopment
Property. Payments of the land write down shall be made solely in accordance with the terms
of Schedule D.
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ARTICLE V
Tax Increment
Section 5.1. Tax Increment Certification. The City has established the Tax Increment
District pursuant to the Tax Increment Act.
Section 5.2. Real Pronertv Taxes. Special Assessments. The Redeveloper shall pay, in
accordance with Section 3.7 herein, all ad valorem taxes and special assessments on the
Redevelopment Property which are payable subsequent to closing on the sale of the
Redevelopment Property. For the years 1997 through 1999 inclusive, this obligation shall also
be a corporate obligation of the Redeveloper which shall continue for those years even if the
Redeveloper sells the Redevelopment Property, unless the Redeveloper is released of its
obligations under this Agreement. The Authority agrees that the Redeveloper is released from
such corporate obligation in the event and to the extent that any transferee of the Redevelopment
Property pays such taxes and special assessments.
Section 5.3. Real Pronertv Assessment. The Redeveloper shall not cause the
Redevelopment Property to be removed from the public tax rolls or to become exempt from
assessment for general real estate taxes by reason of any conveyance, lease, abatement or other
action until the Termination Date.
Section 5.4. Receipt of Tax Increment. Proof of Pavment. The Redeveloper shall receive
its annual tax increment payment from the City in as provided for in the Note.
Section 5.5. Effect of Leeislative Chances. The parties understand and acknowledge that
certain legislation is currently being considered by the Minnesota Legislature which, if enacted,
could limit or entirely remove the authority of the City to carry out its obligations hereunder
including, without limitation, its obligations to make payments pursuant to the Limited Revenue
Tax Increment Note. Redeveloper, for itself and its successors and assigns, understand and
acknowledge that the City's obligations hereunder are entirely limited to the City's authority to
act as such authority may be limited or removed from time to time. On the basis of the
foregoing, the parties for themselves and their successors or assigns each agree that this
Agreement, the Assessment Agreement and the Note shall automatically become null and void
if the City's authority to act under this Agreement is completely removed. The parties for
themselves and for their successors and assigns further agree that if the City's authority to carry
out its obligation is materially impaired by
legislative changes, the Redeveloper shall have the option to: i) terminate the Agreement,
whereupon the parties will be relieved of any further obligations under this Agreement, the
Assessment Agreement or the Note; or ii) agree to continue its performance hereunder and to
accept the City's performance as limited.
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ARTICLE VI
Additional Provisions
Section 6.1. Eaual Emolovment Onnortunity. The Redeveloper, for itself and its
successors and assigns, agrees that in the event the Minimum Improvements are constructed as
provided for in the Agreement, it will comply with all applicable federal, state and local equal
employment and nondiscrimination laws and regulations.
Section 6.2. Restrictions on Use. The Redeveloper agrees for itself, and its successors
and assigns, and every successor in interest to the Redevelopment Property, or any part thereof,
that the Redeveloper, and such successors and assigns, shall devote the Redevelopment Property
to, and only to and in accordance with, the land use regulations of the City of Chanhassen in
effect on the date of the issuance of a building permit for construction of Minimum
Improvements.
Section 6.3. Provisions Not Mereed With Deed. None of the provisions of this
Agreement are intended to or shall be merged by reason of any deed transferring any interest in
the Redevelopment Property.
Section 6.4. Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand, or other communication under the Agreement or the deed by either
party to the other shall be sufficiently given or delivered only if it is dispatched by registered or
certified mail, postage prepaid, return receipt requested, or delivered personally; and
(a) ir the case of the Redeveloper, is addressed to or delivered to the Redeveloper at
; and
(b) in the case of the City, is addressed to or delivered personally to the City at 690
Coulter Drive, Box 147, Chanhassen, Minnesota 55317, 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.
Section 6.5. Disclaimer of Relationships. The Redeveloper acknowledges that nothing
contained in this Agreement nor any act by the City or the Redeveloper shall be deemed or
construed by the Redeveloper or by any third person to create any relationship of third -party
beneficiary, principal and agent, limited or general partner, or joint venture between the City and
the Redeveloper.
Section 6.6. Covenants Runnine with the Land. The terms and provisions of this
Agreement shall be deemed to be covenants running with the Redevelopment Property and shall
be binding upon any successors or assigns of the Redeveloper and any future owners or
encumbrances of the Redevelopment Property.
Section 6.7. Modifications. This Agreement may be modified solely through written
amendments hereto executed by the Redeveloper and the City.
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Section 6.8. Countemarts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section 6.9. Assienment. The Redeveloper may at any time that it is not in default under
this Agreement assign its rights and obligations hereunder to another entity which is acceptable
to the City in its reasonable discretion. The assignment must be evidenced by an instrument in
recordable form and acceptable to the City whereby the Redeveloper assigns and the assignee
accepts all of the Redeveloper's rights and obligations hereunder.
Section 6.10. Waee and Job Covenants. (a) By no later than two years after the first date
on which the Redeveloper receives any payment under the note issued to Redeveloper pursuant
to Section 4.2 hereof, the Redeveloper shall create on the Redevelopment Property at least
new jobs and the gross annual wages for all such employees of Redeveloper located on the
Redevelopment Property shall be no less than $ . The Redeveloper shall submit
to the City a written report by April I of each year after completion of the Minimum
Improvements describing employment and wages in sufficient detail to enable the City to
determine compliance with this Section.
(b) If the Redeveloper fails to comply with any of the terms of this Section, the
Redeveloper shall repay the City, upon written demand from the City, any payments made to the
Redeveloper under Section 4.2. Nothing in this Section shall be construed to limit the City's
other remedies hereunder.
IN WITNESS WHEREOF, the City has caused this Agreement to be executed in its
corporate name by its duly authorized officers and sealed with its corporate seal; and the
Redeveloper has caused this Agreement to be executed in its corporate name as of the date first
above written.
THE CITY OF CHANHASSEN, MINNESOTA
(SEAL)
STATE OF MINNESOTA )
ss.
COUNTY OF )
By
Its Mayor
And
Its City Manager
On this day of , 1997, before me, a Notary Public within and for said
county, appeared and to me personally known, who
JBD122231 13
KG400 -1
being by me duly sworn, did say that they are respectively the Mayor and City Manager of the
City of Chanhassen, Minnesota, a municipal corporation under the laws of the State of Minnesota,
on behalf of the corporation.
Notary Public
JBD122231 14
KG400 -1
REDEVELOPER:
STATE OF MINNESOTA )
ss.
COUNTY OF )
PAULSTARR ENTERPRISES, INC.
By
Its
By
Its
The foregoing instrument was acknowledged before me this day of ,
1997, by and , the and of
PAULSTARR ENTERPRISES, INC., a Minnesota corporation, on behalf of the corporation.
Notary Public
JBD122231
KG400 -1 15
SCHEDULE A
to
CONTRACT FOR PRIVATE REDEVELOPMENT
REDEVELOPMENT PROPERTY LEGAL DESCRIPTION:
[to be completed prior to execution]
JBD122231 A-I
KG400 -1
SCHEDULE B
ASSESSMENT AGREEMENT
and
ASSESSOR'S CERTIFICATION
By and among
THE CITY OF CHANHASSEN
and
PAULSTARR ENTERPRISES, INC.
This Document was drafted by:
KENNEDY & GRAVEN, CHARTERED
470 Pillsbury Center
Minneapolis, Minnesota 55402
JBD122231
KG400 -1
THIS AGREEMENT, dated as of this day of , 1997, by and between
the CITY OF CHANHASSEN, a Minnesota municipal corporation (the "City ") and PAULSTARR
ENTERPRISES, INC., a Minnesota corporation, (the 'Redeveloper ").
WITNESSETH, that
WHEREAS, on or before the date hereof the City and Redeveloper have entered into a
Contract for Private Redevelopment (the "Contract ") regarding certain real property located in the
County of Carver, pursuant to which the City is to acquire certain property, hereinafter referred
to as the Redevelopment Property and legally described in Attachment A hereto; and
WHEREAS, it is contemplated that pursuant to said Contract the Redeveloper will
construct a square foot facility expansion upon the Redevelopment
Property; and
WHEREAS, the City and Redeveloper desire to establish a minimum market value for
said land and the improvements to be constructed thereon, pursuant to Minnesota Statutes Section
469.177, Subdivision 8; and
WHEREAS, the City and the County Assessor for Carver County, have reviewed the
preliminary plans and specifications for the improvements which it is contemplated will be
erected;
NOW, THEREFORE, the parties to this Agreement, in consideration of the promises,
covenants and agreements made by each to the other, do hereby agree as follows:
1. The minimum market value which shall be assessed for the land described in
Attachment A, with the Minimum Improvements and other improvements constructed thereon
shall upon substantial completion be not less than $1,225,000. The parties to this Agreement
expect that the construction of the above - referenced improvements will be entirely completed on
or before December 31, 1997.
2. The minimum market value herein established remains in full force and effect until
the earlier of. i) December 31, 2001 or ii) the date on which the City is no longer entitled to
receive tax increment with respect to the Tax Increment District for the Redevelopment Area, at
which time this Agreement shall terminate.
3. This Agreement shall be promptly recorded by the Redeveloper with a copy of
Minnesota Statutes Section 469.177, Subdivision 8, set forth in Attachment B hereto. The
Redeveloper shall pay all costs of recording.
4. Neither the preambles nor provisions of this Agreement are intended to, nor shall
they be construed as, modifying the terms of the Contract between the City and the Redeveloper.
5. This Agreement shall inure to the benefit of and be binding upon the successors
and assigns of the parties.
JBD122231 B -I
KG400 -1
CITY OF CHANHASSEN
By
Its Mayor
By
Its City Manager
PAULSTARR ENTERPRISES, INC.
By
Its
By
Its
STATE OF MINNESOTA )
ss
COUNTY OF )
The foregoing instrument was acknowledged before me this _ day of
1997, by and _ , the Mayor and City Manager,
respectively, of the City of Chanhassen, a Minnesota municipal corporation, on behalf of the
corporation.
Notary Public
STATE OF MINNESOTA )
SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
1997, by of Paulstarr Enterprises, Inc., a Minnesota corporation.
Notary Public
JHD122231
KG400 -1 B_2
CERTIFICATION BY COUNTY ASSESSOR
The undersigned, having reviewed the plans and specifications for the improvements to
be constructed and the minimum market value assigned to the land upon which the improvements
are to be constructed, and being of the opinion that the minimum market value contained in the
foregoing Agreement appears reasonable, hereby certifies as follows: The undersigned Assessor,
being legally responsible for the assessment of the above described property, hereby certifies that
the minimum market value assigned to such land and improvements commencing on December
31, 1997 (to be calculated on January 2, 1998) shall not be less than $1,225,000 until termination
of this Agreement.
Assessor for Carver County, Minnesota
STATE OF MINNESOTA )
ss
COUNTY OF CARVER )
The foregoing instrument was acknowledged before me this _ day of
by . the County Assessor for Carver County, Minnesota.
Notary Public
JBD122231 B_3
KG400 -1
ATTACHMENT A
Legal Description of Land
REDEVELOPMENT PROPERTY:
[to be completed prior to execution]
JBD122231
xc4 00 -1 B -4
ATTACHMENT B
Section 469.177, Subd. 8. Assessment agreements. An authority may, upon entering into
• development or redevelopment agreement pursuant to section 469.176, subdivision 5, enter into
• written assessment agreement in recordable form with the developer or redeveloper of property
within the tax increment financing district which establishes a minimum market value of the land
and completed improvements to be constructed thereon until a specified termination date, which
date shall be not later than the date upon which tax increment will no longer be remitted to the
authority pursuant to section 469.176, subdivision 1. The assessment agreement shall be
presented to the county assessor, or city assessor having the powers of the county assessor, of the
jurisdiction in which the tax increment financing district is located. The assessor shall review
the plans and specifications for the improvements to be constructed, review the market value
previously assigned to the land upon which the improvements are to be constructed and, so long
as the minimum market value contained in the assessment agreement appears, in the judgment
of the assessor, to be a reasonable estimate, shall execute the following certification upon such
agreement:
The undersigned assessor, being legally responsible for the assessment of the
above - described property upon completion of the improvements to be constructed
thereon, hereby certifies that the market value assigned to such land and
improvements upon completion shall not be less than $
Upon transfer of title of the land to be developed or redeveloped from the authority to the
developer or redeveloper, such assessment agreement, together with a copy of this subdivision,
shall be filed for record and recorded in the office of the county recorder or filed in the office
of the registrar of titles of the county where the real estate or any part thereof is situated. Upon
completion of the improvements by the developer or redeveloper, the assessor shall value the
property pursuant to section 273.11, except that the market value assigned thereto shall not be
less than the minimum market value contained in the assessment agreement. Nothing herein shall
limit the discretion of the assessor to assign a market value to the property in excess of the
minimum market value contained in the assessment agreement nor prohibit the developer or
redeveloper from seeking, through the exercise of administrative and legal remedies, a reduction
in market value for property tax purposes; provided, however, that the developer or redeveloper
shall not seek, nor shall the city assessor, the county assessor, the county auditor, any board of
review, any board of equalization, the commissioner of revenue or any court of this state grant
a reduction of the market value below the minimum market value contained in the assessment
agreement during the term of the agreement filed of record regardless of actual market values
which may result from incomplete construction of improvements, destruction or diminution by
any cause, insured or uninsured, except in the case of acquisition or reacquisition of the property
by a public entity. Recording or filing of an assessment agreement complying with the terms of
this subdivision shall constitute notice of the agreement to any subsequent purchaser or
encumbrancer of the land or any part thereof, whether voluntary or involuntary, and shall be
binding upon them.
JBD122231 B -5
KG400 -1
SCHEDULE C
[Blank]
JBD122231
KG400 -1 C -
1
SCHEDULE D
$ 122,366.26
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF CARVER
THE CITY OF CHANHASSEN
LIMITED REVENUE TAX INCREMENT NOTE
The City of Chanhassen (the "City "), hereby acknowledges itself to be indebted and, for
value received, promises to pay to the order of Paulstarr Enterprises, Inc., a Minnesota
corporation, or its assigns, ( "Paulstarr Enterprises, Inc."), solely from the Available Tax Increment
generated by the Redevelopment Property and Minimum Improvements, to the extent and in the
manner hereinafter provided, the amount of this Note, being $122,366.25, on the Payment Dates
(as hereinafter defined) or such greater amount, if any, which the City is required to pay in
accordance with the terms of this Note.
Each payment on this Note is payable without interest and in any coin or currency of the
United States of America which on the date of such payment is legal tender for public and private
debts and shall be made by check or draft made payable to Paulstarr Enterprises, Inc. and mailed
to Paulstarr Enterprises, Inc. at its postal address within the United States which shall be
designated from time to time by Paulstarr Enterprises, Inc.
The Note is a special and limited obligation and not a general obligation of the City,
which has been issued by the City to aid in financing a "project ", as defined in Minnesota
Statutes Section 469.174, of the City consisting generally of defraying certain capital and
administration costs incurred and to be incurred by the City within and for the benefit of its
Redevelopment Project (the "Project "), and Tax Increment Financing District (the "District ").
EXCEPT AS TO THE OBLIGATION TO MAKE PAYMENTS FROM TAX
INCREMENT, THE NOTE IS NOT A DEBT OF THE CITY OF CHANHASSEN, OR THE
STATE OF MINNESOTA (THE "STATE "), AND NEITHER THE CITY OF CHANHASSEN,
THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON
THE NOTE, NOR SHALL THE NOTE BE PAYABLE OUT OF ANY FUNDS OR
PROPERTIES OTHER THAN AVAILABLE TAX INCREMENT, AS DEFINED BELOW.
Any payments on this Note which are due on any Payment Date shall be payable solely
from and only to the extent that the City shall have received as of such Payment Date "Available
Tax Increment." For the purpose of this Note, "Available Tax Increment means any Tax
Increment generated in the years 199_ through inclusive (or such longer time as provided
for in this Note) and received during the six (6) month period preceding a Payment Date, after
deducting therefrom the following amounts:
JBD122231 D-1
KG400 -1
(i) any payment made to Paulstarr Enterprises, Inc. of amounts due hereunder
with respect to previous Payment Dates, and
(ii) any amounts used to pay any amount pledged for the payment of tax
increment general obligation bonds issued by the City prior to the date hereof.
(iii) any amounts needed to make payments to a school district pursuant to
Minnesota Statutes § 469.177, subd. 10.
(iv) any amounts required to make fiscal disparities contributions and school
aid contributions.
For the purposes of this Note, "Tax Increment" means the portion of the real property taxes
generated with respect to the said Redevelopment Property and Minimum Improvements but
exclusive of Tax Increment generated with respect to improvements located on the
Redevelopment Property, prior to April 1, 1995 which is remitted to the City commencing in
1997, as Tax Increment pursuant to Minnesota Statutes § 469.174- 469.179.
For purposes of this Note, a "Payment Date" shall mean each of the Scheduled Payment
Dates set forth on Exhibit A attached hereto, and each additional Payment Date required in
connection with any extension of the term of this Note as set forth below, because of changes
made in Minnesota Statutes §§ 469.174- 469.179. Notwithstanding anything to the contrary in
this Note, on each of the Payment Dates, the City shall pay to Paulstarr Enterprises, Inc. all of
the Available Tax Increment up to the amount of the Scheduled Payment; but in no event shall
the aggregate of all such payments be in excess of $122,366.25. To the extent that on any
Payment Date the City is unable to make a payment from Available Tax Increment at equal to
the Scheduled Payment due on such date as a result of having received, as of such date,
insufficient Available Tax Increment, such failure shall not constitute a default under this Note
and, except as provided below, the City shall have no obligation under this Note, or otherwise,
to subsequently pay any such deficiency. If, and only if, on any Payment Date there is
insufficient Available Tax Increment to make the Scheduled Payment due on such date and such
insufficiency is a result of changes made in Minnesota Statutes §§ 469.174- 469.179 subsequent
to the date of the Contract for Private Redevelopment dated between the City and
Paulstarr Enterprises, Inc. (the "Redevelopment Contract "), the amount of such deficiency in the
Scheduled Payment shall be deferred and shall be paid on the next Payment Date on which the
City has Available Tax Increment in excess of the amount necessary to make the Scheduled
Payment due on such Payment Date, and if such deficiency has not been paid in full by the final
Scheduled Payment Date set forth on Exhibit A attached hereto, then the term of this Note shall
be extended to include additional successive Payment Dates on which any Available Tax
Increment will be applied to the payment of such accrued and unpaid deficiencies in the
Scheduled Payments to be made hereunder. In no case, however, shall the term of this Note and
the City's obligation to make payments hereunder, extend beyond the last date upon which the
City receives tax increment based upon construction of the Minimum Improvements or the
expiration of the Tax Increment District, whichever comes first.
This Note shall not be payable from or constitute a charge upon any funds of the City of
Chanhassen, and the City shall not be subject to any liability hereon or be deemed to have
JBD122231
KG400 -1 D -2
obligated itself to pay hereon from any funds except the Available Tax Increment, and then only
to the extent and in the manner herein specified.
Paulstarr Enterprises, Inc. shall never have or be deemed to have the right to compel any
exercise of any taxing power of the City or of any other public body, and neither the City nor
any council member, officer, employee or agent of the City, nor any person executing or
registering this Note shall be liable personally hereon by reason of the issuance or registration
hereof or otherwise.
This Note shall not be transferable or assignable, in whole or in part, by Paulstarr
Enterprises, Inc. without the prior written consent of the City.
This Note is given subject to the limitation contained in Section 5.5 of the Redevelopment
Contract.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required
by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be
performed precedent to and in the issuance of this Note have been done, have happened, and have
been performed in regular and due form, time, and manner as required by law; and that this Note,
together with all other indebtedness of the City outstanding on the date hereof and on the date
of its actual issuance and delivery, does not cause the indebtedness of the City to exceed any
constitutional or statutory limitation thereon.
IN WITNESS WHEREOF, the city council or the City of Chanhassen has caused this
Note to be executed by the manual signatures of the Mayor and the City Manager of the City and
has caused this Note to be dated as of
Mayor City Manager
JBD122231 D-3
KG400 -1
EXHIBIT A
Scheduled Payment Dates
and Amounts of Scheduled Payments
Scheduled Scheduled
Pavment Dates Pavments'
July 31, 1999
$20,394.37
December 31, 1999
20,394.38
July 31, 2000
20,394.37
December 31, 2000
20,394.38
July 31, 2001
20,394.37
December 31, 2001
20,394.38
'Scheduled payments are to be made up to these amounts but only from Available Tax
Increment.
JBD122231
xc4 00 -1 D -4
EXHIBIT B
Description of Redevelopment Property
REDEVELOPMENT PROPERTY:
[to be completed prior to execution]
JBD122231 D-5
KG400 -1
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April 1997
Development Proposal For
Paulstarr Enterprises, Inc.
Kennedy & Graven Code #JBD8760 CH130 -42
Carver County Estimated Taxes for 1997
Minimum Market Value:
$1,225,000
- 100.000
$1,125,000
x 4.6%
$ 51,750
+ 3,000
(3% of the first
$100,000 of Market
Valuation)
$ 54,750
x 149% (Estimated Tax Capacity %)
$ 81,577.50 Total Estimated Taxes
PROPOSED DEVELOPMENT INCENTIVE
$ 81,577.50 Yearly Taxes
40.788.75 Fiscal Disparities /School Aid*
$ 40,788.75 Total Estimated Incentive Per Year
*
EX3
This property is located within an Economic Development Tax Increment Financing
District, thus, you must pay into fiscal disparities and school contributions.
To be used only for special assessments and land write -down
PROPOSED PAYMENT SCHEDULE
IF PROJECT IS COMPLETED BY JANUARY 1. 1997
Estimated Increase in Taxes
gAadmi n \tg \pau Istarr.doc
1998 $ 40,788.75
1999 $ 40,788.75
2000 $ 40.788.75
$ 122,366.25 Estimated Total Incentives