A-3. Attachment 1-Private Redevelopment Agreement
DRAFT 7-19-8/17/17
CONTRACT
FOR
PRIVATE REDEVELOPMENT
By and Between
THE CHANHASSEN ECONOMIC DEVELOPMENT AUTHORITY
and
CHANHASSEN FRONTIER LLC
This documentdrafted by:
KENNNEDY & GRAVEN, CHARTERED (RHB)
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612) 337-9300
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TABLE OF CONTENTS
PAGE
PREAMBLE....................................................................................................................................1
ARTICLE I
Definitions
Section 1.1.Definitions
2
Section 1.2.Exhibits
5
Section 1.3.Rules of Interpretation
6
ARTICLE II
Representations and Warranties
Section 2.1.Representations by the EDA
6
Section 2.2.Representations and Warranties by the Redeveloper
7
ARTICLE III
Mixed UseProject; Redevelopment Assistance
Section 3.1.Acquisition of Redevelopment Property
8
Section 3.2.Mixed Use Development
8
Section 3.3.Issuance of Pay-As-You-Go Note A
8
Section 3.4.Conditions Precedent to Issuance of Note A
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Section 3.5.Records
9
Section 3.6.Note B
9
Section 3.7.Community Growth Partnership Grant
10
Section 3.8.No Business Subsidy
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ARTICLE IV
Construction of Minimum Improvements
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Section 4.1.Construction of Minimum Improvements
11
Section 4.2.Preliminary DrawingsApproved Plansand Construction Plans
11
Section 4.3.Commencement and Completion of Construction
1112
Section 4.4.Certificate of Completion
12
ARTICLE V
Insurance
Section 5.1.Insurance
1213
Section 5.2.Evidence of Insurance
13
ARTICLE VI
Payment of Taxes; Use of Tax Increment; Assessment Agreement
Section 6.1.Taxes
13
Section 6.2.Right to Collect Delinquent Taxes and Special Assessments
14
Section 6.3.Redevelopment District; Use of Tax Increment
14
Section 6.4.Assessment Agreement
1415
ARTICLE VII
Restrictions on Sale of Minimum Improvements; Termination Agreement
Section 7.1.Prohibition Against Sale of Minimum Improvements
1516
Section 7.2.Termination of Agreement
1617
ARTICLE VIII
Events of Default
Section 8.1.Events of Default Defined
17
Section 8.2.Remedies on Default
1718
Section 8.3.Remedies after Certificate of Completion
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Section 8.4.No Remedy Exclusive
1819
Section 8.5.No Additional Waiver Implied by One Waiver
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ARTICLE IX
Additional Provisions
Section 9.1.Conflict of Interests; Representatives Not Individually Liable
19
Section 9.2.Equal Employment Opportunity
19
Section 9.3.Restrictions on Use
19
Section 9.4.Notices and Demands
19
Section 9.5.Counterparts
20
Section 9.6.Disclaimer of Relationships
20
Section 9.7.Amendment
20
Section 9.8.Recording
20
Section 9.9.Release and Indemnification Covenants
20
Section 9.10.Titles of Articles and Sections
21
Section 9.11.Governing Law; Venue
21
Section 9.12.Fees and Charges
21
TESTIMONIUM........................................................................................................................2122
SIGNATURES....................................................................................................................21-22-23
EXHIBIT ALEGAL DESCRIPTION OF THE REDEVELOPMENT PROPERTY
EXHIBIT BAPPROVED PLANS
EXHIBIT CFORM OF CERTIFICATE OF COMPLETION
EXHIBIT DFORM OF AUTHORIZING RESOLUTION FOR NOTE A
EXHIBIT EFORM OF INVESTMENT LETTER
EXHIBIT FFORM OF ASSESSMENT AGREEMENT
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CONTRACT FOR PRIVATE REDEVELOPMENT
This Contract for Private Redevelopment (the “Agreement”) is made this _____ day of
_____________, 2017, by and between the Chanhassen Economic Development Authority, a
public body corporate and politic under the laws of Minnesota, having its principal office at 7700
Market Boulevard, Chanhassen, Minnesota 55317 (the “Chanhassen Economic Development
Authority” or the “EDA”), and Chanhassen Frontier LLC, a Delaware limited liability company,
having its principal office at 651 Nicollet Mall, Suite 450, Minneapolis, MN 55402 (the
“Redeveloper”).
WITNESSETH:
WHEREAS, the EDA finds there to exist within Chanhassen’s commercial corebuildings
that have a blighting influence on surrounding properties and are structurally substandard due to
their poor physical condition or functional obsolescence and which, because of those conditions,
threaten the health, safety and welfare of the community; and
WHEREAS, the EDA finds that it is in the public interest, helpful for the tax base and
beneficial for the health, safety and welfare of the community as a whole to remove old,
structurally substandard buildings and to replace them with new commercial or mixed use
developments compatible with surrounding land uses; and
WHEREAS, the EDA finds that, due to market conditions which exist today and are likely
to persist for the foreseeable future, the private sector alone is not able to accomplish
redevelopment of the type needed within downtown Chanhassen and, therefore, such will not
occur without public intervention; and
WHEREAS, in order to foster the redevelopment described above, the EDA intends to
modify the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area to
more fully implement the goals and objectives thereof, all pursuant to Minnesota Statutes, sections
469.001 through 469.047; and
WHEREAS, the EDA also intends to establish Tax Increment Financing District No.11, a
redevelopment district, within the Downtown Chanhassen Redevelopment Project Area and adopt
a tax increment financing plan related thereto, all pursuant to Minnesota Statutes, sections 469.174
through 469.1799; and
WHEREAS, the Redeveloper has proposed to redevelop the property located at 525 West
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78Street, commonly called the Frontier Building and defined in this Agreement as the
Redevelopment Property, through a mixed-use project as more fully described herein; and
WHEREAS, the EDA believes is in the vital and best interests of Chanhassen and the
health, safety and welfare of its residents, and in accord with the public purposes and provisions of
the applicable state and local laws and requirements for which the Downtown Chanhassen
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Redevelopment Project Area and Tax Increment Financing District No. 11 were or will be
established.
NOW, THEREFORE, in consideration of the covenants and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the other as follows:
ARTICLE I
Definitions
Section 1.1. Definitions. In this Agreement the following terms shall have the meanings
given below unless a different meaning clearly appears from the context:
“Administrative Costs” means the administrative expensesincurred by the EDA regarding
the TIF District as defined in section 469.174, subd. 14 of the TIF Act.
“Agreement” means this Agreement, as the same may be from time to time modified,
amended, or supplemented.
“Apartment Building” means an apartment building containing approximately 130134
market rate housing units, first level parking structure and foundation for the Retail Building
structure to be constructed by the Redeveloper on the Apartment Parcel.
“Apartment Parcel” means that portion of the Redevelopment Property on which the
Apartment Building will be constructed by the Redeveloper.
“Approved Plans” means the plans and sketches of the Minimum Improvements attached
hereto as Exhibit B.
“Assessment Agreement” means the assessment agreement regarding the Minimum
Market Value of the Minimum Improvements in the general form attached hereto as Exhibit F to
be recorded against the Apartment Parcel and the Site Improvement Parcel.
“Assessor” means the county assessor of Carver County.
“Authorizing Resolution” means the resolution, in substantially the form attached hereto as
Exhibit D, from the EDA that authorizes the issuance of Note A by the EDA Executive Director,
which resolution the EDA agrees to adopt upon satisfaction of the conditions precedent specified
in Section 3.4. of this Agreement.
“Available Tax Increment” means 95 percent of the Tax Increment paid to the EDA by the
County with respect to the Redevelopment Property and the Minimum Improvements.
“Certificate of Completion” means the certificate, in substantially the form attached hereto
as Exhibit C, which will be provided to the Redeveloper pursuant to Article IV of this Agreement.
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“City” means the city of Chanhassen, a municipal corporation under the laws of
Minnesota.
“City Approvals” means, collectively, the subdivision andsite plan approvalapprovalsand
______________grantedby the City prior to constructing the Minimum Improvements.
“Construction Plans” means the final plans for construction of the Minimum
Improvements which shall be submitted by the Redeveloper pursuant to section 4.2 of this
Agreement.
“County” means Carver County, Minnesota.
“Economic Development Authorities Act” or “EDA Act” means Minnesota Statutes,
sections 469.090 through 469.108, as amended.
“Economic Development Authority” or “EDA” means the Chanhassen Economic
Development Authority, a public body corporate and politic under the laws of Minnesota.
“Event of Default” means an action by the Redeveloper or the EDA listed in Article VIII of
this Agreement.
“Housing and Redevelopment Authorities Act” or “HRA Act” means Minnesota Statutes,
sections 469.001 through 469.047, as amended.
“Material Change” means a change in the Construction Plans which will adversely affect
the generationof tax increment attributable to the Minimum Improvements.
“Maturity Date” means the date Note A has been paid in full or terminated, whichever is
earlier.
“Minimum Improvements” means demolition of the existing Frontier Building and
construction of the Apartment Building and Site Improvements. The building walls and roof for
the Retail Building are being constructed by a third party tenant and are not included in the
definition of Minimum Improvements. After completion of the Minimum Improvements, the term
shall mean the Apartment Parcel and the Site Improvement Parcel as improved by the Minimum
Improvements. The Minimum Improvements are shown on the Approved Plans attached hereto as
Exhibit B.
“Minimum Market Value” means the minimum market value of the Minimum
Improvements and the Apartment Parcel and the Site Improvements Parcel as set forth is Section
6.4 of this Agreement.
“Note A” means the taxable Tax Increment Revenue Note, in substantially the form set
forth in the Authorizing Resolution, to be delivered by the EDA to the Redeveloper to reimburse
the Redeveloper for the Qualifying Costs pursuant to Article III of this Agreement.
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“Note B” means the taxable Tax Increment FinancingRevenueNote which may be issued
by the EDA to the Redeveloper to reimburse the Redeveloper for certain special assessments
levied against the Apartment Parcel and the Site Improvement Parcel with regard to the Market
Boulevard public improvement project.
“Qualifying Costs” means the cost of demolition, utilities, earthwork, grading and site
preparation, construction of a first level parking structure and surface parking, foundations and
footings for the Apartment Building and Retail Building, landscaping and site improvements, SAC
and WAC fees, and other qualifying expenditures made by the Redeveloper related to completion
of the Minimum Improvements which the EDA intends to partially reimburse through Note A.
“Redeveloper” means Chanhassen Frontier LLC, a Delaware limited liability company.
After the Certificate of Completion is issued, Redeveloper does not mean any subsequent owner of
the Redevelopment Property unless the rights and obligations of Redeveloper are specifically
assigned in a writing that is recorded against all or a portion of the Redevelopment Property.
“Redevelopment Assistance” means the financial assistance to be offered by the EDA to
the Redeveloper through issuance of Note A, Note B, if issued, and the Carver County Community
Growth Partnership Grant.
“Redevelopment Plan” means the Redevelopment Plan for the Downtown Chanhassen
Redevelopment Project Area, which was modified most recently on ____________, 2017.
“Redevelopment Project” or “Project” means the Downtown Chanhassen Redevelopment
Project.
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“Redevelopment Property” means the property generally located at 525 West 78Street in
Chanhassen and consisting of the Apartment Parcel, the Site Improvement Parcel and the Retail
Parcel. The property is legally described inExhibit A attached hereto.
“Retail Building” means the building walls and roof for approximately 18,00019,000
square feet of retail space for a grocery store to be constructed by others on the Retail Parcel.
“Retail Parcel” means that portion of the Redevelopment Property on which the Retail
Building will be constructed by others.
“Sale” means any conveyance of fee simple title in and to the Minimum Improvements or
the Redevelopment Property, as more fully defined in Article VII of this Agreement.
“Site Improvements” means the surface parking and other site improvements to be
constructed by the Redeveloper on the Site Improvement Parcel as shown on the Approved Plans.
“Site Improvement Parcel” means that portion of the Redevelopment Property upon which
the Site Improvements will be constructed by the Redeveloper.
“State” means the state of Minnesota.
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“Substantial Completion” means completion of the Minimum Improvements to a degree
allowing the issuance of a certificate of occupancy by the City’s building official.
“Tax Increment” means the tax increment, as that term is defined in Minnesota Statutes,
section 469.174, subd. 25, which is paid to the EDA by the County with respect to the Minimum
Improvements and the Redevelopment Property.
“Tax Increment Financing Act” or “TIF Act” means Minnesota Statutes, sections 469.174
through 469.1799, as amended.
“Tax Increment Financing District” or “TIF District” means Tax Increment Financing
District No. 11, a redevelopment district.
“Tax Increment Financing Plan” or “TIF Plan” means the tax increment plan for Tax
Increment Financing District No. 11 which was approved by the EDA on _________________,
2017.
“Tax Official” means the Assessor, County auditor, County or state board of equalization,
the commissioners of revenue of the State, or any State or federal district court, the tax court of the
State,or the State Supreme Court.
“Termination Date” means the date Tax Increment Financing District No. 11 terminates,
which date is the earlier of: (a) February 1, 2045, the last day of payment of any Available Tax
Increment from the EDA to the Redeveloperunder this Agreement;, or (b) the date all of the
EDA’s financial obligations with regard to the TIF District have been satisfied, or (c) the date that
this Agreement and both Note A and Note B, if issued, are terminated by the EDA for any reason;
or (d)payment of all amounts owed under the Note A and Note B.
“Unavoidable Delays” means delays which are the direct result of adverse weather
conditions; strikes or other labor troubles; fire or other casualty to the Minimum Improvements;
litigation commenced by third parties which, by injunction or other similar judicial action, directly
results in delays; or, except those of the EDA or the City reasonably contemplated by this
Agreement, any acts or omissions of any federal, State or local governmental unit which directly
result in delays in construction of the Minimum Improvements; default or unanticipated delay by
the EDA or the City under this Agreement; or any other cause beyond the reasonable control of a
party.
Section 1.2. Exhibits. The following exhibits are attached to and by reference made a part
of this Agreement:
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Exhibit A.Legal description of the Redevelopment Property
Exhibit B.Approved Plans
Exhibit C.Form of Certificate of Completion
Exhibit D.Form of Authorizing Resolution for Note A
Exhibit E.Form of Investment Letter
Exhibit F.Form of Assessment Agreement
Section 1.3. Rules of Interpretation. (a) This Agreement shall be interpreted in accordance
with and governed by the laws of Minnesota.
(b)The words “herein” and “hereof” and words of similar import, without reference to
any particular section or subdivision, refer to this Agreement as a whole rather than any particular
section or subdivision hereof.
(c)References herein to any particular section or subdivision hereof are to the section
or subdivision of this Agreement as originally executed.
(d)Any titles of the several parts, articles and sections of this Agreement are inserted
for convenience and reference only and shall be disregarded in construing or interpreting any of its
provisions.
ARTICLE II
Representations and Warranties
Section 2.1. Representations by the EDA. The EDA makes the following representations
as the basis for the undertaking on its part herein contained:
(a)The EDA is an economic development authority duly organized and existing under
the EDA Act and also having the powers of a housing and redevelopment authority under the HRA
Act. The EDA has the authority to enter into this Agreement and carry out its obligations
hereunder.
(b)The individuals executing this Agreement and related agreements and documents
on behalf of the EDA have the authority to do so and to bind the EDA by their actions.
(c)The Downtown Chanhassen Redevelopment Project is a redevelopment project
within themeaning of the HRA Act and was created, adopted and approved in accordance with the
HRA Act.
(d)TIF District No. 11 is a redevelopment tax increment financing district within the
meaning of the TIF Act and was created, adopted and approved in accordance with the TIF Act.
(e)There are no previous agreements to which the EDA is a party pertaining to the
Redevelopment Property which would preclude the parties from entering into this Agreement or
which would impede the fulfillment of the terms and conditions of this Agreement.
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(f)The activities of the EDA pursuant to this Agreement are undertaken pursuant to
the modified Redevelopment Plan and the TIF Plan and are for the purpose of redevelopment of
the Redevelopment Property by removing the structurally substandard commercial structures
currently existing on the Redevelopment Property and replacing them with a new mixed-use
development.
(g)The EDA will act in a timely manner to consider all approvals required under this
Agreement and will cooperate with the Redeveloper in seeking consideration of approvals which
must be granted by the City.
(h)In accordance with Resolution ________________, which has been adopted by the
EDA on or before the date of this Agreement, theTheEDA has approved execution of this
Agreement,includingthe issuance of Note A and B, andinthe form ofspecified inthe Authorizing
Resolution, subject to the conditions contained in this Agreement.
Section 2.2. Representations and Warranties by the Redeveloper. The Redevelopermakes
the following representations and warranties as the basis for the undertaking on its part herein
contained:
(a)The Redeveloper is a limited liability company validly existing under the laws of
the state of Delaware. The Redeveloper has the authority to enter into this Agreement and carry
out its obligations hereunder.
(b)The persons executing this Agreement and related agreements and documents on
behalf of the Redeveloper have the authority to do so and to bind the Redeveloper by their actions.
(c)The Redeveloper is currently athecontract for deed vendee and intendsagreesto
acquire the Redevelopment Property in fee by June 1, 2018.
(d)The Redeveloper will demolish the existing improvements which are structurally
substandard and construct the Minimum Improvements in substantial accordance with the terms of
this Agreement, the Redevelopment Plan, the TIF Plan, the Construction Plans and all local, State
and federal laws and regulations, including, but not limited to, environmental, zoning,building
code and public health laws and regulations.
(e)The Redeveloper will apply for and use all reasonable efforts to obtain, in a timely
manner, all required permits, licenses and approvals from the City, and will meet, in a timely
manner, the requirements of all applicable local, State and federal laws and regulations which must
be obtained or met before the Minimum Improvements may be lawfully constructed or used for
their intended purpose.
(f)The Redeveloper has analyzed the economics of acquisition of the Redevelopment
Property, the cost of site improvements, including installation of utilities and demolition of the
improvements currently thereon and construction of the Minimum Improvements and concluded
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that, absent the Redevelopment Assistance to be offered under this Agreement, it would not
undertake this project.
(g)Neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the
terms, conditions or provisions of any corporate organizational documents or any evidence of
indebtedness, agreement or instrument of whatever nature to which the Redeveloper is now a party
or by which it is bound, or constitutes a default under any of the foregoing.
ARTICLE III
Mixed Use Project; Redevelopment Assistance
Section 3.1. Acquisition of Redevelopment Property. The Redeveloper acquiredbecame the
contract for deed vendeeofthe Redevelopment Propertyas acontract for deed vendeeon February
15, 2017, and intendsagreesto acquire the Redevelopment Property in fee by June 1, 2018. The EDA
makes no representations to the Redeveloper regarding the suitability of the Redevelopment Property
for the use and purpose intended by the Redeveloper.
Section 3.2. Mixed Use Development. The mixed use development to be constructed on the
Redevelopment Property shall consist of the following:
(1) Demolition by Redeveloper of the existing Frontier Building;
(2)Construction by Redeveloper of the Apartment Building;
(3)Construction by Redeveloper of the Site Improvements;
(4)Construction by a third party tenant of the Retail Building; and
(5)Subdivision of the Redevelopment Property into the Apartment Parcel, the Site
Improvement Parcel and the Retail Parcel by Registered Land Survey.
Section 3.3. Issuance of Pay-As-You-Go Note A. (a) In consideration of the Redeveloper
incurring the Qualifying Costs while constructing the Minimum Improvements, the EDA will
issue to the Redeveloper Note A in the principal amount of $1,300,000 in substantially the form set
forth in the Authorizing Resolution attached hereto as Exhibit E. The EDA and the Redeveloper
agree that the consideration from the Redeveloper for the purchase of Note A will consist of the
Redeveloper’s payment of the Qualifying Costs which are eligible for reimbursement with Tax
Increment and which are incurred by the Redeveloper in at least the principal amount of Note A.
The Authorizing Resolution will authorize delivery of Note A by the EDA Executive Director
upon satisfaction by the Redeveloper of all the conditions precedent specified in section 3.3 of this
Agreement.
(b)The Redeveloper understands and acknowledges that the EDA makes no
representations or warranties regarding the amount of Available Tax Increment, or that revenues
pledged to Note A will be sufficient to pay the principal of and interest on Note A. Any estimates
of Tax Increment prepared by the EDA or its financial advisors in connection with the TIF District
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or this Agreement are for the benefit of the EDA and are not intended as representations on which
the Redeveloper may rely.
Section 3.4. Conditions Precedent to Issuance of Note A. Notwithstanding anything in this
Agreement to the contrary, the EDA Executive Director is authorized to issue Note A to the
Redeveloper only after all of the following conditions precedent have been satisfied:
(a)The Redeveloper has acquired the Redevelopment Property in fee;
(b)This Agreement has been recorded against the Redevelopment Property;
(c)(b) The Redeveloper has executed the Assessment Agreement;
(d)(c) The Redeveloper has submitted the Investment Letter in the generalform attached
hereto as Exhibit E;
(e)(d) The Redeveloper has submitted evidence, including paid receipts and lien
waivers, it has incurred and paid for the Qualifying Costs in an amount not less than $1,300,000;
(f)(e) The Redeveloper has completed the Minimum Improvements and the EDA has
issued the Certificate of Completion; and
(g)(f)There has been no Event of Default on the part of the Redeveloper which has not
been cured.
Section 3.5. Records. The EDA and its representatives will have the right at all reasonable
times after reasonable notice to inspect, examine and copy invoices paid by the Redeveloper
and/or its general contractor relating to the Minimum Improvements and the Qualifying Costs for
which the Redeveloper will be reimbursed under Note A.
Section 3.6. Note B.
(a)The Minimum Improvementsand Apartment Parcel and the Site Improvement
Parcelwill contribute considerable additional vehicular traffic to downtown Chanhassen. Some of
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the streets in the area, particularly Market Boulevard south of West 78Street, will not be able to
function at desired levels without significant public improvements. To analyze the needed
improvements, the City initiated the Market Boulevard Corridor Study which has preliminarily
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identified desired improvements to Market Boulevard from its intersection with West 78Street to
south of the railroad and, more comprehensively, south to T.H. 5. The more limited project
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between West 78Street and south of the railroad would involve only those improvements needed
to accommodate additional traffic solely attributable to the Minimum Improvementsand the
Apartment Parceland would cost an estimated $2,100,000. A more robust project extending from
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West 78Street to T.H. 5 would cost an estimated $3,200,000 and would benefit properties in
addition to the Redevelopment PropertyMinimum Improvements. The limited project and the
robust project are collectively defined as the “Market Boulevard Project.” The City has not
committed to constructing any improvements but if it does such work would not be undertaken
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until 2020 at the earliest. The City expects to specially assess the cost of any portion of the Market
Boulevard Project it constructs against benefitedproperties, including the Redevelopment
PropertyApartment Parcel and the Site Improvement Parcel, pursuant to Minnesota Statutes,
Chapter 429.
(b)If the City constructs the Market Boulevard Project and specially assesses part or
all of the project cost to the Apartment Parcel and the Site Improvement Parcel, the EDA intends to
issue Note B in an amount equal toor greater thanthe amount of the principal and interest on the
special assessments levied against the Apartment Parcel and the Site Improvement Parcel. Note B
will be payable from Available Tax Increment but will be subordinate to Note A. No Available
Tax Increment will be paid on Note B until Note A has been fully satisfied or has terminated. No
interest shall be paid on Note B except the interestattributable to the special assessments for the
Market Boulevard Project levied against the Apartment Parcel and the Site Improvement Parcel.
(c)Following full payment of principal and interest on Note A, the EDA intends to
devote future Available Tax Increment to the payment of Note B if Note B has been issued by the
EDA. Current projections indicate that sufficient Available Tax Increment will be available prior
to the Termination Date to fully pay Note B but in the event that Available Tax Increment is not
sufficient for such purpose, the EDA agrees to use such other funds as may legally be available to
it to fully pay Note B. The EDA’s obligation to devote funds other than Available tax Increment to
the payment of Note B shall not apply in the event the TIF District has been terminated due to an
Event of Default by the Redeveloper or if the Minimum Improvements have not be reconstructed
following casualty.
(d)Payments under Note B shall reimburse the owner of the Apartment Parcel and the
Site Improvement Parcel for the special assessments owed by such owner or owners for the Market
Boulevard Project. Special assessments levied against the Apartment Parcel and the Site
Improvement Parcel for the Market Boulevard Project shall only be owed during any calendar year
in an amount not to exceed the proceeds received from Note B during such calendar year. The
owner of the Apartment Parcel and the Site Improvement Parcel shall not be liable for any special
assessments for the Market Boulevard Project in excess of the proceeds received from Note B. No
special assessments shall be levied against the Retail Parcel for the Market Boulevard Project.
(e)It is the intent of the parties that simultaneously with the execution of this
Agreement, Redeveloper will enter into an agreement with the City setting forth the possibility of
future special assessments for the Market Boulevard Project being levied against the
Redevelopment Property and incorporating the provisions of Section 3.6(d).
(d)(f)The EDA shall not be obligated to issue Note B until all of the following
conditions precedent have been satisfied:
1)The Redeveloper shall have executed and delivered to the City a petition
and waiver agreement petitioning for the Market Boulevard Project and waiving the right
to object to or appeal the special assessments under Minnesota Statutes, Chapter 42,429,
which petition and waiver shall be included in the agreement betweenin form and
substance satisfactory tothe City and the Redeveloperreferenced in subsection 3.6(e);
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2)The City shall have constructed a public improvement project involving
street improvementsto Market Boulevard and levied special assessments related thereto
against the Redevelopment Property pursuant to Minnesota Statutes, Chapter 429;
3)The TIF District shall not have terminated;
4)The Redeveloper shall have submitted another Investment Letter in the
general form attached hereto as Exhibit E but specifically related to Note B; and
5)The Redeveloper shall not be in default under this Agreement or any other
agreement with the City.
Section 3.7. Community Growth Partnership Grant. The EDA/City has been awarded a
Community Growth Partnership Grant (the “Grant”) by Carver County. Under the terms of the
Grant, the Redeveloper is eligible for reimbursement of $60,000 if it first incurs eligible expenses
in an amount not less than $120,000. The EDA/City agrees to make a payment to the Redeveloper
of $60,000 after presentation to the EDA/City of evidence by the Redeveloper that it has incurred
eligible costs of at least $120,000, including paid receipts and lien waivers, and so long as there has
been no uncured Event of Default by the Redeveloper. Payment to Redeveloper shall occur within
30 days after Redeveloper submits such evidence. Eligible costs shall be those permitted under the
terms of the Grant and are as follows _______________.
Section 3.8. No Business Subsidy. All of the financial assistance offered herein to the
Redeveloper is related to the Apartment Building and Site Improvements. No assistance is being
offered with respect to the Retail Building. Therefore, the assistance offered by the EDA under
this Agreement through issuance of the Note and is not a “business subsidy” within the meaning
of Minnesota Statutes, sections 116J.993 to 116J.995.
ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Minimum Improvements. The Redeveloper agrees that it will
construct the Minimum Improvements on the Redevelopment Property in accordance with the
Approved Plans and the Construction Plans. The Redeveloper acknowledges that, in addition to
the requirements of this Agreement, construction of the Minimum Improvements will necessitate
compliance with other reviews and approvals by the City and possibly other governmental
agencies. To the extent such approvals have not already been obtained, the Redeveloper agrees to
submit in a timely manner all applications for and pursue to their conclusion all other approvals
needed prior to constructing the Minimum Improvements.
Section 4.2. Preliminary DrawingsApproved Plansand Construction Plans. (a) The
Redeveloper has submitted and the EDA has approved the Approved Plans included in Exhibit B
attached hereto. Prior to beginning construction on the Minimum Improvements, the Redeveloper
shall submit dated Construction Plans to the EDA. The Construction Plansshall provide for the
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construction of the Minimum Improvements and shall be in substantial conformity with the
Approved Plans in Exhibit B and this Agreement. The EDA will approve the Construction Plans if
they (1) are consistent with the Approved Plans in Exhibit B; (2) conform to all applicable federal,
State and local laws, ordinances, rules and regulations; (3) are adequate to provide for the
construction of the Minimum Improvements; (4) conform to the State building code; and (5) if
there has occurred no uncured Event of Default on the part of the Redeveloper. Except as
otherwise set forth herein, no approval by the EDA shall relieve the Redeveloper of the obligation
to comply with the terms of this Agreement and the terms of all applicable federal, State and local
laws, ordinances, rules and regulations in the construction of the Minimum Improvements. Except
as otherwise set forth herein, no approval by the EDA shall constitute a waiver of an Event of
Default. The EDA shall use good faith efforts to review the Construction Plans and either approve
or reject them in writing within 1015business days after receipt. Any rejection, in whole or in
part, shall set forth in detail the reasons for rejection.
(b)If the Redeveloper desires to make any Material Change in the Construction Plans,
the Redeveloper shall submit the proposed change to the EDA for its approval. If the proposed
change is consistent with Exhibit B or is otherwise acceptable to the EDA and meets all other
requirements of section 4.2(a) above, the EDA shall approve the proposed change. Such change in
the Construction Plans shall be deemed approved by the EDA unless rejected within the required
10 business day period, in whole or in part, by written notice by the EDA to the Redeveloper,
setting forth in detail the reasons for rejection. Such rejection shall be made within 1015business
days after receipt by the EDA of the written notice of such change from the Redeveloper.
Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable
Delays, the Redeveloper shall commence construction of the Minimum Improvements by no later
than June 1, 2018. All work with respect to the Minimum Improvements to be constructed or
provided by the Redeveloper on the Redevelopment Property shall be in conformity with the
Construction Plans. The Redeveloper shall make such reports to the EDA regarding construction
of the Minimum Improvements as the EDA deems necessary or helpful in order to monitor
progress on construction of the Minimum Improvements. The Redeveloper shall have achieved
Substantial Completion of the Minimum Improvements by no later than 21 months after issuance
of the building permit for the Minimum Improvements by the City, subject to Unavoidable Delays.
Section 4.4. Certificate of Completion. (a) After Substantial Completion of the Minimum
Improvements in accordance with the Construction Plans and at the written request of the
Redeveloper, the EDA will, within 20 days thereafter, furnish the Redeveloper with an appropriate
Certificate of Completion so certifying in the form of Exhibit C attached hereto. Such Certificate
of Completion by the EDA shall be a conclusive determination of satisfaction and termination of
the agreements and covenants in this Agreement with respect to the obligations of the Redeveloper
to construct the Minimum Improvements and the dates for the beginning and completion thereof.
(b)The Certificate of Completion shall be in such form set forth in Exhibit C and as
will enable it tobe recorded in the proper County office for the recordation of deeds and other
instruments pertaining to the Redevelopment Property. If the EDA shall refuse to provide a
Certificate of Completion in accordance with the provisions of this section 4.4, theEDA shall
promptly notify Redeveloper within the same 20 day period following receipt of request by the
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Redeveloper for the Certificate of Completion, and such notification from the EDA shall include a
written statement, indicating in adequate detail in what respects the Redeveloper has failed to
complete the relevant portion of the Minimum Improvements in accordance with the Construction
Plans and what measures or acts will be necessary, in the opinion of the EDA, for the Redeveloper
to take or perform inorder to obtain such certification. If the EDA fails to issue such a written
statement within such 20-day period, the EDA shall be deemed to have waived its right to do so
and shall be deemed to have issued a Certificate of Completion to the Redeveloper. The
Redeveloper shall have 60 days following receipt of the EDA’s written response to cure or agree to
terms with the EDA regarding issues to be resolved prior to the Redeveloper obtaining a
Certification of Completion from the EDA.
ARTICLE V
Insurance
Section 5.1. Insurance. The Redeveloper or its general contractor will provide and
maintain at all times during the process of constructing the Minimum Improvements a Special
Form Basis Insurance Policy and, from time to time during that period, at the request of the EDA
no more frequently than once annually, furnish the EDA with proof of payment of premiums on
policies covering the following:
(1)Builder’s risk insurance, written on the so-called “Builder’s Risk –
Completed Value Basis,” in an amount equal to one hundred percent (100%) of the
insurable value of the applicable portion of the Minimum Improvements at the date of
completion, and with coverage available in reporting form on the so-called “special” form
of policy;
(2)Commercial general liability insurance (including operations, contingent
liability, operations of subcontractors, completed operations and contractual liability
insurance) with limits against bodily injury and property damage of not less than
$2,000,000 for each occurrence (to accomplish the above-required limits, an umbrella
excess liability policy may be used); and
(3)Workers’ compensation insurance, with statutory coverage.
Section 5.2. Evidence of Insurance. All insurance required in this Article V of this
Agreement must be taken out and maintained in responsible insurance companies selected by the
Redeveloper which are authorized under the laws of Minnesota to assume the risks covered
thereby. In lieu of separate policies, the Redeveloper may maintain a single policy, blanket or
umbrella policies, or a combination thereof, having the coverage required herein. Upon written
request by the EDA, the Redeveloper agrees to deposit with the EDA a certificate or certificates or
binders of the respective insurers stating that such insurance is in force and effect
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ARTICLE VI
Payment of Taxes; Use of Tax Increment; Assessment Agreement
Section 6.1. Taxes. The Redeveloper agrees that prior to the Termination Date: (i) it will not seek
administrative or judicial review of the applicability of any tax statute determined by any Tax
Official to be applicable to the Minimum Improvements or the Apartment Parcel or Site
Improvement Parcel or raise the inapplicability of any such tax statute as a defense in any
proceedings, including delinquent tax proceedings; (ii) it will not seek administrative or judicial
review of the constitutionality of any tax statute determined by any Tax Official to be applicable to
the Minimum Improvements or the Apartment Parcel or Site Improvement Parcel or raise the
unconstitutionality of any such tax statute as a defense in any proceedings, including delinquent
tax proceedings; and (iii) it will not cause a reduction in the Minimum Market Value assessed in
respect of the Minimum Improvements or the Apartment Parcel or Site Improvement Parcel below
the Minimum Market Value described in section 6.4 of this Agreement through:
(a)willful destruction of the Minimum Improvements or any part thereof;
(b)a request to the Assessor to reduce the Minimum Market Value of all or any portion
of the Minimum Improvements or the Apartment Parcel or Site Improvement Parcel;
(c)a petition to the board of equalization of the County to reduce the Minimum Market
Value of all or any portion of the Minimum Improvements or the Apartment Parcel or Site
Improvement Parcel;
(d)a petition to the board of equalization of the State or the commissioner of revenue
of the State to reduce the Minimum Market Value of all or any portion of the Minimum
Improvements or the Apartment Parcel or Site Improvement Parcel;
(e)an action in a district court of the State or the tax court of the State seeking a
reduction in the Minimum Market Value of the Minimum Improvements or the Apartment Parcel
or Site Improvement Parcel;
(f)an application to the commissioner of revenue of the State or to any local taxing
jurisdiction requesting an abatement or deferral of real estate taxes on the Minimum Improvements
or the Apartment Parcel or SiteImprovement Parcel;
(g)a transfer of the Minimum Improvements or the Apartment Parcel or Site
Improvement Parcel, or any part thereof, to an entity exempt from the payment of real estate taxes
under State law and that entity applies for tax exemption; or
(h)any other proceedings, whether administrative, legal or equitable, with any
administrative body within the County or the State or with any court of the State or the federal
government.
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Section 6.2. Right to Collect Delinquent Taxes and Special Assessments. The
Redeveloper acknowledges that at all times prior to the Termination Date the EDA shall have the
right to sue the Redeveloper or its successors and assigns to collect delinquent real estate taxes and
any penalty or interest thereon and special assessments due on the Apartment Parcel or Site
Improvement Parcel or the Minimum Improvements and to pay over the same as a tax payment to
the County auditor. In any such suit in which the EDA prevails, the EDA shall also be entitled to
recover its reasonable out-of-pocket costs and expenses, including attorney fees.
Section 6.3. Use of Tax Increment.Redevelopment District; Use of Tax Increment. (a)
TIF District No. 11 is a redevelopment tax increment financing district within the meaning of
section 469.174, subd. 10 of the TIF Act. The property qualified for inclusion in a redevelopment
tax increment financing district because of the existence of structurally substandard buildings on
the site. The TIF District was established in order to redevelop a key area of downtown and add to
the mix of uses in the community. The TIF District is not a housing district and there are no
income limitations on the occupants or caps on the rents to be charged. The residential portions of
the project will be market rate rentals.
(b)Except for payments to the Redeveloper as provided for in this Agreement and
Note A and Note B, if issued, the EDA shall be free to use any Tax Increment it receives from the
County with respect to TIF District No. 11 for any purpose for which such increment may lawfully
be used under the TIF Act and the EDA shall have no obligations to the Redeveloper with respect
to the use of such Tax Increment.
Section 6.4. Assessment Agreement. (a) At the time of execution of this Agreement, the
EDA and the Redeveloper shall execute the Assessment Agreement for the Apartment Parcel and
the Site Improvement Parcel and the Minimum Improvements. The Assessment Agreement shall
specify a Minimum Market Value for the Minimum Improvements and Apartment Parcel and the
Site Improvement Parcel of $21,400,00022,058,410as of January 2, 2019 for taxes payable
beginning in 2020 through the Termination Date. The Minimum Market Value will be in force
and effect notwithstanding any failure to complete the Minimum Improvements on the Apartment
Parcel and the Site Improvement Parcel by said date or any failure to reconstruct the Minimum
Improvements after damage or destruction before the Termination Date.
(b)The Assessment Agreement shall be substantially in the form attached hereto as
Exhibit F. Nothing in the Assessment Agreement shall limit the discretion of the Assessor to
assign a market value to the Minimum Improvements or the Apartment Parcel and the Site
Improvement Parcel in excess of the Minimum Market Value nor prohibit the Redeveloper from
seeking through the exercise of legal or administrative remedies a reduction in any increase in the
market value established pursuant to this Agreement; provided, however, that the Redeveloper
shall not seek a reduction of such market value below the Minimum Market Value for the
Minimum Improvements or the Apartment Parcel and the Site Improvement Parcel set forth in the
Assessment Agreement in any year so long as such Assessment Agreement shall remain in effect.
The Assessment Agreement shall remain in effect until the Termination Date; provided, that if at
any time before the Termination Date the Assessment Agreement is found to be terminated or
unenforceable by any Tax Official or court of competent jurisdiction, the Minimum Market Value
of the Apartment Parcel and the Site Improvement Parcel and Minimum Improvements described
in this section 6.4 shall remain an obligation of the Redeveloper or its successors and assigns
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(whether or not such value is binding onthe Assessor) , it being the intent of all parties that the
obligation of the Redeveloper to maintain, and not seek reduction of, the Minimum Market Value
specified in this section 6.4 for the Minimum Improvements or the Apartment Parcel and the Site
Improvement Parcel is an obligation under this Agreement as well as under the Assessment
Agreement, and is enforceable by the EDA against the Redeveloper, its successors and assigns, in
accordance with the terms of this Agreement and the Assessment Agreement. Notwithstanding
anything contained in this Agreement to the contrary, the Redeveloper shall not be precluded from
contesting the Minimum Market Value of the Minimum Improvements and the Apartment Parcel
and the Site Improvement Parcel if the Minimum Improvements or the Apartment Parcel and the
Site Improvement Parcel, or any substantial portion thereof, is acquired by a public entity through
eminent domain prior to the Termination Date.
(c)The Minimum Market Value shall exclude the valuation of the Retail Building and
the Retail Parcel, which shall not be subject to the Assessment Agreement.
ARTICLE VII
Restrictions on Sale of Minimum Improvements; Termination of Agreement
Section 7.1. Prohibition Against Sale of Minimum Improvements.
(a) The Redeveloper represents and agrees that its use of the Redevelopment Property
and its other undertakings pursuant to the Agreement, are, and will be, used for the purpose of
construction of the Minimum Improvements on the Redevelopment Property and not for
speculation in land holding. The Redeveloper represents and agrees that, prior to the issuance of a
Certificate of Completion regarding the Minimum Improvements, there shall be no Sale of the
Redevelopment Property or the Minimum Improvements constructed thereon nor shall the
Redeveloper suffer any such Sale to be made, without the prior written approval of the EDA;
provided however, notwithstanding the foregoing, the Redeveloper shall be entitled to lease and/or
license portions of the Redevelopment Property to third parties without the prior written approval
of the EDA. As a condition of approval of any such sale, the EDA shall require, at a minimum, that
the proposed transferee shall have entered into an agreement whereby the transferee expressly
assumes all of the Redeveloper’s obligations under this Agreement. Any such agreement shall
include the EDA as a party and otherwise be in form and substance reasonably acceptable to the
EDA. No approval of the EDA shall be needed for any Sale after the issuance of a Certificate of
Completion regarding the Minimum Improvements.
(b)Notwithstanding anything in this Agreement to the contrary, Redeveloper is
authorized, without the approval of EDA, to obtain construction and permanent financing for the
Minimum Improvements and to mortgage the Redevelopment Property to provide security for the
construction and permanent financing, and the EDA is authorized to subordinate this Agreement to
such mortgaging. In the event of foreclosure, deed-in-lieu of foreclosure orother transfer of the
Minimum Improvements or the Redevelopment Property as a result of default of such mortgaging,
the acquiring party shall not need the approval of the EDA for the transfer and shall not be subject
to the obligations of this Agreement.
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(c)After a Certificate of Completion has been issued, Redeveloper or other transferor
may freely, without the approval of EDA, sell or transfer all or any portion of the Minimum
Improvements or the Redevelopment Property to any person at any time. In the event that the
Redeveloper or other transferor sells or transfers the Minimum Improvements or the
Redevelopment Property or any portion to any person, then, within 15 days after request, the EDA
shall acknowledge and certify certain facts in connection with this Agreement and the status of
obligations of Redeveloper/transferor under this Agreement. The EDA shall provide this
certification to Redeveloper/transferor and any potential buyer or transferee of the Minimum
Improvements or the Redevelopment Property or any portion. The certification shall reference the
following: (1) that the Redeveloper/transferor and transferee may rely on the representations and
agreements made by the EDA in the certification; (2) the status of the completion of the
construction obligations of the Minimum Improvements; (3) the amount of payments made under
Note A and the outstanding principal balance of Note A, if any, and that any amounts owed under
Note A will be paid to Redeveloper and not the transferee unless the rights under Note A are
specifically assigned to the transferee; (4) that the Redeveloper and not the transferee remains
responsible for construction obligations under this Agreement, and that transferee and any
subsequent owners of the Minimum Improvements or the Redevelopment Property are released
from all construction obligations under this Agreement; (5) that the transferee and not the
Redeveloper/transferor shall be responsible for all non-construction obligations under this
Agreement arising subsequent to the sale or transfer of the Minimum Improvements or the
Redevelopment Property for the portion of the Redevelopment Property owned by the transferee
so long as the transferee has assumed such obligations by written instrument, and that the
Redeveloper/transferor is released from all such non-construction obligations under this
Agreement; and (6) whether or not there exists any defaults, events of default, or conditions which
with the passage of time or giving of notice would constitute a default under this Agreement.
Section 7.2. Termination of Agreement. Upon the occurrence of the Termination Date, the
parties agree to execute and record a document terminating this Agreement and providing for the
release of any minimum assessment and the obligations under this Agreement and the Assessment
Agreement.
ARTICLE VIII
Events of Default
Section 8.1. Events of Default Defined. Each and every one of the following shall be an
Event of Default under this Agreement:
(a)Failure by the Redeveloper to seek approval from the EDA, the City and other
entities necessary in order to construct the Minimum Improvements diligently and in good faith;
provided that if a Certificate of Completion is issued by the EDA, such failure shall no longer be an
Event of Default;
(b)Failure of the Redeveloper to pay real estate taxes or special assessments on the
Apartment Parcel or the Site Improvement Parcel or Minimum Improvements as they become due;
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(c)Failure by the Redeveloper to commence and completion construction of the
Minimum Improvements pursuant to the terms, conditions and limitations of Article IV of this
Agreement, including the timing thereof, unless such failure is caused by an Unavoidable Delay or
waived by the Redeveloper and the EDA;
(d)If the Redeveloper shall file a petition in bankruptcy, or shall make an assignment
for the benefit of its creditors or shall consent to the appointment of a receiver;
(e)Prior to the Termination Date, appeal or challenge by the Redeveloper of the
Minimum Market Value of the Apartment Parcel or Site Improvement Parcel or the Minimum
Improvements under this Agreement or the Assessment Agreement, except as otherwise provided
in Article VI of this Agreement;
(f)Sale of the Apartment Parcel or Site Improvement Parcel or the Minimum
Improvements, or any portion thereof, by the Redeveloper in violation of Article VII of this
Agreement; or
(g)Failure by either party to observe or perform any material covenant, condition,
obligation or agreement on its part to be observed or performed under this Agreement, including
but not limited to any action necessary for the establishment of the TIF District.
Section 8.2. Remedies on Default. Whenever any Event of Default referred to in section
8.1 of this Agreement occurs, the non-defaulting party may take any one or more of the following
actions after providing 30 days written notice to the defaulting party of the Event of Default, but
only if the Event of Default has not been cured within said 30 days from the receipt of Notice or, if
the Event of Default is by its nature incurable within 30 days, the defaulting party does not provide
assurances to the non-defaulting party reasonably satisfactory to the non-defaulting party that the
Event of Default will be cured and will be cured as soon as reasonably possible:
(a)Suspend its performance under this Agreement until it receives assurances from the
defaulting party, deemed adequate by the non-defaulting party, that the defaulting party will cure
its default and continue its performance under this Agreement;
(b)Prior to issuance of the Certificate of Completion, cancel and rescind or terminate
this Agreement;
(c)If the default occurs after issuance of the Certificate of Completion, the EDA may
suspend payments under Note A or Note B, if issued, subject to the provisions of section 8.3 of this
Agreement;
(e)Enforce the Assessment Agreement; and
(f)Take whatever action, including legal or administrative action, which may appear
necessary or desirable to the non-defaulting party to collect any payments due under this
Agreement, including reimbursement of the Redevelopment Assistance previously granted, or to
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enforce performance and observance of any obligation, agreement, or covenant of the defaulting
party under this Agreement.
Section 8.3. Remedies after Certificate of Completion. The EDA may exercise its rights
under Section 8.2(c) only for the following Events of Default:
(1)the Redeveloper fails to pay real estate taxes or special assessments on the
Apartment Parcelor Site Improvement Parcel or Minimum Improvements or any part thereof
when due and the taxes or special assessments have not been paid, or provision satisfactory to the
EDA made for their payment, within 45 days after written demand by the EDA to do so; or
(2)the Redeveloper takes or permits an action prohibited by section 6.1 of this
Agreement; or
(3)the Redeveloper transfers the Minimum Improvements or Apartment Parcel or Site
Improvement Parcel, or any part thereof, to an entity exempt from the payment of real estate taxes
under State law.
Section 8.4. No Remedy Exclusive. No remedy conferred herein or reserved to the parties
is intended to be exclusive of any other available remedy or remedies, but each and every remedy
shall be cumulative andshall be in addition to every other remedy given under this Agreement or
now or hereafter existing at law or in equity. No delay or omission to exercise any right or power
accruing upon any default shall impair any such right or power or shall be construed to be a waiver
thereof, but any such right and power may be exercised from time to time and as often as may be
deemed expedient. In order to entitle the EDA or the Redeveloper to exercise any remedy reserved
to it, it shall not be necessary to give notice, other than such notice as may be required under this
Agreement.
Section 8.5. No Additional Waiver Implied by One Waiver. In the event any covenant or
agreement contained in this Agreement should be breached by either party and thereafter waived
bythe other party, such waiver shall be limited to the particular breach so waived and shall not be
deemed to waive any other concurrent, previous or subsequent breach hereunder
ARTICLE IX
Additional Provisions
Section 9.1. Conflict of Interests; Representatives Not Individually Liable. No member,
official, or employee of the EDA shall have any personal financial interest, direct or indirect, in the
Agreement, nor shall any such member, official, or employee participate in any decision relating to
the Agreement which affects his or her personal financial interests or the interests of any
corporation, partnership, or association in which he or she is, directly or indirectly, interested. No
member, official, or employee of the EDA shall be personally liable to the Redeveloper, or any
successor in interest, in the event of any default or breach or for any amount which may become
due or on any obligations under the terms of this Agreement.
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Section 9.2. Equal Employment Opportunity. The Redeveloper, for itself and its
successors and assigns, agrees that during the construction of the Minimum Improvements
provided for in this Agreement, it will comply with all applicable equal employment and
nondiscrimination laws and regulations.
Section 9.3.Restrictions on Use. The Redeveloper agrees that through the Termination
Date it will use the Minimum Improvements for only such uses as permitted under the City’s land
use regulations and in compliance with the City Approvals.
Section 9.4. Notices andDemands. Except as otherwise expressly provided in this
Agreement, any notice, demand, or other communication under the Agreement or any related
document by either party to the other shall be sufficiently given or delivered if it is dispatched by
registered or certified United States mail, postage prepaid, return receipt requested, or delivered
personally to:
(a)in the case of the Redeveloper:Chanhassen Frontier LLC
c/o United Properties Development LLC.
651 Nicollet Mall, Suite 450
Minneapolis, MN 55402
Attn: Rick McKelvey
(b)in the case of the EDA:Chanhassen Economic
Development Authority
7700 Market Boulevard
Chanhassen, MN 55317
Attn: Executive Director
and with a copy to:Kennedy & Graven, Chartered
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
Attn: Ronald H. Batty
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 9.4.
Section 9.5. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section 9.6. Disclaimer of Relationships. The Redeveloper acknowledges that nothing
contained in this Agreement nor any act by the EDA or the Redeveloper shall be deemed or
construed by the Redeveloper or by any third person to create any relationship of third-party
beneficiary, principal and agent, limited or general partner, or joint venture between the EDA and
the Redeveloper.
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Section 9.7. Amendment. This Agreement may be amended only by the written agreement
of the parties.
Section 9.8.Recording. The EDA intends to record this Agreement among the County
land records and the Redeveloper agrees to pay for the cost of recording same.
Section 9.9.Release and Indemnification Covenants. a) Except for any negligent act of
the following named parties, the Redeveloper hereby releases from and covenants and agrees that
the EDA, and its governing body members, officers, agents, servants, and employees (the
“Indemnified Parties”) shall not be liable for, and hereby agrees to indemnify and hold harmless
the Indemnified Parties against any loss or damage to property or any injury to or death of any
person occurring at or about or resulting from any defect in the Minimum Improvements.
b)The aforesaid indemnification shall not apply to willful misrepresentation or any
willful or wanton misconduct or negligence of the EDA.
c)Except for any negligent or willful act of the EDA, the Indemnified Parties shall not
be liable for any damage or injury to the persons or property of the Redeveloper or its partners,
officers, agents, servants or employees or any other person who may be about the Apartment
Parcel or Site Improvement Parcel or Minimum Improvements due to any act of negligence of any
person.
d)The EDA hereby agrees to indemnify, protect and defend the Redeveloper, its
successors and assigns, now or forever, and hereby further agrees to hold the aforesaid harmless
from any claim, demand, suit, action or other proceeding whatsoever by any person or entity
whatsoever arising or purportedly arising from the negligence or any willful or wanton misconduct
of any Indemnified Party arising from this Agreement, the transactions contemplated hereby, and
any way connected with or upon the Redevelopment Property or Minimum Improvements.
Section 9.10. Titles of Articles and Sections. Any titles of the several parts, articles, and
sections of this Agreement are inserted for convenience of reference only and shall be disregarded
in construing or interpreting any of its provisions.
Section 9.11. Governing Law; Venue. This Agreement shall be construed in accordance
with the laws of Minnesota. Any dispute arising from this Agreement shall be heard in the State or
federal courts of Minnesota, and all parties waive any objection to the jurisdiction thereof, whether
based on convenience or otherwise.
Section 9.12. Feesand Charges. The EDA agrees not to charge the Redeveloper any fees
or costs for legal, engineering, planning or other staff time for drafting or negotiating this
Agreement or for reviewing any plans regarding the Minimum Improvements submitted in
satisfaction of this Agreement.
********************
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IN WITNESS WHEREOF, the EDA and the Redeveloper have caused this Agreement to
be duly executed in their names and behalves on or as of the date first above written.
THE CHANHASSEN ECONOMIC
DEVELOPMENT AUTHORITY
By:
Its President
By:
Its Executive Director
STATE OF MINNESOTA)
) ss.
COUNTY OF _________)
The foregoing instrument as acknowledged before me this _____ day of ____________,
2017,by _______________________ and ___________________, the President and Executive
Director, respectively, of the Chanhassen Economic Development Authority, a public body
corporate and politic under the laws of Minnesota, on behalf of the Economic Development
Authority.
____________________________________
Notary Public
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CHANHASSEN FRONTIER LLC,
a Delaware limited liability company
By:United Properties Development LLC,
a Minnesota limited liability company
Its:Manager
By:___________________________
Print:___________________________
Title:___________________________
Dated:___________________________
By:___________________________
Print:___________________________
Title:___________________________
Dated:___________________________
STATE OF MINNESOTA)
) ss.
COUNTY OF HENNEPIN)
The foregoing instrument was executed before me this _____ day of _______________,
2017, by __________________________ and _______________________, the
_________________ and ________________, respectively, of United Properties Development
LLC, a Minnesota limited liability company, as the manager of Chanhassen Frontier LLC, a
Delaware limited liability company, on behalf of the companies.
____________________________________
Notary Public
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EXHIBIT A TO
REDEVELOPMENT AGREEMENT
LEGAL DESCRIPTION OF REDEVELOPMENT PROPERTY
Lot 2, Block 1, Frontier Cinema Addition, Carver County, Minnesota.
The property’s PID Number is 25.2830020.
And:
Outlot A, Frontier Cinema Addition, Carver County, Minnesota, EXCEPT that part thereof now
platted into Chanhassen Transit Station, described as follows:
Commencing at the southeast corner of said Outlot A, Frontier Cinema Addition,
Carver County, Minnesota; thence North 00 degrees, 33 minutes, 26 seconds West,
an assumed bearing, along the east line of said Outlot A, a distance of 110.00 feet;
thence North 17 degrees 52 minutes 40 seconds East along said east line of Outlot
A, a distance of 6.11 feet to the point of beginning; thence North 11 degrees 09
minutes 45 seconds West a distance of 98.29 feet; thence North 78 degrees 50
minutes 15 seconds East a distance of 31.70 feet to said east line of Outlot A;
thence southerly along said east line of Outlot A to the point of beginning.
The property’s PID Number is 25.2830031.
And:
Lot 3, Block 1, Chanhassen Transit Station, Carver County, Minnesota, EXCEPT that part of said
Lot 3 lying southerly of Lot 2, Block 1, said Chanhassen Transit Station, and easterly of the
following described line:
Beginning at the northeast corner of Outlot A, Frontier Cinema Addition, said
Carver County, Minnesota; thence north 00 degrees 33 minutes 27 seconds West,
assumed bearing along the Northerly extension of the east line of said Outlot A, a
distance of 40.00 feet; thence South 89 degrees 26 minutes 33 seconds West a
distance of 54.37 feet to the southerly extension of the west line of said Lot 2;
thence North 00 degrees 01 minutes 05 seconds West, along said line extended a
distance of 78.92 feet to the southern most corner of said west line and said line
there terminating.
The property’s PID Number is 25.1680031.
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EXHIBIT B TO
REDEVELOPMENT AGREEMENT
APPROVED PLANS
The following plans and sketches of the Minimum Improvements constitute the Approved Plans.
\[to be completed\]
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EXHIBIT C TO
REDEVELOPMENT AGREEMENT
FORM OF
CERTIFICATE OF COMPLETION
WHEREAS, the Chanhassen Economic Development Authority, a public body corporate
and politic under the laws of Minnesota (the “EDA”), and Chanhassen Frontier LLC, a Delaware
limited liability company(the “Redeveloper”), have entered into a certain Contractfor Private
Redevelopment (the “Agreement”) dated the ____ day of ____________, 2017, and recorded in
the office of the County Recorder in Carver County, Minnesota, as Document No. __________,
which Agreement contained certain covenants and restrictions regarding completion of the
Minimum Improvements, as defined in the Agreement; and
WHEREAS, the Redeveloper has performed said covenants and conditions in a manner
deemed sufficient by the EDA to permit the execution and recording of this certification.
NOW, THEREFORE, this is to certify that all construction of the Minimum Improvements
specified to be done and made by the Redeveloper has been completed and the County Recorder in
Carver County, Minnesota, is hereby authorized to accept for recording and to record the filing of
this instrument, to be a conclusive determination of the satisfactory termination of the covenants
and conditions relating to completion of the Minimum Improvements.
Dated: _______________.
CHANHASSEN ECONOMIC
DEVELOPMENT AUTHORITY
By:
Its President
By:
Its Executive Director
STATE OF MINNESOTA)
) ss.
COUNTY OF _________)
The foregoing instrument as acknowledged before me this _____ day of ____________,
201__, by _______________________ and ___________________, the President and Executive
Director, respectively, of the Chanhassen Economic Development Authority, a public body
corporate and politic under the laws of Minnesota, on behalf of the Economic Development
Authority.
____________________________________
Notary Public
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EXHIBIT D TO
REDEVELOPMENT AGREEMENT
FORM OF AUTHORIZING RESOLUTION FOR NOTE A
CHANHASSEN ECONOMICDEVELOPMENT AUTHORITY
RESOLUTION NO. ______
RESOLUTION APPROVING THE ISSUANCE OF, AND
PROVIDING THE FORM, TERMS, COVENANTS AND
DIRECTIONS FOR THE ISSUANCE OF ITS TAXABLE
TAX INCREMENT REVENUE NOTE, SERIES 201__ IN AN
AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED
$1,300,000
BE IT RESOLVED BY the Chanhassen Economic Development Authority (the “EDA”), as
follows:
Section 1. Authorization; Award of Sale.
1.01.Authorization. The EDA has heretofore approved the establishment of Tax
Increment Financing District No. 11 (the “TIF District”) within the Downtown Chanhassen
Redevelopment Project Area (“Redevelopment Project”), and has adopted a tax increment
financing plan for the purpose of financing certain improvements within the Redevelopment
Project.
Pursuantto MinnesotaStatutes, Section 469.178, the EDA is authorized to issue and sell its
bonds for the purpose of financing a portion of the public development costs of the Redevelopment
Project. The bonds are payable from all or any portion of revenues derived from the TIF District
and pledged to the payment of the bonds. The EDA hereby finds and determines that it is in the
best interests of the EDA that it issue and sell its taxable Tax Increment Revenue Note, Series
201__ (the “Note”), in the aggregate principal amount of $1,300,000, for the purpose of financing
certain public costs of the Redevelopment Project.
1.02.Agreement Approved; Issuance, Sale and Terms of the Note. The EDA has
previously approved the Contract for Private Redevelopment (the “Agreement”) between the EDA
and Chanhassen Frontier LLC, a Delaware limited liability company (the “Owner”), and
authorized the Executive Director and President to execute the Agreement. Pursuant to the
Agreement, the Note will be issued to the Owner. The Note will be dated as of the date of delivery
and will bear interest at the rate of 5.0 percent per annum to the earlier of maturity or prepayment.
In exchange for the EDA’sissuance of the Note to the Owner, the Owner will pay certain costs
related to the Minimum Improvements (the Qualifying Costs, as defined in the Agreement)
pursuant to Section 3.3 of the Agreement. The Note will be delivered in the principal amount of
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$1,300,000 for reimbursement of the Owner’s costs in accordance with the terms of Sections 3.3
and 3.4 of the Agreement.
Section 2.Form of Note. The Note will be in substantially the following form, with
the blanks to be properly filled in and the principal amount and payment schedule adjusted as of
the date of issue:
UNITED STATE OF AMERICA
STATE OF MINNESOTA
CARVER COUNTY
CHANHASSEN ECONOMIC DEVELOPMENT AUTHORITY
No. R-1$1,300,000
TAXABLE TAX INCREMENT REVENUE NOTE
SERIES 201__
Date
Rateof Original Issue
5.0%__________
The Chanhassen Economic Development Authority (the “EDA”), for value received,
certifies that it is indebted and hereby promises to pay to Chanhassen Frontier LLC, or registered
assigns (the “Owner”), the principal sum of $1,300,000 and to pay interest thereon at the rate of 5
percent per annum, as and to the extent set forth herein.
1.Payments. Principal and interest (“Payments”) will be paid on August 1, 2020, and
each February 1 and August 1 thereafter until the earlier of payment in full or February 1, 2045
(“Payment Dates”), in the amounts and from the sources set forth in Section 3 herein. Payments
will be applied first to accrued interest, and then to unpaid principal.
Payments are payable by mail to the addressof the Owner or any other address as the
Owner may designate upon 30 days written notice to the EDA. Payments on this Note are payable
in any coin or currency of the United States of America which, on the Payment Date, is legal tender
for the payment of public and private debts.
2.Interest. Simple, non-compounding interest at the rate stated herein will accrue on
the unpaid principal, commencing on the date of original issue. Interest will be computed on the
basis of a year of 360 days and charged foractual days principal is unpaid.
3.Available Tax Increment. Payments on this Note are payable on each Payment
Date in the amount of and solely payable from “Available Tax Increment,” which will mean, on
each Payment Date, 95 percent of the Tax Increment attributable to the Redevelopment Property
and Minimum Improvements (as defined in the Agreement) and paid to the EDA by Carver
County in the six months preceding the Payment Date, all as the terms are defined in the Contract
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for Private Redevelopment between the EDA and Owner dated as of ______________, 2017 (the
“Agreement”). Available Tax Increment will not include any Tax Increment if, as of any Payment
Date, there is an uncured Event of Default by the Owner under the Agreement.
The EDA willhave no obligation to pay principal of and interest on this Note on each
Payment Date from any source other than Available Tax Increment, and the failure of the EDA to
pay the entire amount of principal or interest on this Note on any Payment Date will not constitute
a default hereunder as long as the EDA pays principal and interest hereon to the extent of
Available Tax Increment. The EDA will have no obligation to pay unpaid balance of principal or
accrued interest that may remain after the final Paymenton February 1, 2045.
4.Optional Prepayment. The principal sum and all accrued interest payable under
this Note is pre-payable in whole or in part at any time by the EDA without premium or penalty.
No partial prepayment will affect the amount or timingof any other regular payment otherwise
required to be made under this Note.
5.Suspension of Payment for Default. At the EDA’s option, the EDA’s obligation to
make any payments under this Note will be suspended upon the occurrence of an Event of Default
on the part of the Redeveloper as defined in Section 8.1 of the Agreement, but only if the Event of
Default has not been cured in accordance with Section 8.2 of the Agreement.
6.Nature of Obligation. This Note is a single note in the total principal amount of
$1,300,000 issued to aid in financing certain public costs of a Redevelopment Project undertaken
by the EDA pursuant to Minnesota Statutes, Sections 469.001 through 469.047, as amended, and is
issued pursuant to an authorizing resolution (the “Resolution”) duly adopted by the EDA on
______________, 201__, pursuant to and in full conformity with the Constitution and laws of the
State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.179, as amended. This
Note is a limited obligation of the EDA which is payable solely from Available Tax Increment
pledged to the payment hereof under the Resolution. This Note and the interest hereon will not be
deemed to constitute a general obligation of the State of Minnesota or any political subdivision
thereof, including, without limitation, the EDA or the city of Chanhassen. Neither the State of
Minnesota, nor any political subdivision thereof will be obligated to pay the principal of or interest
on this Note or other costs incident hereto exceptout of Available Tax Increment, and neither the
full faith and credit nor the taxing power of the State of Minnesota or any political subdivision
thereof is pledged to the payment of the principal of or interest on this Note or other costs incident
hereto.
7.Estimated Tax Increment Payments. Any estimates of Tax Increment prepared by
the EDA or its financial advisors in connection with the TIF District or the Agreement are for the
benefit of the EDA, and are not intended as representations on which the Owner may rely.
THE EDA MAKES NO REPRESENTATION OR WARRANTY THAT THE
AVAILABLE TAX INCREMENT WILL BE SUFFICIENT TO PAY THE PRINCIPAL OF
AND INTEREST ON THIS NOTE.
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8.Registration and Transfer. As provided in the Resolution, and subject to certain
limitations set forth herein, this Note is issuable only as a fully registered note without coupons.
This Note is transferable upon the books of the EDA kept for that purpose at the principal office of
the Executive Director of the EDA as Registrar, by the Owner hereof in person or by the Owner’s
attorney duly authorized in writing, upon surrender of this Note together with a written instrument
of transfer satisfactory to the EDA, duly executed by the Owner. Upon the transfer or exchange
and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the
EDA with respect to the transfer or exchange, there will be issued in the name of the transferee a
new Note of the same aggregate principal amount, bearing interest at the same rate and maturing
on the same dates.
This Note may be transferred, assigned or pledged without the approval of the EDA;
provided that this Note will not be transferred to any person other than an affiliate, or other related
entity, of the Owner unless theEDA has been provided with an investment letter in a form
substantially similar to the investment letter submitted by the Owner or a certificate of the
transferor, in a form satisfactory to the EDA, that the transfer is exempt from registration and
prospectus delivery requirements of federal and applicable state securities laws. Notwithstanding
anything to the contrary in this Note, in no event will a lender providing funds to the Redeveloper
and taking an assignment of the Note as security for such fundsbe required to sign an investment
letter at either the time of execution of an assignment or transfer of the Note as a result of the
assignment. The holder of the Note may be different than the Owner of the Apartment Parcel and
the Site Improvement Parcel.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required
by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be
performed in order to make this Note a valid and binding limited obligation of the EDA according
to its terms, have been done, do exist, have happened, and have been performed in due form, time
and manner as so required.
IN WITNESS WHEREOF, the board of commissioners of the Chanhassen Economic
Development Authority, has caused this Note to be executed with the manual signatures of its
President and Executive Director, all as of the Date of Original Issue specified above.
CHANHASSEN ECONOMIC
DEVELOPMENT AUTHORITY
PresidentExecutive Director
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REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond register of
the Executive Director of the EDA, in the name of the person last listed below.
Date of RegistrationRegistered OwnerSignature of EDA Executive Director
Chanhassen Frontier LLC,
c/o United Properties
Development LLC
651 Nicollet Mall, Suite 450
Minneapolis, MN 55402
Attn: Rick McKelvey
Federal Tax ID #___________
\[End of Form of Note\]
Section 3.Terms, Execution and Delivery.
3.01.Denomination, Payment. The Note will be issued as a single typewritten note
numbered R-1.
The Note will be issuable only in fully registered form. Principal of and interest on the
Note will be payable by check or draft issued by the Registrar described herein.
3.02.Dates; Interest Payment Dates. Principal of and interest on the Note will be payable
by mail to the owner of record thereof as of the close of business on the fifteenth day of the month
preceding the Payment Date, whether or not the day is a business day.
3.03.Registration. The EDA hereby appoints the Executive Director to perform the
functions of registrar, transfer agent and paying agent (the “Registrar”). The effect of registration
and the rights and duties of the EDA and the Registrar with respect thereto will be as follows:
(a)Register. The Registrar will keep at his office a bond register in which the
Registrar will provide for the registration of ownership of the Note and the registration of transfers
and exchanges of the Note.
(b)Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the
registered owner thereof or accompanied by a written instrument of transfer, in form reasonably
satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly
authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the
name of the designated transferee or transferees, a new Note of a like aggregate principal amount
and maturity, as requestedby the transferor. Notwithstanding the foregoing, the Note will not be
transferred to any person other than an affiliate, or other related entity, of the Owner unless the
EDA has been provided with an investment letter in a form substantially similar to the investment
letter submitted by the Owner or a certificate of the transferor, in a form satisfactory to the EDA,
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that the transfer is exempt from registration and prospectus delivery requirements of federal and
applicable state securities laws. The Registrar may close the books for registration of any transfer
after the fifteenth day of the month preceding each Payment Date and until the Payment Date.
(c)Cancellation. The Note surrendered upon any transfer will be promptly cancelled
by the Registrar and thereafter disposed of as directed by the EDA.
(d)Improper or Unauthorized Transfer. When the Note is presented to the Registrar
for transfer, the Registrar may refuse to transfer the same until he is satisfied that the endorsement
on the Note or separate instrument of transfer is legally authorized. The Registrar will incur no
liability for his refusal, in good faith, to make transfers which he, in his judgment, deems improper
or unauthorized.
(e)Persons Deemed Owners. The EDA and the Registrar may treat the person in
whose name the Note is at any time registered in the bond register as the absolute owner of the
Note, whether the Note is overdue or not, for the purpose of receiving payment of, or on account
of, the principal of and interest on the Note and for all other purposes, and all the payments so
made to any registered owner or upon the owner’s order will be valid and effectual to satisfy and
discharge the liability of the EDA upon the Note to the extent of the sum or sums so paid.
(f)Taxes, Fees and Charges. For every transfer or exchange of the Note, the Registrar
may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee,
or other governmental charge required to be paid with respect to the transfer or exchange.
(g)Mutilated, Lost, Stolen or Destroyed Note. In case the Note becomes mutilated or
is lost, stolen, or destroyed, the Registrar will deliver a new Note of like amount, maturity dates
and tenor in exchange and substitution for and upon cancellation of the mutilated Note or in lieu of
and in substitution for the Note lost, stolen, or destroyed, upon the payment of the reasonable
expenses and charges of the Registrar in connection therewith; and, in the case the Note lost,
stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that the Note was
lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an
appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the
EDA and the Registrar will be named as obligees. The Note so surrendered to the Registrar will be
cancelled by him and evidence of the cancellation will be given to the EDA. If the mutilated, lost,
stolen, or destroyed Note has already matured or been called for redemption in accordance with its
terms, it will not be necessary to issue a new Note prior to payment.
3.04.Preparation and Delivery. The Note will be prepared under the direction of the
Executive Director and will be executed on behalf of the EDA by the signatures of its President
and Executive Director. In case any officer whose signature appears on the Note ceases to be the
officer before the delivery of the Note, the signature will nevertheless be valid and sufficient for all
purposes, the same as if the officer had remained in office until delivery. When the Note has been
so executed, it will be delivered by the EDA to the Owner following the delivery of the necessary
items delineated in Section 3.3 of the Agreement.
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Section 4. Security Provisions.
4.01.Pledge. The EDA hereby pledges to the payment of the principal of and interest on
the Note all Available Tax Increment as defined in the Note. Available Tax Increment will be
applied to payment of the principal of and interest on the Note in accordance with the terms of the
form of Note set forth in Section 2 of this resolution.
4.02.Bond Fund. Until the date the Note is no longer outstanding and no principal
thereof or interest thereon (to the extent required to be paid pursuant to this resolution) remains
unpaid, the EDA will maintain a separate and special “Bond Fund” to be used for no purpose other
than the payment of the principal of and interest on the Note. The EDA irrevocably agrees to
appropriate to the Bond Fund in each year Available Tax Increment. Any Available Tax
Increment remaining in the Bond Fund will be transferred to the EDA’s account for the TIF
District upon the payment of all principal and interest to be paid with respect to the Note.
Section 5.Certification of Proceedings.
5.01.Certification of Proceedings. The officers of the EDA are hereby authorized and
directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and
records of the EDA, and the other affidavits, certificates, and information as may be required to
show the facts relating to the legality and marketability of the Note as the same appear from the
books and records under their custody and control or as otherwise known to them, and all the
certified copies, certificates, and affidavits, including any heretofore furnished, will be deemed
representations of the EDA as to the facts recited therein.
Section 6. Effective Date. This resolution will be effective upon execution by the
President and Executive Director following authorization by the board of commissioners of the
EDA.
Adopted by the board of commissioners of the Chanhassen Economic Development Authority,
this ____ day of ________, 201___.
President
Executive Director
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EXHIBIT E TO
REDEVELOPMENT AGREEMENT
FORM OF INVESTMENT LETTER
To the Chanhassen Economic Development Authority (the “EDA”)
Attention: Executive Director
Dated: __________________, 201__
Re:$1,300,000 Tax Increment Revenue Note (Frontier Redevelopment Project)
The undersigned, as Purchaser of $1,300,000 in principal amount of the above-captioned
Tax Increment Revenue Note (Frontier Redevelopment Project) (the “Note”), approved by the
Board of Commissioners of the Chanhassen Economic Development Authority on
______________, 201__, hereby represents to you and to Kennedy & Graven, Chartered,
Minneapolis, Minnesota, as legal counsel to the EDA, as follows:
1.We understand and acknowledge that the Note is delivered to the Purchaser on this
date pursuant to the Contract for Private Redevelopment by and between the EDA and the
Purchaser dated __________________, 2017 (the “Agreement”).
2.The Note is payable as to principal and interest solely from Available Tax
Increment pledged to the Note, as defined therein.
3.We have sufficient knowledge and experience in financial and business matters,
including purchase and ownership of municipal obligations, to be able to evaluate the risks and
merits of the investment represented by the purchase of the above-stated principal amount of the
Note.
4.We acknowledge that no offering statement, prospectus, offering circular or other
comprehensive offering document or disclosure containing material information with respect to
the EDA and the Note has been issued or prepared by the EDA, and that, in due diligence, we have
made our own inquiry and analysis with respect to the EDA, the Note and the security therefor, and
other material factors affecting the security and payment of the Note.
5.We acknowledge that we have either been supplied with or have access to
information, including financial statements and other financial information, to which a reasonable
investor would attach significance in making investment decisions, and we have had the
opportunity to ask questions and receive answers from knowledgeable individuals concerning the
EDA, the Note and the security therefor, and that as reasonable investors we have been able to
make our decision to purchase the above-stated principal amount of the Note.
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6.We have been informed that the Note (i) is not being registered or otherwise
qualified for sale under the “Blue Sky” laws and regulations of any state, or under federal
securities laws or regulations, (ii) will not be listed on any stock or other securities exchange, and
(iii) will carry no rating from any rating service.
7.We acknowledge that the EDA and Kennedy & Graven, Chartered, as legal counsel
to the EDA, have not made any representations or warranties as to the status of interest on the Note
for the purpose of federal or state income taxation.
8.We represent to you that we are purchasing the Note for our own account and not
for resale or other distribution thereof, except to the extent otherwise provided in the Note or as
otherwise approved in writing by the EDA.
9.All capitalized terms used herein have the meaning provided in the Agreement
unless the context clearly requires otherwise.
10.The Purchaser’s federal tax identification number is __________________.
11.We acknowledge receipt of the Note on the date hereof.
IN WITNESS WHEREOF, the undersigned has executed this Investment Letter as of the
date and year first written above.
CHANHASSEN FRONTIER LLC,
a Delaware limited liability company
By:United Properties Development LLC,
a Minnesota limited liability company
Its:Manager
By:___________________________
Print:___________________________
Title:___________________________
Dated:___________________________
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By:___________________________
Print:___________________________
Title:___________________________
Dated:___________________________
STATE OF MINNESOTA)
) ss.
COUNTY OF HENNEPIN)
The foregoing instrument was executed before me this _____ day of _______________,
2017, by __________________________ and _______________________, the
_________________ and ________________, respectively, of United Properties Development
LLC, a Minnesota limited liability company, as the manager of Chanhassen Frontier LLC, a
Delaware limited liability company, on behalf of the companies.
____________________________________
Notary Public
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EXHIBIT F TO
REDEVELOPMENT AGREEMENT
FORM OF ASSESSMENT AGREEMENT
ASSESSMENT AGREEMENT
THIS ASSESSMENT AGREEMENT (the “Assessment Agreement”) is made and dated as of this
___ day of __________, 2017, by and between the Chanhassen Economic Development
Authority, a public body corporate and politic under the laws of Minnesota (the “EDA”), and
Chanhassen Frontier LLC, a Delaware limited liability company (the “Redeveloper”).
WITNESSETH:
WHEREAS, the Redeveloper is the fee owner of the property legally described on Exhibit
A attached hereto, which property contains the Minimum Improvements described herein, (the
“Redeveloper Property”); provided that the Redeveloper Property does not include the adjacent
retail parcel upon which a third party is constructing a grocery store building; and
WHEREAS, on or before the date hereof, the EDA and the Developer have entered into a
Contract for Private Redevelopment (the “Agreement”) concerning the RedevelopmentProperty;
and
WHEREAS, pursuant to the Agreement, the Redeveloper has agreed to construct an
apartment building containing approximately 130134market rate rental housing units with a first
level parking structure and surface parking and other site improvements (the “Minimum
Improvements”) on the Redeveloper Property; and
WHEREAS, the EDA and the Redeveloper desire to establish a minimum marketvalue for
the Redeveloper Property and the Minimum Improvements to be constructed thereon, pursuant to
Minnesota Statutes, section 469.177, Subd. 8 attached as Exhibit B; and
WHEREAS, the EDA and the Assessor for Carver County, Minnesota have reviewed the
Plans for the Minimum Improvements which the Redeveloper has agreed to construct on the
Redeveloper Property pursuant to the Agreement.
NOW, THEREFORE, the parties to this Assessment Agreement, in consideration of the
promises, covenants and agreements made herein and in the Agreement by each to the other, do
hereby agree as follows:
1.The parties agree that the Minimum Market Value of the Redeveloper
Property and the Minimum Improvements shall be $21,400,000 as of January 2, 2019 for taxes
payable beginning in 2020, notwithstanding any failure to complete construction of the Minimum
Improvements by such date.
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2.The Minimum Market Value herein established shall be of no further force and
effect and this Assessment Agreement shall terminate on theTermination Date. The “Termination
Date” means the date Tax Increment Financing District No. 11 terminates, which is date is the
earliest of: (a) February 1, 2045, is the last day of payment of any Available Tax Increment from
the EDA to the Redeveloperunder the Agreement, or (b) the date all of the EDA’s financial
obligations with regard to the TIF District have been satisfied, or (c) the date that the Agreement
and Note A and Note B, if issued, are terminated by the EDA for any reason; or (d) payment of all
amounts owed under Note A and Note B.
3.Upon the occurrence of the Termination Date, the parties agree to execute and
record a document terminating this Assessment Agreement and providing for the release of any
minimum assessment.
4.This Assessment Agreement shall be promptly recorded against the Redeveloper
Property with a copy of Minnesota Statutes, section 469.177, Subd. 8 set forth in Exhibit B
attached hereto.
5.Neither the preambles nor the provisions of this Assessment Agreement are
intended to, nor shall they be construed as, modifying the terms of the Agreement. Unless the
context indicates clearly to the contrary, the terms used in this Assessment Agreement shall have
the same meaning as the terms used in the Agreement.
6.This Assessment Agreement shall inure to the benefit of and be binding upon the
successors and assigns of the parties.
7.Each of the parties represents and warrants that it has authority to enter into this
Assessment Agreement and to take all actions required of it and has taken all actions necessary to
authorize the execution and delivery of this Assessment Agreement.
8.In the event any provision of this Assessment Agreement shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
9.The parties hereto agree that they will, from time to time, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, such supplements, amendments
and modifications hereto, and such further instruments as may reasonably be required for
correcting any inadequate, incorrect, or amended description of the Redeveloper Property, or for
carrying out the expressed intention of this Assessment Agreement.
10.This Assessment Agreement may not be amended nor any of its terms modified
except by a writing authorized and executed by all parties hereto.
11.This Assessment Agreement may be simultaneously executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the
same instrument.
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12.This Assessment Agreement shall be governed by and construed in accordance
with the laws of Minnesota.
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THE CHANHASSEN ECONOMIC
DEVELOPMENT AUTHORITY
By:
Its President
By:
Its Executive Director
STATE OF MINNESOTA)
) ss.
COUNTY OF _________)
The foregoing instrument as acknowledged before me this _____ day of ____________,
2017, by _______________________ and ___________________, the President and Executive
Director, respectively, of the Chanhassen Economic Development Authority, a public body
corporate and politic under the laws of Minnesota, on behalf of the Economic Development
Authority.
____________________________________
Notary Public
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CHANHASSEN FRONTIER LLC,
a Delaware limited liability company
By:United Properties Development LLC,
a Minnesota limited liability company
Its:Manager
By:___________________________
Print:___________________________
Title:___________________________
Dated:___________________________
By:___________________________
Print:___________________________
Title:___________________________
Dated:___________________________
STATE OF MINNESOTA)
) ss.
COUNTY OF HENNEPIN)
The foregoing instrument was executed before me this _____ day of _______________,
2017, by __________________________ and _______________________, the
_________________ and ________________, respectively, of United Properties Development
LLC, a Minnesota limited liability company, as the manager of Chanhassen Frontier LLC, a
Delaware limited liability company, on behalf of the companies.
____________________________________
Notary Public
This instrument was drafted by:
Kennedy & Graven, Chartered (RHB)
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612) 337-9300
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EXHIBIT A TO
ASSESSMENT AGREEMENT
Legal Description of Redeveloper Property
\[Include legal of only Apartment Parcel and Site Improvement Parcel\]
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EXHIBIT B
TO ASSESSMENT AGREEMENT
Section 469.177, subd. 8. Assessment Agreements. An authority may enter into a
written assessment agreement with any person establishing a minimum market value of land,
existing improvements, or improvements to be constructed in a district, if the property is owned
or will be owned by the person. The minimum market value established by an assessment
agreement may be fixed, or increase or decrease in later years from the initial minimum market
value. If an agreement is fully executed before July 1 of an assessment year, the market value
as provided under the agreement must be used by the county or local assessor as the taxable
market value of the property for that assessment. Agreements executed on or after July 1 of an
assessment year become effective for assessment purposes in the following assessment year.
An assessment agreement terminates on the earliest of the date on which conditions in the
assessment agreement for termination are satisfied, the termination date specified in the
agreement, or the date when tax increment is no longer paid to the authority under 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 and the property that is the subject of the agreement 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, certifies that the market values assigned to the land
and improvements are reasonable.
The assessment agreement shall be filed for record and recorded in the office of the
county recorder or the registrar of titles of each county where the real estate or any part thereof
is situated. After the agreement becomes effective for assessment purposes, the assessor shall
value the property under section 273.11, except that the market value assigned shall not be less
thanthe minimum market value established by the assessment agreement. The assessor may
assign a market value to the property in excess of the minimum market value established by the
assessment agreement. The owner of the property may seek, through the exercise of
administrative and legal remedies, a reduction in market value for property tax purposes, but no
city assessor, county assessor, county auditor, board of review, board of equalization,
commissioner of revenue, or court of this state shall grant a reduction of the market value below
the minimum market value established by 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
an assessment agreement constitutes notice of the agreement to anyone who acquires any
interest in the land or improvements that is subject to the assessment agreement, and the
agreement is binding upon them.
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CERTIFICATION BY ASSESSOR
The undersigned, having reviewed the plans and specifications for the 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
Assessment Agreement appears reasonable, hereby certifies as follows: The undersigned
Assessor, being legally responsible for the assessment of the described property, hereby certifies
that the market value assigned to such land and improvements at the property legally described on
Exhibit A attached hereto shall be not less than $21,400,00022,058,410as of January 2, 2019 for
taxes payable beginning in 2020 until termination of this Assessment Agreement.
_______________________________________
County Assessor for
Carver County, Minnesota
STATE OF MINNESOTA )
) ss.
COUNTY OF CARVER)
The foregoing instrument was acknowledged before me this ______ day of
________________, 2017, by ________________, the County Assessor, Carver County,
Minnesota.
____________________________________
Notary Public
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