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4e. Rosemount, Dev Contract m. CITYOF 11 CHANHASSEN 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937-1900 MEMORANDUM TO: Don Ashworth, City Manager FROM: Todd Gerhardt, Administrative Assistant ' DATE: November 23 , 1988 ' SUBJ: Development Contract for Rosemount, Inc. Attached for the City Council' s review is a summary prepared by John Dean of the Lefever firm regarding the development contract for Rosemount, Inc. Mr . Dean' s summary highlights the key elements within the proposed contract. A final draft of the contract will be completed as soon as the feasibility study has been completed and the establishment of a Minimum Market Value by the Carver County Assessor. • Staff will be sending the final draft of the contract to all Council members after the above information is received. However, to stay on schedule, staff is recommending the City Council approve the develop- ment contract with the three conditions outlined by John Dean and any changes the HRA or City Council have regarding their review of the final draft of the contract. RECOMMENDATION Staff recommends the approval of the development contract between the City of Chanhassen, the Chanhassen Housing and Redevelopment Authority and Rosemount, Inc. with the following conditions: 1 . The site plan review process be completed and the approved • site plan and any stipulations therein be made a part of the concept plan (Exhibit B of the CPD) . 2 . The feasibility study for the public improvements be completed and approved and the description of the public improvements as shown and described in the approved feasibility study be made a part of the concept plan as Exhibit F of the CPD. 3 . All other preconditions and contingencies to closing be removed or waived by the developer. 4 . Any changes the City Council or HRA may have during their review of the final draft of the development contract. ATTACHMENTS 1 . Summary letter from John Dean. 40' LeFevere Lefler Kennedy O'Brien & Drawz a Professional I Association 2000 First Bank Place West November 17 , 1988 Minneapolis Minnesota 55402 . • Telephone(612)333-0543 Telecopier(612)333-0540 Mr. Todd Gerhardt J. Dennis O'Brien City of Chanhassen John E. Drawn y David J. Kennedy 690 Coulter Drive Joseph E. Hamilton P. 0. Box 147 John B. Dean Chanhassen, MN 55317 Glenn E. Purdue Richard J Schieffer Charles L. LeFevere Re: Chanhassen/Rosemount Development Contract James J.Thomson,Jr — Thomas R. Galt Steven B.Schmidt Dear Todd: John G. Kressei James M.Strommen Enclosed please find my revised summary of the — Ronald H Batty William P Jordan development contract. This summary is based upon the William R. Skallerud latest figures which are available to me. I recommend — Corrine A. Heine that you send this summary to the HRA and Council in the David D. Beaudoin — Steven M.Tallen agenda packet for the meetings during which the contract — Mary Frances Skala will be considered. If I get better numbers before then, Leslie M.Altman I will send you a revised summary. Timothy J. Pawlenty Rolf A. Sponheim Julie A. Bergh The summary should remain otherwise accurate. The Darcy L. Hitesman provisions which are still being negotiated will not, as David C. Roland Karen A. Chamerlik far as I can determine, effect the summary. - Paul D Baertschi Arden Fritz Respectfully yours, Clayton L. LeFevere,Retired glikk o Herbert P. Lefler, Retired 'ohn B. Dean JBD:rsr Enclosure cc: Fred Hoisington Andrew Merry r- NOV 18 1988 CITY Lr1A111--1,-L,,5c,f11 1 MEMORANDUM 1 TO: CHAIRPERSON AND HRA COMMISSIONERS and MAYOR AND CITY 1 COUNCIL MEMBERS FROM: JOHN DEAN, HRA COUNSEL DATE: November 17, 1988 RE: CONTRACT FOR PRIVATE DEVELOPMENT (CPD) - ROSEMOUNT INC. 1 iThe City Council on November 14 and the HRA on November 17 will be considering approval of a redevelopment contract between 1 the City, the HRA and Rosemount. The purpose of this memorandum is to provide a basic summary of the key elements of the contract, to analyze the risks atten- dant to such a development and to provide our recommendation. A. THE CONTRACT. The CPD is one of five instruments which, taken together, will control the sale of the property, the idevelopment of the property, the public improvement infrastruc- ture necessary to serve the development, and the tax increment assistance which the HRA will provide in furtherance of the 1 development. The five instruments are: (1) Purchase Agreement - Alscor to HRA 1 (2) Purchase Agreement - HRA to Rosemount (3) CPD (4) Assessment Agreement (5) Deficiency Agreement ' The Purchase Agreements provide that, if the Contract for 1 Private Development is executed by the parties, (and certain other conditions and contingencies are met) Alscor will convey 1 the property to the HRA for $1 , 442 , 000 in cash payable at the I MEMORANDUM November 17, 1988 Page 2 Closing. At a simultaneous Closing, the HRA will convey the property to Rosemount for $1 .00 . Rosemount will, immediately , thereafter convey Outlot A, Chanhassen Business Park Second Addition to the City together with $32, 849 . 00 as combined park- ' land trail dedication and fees in lieu of dedication. The difference between the HRA' s purchase price of $1 ,442 ,000 and its sale price of $1 . 00 is $1, 441 ,999. That difference, known as the ' "land writedown" is being financed through the sale of the City' s G.O. taxable tax increment bonds . Debt service on those bonds is to be paid from the tax increment generated by the improvements to be constructed by Rosemount on the property. The tax incre- ' ment will also be used to amortize existing special assessments levied against the property (approximately $96, 623 . 19) and the portion of the cost of the new public improvements to be con- structed which would have been specially assessed against the property (approximately $1 , 000 , 000) . Obviously, the City and the ' HRA are significantly "on the line. " This brings us to the CPD. This long and somewhat complex document has, as we see it, two essential functions. I (1) To promote a development within the City which is viewed by the decision makers as desirable for the community. One which will contribute to the orderly development of the City; will bring jobs and people into town; will enhance the commercial tax base; and will assist the City in financing its public improve- ment infrastructure. (2) To assure, to the extent possible, that the City, the HRA and the taxpayers of the community make it through with their hides intact. 1 I ' MEMORANDUM November 17 , 1988 Page 3 (1) The Development. In accordance with the terms of the CPD, if the property is conveyed to Rosemount, Rosemount will undertake to construct an rapproximately 330, 000 square foot facility which will house office, warehouse and manufacturing activities. The development will also include parking and related site improvements. The site plan and related documents are currently under review as part of the City' s customary review and approval process . Once ' approved, those documents will become part of the concept plan documents, and will become part of the CPD. Rosemount will commence construction activities (site grading) this year and will have completed construction by the beginning of 1990 . The development will have a captured market ' value upon completion of approximately $17, 500 ,000 . 1 The CPD also provides for construction of certain public improvements to be completed next year. The City is currently finalizing its feasibility study for the public improvements; and the general description of them will be contained as an exhibit ' to the CPD. 1 This figure cannot be fixed until the Carver County Assessor has reviewed plans for the development. The actual figure will be known prior to execution of the CPD. The current figure includes 15 million for construction, 1 . 5 million for build-out and 1 million for captured land value. The assessor ' s EMV equals 92% of market value or approximately ' $16, 100 ,000 . In addition to the captured EMV, there is approximately $450, 000 of uncaptured EMV which represents the base value of the property at the time the district was ' certified. Although the developer will also be paying taxes on the uncaptured EMV, those taxes will not be tax incre- ment. Consequently, that component of value and taxes is being disregarded in this memo. I MEMORANDUM November 17, 1988 Page 4 (2) Risk Reduction. Because this development is being financed in part through the sale of bonds, it is essential that protections be built into 11 the CPD which will limit the risk to the City and to the HRA that tax increment will be insufficient to pay debt service on those bonds. The CPD addresses this concern in a number of ways. I 1. Developer. The developer, Rosemount Inc. , appears to be a highly successful and financially sound business entity. It has already entered into contracts for the construction of the development and will be financing the construction through a combination of its own equity and the equity of its parent corporation, Emerson Electric Company. The CPD prohibits the transfer of Rosemount' s interest in the contract or in the development until construction has been completed. 2 . Back-up Guarantee. Rosemount' s obligation to pay a fixed level of tax increment is guaranteed by its parent corporation - Emerson Electric Company. Emerson, a "Fortune 500 Company" whose corporate obligations carry the highest available rating. Consequently, if Rosemount fails to make the payments required of it under the CPD during the first two years of full tax increment, the City and HRA can look to Emerson. 3 . Value and Tax Increment. The development upon comple- tion will have a captured estimated market value (EMV) of approximately $16 , 100 , 000; and is "anticipated" to generate 2an annual tax increment of approximately $936 , 063 . The tax increment will be used to pay debt service on the tax increment bonds and to pay existing and new special assessments. The annual level of those payments fluctuates from year-to-year, the average is approximately $419 ,332 3 consequently, the "antici pated" tax increment will in most years be sufficient. 4 , 2 This figure assumes i) $16 , 100 , 000 EMV, ii) no appreciation 1 in the EMV during the term of the tax increment district, and taxes computed in accordance with Chapter 719 , Laws 1988. 1 3 This figure is subject to change if there is a change in the cost of the public improvements . We are informed that the figure may depart upward in the cost estimates which will be contained in the feasibility report. 4 At the end of this memorandum is Table A which shows the ' relationship between tax increment revenues and expenditures from year-to-year. Again, the table assumes all the values and expenditures described above. MEMORANDUM November 17, 1988 Page 5 For treatment of the shortfall years, see paragraph 4 (b) below. 4 . "Anticipated" The "anticipated" tax increment can be ' unrealized as a result of "unanticipated" events . Consequently, the CPD addresses that concern in two ways: (a) Assessment Agreement. This instrument, required in the CPD to be executed at Closing will bind the parties and the county assessor to a minimum ' market value which can be given to the property beginning in January 2, 1989, and continuing for the life of the bonds . This value ($15, 000, 000) will generate anticipated taxes sufficient to ' cover all the City' s costs and expenses. The assessor may value of the property above the minimum stipulated value, but not below. (b) Deficiency Agreement. Even though a floor is set for the market value by the Assessment Agreement, the tax increment realized by the value may be less than expected due to events such as legisla- tive alteration of the tax increment laws. Therefore, the CPD also requires that an instru- ment known as the Deficiency Agreement also be executed at Closing. The purpose of the Defi- ciency Agreement is to obligate the developer to ' the payment of a fixed stream of money. If the tax increment payments are less than the agreed upon level of payments, the developer is required to pay the difference (the deficiency) to the HRA. You will note in Table A that deficiencies are expected in 1989 and 1990. It is this obligation which Emerson Electric Company will be guaran- i' teeing until two years of full tax increment have been received by the HRA. ' 5. Termination of Certain Assistance. In addition to the land writedown assistance which is payable from bond proceeds at Closing, the HRA is also providing special assessment reduction assistance over time. In the event that the developer fails to pay taxes , or fails to pay any deficiencies , the HRA can cancel future payments of that assistance. I I MEMORANDUM November 17 , 1988 Page 6 B. ARE THE PROTECTIONS ADEQUATE. The CPD places a legally binding obligation on Rosemount to pay an amount of money which will make the City and HRA whole even if Rosemount never builds the development. This obligation , is further guaranteed by Emerson for the first two years of full tax increment. If Rosemount or Emerson fail to honor their obligations, it may be necessary for the HRA to sue to compel I performance and recover damages. However, if Rosemount or Emerson elect that course, they will be abandoning Rosemount' s , right to receive well in excess of $700 ,000 of special assessment reduction assistance and they will be faced with the prospect of I losing in court. The greatest risk in this development, or in any other, is that the developer will become financially unable to honor its obligations. The risk appears to be mitigated in this case because of two factors : , (1) The apparent exceptionally strong financial condition of Rosemount and Emerson. (2) The fact that this development is to be internally financed (Rosemount and Emerson) . That means that in the event of financial problems, the property will be less likely to pass to a third party who has no obli- gations to the HRA or the City. C. CONCLUSION AND RECOMMENDATION. The negotiation of the CPD has been tremendously enjoyable. I Rosemount' s representatives have shown a high level of sophisti- cation and skill which is frequently lacking in the negotiation 11 I II MEMORANDUM November 17, 1988 Page 7 IIprocess. The process has been as extensive and as thorough as IIany which I have known; and the product, the CPD is an unusually well balanced agreement which, in my judgment resolves the Iessential concerns of the parties . In light of the foregoing, I recommend that the CPD be approved subject to the following Iconditions: Ii . The site plan review process be completed and the approved site plan and any stipulations thereon be made a part of the Concept Plan (Exhibit B of the CPD) . I 2 . That the feasibility study for the Public Improvements be completed and approved, and the description of the Public Improvements as shown and described in the I approved feasibility study be made a part of Exhibit F of the CPD. II 3 . That all other preconditions and contingencies to Closing be removed or waived by the developer. 0511ME04 .E14 I II II I I I I I II TABLE A I Tax Increment and Expenditure Analysis 1 1 Year Tax Increment Expenditures Surplus (Deficiency) 1988 0 0 0 II 1989 0 255, 623 (165, 623) 2 1990 235,000 284 , 688 (49 , 688) 2 1991 936, 063 493 , 039 443 , 024 3 1992 936,063 499, 594 436, 469 II 1993 936, 063 529 ,914 406 ,119 1994 936, 063 502 , 964 433 ,099 1995 936,063 528, 327 407 ,736 1996 936,063 496 , 412 439 , 651 1997 936,063 451 , 605 484 , 458 1998 936, 063 421 ,024 515 ,039 1999 936 , 063 311 , 588 624 , 476 I 2000 936 , 063 287 , 175 648 , 888 II II II II II 1 Assumptions and limitations are as described in the attached I memo. 2 Developer to pay over to HRA actual amount of deficiency. II 3 HRA to repay earlier deficiency payments to the extent provided in the Deficiency Agreement. I 11 I I/ 111 , LeFevere 1 Lefler Kennedy O'Brien & /golit, : a..._/c/ 0.a y lc.4si--,vc.�../ I Drawz a Professional I Association / J 1 �4.Jc A/o/.. J iN g. Lc w 2000 First Bank Place West /Y1��o.c=+-✓a•rs t.S C b r• 1't G Minneapolis November 14, 1988 Minnesota 55402 tai r/ hi f P mod.^rH,4 mj/72_e/ Jo".' Telephone(612)333-0543 Telecopier(612)333-0540 Mr.. Andrew Merry CO�— / • •-. //9ieR c.,.. J1, I J. Dennis O'Brien 3055 Old HW 8 John E. Drawz y DavidJ Kennedy Minneapolis, MN 55418 Joseph E. Hamilton IJohn B. Dean Mr. Don Ashworth Glenn E. Purdue Richard J Schieffer City of Chanhassen Charles L. LeFevere 690 Coulter Drive IJames J.Thomson,Jr. p O. Box 14 7 Thomas R. Galt Steven B Schmidt Chanhassen, MN 55317 John G Kressel IJames M Strommen Re: Chanhassen/Rosemount Development Contract Ronald H Batty William P Jordan William R. Skallerud Gentlemen: Corrine A. Heine IDavid D. Beaudoin Steven M Tallen Enclosed please find the most recent draft of the develop- Mary Frances Skala ment contract. Leslie M Altman ITimothy J nheim Pawlenty I expect that the negotiations are very near an end, and Rolf A. Bergh P g y , Julie A. Bergh the next draft will probably be the final form. Conse- DarcyL. Hitesman quently, if there are any modifications or additional David C. Roland KarenA. Chamerlik I Paul D Baertschi points which need to be considered, please let me know soon. Arden Fritz Clayton L. LeFevere, Retired Respectfully yours, I Herbert P Lefler, Retired 1 , IJ'i B. Dean JBD:rsr Enclosure I I I NOV 15 1988 ICITY.OF CHANIASSEN I ' 11/09/88(4) 1 I 1 CONTRACT FOR PRIVATE DEVELOPMENT Among THE HOUSJNG AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CHANHASSEN 1 and I THE CITY OF CHANHASSEN, MINNESOTA and ROSEMOUNT INC. ' 1 This Instrument Drafted by: ' LeFevere, Lefler, Kennedy, O'Brien & Drawz a Professional Association 2000 First Bank Place West Minneapolis, Minnesota 55402 Telephone: (612) 333-0543 ' i I/ I TABLE OF CONTENTS ' Page Preamble 1,2 ARTICLE I. DEFINITIONS, EXHIBITS, RULES OF INTERPRETATION Section 1. 1. Definitions 3 Section 1.2. Exhibits 4 Section 1.3. Rules of Interpretation 4 ARTICLE II. REPRESENTATIONS AND WARRANTIES ' Section 2. 1. Representations and Warranties by the HRA5 Section 2.2. Representations and Warranties by the Developer 5 Section 2.3. Representations and Warranties by the City6 ARTICLE III. SALE AND CONVEYANCE Section 3. 1. Sale by HRA 6 ARTICLE IV. CONSTRUCTION OF IMPROVEMENTS Section 4. 1. Agreement to Construct 7 ' Section 4.2. Demolition 7 Section 4.3. Soil Correction 7 Section 4.4. Conformity with Concept Plans 7 Section 4.5. Completion of Construction 8 Section 4.6. Security 9 Section 4.7. Certificate of Completion 9 Section 4.8. Public Improvements 10 Section 4.8A. Special Assessment Reduction Program 11 Section 4.9. Construction Easements 13 Section 4. 10. Time to Respond - Authority 14 ARTICLE V. INSURANCE Section 5.1. Developer's Obligation 14 ' ARTICLE VI. TAX INCREMENT Section 6. 1. Real Property Taxes 16 I 11 11 1 Page ARTICLE VII. FINANCING Section 7. 1. Financing 19 Section 7.2. Limitations Upon Encumbrance of Property 19 Section 7.3. Copy of Notice of Default to Lender 19 Section 7.4. Mortgagee Not Obligated to Construct 20 Section 7.5. HRA's Option to Cure Default 20 Section 7.6. Subordination 21 ARTICLE VIII. PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER Section 8. 1. Representation as to Redevelopment 21 Section 8.2. Prohibition Against Transfer of Property and Assignment of Agreement 22 Section 8.3. Approvals 23 Section 8.4. Upon Completion Z3 Section 8.5. Sale of Residual Land 23 ARTICLE IX. EVENTS OF DEFAULT Section 9. 1. Events of Default Defined 24 Section 9.2. Remedies on Default 25 Section 9.3. No Remedy Exclusive 26 Section 9.4. No Additional Waiver Implied by One Waiver26 ARTICLE X. ADDITIONAL PROVISIONS ' Section 10. 1. Conflict of Interests; Representatives Not Individually Liable 26 Section 10.2. Non-Discrimination 27 Section 10.3. Provisions Not Merged with Deed 27 Section 10.4. Notice of Status and Conformance 27 Section 10.5. Notices and Demands 28 , Section 10.6. Counterparts 28 r I/ t 1 ii I Is CONTRACT FOR PRIVATE DEVELOPMENT THIS AGREEMENT, made and entered into this day of ' 1988, by and between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CHANHASSEN, a Minnesota public body corporate and politic ("HRA") , the CITY OF CHANHASSEN, a Minnesota Municipal Corporation ("City") , and ROSEMOUNT INC. , a Minnesota corporation ("Developer") . WITNESSETH: WHEREAS, the HRA 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 HRA has under- taken a program for the clearance and reconstruction or rehabilitation of blighted, deteriorated, deteriorating, vacant, unused, underused or inappro- priately used, areas of the City, and in this connection is engaged in carry- ing out a redevelopment project known as the Chanhassen Downtown Redevelopment Project in the area (hereinafter defined 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, and subsequently amended, pursuant to the Act a redevelopment plan for the Project Area, 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, 11 11 I Retail center by rehabilitation and redevelopment of certain business property; and I WHEREAS, the HRA, the City and the Developer desire to enter into this Agreement in order to set forth the rights and responsibilities of each with respect to the Development; and WHEREAS, the HRA and the City believe that the Development and fulfill- ment 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 Development has been undertaken and is being assisted. NOW, THEREFORE, in consideration of the premises and the mutual obliga- , tions of the parties hereto, each of them does hereby covenant and agree with the other as follows: t 1 I I I 2 1/ 1 ARTICLE I ' DEFINITIONS, EXHIBITS, RULES OF INTERPRETATION 1.1) Definitions - In this Agreement, the following terms have the following respective meanings unless the context hereof clearly requires otherwise. (01) Tax Increment Bonds (TIF Bonds) - The general obligation taxable tax increment bonds issued by the City to finance the acquisition of the Property and related costs. The term also includes any bonds or obligations issued to refund any TIF Bonds. (02) Concept Plan - The drawings and narrative description of the Devel- opment contained in Exhibit B. r (03) Development - The Improvements and the Property. (04) Construction Contract - A contract that provides for completion of ' the Improvements constituting the Development. (05) District - The Project Area. ' (06) Financial Commitment - A written document which sets forth the conditions which, if satisfied by Developer, entitled Developer to a loan in a specified amount at specific loan terms. (07) Improvements - Each and all of the Improvements specified and provided in the Concept Plan which are approved by the HRA and City as hereinafter provided and consisting of an approximately 330,000 square foot facility housing office, warehouse and manufacturing activities; together with related parking and site improvements. (08) Market Value - The market value of the Property as determined by the County Assessor of the County of Carver in accordance with Minnesota Statutes 1984, Section 273.11 (or as finally adjusted by an assessor, Board of Equalization, Commissioner of Revenue or any court of competent jurisdiction) . (09) Maturity Date - The earlier of i) the date on which the last TIF Bonds issued to assist the Development mature, or are paid, defeased or redeemed according to their terms, or ii) November 1, 2000. (10) Project Area - The Chanhassen Downtown Redevelopment District as established by the HRA and the City. (11) Property - The real property described in Exhibit A as the "Property" and consisting of approximately 58 acres, more or less. I MI 3 (12) Public Improvements - All of the public improvements to be con- structed by the City intended to serve and benefit the Development. the nature and description of the Public Improvements is contained in Exhibit F. (13) Redevelopment Plan - The Chanhassen Downtown Redevelopment Plan. (14) Unavoidable Delay - A forced delay of any party in the performance of obligations which is the direct result of unforeseeable events beyond the control of the Developer, the City, or the HRA and without their fault or negligence, including, but not restricted to, acts of God, acts of any other party, fire, floods, epidemics, quarantine restrictions, strikes, freight embargoes, unavailability of materials, unusually severe weather or delays of contractors, subcontractors or materialmen. (15) Affiliated Entity - Any division or subsidiary of Developer or of Developer's parent corporation. (16) Act - the Housing and Redevelopment Authorities Act, Minnesota Statutes, Sections 469.001 to 469.047, as amended. 1.2) Exhibits - The following exhibits are attached to and made a part 1 of this Agreement. A. Property Description; B. Concept Plans; C. Certificate of Completion; D. Assessment Agreement and Assessor's Certification; E. Agreement to Pay Deficiencies; F. Public Improvements. 1.3) Rules of Interpretation - (01) This Agreement will be interpreted in accordance with and governed by the laws of the State of Minnesota; (02) The words "herein" and "hereof" and words of similar import, without I reference to any particular section or subdivision refer to this Agreement as a whole rather than any particular section or subdivi- sion hereof; (03) References herein to any particular section or subdivision hereof are to the section or subdivision of this instrument as originally executed unless such section or subdivision has been subsequently amended, in which case references are to the section or subdivision as amended; and (04) Any titles of the several parts, articles and sections of this Agreement are inserted for convenience and reference only and will be disregarded in construing or interpreting any of its provisions. 4 1 11 ARTICLE II. REPRESENTATIONS AND WARRANTIES 2. 1) Representations and Warranties by the HRA - The HRA makes the following representations as the basis for the undertaking on its part herein contained: (01) The HRA is a housing and redevelopment authority duly organized and existing under the laws of the State. Under the provisions of the Act, the HRA has the power to enter into this Agreement and carry out its obligations hereunder. (02) The Development is a "redevelopment project" within the meaning of the Act and was created, adopted and approved in accordance with the terms of the Act. (03) The Development Area is a "tax increment district," which operates under and in accordance with the Tax Increment Act. (04) Subject to the provisions of this Agreement and the Purchase Agreement, the HRA will (i) acquire the Property; and (ii) once I acquired, convey the Property to the Developer for uses in accor- dance with this Agreement. (05) The activities of the Authority are undertaken for the purpose of 11 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. r2.2) Representations and Warranties by the Developer. The Developer represents and warrants that: (01) The Developer is a Minnesota corporation duly organized and in good standing under the laws of the State, has power to enter into this Agreement and has duly authorized the execution, delivery and 11 performance of this Agreement by proper action of its board of directors. (02) In the event the Property is conveyed to the Developer, the Developer will construct the Improvements in accordance with the terms of this Agreement and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations) . (03) The Developer 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 Improvements may be lawfully constructed. 1 5 (04) Neither the execution and delivery of this Agreement, the consumma- tion , y g 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 corporate restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which the Developer is now a party or by which it is bound, or constitutes a default under any of the foregoing. 2.3) Representations and Warranties by the City. The City represents ' and warrants that: (01) The City is a municipal corporation duly organized and existing under the laws of the State under relevant laws of the State, the City has the power to enter into this Agreement and to carry its obligations hereunder. (02) The City will, in accordance with the procedures provided in Minnesota Statutes, Chapter 429, utilize its best efforts to con- struct the Public Improvements when required pursuant to the terms of this Agreement. I ARTICLE III ' SALE AND CONVEYANCE 3. 1) Sale by BRA - The HRA and Developer have heretofore entered into that certain agreement entitled "Purchase Agreement" calling for the sale -by the HRA to Developer of the tracts of land described in the Purchase Agreement and in Exhibit A. The HRA and Developer intend that the provisions of the Purchase Agreement will control the sale and conveyance of the lands described in Exhibit A, and that the provisions of the Purchase Agreement are incorpo- rated hereat as though fully set out at this point. 6 I/ 1 1 1 ARTICLE IV. CONSTRUCTION OF IMPROVEMENTS 4. 1) Agreement to Construct - Subject only to delivery of title to the Property, Developer agrees that it will construct, operate and maintain the Improvements on the Property in accordance with the approved Development Plans and this Agreement. 4.2) Demolition - Developer will, at its sole expense, raze and remove all structures remaining on the Property at the time of conveyance by the HRA, the removal of which is necessary for construction of the Improvements. 1 4.3) Soil Correction - Developer will have the sole responsibility to P Y make any necessary soil correction and site improvements. Site improvements include, without limitation, grading, removal compacting, and replace of fill, ' construction of retaining walls, piling, footings, removal of gas services, telephone services, electrical services, sanitary sewers, water services, wells foundation, trees and basements. 4.4) Conformity with Concept Plans - Included in this Agreement as Exhibit are the Concept Plans for the Development. No building permit for construction of the Improvements will be issued unless the building plans are in conformity with the Concept Plans. If the Developer desires to make a material modification to the Concept Plans, it will submit the proposed changes to the HRA for its approval, which approval will not be unreasonably withheld. Such approval will be deemed to have been given unless the proposed modifications are rejected in a written instrument stating the reasons for such rejection within the time period described in Section 4. 10. For the purposes of this Section, a material modification will be deemed to include any of the following: 1 1 01) any modification which would depart from the conditions upon which any permit, or land use or environmental approval was given in connection with the Development; ' (02) any modification which could result in a reduction of the market value of the Development below the minimum market value contained in Exhibit D; (03) any modification in the building exterior design or treatment; (04) any reduction in the amount of green space, or in the quantity or size of nursery stock. Final construction plans and specification must be reviewed and approved by the City Building Official. 4.5) Completion of Construction - Subject to Unavoidable Delays, con- struction of the Improvements must commence by December 20, 1988, and be complete by January 1, 1990. "Commencement of construction" means, for the purpose of this Agreement, the date upon which Developer has commenced site improvement procedures as that term is used in Section 4.3. Developer agrees for itself, its successors and assigns, and every successor in interest to the Property, or any part thereof, that it, and such successors and assigns, will as soon as reasonably possible begin and diligently prosecute to completion the redevelopment of the Property through I the construction of the Improvements thereon, and that such construction will in any event be substantially completed within the period specified in this Section 4.5. It is intended and agreed, that such agreements and covenants , are covenants running with the land and that they will, in any event, and without regard to technical classification or designation, legal or otherwise, ' and except only as otherwise specifically provided in the Agreement itself, be, to the fullest extent permitted by law and equity, binding for the benefit of the community and the HRA and enforceable by the HRA against Developer and its successors and assigns. I 8 i Ir 4.6) Security As Security ' y - e rity for Developer's obligation to complete construction of the Improvements, Developer will cause Emerson Electric Company to join in the execution of the Deficiency Agreement in the form set forth in Exhibit E ("Deficiency Agreement") for the limited purposes set forth therein, such agreement to be delivered on the date upon which a closing occurs under the terms of the Purchase Agreement ("Closing"). 4.7) Certificate of Completion - Promptly after notification by Developer of substantial completion of the Improvements contemplated by the Concept Plans, the HRA will inspect the construction to determine whether such Improvements are completed substantially in accordance with the terms of this Agreement and the Concept Plans. If the HRA so determines, it will furnish Developer with a Certificate of Completion. Such Certification by the HRA will, except as further provided in this Section 4.7, be a conclusive deter- mination of satisfaction and termination of the agreements and covenants in this Agreement with respect to the obligations of Developer to construct the Improvements and of all of Developer's obligations under this Agreement except those contained in Subsections 4.8(02) , 4.8A(05) , 5. 1(02) , 5.1(03) , 5. 1(04) , 6.1(02) and Section 8.5 ("Surviving Obligations") . I/ The certification provided for in this section will be in recordable form, and will otherwise be in the form of Exhibit C attached hereto. If the HRA refuses or fails to provide Developer a certification in accordance with ' the provisions of this Section 4.7, the HRA will, within thirty days after written notification by Developer of substantial completion of the Improvements, provide it with a written statement, indicating in adequate detail in what respects it has failed to complete the Improvements in accordance with the provisions of this Agreement, or is otherwise in default, and what measures or acts will be necessary, in the reasonable opinion of the ' HRA, for Developer to take or perform in order to obtain such certification. 9 I 1 1 1 1 1 1 1 1 I 1 1 1 1 1 1 1 1 1 I. 4.8) Public Improvements - II (01) As an inducement to the Developer to undertake the Development contemplated by this Agreement, the City agrees 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 Property. The nature and description of the Public Improvements is contained on the attached Exhibit F. (02) The City agrees that as soon as reasonably possible after the date of this Agreement, it will take all such actions as may be necessary to undertake the construction of the Public Improvements as a public improvement project under Minnesota Statutes, Chapter 429, including the holding of all necessary public hearings and the preparation of plans and specifications for the Public Improvements. The City 11 agrees to undertake such actions and, except to the extent qualified or limited in this Agreement, to construct the Public Improvements in accordance with the plans and specifications approved by the Developer at such time and in such manner as to permit its timely construction by the Developer of the Improvements. (03) Prior to the commencement of construction by the City of the Public Improvements, the City will prepare plans and specifications for the Public Improvements. Such plans and specifications will be sub- mitted to the Developer for its review and approval as to consis- tency with the Improvements which the Public Improvements are intended to serve and benefit. The Developer may not object or fail to approve the plans and specifications for any portion of the 11 Public Improvements for any reason which could have been determined by a review of the attached Exhibit F. 11 10 I (04) The City's financing of the cost of constructing the Public Improvements will include the assessment of a portion of such cost against benefitted properties pursuant to and in the manner provided by Minnesota Statutes, Chapter 429. The Developer agrees that a portion of such cost will be assessed against the Property. The amount to be assessed against the Property is presently estimated to be equal to $ . The Developer agrees that it will not contest, on statutory, constitutional or other grounds, the amount of such assessments to the extent they are less than or equal to such presently estimated amounts. Nothing in this paragraph 4.8 (04) will be construed either to limit the opportunity of the City to levy assessments against the Property in an amount in excess of such presently estimated amounts or to limit the opportunity of the Developer to challenge, on the basis of benefit, the amount of any special assessment levy of the presently estimated amounts. (05) In its contract for the construction of the Public Improvements, the 11 City will obligate all contractors required to obtain policies of comprehensive general public insurance to also require that Developer be named as an additional insured on such policies. 4.8A) Special Assessment Reduction Assistance. As an additional inducement for Developer to locate its Development within the City of Chanhassen, the HRA agrees to make available to Developer certain special assessment assistance in accordance with the established policies of the HRA all as fully set out in this section. (01) (Intentionally left blank.) (02) Eligible Assessments. Beginning in 1989, the principal amount of all of the special assessments pending or levied with respect to the Property is $96,626. 18. The term "Eligible Assessments," as used herein, means the total of (i) all of the above-described assess- "! 11 1, ments, together with interest accrued on such assessments on January 1, 1989, plus (ii) all special assessments which arise or could arise against the Property (whether or not the same are actually levied) for the Public Improvements described in Exhibit F (which amount is anticipated to be $900,000) . (03) Level of Special Assessment Reduction Assistance. The HRA will pay, in the manner hereinafter provided, an amount equal to the lesser of i) the Eligible Assessments or, ii) the amount of $ , which constitutes an amount equal to 7% of the increase in market value of the Property as measured by the assessor's Estimated Market Value for 1988 and the stipulated minimum market value contained in the Assessment Agreement. In addition, the HRA shall also pay, at the time payment is made on the Eligible Assessments, all interest which is due with such payment. (04) HRA and City Obligation. (a) Beginning with the installments of the Eligible Assessments described in paragraph (02) , above, due and payable in 1989 and continuing thereafter until fully paid, the HRA will pay the semi-annual installments for such Eligible Assessments. Except as provided in paragraph (05) below, if the HRA fails to make such payments as the same become payable, the City will nevertheless release such assessments from the Property and seek payment therefor from the HRA, without recourse to Developer or the Property. (b) The City will forego levying the anticipated special assess- !' ments for the Public Improvements described in Exhibit F so long as the Developer is in compliance with the obligations imposed upon it under this Agreement, the Assessment Agreement and the Deficiency Agreement; and (c) Beginning in 1991, the HRA shall annually pay over to the City, out of the tax increment received by the HRA from the County Auditor, generated by the Development, and out of the funds paid to the HRA pursuant to the Deficiency Agreement an amount necessary to amortize the anticipated assessment against the 11 Property in (?) years. (05) Termination of Obligations. The obligations described in (04) will terminate upon the happening of any of the following: (a) Developer fails to pay, when due all or part of the real estate taxes assessed against the Property, and such failure is not cured by payment within 30 days following written notice thereof to Developer; (b) Developer fails to make any payment required pursuant to the Deficiency Agreement when the same becomes payable by Developer, and, if Emerson Electric Co. is also obligated under the Deficiency Agreement to make such payment, Emerson Electric Co. also fails to make such payment when the same becomes 1 12 1 1 1 1 1 1 1 1 1 1 1 1 1 I 1 1 1 b payable y Emer o Emerson Electric Co. , and such failures are not cured by payment within 30 days following written notice thereof to Developer and Emerson Electric Co. ; and (c) Sale by Developer of all or a portion of the Excess Lands; provided, however, that such termination will only be applica- ble to the remaining special assessments allocated to the Excess Lands or portion thereof which are sold. (06) Effect of Termination. Upon the happening of any events described in paragraph (05) above, the City and HRA may take any or all of the following actions: ' (a) The HRA may discontinue the payment of installments of Eligible Assessments on the Property; (b) The City may levy the remaining balance due on the anticipated assessments for the Public Improvements and certify the same to the County Auditor for collection; and (c) The HRA may discontinue the payment to the City out of tax increment, of the anticipated assessments for the Public Improvements; provided, however, that in the event that such actions arise by reason of the event described in subparagraph (c) of paragraph (05) , such actions shall relate only to that portion of the Excess Lands which are sold. 4.9) Construction Easements. The parties understand and agree that it may be necessary during the course of construction of the Improvements and the Public Improvements for the party undertaking such construction to enter upon the property owned by the other party. Therefore, the parties hereby agree to grant to each other construction easements at locations reasonably acceptable to the party granting the easement to permit each to enter upon the other's property for the purpose of undertaking the construction of the Improvements and Public Improvements, as applicable. The grantee of any such temporary construction easement will agree, as a precondition to the grant, to indemnify and hold harmless the grantor from any claims or causes of action arising out of or occasioned by the activities of grantee within the temporary construc- tion easement area. 1 1 13 I 4. 10) Time to Respond - Authority. With respect to any Developer submittal described in Sections 4.4, 4.7 or 7. 1, the HRA will respond not later than five (5) days following the first regularly scheduled HRA meeting 11 occurring not less than fifteen (15) days from the date of receipt of the submittal or request. ARTICLE V ' INSURANCE 5.1) Developer's Obligation. (01) The Developer will provide and maintain, or cause to be maintained, at all times during the process of constructin g Improvements Im rovements and, from time-to-time at the request of the City, furnish the City with proof of payment of premiums on: (i) Builder's risk insurance, written on the so-called "Builder's Risk -- Completed Value Basis," in an amount equal to 100% of ' the insurable value of the Improvements at the date of comple- tion, and with coverage available in nonreporting form on the so-called "all risk" form of policy; the interest of the City shall be protected in accordance with clause in form and I/ content satisfactory to the City; (ii) Comprehensive general liability insurance (including opera- tions, contingent liability, operations of subcontractors, completed operations and contractual liability insurance) together with an Owner's Contractor's Policy with limits against bodily injury and property damage of not less than $1,000,000 for each occurrence (to accomplish the above- required limited, an umbrella excess liability policy may be used) ; and (iii) Workers' compensation insurance, with statutory coverage. ' (02) Upon completion of construction of the Improvements and prior to the Maturity Date, the Developer will maintain, or cause to be main- "' tained, at its cost and expense, and from time-to-time at the ' request of the City shall furnish proof of the payment of premiums on, insurance as follows: 14 (i) Insurance against loss and/or damage to the Improvements under a policy or policies covering such risks as are ordinarily insured against by similar businesses, including (without limiting the generality of the foregoing) fire, extended coverage, vandalism and malicious mischief, explosion, water damage, demolition cost, debris removal, and collapse in an amount not less than the full insurable replacement value of the Improvements, but any such policy may have a deductible amount of not more than $50,000. No policy of insurance shall be so written that the proceeds thereof will produce less than the minimum coverage required by the preceding sentence, by reason of co-insurance provisions or otherwise, without the ' prior consent thereto in writing by the City. The term "full insurable replacement value" shall mean the actual replacement cost of the Improvements (excluding foundation and excavation costs and costs of underground flues, pipes, drains and other uninsurable items) and equipment, and shall be determined from time-to-time - at the request of the City, but not more frequently than once every three years, by an insurance consultant or insurer selected and paid for by the Developer and approved by the City. (ii) Comprehensive general public liability insurance, including personal injury liability for injuries to persons and/or property, including any injuries resulting from the operation of automobiles or other motorized vehicles on or about the Property, in the minimum amount for each occurrence and for each year of $1,000,000, and shall be endorsed to show the City ' as an additional insureds. (iii) Such other insurance, including workers' compensation insurance respecting all employees of the Developer, in such amount as is customarily carried by like organizations engaged in like activities of comparable size and liability exposure; provided that the Developer may be self-insured with respect to all or any part of its liability for workers compensation. (03) All insurance required in this Article V will be taken out and maintained in responsible insurance companies selected by the Developer which are authorized under the laws of the State to assume the risks covered thereby. The Developer will deposit upon request, ' but not more often than annually with the City copies of policies evidencing all such insurance, or a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article V, each 11 15 I, policy y will contain a provision that the insurer shall not cancel or modify it without giving written notice to the Developer and the City at least 30 days before the cancellation or modification becomes effective. Not less than 15 days prior to the expiration of ' any policy, the Developer will furnish the City evidence satis- factory to the City that the policy has been renewed or replaced by Ianother policy conforming to the provisions of this Article V, or that there is no necessity therefor under the terms hereof. In lieu of separate policies, the Developer may maintain a single policy, or blanket or umbrella policies, or a combination thereof, which provide the total coverage required herein, in which event the Developer will deposit with the City a certificate or certificates of the respective insurers as to _ the amount of coverage in force upon the Improvements. (04) The Developer agrees to notify the City immediately in the case of I/ damage exceeding $100,000 in amount to, or destruction of, the ' Improvements or any portion thereof resulting from fire or other casualty. I ARTICLE VI. TAX INCREMENT 6.1) Real Property Taxes - P Y II (01) Assessment Agreement - On or before the date of Closing, the HRA and Developer will execute the Assessment Agreement and Certification of County Assessor contained in Exhibit D of this Agreement. The HRA will then present the Assessment Agreement to the County Assessor ' 16 II for certification. The County Assessor will value the property and ' assign a market value to the Property and Improvements which will not be less than the Minimum Market Value contained in the Assess- ment Agreement. The market value so established may, in the discretion of the assessor, exceed the value contained in the Assessment Agreement. ' (02) Review of Taxes - Except as otherwise provided in this Agreement, Developer will pay all real property taxes and special assessments ' assessed against the Property. Developer agrees that subject to the ' last sentence of this paragraph (02) , prior to the Maturity Date: (1) it will not seek administrative review or judicial review of the ' applicability of any tax statute determined by any tax official to be applicable to the Development or raise the applicability of any ' such tax statute as a defense in any proceeding including delinquent tax proceedings; (2) it will not seek administrative review or judicial review of the constitutionality of any such tax statute determined by an tax official to be applicable to the Development or Developer or raise the unconstitutionality of such tax statutes a ' defense in any proceeding including delinquent tax proceedings; (3) it will not request the County Assessor to reduce the Assessed Market Value or Assessed Value of all or any portion of the Pro- perty; (4) it will not petition the board of equalization of the City or the board of equalization of the County to reduce the ' Assessed Market Value or Assessed Value of all or any portion of the Property; (5) it will not petition the board of equalization of the State or Commissioner of Revenue of the State to reduce the Assessed Market Value or Assessed Value of all or any portion of the 17 I I 1 1 1 1 1 1 1 1 1 1 1 1 1 I 1 I I t' Property; 6 p y, ( ) it will not commence an action in a District Court of ' the State or the Tax Court of the State pursuant to Minn. Stat. , Chapter 278, seeking a reduction in the Assessed Market Value or ' Assessed Value of the Property; (7) it will not make an application ' to the Commissioner of Revenue of the State requesting an abatement of real property taxes pursuant to Minn. Stat. , Chapter 270; and (8) ' it will not commence 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 with regard to the Minimum Market Value contained in the Assessment Agreement. Developer will not, prior to the ' Maturity Date, apply for a deferral of property tax on the Property pursuant to the Act. Nothing contained herein will be deemed to ' limit the right or opportunity of Developer to challenge through any of the means set forth above or otherwise that part of any valuation or the Market Value which is in excess of the stipulated value ' contained in the Assessment Agreement; provided, however, that Developer may not institute or prosecute any challenge to the excess ' which if successful would also result in a reduction of the assess- ment below the stipulated value. ' (03) Agreement to Pay Deficiencies - On the date of Closing, Developer and the HRA will execute the Deficiency Agreement contained in the form set forth in Exhibit E. 1 1 18 I ARTICLE VII. ' FINANCING 7. 1) Financing - Developer intends to finance the construction of the Improvements either through its equity or the equity of its parent corporation, or both, and not with borrowed capital. ' 7.2) Limitations Upon Encumbrance of Property - Prior to the issuance of a Certificate of Completion, neither Developer nor any successor in interest to the Property or any part thereof will engage in any financing or any other transaction creating any mortgage or other encumbrance or lien upon the ' Property, whether by express agreement or operation of law, or suffer any ' encumbrance or lien to be made on or attached to the Property without the prior written approval of the HRA, which approval will not be unreasonably Iwithheld. For the purposes of such financing as may be made pursuant to the Agreement, the Property may, at the option of Developer (or successor in interest) , be divided into several parts not inconsistent with the purposes of ' the Development Plan and the Agreement. The HRA will not approve any Mortgage which does not contain terms that conform to the terms of Article VII and ' Section 9.2 of this Agreement. 7.3) Copy of Notice of Default to Lender - Whenever the HRA delivers any notice or demand to Developer with respect to any breach or default by ' Developer in its obligations or covenants under this Agreement, the HRA will at the same time forward a copy of such notice or demand to each Holder of any ' mortgage covering the Property or any part thereof, authorized by this Agreement, and known to the HRA, at the last known address of such holder as shown in the records of the HRA. ' 19 I 1 7.4) Mortgagee Not Obligated to Construct. Notwithstanding any of the ' provisions of this Agreement, including but not limited to those which are or are intended to be covenants running with the land, the holder of any mortgage including any such holder who obtains title to the Property or any part ' thereof as a result of foreclosure proceedings, or action in lieu thereof, but not including any other purchaser at foreclosure sale (other than the holder ' of the mortgage itself) will in no way be obligated by the provisions of this Agreement to construct or complete the Improvements or to guarantee such ' construction or completion. Nor will any covenant or any other provision in the deed be construed to so obligate such holder; provided that nothing in this section or any other section or rovision of this Agreement p g ent will be ' deemed or construed to permit or authorize any such holder to devote the Property or any part thereof to the uses, or to construct any Improvements thereon, other than those uses or Improvements provided or permitted in the ' Concept Plan. 7.5) HRA's Option to Cure Default - In the event that the Holder of ' financing authorized pursuant to this Article VII sends a notice of default to Developer, the holder will also notify the HRA in writing of: (a) the fact of ' the default, (b) the elements of the default, and (c) the actions required to cure the default. If Developer fails to timely cure the default or fails to ' make arrangements satisfactory to the holder to cure said default, then the ' HRA will have 30 days from the expiration of such cure period to cure the default. If the HRA cures the default as set forth above, then the holder ' will pursue none of its remedies under the financing based upon the said default of Developer. In the event of a transfer of the title to the Property ' to the HRA, or a third party approved by the HRA, whether or not required to cure a default, said transfer will not constitute an event of default under 20 I I III 1 1 1 1 1 1 1 1 1 1 1 1 1 I I 1 I. the financing unless the security of the holder lder has, in fact, been impaired by ' said transfer. In the event of said transfer (which does not impair the security of the holder) , the holder will permit the transferee to assume all outstanding obligations (and receive all remaining disbursements) under the financing. 7.6) Subordination - In order to facilitate the obtaining of financing ' for the construction of the Improvements by Developer, the City and HRA agree to subordinate their rights under this Agreement to the mortgage held by the financial institution providing such funds, but only to the extent to be reasonably determined by thew City and HRA. ARTICLE VIII PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER 8. 1) Representation as to Redevelopment - Developer represents and agrees that its undertakings pursuant to the Agreement, are for the purpose of development of the Property and not for speculation in landholding. Developer ' further recognizes that, in view of: (01) the importance of the development of the Property to the HRA; ' (02) the substantial financing and other public aids that have been made available by the HRA and the City for the purpose of making such Development possible; that the qualifications and identity of Developer are of particular concern to the HRA and the City. Developer further recognizes that it is because of such qualifications ' and identity that the HRA and the City are entering into this Agreement, and, in so doing, are further willing to have relied on the representations and ' undertakings of Developer for the faithful performance of all undertakings and covenants agreed by Developer to be performed. 21 I 8.2) Prohibition Against Transfer of Property and Assignment of Agree- ' ment - For the reasons set out in Section 8.1, Developer represents and ' agrees that (except for transactions with Affiliated Entities) , prior to the substantial completion of Improvements as certified by the HRA: (01) Except only by way of security for, and only for the purpose of obtaining financing necessary to enable Developer or any successor in interest to the Property, or any part thereof, to perform its ' obligations with respect to the Development under this Agreement and any other purpose authorized by this Agreement, Developer (except as so authorized ) has not made or created, and that it will not make or create, or suffer to be made or created, any total or partial ' sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to the Agree- ment or the Property or any part thereof or any interest therein, or ' any contract or agreement to do any of the same, without the prior written approval of the HRA. ' (02) The HRA is entitled to require, except as otherwise provided in this Agreement, as conditions to any such approval that: (i) any proposed transferee shall have the qualifications and financial responsi- bility, as determined by the HRA, -necessary and adequate to fulfill the obligations undertaken in the Agreement by Developer (or, in the • event the transfer is of or relates to part of the Property, such obligations to the extent that they relate to such part) ; (ii) any ' proposed transferee, by instrument in writing satisfactory to the HRA and in form recordable among the land records, will for itself and its successors and assigns, and expressly for the benefit of the HRA, have expressly assumed all of the obligations of Developer I under this Agreement and agreed to be subject to such obligations, conditions and restrictions to the extent that they relate to such part) ; provided, that the fact that any transferee of, or any other ' successor in interest whatsoever to, the Property or any part thereof, will, for whatever reason, not have assumed such obliga- tions or so agreed to do so, will not (unless and only to the extent ' otherwise specifically provided in the Agreement or agreed to in writing by the HRA) relieve or except such transferee or successor of or from such obligations, conditions, or restrictions, or deprive or limit the HRA of or with respect to any rights or remedies or controls with respect to the Property or the construction of the Improvements; it being the intent of this Section, together with other provisions of the Agreement, that (to the fullest extent ' permitted by law and equity and excepting only in the manner and to the extent specifically provided otherwise in the Agreement) no transfer of, or change with respect to, ownership in the Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, will operate, legally or practically, to deprive or limit the HRA, of any rights or remedies or controls provided in or resulting from the Agreement with respect to the Property and the construction of the Improve- ' 22 I ments that the HRA would have had, had there been no such transfer ' or change; (iii) there will be submitted to the HRA for review all instruments and other legal documents involved in effecting trans- fers described herein; and if approved by the HRA, its approval will ' be indicated to Developer in writing. In the absence of specific written agreement by the HRA to the contrary, no such transfer or approval by the HRA thereof will be deemed to relieve Developer from any of its obligations with respect thereto. 1 8.3) Approvals - Any approval required to be given by the HRA under this Article VIII may be denied only in the event that the HRA reasonably deter- mines that the ability of Developer to perform its obligations under this ' Agreement will be materially impaired by the action for which approval is sought. 8.4) Upon Completion - Upon issuance of the Certificate of Completion by the HRA, no consent or approval of the HRA or City will be required with regard to any sale of the Property, or additional financing. ' 8.5) Sale of Residual Land - The parties understand that the gross area of the Property is sufficient in size to accommodate future development in addition to the Improvements, such areas in excess of the portion of the Property upon which the Improvements are constructed to be herein referred to as "Excess Lands." In the event that the Developer at any time prior to ' November 1, 2000, conveys its interest to all or a portion of the Excess Lands, whether or not in combination with a conveyance of the lands on which ' the Improvements are constructed, it will, at the time of such conveyance, pay to the HRA: (01) An amount equal to the lesser of: i) $24,000 times the number of acres (or fractional parts) of Excess Lands so conveyed; or ii) The full sale price of the Excess Lands sold. ' 23 (02) Together with an amount of money equal to the pro rata share (based upon area) of the special assessments paid with respect to such Excess Lands pursuant to Section 4.8A. This Section 8.5 will not be applicable to a conveyance by Developer to ' an Affiliated Entity or to the City or HRA; but will be applicable to a conveyance by an Affiliated Entity to other than another Affiliated Entity or the City or HRA. The HRA and Developer agree that upon any conveyance of all or part of the Excess Lands, they will release, by appropriate instrument, such conveyed Excess Lands from the Assessment Agreement and the Deficiency Agreement, provided, however, that such release shall in no way diminish or reduce the minimum market values contained in the Assessment Agreement or the ' tax increment schedule contained in the Deficiency Agreement. reement ARTICLE IX. EVENTS OF DEFAULT 9. 1) Events of Default Defined - The following are "Events of Default" ' under this Agreement if the same are not cured within the cure period described in Section 9.2 below, and the term "event of default" means, whenever it is used in this Agreement (unless the context otherwise provides) , any one or more of the following events together with the expiration of the ' cure period described in Section 9.2 below without cure of the same: (01) Failure of Developer to pay when due the payments required to be ' paid under any provision of this Agreement including the payment of property taxes. ' (02) Failure by Developer to observe and substantially perform any covenant, condition, obligation or agreement on its part to be observed or performed hereunder, after written notice as provided in ' this Agreement. (03) If Developer admits in writing its inability to pay its debts generally as they become due, or files a petition in bankruptcy, or ' makes an assignment for the benefit of its creditors, or consents to the appointment of a receiver of itself or of the whole or any substantial part of the Property. ' 24 1 ' 0 I ( 4) If Developer files a petition under the federal bankruptcy laws. ' (05) If Developer on a petition in bankruptcy filed against it, be adjudicated a bankrupt, or a court of competent jurisdiction shall enters an order of decree appointing, without its consent, a receiver of it or of the whole or substantially all of its property, or approve a petition filed against it seeking reorganization or arrangement of it under the federal bankruptcy laws, and such ' adjudication, order or decree is not vacated or set aside or stayed within 60 days from the date of entry thereof. (06) If Developer is in material default under any mortgage covering the Property and has not entered into a workout agreement with the mortgagee under such mortgage. 9.2) Remedies on Default - Whenever any event of default occurs, the City or HRA may, in addition. to any other remedies or rights given them under ' this Agreement but only after Developer's failure to cure within 30 days of written notice of default, or such additional time as is reasonably necessary ' to effect a cure, provided that within such 30 days efforts to cure are ' undertaken and diligently pursued, take any one or more of the following actions: ' (01) Suspend their performance under this Agreement until they receive assurances from Developer, deemed adequate by the City and HRA, that it will cure its default and continue its performance under this ' Agreement; (02) Cancel and rescind this Agreement; (03) Take whatever action at law or in equity may appear necessary or desirable to the City or HRA to collect any payments due under this Agreement, or to enforce performance and observance of any obliga- tion, agreement, or covenant of the Developer under this Agreement; provided that any exercise by the City or HRA of its rights or remedies 1 hereunder will always be subject to and limited by, and will not defeat, render invalid or limit in any way (a) the lien of any mortgage authorized by ' this Agreement and (b) any rights or interests provided in this Agreement for 1 the protection of the holders of a mortgage; and provided further that should any mortgagee succeed by foreclosure of the mortgage or deed in lieu thereof 1 1 25 to the Property, it will, notwithstanding the foregoing, be obligated to ' perform the following obligations of Developer only to the extent that the same have not theretofore been performed by Developer: Sections 3. 1 through 3.5; Sections 4.1 through 4.5; Section 5. 1; Section 6. 1. Said mortgagee will Ihave no obligations pursuant to this Agreement other than as specifically set forth in the foregoing sentence. 9.3) No Remedy Exclusive - No remedy herein conferred upon or reserved to Developer, the City or HRA is intended to be exclusive of any other available ' remedy or remedies, but each and every such remedy is cumulative and is in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise ' any right or power accruing upon any default will impair any such right or power or will be construed to be a waiver thereof, but any such right and power may be exercised from time-to-time and as often as may be deemed expedient. In order to entitle the City or HRA or Developer to exercise any ' remedy reserved to it, it will not be necessary to give notice, other than such notice as may be required in this Article IX. 9.4) No Additional Waiver Implied by One Waiver - In the event any ' agreement contained in this Agreement should be breached by any party and thereafter waived by the other parties, such waiver will be limited to the ' particular breach so waived and will not be deemed to waive any other concur- rent, previous or subsequent breach hereunder. ARTICLE X. ADDITIONAL PROVISIONS 10. 1) Conflict of Interests; Representatives Not Individually Liable - IINo member, official, or employee of the City or HRA will have any personal interest, direct or indirect, in this Agreement, nor will any such member, ' 26 I I 1 1 1 I 1 1 I I 1 1 I 1 1 1 1 I 1 I 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, inter- ested. No member, official, or employee of the City or HRA will be personally ' liable to the Developer, or any successor in interest, in the event of any default or breach by the City or HRA or for any amount which may become due to Developer or successor or on any obligations under the terms of this Agree- ment. 10.2) Non-Discrimination - The provisions of Minnesota Statutes, Section 181.59, which relate to civil rights and non-discrimination will be considered a part of this Agreement and binding on Developer as though fully set forth herein. 10.3) Provisions Not Merged with Deed - None of the provisions of this tAgreement are intended to be or will be merged by reason of any deed trans- ferring any interest in the Property and any such deed will not be deemed to affect or impair the provisions of this Agreement. ' 10.4) Notice of Status and Conformance - At such time as all of the provisions of this Agreement have been fully performed by Developer, the HRA, ' upon not less than ten days prior written notice by Developer, agrees to ' execute, acknowledge and deliver, without charge to Developer or to any person designated by Developer, a statement in writing in recordable form certifying, ' to the extent to which this Agreement has been fully performed and the obligations hereunder fully satisfied. Such certification will not, however, be deemed a satisfaction of Developer's obligations created under the Assessment Agreement or the Agreement to Pay Deficiencies or the Letter of Credit. 1 ' 27 I I 10.5) Notices and Demands - Except as otherwise expressly provided in ' this Agreement, a notice, demand or other communication under the Agreement by ' either party to the other will be sufficiently given or delivered if it is sent by mail, postage prepaid, return receipt requested or delivered ' personally: (01) As to the HRA: Chanhassen Housing and Redevelopment Authority 690 Coulter Drive Chanhassen, Minnesota 55317 ATTN: Executive Director ' (02) As to the City: ' City of Chanhassen 690 Coulter Drive Chanhassen, Minnesota 55317 ATTN: City Manager (03) As to Developer: 1 ' 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. 10.6) Counterparts - This Agreement may be simultaneously executed in ' any number of counterparts, all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, the City and HRA have caused this Agreement to be duly executed in their names and behalf and its seal to be hereunto duly I 28 I 1 1 1 I 1 1 1 1 1 1 1 1 1 I 1 I r affixed and Developer has caused this Agreement to be duly executed as of the day and year first above written. ' THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF ' CHANHASSEN By Its Executive Director By Its Commission Chairperson ' CITY OF CHANHASSEN By Its Mayor By Its City Manager I/ ROSEMOUNT INC. By Its By Its C8:0511PDO1.E14 I 1 I 1 29 1 1 I 1 1 I 1 1 I 1 I 1 I 1 1 I I 1 I STATE OF MINNESOTA ss COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 1988, by and , the Executive Director and Commissioner Chairperson, respectively, of The Housing and Redevelopment Authority in and for the City of Chanhassen. Notary Public STATE OF MINNESOTA ) ) ss COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 1988, by Tom Hamilton and Don Ashworth, the Mayor and City Manager, respectively, of the City of Chanhassen, a municipal corporation - under the laws of Minnesota, on behalf of the City. rNotary Public 1 STATE OF MINNESOTA ) _ ) ss COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 1988, by and , the and of Rosemount Inc. , a Minnesota corporation, on behalf of the corporation. 1 Notary Public I I II . II [11-09-88] 1 EXHIBIT A PROPERTY DESCRIPTION IPROPERTY II Lot 1, Block 1, Chanhassen Lakes Business Park Second Addition 1 II IIOTHER LANDS II Outlot A, Chanhassen Lakes Business Park Second Addition r II II II II II II II II II EXHIBIT B CONCEPT PLANS ' [To Be Supplied Prior PP to Consideration by HRA] 1 1 1 1 1---z r 1, EXHIBIT C CERTIFICATE OF COMPLETION The undersigned hereby certifies that ROSEMOUNT INC. a Minnesota Icorporation, has fully and completely complied with its obligations under Article of that document entitled "Contract for Private Development" dated , 1988, between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CHANHASSEN (HRA) , the CITY OF CHANHASSEN (City) , and IROSEMOUNT INC. , with respect to construction of the Improvements, on the lands described in the attached Exhibit A, in accordance with the approved Concept ' Plan and is released and forever discharged from its obligations under such Agreement except for those obligations contained obligations described in Section 4.7 of the Agreement as Surviving Obligations. I DATED: THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CHANHASSEN By Its Commission Chairperson ' By Its Executive Director C8:0511PDEX.E14 I I I I 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 i EXHIBIT D ' ASSESSMENT AGREEMENT AND CERTIFICATION OF ASSESSOR jTHIS AGREEMENT, MADE and entered into this day of , 1988, ' be and between THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF CHANHASSEN, a Minnesota public body corporate and politic ("HRA") and ' ROSEMOUNT INC. , a Minnesota corporation ("Developer") : WITNESSETH: WHEREAS, parties have heretofore entered into a Contract for Private Development ("Development Contract") , dated , 1988, regarding the redevelopment of certain real property ("Property") located in the Downtown Chanhassen Redevelopment District in the City of Chanhassen legally described in Schedule A hereto; and WHEREAS, the HRA, and the Developer desire to establish minimum market values for the Property and the Improvements to be constructed thereon during the time of the private development, pursuant to Minnesota Statutes, Section 469. 177, Subdivision 8; and WHEREAS, the HRA and the County Assessor have reviewed the preliminary plans and specifications for the Improvements which it is contemplated will be erected. ' NOW, THEREFORE, the parties do hereby agree as follows: 1. Except as otherwise defined herein, the terms used in this Agreement shall have the meanings given them in the Development Contract. 2. Upon completion of the Improvements and until the Maturity Date, the I minimum market value of the Improvements and land described in Schedule A shall be $ 3. The County Assessor shall value the Property and Improvements to be built thereon and assign a market value which shall not be less than the minimum market value provided herein. Nothing in this Agreement shall 1 I 1 1 1 1 1 1 1 limit the discretion of the Assessor or any other public official or body having the duty to determine the market value of the Property for ad valorem tax purposes, to assign to the Property and the Improvements to be built thereon, market value in excess of the minimum market value specified in this Agreement. 4. Neither the preambles nor the provisions of this Agreement are intended nor shall they be construed as modifying the terms of the Development Contract. 5. This Agreement shall remain in effect and inure to the benefit and be binding upon the successors and assigns of the parties until the Maturity Date and shall not be affected by any damage to or destruction of the Improvements. ' 6. As provided in Minnesota Statutes, Section 469. 177, Subdivision 8, a copy of which is attached hereto as Schedule B, nothing contained herein shall be deemed to limit the right of the Developer to challenge that part of ' any valuation on the market value which is in excess of the stipulated minimum market value contained in this Agreement. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CHANHASSEN I By Its Commission Chairperson 1 By Its Executive Director ROSEMOUNT INC. 1 By Its C8:0511PDEX.E14 I I I I 1 I I I II 1 1 1 1 1 1 1 1 1 1 I 1 1 I I ' STATE OF MINNESOTA ) ss COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 1988, by and , the Commission Chair- person and Executive Director of the Housing and Redevelopment Authority in and for the City of Chanhassen. I Notary Public I STATE OF MINNESOTA ) ) ss COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 1988, by and , respectively, the and of ROSEMOUNT INC. , a Minnesota corporation, on behalf of the corporation. Notary Public 1 I I I I I I I I I I I I I I I I I 1 1 I I I CERTIFICATION BY ASSESSOR The undersigned, having reviewed the plans and specifications for the 11 improvements to be constructed and the 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 reason- ' able, hereby certifies as follows: The undersigned Assessor, being legally responsible for the assessment of the above-described property, hereby certifies that the market value assigned to such land and improvements upon completion of the improvements to be constructed there on shall not be less 11 than the amounts contained in paragraph 2 of the attached Assessment Agreement until expiration of the Agreement as provided in paragraph 5 thereof. I Assessor I I I STATE OF MINNESOTA ) ) ss COUNTY OF ) The foregoing instrument was acknowledged before me this day of 1988, by , the Assessor for the County of Carver. 11 Notary Public 1 11 11 1 I I I I I I I I I I I I 1 I I 1 1 t I I Schedule A 11 PROPERTY 1 Lot 1, Block 1, Chanhassen Lakes Business Park Second Addition, according to the recorded plat thereof, Carver County, Minnesota. 1 1 1 1 1 1 1 1 1 1 I 1 I 1 1 1 1 I I I I I I I I 1 1 I I I I I 1 I r r Schedule B r MINNESOTA STATUTES, SECTION 469. 177, SUBDIVISION 8 Subd. 8. Assessment agreements. An authority may, upon entering into a development or redevelopment agreement pursuant to section 469. 176, subdivision 5, enter into a 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 Wring 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 r 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 the 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 the land and improvements upon completion rshall not be less than $ Upon transfer of title of the land to be developed or redeveloped ' from the authority to the developer or redeveloper, the 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 r r • 1 1 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 encumbrances of the land or any part thereof, whether voluntary or involuntary, and shall be binding upon them. • • I I 1 I I I EXHIBIT E DEFICIENCY AGREEMENT THIS AGREEMENT, made as of the day of 1988, by and among THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CHANHASSEN, a Minnesota public body corporate and politic ("HRA") ; ROSEMOUNT INC. a Minnesota corporation ("Developer") ; and EMERSON ELECTRIC CO. , a corporation ("Emerson"). IWITNESSETH: WHEREAS, the Developer has on , 1988, entered into an agree- ' ment entitled: Contract for Private Development ("Development( elopment Contract") with the BRA and the City of Chanhassen, a Minnesota municipal corporation ("City") , for the purpose of causing the redevelopment by the Developer of Icertain real property described in the Agreement and in the attached Schedule A and situated in the City of Chanhassen, County of Carver, and State of Minnesota ("Property") ; and WHEREAS, the HRA has established the Downtown Chanhassen Redevelopment District ("Project Area") and established within such Project Area a redevelopment tax increment district pursuant to Minnesota Statutes, Section 469. 174, et. sea. , which includes the Property; and WHEREAS, the Development Contract requires the HRA to convey certain 1 property within the Project Area to the Developer and requires the Developer to perform certain covenants and promises, and to construct certain ' Improvements thereon (which Improvements and Property are hereinafter referred to as the Development) all as more fully described in the Development Contract ' and located on land described in the attached Schedule A; and I I I 4. In the event that any obligations of the HRA to make payments pursuant to the terms of the Development Contract are terminated pursuant to Section 4.8(A) (05) or (06) thereof or otherwise, the amount that the HRA would have been required to pay thereunder in each calendar year in the absence of such termination shall be deducted from the amount set forth with ' respect to such calendar year on Schedule B hereto before the Deficiency for such year is calculated, but only to the extent that such terminated payments are made by Developer from and after termination. 5. If the tax increment generated from the Development and received by the HRA in any calendar year during the period commencing in 1990 and ending I with the Maturity Date is greater than the amount set forth with respect to such year on Exhibit B, the HRA shall promptly pay the amount of such excess to Developer to the extent of the outstanding Recovery Amount (as the term is hereafter defined) . The Term "Recovery Amount," as used ' herein, means the total of all payments of Deficiency made to the HRA pursuant to this Agreement and not previously recovered by Developer out of excess tax increment- pursuant to this paragraph, but does not include ' the amount of any Deficiency resulting from a loss of tax increment occasioned by the failure of Developer to complete construction of the Improvements by January 1, 1990, unless, and to the extent that such failure is due to an Unavoidable Delay. 6. If, on or before the Emerson Termination Date (as the term is hereinafter defined) , Developer fails to pay within the time provided above the amount of any Deficiency which has become payable hereunder, the HRA shall so notify Emerson in writing and make written demand for payment of such Deficiency by Emerson. Emerson shall, within 30 days after receipt ' of such written notice, pay to the HRA the unpaid amount of such Deficiency. Notwithstanding any provision herein to the contrary: a. Emerson shall have no obligations whatsoever under this Agreement ' from and after the date ("Emerson Termination Date") upon which tax increment payable with respect to the Development in two calendar years upon the basis of the minimum market value of the Property and Improvements stipulated in the Assessment Agreement ("Minimum Market Value") has been remitted to the HRA; provided, however, that after the Emerson Termination Date, Emerson shall remain obligated for any Deficiencies accruing prior to such date; and b. The maximum total of all payments which Emerson will be obligated to make pursuant to the terms of this Agreement will be $ as of the date hereof, and such maximum will be reduced by $ with respect to all future payments to be required pursuant to the terms hereof as of each date upon which Developer makes a semi-annual tax payment for the Development that has been calculated upon the basis of the Minimum Market Value. 7. Any notice or demand under this Agreement will be deemed given or served if it is delivered personally to an officer or director of the party to be notified, or if it is sent by certified mail, postage prepaid, return receipt requested, addressed as follows: I I • 1 I I I I I I I I I I I I I I 1 I I I 1 If to the HRA: I If to Developer: 1 If to Emerson: Any party hereto may change its address for service of notice hereunder by giving written notice of such change in the manner provided above not less than 10 days prior to the effective date of such address change. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CHANHASSEN By Its Executive Director By Its Commission Chairperson ROSEMOUNT INC. By Its 1 By ' Its EMERSON ELECTRIC CO. r By Its C8:O511PDEX.E14 I I 1 1 1 I 1 1 I 1 1 1 1 1 1 1 1 1 I I STATE OF MINNESOTA ) ' ) ss COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 1988, by and , the Commission Chair- person and Executive Director of The Housing and Redevelopment Authority in and for the City of Chanhassen. ' Notary Public STATE OF MINNESOTA ) ss COUNTY OF ) ' The foregoing instrument was acknowledged before me this day of , 1988, by and , respectively, the and of ROSEMOUNT INC. , a Minnesota corporation, on behalf of the corporation. Notary Public 1 ' STATE OF MINNESOTA ) ss COUNTY OF ) ' The foregoing instrument was acknowledged before me this day of , 1988, by and , respectively, the ' and of EMERSON ELECTRIC CO. , a corporation, on behalf of the corporation. Notary Public I I I 1 I 1 1 1 1 1 1 1 I 1 1 1 1 • 1 1 I ' Schedule A ' PROPERTY Lot 1, Block 1, Chanhassen Lakes Business Park Second Addition, according to the recorded plat thereof, Carver County, Minnesota. 1 I Schedule B MINNESOTA STATUTES, SECTION 469. 177, SUBDIVISION 8 Subd. 8. Assessment agreements. An authority may, upon P on entering into a development or redevelopment agreement pursuant ' to section 469. 176, subdivision 5, enter into a 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 the 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 the 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, the 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 11 I 1 1 1 1 1 1 1 1 II 1 1 1 1 1 III 1 1 I '' 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 encumbrances of the land or any part thereof, whether voluntary or involuntary, and shall be binding upon them. 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1