Private redev agreement with Chan Inn g
CITY OF -
I ,1!0' CHANHASSEN
I ,• 690 COULTER DRIVE s P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
(612) 937-1900 • FAX (612) 937-5739
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MEMORANDUM
ITO: Housing and Redevelopment Authority
FROM: Todd Gerhardt, Assistant Executive Director
1 DATE: September 14, 1990
I SU •J: Consider Approval of a Private Redevelopment Agreement
with the Chanhassen Inn, Inc.
I , Attached for the HRA's consideration is a Private Redevelopment
Agreement between the HRA and the Chanhassen, Inn, Inc. The
Chanhassen Inn is located on Lot 3, Block 1, Zamor Addition (see
IAttachment #1) .
The attached contract is very similar to the contract we entered
I into with PMT, Country Hospitality Suites, etc. The Chanhassen Inn
is requesting special assessment assistance to write down
$11, 662. 13 worth of public improvements that were assessed against
their property as part of the Phase II downtown improvements.
IIPresently the HRA/Redevelopment District is capturing $49, 619.00
per year in taxes from the Chanhassen Inn. In this case, the HRA
could provide a total write down of special assessments with less
than one years worth of taxes.
11 One Years Worth of Taxes $49, 619.00
Total Special Assessment $11,662 . 13
Remaining Increment $37,956.87
IIRECOMMENDATION
Staff would recommend approval of the Private Redevelopment
I Agreement with Chanhassen Inn, Inc. and their request for
$11,662. 13 in special assessment assistance.
ATTACHMENTS
II1. Location map.
2. Private Redevelopment Contract
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' CONTRACT
FOR
PRIVATE REDEVELOPMENT
By and Between
' THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF CHANHASSEN,
and
CHANHASSEN INN, INCORPORATED
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CONTRACT FOR PRIVATE REDEVELOPMENT
THIS AGREEMENT, made on or as of September 11, 1990, by and between '
the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF
CHANHASSEN, a public , body corporate and politic (hereinafter
referred to as the "Authority") , established pursuant to Laws of
Minnesota 1947, Chapter 487, as amended, being Minnesota Statutes,
Chapter 469 (hereinafter referred to as the "Act") , and having its
principal office at 690 Coulter Drive, Chanhassen, Minnesota and
CHANHASSEN INN, INCORPORATED, a Minnesota Corporation, (hereinafter
referred to as the ("Redeveloper") , having its principal office at
531 West 79th Street, Chanhassen, MN 55317.
WITNESSETH:
WHEREAS, the Authority was created pursuant to law and was
authorized to transact business and exercise its powers by a
resolution of the Common Council of the City adopted on March 25,
1974; and
WHEREAS, in furtherance of the objectives of the Act., the
Authority 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 (hereinafter referred to as the "Project") in
an area (hereinafter referred to as the "Project Area") located in
the City; and
WHEREAS, as of the date of this Agreement there has been
prepared and approved by the Authority and the City Council of the
City pursuant to the Act a redevelopment plan for the Project,
dated April, 1990 (which amendment is hereinafter referred to as
"Modification No. 10" and which plan, as amended, and as it may
hereafter be further amended, is hereinafter referred to as the
"Redevelopment Plan") ; and
WHEREAS, a major objective of the Redevelopment Plan is to
stimulate and revitalize the City's downtown commercial area into
a strong, community level, retail center by rehabilitation and
redevelopment of certain business property; and
WHEREAS, the Redeveloper has submitted and the Authority has I
approved and accepted plans for the development of certain areas
located within the Project Area; and I
WHEREAS, the Authority and the Redeveloper desire to enter
into this Agreement in order to set forth the rights and
responsibilities of each with respect to the development proposed
by the Redeveloper within the Project Area; and
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WHEREAS, the Authority believes that the redevelopment of the
Project Area 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 Project has
been undertaken and is being assisted.
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:
ARTICLE I
' Definitions
Section 1.1 Definitions. In this Agreement, unless a
different meaning clearly appears from the context:
"Act" means the Economic Development Act, Minnesota Statutes,
Chapter 469, as amended.
"Agreement" means this Agreement, as the same may be from
time-to-time modified, amended, or supplemented.
"Authority" means the Housing and Redevelopment Authority in
and for the City of Chanhassen.
"Certificate of Compliance" means the certification, in the
form of the certificate contained in Exhibit C attached to and made
a part of this Agreement, provided to the Redeveloper pursuant to
Section 3.4 of this Agreement.
"City" means the City of Chanhassen.
"Completion of Construction" means the completion of
construction of the Minimum Improvements except for tenant finish
work.
"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 as
detailed as the plans, specifications, drawings and related
documents which are submitted to the building inspector of the
1 City, and (b) shall include at least the following: (1) site plan;
(2) foundation plan; (3) basement plans; (4) floor plan for each
floor; (5) cross sections of each (length and width) ; (6)
elevations (all sides) ; and (7) landscape plan.
"County" means the County of Carver.
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"Development" means the Minimum Improvements to be constructed 111 on the Redevelopment Property all in accordance with the provisions
of this Agreement.
"Development" means the Minimum Improvements to be constructed I
on the Redevelopment Property all in accordance with the provisions
of this Agreement.
"Development Plans" means the drawings, plan sheets and ,
descriptive narrative contained in Exhibit B.
"Event of Default" means an action by the Redeveloper listed 1
in Article VII of this Agreement.
"Minimum Improvements" means the improvements to be
constructed by the Redeveloper on Parcel 1 of the Redevelopment
Property, and which, upon completion, will have a market value of
not less than $920,000.00 as determined by the County Assessor. '
"Minnesota Environmental Policy Act" means the statutes
located at Minnesota Statutes, Sections 116D.01 et seq. , as
amended. I
"Minnesota Environmental Rights Act" means the statutes
located at Minnesota Statutes, Sections 116B.01 et seq. , as
amended.
"National Environmental Policy Act: means the federal law
located at 42 U.S.C. §331 et seq. , as amended.
"Project" means the Chanhassen Downtown Redevelopment Project.
"Project Area" means the real property located within the
boundaries of the Project.
"Project Improvements" means the improvements to be I
constructed by the City to benefit and serve. the Minimum
Improvements in accordance with the provisions of Article V of this
Agreement.
"Redeveloper" means Chanhassen Inn, Inc. , a Minnesota
Corporation. ,
"Redevelopment Property" means the real property described in
Exhibit A of this Agreement. I
"Redevelopment Plan" means the Chanhassen Downtown
Redevelopment Project Plan, as amended as of the date of this
Agreement.
"Special Assessment" means, for the purposes of Section 3.5 of
this Agreement, the special assessments levied against the
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Redevelopment Property by the City to finance the cost of the
public improvements constructed as part of City Project 86-11B,_and
shall also include all special assessments pending or levied
against the Redevelopment Property.
"State" means the State of Minnesota.
' "Tax Increment" means that portion of the real property taxes
which is paid with respect to the Redevelopment Property and which
is remitted to the Authority as tax increment pursuant to the Tax
11 Increment Act, after reduction (if any) of fiscal disparities
contributions which are mandated by state law to be made with
respect to any parcel.
' "Tax Increment Act" means Minnesota Statues, Sections 469.174
through 469.179, of the Economic Development Act.
"Tax Official" means any City or County Assessor; County
Auditor; City, County or State Board of Equalization, the
Commissioner of Revenue of the State, or any State or Federal
District Court, the Tax Court of the State, or the State Supreme
Court.
"Unavoidable Delays" means delays which are the direct result
of strikes, other labor troubles, fire or other casualty to the
Minimum Improvements, litigation commenced by third parties which,
by injunction or other similar judicial action, directly results in
delays, or acts of any federal, state or local governmental unit or
any other cause beyond the control of Redeveloper which directly
results in delays.
Section 1.2. Exhibits - The following exhibits are attached
to and made a part of this Agreement.
' Exhibit A - Redevelopment Property Description
Exhibit B - Development Plans
Exhibit C - Certificate of Completion
11 Exhibit D - Special Assessment Schedule
Section 1.3. Rules of Interpretation
(a) This Agreement shall be interpreted in accordance with
and governed by the laws of the State of Minnesota;
(b) The words "herein" and "hereof" and words of similar
import, without reference to any particular section or
subdivision refer to this Agreement as a whole rather
than any particular section or subdivision hereof;
(c) References to any particular section or subdivision
11 hereof are to be section or subdivision of this Agreement
as originally executed; and
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(d) Any titles of the several parts, articles and sections of
this Agreement are inserted for convenience and reference r
only and shall be disregarded in construing or
interpreting any of its provisions.
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ARTICLE II
Representations and Warranties 11
Section 2. 1 Representations and Warranties by the Authority.
The Authority makes the following representations as the basis for
the undertaking on its part herein contained:
(a) The Authority is a housing and redevelopment authority
duly organized and existing under the laws of the State.
Under the provisions of the Act, the Authority has the
power to enter into this Agreement and carry out its
obligations hereunder.
(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", which operates
under and in accordance with the Tax Increment Act.
(d) Subject to the provisions of this Agreement, the
Authority proposes to provide, from the tax increment
generated by construction of the Minimum Improvements,
monies to be used to assist Redeveloper in the payment of
the Special Assessments. I
(e) The activities of the Authority 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.
Section 2.2. Representations and Warranties by the
Redeveloper. The Redeveloper represents and warrants that:
(a) The Redeveloper is an individual residing in Hennepin
County, Minnesota, has power to enter into this
Agreement. '
(b) The Redeveloper is the owner of the Redevelopment
Property; and will use its best efforts to construct the
Minimum Improvements in accordance with all local, state
or federal energy-conservation laws or regulations.
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• (c) The Redeveloper will use its best efforts to obtain, in
a timely manner, all required permits, licenses and
approvals, and will meet, in a timely manner, all
requirements of all applicable local, state and federal
laws and regulations which must be obtained or met before
the Minimum Improvements may be lawfully constructed.
(d) 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 or any restriction or 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.
' (e) There are no individuals or entities having an interest
or status with respect to the Redevelopment Property
' which would entitle such individuals or entities to any
relocation benefits or assistance as a result of the
performance by the Authority of its obligations
hereunder.
' ARTICLE III
Construction of Minimum Improvements and Public Improvements
Section 3 . 1 Construction of Minimum Improvements. The
Redeveloper agrees that it will construct the Minimum Improvements.
Redeveloper further agrees that it will operate and maintain such
Improvements all in accordance with the approved Construction Plans
and this Agreement. Nothing herein shall relieve the Redeveloper
from its obligation to prepare, and construct in accordance with,
such additional construction plans as may be required under the
City's normal construction permitting process.
Section 3.2 Construction Plans.
' (a) Submittal. Not later than October 1, 1990, the
Redeveloper shall submit Construction Plans to the Authority;
(b) Approval. The Construction Plans shall provide for the
construction of the Minimum Improvements and shall be in conformity
with the Redevelopment Plan, the Development Plans, this Agreement,
and all applicable state and local laws and regulations. The
1 Authority shall approve the Construction Plans in writing if, in
the reasonable discretion of the Authority: (i) the Construction
Plans conform to the terms and conditions of this Agreement; (ii)
the Construction Plans conform to the terms and conditions of the
' Redevelopment Plan; (iii) the Construction Plans conform to all
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applicable federal, state and local laws, ordinances, rules and
regulations; (iv) the Construction Plans are adequate to provide
for the construction of the Minimum Improvements; and (v) the
Construction Plans demonstrate a building design, local exterior
treatment, landscaping and other site amenities which in the
opinion of the Authority are harmonious with other development in
the District and contribute to the appearance of the area and
describe a facility which will, upon completion, have a market
value of not less than $920,000.00. Such Construction Plans shall,
in any event, be deemed approved unless rejected in writing by the
Authority, in whole or in part, within the time period described in
Section 3.6. Such rejection shall set forth in detail the reasons
therefor. If the Authority rejects the Construction Plans in whole
or in part, the Redeveloper may submit new or corrected
Construction Plans within thirty (30) days after written
notification to the Redeveloper of the rejection. The provisions
of this Section relating to approval, rejection and resubmission of
corrected Construction Plans shall continue to apply until the
Construction Plans have been approved by the Authority or until
this Agreement has been terminated pursuant to Article VIII. The
Authority's approval shall not be unreasonably withheld. Said
approval shall constitute a conclusive determination that the '
Construction Plans (and the Minimum Improvements, if constructed in
accordance with said plans) comply with the Authority's
satisfaction with the provisions of this Agreement relating 11 thereto.
(c) Changes. If the Redeveloper desires to make any
substantial change in the Construction Plans after their approval
by the Authority, the Redeveloper shall submit the proposed change
to the Authority for its approval. If the Construction Plans, as
modified by the proposed change, conform to the requirements of
this Section 3.2 of this Agreement with respect to such previously
approved Construction Plans, the Authority shall approve the
proposed change and notify the Redeveloper in writing of its
approval. Such change in the Preliminary Plans for Construction
Plans shall, in any event, be deemed approved by the Authority
unless rejected, in whole or in part, by written notice by the
Authority to the Redeveloper, setting forth in detail the reasons
therefor within the time period described in Section 3.17 ;
provided, however, that the period for the review of such proposed
changes shall not commence until the Executive Director has
acknowledged, in writing, the receipt of such proposed changes.
Section 3.3 Commencement and Completion of Construction.
Subject to Unavoidable Delays, the Redeveloper shall commence
construction of the Minimum Improvements within ninety (90) days
after the execution of this Agreement, or on such other date as the
parties shall mutually agree. Subject to Unavoidable Delays, the
Redeveloper shall complete the construction of the Minimum
Improvements within twelve (12) months from the date of
commencement of the construction. All work with respect to the
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It Minimum Improvements to be constructed or provided by the
Redeveloper on the Redevelopment Property shall be in conformity
with the Construction Plans as submitted by the Redeveloper and
II approved by the Authority.
Section 3.4 Certificate of Completion. (a) Promptly after
completion of the Minimum Improvements in accordance with those
provisions of the Agreement relating solely to the obligations of
the Redeveloper to construct the Minimum Improvements, the
Authority will furnish the Redeveloper with an appropriate
instrument so certifying. Such certification by the Authority
shall be (and it shall be so provided in the certification itself)
a conclusive determination of satisfaction and termination of the
agreements and covenants in the Agreement with respect to the
obligations of the Redeveloper, and its successors and assigns, to
construct the Minimum Improvements and the dates for the beginning
and completion thereof. Such certification and such determination
I �. shall not constitute evidence of compliance with or satisfaction of
any obligation of the Redeveloper to any Holder of a Mortgage, or
any insurer of a Mortgage, securing money loaned to finance the
Minimum Improvements, or any part thereof.
(b) The certificate provided for in this Section 3.4 of this
Agreement shall be in such form as will enable it to be recorded in
I the proper office for the recordation of deeds and other
instruments pertaining to the Redevelopment Property. If the
Authority shall refuse or fail to provide any certification in
accordance with the provisions of this Section 3.4 of this
Agreement, the Authority shall, within the time period described in
Section 3.6, provide the Redeveloper with a written statement,
' indicating in adequate detail in what respects the Redeveloper has
failed to complete the Minimum Improvements in accordance with the
provisions of the Agreement and what measures or acts it will be
necessary, in the opinion of the Authority, for the Redeveloper to
take or perform in order to obtain such certification.
(c) The construction of the Minimum Improvements shall be
deemed to be completed when construction is substantially
completed, as certified by the Redeveloper's architect; provided,
however, that such determination shall not preclude the withholding
of a Certificate of Completion in accordance with the provisions of
this Section.
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Section 3.5 Public Improvements. (a) As an inducement to
' the Redeveloper to undertake the development contemplated by this
Agreement, the City by separate action has agreed to undertake, as
permitted by law, and to the extent of its control and authority to
construct or cause to be constructed the Public Improvements to
serve and benefit the Redevelopment Property.
' (b) The Redeveloper and Authority acknowledge that the City's
financing of the cost of constructing the Public Improvements will
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Section 5.3 Tax Increment. The Redeveloper and the Authority 1I
understand and agree that the Tax Increment generated from the �`
Redevelopment Property, which is actually remitted to the Authority
during each of the three consecutive calendar years beginning with 11
1992, shall be utilized as follows:
Tax Increment received in each of such years shall first be
used to pay up to one-third of the total principal amount of the
special assessments (as such amount is described in Section 3.5)
levied against the property as of January 1, 1990, as a result of
either previously levied special assessments or the Public
Improvements described in Section 3.5. So long as the Redeveloper
is not in default on any of its obligations under this Agreement,
the HRA shall pay from such tax increment any interest accruing on
such special assessments which become due and payable in and after
1992 .
Section 5.4 Tax Increment - Payment of Special Assessments.
The Authority shall accumulate the tax increment described in
Section 5.3, and may invest the same as it deems proper. For such
accumulated tax increment, the Authority shall annually pay over to
the Redeveloper beginning in 1992 the lesser of: (i) the
accumulated amount of tax increment, or (ii) the total amount of
Special Assessment due and payable in that year and the total
principal payments made on such Special Assessments from 1990 and
1991. It is the intent of the parties that the tax increment paid
over to the Redeveloper will be utilized to pay or assist in the
payment of the Special Assessments due and payable in the year it
is paid over and as reimbursement for previously made principal
payments.
Attached to this Agreement as Exhibit D is a schedule for the
payments contemplated under this Section. The schedule is intended
for descriptive purposes only, and may not correctly indicate the
actual amount of tax increment, years of receipt or the spread of
the Special Assessments.
Such payments from the three years of accumulated tax
increment shall continue to be made annually until either: ii) no
accumulations remain; or (ii) the Special Assessments have been
fully paid; or (iii) the Redeveloper is in default of its
obligations under this Agreement; and has failed to cure the same
in the manner provided in Article VI.
The parties agree and stipulate that notwithstanding any
provision in this Section 5.4 to the contrary, the Authority may,
in its sole discretion, utilize the accumulated tax increment to
fully or partially prepay the remaining Special Assessments.
Section 5.5. Nature of Obligation. The parties acknowledge .
and understand that:
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If (a) The obligation of the Authority is a revenue obligation
and is absolutely limited to the tax increment generated
by the Redevelopment Property and received in the years
1991, 1992 and 1993 only.
(b) The obligation of the Authority is additionally limited
to an amount equal to principal and interest on the
IISpecial Assessments.
Section 5. 6. Additional Tax Increment - Uses. Tax increment
II generated by the Redevelopment Property in excess of the amount
required to pay the Special Assessments shall be available to the
Authority for any purpose for which the expenditure of such funds
is permitted by law.
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ARTICLE VI
I1Events of Default
1 Section 6. 1. Events of Default Defined. The following shall
be "Events of Default" under this Agreement and the term "Event of
Default" shall mean, whenever it is used in this Agreement (unless
the context otherwise provides) , any one or more of the following
.. � events:
(a) Failure by the Redeveloper or Authority to pay when due
any payments required to be paid under this Agreement,
including, but not limited to the payment, when due, of
real estate taxes and installments of Special
Assessments.
(b) Failure by the Redeveloper to submit Construction Plans
when required in accordance with Section 3.2 of this
Agreement.
(c) Failure by the Redeveloper to provide and maintain any
insurance required to be provided and maintained by
Section 4.1 of this Agreement.
(d) Failure by the Redeveloper to commence and complete
construction of the Minimum Improvements pursuant to the
terms, conditions and limitations of Article III of this
Agreement.
(e) Failure by the Redeveloper or Authority to substantially
observe or perform any material covenant, condition,
obligation or agreement on their part to be observed or
performed hereunder.
Section 6.2. Remedies on Default. Whenever any Event of
Default referred to in Section 6. 1 of this Agreement occurs, the
party not in default may take any one or more of the following
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Exhibit A II
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Redevelopment Property Description: ; II
Lot 3, Block 1, Zamor Addition � II
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IFExhibit C
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CERTIFICATE OF COMPLETION
The undersigned hereby certifies that Chanhassen Inn, Inc.
1 has fully and completely complied with its obligations under
Article IV of that document entitled "Contract for Private
Development", dated September 7, 1990 between the Housing and
1 Redevelopment Authority in and for the City of Chanhassen and
Chanhassen Inn, Inc. with respect to construction of the
Improvements in accordance with the approved construction plans and
1 is released and forever discharged from its obligations to
construct under such above-referenced Article.
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Dated:
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By:
Clark D. Horn, Chairman
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•Don Ashworth, Executive Director
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Exhibit D
SPECIAL ASSESSMENT SCHEDULE
Specials1 (Principal) Tax Increment
1990 $2,904.03 $11,662.13
1991 2,904.03
1992 2,904.03
1993 2,904.03
1994 2,904.03
1995 2,904.03
1996 2,904.03
1997 2,904.03
1998 2,904.03
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NOTES:
Specials include $11, 662. 13 for ,
P pending assessment. Exhibit
assumes that it will be spread for nine years ending in 1998.
2 This is the anticipated tax increment based upon a completed
development in 1990 having a market value of approximately
$ 920, 000. 00 .
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CERTIFICATION BY COUNTY ASSESSOR
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 the land and improvements upon completion
and for the term of this Agreement shall not be less than
' $ 920, 000. 00 .
Orlin H. Schafer, County Assessor
for the City of Chanhassen
STATE OF MINNESOTA )
ss
COUNTY OF CARVER )
The foregoing instrument was acknowledged before me this day
of for the City of Chan1990, by Orlin H. Schafer, the County Assessor
hassen.
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Notary Public
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