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F-1. Modification to the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area and the Establishment of Tax Increment Financing District No. 11 Y o ►- - I • CITY OF CHANIIASSEN S Chanhassen is a Community for Life-Providing for Today and Planning for Tomorrow # H t MEMORANDUM TO: Mayor& City Council FROM: Todd Gerhardt, City Manager er DATE: September 11, 2017 SUBJ: Public Hearing on the Modification to the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area and the establishment of Tax Increment Financing District No. 11. PROPOSED MOTION: "The Chanhassen City Council Adopts Resolution 2017-61 Approving Modification to the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area and Tax Increment Financing Plan No. 11 and; Approves the contract for Private Redevelopment by and between the Chanhassen Economic Development Authority and Chanhassen Frontier, LLC and; Approves the Public Improvement and Special Assessment Agreement with Chanhassen Frontier, LLC." Approval requires a simple majority vote. Staff is requesting the City Council open a public hearing regarding the Economic Development Authority's (EDA) modification to the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area, and the establishment of Tax Increment Financing(TIF) District #11 (see attachment#2). The TIF Plan will govern the budget and use of tax increment revenues toward this end and is subject to the City Council's approval after a public hearing. The plan also outlines the EDA's intent to provide$1.3M in assistance in order to help create a 134-unit market rate apartment complex and a 19,000 square-foot specialty grocery store(Aldi). Under the plan, only the apartment complex will receive assistance. The City Council is also being asked to approve a Private Redevelopment Agreement between the EDA and Chanhassen Frontier, LLC (see attachment#3). The agreement states that the EDA believes it is in the public's best interest to remove a structurally substandard building and replace it with a new commercial user and a market-rate apartment building in order to enhance PH 952.227.1100• www.ci.chanhassen.mn.us • FX 952.227.1110 7700 MARKET BOULEVARD • PO BOX 147 • CHANHASSEN • MINNESOTA 55317 Mayor& City Council Downtown Chanhassen Redevelopment Project Area and TIP District No. 11 September 11, 2017 Page 2 the local tax base. The agreement also calls for a minimum taxable market value for the apartment complex of$22,058,410 as of January 2, 2019 for taxes payable in 2020. This value will stay in place until the termination of the Private Redevelopment Agreement. If the City Council approves the actions above, later this evening the EDA will consider approval of the establishment of TIF District No. 11, a redevelopment district within the Downtown Chanhassen Redevelopment Project Area. It should be noted that the TIF District is not a housing district. Therefore, no income limitations can be set on either the occupants of the building or the rent charged. Per Section 6.3 of the Private Redevelopment Agreement, the residential portion of the project will be built and shall remain a Market Rate Rental complex. The entire agreement will be recorded against the property and can be changed or released only by City Council and EDA approval. The Redevelopment Project will include the demolition of the existing structurally substandard building, and replace it with a 19,000 square-foot specialty grocery store (Aldi) and a 134-unit market-rate apartment building(Venue)with underground parking. In consideration of the redevelopment, the EDA will reimburse Chanhassen Frontier, LLC the qualifying costs outlined below while constructing the"mixed-use development"in the principal loan amount of$1.3M. No funds will be distributed to the grocery portion of the project, as the reimbursable funds are designated for the residential user only. The redeveloper must submit evidence, including paid receipts and lien waivers, for all qualifying costs in the amount not less than $1.3M. Examples of qualified costs Estimates Demolition $100,000 Utility upgrades $500,000 Earthwork/grading $480,000 Parking structure construction $3,400,000 Surface parking construction $200,000 Principal and interest payments will be paid on August 1, 2020, and each February 1 and August 1 thereafter until the note has been satisfied. Based on Ehlers' proposed schedule, the note should be satisfied by February 1, 2025. This note is only payable from "Available Tax Increment,"which means the redevelopment must pay annual taxes in order to receive 95%of the tax increment back. If the redeveloper does not make the annual tax payment then they will not receive any increment; this is known as a"pay-as-you-go"note. Once the taxes are paid, then the qualified costs outlined in this agreement are reimbursed. Annual available increment is estimated at $294,468. The developer is also agreeing with the city to be specially assessed in the amount of$2.1M for improvements to Market Boulevard. The amount of the special assessments is further restricted to an amount not to exceed the tax increment dollars received by the property owners. This is outlined in both the Private Redevelopment Agreement under"Note B" and the"Special Assessment Agreement" (see attachment#3). These Market Boulevard improvements are needed Mayor& City Council Downtown Chanhassen Redevelopment Project Area and TIF District No. 11 September 11, 2017 Page 3 to accommodate additional traffic attributable to the new apartment building and site improvements. ATTACHMENTS 1. Resolution 2017-61. 2. Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area and the establishment of Tax Increment Financing District No. 11. 3. Private Redevelopment Agreement between the EDA and Chanhassen Frontier, LLC. 4. Assessment Agreement for Market Boulevard Improvements. 5. Documents supporting/opposing project(3). 6. Planning Commission minutes dated September 5, 2017, g:\admin\tg\frontier building redevelopment\cc memo 09-11-2017.docx CITY OF CHANHASSEN CARVER AND HENNEPIN COUNTIES, MINNESOTA DATE: September 11, 2017 RESOLUTION NO: 2017-61 MOTION BY: SECONDED BY: RESOLUTION APPROVING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR THE DOWNTOWN CHANHASSEN REDEVELOPMENT PROJECT AREA; AND ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 11 THEREIN AND APPROVING A TAX INCREMENT FINANCING PLAN THEREFOR. BE IT RESOLVED by the City Council (the "Council") of the City of Chanhassen, Minnesota (the "City"), as follows: Section 1. Recitals 1.01. The Board of Commissioners of the Chanhassen Economic Development Authority (the "EDA") has heretofore established the Downtown Chanhassen Redevelopment Project Area and adopted the Redevelopment Plan therefor. It has been proposed by the EDA to adopt a Modification to the Redevelopment Plan (the "Redevelopment Plan Modification") for the Downtown Chanhassen Redevelopment Project Area (the "Project Area") and establish Tax Increment Financing District No. 11 (the "District") therein and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the Redevelopment Plan Modification and the TIF Plan are referred to collectively herein as the "Plans"); all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.090 to 469.1082 and Sections 469.174 to 469.1794, all inclusive, as amended, (the "Act") all as reflected in the Plans, and presented for the Council's consideration. 1.02. The EDA and City have investigated the facts relating to the Plans and have caused the Plans to be prepared. 1.03. The EDA and City have performed all actions required by law to be performed prior to the establishment of the District and the adoption and approval of the proposed Plans, including, but not limited to, notification of Carver County and Independent School District No. 112 having taxing jurisdiction over the property to be included in the District, a review of and written comment on the Plans by the City Planning Commission, adoption of the Plans by the EDA on September 11, 2017, and the holding of a public hearing upon published notice as required by law. 1.04. Certain written reports (the "Reports") relating to the Plans and the activities contemplated therein have heretofore been prepared by staff and consultants and submitted to the Council and/or made a part of the City files and proceedings on the Plans. The Reports, including the redevelopment qualifications reports and planning documents, include data, information and/or substantiation constituting or relating to the basis for the other findings and determinations made in this resolution. The Council hereby confirms, ratifies and adopts the Reports, which are hereby incorporated into and made as fully a part of this resolution to the same extent as if set forth in full herein. 1.05 The City is not modifying the boundaries of the Downtown Chanhassen Redevelopment Project Area, but is however, modifying the Redevelopment Plan therefor. Section 2. Findings for the Adoption and Approval of the Plans. 2.01. The Council hereby find that the Plans are intended and, in the judgment of this Council, the effect of such actions will be, to provide an impetus for development in the public interest and accomplish certain objectives as specified in the Plans, which are hereby incorporated herein. Section 3. Findings for the Establishment of the District 3.01. The Council hereby finds that the District is in the public interest and is a "redevelopment district" under Minnesota Statutes, Section 469.174, Subd. 10(a) of the Act. 3.02. The Council further finds that the proposed redevelopment would not occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the District permitted by the Tax Increment Financing Plan, that the Plans conforms to the general plan for the development or redevelopment of the City as a whole; and that the Plans will afford maximum opportunity consistent with the sound needs of the City as a whole, for the development or redevelopment of the District by private enterprise. 3.03. The Council further finds, declares and determines that the City made the above findings stated in this Section and has set forth the reasons and supporting facts for each determination in writing, attached hereto as Exhibit A. 3.04. The EDA elects to calculate fiscal disparities for the District in accordance with Minnesota Statutes, Section 469.177, Subd. 3, clause b, which means the fiscal disparities contribution would be taken from inside the District. Section 4. Public Purpose 4.01. The approval of the Plans conforms in all respects to the requirements of the Act and will help fulfill a need to develop an area of the City which is already built up, to provide employment opportunities, to improve the tax base and to improve the general economy of the State and thereby serves a public purpose. For the reasons described in Exhibit A, the City believes these benefits directly derive from the tax increment assistance provided under the TIF Plan. A private developer will receive only the assistance needed to make this development financially feasible. As such, any private benefits received by a developer are incidental and do not outweigh the primary public benefits. Section 5. Approval and Adoption of the Plans 5.01. The Plans, as presented to the Council on this date, including without limitation the findings and statements of objectives contained therein, are hereby approved, ratified, established, and adopted and shall be placed on file in the office of the City Manager. 5.02. The staff of the City, the City's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plans and to negotiate, draft, prepare and present to this Council for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. 5.03 The Auditor of Carver County is requested to certify the original net tax capacity of the District, as described in the Plans, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased; and the Chanhassen Economic Development Authority is authorized and directed to forthwith transmit this request to the County Auditor in such form and content as the Auditor may specify, together with a list of all properties within the District, for which building permits have been issued during the 18 months immediately preceding the adoption of this resolution. 5.04. The EDA Executive Director is further authorized and directed to file a copy of the Plans with the Commissioner of the Minnesota Department of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a. Passed and adopted by the Chanhassen City Council this 11th day of September, 2017. ATTEST: Todd Gerhardt, City Manager Denny Laufenburger, Mayor YES NO ABSENT EXHIBIT A RESOLUTION NO. 2017-61 The reasons and facts supporting the findings for the approval of the Tax Increment Financing Plan (TIF Plan) for Tax Increment Financing District No. 11 (District), as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: 1. Finding that the District is a redevelopment district as defined in M.S., Section 469.174, Subd. 10. The District consists of three parcels, with plans to redevelop the area for rental housing and commercial/industrial purposes. At least 70 percent of the area of the parcels in the District is occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures and more than 50 percent of the buildings in the District, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance. (See Appendix F of the TIF Plan.) 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax incrementfinancing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the District permitted by the TIF Plan. The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future: This finding is supported by the fact that the redevelopment proposed in the TIF Plan meets the City's objectives for redevelopment. Due to the high cost of redevelopment on the parcels currently occupied by substandard buildings, the limited amount of commercial property for expansion adjacent to the existing project, the incompatible land uses at close proximity, and the cost of financing the proposed improvements, this project is feasible only through assistance, in part, from tax increment financing. The developer was asked for and provided its proforma as justification that the developer would not have gone forward without tax increment assistance. In addition, public roadway improvements are needed to facilitate the new private development. The City has made expenditures in preparation for the public improvement costs associated with the redevelopment, which it anticipates being repaid with TIF. The increased market value of the site that could reasonably be expected to occur without the use oftax incrementfinancing would be less than the increase in market value estimated to result from theproposed development after subtracting the present value ofthe projected tax increments for the maximum duration of the District permitted by the TIF Plan: This finding is justified on the grounds that the cost of site and public improvements and utilities add to the total redevelopment cost. The improvements are proposed to be constructed in M two phases. Phase 1 will include the demolition of the existing Frontier building and required earthwork, grading and site preparation, utility improvements and construction of underground and surface parking. Phase 2 will include street improvements that will be constructed to facilitate the increased traffic to the downtown site, a portion of which will be assessed to the project. Historically, site and public improvements costs in this area have made redevelopment infeasible without tax increment assistance. The City reasonably determines that no other redevelopment of similar scope is anticipated on this site without substantially similar assistance being provided to the development. Therefore, the City concludes as follows: a. The City's estimate of the amount by which the market value of the entire District will increase without the use of tax increment financing is $0. b. If the proposed development occurs, the total increase in market value will be $22,144,610. C. The present value of tax increments from the District for the maximum duration of the district permitted by the TIF Plan is estimated to be $3,954,399. d. Even if some development other than the proposed development were to occur, the Council finds that no alternative would occur that would produce a market value increase greater than $18,190,211 (the amount in clause b less the amount in clause c) without tax increment assistance. 3. Finding that the TIFPlan for the District conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission reviewed the TIF Plan and found that the TIF Plan conforms to the general development plan of the City. 4. Finding that the TIF Plan for the District will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of Downtown Chanhassen Redevelopment Project Area by private enterprise. The project to be assisted by the District will result in increased employment in the City and the State of Minnesota, the renovation of substandard properties, increased tax base of the State, add a high quality development, and increase the availability of safe and decent life -cycle housing in the City. As of August 31, 2017 Draft for Public Hearing Modification to the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area and the Tax Increment Financing Plan for the establishment of Tax Increment Financing District No. 11 (a redevelopment district) within the Downtown Chanhassen Redevelopment Project Area Chanhassen Economic Development Authority City of Chanhassen Carver County State of Minnesota Public Hearing: September 11, 2017 Adopted: Prepared by: EHLERS &ASSOCIATES, INC. EH L E R C V 306 651-697-8500 Df xVe651 697I8555inn�tehlers i c.com Table of Contents (for reference purposes only) Section 1 - Modification to the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area ..................... 1-1 Foreword............................................................. 1-1 Section 2 - Tax Increment Financing Plan for Tax Increment Financing District No. 11 ................................... 2-1 Subsection 2-1. Foreword ............................................... 2-1 Subsection 2-2. Statutory Authority ........................................ 2-1 Subsection 2-3. Statement of Objectives ................................... 2-1 Subsection 2-4. Redevelopment Plan Overview .............................. 2-1 Subsection 2-5. Description of Property in the District and Property To Be Acquired . 2-2 Subsection 2-6. Classification of the District ................................. 2-2 Subsection 2-7. Duration and First Year of Tax Increment of the District ........... 2-4 Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements ................ 2-4 Subsection 2-9. Sources of Revenue/Bonds to be Issued ...................... 2-5 Subsection 2-10. Uses of Funds ........................................... 2-6 Subsection 2-11. Fiscal Disparities Election .................................. 2-6 Subsection 2-12. Business Subsidies ....................................... 2-7 Subsection 2-13. County Road Costs ....................................... 2-8 Subsection 2-14. Estimated Impact on Other Taxing Jurisdictions ................. 2-8 Subsection 2-15. Supporting Documentation ................................ 2-10 Subsection 2-16. Definition of Tax Increment Revenues ....................... 2-11 Subsection 2-17. Modifications to the District ................................ 2-11 Subsection 2-18. Administrative Expenses .................................. 2-11 Subsection 2-19. Limitation of Increment ................................... 2-12 Subsection 2-20. Use of Tax Increment .................................... 2-13 Subsection 2-21. Excess Increments ...................................... 2-14 Subsection 2-22. Requirements for Agreements with the Developer .............. 2-14 Subsection 2-23. Assessment Agreements ................................. 2-14 Subsection 2-24. Administration of the District ............................... 2-14 Subsection 2-25. Annual Disclosure Requirements ........................... 2-15 Subsection 2-26. Reasonable Expectations ................................. 2-15 Subsection 2-27. Other Limitations on the Use of Tax Increment ................. 2-15 Subsection 2-28. Summary .............................................. 2-16 Appendix A Project Description...................................................... A-1 Appendix B Maps of the Downtown Chanhassen Redevelopment Project Area and the District .... B-1 Appendix C Description of Property to be Included in the District ............................ C-1 Appendix D Estimated Cash Flow for the District ........................................ D-1 Appendix E Minnesota Business Assistance Form ....................................... E-1 Appendix F Redevelopment Qualifications for the District .................................. F-1 Appendix G Findings Including But/For Qualifications ..................................... G-1 Section 9 - Modification to the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area Foreword The following text represents a Modification to the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area. This modification represents a continuation ofthe goals and objectives set forth in the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area. Generally, the substantive changes include the establishment of Tax Increment Financing District No. 11. For further information, a review of the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area is recommended. It is available from the City Manager at the City of Chanhassen. Other relevant information is contained in the Tax Increment Financing Plans for the Tax Increment Financing Districts located within the Downtown Chanhassen Redevelopment Project Area. Chanhassen Economic Development Authority Modfcation to the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area 1-1 Section 2 - Tax Increment Financing Plan for Tax Increment Financing District No. 11 Subsection 2-1. Foreword The Chanhassen Economic Development Authority (the "EDA"), the City of Chanhassen (the "City"), staff and consultants have prepared the following information to expedite the establishment of Tax Increment Financing District No. 11 (the "District"), a redevelopment tax increment financing district, located in the Downtown Chanhassen Redevelopment Project Area. Subsection 2-2. Statutory Authority Within the City, there exist areas where public involvement is necessary to cause development or redevelopment to occur. To this end, the EDA and City have certain statutory powers pursuant to Minnesota Statutes ("M.S.'), Sections 469.090 to 469.1082, inclusive, as amended, and M.S., Sections 469.174 to 469.1794, inclusive, as amended (the "Tax Increment Financing Act" or "TIF Act"), to assist in financing public costs related to this project. This section contains the Tax Increment Financing Plan (the "TIF Plan") for the District. Other relevant information is contained in the Modification to the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area. Subsection 2-3. Statement of Objectives The District currently consists of three parcels of land and adjacent and internal rights-of-way. The District is being created to facilitate the redevelopment of the former Frontier property into 134 market rate apartments and 19,000 square feet of retail, as well as the construction of public improvements adjacent to the site. Please see Appendix A for further District information. The EDA plans to enter into an agreement with Chanhassen Frontier LLC as the developer. This TIF Plan is expected to achieve many of the objectives outlined in the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project Area. The activities contemplated in the Modification to the Redevelopment Plan and the TIF Plan do not preclude the undertaking of other qualified development or redevelopment activities. These activities are anticipated to occur over the life of the Downtown Chanhassen Redevelopment Project Area and the District. Subsection 2-4. Redevelopment Plan Overview 1. Property to be Acquired - Selected property located within the District may be acquired by the EDA or City and is further described in this TIF Plan. 2. Relocation - Relocation services, to the extent required by law, are available pursuant to M.S., Chapter 117 and other relevant state and federal laws. 3. Upon approval of a developer's plan relating to the project and completion of the necessary legal requirements, the EDA or City may sell to a developer selected properties that it may acquire within the District or may lease land or facilities to a developer. 4. The EDA or City may perform orprovide for some or all necessary acquisition, construction, relocation, demolition, and required utilities and public street work within the District. Chanhassen Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 11 2-1 Subsection 2-5. Description of Property in the District and Property To Be Acquired The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the parcels listed in Appendix C of this TIF Plan. Please also see the map in Appendix B for further information on the location of the District. The EDA or City may acquire any parcel within the District including interior and adjacent street rights of way. Any properties identified for acquisition will be acquired by the EDA or City only in order to accomplish one or more of the following: storm sewer improvements; provide land for needed public streets, utilities and facilities; carry out land acquisition, site improvements, clearance and/or development to accomplish the uses and objectives set forth in this plan. The EDA or City may acquire property by gift, dedication, condemnation or direct purchase from willing sellers in order to achieve the objectives of this TIF Plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition and related costs. Subsection 2-6. Classification of the District The EDA and City, in determining the need to create a tax increment financing district in accordance with M.S., Sections 469.174 to 469.1794, as amended, inclusive, find that the District, to be established, is a redevelopment district pursuant to M.S., Section 469.174, Subd. 10(a)(1) as defined below: (a) 'Redevelopment district" means a type oftax incrementfinancing district consisting ofaproject, or portions of a project, within which the authorityfnds by resolution that one or more of the following conditions, reasonably distributed throughout the district, exists: (1) parcels consisting of70percent ofthe area in the district are occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures and more than 50 percent of the buildings, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance; (2) The property consists of vacant, unused, underused, inappropriately used, or infrequently used rail yards, rail storage facilities or excessive or vacated railroad rights-of-way; (3) tankfacilities, orproperty whose immediatelyprevious use wasfor tankfacilities, as defined in Section 115C, Subd. 15, if the tankfacility: (i) have or had a capacity of more than one million gallons; (it) are located adjacent to rail facilities; or (iii) have been removed, or are unused, underused, inappropriately used or infrequently used; or (4) a qualifying disaster area, as defined in Subd. 10b. (b) For purposes of this subdivision, "structurally substandard" shall mean containing defects in structural elements or a combination ofdeficiencies in essential utilities andfacilities, light and ventilation, fireprotection including adequate egress, layoutand condition ofinteriorpartitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance. (c) A building is notstructurally substandard ifit is in compliance with the building code applicable Chanhassen Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 11 2-2 to new buildings or could be modified to satisfy the building code at a cost of less than 15 percent of the cost of constructing a new structure of the same square footage and type on the site. The municipality may find that a building is not disqualified as structurally substandard under the preceding sentence on the basis of reasonably available evidence, such as the size, type, and age of the building, the average cost ofplumbing, electrical, or structural repairs or other similar reliable evidence. The municipality may not make such a determination without an interior inspection of the property, but need not have an independent, expert appraisal prepared of the cost of repair and rehabilitation of the building. An interior inspection of the property is not required, if the municipalityfinds that (1) the municipality or authority is unable to gain access to the property after using its best efforts to obtain permission from the party that owns or controls the property; and (2) the evidence otherwise supports a reasonable conclusion that the building is structurally substandard. (d) A parcel is deemed to be occupied by a structurally substandard building for purposes of the finding under paragraph (a) or by the improvement described in paragraph (e) if all of the following conditions are met: (1) the parcel was occupied by a substandard building or met the requirements ofparagraph (e), as the case may be, within three years of the filing of the requestfor certification of the parcel as part of the district with the county auditor; (2) the substandard building or the improvements described in paragraph (e) were demolished or removed by the authority or the demolition or removal was financed by the authority or was done by a developer under a development agreement with the authority; (3) the authority found by resolution before the demolition or removal that the parcel was occupied by a structurallysubstandard building or met the requirementofparagraph (e) and that after demolition and clearance the authority intended to include the parcel within a district; and (4) upon filing the request for certification ofthe tax capacity of theparcel aspart ofa district, the authority notifies the county auditor that the original tax capacity ofthe parcel must be adjusted as provided by § 469.177, subdivision 1, paragraph 69. (e) For purposes of this subdivision, a parcel is not occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures unless 15 percent of the area of the parcel contains buildings, streets, utilities, paved or gravel parking lots or other similar structures. 69 For districts consisting of two or more noncontiguous areas, each area must qualify as a redevelopment district underparagraph (a) to be included in the district, and the entire area of the district must satisfy paragraph (a). In meeting the statutory criteria the EDA and City rely on the following facts and findings: • The District is a redevelopment district consisting of three parcels. • An inventory shows that parcels consisting of more than 70 percent of the area in the District are occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures. • An inspection of the buildings located within the District finds that more than 50 percent of the buildings are structurally substandard as defined in the TIF Act. (See Appendix F). Pursuant to M.S., Section 469.176, Subd. 7, the District does not contain any parcel or part of a parcel that Chanhassen Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 11 2.3 qualified under the provisions of M.S., Sections 273.111, 273.112, or 273.114 or Chapter 473H for taxes payable in any of the five calendar years before the filing of the request for certification of the District. Subsection 2-7. Duration and First Year of Tax Increment of the District Pursuant to M.S., Section 469.175, Subd. 1, and Section 469.176, Subd. 1, the duration and first year of tax increment of the District must be indicated within the TIF Plan. Pursuant to M.S., Section 469.176, Subd. l b., the duration of the District will be 25 years after receipt of the first increment by the EDA (a total of 26 years of tax increment). The EDA elects to receive the fust tax increment in 2020, which is no later than four years following the year of approval of the District. Thus, it is estimated that the District, including any modifications of the TIF Plan for subsequent phases or other changes, would terminate after 2045, or when the TIF Plan is satisfied. The EDA reserves the right to decertify the District prior to the legally required date. Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements PursuanttoM.S., Section 469.174, Subd. 7andM.S., Section 469.177, Subd. 1, the Original Net Tax Capacity (ONTC) as certified for the District will be based on the market values placed on the property by the assessor in 2017 for taxes payable 2018. Pursuant to M.S., Section 469.177, Subds. I and 2, the County Auditor shall certify in each year (beginning in the payment year 2020) the amount by which the original value has increased or decreased as a result of: 1. Change in tax exempt status of property; 2. Reduction or enlargement of the geographic boundaries of the district; 3. Change due to adjustments, negotiated or court-ordered abatements; 4. Change in the use of the property and classification; 5. Change in state law governing class rates; or 6. Change in previously issued building permits. In any year in which the current Net Tax Capacity (NTC) value of the District declines below the ONTO, no value will be captured and no tax increment will be payable to the EDA. The original local tax rate for the District will be the local tax rate for taxes payable 2018, assuming the request for certification is made before June 30, 2018. The ONTC and the Original Local Tax Rate for the District appear in the table below. Pursuant to M.S., Section 469.174 Subd. 4 and M.S., Section 469.177, Subd. 1, 2, and 4, the estimated Captured Net Tax Capacity (CTC) of the District, within the Downtown Chanhassen Redevelopment Project Area, upon completion of the projects within the District, will annually approximate tax increment revenues as shown in the table below. The EDA requests 100 percent of the available increase in tax capacity for repayment of its obligations and current expenditures, beginning in the tax year payable 2020. The Project Tax Capacity (PTC) listed is an estimate of values when the projects within the District are completed. Chanhassen Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 11 2-4 Project Estimated Tax Capacity upon Completion (PTC) $320,580 Original Estimated Net Tax Capacity (ONTC) $30,024 Fiscal Disparities Contribution $13,751 Estimated Captured Tax Capacity (CTC) $276,805 Original Local Tax Rate 1.06381 Pay 2017 Estimated Annual Tax Increment (CTC x Local Tax Rate) $294,468 Percent Retained by the EDA 100% Pursuant to M.S., Section 469.177, Subd. 4, the EDA shall, after a due and diligent search, accompany its request for certification to the County Auditor or its notice of the District enlargement pursuant to M.S., Section 469.175, Subd. 4, with a listing of all properties within the District or area of enlargement for which building permits have been issued during the eighteen (18) months immediately preceding approval of the TIF Plan by the municipality pursuant to M.S., Section 469.175, Subd. 3. The County Auditor shall increase the original net tax capacity of the District by the net tax capacity of improvements for which a building permit was issued. The City has reviewed the area to be included in the District and found no parcels for which building permits have been issued during the 18 months immediately preceding approval of the TIF Plan by the City. Subsection 2-9. Sources of Revenue/Bonds to be Issued The costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax increments. The EDA reserves the right to incur bonds or other indebtedness as a result of the TIF Plan. As presently proposed, the projects within the District will be financed by pay-as-you-go notes and interfund loan. Additional indebtedness may be required to finance other authorized activities. The total estimated tax increment revenues for the District are shown in the table below: SOURCES OF FUNDS TOTAL Tax Increment $7,628,595 Interes $762,859 TOTAL $8,391,454 The EDA or City may issue bonds (as defined in the TIF Act) secured in whole or in part with tax increments from the District in a maximum principal amount of $4,887,444. Such bonds may be in the form of pay-as- you-go notes, revenue bonds or notes, general obligation bonds, or interfand loans. This estimate of total bonded indebtedness is a cumulative statement of authority under this TIF Plan as of the date of approval. Any refunding amounts will be deemed a budgeted cost without a formal TIF Plan Modification. This provision does not obligate the EDA or City to incur debt. The EDA or City will issue bonds or incur other debt only upon the determination that such action is in the best interest of the City. Chanhassen Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 11 2-5 Subsection 2-10. Uses of Funds Currently under consideration for the District is a proposal to facilitate the redevelopment of the former Frontierproperty into a six -story building consisting of 134 marketrate apartments with underground parking and a single -story building with 19,000 square feet of commercial retail and surface parking, as well as facilitate the construction of public improvements adjacent to the site. The EDA and City have determined that it will be necessary to provide assistance to the project for certain District costs, as described. The EDA has studied the feasibility of the development or redevelopment of property in and around the District. To facilitate the establishment and development or redevelopment of the District, this TIF Plan authorizes the use of tax increment financing to pay for the cost of certain eligible expenses. The estimate of public costs and uses of funds associated with the District is outlined in the following table. USES OF TAX INCREMENT FUNDS TOTAL Land/Building Acquisition $1,250,000 Site Improvements/Preparation $780,000 Utilities $500,000 Other Qualifying Improvements $1,976,014 Administrative Costs (up to 10%) $381,430 PROJECT COST TOTAL $4,887,444 Interest 3 504 010 PROJECT AND INTEREST COSTS TOTAL $8,391,454 The total project cost, including financing costs (interest) listed in the table above does not exceed the total projected tax increments for the District as shown in Subsection 2-9. Estimated costs associated with the District are subject to change among categories without a modification to this TIF Plan. The cost of all activities to be considered for tax increment financing will not exceed, without formal modification, the budget above pursuant to the applicable statutory requirements. Pursuant to M.S., Section 469.1763, Subd. 2, no more than 25 percent of the tax increment paid by property within the District will be spent on activities related to development or redevelopment outside of the District but within the boundaries of the Downtown Chanhassen Redevelopment Project Area, (including administrative costs, which are considered to be spent outside of the District) subject to the limitations as described in this TIF Plan. Subsection 2-11. Fiscal Disparities Election Pursuant to M.S., Section 469.177, Subd. 3, the EDA may elect one of two methods to calculate fiscal disparities. If the calculations pursuant to M.S., Section 469.177, Subd. 3, clause b, (within the District) are followed, the following method of computation shall apply: (1) The original net tax capacity shall be determined before the application of the fiscal disparity provisions of Chapter 276A or 473E The current net tax capacity shall exclude any fiscal disparity commercial -industrial net tax capacity increase between the original year and the current year multiplied by the fiscal disparity ratio determined pursuant to M.S., Section Chanhassen Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 11 2-6 276A.06, subdivision 7 or M.S., Section 473E 08, subdivision 6. Where the original net tax capacity is equal to orgreater than the current net tax capacity, there is no captured tax capacity and no tax increment determination. Where the original tax capacity is less than the current tax capacity, the difference between the original net tax capacity and the current net tax capacity is the captured net tax capacity. This amount less any portion thereof which the authority has designated, in its tax increment financing plan, to share with the local taxing districts is the retained captured net tax capacity of the authority. (2) The county auditor shall exclude the retained captured net tax capacity ofthe authorityfrom the net tax capacity of the local taxing districts in determining local taxing district tax rates. The local tax rates so determined are to be extended against the retained captured net tax capacity of the authority as well as the net tax capacity of the local taxing districts. The tax generated by the extension of the less of(A) the local taxing district tax rates or (B) the original local tax rate to the retained captured net tax capacity of the authority is the tax increment of the authority. The EDA will choose to calculate fiscal disparities by clause b. According to M.S., Section 469.177, Subd. 3: (c) The method ofcomputation of tax increment applied to a district pursuant to paragraph (a) or (b) shall remain the same for the duration of the district, except that the governing body may elect to change its election from the method of computation in paragraph (a) to the method in paragraph (b). Subsection 2.12. Business Subsidies Pursuant to M.S., Section 116J.993, Subd. 3, the following forms of financial assistance are not considered a business subsidy: (1) A business subsidy of less than $150,000; (2) Assistance that is generally available to all businesses or to a general class of similar businesses, such as a line of business, size, location, or similar general criteria; (3) Public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made; (4) Redevelopment property polluted by contaminants as defined in M.S., Section 116J.552, Subd. 3; (5) Assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code and assistance provided for designated historic preservation districts, provided that the assistance is equal to or less than 50% of the total cost; (6) Assistance to provide job readiness and training services if the sole purpose of the assistance is to provide those services; (7) Assistance for housing; (8) Assistance for pollution control or abatement, including assistance for a tax increment financing hazardous substance subdistrict as defined under M.S., Section 469.174, Subd. 23; (9) Assistance for energy conservation; (10) Tax reductions resulting from conformity with federal tax law; (11) Workers' compensation and unemployment compensation; (12) Benefits derived from regulation; (13) Indirect benefits derived from assistance to educational institutions; (14) Funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and Chanhassen Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 11 2_7 bonds issued for the benefit of an organization described in section 501 (c) (3) of the Internal Revenue Code of 1986, as amended through December 31, 1999; (15) Assistance for a collaboration between a Minnesota higher education institution and a business; (16) Assistance for a tax increment financing soils condition district as defined under M.S., Section 469.174, Subd. 19; (17) Redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value; (18) General changes in tax increment financing law and other general tax law changes of a principally technical nature; (19) Federal assistance until the assistance has been repaid to, and reinvested by, the state or local government agency; (20) Funds from dock and wharf bonds issued by a seaway port authority; (21) Business loans and loan guarantees of $150,000 or less; (22) Federal loan funds provided through the United States Department of Commerce, Economic Development Administration; and (23) Property tax abatements granted under M.S., Section 469.1813 to property that is subject to valuation under Minnesota Rules, chapter 8100. The EDA will comply with M.S., Sections 116J.993 to 116J.995 to the extent the tax increment assistance under this TIF Plan does not fall under any of the above exemptions. Subsection 2-13. County Road Costs Pursuant to M.S., Section 469.175, Subd. ]a, the county board may require the EDA to pay for all or part of the cost of county road improvements if the proposed development to be assisted by tax increment will, in the judgment of the county, substantially increase the use of county roads requiring construction of road improvements or other road costs and if the road improvements are not scheduled within the next five years under a capital improvement plan or within five years under another county plan. If the county elects to use increments to improve county roads, it must notify the EDA within forty-five days of receipt of this TIF Plan. In the opinion of the EDA and City and consultants, the proposed development outlined in this TIF Plan will have little or no impact upon county roads, therefore the TIF Plan was not forwarded to the county 45 days prior to the public hearing. The EDA and City are aware that the county could claim that tax increment should be used for county roads, even after the public hearing. Subsection 2-14. Estimated Impact on Other Taxing Jurisdictions The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by the TIF Plan would occur without the creation of the District. However, the EDA has determined that such development or redevelopment would not occur "but for" tax increment financing and that, therefore, the fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as follows on the next page if the "but for" test was not met: Chanhassen Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 11 2-8 Other 0.066700 6.27% 276.805 18.463 Total 1.063810 100.00% 294,468 The estimates listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the actual Pay 2017 rate. The total net capacity for the entities listed above are based on actual Pay 2017 figures. The District will be certified under the actual Pay 2018 rates, which were unavailable at the time this TIF Plan was prepared. Pursuant to M.S. Section 469.175 Subd. 2(b): (1) Estimate of total tax increment. It is estimated that the total amount of tax increment that will be generated over the life of the District is $7,628,595; (2) Probable impact of the District on city provided services and ability to issue debt An impact of the District on police protection is expected. The City police department does track all calls for service including property -type calls and crimes. With any addition of new residents or businesses, police calls for service will be increased. New developments add an increase in traffic, and additional overall demands to the call load. The City does not expect that the proposed development, in and of itself, will necessitate new capital investment at this time. The City is preparing to add additional officers some time in the future with or without the completion of this project. The probable impact ofthe District on fire protection is not expected to be significant. Typically new buildings generate few calls, if any, and are of superior construction. The impact of the District on public infrastructure is expected to be minimal. The development is not expected to significantly impact any traffic movements in the surrounding area and no new public streets are required to be constructed in conjunction with this development, however the development is expected to contribute to additional vehicular traffic within the downtown area. The City initiated a study of the impact and is planning to upgrade Market Boulevard to accommodate the increase in downtown traffic from this development and will assess the developer for the improvements. The Chanhassen Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 11 2-9 IMPACT ON TAX BASE 2016/Pay 2017 Estimated Captured Pay 2017 Total Net Tax Capacity (CTC) Percent of CTC Tax Capacity Upon Completion to Entity Total Carver County 121,806,073 276,805 0.2273% City of Chanhassen 40,553,943 276,805 0.6826% East Carver County ISD 112 70,429,593 276,805 0.3930% Other 0.066700 6.27% 276.805 18.463 Total 1.063810 100.00% 294,468 The estimates listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the actual Pay 2017 rate. The total net capacity for the entities listed above are based on actual Pay 2017 figures. The District will be certified under the actual Pay 2018 rates, which were unavailable at the time this TIF Plan was prepared. Pursuant to M.S. Section 469.175 Subd. 2(b): (1) Estimate of total tax increment. It is estimated that the total amount of tax increment that will be generated over the life of the District is $7,628,595; (2) Probable impact of the District on city provided services and ability to issue debt An impact of the District on police protection is expected. The City police department does track all calls for service including property -type calls and crimes. With any addition of new residents or businesses, police calls for service will be increased. New developments add an increase in traffic, and additional overall demands to the call load. The City does not expect that the proposed development, in and of itself, will necessitate new capital investment at this time. The City is preparing to add additional officers some time in the future with or without the completion of this project. The probable impact ofthe District on fire protection is not expected to be significant. Typically new buildings generate few calls, if any, and are of superior construction. The impact of the District on public infrastructure is expected to be minimal. The development is not expected to significantly impact any traffic movements in the surrounding area and no new public streets are required to be constructed in conjunction with this development, however the development is expected to contribute to additional vehicular traffic within the downtown area. The City initiated a study of the impact and is planning to upgrade Market Boulevard to accommodate the increase in downtown traffic from this development and will assess the developer for the improvements. The Chanhassen Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 11 2-9 IMPACT ON TAX RATES Pay 2017 Percent Potential Extension Rates of Total CTC Taxes Carver County 0.388510 36.52% 276,805 107,542 City of Chanhassen 0.238550 22.42% 276,805 66,032 East Carver County ISD 112 0.370050 34.79% 276,805 102,432 Other 0.066700 6.27% 276.805 18.463 Total 1.063810 100.00% 294,468 The estimates listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the actual Pay 2017 rate. The total net capacity for the entities listed above are based on actual Pay 2017 figures. The District will be certified under the actual Pay 2018 rates, which were unavailable at the time this TIF Plan was prepared. Pursuant to M.S. Section 469.175 Subd. 2(b): (1) Estimate of total tax increment. It is estimated that the total amount of tax increment that will be generated over the life of the District is $7,628,595; (2) Probable impact of the District on city provided services and ability to issue debt An impact of the District on police protection is expected. The City police department does track all calls for service including property -type calls and crimes. With any addition of new residents or businesses, police calls for service will be increased. New developments add an increase in traffic, and additional overall demands to the call load. The City does not expect that the proposed development, in and of itself, will necessitate new capital investment at this time. The City is preparing to add additional officers some time in the future with or without the completion of this project. The probable impact ofthe District on fire protection is not expected to be significant. Typically new buildings generate few calls, if any, and are of superior construction. The impact of the District on public infrastructure is expected to be minimal. The development is not expected to significantly impact any traffic movements in the surrounding area and no new public streets are required to be constructed in conjunction with this development, however the development is expected to contribute to additional vehicular traffic within the downtown area. The City initiated a study of the impact and is planning to upgrade Market Boulevard to accommodate the increase in downtown traffic from this development and will assess the developer for the improvements. The Chanhassen Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 11 2-9 current infrastructure for sanitary sewer, storm sewer and water will be able to handle the additional volume generated from the proposed development. Based on the development plans, there are no additional costs associated with street maintenance, sweeping, plowing, lighting and sidewalks. The development in the District is expected to contribute an estimated $7,157 per unit in City water (WAC) connection fees, $2,302 per unit in City sewer (SAC) connection fees, and an additional $2,560 per unit in Met Council SAC. A sewer capacity analysis is currently being completed for the project, and any necessary sanitary sewer system improvements will be paid by the developer. The probable impact of any District general obligation tax increment bonds on the ability to issue debt for general fund purposes is expected to be minimal. It is not anticipated that there will be any general obligation debt issued in relation to this project, therefore there will be no impact on the City's ability to issue future debt or on the City's debt limit. (3) Estimated amount of tax increment attributable to school district levies. It is estimated that the amount of tax increments over the maximum life of the District that would be attributable to school district levies, assuming the school district's share of the total local tax rate for all taxing jurisdictions remained the same, is $2,653,988; (4) Estimated amount of tax increment attributable to county levies. It is estimated that the amount of tax increments over the maximum life of the District that would be attributable to county levies, assuming the county's share of the total local tax rate for all taxing jurisdictions remained the same, is $2,785,963; (5) Additional information requested by the county or school district. The City is not aware of any standard questions in a county or school district written policy regarding tax increment districts and impact on county or school district services. The county or school district must request additional information pursuant to M.S. Section 469.175 Subd. 2(b) within 15 days after receipt of the tax increment financing plan. No requests for additional information from the county or school district regarding the proposed development for the District have been received. Subsection 2.15. Supporting Documentation Pursuant to M.S. Section 469.175, Subd. I (a), clause 7 the TIF Plan must contain identification and description of studies and analyses used to make the determination set forth in M.S. Section 469.175, Subd. 3, clause (b)(2) and the findings are required in the resolution approving the District. Following is a list of reports and studies on file at the City that support the EDA and City's findings: • Chanhassen West 78" Street Redevelopment TIF District Report of Inspection Procedures and Results for Determining Qualifications of a Tax Increment Financing District as a Redevelopment District - prepared by LHB, Inc. (also attached in Appendix F). • Initial MarketAssessmentforGeneralOccupancyMarketRaterentalhousinginChanhassen,MiV- prepared by Maxfield Research & Consulting. • Frontier Building Potential Redevelopment - City Council Work Session and City Memorandum dated December 12, 2016. • Market Boulevard Corridor Study - dated May 17, 2017. • Site Plan Review and recommendation to City Council - Chanhassen Planning Commission Public Hearing and Staff Report dated June 20, 2017. Chanhassen Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 11 2-10 Subsection 2-16. Definition of Tax Increment Revenues Pursuant to M.S., Section 469.174, Subd. 25, tax increment revenues derived from a tax increment financing district include all of the following potential revenue sources: 1. Taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed underM.S., Section 469.177, 2. The proceeds from the sale or lease ofproperty, tangible or intangible to the extent the property was purchased by the authority with tax increments; 3. Principal and interest received on loans or other advances made by the authority with tax increments; 4. Interest or other investment earnings on or from tax increments; 5. Repayments or return of tax increments made to the Authority under agreements for districts for which the request for certification was made after August 1, 1993; and 6. The market value homestead credit paid to the Authority under M.S., Section 273.1384. Subsection 2-17. Modifications to the District In accordance with M.S., Section 469.175, Subd. 4, any: I. Reduction or enlargement of the geographic area of the District, if the reduction does not meet the requirements of M.S., Section 469.175, Subd. 4(e); 2. Increase in amount of bonded indebtedness to be incurred; 3. A determination to capitalize interest on debt if that determination was not a part of the original TIF Plan; 4. Increase in the portion of the captured net tax capacity to be retained by the EDA; 5. Increase in the estimate of the cost ofthe District, including administrative expenses, that will be paid or financed with tax increment from the District; or 6. Designation of additional property to be acquired by the EDA, shall be approved upon the notice and after the discussion, public hearing and findings required for approval of the original TIF Plan. Pursuant to M.S. Section 469.175 Subd. 469, the geographic area of the District may be reduced, but shall not be enlarged after five years following the date of certification of the original net tax capacity by the county auditor. If a redevelopment district is enlarged, the reasons and supporting facts for the determination that the addition to the district meets the criteria of M.S., Section 469.174, Subd. 10, must be documented in writing and retained. The requirements of this paragraph do not apply if (1) the only modification is elimination of parcel(s) from the District and (2)(A) the current net tax capacity of the parcel(s) eliminated from the District equals or exceeds the net tax capacity of those parcel(s) in the District's original net tax capacity or (B) the EDA agrees that, notwithstanding M.S., Section 469.177, Subd. 1, the original net tax capacity will be reduced by no more than the current net tax capacity of the parcel(s) eliminated from the District. The EDA must notify the County Auditor of any modification to the District. Modifications to the District in the form of a budget modification or an expansion of the boundaries will be recorded in the TIF Plan. Subsection 2-18. Administrative Expenses In accordance with M.S., Section 469.174, Subd. 14, administrative expenses means all expenditures of the EDA, other than: Chanhassen Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 11 2.11 1. Amounts paid for the purchase of land; 2. Amounts paid to contractors or others providing materials and services, including architectural and engineering services, directly connected with the physical development of the real property in the District; 3. Relocation benefits paid to or services provided for persons residing or businesses located in the District; 4. Amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued pursuant to M.S., Section 469.178; or 5. Amounts used to pay other financial obligations to the extent those obligations were used to finance costs described in clauses (1) to (3). For districts for which the request for certification were made before August 1, 1979, or after June 30, 1982, and before August 1, 2001, administrative expenses also include amounts paid for services provided by bond counsel, fiscal consultants, and planning or economic development consultants. Pursuant to M.S., Section 469.176, Subd. 3, tax increment may be used to pay any authorized and documented administrative expenses for the District up to but not to exceed 10 percent of the total estimated tax increment expenditures authorized by the TIF Plan or the total tax increments, as defined by M.S., Section 469.174, Subd. 25, clause (1), from the District, whichever is less. For districts for which certification was requested after July 31, 2001, no tax increment may be used to pay any administrative expenses for District costs which exceed ten percent of total estimated tax increment expenditures authorized by the TIF Plan or the total tax increments, as defined in M.S., Section 469.174, Subd. 25, clause (1), from the District, whichever is less. Pursuant to M.S., Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual administrative expenses incurred in connection with the District and are not subject to the percentage limits ofMS, Section 469.176, Subd. 3. The county may require payment of those expenses by February 15 of the year following the year the expenses were incurred. Pursuant to M.S., Section 469. 177, Subd. 11, the County Treasurer shall deduct an amount (currently .36 percent) of any increment distributed to the EDA and the County Treasurer shall pay the amount deducted to the State Commissioner of Management and Budget for deposit in the state general fund to be appropriated to the State Auditor for the cost of financial reporting of tax increment financing information and the cost of examining and auditing authorities' use of tax increment financing. This amount may be adjusted annually by the Commissioner of Revenue. Subsection 2-19. Limitation of Increment The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District may be terminated if sufficient funds have been irrevocably deposited in the debt service fund or other escrow account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or redemption date. Pursuant to M.S., Section 469.176, Subd. 6: if, after four years from the date of certification of the original net tax capacity of the tax incrementfinancing district pursuant tOMS., Section 469.177, no demolition, rehabilitation or renovation ofproperty or other site preparation, including qualified improvement of street adjacent to a parcel but not installation of utility service including sewer or water systems, has been commenced on a parcel located within a tax increment financing district Chanhassen Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 11 2-12 by the authority or by the owner oftheparcel in accordance with the tax incrementfinancing plan, no additional tax increment may be taken from that parcel, and the original net tax capacity of that parcel shall be excluded from the original net tax capacity of the tax increment financing district. If the authority or the owner of the parcel subsequently commences demolition, rehabilitation or renovation or othersitepreparation on thatparcel including qualified improvement of a street adjacent to that parcel, in accordance with the tax incrementfinancingplan, the authority shall certify to the county auditor that the activity has commenced and the county auditor shall certify the net tax capacity thereof as most recently certified by the commissioner ofrevenue and add it to the original net tax capacity ofthe tax incrementfinancing district. The county auditor must enforce the provisions ofthis subdivision. The authority must submit to the county auditor evidence that the required activity has taken place for each parcel in the district. The evidence for a parcel must be submitted by February I of the fifth yearfollowing the year in which the parcel was certified as included in the district. For purposes of this subdivision, qualified improvements of a street are limited to (1) construction or opening of a new street, (2) relocation of a street, and (3) substantial reconstruction or rebuilding of an existing street. The EDA or a property owner must improve parcels within the District by approximately September 2021 and report such actions to the County Auditor. Subsection 2-20. Use of Tax Increment The EDA hereby determines that it will use 100 percent of the captured net tax capacity of taxable property located in the District for the following purposes: 1. To pay the principal of and interest on bonds issued to fmance a project; 2. To finance, or otherwise pay the cost of redevelopment of the Downtown Chanhassen Redevelopment Project Area pursuant to M.S., Sections 469.090 to 469.1082; 3. To pay for project costs as identified in the budget set forth in the TIF Plan; 4. To finance, or otherwise pay for other purposes as provided in M.S., Section 469.176, Subd. 4; 5. To pay principal and interest on any loans, advances or other payments made to or on behalf of the EDA or for the benefit of the Downtown Chanhassen Redevelopment Project Area by a developer; 6. To fmance or otherwise pay premiums and other costs for insurance or other security guaranteeing the payment when due of principal of and interest on bonds pursuant to the TIF Plan or pursuant to M.S., Chapter 4620 M.S., Sections 469.152 through 469.165, and/or M.S., Sections 469.178; and 7. To accumulate or maintain a reserve securing the payment when due of the principal and interest on the tax increment bonds or bonds issued pursuant to M.S., Chapter 462C, M.S., Sections 469.152 through 469.165, and/or M.S., Sections 469.178. These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other purposes prohibited by M.S., Section 469.176, Subd. 4. Tax increments generated in the District will be paid by Carver County to the EDA for the Tax Increment Fund of said District. The EDA will pay to the developer(s) annually an amount not to exceed an amount as specified in a developer's agreement to reimburse the costs of land acquisition, public improvements, demolition and relocation, site preparation, and administration. Remaining increment funds will be used for EDA administration (up to 10 percent) and for the costs ofpublic improvement activities outside the District. Chanhassen Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 11 2-13 Subsection 2-21. Excess Increments Excess increments, as defined in M.S., Section 469.176, Subd. 2, shall be used only to do one or more of the following: 1. Prepay any outstanding bonds; 2. Discharge the pledge of tax increment for any outstanding bonds; 3. Pay into an escrow account dedicated to the payment of any outstanding bonds; or 4. Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in proportion to their local tax rates. The EDA must spend or return the excess increments under paragraph (c) within nine months after the end of the year. In addition, the EDA may, subject to the limitations set forth herein, choose to modify the TIF Plan in order to finance additional public costs in the Downtown Chanhassen Redevelopment Project Area or the District. Subsection 2-22. Requirements for Agreements with the Developer The EDA will review any proposal for private development to determine its conformance with the Redevelopment Plan and with applicable municipal ordinances and codes. To facilitate this effort, the following documents may be requested for review and approval: site plan, construction, mechanical, and electrical system drawings, landscaping plan, grading and storm drainage plan, signage system plan, and any other drawings or narrative deemed necessary by the EDA to demonstrate the conformance of the development with City plans and ordinances. The EDA may also use the Agreements to address other issues related to the development. Pursuant to M.S., Section 469.176, Subd. 5, no more than 25 percent, by acreage, of the property to be acquired in the District as set forth in the TIF Plan shall at any time be owned by the EDA as a result of acquisition with the proceeds ofbonds issued pursuant to M.S., Section 469.178 to which tax increments from property acquired is pledged, unless prior to acquisition in excess of 25 percent of the acreage, the EDA concluded an agreement for the development or redevelopment of the property acquired and which provides recourse for the EDA should the development or redevelopment not be completed. Subsection 2-23. Assessment Agreements Pursuant to M.S., Section 469.177, Subd. 8, the EDA may enter into a written assessment agreement in recordable form with the developer ofproperty within the District which establishes a minimum market value of the land and completed improvements for the duration of the District. The assessment agreement shall be presented to the County Assessor who 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, the County Assessor shall also certify the minimum market value agreement. Subsection 2-24. Administration of the District Administration of the District will be handled by the EDA Executive Director. Chanhassen Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing District No. 11 2-14 Subsection 2-25. Annual Disclosure Requirements Pursuant to M.S., Section 469.175, Subds. 5, 6, and 6b the EDA must undertake financial reporting for all tax increment financing districts to the Office of the State Auditor, County Board and County Auditor on or before August 1 of each year. M.S., Section 469.175, Subd. 5 also provides that an annual statement shall be published in a newspaper of general circulation in the City on or before August 15. If the City fails to make a disclosure or submit a report containing the information required by M.S., Section 469.175 Subd. 5 and Subd. 6, the Office of the State Auditor will direct the County Auditor to withhold the distribution of tax increment from the District. Subsection 2-26. Reasonable Expectations As required by the TIF Act, in establishing the District, the determination has been made that the anticipated development would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the District permitted by the TIF Plan. In making said determination, reliance has been placed upon written representation made by the developer to such effects and upon EDA and City staff awareness of the feasibility of developing the project site(s) within the District. A comparative analysis of estimated market values both with and without establishment of the District and the use of tax increments has been performed as described above. Such analysis is included with the cashflow in Appendix D, and indicates that the increase in estimated market value of the proposed development (less the indicated subtractions) exceeds the estimated market value of the site absent the establishment of the District and the use of tax increments. Subsection 2-27. Other Limitations on the Use of Tax Increment 1. General Limitations. All revenue derived from tax increment shall be used in accordance with the TIF Plan. The revenues shall be used to finance, or otherwise pay the cost of redevelopment of the the Downtown Chanhassen Redevelopment Project Area pursuant to M.S., Sections 469.090 to 469.1082. Tax increments may not be used to circumvent existing levy limit law. No tax increment may be used for the acquisition, construction, renovation, operation, or maintenance of a building to be used primarily and regularly for conducting the business of a municipality, county, school district, or any other local unit of government or the state or federal government. This provision does not prohibit the use of revenues derived from tax increments for the construction or renovation of a parking structure. 2. Pooling Limitations. At least 75 percent of tax increments from the District must be expended on activities in the District or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities within said district or to pay, or secure payment of, debt service on credit enhanced bonds. Not more than 25 percent of said tax increments may be expended, through a development fund or otherwise, on activities outside of the District except to pay, or secure payment of, debt service on credit enhanced bonds. For purposes of applying this restriction, all administrative expenses must be treated as if they were solely for activities outside of the District. 3. Five Year Limitation on Commitment of Tax Increments. Tax increments derived from the District shall be deemed to have satisfied the 75 percent test set forth in paragraph (2) above only if the five year rule set forth in M.S., Section 469.1763, Subd. 3, has been satisfied; and beginning with the sixth year following certification of the District, 75 percent of said tax increments that remain after expenditures Chanhassen Economic Development Authority - Tax Increment Financing Plan for Tax Increment Financing District No. 11 2-15 permitted under said five year rule must be used only to pay previously committed expenditures or credit enhanced bonds as more fully set forth in M. S., Section 469.1763, Subd. 5. 4. Redevelopment District. At least 90 percent of the revenues derived from tax increment from a redevelopment district must be used to finance the cost of correcting conditions that allow designation of redevelopment and renewal and renovation districts underM.S, Section 469.176 Subd. 4j. These costs include, but are not limited to, acquiring properties containing structurally substandard buildings or improvements or hazardous substances, pollution, or contaminants, acquiring adjacentparcels necessary to provide a site of sufficient size to permit development, demolition and rehabilitation of structures, clearing of the land, the removal of hazardous substances or remediation necessary for development of the land, and installation of utilities, roads, sidewalks, and parking facilities for the site. The allocated administrative expenses ofthe EDA, including the cost ofpreparafion ofthe development actionresponse plan, may be included in the qualifying costs. Subsection 2-28. Summary The Chanhassen Economic Development Authority is establishing the District to preserve and enhance the tax base, redevelop substandard areas, and provide employment opportunities in the City. The TIF Plan for the District was prepared by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota 55113, telephone (651) 697-8500. Chanhassen Economic Development Authority 2-16 Tax Increment Financing Plan for Tax Increment Financing District No. 11 Appendix A Project Description Chanhassen Frontier LLC is proposing to redevelop an aging and underutilized commercial site known as the Frontier site. On the four -acre site, the developer is proposing to replace the existing substandard building by constructing a six -story, 134 unit market rate multifamily housing building with underground parking and a single -story commercial retail building adjoined by surface parking. Additional public street infrastructure is expected to be constructed to facilitate the new density within the downtown area, a portion of which will be assessed to the redevelopment project. The multifamily building is to be comprised of a mix of studio, one - bedroom den, as well as two and three-bedroom units. The redevelopment cost is estimated to be in excess of $33 million. Construction is expected to start as early as the Fall of 2017 and occur over the next 18 -month period reaching initial occupancy in early 2019. Tax Increment from the District will be utilized with potential funding from Carver County's Community Growth Partnership Grant to provide financing for the project. Under terms of a Contract for Private Redevelopment to be negotiated between the EDA and Chanhassen Frontier, LLC, the EDA proposes to issue one or more pay-as-you-go TIF Notes to the developer to reimburse additional qualifying costs necessary to facilitate the redevelopment. Qualifying activities include: demolition, utilities, earthwork, grading and site preparation, surface and structured parking, project street infrastructure costs, and various other site improvement costs. The Contract for Private Redevelopment will require the EDA and Chanhassen Frontier LLC enter into an assessment agreement establishing a minimum market value for the portions of the redevelopment property containing the apartment building and parking structure at $22,058,410. The assessment agreement shall not apply to the retail portion of the proposed redevelopment. Appendix AA Appendix B Maps of the Downtown Chanhassen Redevelopment Project Area and the District Appendix B'I Appendix C Description of Property to be Included in the District The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the parcels listed below. Parcel Numbers Address Owner 25.2830020 Unassigned Chanhassen Frontier LLC 25.1680031 0 78`" St. W Chanhassen Frontier LLC 25.2830031 0 Market St Chanhassen Frontier LLC The property within the TIF District will be undergoing a registered land survey to facilitate the new use of the property and subdivision. An updated description will amend this section upon completion of that process. Appendix C -t Appendix D Estimated Cash Flow for the District Appendix QI 8/102017 EHLERS Frontier 2 Redevelopment TIF District City o2 Chanhassen, MN 134 MCAe1 Wb Aprlmanh and 19,000 sq h mall `1N5 GNO R Bess Value Assursdons -Page 1 ObtrMypc Radm lopnbnt Tex Rebs DallalLmelNards— TIF No. 11 Cause, District 0: Exempt Cbes RMe (Evam(A) Beer, Plitt Year ComNain or lnOatlon on Value 2010 Commmdel Industrial Plefemtl Cleee Rale (GI Pi Existing DbMd- Specify No. Years Remaining Most $151 t6O% IMrson Rab- Every Year: 0.00% Over $150,000 2.06% Inbre9 R. 5.00% OOmmeracl Induarrod Clew Raw(Olh 2.50% Passed Value Dere: 1 -pug -10 Kendal Food, OMw Rate(Rendap 115% First period Mdires 1Fli AhaNeble Randal Nopoing Clew Fine live, Ranier) T.Ywr Dlarrigwes CenBmd Pay2O18 FbH $115,000 n7M CeeMbw Assumes Flur Tax lndemant For Desslopmend: 2610 Over $115,000 025% Yaeaof Tsxlndi 26 NonAbmeeleed Reskadbl(ski Ra.1 Led) Asaurtaa Leat Year a Tax lnmmeM 2095 Find $5O3,0W 100% Fbwl DlapeMles Median IO Beide (A), Inside (B), or NAI Insldi Over $500,000 125% IncmmeNel or Tobl Fowl DlspeMies Inammantel Fomented Reekediel Claes Rete (NmsW. Rw.) Fiawl DbwMba Condribrs., Rete 37506]% My M17 First $SW,OW Hund gspartlies MNmWke Tax Rab 150.0490% pey2O1] Over $SD0.000 12596 AbumumFinanwail Tsx Rete: 105.391% Pay 2017 Agdaultuml Norhlomwbed 1.00% CunardLomlTax RHs: lUw lnwrol Curtend or Mex) 106.381% Pai Dlebwke Tex ReM(Convi only used brbbl arms) 45.8020% Pay 2017 MCMIValue Taxibran1aedbrbblbma) 024063% R A9 bond MCMI Marks, Of Value Uwd Orrbrol Oagival Ton Odginel After Conversion Areal 2 25.168031 BlwmCarg Co 408,[00 %.900 .6,90D 100% 448:500 Yey Nta cit a,a:n on✓rea. oto, 3 25.28300E BlwmCerg Ca 287.600 0 287,60D 100% 287.600 Pay 2018 C0 5.752 Rental 3,595 Note: 1. Baso values are for pay 2016 based upnn review of coun, waedre on July 10, 260 anpred Is C. 6 IaWaM. Irt.. be. tiny N.W✓aernuSenivrwWWry yw-WJevakpmntlilMlF gefkertlF l 1 2 TR A. le a N1?late 811lW017 EHLERS Frontier 2 RedevelopmentTIFDistrict City W Chanhassen, MN 1 ]q Markel flute gnmpirenb aN tB4OY.1 aq tt leiell 8—Value Assamplora - Page 2 1. Mahat valuaa ara lIe-e upon the propomd minimum eas—d veluo egmammn for rho apvcmem Tue-elopmant, antl robil eatimeba P—M. by lha Counq Auasaor. a• TWelProprty axes gRB,6T0 Cumllt MfNel Ve ua- 2,193,800 Iesa SlNe-wlda T. 20,542) tKw MCMet Velw-Fai. 2q 33B 410 Ieae Foul Of, AO). (25,$41) gRenllu Iesa Market Value Texea io,7") PrteeM Vel. el Tex In reud Iesa 9eva Velua Tuea (28,BTJ Okfenl�m Hnnuel6�ueTIF Value like WawrwilMNTexln[renleM le Iesa lFen: Pnyereeey ENxB Naocvbe,Irc.Ee4rrelea Only HWLeaeYN eee"`lwree-[mmmk.WM1relgam,MlFlTf Peekerte 11 Fm,M1lClaeeuu,'M s2 TIF Ru,@eblTy 8/14"101] Tn1--i Co". -88.,9 EHLERS Frontier 2 Redevelopment TIF District City of Chanhassen, MN 134 Market Rate Apartments and 19,000 sq ft retail 050.,[.-. -, Fe.. E-., [0697690-Reae.en9mann3Fll m o--11111 FnvY3Crmihoa�F-12 TF Roo(8a 1?)- 02/0137 ion 920,580 (90.024) (13,]fi1) P48W 108.381% 299,489 147234 (530) (/,336) 190,989 124281 0.5 2120 08311310 147294 (690) (7,995) 134369 1 2020 100% 920.683 (34022) (19,]51) 2/8.899 1`8.381% 3Bg480 14],294 (590) (],995) 130,900 UNq�.'aw 988,820 1.6 2121 ..1 I 147�34 (590) (],395) 408,8. 2 .1. 021 02NV12 108% 920,580 190,024) (19.751) PB,BM 10.901% 299,480 14].234 (n (7935) I139.Mn. 194380 801,252 25 08311113 14],2. )) (530) (7396) 194%0 9 MM 2023 100% 920.683 (30,024) (13,]5[) 2/8.80 1`8.981% 28/.469 147294 (630) (],3.) 190,988 .1,723 921... 96 2023 civolm 147294 (SM) (],935) 0],842 d (414DW4 2023 O2MlQ 10%6 320.600 (9404) (13,151) 218.00 1M 981% 299,/88 14].291 (fin) (7935) Man 139,389 1,0.31,6]0 4.5 20N NN1/N 147,294 (n (7336) 13&n0 1,192811 5 204 0311/15 104% 920,177 (90,031) (13.]61) n.,.100.381% 2Pd,4H 14],291 (bna (7.336) 1n. 1,231,78 65 OftN1MIM14],294 (6n) (],399) . 'lung 1,921,5956 202620M 02311(18 D% 920,680 (9402) (19,]171) 278.805 108.981% 204,/88 141,291 (fin) (7995) 139,78 1,421.417 45 XM 14],294 (6n) (7133) Inn. 1,614M0 ] oIOtn 020 MI,W 10316 320,57 (90,04) (19,761) 888,80.5 10.981% ID4,48B 14],234 (5n) (7.936) 130,389 OMM8 7.5 20] 147.230 (590) (7.396) 198,900 1,87,54] a n2] OWOV28 100% 92057 (90.031) (19,]51) 218.80 106381% 84,468 14],231 (690) (].n5) 190,.0 1,884,580 8.5 OMM 2028 0&31120 147,234 (890) (r,3.) 199,.8 1,8876]] B 2028 0X028 100% 920170 (30.020) (19,751) 276.05 108.901% 284.468 147234 (MO) 19.908 1,017,72 200 147234 (5.7 Mm) 13..9 2,OPsn 1. 10 oV0,M 209 02090 100% 920,5. (90.031) (1$751) 2]8,805 106381% 2H4,408 14],2M (5n) p.3.) (T.M) 19..0 204.5 105 200 08/01/90 1472. (5n) (79.) 17,.0 218.]38 it 200 0311131 100% 92060 (30,024) (19,751) 278,90 ICe..1% 80.080 147,294 (6M) (7,995) 139..9 2319.00 112 201 017131 14].294 (5M) (].935) 1393692914691 12 201 02R1 100% 3241769 (90,04) (19.751) 278,80 10..1% 284,400 14727 (5.) (7,935) 139..0 2.4030 125 0 W 147.2. (5M) (],336) 13.360 2452542 19 n 1. o 2092 WA1W 100% 324569 (90.031) 73.761) P0,8W fG0..1% 284488 147,2. (no) (7,35) 13.369 25140. 13.5 n. 0601W 147,234 (5.) (7,n6) 130.360 260,807 14 20. 02311/34 10%6 920,680 (30.00) (19,]51) 2]6,80 100.3o1% 314400 147,294 (630) (7.995) 1n 2... 14.6 20M 14],2. (5n) (7,.$) 130,909 Ng 2]`8,]40 t5 20M 02311/36 WOWS tOUF 9205. (90.024) (19,751) 29,80 169.1% 310.4. 147.234 (6M) (7995) 13.980 2]..992 16.6 20. 0311/95 147.294 (fin) (7.995) 139.308 202707 18 n. 100E 92457 (13.]61) PB,BM 109.1% 311.488 147.2. (ow) (7.. 5) 39 1..0 2881.869 1 iift M te 2035 0&91/30 147.234 (5n) (7.3.) 19.309 2,995. 17] 9 n% MIM7 100% 92450 (30.024) (19.]51) PO.B`8 109.1% 3199.4. 147.294 (530) 139,988 290,.0 11. 2M] 04019] 147.294 (690) 7..5) 01.395) 130..8 9,1.&4. 1B n3] 001/38 10G% 375. (90.031) (19.761) 888,0`8 10.381% 74,4. 14].2. (5n) (7..5) 13..0 9,15,In 11. WADIM Ui.231 (Sn) (7,3.) 1n'.B 3,151 In iB nn 258 02311/98 MUN 100% 92457 (90.01) (13,751) 2]8,80 131901% 2044. 14].24 (590) (73.) 199.308 186 20DB 0X1/718 147,294 (6.) 139.37 oM.741 4240.]40 n 769 02WVb 100% 9201769 (7.024) (19.]51) T]B.BM 10.981% 74.48 14],291 (5.) (7,995) 9,3W 1391 9.2..04 'NIS 200 0&01/40 14],2. (690) (7,3.) 13..830 3.41,840 21 2040 02691/41 101017 .8569 (90.031) (19.751) 310.805 10.301% 74.408 14724 (630) (7535) 1393% 9.9..78 21,5 5691/41 14734 (6.) (7,995) 19997 447,084 .4 02311 74 1 1/2 15% 92067 (90.01) (19.751) 2]8.80169981%n4.468 1472M (669) (7.995) 1730 44]2.6 22.55 2992 0311/02 147234 (6n) (7..6j 130,389 3614.31] 2002 03103 1/ 1MF 90,50 (7.021) (13751) 880.80.5 16971% 74468 147.231 (590) (7395) 19%,.03664.375 n.6.5 2043 =1.14724 (690) (7S.) 198,.% 3,59434 N 8043 OLb1/49 tOG% 92450 (7,04) (13]51) 3/6.8(6 10..1% 282.408 147,2N (5.) 95.) 199.969 3.692.00 31.6 2099 0311/40 147,2. (57) (7396) 139.9 9,07.1 25 2040 0311/46 100% 3757 (30.04) (13.]61) 218,805 108.981% 74489 147,24 (590) (7,335) 190,300 3,]0],318 265 745 08691/45 14724 f5n�]335 13038% 3]43,155 n 2045 02/01/48 Ta l ] .16] (VAea (7881 P Valu Fwm 0N12M8 Prari4... 5.00% D % 318154 050.,[.-. -, Fe.. E-., [0697690-Reae.en9mann3Fll m o--11111 FnvY3Crmihoa�F-12 TF Roo(8a 1?)- Appendix E Minnesota Business Assistance Form (Minnesota Department of Employment and Economic Development) A Minnesota Business Assistance Form (MBAF) should be used to report and/or update each calendar year's activity by April 1 of the following year. Please see the Minnesota Department of Employment and Economic Development (DEED) website at htto://www.deed.state.mn.us/Community/subsidies/MBAFForrnhtm for information and forms. Appendix E-1 Appendix F Redevelopment Qualifications for the District Appendix F4 Report of Inspection Procedures and Results for Determining Qualifications of a Tax Increment Financing District as a Redevelopment District Chanhassen West 78th Street Redevelopment TIF District Chanhassen, Minnesota December 15, 2015 Prepared For the City of Chanhassen Prepared by: LHB, Inc. 701 Washington Avenue North, Suite 200 Minneapolis, Minnesota 55401 LHB Project No. 150703 TABLE OF CONTENTS PART 1 — EXECUTIVE SUMMARY................................................................................ 2 Purpose of Evaluation................................................................................ 2 Scopeof Work........................................................................................... 3 Conclusion................................................................................................. 3 PART 2 — MINNESOTA STATUTE 469.174, SUBDIVISION 10 REQUIREMENTS....... 3 A. Coverage Test...................................................................................... 4 B. Condition of Buildings Test................................................................... 4 C. Distribution of Substandard Buildings ................................................... 5 PART 3 — PROCEDURES FOLLOWED......................................................................... 6 PART4 — FINDINGS...................................................................................................... 6 A. Coverage Test...................................................................................... 6 B. Condition of Building Test..................................................................... 7 1. Building Inspection....................................................................7 2. Replacement Cost..................................................................... 8 3. Code Deficiencies..................................................................... 8 4. System Condition Deficiencies.................................................. 9 C. Distribution of Substandard Structures ................................................. 9 PART 5 - TEAM CREDENTIALS..................................................................................11 APPENDIX A Property Condition Assessment Summary Sheet APPENDIX B Building Code, Condition Deficiency and Context Analysis Reports APPENDIX C Building Replacement Cost Reports Code Deficiency Cost Reports Photographs PART 1 - EXECUTIVE SUMMARY PURPOSE OF EVALUATION LHB was hired by the City of Chanhassen to inspect and evaluate the properties within a Tax Increment Financing Redevelopment District (`"TIF District's proposed to be established by the City. The proposed TIF District is located between 78" Street West and Market Street, east of Market Boulevard (Diagram 1). The purpose of LHB's work is to determine whether the proposed TIF District meets the statutory requirements for coverage, and whether two (2) buildings on three (3) parcels, located within the proposed TIF District, meet the qualifications required for a Redevelopment District. SCOPE OF WORK The proposed TIF District consists of three (3) parcels with two (2) buildings. Two (2) buildings were inspected on November 20, 2015. Building Code and Condition Deficiency reports for the buildings that were inspected are located in Appendix B. CONCLUSION After inspecting and evaluating the properties within the proposed TIF District and applying current statutory criteria for a Redevelopment District under Minnesota Statutes, Section 469.174, Subdivision 10, it is our professional opinion that the proposed TIF District qualifies as a Redevelopment District because: The proposed TIF District has a coverage calculation of 100 percent which is above the 70 percent requirement. 100 percent of the buildings are structurally substandard which is above the 50 percent requirement. • The substandard buildings are reasonably distributed. The remainder of this report describes our process and findings in detail. PART 2 - MINNESOTA STATUTE 469.174, SUBDIVISION 10 REQUIREMENTS The properties were inspected in accordance with the following requirements under Minnesota Statutes, Section 469.174, Subdivision 10(c), which states: INTERIOR INSPECTION "The municipality may not make such determination [that the building is structurally substandard] without an interior inspection of the property.. " EXTERIOR INSPECTION AND OTHER MEANS "An interior inspection of the property is not required, if the municipality finds that (1) the municipality or authority is unable to gain access to the property after using its best efforts to obtain permission from the parry that owns or controls the property, and (2) the evidence otherwise supports a reasonable conclusion that the building is structurally substandard." DOCUMENTATION "Written documentation of the findings and reasons why an interior inspection was not conducted must be made and retained under section 469.175, subdivision 3(1)." QUALIFICATION REQUIREMENTS Minnesota Statutes, Section 469.174, Subdivision 10 (a) (1) requires three tests for occupied parcels: A. COVERAGE TEST ..."parcels consisting of 70 percent of the area of the district are occupied by buildings, streets, utilities, or paved or gravel parking lots..." The coverage required by the parcel to be considered occupied is defined under Minnesota Statutes, Seetion 469.174, Subdivision 10(e), which states: "For purposes of this subdivision, a parcel is not occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures unless 15 percent of the area of the parcel contains buildings, streets, utilities, paved or gravel parking lots, or other similar structures." B. CONDITION OF BUILDINGS TEST Minnesota Statutes, Section 469.174, Subdivision 10(a) states, "...and more than 50 percent of the buildings, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance;" 1. Structurally substandard is defined under Minnesota Statutes, Section 469.174, Subdivision 10(b), which states: "For purposes of this subdivision, `structurally substandard' shall mean containing defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance." a. We do not count energy code deficiencies toward the thresholds required by Minnesota Statutes, Section 469.174, Subdivision 10(b) defined as "structurally substandard", due to concerns expressed by the State of Minnesota Court of Appeals in the IvalserAuto Sales, Inc. vs. City of Ricbfeld case filed November 13, 2001. 2. Buildings are not eligible to be considered structurally substandard unless they meet certain additional criteria, as set forth in Subdivision 10(c) which states: "A building is not structurally substandard if it is in compliance with the building code applicable to new buildings or could be modified to satisfy the building code at a cost of less than 15 percent of the cost of constructing a new structure of the same square footage and type on the site. The municipality may find that a building is not disqualified as structurally substandard under the preceding sentence on the basis of reasonably available evidence, such as the size, type, and age of the building, the average cost of plumbing, electrical, or structural repairs, or other similar reliable evidence." "Items of evidence that support such a conclusion [that the building is not disqualified] include recent fire or police inspections, on-site property tax appraisals or housing inspections, exterior evidence of deterioration, or other similar reliable evidence." LHB counts energy code deficiencies toward the 15 percent code threshold required by Minnesota Statutes, Section 469.174, Subdivision 10(c)) for the following reasons: • The Minnesota energy code is one of ten budding code areas highlighted by the Minnesota Department of Labor and Industry website where minimum construction standards are required by law. • Chapter 13 of the 2015 Minnesota Building Code states, `Buildings shall be designed and constructed in accordance with the International Energy Conservation Code." Furthermore, Minnesota Rules, Chapter 1305.0021 Subpart 9 states, "References to the International Energy Conservation Code in this code mean the Minnesota Energy Code..." • The Senior Building Code Representative for the Construction Codes and Licensing Division of the Minnesota Department of Labor and Industry confirmed that the Minnesota Energy Code is being enforced throughout the State of Minnesota. • In a January 2002 report to the Minnesota Legislature, the Management Analysis Division of the Minnesota Department of Administration confirmed that the construction cost of new buildings complying with the Minnesota Energy Code is higher than buildings built prior to the enactment of the code. • Proper TIF analysis requires a comparison between the replacement value of a new building built under current code standards with the repairs that would be necessary to bring the existing building up to current code standards. In order for an equal comparison to be made, all applicable code chapters should be applied to both scenarios. Since current construction estimating software automatically applies the construction cost of complying with the Minnesota Energy Code, energy code deficiencies should also be identified in the existing structures. C. DISTRIBUTION OF SUBSTANDARD BUILDINGS Minnesota Statutes, Section 46P.174, Subdivision 10, defines a Redevelopment District and requires one or more of the following conditions, "reasonably distributed throughout the district." (1) "Parcels consisting of 70 percent of the area of the district are occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures and more than 50 percent of the buildings, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance; (2) the property consists of vacant, unused, underused, inappropriately used, or infrequently used rail yards, rail storage facilities, or excessive or vacated railroad rights-of-way; (3) tank facilities, or property whose immediately previous use was for tank facilities..." Out interpretation of the distribution requirement is that the substandard buildings must be reasonably distributed throughout the district as compared to the location of all buildings in the district. For example, if all of the buildings in a district are located on one half of the area of the district, with the other half occupied by parking lots (meeting the required 70 percent coverage for the district), we would evaluate the distribution of the substandard buildings compared with only the half of the district where the buildings are located. If all of the buildings in a district are located evenly throughout the entire area of the district, the substandard buildings must be reasonably distributed throughout the entire area of the district. We believe this is consistent with the opinion expressed by the State of Minnesota Court of Appeals in the Walser Auto Saks, Inc. vs. City ofBicbfreld case filed November 13, 2001. PART 3 - PROCEDURES FOLLOWED LBB inspected two (2) of the two (2) buildings during the day of November 20, 2015. PART 4 - FINDINGS A. COVERAGE TEST L The total square foot area of the parcel in the proposed TIF District was obtained from City records, GIS mapping and site verification. 2. The total square foot area of buildings and site improvements on the parcels in the proposed TIF District was obtained from City records, GIS mapping and site verification. 3. The percentage of coverage for each parcel in the proposed TIF District was computed to determine if the 15 percent minimum requirement was met. The total square footage of parcels meeting the 15 percent requirement was divided into the total square footage of the entire district to detemtine if the 70 percent requirement was met. FINDING: The proposed TIF District met the coverage test under Minnesota Statutes, Section 469.174, Subdivision 10(e), which resulted in parcels consisting of 100 percent of the area of the proposed TIF District being occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures (Diagram 2). This exceeds the 70 percent area coverage requirement for the proposed TIF District under Minnesota Statutes, Section 469.174, Subdivision (a) (1). Diagram 2 — Coverage Diagram Shaded area depicts a parcel mote than 15 percent occupied by buildings, streets, utilities, Paved or gravel parlang lots or other similar structures B. CONDITION OF BUILDING TEST BUILDING INSPECTION The first step in the evaluation process is the building inspection. After an initial walk- thm, the inspector makes a judgment whether or not a building "appears" to have enough defects or deficiencies of sufficient total significance to justify substantial renovation or clearance. If it does, the inspector documents with notes and photographs code and non - code deficiencies in the building. 2. REPLACEMENT COST The second step in evaluating a building to determine if it is substandard to a degree requiring substantial renovation or clearance is to determine its replacement cost. This is the cost of constructing a new structure of the same square footage and type on site. Replacement costs were researched using R.S. Means Cost Works square foot models for 2015. A replacement cost was calculated by first establishing building use (office, retail, residential, etc.), building construction type (wood, concrete, masonry, etc), and building size to obtain the appropriate median replacement cost, which factors in the costs of construction in Chanhassen, Minnesota. Replacement cost includes labor, materials, and the contractor's overhead and profit. Replacement costs do not include architectural fees, legal fees or other "soft" costs not directly related to construction activities. Replacement cost for each building is tabulated in Appendix A. 3. CODE DEFICIENCIES The next step in evaluating a building is to determine what code deficiencies exist with respect to such building. Code deficiencies are those conditions for a building which are not in compliance with current building codes applicable to new buildings in the State of Minnesota. Minnesota Statutes, Section 469.174, Subdivision 10(c), specifically provides that a building cannot be considered structurally substandard if its code deficiencies are not at least 15 percent of the replacement cost of the building. As a result, it was necessary to determine the extent of code deficiencies for each building in the proposed TIF District. The evaluation was made by reviewing all available information with respect to such buildings contained in City Building Inspection records and making interior and exterior inspections of the buildings. LHB utilizes the current Minnesota State Building Code as the official code for our evaluations. The Minnesota State Building Code is actually a series of provisional codes written specifically for Minnesota only requirements, adoption of several international codes, and amendments to the adopted international codes. After identifying the code deficiencies in each building, we used R.S. Means Cost Works 2015: Unit and Assembly Costs to determine the cost of correcting the identified deficiencies. We were then able to compare the correction costs with the replacement cost of each building to determine if the costs for correcting code deficiencies meet the required 15 percent threshold. FINDING: Two (2) out of two (2) buildings (100 percent) in the proposed TIF District contained code deficiencies exceeding the 15 percent threshold required by Minnesota Statutes, Section 469.174, Sub&vision 10(c). Building Code, Condition Deficiency and Context Analysis reports for the buildings in the proposed TIF District can be found in Appendix B of this report. 4. SYSTEM CONDITION DEFICIENCIES If a building meets the minimum code deficiency threshold under Minnesota Statutes, Section 469.174, Subdivision 10(c), then in order for such building to be "structurally substandard" under Minnesota Statutes, Section 469.174, Subdivision 10(b), the building's defects or deficiencies should be of sufficient total significance to justify "substantial renovation or clearance." Based on this definition, LHB re-evaluated each of the buildings that met the code deficiency threshold under Minnesota Statutes, Section 469.174, Subdivision 10(c), to determine if the total deficiencies warranted "substantial renovation or clearance" based on the criteria we outlined above. System condition deficiencies are a measurement of defects or substantial deterioration in site elements, structure, exterior envelope, mechanical and electrical components, fire protection and emergency systems, interior partitions, ceilings, floors and doors. The evaluation of system condition deficiencies was made by reviewing all available information contained in City records, and making interior and exterior inspections of the buildings. LHB only identified system condition deficiencies that were visible upon our inspection of the building or contained in City records. We did not consider the amount of "service life" used up for a particular component unless it was an obvious part of that component's deficiencies. After identifying the system condition deficiencies in each building, we used our professional judgment to determine if the list of defects or deficiencies is of sufficient total significance to justify "substantial renovation or clearance." FINDING: In our professional opinion, two (2) out of two (2) buildings (100 percent) in the proposed TIF District are structurally substandard to a degree requiring substantial renovation or clearance, because of defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance. This exceeds the 50 percent requirement of Subdivision 10a(1). C. DISTRIBUTION OF SUBSTANDARD STRUCTURES Much of this report has focused on the condition of individual buildings as they relate to requirements identified by Minnesota Statutes, Section 469.174, Subdivision 10. It is also important to look at the distribution of substandard buildings throughout the geographic area of the proposed TIF District (Diagram 3). FINDING: The parcels with substandard buildings are reasonably distributed compared to all parcels that contain buildings. _ —78th_Street-Most �F. -4:ot Street Chanhassen West Mh Street Redevelopment TIF District SHB Project No. 150703 Page 10 of 11 Final Report PART 5 - TEAM CREDENTIALS Michael A. Fischer, AIA, LEED AP -Project PrincipaIMF Analyst Michael has 28 years of experience as project principal, project manager, project designer and project architect on planning, urban design, educational, commercial and governmental projects. He has become an expert on Tax Increment Finance District analysis assisting over 100 cities with strategic planning for TIF Districts. He is a Senior Vice President at LHB and currently leads the Minneapolis office. Michael completed a two-year Bush Fellowship, studying at MIT and Harvard in 1999, eaming Masters degrees in City Planning and Real Estate Development from MIT. He has served on more than 50 conunittees, boards and community task forces, including a term as a City Council President and as Chair of a Metropolitan Planning Organization. Most recently, he served as Chair of the Edina, Minnesota planning commission. Michael has also managed and designed several award-winning architectural projects, and was one of four architects in the Country to receive the AIA Young Architects Citation in 1997. Philip Waugh — Project ManageNTIF Analyst Philip is a project manager with 13 years of experience in historic preservation, building investigations, material research, and construction methods. He previously worked as a historic preservationist and also served as the preservation specialist at the St. Paul Heritage Preservation Commission. Currently, Phil sits on the Board of Directors for the Preservation Alliance of Minnesota. His current responsibilities include project management of historic preservation projects, performing building condition surveys and analysis, TIF analysis, writing preservation specifications, historic design reviews, writing Historic Preservation Tax Credit applications, preservation planning, and grant writing. Phil Fisher — Inspector For 35 years, Phil Fisher worked in the field of Building Operations in Minnesota including White Bear Lake Area Schools. At the University of Minnesota he earned his Bachelor of Science in Industrial Technology. He is a Certified Playground Safety Inspector, Certified Plant Engineer, and is trained in Minnesota Enterprise Real Properties (NIERP) Facility Condition Assessment (FCA). His FCA training was recently applied to the Minnesota Department of Natural Resources Facilities Condition Assessment project involving over 2,000 buildings. M:\I5Prcq\150703\400Design\406 Reports\Final Report\150703 20151215 Chanhassen West 78th Redevelopment TIF Repo2do APPENDICES APPENDIX A Property Condition Assessment Summary Sheet APPENDIX B Building Code and Condition Deficiencies Reports APPENDIX C Building Replacement Cost Reports Code Deficiency Cost Reports Photographs APPENDIX A Property Condition Assessment Summary Sheet Chanhassen West 78th Street Redevelopment TIF District Chanhassen Minnesota Property Condition Assessment Summary Sheet A z5z65ppzp e wA oZ zzorwa �wSpnoCsesuSr s5raau u6x z,ccccar >6TnsTw m5ow m c zsz65wai I maRRSTeT IImmrove] Smnw 5eaez I zs.ais A. I o 169,66a Total Coverage Percent of buildings exceeding 15 percent code deficiency M115PmIIN10eMGeoeupewWROPoN ireIRegMV1WN3a]r5r2r5Ch.mee..e Tams tRemelc nITIFSMMm Sl...mlw MIPrap.nv Percent of buildings OW.— . ]BN Snel peMMopeenr TIF .1. 1 L rrq. No. IN.N Pe9e 1 M 1 PrcpeMSeMN>n Aneanienr Sinnmerybhmr APPENDIX B Building Code, Condition Deficiency and Context Analysis Reports Chanhassen West 78th Street Redevelopment TIF District Building Code, Condition Deficiency and Context Analysis Report December 1, 2015 Map No. & Address: Parcel A - 78Th Street West, Chanhassen, MN 55317 Inspection Date(s) & Time(s): November 20, 2015 10:00 am Inspection Type: Interior and Exterior Summary of Deficiencies: It is our professional opinion that this building is Substandard because: - Substantial renovation is required to correct Conditions found. - Building Code deficiencies total more than 15% of replacement cost, NOT including energy code deficiencies. Estimated Replacement Cost: $2,264,147 Estimated Cost to Correct Building Code Deficiencies: $515,382 Percentage of Replacement Cost for Building Code Deficiencies: 22.76% Defects in Structural Elements 1. There is a bowed wooden support column on the south side of the building that supports a roof. 2. There are brick parapet columns that are out of plumb. 3. Steel arches are rusting. Combination of Deficiencies 1. Essential Utilities and Facilities a. Thresholds are not ADA compliant. b. There is not an accessible route to two out of the three levels in this building. c. There are no accessible restrooms on the second floor. d. Door hardware are not all ADA compliant. e. Stair railings are missing and not in compliance with building code. f Faucets in one ground floor restroom are non-compliant. g. Stair risers on two sets of stairs are not compliant. h. Sidewalks do not meet accessibility standards. i. There is a non-compliant threshold leading into the restaurant cooler. j. The staff break room sinks in two areas are non-compliant. k. The transaction counter in one of the retail spaces is not ADA compliant. 1. There are showers that are not ADA compliant 2. Light and Ventilation a. The HVAC system in several areas is of an age that it would not meet current ASHRAE standards. b. Light diffusers are stained and damaged from cooking grease and water. c. Wall return grills are covered in dust indicative of a compromised HVAC system d. Water stains are evident on the OSB flooring in the mechanical room- e. oome. Exterior exhaust diffusers are hail damaged. 3. Fire Protection/Adequate Egress a. There is a smoke detector that has been disabled on the lower level. b. Carpeting is missing and/or tom preventing adequate egress in the event of an emergency. c. Vinyl flooring is loosen and damaged preventing adequate egress in the event of an emergency. d. The stoop is too high for safe egress from the building. 4. Layout and Condition of Interior Partitions/Materials a. Interior corridors are in need of repair and painting. b. Walls have been removed and are exposing structural members. c. Glass wall mirrors are broken and should be replaced. d. The interior block walls in the lower service areas show signs of water intrusion and mold. e. There are stained ceiling tiles indicative of water intrusion from the roof. f Wooden stairs are in need of paint. g. Interior sheetrock ceiling in lower area is damaged from a pipe leak and in need of repair. h. Interior wall sections are missing and need repair or replacement. i. Transitions are missing between dissimilar surfaces. j. Window sills need to be refinished. k. Window hardware is missing. 1. Ceiling sheetrock is damaged at tape joints in several areas. in. Wallpaper is peeling and needs repair. n. Ceramic the is cracked and in need of replacement. o. Wooden dance floor needs refinishing. S. Exterior Construction a. The EPDM roof is failing, showing water leakage on ceiling members below. b. Block work is in need of pointing and replacement. c. Windows are rotting and allowing for water intrusion. d. Exposed wood ceiling members are stained from water intrusion and need painting. e. Sidewalks and parking lots are cnu abling and in need of repair. f Brick is missing from column wrap. g. Roof drains are spilling over walkway and may cause icy conditions in the winter. h. Exterior openings on the upper floor have a temporary plastic covering over them i. Gas pipe is rusting and in need of painting. j. Exterior block is in need of painting. k Door trim should be painted. 1. Miscellaneous debris including an AC unit is abandoned on the roof. m Roof tie downs are rusting and should be replaced. n. Exterior windows should be repainted. o. Metal flashing is in need of painting. Description of Code Deficiencies 1. Replace thresholds that are not ADA compliant. 2. Create an accessible route between all building levels per building code. 3. Create ADA compliant restrooms on upper level per code. 4. Install code compliant door hardware where necessary. 5. Install code compliant hand railings on all stairs. 6. Install code compliant ADA accessible lavatory faucet on main level. 7. Correct stair risers to be building code compliant on two stairways. 8. Sidewalks need to be replaced to meet building code. 9. Correct the threshold on the walk-in cooler to be building code compliant. 10. Create a transaction counter in the lower retail space to meet ADA compliance. 11. Modify the two staff break room sinks to be ADA compliant. 12. Create at least one accessible shower facility for ADA compliance. 13. Replace HVAC system to meet building code compliance. 14. Replace/repair the nonfunctioning smoke detector for code compliance. 15. Replace the damaged carpet to allow for unimpeded egress in an emergency per life safety code. 16. Replace the tom vinyl flooring to allow for unimpeded egress in an emergency per life safety code. 17. Correct the elevation on the stoop to allow for safe egress per building code. 18. Repair damaged block to prevent water intrusion per building code. 19. Replace EPDM roofing to prevent water intrusion per building code. 20. Replace failed window systems to prevent water intrusion per building code. Overview of Deficiencies This building was originally constructed as a lumber yard and hardware store. Over the years it has been remodeled into its current retail businesses on the lower levels and professional services on the upper level There is no accessible route between levels. Restrooms on the second floor are non-compliant for accessibility. The individual HVAC systems are of an age that they would not meet ASHRAE standards for the current usage. The exposed block wall on the east side is in need of repair as it is allowing for water intrusion. Chanhassen West 7811 Street Redevelopment TIF District Buildinq Code, Condition Deficiencv and Context Anaivcic Rnnnrt December 1, 2015 Map No. & Address: Parcel B - 78th Street West, Chanhassen, MN 55317 Inspection Date(s) & Time(s): November 20, 2015 9:00 am Inspection Type: Interior and Exterior Summary of Deficiencies: It is our professional opinion that this building is Substandard because: - Substantial renovation is required to correct Conditions found. - Building Code deficiencies total more than 15% of replacement cost, NOT including energy code deficiencies. Estimated Replacement Cost: $429,067 Estimated Cost to Correct Building Code Deficiencies: $96,075 Percentage of Replacement Cost for Building Code Deficiencies: 22.39% Defects in Structural Elements 1. Not Applicable. Combination of Deficiencies 1. Essential Utilities and Facilities a. Drinking fountain is inoperable. b. Thresholds are non-compliant. c. Sidewalks do not provide for an unobstructed route to building. d. Install code -compliant door hardware 2. Light and Ventilation a. HVAC system is older and functioning below ASHRAE standards. b. Smoke stack needs to be replaced/repaired. 3. Fire Protection/Adequate Egress a. There are no GFCI receptacles present in building. 4. Layout and Condition of Interior Partitions/Materials a. Interior walls should be painted. b. Scuff marks on exit corridor walls. c. VCT flooring showing signs of age. d. Exit door stained and dented. 5. Exterior Construction a. Siding needs repair and painting. b. Roof needs replacement. c. Ceiling in walkway needs painting. d. Exterior block walls cracked, damaged and in need of painting. e. Gutters need to be repaired/replaced. Description of Code Deficiencies 1. Replace roof to prevent water intrusion per building code 2. Repair/replace drinking fountain per plumbing and building code. 3. Correct threshold height to meet ADA compliance code. 4. Replace sidewalks to provide an unobstructed route to building per ADA code. 5. Replace existing HVAC system to meet building code requirements. 6. Install GFCI receptacles near all water sources per electrical code. 7. Repair/replace siding to prevent water intrusion per building code. 8. Install ADA compliant door hardware. Overview of Deficiencies This building is part of a commercial mixed use assemblage of both retail and professional services connected by an enclosed walkway and an exposed sidewalk. In this building there is a hair salon and an educational training service. The roof is showing signs of weathering with curling of the asphalt shingles. The wood siding is damaged and in need of repair. Accessibility concerns are apparent by the uneven sidewalk and the elevated thresholds. The HVAC system is older and appears not to meet current ASHRAE criteria. APPENDIX C Building Replacement Cost Reports Code Deficiency Cost Reports Photographs Chanhassen West 78th Street Redevelopment TIF District Replacement Cost Report Square Foot Cost Estimate Report Date: 11/25/2015 Estimate Name: Parcel A City of Chanhassen 78th StreetWest, Chanhassen, Minnesota, 55317 Store, Retail with Painted Concrete Block Building Type: / Steel Joists Location: MINNEAPOLIS, MN Story Count: 1 O 0 f t Story Height (LF.): 12 T} y n Floor Area (S.F.): 33357 y Labor Type: OPN Basement Included: Yes - --= Data Release: Year 2016 Costs are served from a building model with basic components. Cost Per Square Foot: $126.82 Scope dlfterencesand maBetwndnans can cause Costs tovary significantly, Building Cost: $2,264,146.89 % of Total Cost Per S.F. Cost SubstructureMEMM,®' A1010 Standard Foundations 3.68 61,430.46 Strip footing, concrete, reinforced, load 11.1 KLF, soil bearing capacity 6 KSF, 12" deep x 24" wide 1.32 22,046.53 Spread footings, 3000 PSI concrete, load 100K, soil bearing capacity 6 KSF, 4'- 6" square x 15" deep 2.36 39,383.93 A1030 Slab on Grade 5.63 93,972.36 Slab on grade, 4" thick, non industrial, reinforced 5.63 93,972.36 A2010 Basement Excavation 4.42 73,711.42 Excavate and fill, 10,000 SF, 8' deep, sand, gravel, or common earth, on site storage 4.42 73,711.42 A2020 Basement Walls 8.29 138,209.22 Foundation wall, CIP, 12' wall height, pumped, .444 CY/LF, 21.59 PLF, 12" thick 8.29 138,209.22 81010 Floor Construction 19.83 330,705.74 Cast -in-place concrete column, 12" square, tied, 200K load, 12' story height, 142 lbs/LF, 4000PSI 5.66 94,456.20 Flat slab, concrete, with drop panels, 6" slab/2.5" panel, 12" column, 15'x15' bay, 75 PSF superimposed load, 153 PSF total load 14.17 236,249.54 B1020 Roof Construction 10.16 169,385.11 Roof, steel joists, beams, 1.5" 22 ga metal deck, on columns, 25'x25' bay, 20" deep, 40 PSF superimposed load, 60 PSF total load 8.41 140,269.32 Roof, steel joists, beams, 1.5" 22 ga metal deck, on columns, 25'x25' bay, 20" deep, 40 PSF superimposed load, 60 PSF total load, add for column 1.75 29,115.79 82010 Exterior Walls 6.67 111,179.53 E.I.F.S., cement board sheathing, 1x8 fascia, R8 insulation, 6" metal studs, 16" O.C., 2" EPS 6.67 111,179.53 B2020 Exterior Windows 1.48 24,805.65 Aluminum flush tube frame, for 1/4"glass,1-3/4"x4", 5'x6' opening, no intermediate horizontals 0.11 1,875.35 Chanhassen West 78th Street Redevelopment TIF District Replacement Cost Report LHB Project No. 150703 Page 1 of 3 Parcel A Chanhassen West 78th Street Redevelopment TIF District Replacement Cost Report -HB Project No. 150703 Page 2 of 3 Parcel A % of Total Cost Per S.F. Cost Glazing panel, insulating, 1/2" thick, 2 lites 1/8" float glass, clear 1.37 22,930.30 82030 Exterior Doors 1.67 27,904.64 Door, aluminum & glass, with transom, black finish, hardware, 3'-0" x 10'-0" opening 1.42 23,654.95 Door, steel 18 gauge, hollow metal, 1 door with frame, no label, 3'-0" x 7'-0" opening 0.25 4,249.69 83010 Roof Coverings 5.95 99,312.93 Roofing, single ply membrane, EPDM, 60 mils, loosely laid, stone ballast 1.69 28,200.83 Insulation, rigid, roof deck, extruded polystyrene, 40 PSI compressive strength, 4" thick, R20 2.94 49,056.34 Roof edges, aluminum, duranodic, .050" thick, 6" face 0.92 15,398.53 Gravel stop, aluminum, extruded, 4", mill finish, .050" thick 0.4 6,657.23 B3020 Roof Openings 0.06 967.01 Roof hatch, with curb, 1" fiberglass insulation, 2'-6" x 3'-0", galvanized steel, 165 lbs 0.06 967.01 C1010 �� Partitions 1.38 t 23,049.23 Metal partition, 5/8"fire rated gypsum board face, no base,3 -5/8" @ 24" OC framing, same opposite face, no insulation 0.79 13,231.55 Gypsum board, 1 face only, exterior sheathing, fire resistant, 5/8" 0.35 5,884.53 Add for the following: taping and finishing 0.24 3,933.15 C1020 Interior Doors 2.05 34,225.32 Door, single leaf, kd steel frame, hollow metal, commercial quality, flush, 3'-0" x 7'-0" x 1-3/8" 2.05 34,225.32 C1030 Fittings 0.20 3,345.70 Toilet partitions, cubicles, ceiling hung, stainless steel 0.2 3,345.70 C3010 Wall Finishes 0.87 14,436.58 Painting, interior on plaster and drywall, walls & ceilings, roller work, primer & 2 coats 0.28 4,666.77 Painting, interior on plaster and drywall, walls & ceilings, roller work, primer & 2 coats 0.31 5,137.42 Ceramic tile, thin set, 4-1/4" x 4-1/4" 0.28 4,632.39 C3020 Floor Finishes 2.95 49,200.43 Vinyl, composition tile, maximum 2.95 49,200.43 C3030 Ceiling Finishes 7.82 130,486.34 Acoustic ceilings, 3/4"mineral fiber, 12" x 12" tile, concealed 2" bar & channel grid, suspended support 7.82 130,486.34 r� D2010 Plumbing Fixtures 1.79 29,826.08 Water closet, vitreous china, tank type, 2 piece close coupled 0.34 5,674.02 Urinal, vitreous china, wall hung 0.08 1,288.21 Lavatory wltrim, vanity top, PE on Cl, 20" x 18" 0.31 5,183.15 Service sink w/trim, PE on Cl,wall hung w/rim guard, 24" x 20" 0.82 13,624.26 Water cooler, electric, wall hung, dual height, 14.3 GPH 0.24 4,056.44 D2020 Domestic Water Distribution 1.49 24,826.40 Gas fired water heater, commercial, 100< F rise, 500 MBH input, 480 GPH 1.49 24,826.40 D2040 Rain Water Drainage 1.26 21,043.16 Chanhassen West 78th Street Redevelopment TIF District Replacement Cost Report -HB Project No. 150703 Page 2 of 3 Parcel A SubTotal % of Total Cost Per S.F. Cost Contractor Fees (General Conditions,Overhead,Profit) Roof drain, Cl, soil,single hub, 4" diam, 10' high 1.16 19,303.74 Architectural Fees Roof drain, Cl, soil,single hub, 4" diam, for each additional foot add 0.1 1,739.42 D3050 Terminal & Package Units 8.10 270,191.70 Total Building Cost Rooftop, single zone, air conditioner, department stores, 10,000 SF, 29.17 ton 8.1 270,191.70 D4010 Sprinklers 4.37 72,893.87 Wet pipe sprinkler systems, steel, ordinary hazard, 1 floor, 10,000 SF 4.37 72,893.87 D4020 Standpipes 1.09 18,176.62 Wet standpipe risers, class III, steel, black, sch 40, 4" diam pipe, 1 floor 1.09 18,176.62 D5010 Electrical Service/Distribution 1.36 22,848.70 Overhead service installation, includes breakers, metering, 20' conduit & wire, 3 phase, 4 wire, 120/208 V, 400 A 0.36 6,081.30 Feeder installation 600 V, including RGS conduit and XHHW wire, 400 A 0.27 4,529.15 Switchgear installation, incl switchboard, panels & circuit breaker, 120/208 V, 1 phase, 400 A 0.73 12,238.25 D5020 Lighting and Branch Wiring 10.99 183,240.25 Receptacles incl plate, box, conduit, wire, 8 per 1000 SF, .9 watts per SF 2.88 47,955.25 Miscellaneous power, 1.5 watts 0.42 6,979.74 Central air conditioning power, 4 watts 0.84 14,020.93 Fluorescent fixtures recess mounted in ceiling, 1.6 watt per SF, 40 FC, 10 fixtures @32watt per 1000 SF 6.85 114,284.33 D5030 Communications and Security 1.73 28,940.90 Communication and alarm systems, fire detection, addressable, 25 detectors, includes outlets, boxes, conduit and wire 0.96 16,046.62 Fire alarm command center, addressable without voice, excl. wire & conduit 0.77 12,894.28 ,E Equipment,& Furnishings E1090 Other Equipment 0 0 SubTotal 100% $115.29 $2,058,315.35 Contractor Fees (General Conditions,Overhead,Profit) 10.00% $11.53 $205,831.54 Architectural Fees 0.00% $0.00 $0.00 User Fees 0.00% $0.00 $0.00 Total Building Cost Chanhassen West 78th Street Redevelopment TIF District Replacement Cost Report LHB Project No. 150703 Page 3 of 3 Parcel A Chanhassen West 78th Street Redevelopment TIF District Code Deficiencv Cost Report Parcel A - 78th Street West, Chanhassen, MN 55317 - Parcel No. 252830020 Accessibility Items Thresholds Replace all thresholds for ADA compliance $ 250.00 Ea 10 $ 2,500.00 Door Hardware $ 250.00 Ea 15 $ 3,750.00 Replace door hardware for ADA compliance $ 250.00 Ea 40 $ 10,000.00 Sidewalks $ 2.95 SF 12,000 $ 35,400.00 Remove and Replace sidewalks for ADA compliance $ 10.00 SF 1,000 $ 10,000.00 Accessible route Install an elevator between all levels $ 100,000.00 Lump 1 $ 100,000.00 Restrooms Fire Protection Create ADA compliant restrooms on upper level $ 10,000.00 Ea 2 $ 20,000.00 Install compliant lavatory faucet on lower level $ 150.00 Ea 1 $ 150.00 Restaurant walk in cooler Modify threshold for ADA compliance $ 2,500.00 Ea 1 $ 2,500.00 Transaction counter Modify counter to comply with ADA $ 500.00 Ea 1 $ 500.00 Staff break room sinks Modify sink for ADA compliance $ 500.00 Ea 2 $ 1,000.00 Shower facility Install ADA compliant shower stall $ 1,500.00 Ea 1 $ 1,500.00 Structural Elements Exiting Stairways Install compliant hand railings $ 250.00 Ea 4 $ 1,000.00 Correct stair riser height to meet compliance $ 250.00 Ea 15 $ 3,750.00 Flooring Replace damaged carpeting $ 2.95 SF 12,000 $ 35,400.00 Replace damaged vinyl flooring $ 2.35 SF 1,000 $ 2,350.00 Exterior stoop Correct excessive elevation per code $ 500.00 Ea 1 $ 500.00 Fire Protection Smoke detector Replace non functioning detector $ 100.00 Ea 1 $ 100.00 Chanhassen West 78th Street Redevelopment TIF District Code Deficiency Cost Report LHB Project No. 150703 Page 1 of 2 Parcel A Exterior Construction Block walls Repair/replace damaged block to prevent water intrusion $ 8.00 Ea 4,000 $ 32,000.00 Windows Replace failed window systems $ 1.48 Ea 10,000 $ 14,800.00 Roof Construction Provide code compliant exterior roof covering Remove and replace EPDM roof $ 5.95 SF 1,200 $ 7,140.00 Mechanical- Electrical Mechanical Replace HVAC system for code compliance $ 8.10 SF 33,357 $ 270,191.70 Total Code Improvements $ 515,381.70 Chanhassen West 78th Street Redevelopment TIF District Code Deficiency Cost Report LHB Project No. 150703 Page 2 of 2 Parcel A Chanhassen West 78th Street TIF District P1060101.JPG P1060103.JPG P1060104.JPG P1060105.JPG 108.JPG P1060109.JPG Page 1 of 13 `! 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P1060176.JPG i i P1060177.JPG P1060179.JPG IiGIYdI[:b�1�Z� P1060182.JPG P1060184.JPG Chanhassen West 78th Street Redevelopment TIF District Page 6 of 13 Photos LHB Project No. 150703 Parcel P1060195.JPG P1060197.JPG v P1060199.JPG P1060200.JPG P1060198.JPG Chanhassen West 78th Street Redevelopment TIF District Page 7 of 13 Photos LHB Project No. 160703 Parcel A P1060202.JPG P1060205.JPG 4 1 t s` 1 !I P 1060209.J PG P1060210.JPG P1060212.JPG Chanhassen West 78th Street Redevelopment TIF District Page 8 of 13 Photos LH6 Project No. 150703 Parcel A P1060215.JPG P1060216.JPG PAINKEEH VALVE =FS P1060226.JPG P1060227.JPG P1060228.JPG Chanhassen West 78th Street Redevelopment TIF District Page 9 of 13 Photos LHB Project No. 150703 Parcel A P1060231.JPG P1060235.JPG P1060240.JPG P1060242.JPG Chanhassen West 78th Street Redevelopment TIF District Page 10 of 13 Photos LHB Project No. 150703 Parcel A P1060247.JPG P1060256.JPG P1060261.JPG P1060265. PG P1060266.JPG Chanhassen West 78th Street Redevelopment TIF District Page 11 of 13 Photos LHB Project No. 150703 Parcel A P1060267.JPG� P1060271.JPG P1060273.JPG P1060276.JPG P1060279.JPG Chanhassen West 78th Street Redevelopment TIF District Page 12 of 13 Photos LHB Project No. 150703 Parcel A 9117 P1060281.JPG P1060283.JPG P1060282.JPG �io66289.,JPG VC Chanhassen West 78th Street Redevelopment TIF District Page 13 of 13 Photos LHB Project No. 150703 Parcel A Chanhassen West 78th Street Redevelopment TIF District Replacement Cost Report RSMea WPGIAN GPOUP Square Foot Cost Estimate Report Date: 11/25/2015 Estimate Name: Chanhassen Parcel B City of Chanhassen Building Type: Location: Story Count: Story Height (LF.): Floor Area (S.F.): Labor Type: Basement Included: Data Release: Cost Per Square Foot: Building Cost: 78th St W, Chanhassen, Minnesota, 55317 Retail, Wood Siding / Wood Truss MINNEAPOLIS, MN 12 3494 OPN No Year2016 $122.82 $429,067.46 i Costs are derived from a building model with basic components. Scope differences and market conditions can cause costs to vary significantly. % of Total Cost Per S.F. cost A1010 Standard Foundations 3.27 11,431.53 B1020 Strip footing, concrete, reinforced, load 11.1 KLF, soil bearing capacity 6 7.48 26,149.24 KSF, 12" deep x 24" wide 3.27 11,431.53 A1030 Slab on Grade 5.63 19,686.98 Slab on grade, 4" thick, non industrial, reinforced 5.63 19,686.98 A2010 Basement Excavation 0.35 1,216.93 Excavate and fill, 10,000 SF, 4' deep, sand gravel, or common earth, on 7.73 26,994.24 B2030 site storage 0.35 1,216.93 A2020 Basement Walls 6.19 21,644.14 B3010 Foundation wall, CIP, 4' wall height, direct chute, .123 CY/LF, 6.0 PLF, 5.10 17,782.16 Asphalt roofing, strip shingles, inorganic, Class A, 4" slope, 210-235 Ibs/SQ 2.41 8,406.81 Insulation, rigid, roof deck, fiberglass, 3'x4' or 4'x8' sheets, 15/16" thick, R3.70 1.79 6,269.17 Flashing, aluminum, no backing sides, .019" 0.46 1,595.11 Gutters, box, aluminum, .027" thick, 5", enameled finish 0.38 1,310.93 Downspout, aluminum, rectangular, 2" x 3", embossed mill finish, .020" thick 0.06 200.14 Interiors C1010 Partitions 12.06 42,121.36 Chanhassen West 78th Street Redevelopment TIF District Replacement Cost Report LHB Project No. 150703 Page 1 of 3 Parcel B 10" thick mmom, pw�Nanmn 6.19 21,644.14 B1020 Roof Construction 7.48 26,149.24 Wood roof, truss, 4/12 slope, 24" O.C., 30' to 43' span 7.48 26,149.24 B2010 Exterior Walls 8.37 29,244.78 Wood siding systems, 1/2" x 6" beveled cedar siding, "A" grade 8.37 29,244.78 B2020 Exterior Windows 7.73 26,994.24 Windows, wood, double hung, insulated glass, 2'-8" x 4'-6" 7.73 26,994.24 B2030 Exterior Doors 4.29 14,973.77 Door, birch, solid core, single door, hinged, 3'-0" x 7'-0" opening 4.29 14,973.77 B3010 Roof Coverings 5.10 17,782.16 Asphalt roofing, strip shingles, inorganic, Class A, 4" slope, 210-235 Ibs/SQ 2.41 8,406.81 Insulation, rigid, roof deck, fiberglass, 3'x4' or 4'x8' sheets, 15/16" thick, R3.70 1.79 6,269.17 Flashing, aluminum, no backing sides, .019" 0.46 1,595.11 Gutters, box, aluminum, .027" thick, 5", enameled finish 0.38 1,310.93 Downspout, aluminum, rectangular, 2" x 3", embossed mill finish, .020" thick 0.06 200.14 Interiors C1010 Partitions 12.06 42,121.36 Chanhassen West 78th Street Redevelopment TIF District Replacement Cost Report LHB Project No. 150703 Page 1 of 3 Parcel B Wood partition, 5/8" fire rated gypsum board face, 1/4"sound deadening gypsum board, 2x4 @ 16" OC framing, same opposite face, 1.5" 7.86 27,450.42 1/2" fire rated gypsum board, taped & finished, painted on metal furring 4.2 14,670.94 C1020 Interior Doors 1.92 6,725.95 Door, single leaf, wood frame, 3'-0" x 7'-0" x 1-3/8", birch, hollow core 1.92 6,725.95 C3010 Wall Finishes 2.97 10,390.15 Painting, interior on plaster and drywall, walls & ceilings, roller work, primer & 2 coats 1.49 5,214.28 Ceramic tile, thin set, 4-1/4" x 4-1/4" 1.48 5,175.87 C3020 Floor Finishes 7.38 25,775.56 Carpet, tufted, nylon, roll goods, 12' wide, 36 oz 4.52 15,796.90 Carpet, padding, add to above, 2.7 density 1.01 3,531.21 Tile, ceramic natural clay 1.85 6,447.45 C3030 Ceiling Finishes 5.10 17,835.33 Gypsum board ceilings, 1/2" fire rated gypsum board, painted and textured finish,1" x 3" wood, 16" OC furring, wood support 5.1 17,835.33 rmomm.00MEM. D2010 Plumbing Fixtures 2.08 7,267.52 Water closet, vitreous china, tank type, 2 piece close coupled 1.33 4,647.02 Lavatory w/trim, vanity top, cultured marble, 19" x 17" 0.75 2,620.50 D2020 Domestic Water Distribution 4.33 15,116.41 Gas fired water heater, commercial, 100< F rise, 155 MBH input, 150 D3050 GPH Terminal& Package Units 4.33 8.43 15,116.41 29,454.42 3/4 ton,cooling units 3.74 13,067.56 Furnace, gas heating only, 100 MBH, area to 1200 SF 0.72 2,515.68 Intermittent pilot, 100 MBH furnace 0.12 419.28 Supply duct, rectangular, area to 1200 SF, rigid fiberglass 0.82 2,865.08 Return duct, sheet metal galvanized, to 1500 SF 1.02 3,563.88 Lateral ducts, flexible round 6" insulated, to 1200 SF 0.87 3,039.78 Register elbows, to 1500 SF 0.56 1,956.64 Floor registers, enameled steel w/damper, to 1500 SF 0.28 978.32 Return air grille, area to 1500 SF 12" x 12" 0.09 314.46 Thermostat, manual, 1 set back 0.09 314.46 Plenum, heating only, 100 MBH 0.12 419.28 D4010 Sprinklers 4.70 16,434.66 Wet pipe sprinkler systems, steel, light hazard, 1 floor, 5000 SF 4.7 16,434.66 D4020 Standpipes 1.09 3,807.96 Wet standpipe risers, class 111, steel, black, sch 40, 4" diam pipe, 1 floor 1.09 3,807.96 D5010 Electrical Service/Distribution 3.05 10,646.16 Overhead service installation, includes breakers, metering, 20' conduit & wire, 3 phase, 4 wire, 120/208 V, 200 A 0.87 3,054.80 Feeder installation 600 V, including RGS conduit and XHHW wire, 200 A Switchgear installation, incl switchboard, panels & circuit breaker, 1.3 4,531.80 120/208 V, 1 phase, 400 A 0.88 3,059.56 D5020 Lighting and Branch Wiring 7.33 25,563.78 Receptacles incl plate, box, conduit, wire, 10 per 1000 SF, 1.2 watts per SF 3.07 10,715.19 Wall switches, 5.0 per 1000 SF 1.35 4,710.54 Miscellaneous power, to .5 watts 0.17 578.47 Chanhassen West 78th Street Redevelopment TIF District Replacement Cost Report LHB Project No. 150703 Page 2 of 3 Parcel B Fluorescent fixtures recess mounted in ceiling, 1 watt per SF, 20 FC, 5 fixtures @40 watts per 1000 SF 2.74 9,559.58 D5030 Communications and Security 2.80 9,798.30 Communication and alarm systems, fire detection, addressable, 25 detectors, includes outlets, boxes, conduit and wire 2.03 7,096.98 Fire alarm command center, addressable without voice, excl. wire & conduit 0.77 2,701.32 E Equipment & Furnishings rrr rrr trr E1090 Other Equipment 0 0 SubTotal 100% $111.65 $390,061.33 Contractor Fees (General Conditions,Overhead,Profit) 10.00%. $11.17 $39,006.13 Architectural Fees 0.00% $0.00 $0.00 User Fees 0.00% $0.00 $0.00 Total Building Cost MEMKOW-MK�E1 Chanhassen West 78th Street Redevelopment TIF District Replacement Cost Report LHB Project No. 150703 Page 3 of 3 Parcel B Chanhassen West 78th Street Code Deficiency Cost Report TIF District Parcel B - 78th Street West, Chanhassen, MN 55317 - Parcel No. 25168003 Accessibility Items Thresholds Replace all thresholds for ADA compliance $ 250.00 Ea 2 $ 500.00 Door Hardware Replace door hardware for ADA compliance $ 250.00 Ea 4 $ 1,000.00 Sidewalks Remove and Replace sidewalks for ADA compliance $ 10.00 SF 450 $ 4,500.00 Structural Elements Exiting $ Fire Protection Exterior Construction Provide code compliant exterior wall covering Replace siding to prevent water intrusion $ 8.37 SF 3,494 $ 29,244.78 Roof Construction Provide code compliant exterior roof covering Remove and replace ashphalt shingles $ 8.48 SF 3,494 $ 29,629.12 Mechanical- Electrical Electrical Provide GFCI protected receptacles at sink locations $ 0.50 SF 3,494 $ 1,747.00 Mechanical Replace HVAC system for code compliance $ 8.43 SF 3,494 $ 29,454.42 Total Code Improvements $ 96,075.32 Chanhassen West 78th Street Redevelopment TIF District Code Deficiency Cost Report LHB Project No. 150703 Page 1 of 1 Parcel B Chanhassen West 78th Street Redevelopment TIF District P1060099.JPG P1060117.JPG P1060126.JPG P1060134.JPG P1060138.JPG Page 1 of 3 i Ok i P1060251.JPG P1060252.JPG P 1060253. JPG P1060254.JPG P1060284.JPG P1060286.JPG Chanhassen West 78th Street Redevelopment TIF District Page 2 of 3 Photos LHB Project No. 150703 Parcel 8 P1060297.JPG V— P 1060298.JPG P1060296.JPG P1060299.JPG Chanhassen West 78th Street Redevelopment TIF District Page 3 of 3 Photos LHB Project No. 160703 Parcel B Appendix G Findings Including But/For Qualifications The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan (TIF Plan) for Tax Increment Financing District No. 11 (District), as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: Finding that the District is a redevelopment district as defined in M.S., Section 469.174, Subd. 10. The District consists of three parcels, with plans to redevelop the area for rental housing and commercial/industrial purposes. At least 70 percent of the area of the parcels in the District are occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures and more than 50 percent of the buildings in the District, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance. (See Appendix F of the TIF Plan.) Finding that theproposed development, in the opinion ofthe City Council, would not reasonably be expected to occursolely through private investment within the reasonablyforeseeablefuture and that the increased market value ofthe site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the District permitted by the TIF Plan. The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonablyforeseeablefuture.• This finding is supported by the fact that the redevelopment proposed in the TIF Plan meets the City's objectives for redevelopment. Due to the high cost of redevelopment on the parcels currently occupied by substandard buildings, the limited amount of commercial property for expansion adjacent to the existing project, the incompatible land uses at close proximity, and the cost of financing the proposed improvements, this project is feasible only through assistance, in part, from tax increment financing. The developer was asked for and provided its proforma as justification that the developer would not have gone forward without tax increment assistance. In addition, public roadway improvements are needed to facilitate the new private development. The City has made expenditures in preparation for the public improvement costs associated with the redevelopment, which it anticipates being repaid with TIF. The increased market value ofthe site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration ofthe Districtpermitted by the TIFPIan: This finding is justified on the grounds that the cost of site and public improvements and utilities add to the total redevelopment cost. The improvements are proposed to be constructed in two phases. Phase 1 will include the demolition of the existing Frontier building and required earthwork, grading and site preparation, utility improvements and construction of underground and surface parking. Phase 2 will include street improvements that will be constructed to facilitate the increased traffic to the downtown site, a portion of which will be assessed to the project. Historically, site and public improvements costs in this area have made redevelopment infeasible without tax increment assistance. The City reasonably determines that no other redevelopment of similar scope is anticipated on this site without substantially similar assistance being provided to the development. Appendix G -t Therefore, the City concludes as follows: a. The City's estimate of the amount by which the market value of the entire District will increase without the use of tax increment financing is $0. b. If the proposed development occurs, the total increase in market value will be $22,144,610. c. The present value of tax increments from the District for the maximum duration of the district permitted by the TIF Plan is estimated to be $3,954,399. d. Even if some development other than the proposed development were to occur, the Council finds that no alternative would occur that would produce a market value increase greater than $18,190,211 (the amount in clause b less the amount in clause c) without tax increment assistance. 3. Finding that the TIF Plan for the District conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission reviewed the TIF Plan and found that the TIF Plan conforms to the general development plan of the City. 4. Finding that the TIFPlanfor the District will affordmaximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of Downtown Chanhassen Redevelopment Project Area by private enterprise. The project to be assisted by the District will result in increased employment in the City and the State of Minnesota, the renovation of substandard properties, increased tax base of the State, add a high quality development, and increase the availability of safe and decent life -cycle housing in the City. But -For Analysis Current Market Value 2,193,800 New Market Value - Estimate 24,338,410 Difference 22,144,610 Present Value of Tax Increment 3,954,399 Difference 18,190,211 Value Likely to Occur Without TIF is Less Than: 18,190,211 Appendix G-2 EXECUTION COPY CONTRACT FOR PRIVATE REDEVELOPMENT By and Between THE CHANHASSEN ECONOMIC DEVELOPMENT AUTHORITY and CHANHASSEN FRONTIER LLC This document drafted by: KENNNEDY & GRAVEN, CHARTERED (RHB) 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 496887v7 RHB CH135-59 8278770v5 TABLE OF CONTENTS PAGE PREAMBLE....................................................................................................................................1 ARTICLE I Definitions Section1.1. Definitions................................................................................................................2 Section1.2. 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 Use Project; 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 ...........................................................9 Section3.5. Records....................................................................................................................9 Section3.6. Note B......................................................................................................................9 Section 3.7. Community Growth Partnership Grant..................................................................10 Section 3.8. No Business Subsidy..............................................................................................1 l ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Minimum Improvements.............................................................11 Section 4.2. Approved Plans and Construction Plans................................................................11 Section 4.3. Commencement and Completion of Construction.................................................12 Section 4.4. Certificate of Completion......................................................................................12 ARTICLE V Insurance Section5.1. Insurance................................................................................................................13 Section 5.2. Evidence of Insurance...........................................................................................13 i 496887v7 RBB CH135-59 8278770v5 ARTICLE VI Payment of Taxes; Use of Tax Increment; Assessment Agreement Section6.1. 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..........................................................................................15 ARTICLE VII Restrictions on Sale of Minimum improvements; Termination Agreement Section 7.1. Prohibition Against Sale of Minimum Improvements...........................................16 Section 7.2. Termination of Agreement.....................................................................................17 ARTICLE VIII Events of Default Section 8.1. Events of Default Defined.....................................................................................17 Section 8.2. Remedies on Default..............................................................................................18 Section 8.3. Remedies after Certificate of Completion.............................................................18 Section 8.4. No Remedy Exclusive............................................................................................19 Section 8.5. No Additional Waiver Implied by One Waiver.....................................................19 ARTICLE DX 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 Section9.5. Counterparts...........................................................................................................20 Section 9.6. Disclaimer of Relationships...................................................................................20 Section9.7. Amendment............................................................................................................20 Section9.8. 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 TESTEVONIUM............................................................................................................................22 SIGNATURES......................................................................................................................... 22-23 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 ii 496887v7 RHB CH135-59 827877ov5 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 core buildings 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 78' Street, 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 496887v7 RHB CH135-59 8278770v5 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 Defmitions 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 expenses incurred 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 134 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. 2 496887v7 RHB CH135-59 8278770v5 "City" means the city of Chanhassen, a municipal corporation under the laws of Minnesota. "City Approvals" means, collectively, the subdivision and site plan approvals and granted by 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 generation of tax increment attributable to the Minimum hnprovements. "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. 3 496887v7 RHB CH135-59 827s77ov5 "Note B" means the taxable Tax Increment Revenue Note 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 September 11, 2017. "Redevelopment Project" or "Project" means the Downtown Chanhassen Redevelopment Project. "Redevelopment Property" means the property generally located at 525 West 78"' Street in Chanhassen and consisting of the Apartment Parcel, the Site Improvement Parcel and the Retail Parcel. The property is legally described in Exhibit A attached hereto. "Retail Building" means the building walls and roof for approximately 19,000 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. 4 496887v7 RHB CHI 35-59 8278770v5 "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. "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 September 11, 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 Redeveloper under 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: 496887v7 RUB CHI 35-59 s27877ov5 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. Int=retation. (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 the meaning 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. 496887v7 RHB CH135-59 8278770v5 (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) The EDA has approved execution of this Agreement, including the issuance of Note A in the form specified in the Authorizing Resolution, subject to the conditions contained in this Agreement. Section 2.2. Representations and Warranties by the Redeveloper. The Redeveloper makes 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 the contract for deed vendee and agrees to 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 7 496887v7 RHB CHI 35-59 s27877ovs Improvements and concluded 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 Proiect; Redevelopment Assistance Section 3.1. Acquisition of Redevelopment Property. The Redeveloper became the contract for deed vendee of the Redevelopment Property on February 15, 2017, and agrees to 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 Pav-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 D. 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 hicrement, 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 8 496887v7 RHB CH135-59 827s770vs TIF District 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) The Redeveloper has executed the Assessment Agreement; (d) The Redeveloper has submitted the Investment Letter in the general form attached hereto as Exhibit E; (e) 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) The Redeveloper has completed the Minimum Improvements and the EDA has issued the Certificate of Completion; and (g) 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 Improvements will contribute considerable additional vehicular traffic to downtown Chanhassen. Some of the streets in the area, particularly Market Boulevard south of West 78"' Street, 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 identified desired improvements to Market Boulevard from its intersection with West 78`s Street to south of the railroad and, more comprehensively, south to T.H. 5. The more limited project between West 78' Street and south of the railroad would involve only those improvements needed to accommodate additional traffic solely attributable to the Minimum Improvements and would cost an estimated $2,100,000. A more robust project extending from West 78a' Street to T.H. 5 would cost an estimated $3,200,000 and would benefit properties in addition to the Minimum 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 until 2020 at the earliest. The City expects to specially assess the cost of any portion of the 496887v7 RHB CH135-59 8278770v5 Market Boulevard Project it constructs against benefited properties, including the Apartment 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 to the 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 interest attributable 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) 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 429, which petition and waiver shall be in form and substance satisfactory to the City and the Redeveloper; 2) The City shall have constructed a public improvement project involving street improvements to 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 10 496887v7 RHB CH135-59 s2ranov5 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 Subsidv. 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. Approved Plans and 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 Plans shall provide for the 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 15 business 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 11 496887v7 RBB CH135-59 s27s770V5 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 15 business 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 to be 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, the EDA shall promptly notify Redeveloper within the same 20 day period following receipt of request by the 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 in order 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. 12 496887v7 RHB CH135-59 827s77ov5 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 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 hnprovement 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: 13 496887v7 RHB CH135-59 8278770v5 (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 hnprovement 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 hnprovements 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 Site Improvement Parcel; (g) a transfer of the Minirnum Improvements or the Apartment Parcel or Site Improvement Parcel, or any part thereof, to an entity exempt from the payment of real estate tines 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. 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 Irnprovements 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. 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. 14 496887v7 RUB CHI 35-59 fi27S77ov5 (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 $22,058,410 as 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 (whether or not such value is binding on the 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. 15 496887v7 RHB CHI 35-59 s27877ov5 ARTICLE VII Restrictions on Sale of Minimum Improvements• Termination of Agreement Section 7.1. Prohibition Against Sale of Minimum hnprovements. (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 or other 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. (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 16 496887v7 RHB CH135-59 s27s77ov5 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 haprovement Parcel or Minimum Improvements as they become due; (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; 17 496887v7 RHB CH135-59 827877av5 (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 enforce performance and observance of any obligation, agreement, or covenant of the defaulting party under this Agreement. Section 8.3. Remedies after Certificate of Com len tion. 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 Parcel or 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 18 496887v7 RBB CH135-59 8278770v5 (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 and shall 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 by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, 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. 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 and Demands. 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 19 496887v7 RHB CHI 35-59 8278770v5 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. Section 9.7. Amendment. This Agreement may be amended only by the written agreement of the parties. Section 9.8. Recordine. 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. 20 496887v7 REB CH135-59 8278770v5 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. Fees and 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. 21 496887v7 RHB CH135-59 s27g77av5 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 22 496887v7 RHB CH135-59 s27s77ov5 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 23 496887v7 RHB CHI 35-59 827877ov5 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. Um 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. W1 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. A-1 496887v7 RHB CH135-59 827877Ov5 OUE A•1 VENUE L, 0 BE Rl 4t A-4 NUE L, IN TT1'�T 1 1 1 L 1 11 1 1 1 11 1- w w Hca sa .1 di k [[ ! R I[[ ! I If I ,lits � nl!, ra •r' ;: .c 111 ! fl t✓�' xx s '1 I�y.t � r: � 1�� c'- a.nPi�,l lii£. IG-[ { ; It�ty '!► ,,,it �\�� r : IEt f ; ,' � it , EI 11 ' • 1 - 4w� c i AIDI r EXHIBIT B TO REDEVELOPMENT AGREEMENT APPROVED PLANS The following plans and sketches of the Minimum Improvements constitute the Approved Plans. B-1 496887v7 RUB CH135-59 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 Contract for 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 Irnprovements. 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 201_, by and Director, corporate Authority. 8278770v5 day of the President and Executive respectively, of the Chanhassen Economic Development Authority, a public body and politic under the laws of Minnesota, on behalf of the Economic Development Notary Public C-1 496887v7 RHB CH135-59 EXHIBIT D TO REDEVELOPMENT AGREEMENT FORM OF AUTHORIZING RESOLUTION FOR NOTE A CHANHASSEN ECONOMIC DEVELOPMENT 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. Pursuant to Minnesota Statutes, 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's issuance 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 D-1 827877M 496887v7 RHB CHI 35-59 Principal amount of $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: No. R-1 UNITED STATE OF AMERICA STATE OF MINNESOTA CARVER COUNTY CHANHASSEN ECONOMIC DEVELOPMENT AUTHORITY TAXABLE TAX INCREMENT REVENUE NOTE SERIES 201 $1,300,000 Date Rate of 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 address of 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 for actual 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 D-2 496887v7 RHB CH135-59 627s77ov5 Contract 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 will have 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 Payment on 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 timing of 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 , 201pursuant 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 except out 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. D-3 496887v7 RHB CH135-59 827877av5 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 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, 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 funds be 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 President Executive Director D-4 496887v7 RHB CH135-59 sz7s77ov5 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 Registration Registered Owner Chanhassen Frontier LLC, c/o United Properties Development LLC 651 Nicollet Mall, Suite 450 Minneapolis, MN 55402 Attn: Rick McKelvey Federal Tax ID # Signature of EDA Executive Director [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 requested by 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 D-5 496887v7 RHB CH135-59 8278770v5 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, 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 terns, 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 D-6 496887v7 RHB CH135-59 8278770v5 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. 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 D-7 496887v7 RHB CHI 35-59 8278770v5 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. E-1 496887v7 RHB CHI 35-59 d27s77ov5 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: E-2 4968870 RHB CHI 35-59 8278770v5 By: Print: Title: Dated: STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was executed before me this day of 2017, by and and respectively, the of United Properties Development of Chanhassen Frontier LLC, a LLC, a Minnesota limited liability company, as the manager Delaware limited liability company, on behalf of the companies. 8278770v5 Notary Public E-3 4968870 RBB CH135-59 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"). 1LNfYICNl�1.3.`] If1 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 Redevelopment Property; and WHEREAS, pursuant to the Agreement, the Redeveloper has agreed to construct an apartment building containing approximately 134 market 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 market value 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 $22,058,410 as of January 2, 2019 for taxes payable beginning in 2020, notwithstanding any failure to complete construction of the Minimum Improvements by such date. F-1 496887v7 RHB CH135-59 8278770v5 2. The Minimum Market Value herein established shall be of no further force and effect and this Assessment Agreement shall terminate on the Termination 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 Redeveloper under 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. F-2 496887v7 RHB CH135-59 s278770Y5 12. This Assessment Agreement shall be governed by and construed in accordance with the laws of Minnesota. F-3 496887v7 RHB CHI 35-59 8278770v5 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 F-4 496887v7 RUB CHI 35-59 82787705 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 F-5 496887v7 RHB CHI 35-59 827877ov5 EXHIBIT A TO ASSESSMENT AGREEMENT Legal Description of Redeveloper Property [Include legal of only Apartment Parcel and Site Improvement Parcel] F -A-1 496887v7 RHB CH135-59 82787700 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 than the 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. F -B-1 4968870 RHB CH135-59 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 $22,058,410 as 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 F -B-2 4968870 RHB CHI 35-59 PUBLIC IMPROVEMENT AND SPECIAL ASSESSMENT AGREEMENT AGREEMENT made this day of 2017, by and between the CITY OF CHANHASSEN, a Minnesota municipal corporation ("City") and CHANHASSEN FRONTIER LLC, a Delaware limited liability company (the "Property Owner"). RECITALS A. Property Owner is the fee owner of the following property located at 525 West 7811' Street, commonly called the Frontier Building, in the City of Chanhassen, County of Carver, State of Minnesota (the "Subject Property"): Parcel A Lot 2, Block 1, Frontier Cinema Addition, Carver County Minnesota Parcel B Outlot A, Frontier Cinema Addition, 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. Parcel C Lot 3, Block 1, Chanhassen Transit Station, 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: 1940700 84610548 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 southernmost corner of said west line and said line there terminating, Carver County, Minnesota. B. The Subject Property will be redeveloped into a mixed-use project consisting of three separately subdivided parcels created by Registered Land Survey. The "Apartment Parcel" means the portion of the Subject Property on which an apartment building will be constructed containing approximately 134 market rent apartment units and a first level parking structure. The Apartment Parcel provides the foundation for the Retail Parcel. The "Retail Parcel" means the portion of the Subject Property on which the retail building will be constructed containing approximately 19,000 square feet of retail space. The "Site Improvement Parcel" means the portion of the Subject Property on which surface parking and other site improvements will be constructed. C. The Property Owner and The Chanhassen Economic Development Authority ("EDA") have entered into a Contract for Private Redevelopment ("TIF Agreement") as part of the redevelopment of the Subject Property. D. Property Owner has agreed to the following assessments if the City widens and overlays Market Boulevard; constructs left and right turn lanes at various intersections on Market Boulevard, and replaces the railroad crossing, storm sewer system and pedestrian trail ("City Project"). NOW, THEREFORE, IN CONSIDERATION OF THEIR MUTUAL COVENANTS THE PARTIES AGREE AS FOLLOWS: 1. PUBLIC IMPROVEMENTS. The City will construct the City Project if the City Council determines it is in the City's best interest to do so ("Public Improvements"). 2. SPECIAL ASSESSMENT. If the EDA and the Property Owner have entered into the TIF Agreement to provide the Property Owner tax increment financing, and if the Public Improvements have been ordered by the City, the City will then assess the Apartment Parcel and Site Improvement Parcel for the City Project in a total principal amount that is the lessor of Two Million One Hundred Thousand Dollars ($2,100,000.00) or the cost of the Public hnprovements, which amount shall be adjusted for inflation from the date of this Agreement to the date the City levies the special assessment. The inflation adjustment shall be determined by using the Consumer Price Index for all Urban Consumers (CPI -U) U.S. city average all items. In addition, interest will accrue on the principal amount of the special assessment for the City Project as set forth below. Notwithstanding anything to the contrary in this Agreement, the principal and interest for the special assessment for the City Project payable each calendar year by the Apartment Parcel and Site Improvement Parcel will not exceed the tax increment dollars received by the owner of the Apartment Parcel and Site Improvement Parcel under Note B as defined in the TIF Agreement for »ao70vi 8461054x8 that calendar year as supplemented by the EDA to meet assessment payments; it being the intent of the parties that the calendar year payments under Note B as supplemented by the EDA shall reimburse the owners of the Apartment Parcel and the Site Improvement Parcel for all principal and interest for the special assessment for the City Project payable by the owners of the Apartment Parcel and Site Improvement Parcel for such calendar year. The owners of the Apartment Parcel and the Site Improvement Parcel shall not be liable for any principal and interest for the special assessment for the City Project in excess of the proceeds received from Note B as supplemented by the EDA. The special assessment for the City Project when levied shall be spread over ten (10) years, together with interest at the prime rate at the time of the award of the construction contract plus two percent (2%) interest. Interest shall accrue from the date the City levies the special assessment. The fust installment shall be due and payable with taxes the year after the City levies the assessments. The owners of the Apartment Parcel and the Site Improvement Parcel waive any and all procedural and substantive objections to the Public Improvements and special assessments, including, but not limited to, hearing requirements and any claim that the assessment exceeds the benefit to the Subject Property. The owners of the Apartment Parcel and the Site Improvement Parcel waive any appeal rights otherwise available pursuant to Minn. Stat. § 429.081. 3. NO ADDITIONAL ASSESSMENTS FOR CITY PROJECT. The special assessment for the City Project that would have been assessed against the Retail Parcel shall be spread against the Apartment Parcel and the Site Improvement Parcel. There shall be no additional special assessments for the City Project levied against the Apartment Parcel or the Site Improvement Parcel or the Retail Parcel. 4. BINDING EFFECT; RECORDING. This Agreement shall be binding upon the Property Owner and the Property Owner's successors and assigns. This Agreement may be recorded against the title to the Subject Property. [Remainder of Page Intentionally Left Blank] [Signature Page Follows.] 1940700 8461054v8 CITY OF CHANHASSEN BY: Denny Laufenburger, Mayor (SEAL) 0 STATE OF MINNESOTA ) ( ss. COUNTY OF CARVER ) Todd Gerhardt, City Manager The foregoing instrument was acknowledged before me this day of 2017, by Denny Laufenburger and Todd Gerhardt, respectively the Mayor and City Manager of the City of Chanhassen, a Minnesota corporation, on behalf of the corporation and pursuant to the authority granted by its City Council. NOTARY PUBLIC 194070A 8461054v8 PROPERTY OWNER: CHANHASSEN FRONTIER LLC By: United Properties Development LLC Its Manager BY: Print: Its AND BY: Print: Its STATE OF MINNESOTA ) (ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of 2017, by and the and of United Properties Development LLC, as the manager of Chanhassen Frontier LLC, a Delaware limited liability company, on behalf of the limited liability companies. NOTARY PUBLIC Drafted By: CAMPBELL KNUTSON, P.A. 860 Blue Gentian Road, Suite 290 Eagan, Minnesota 55121 Telephone: (651) 452-5000 [RNN] 5 1940701 8461054v8 Gerhardt, Todd From: Michael Brindisi <chanmike2@yahoo.com> Sent: Wednesday, June 28, 2017 11:05 AM To: Gerhardt, Todd Subject: Support for site plan To Chanhassen Planning Commission: This is to notify you that the Chanhassen Dinner Theatres, its senior staff and board of directors is in full support of the planned 134 unit apartment building and retail (Aldi) project. We view this as a great opportunity for developing and enhancing our downtown area. We also believe this will be of great benefit to local downtown businesses including of course the Dinner Theatre. On a personal note I am a Chanhassen resident and my wife, daughter and myself have greatly enjoyed our beautiful town. Thank you all for your dedicated work. Michael Brindisi President/Owner/Artistic Director Chanhassen Dinner Theatre Sent from my iPad Aanenson, Kate From: Brad Johnson <brad@lotusre.biz> Sent: Friday, September 01, 2017 9:37 AM To: editor@chanvillager.com Cc: Brad Johnson; Aanenson, Kate Subject: Frontier Building redevelopment To: Villager Editor From: Brad Johnson Subject: Letter to the Editor Congratulations to City Staff, Planning Commission, City Council and United Properties For proposing and approving the "Mixed Use" redevelopment of the Frontier Building. Chanhassen's 78th Street is in need of a revitalization including the addition of retail anchors and additional Market Rate Housing. There is no question that the retail real estate landscape is changing with the evolution of e-commerce. The new uniting theme for retail new construction is "Mixed Use". E-commerce is draining the market place for the small vendors and making it difficult for the larger retailors to operate profitability without the necessary corporate resources. Restaurants without strong anchors and nearby housing density are on the survival list. Redevelopments such as Frontier are perceived to be the solution. Adding popular, strong financial anchors such as Aldi's with residential density is seen are a solution for the success of retail and restaurants. The combination creates more customers driving, walking or biking to the marketplace. The next step in the development is for the council to approve the public portion of the of the approximately $25,000,000 finance package at their Sept 11th meeting. TIF financing is suggested as part of the package which seems appropriate. Most of the "Downtown Chanhassen" we know today was redeveloped using TIF dollars generated by each project and TIF dollars available from new industrial development. Chanhassen has not needed to use TIF of late because most developments are new and self-supporting. Checking Carver County's tax rolls Chanhassen is the only major Carver County city without any current use of TIF. Go for it City Council! Vote Yes! with no apparent reason to vote no considering the current realities of the Chanhassen Retail Landscape. Brad Johnson President of Lotus Realty Services 8299 Essex Rd Chanhassen, MN 55317 612-369-4364 Brad@LotusRE.biz Lotus, along with the Bloomberg Companies, Thies and Talle, Vernelle Clayton and the City Were involved in the development of most off the Down town we know today. Fact Sheet The United Properties Proposal IS NOT a Done Deal —Come To Chanhassen's City Hall Meeting On September 11th, 2017 @ 7:00 PM Write a Letter — Call a Council Member Elected City of Chanhassen Officials DennyLaufenbur er—Ma or dlaufenbur er tTi. hanhw"en.mn.us 612-327-6800 Bethany 'ornhom — Councilwoman bt ornhom a cj.chanhas en.nm.us 612-695-2108 Jerry McDonald—Councilman iro Inturid++>ci.chmh ssen.nm.us 952-253-1406 Elise Ran — Councilwoman eman wci.chanhassen.mn.us 612-703-0598 Dan Campion — Councilman dcant )ion iBci.chanhassen.mn.us 612-865-9729 We are not powerless, let your voice be heard! F PETITION TO THE CITY COUNCIL OF CHANHASSEN, MN OPPOSING THE ALDI-134 APARTMENT PROJECT • WHEREAS the Chanhassen City Council has approved a plan to construct an ALDI grocery store and 134 unit apartment project located adjacent to the Chanhassen Dinner Theater, and • WHEREAS the developer of this project, United Properties owned by the Pohlad family has stated that the project is marginal without being subsidized by the taxpayers of Chanhassen, and • WHEREEAS Chanhassen tax payers will be liable for $1.3 million from a TIF, $750,000 from the Met Council and $60,000 from Carver County, and • WHEREAS this project cannot proceed without this subsidy from the Chanhassen taxpayers, and • WHEREAS with the huge financial assets of the Pohlad family, asking the taxpayers of Chanhassen to subsidize this project is shameful, and • WHEREAS to be economically viable without a Chanhassen taxpayer subsidy, the project should be scaled back to make it sustainable without taxing the citizens of Chanhassen, • NOW THEREFORE, we, the undersigned citizens of Chanhassen demand that the Chanhassen City Council refuse and reject any funding of this project by the taxpayers of Chanhassen. Chanhassen ' 'zen Name Chanhassen Citizen Address 1 2. _. �5E Z 3- 4. 5• 6. 7. 8. 9• .LO. httns:llcominuiiityactioneliaiihassen.woi-dpress.com littps:/twww.,oftindme.com/chanhassen-community-action MAIL ALL SIGNED PETITIONS TO: Community Action Group, PO Box 121, Chanhassen, MN 55317 or Drop off at ChuckWagon Charlie's Smokehouse -545 W 78th Street. ChanHassen j entertaining'Llpu Honorable Mayor and members of the City Council: The Chanhassen Dinner Theatres, senior staff, and board of directors are in full support of the proposed Venue Project. The planned 134 -unit apartment complex and grocery store will generate an energy in the downtown that will benefit Chanhassen including the Dinner Theatres. We view this as a great opportunity for developing and enhancing our downtown area. On a personal note I am a Chanhassen resident; and my wife, daughter and I have greatly enjoyed our beautiful town. Thank you all for your dedicated work. Sincerely, Michael Brindisi President/Owner/Artistic Director Chanhassen Dinner Theatres CHANHASSEN DINNER THEATRES 501 WEST 78TH STREET CHANHASSEN, MN 55317 KRAUS -ANDERSON® ® REALTY COMPANY September 8, 2017 Honorable Mayor and Members of the City Council City of Chanhassen 7700 Market Boulevard/ PO BOX 147 Chanhassen, MN 55317 4210 West Old Shakopee Road Bloomington, MN 55437-2951 Office 952.881.8166 Fax 952.881.8114 www.krausanderson.com RE: Redevelopment Plan for Downtown Chanhassen/Tax Incremental Financing Mayor Laufenburger, Councilmembers Campion, McDonald, Ryan and Tjornhom, We're excited about the "Mixed Use" redevelopment of the Frontier Building. The synergy of adding a strong anchor like Aldi's combined with residential density will create success for retail, restaurants and office tenants. It also creates a community atmosphere with more people biking and walking to their destination and taking in the amenities the City has to offer along the way, like the free concerts and Farmer's Market. At the September 11, 2017 City Council meeting, TIF financing will be discussed to assist in the redevelopment of a proposed 134 unit, market rate apartment complex. This is a suitable method of financing and how most of "Downtown Chanhassen" was redeveloped. Vote Yes! In support of the Chanhassen businesses, their survival and the additional draw of patrons it will produce for the community. Respectfully Kraus -Anderson, CHANHASSEN PLANNING COMMISSION REGULAR MEETING SEPTEMBER 5, 2017 Chairman Aller called the meeting to order at 7:00 p.m. Andrew Aller, Mark Undestad, Steve Weick, Nancy Madsen, and Mark Randall MEMBERS ABSENT: John Tietz, and Maryam Yusuf STAFF PRESENT: Kate Aanenson, Community Development Director PUBLIC PRESENT: Steve Sather Steve McAuley Mason McClellan 10432 Puddey Road 20 Hill Street 470 West 78th Street DOWNTOWN CHANHASSEN REDEVELOPMENT PROJECT AREA: TAX INCREMENT FINANCING DISTRICT NO. 11: REVIEW PLANS TO DETERMINE IF THEY COMPLY WITH THE CITY'S COMPREHENSIVE PLAN. Aanenson: Thank you Chairman, members of the Planning Commission. So your action tonight is really just narrow in scope. The City is considering putting together a Tax Increment District Number 11 for the redevelopment of the apartment building and in the Aldi's area so one of the requirements is the Planning Commission insure that it's in conformance with the Comprehensive Plan and the zoning ordinance. So on June 20`h you did approve that project and in order to approve it one of the findings that we put in there for your Findings of Fact was that it was consistent with the Comprehensive Plan and the zoning ordinance and I wanted to point out the last one you approved doing this format was when we did the Southwest Transit. That was also Park and Ride was in that district so what the findings would say is that the property zoned Central Business District. Both uses are permitted in there, again consistent with the findings. The property is guided for commercial. The Central Business District does also allow residential and the subdivision is consistent with the zoning ordinance and it meets all the applicable regulations as were in the Findings of Fact so again a public hearing will be held on the tax increment district. Your role is to say the zoning part of it is consistent with the zoning ordinance and the Comprehensive Plan. So we are recommending that you approve the attached resolution stating that the 19,000 square foot commercial retail building and the 134 unit apartment building is consistent with the zoning and Comprehensive Plan. So with that I'd be happy to answer any other questions. Otherwise I would just recommend someone make a motion. Aller: Okay for those of you that are present and at home there's a comprehensive report as well as the documents that we've reviewed in this matter to determine whether or not, that the TIF meets those requirements. Whether it's consistent. We've gone through this process. We have had hearings on this matter before. It is extensive in nature. Has several exhibits. It's not necessarily something that we need to go through at this point in time but it is available for your review on the City's website as are all our Minutes and documents and packages so please take the time to take a review of these and this matter as it moves forward. It will be going to City Council then when Kate? Aanenson: September 11th Aller: September l la' Aanenson: And there will be a public hearing on the TIF district at that time. Aller: September 11" so based on the report which I think is very comprehensive, I don't have any questions but maybe these commissioners do. Do you have any questions for staff at this point? Weick: I think it's consistent with what we've reviewed. Aller: Okay, hearing no questions for staff then we'll take a action as deemed necessary. We can table it or someone can make a motion in accordance with the documents that we have before us tonight again are on the website for review. Undestad: Alright I'll make a motion here. That the Chanhassen Planning Commission adopts the attached resolution. Weick: Second. Sorry. Aller: I have a motion. Weick: Little jumpy tonight. I'm sorry. Aller: Commissioner Weick, would you like to make a second? Weick: Sure. Second. Aller: Having a valid motion and a second. Any further discussion on this particular item which is basically to indicate that we're adopting the resolution which is in line and that the proposed TIF is in line with our plan. Plannina Commission Resolution #2017-01: Commissioner Undestad moved, Commissioner Weick seconded that the Chanhassen Planning Commission adopts the attached Resolution of the City of Chanhassen Planning Commission Finding that a Modification to the Redevelopment Project Area and a Tax Increment Financing Plan for Tax Increment Financing District No. 11 Conform to the General Plans for the Development and Redevelopment of the City. All voted in favor and the motion carried unanimously with a vote of 5 to 0.