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EDA 1999 04 15 ECONOMIC DE VEL OPMENT A UTHORI. TY THURSDA Y, APRIL 15, 1999, 6:30 P.M. c~av~ss~2v M~¢n'~ z .v~. ~v~, 690 crrr c~2vr~r~ CALL TO ORDER 1. Approval of January 28, 1999 Minutes. VISITOR PRF~ENTA TIONS Anyone wishing to address the Economic Development Authority may do so at this a'me NE FY BUSINESS a , Klingelhutz Easement Acquisition. Consider Assigning the Gary Kirt Loan (Hanus Facility) to Gary Brown. Approval of Bills. .. ECONOMIC DEVELOPMENT AUTHOR[TY PRESE~A TIoNs ADJOURNMENT CHANHASSEN ECONOMIC DEVELOPMENT AUTHORITY REGULAR MEETING JANUARY 28, 1999 Chairman Boyle called the meeting to order at 6:30. p.m. MEMBERS PRESENT: Gary Boyle, Jim B°hn; Mark Engel, Mark Senn, Nancy Mancino, Steve Labatt, and Linda Jansen MEMBERS ABSENT: None. STAFF PRESENT: Acting City Manager Don Ashworth, Econ~).mi.'c Development Director; and Todd Gerhardt, APPROVAL OF MINLrI~S: Bohn: Can I ask a question? Mike Mason did not approve the Minutes. He didn't approve the Minutes in what sense? Bohn: He wasn't here. Senn: Oh. Boyle: Under approval of the previous minutes it says Boyle movec~ Mason seconded to approve the minutes but Mason wasn't here so. Senn: So it couldn't have been him who Seconded it is what you're saying? Boyle: Yeah. Bohn: I did. Senn: You did? Boyle: Can you correct'that Todd and make sure that Mr. Bohn gets reco~ition. -. . . · . . Mancino: I move to approve the Minutes With {he correction of the appwval Of Minutes from our last meeting. The second was done, not by Mike Mason but by Jim Bohn_ . · . Boyle: May I have a second? Bohn: Second. · . Economic Development Authority- January 28; 1'999 Mancino moved, Bohn seconded to approve the Minutes of the Economic Development Authority meeting dated January 28, 1999 as correct noting that Jim .Bohn seconded the approval of Minutes for August 13, 1998, not Mike Mason who was absent AH voted in favor and the motion carried. 'VISITOR PRESENTATIONS: None. " · . REQUEST FOR TIF ASSISTANCE~ EDEN TRACE CORPORATION. .. Ashworth: Thank you Mr. Chair. Staff's been meeting with'the representafiv'es-ofEden Trace. We're very excited about the proposal. It provides an'opportunity to bring a number of small businesses into the community. The development's located north of proposed Lake Drive, south of the existing business park. It will compliment our existing business park tremendously. The developer has asked whether or not TIF could be considered for theproject. Staff stated that we would make that recommendation and we would do it in light of the fact that it appeared that the proposal met the guidelines that had previously been set by the EDA Or whether you would consider a TIF project or not. Specifically the project cannot go forward without the construction of Lake Drive. Lake Drive represents a major roadway for the city of Chanhassen. The roadway, without the roadway the housing project that's currently owned by Mr. patton, which is south of Lake Drive, cannot be a reality. And third, the construction of the roadway is going to involve a lot of public costs in that there's a large frontage on the roadway by a pond that lies on the west end. A lot of this, if you look to the map in the back you can kind of follow what I'm saying. As well as city park. If not done by TIF, those would become general obligation dollam The EDA has supported the use of tax increment only to the extent that it's solely used to reduce special assessment costs. EDA no longer will consider land write downs, soil corrections, those kinds of things. In this particular instance, the developer himself would not be receiving any direct benefit. A potential buyer of any of those lots would see the special assessments against them. Therefore he cannot really increase his costs recognizing that that is a total cost of the lot. On the other side of the coin, whichever smaller firm comin.' g in would be made aware of the fact that they could see those special assessments for their particular business written down through the EDA's TIF policies. I don't know where I was, fourth, fifth. This project should produce a strong economic vitality for the City. Right now we've been going through a process of continuing dwindling residential lots. We haven't seen near as much construction on residential. It's not hurt us in terms of permit revenue and permit activity but within, if it continues the current trend it will within 1 or 2 years whereas the commercial-industrial type of activity has continued to be strong and is one of the primary reasons that our overall revenues have stayed the way they have. Finally, and I'm able atthis point to give two reports at one time and that is that tax increment pooling, we did do a new nm. We really dodged the bullet on this one and that is we've got, here are the projections that were used by...when we did a refunding earlier, well during 1988...We had anticipated that this would be much more severe than what it turned out to be. When that.., auditor's office I sampled about 40 parcels and' found that in'almost all cases property taxes were being reduced by between 12% and 14% fo3 1999. That would have. stayed' tree and you look at some of the numbers as far as the tax increment collected. When I wrote my report approximately a week ago we were looking at like say year 2000 where you have increment of $5,376,000.00, or 1999, $5,178,000.00. Those figures being reduced by anywhere Economic Development Authority - Sanuary 28, 1999 from $500,000.00 to $700,000.00 per y .e~..,- If that were the case the overall deficit Would have' ehan~ from the $2,555,000.00 shown unde~ the 2004 scenario to woll over $5 milli'on. I did, I was successful today in getting from Laurie the total tax capa~ty for the TIF district. As it turns out, we did see a significant increase in new cons~0n and as a're~ult, the figure shown for the $5 million, let's say $178,000.00 for 1999 is almost right on the mark with the figure that we're looking at right now for 1999 is $5,204,000.00. About $.20,000.00 b~r than what's shown there. 2000 should be on line. What it comes down to is we're still loolcing to an approx/nmte ' 2.7 million dollar deficit. At this point in time we, our consultants are. advising us to approach the legislature because they created the problem which is really one of the next items on the agenda, seeking your authorization to. allow Smffto do that. As really the first line of defense to' solve that 2.7 million dollar problem. The' alternative with failure of the legislature to consider our request would be to take from some other district. The logical district would be the Hennepin County district. The problem with that is raiding dollars out of there potentially hurts our ability to construct Highway 101, and I think that that has remained as a high priority for the city council and EDA. Accordingly the creation of this district and not providing incentive dollars back to the developer provides you with a third alternative means by which to cover that $2.7 deficit while still ensuring that we had monies available tO. carry out the construction of 101. In conclusion staff is recommendi/lg that the EDA authorize staff tb prepare a TIF plan. It would be brought back to you. If you approved it we would then send it to the various agencies and carry out the necessary public hearings to in fact make it a reality. And again this report basically is the same report that I'd be giving for the authorization to have staff meet with the slate legislature and try to get them to help solve tha/$2.7 million problem. With that staff stands ready for any questions. Boyle: Bohn: Jim, would you like to start? I have no questions. Boyle: Nancy'? Mancino: Don, when you come back with a plan will it include the future housing? That development on the south side of the road is zoned high density, correct? So will Eden Trace come back with a plan for, are. they going to develop any high density housing?' Ashworth: At this point in time there's no intent by F_zien Trace to attempt to do that. I don't know how much they're into the housing .... he's not here? Mancino: ...but when you come back with a plan-you can show how it's applicable'to the affordable housing... -. · · Boyle: Mark, do you have any questions? - . . · · . Engel: Well the question, and Nancy touched on it already .wlien I was reading about it was the affordable housing component~ I was curious what that might'lbok like. But I guess it doesn't look like we've, you already got the answer to that. .. . . .. Economic Development Authority- Janua~ 28, 1999 Mancino: We really haven't talked about it at all. I just wanted to see how it works in the tax increment district. Ashworth: It looks like R-12. Mancino: And then the city park is the Sun,et Ridge Park that's already there and is already . zoned and is part of our comprehensive plan...which is fight here. It's not a newly created park. . · Engel: Yeah, and that's the one, I'm familiar with that one. They've got swing sets and a baseball diamond on it already. I'm familiar'withit. Mancino: I have one last question. Don, the piece that's... Gerhardt: You've got the interceptor that' goes through a portion of that. So the interceptor which is probably 100 feet, 200 feet. Ashworth: That's fight. There is the strip 0fproperty that's owned by the city that lies between there and then on the other side of that. is the Pat Paid property. That:s the real high hill up there. Mancino:... -' Gerhardt: A farmer still farms part Of the land up there. And he has no long range plans to develop that. Or short range plans to develop it. Mancino: So there would be, if we put a road in there, they would be assessed, that property would be assessed? Ashworth: We assessed them for Powers Boulevard with the interceding parcel owned by the city. I don't see a way which you could assess Mr. Pahl. He's the original owner of NordieTrak and really doesn't need a lot of money. -. Gerhardt: Direct access I would believe off of Lake Drive. Ashworth: He has no frontage on Lake Drive. Boyle: Questions? Jansen: I think mine are probably premature. I guess I'm looking at the faci that we're referring to the assessment for the road and what that would be. I gues's my question is you know what kind of dollars are we looking at for that city park.frontage that you're referring to md the drainage pond. But I went back in my prior records and did we just approve the feasibility, study for this piece of Lake Drive back on 12-147 Ashworth: Correct. Economic Development Authority - January 28;- 1999.- Jansen: And that's where we'll get more the dollar amounts as to what we're actually talking about. Ashworth: Righ~ Jansen: Okay. That was my big question was'what'kind of dollars we were talking about being assessed. Boyle: Mark? Senn: Don is this in District 1 or not now? · -. . Ashworth: It would have to be decertified out of District 1 so the answer'is yes. It currently is in I. Senn: Okay, and as we decertify it of 1, what ramifications does that have to 17 Ashworth: Right now it's shown really as raw land value and I~ll have that answer but, I will provide that answer for you. I cannot give it to you right now.' Senn: Okay, so what you're effectively pr0p0~hig i~ to decerfify this', out Of district 1, set-up a - separate district as what, pay as you go or bonding7 . Ashworth: I don't know of any other way to do it-than to do the bonding portion. Gerhardt: The payments would be pay as you go with each of the individual tenants. You would have to bond to build Lake Drive and then we would hope that this would be 100% assessed. So the city would finance the construction of Lake Drive and assess each of the benefiting property owners. And then through our special assessment reduction program, each of the businesses could come in and apply for the half year worth of taxes over 3 years, to write down'those assessments against each of the individual propefdes... - . Senn: No other questions at this time. I'll ha~/e-the rest in comments. Boyle: Okay. Are there any further questions before I ask for a mofi6n? Therefore I'd like to have a motion that we authorize staff to prepare an economic development plan that would encompass the Eden Trace development, including those parge..ls abutting the soufli side Of Lake . o . · Senn: Before we have a motion I guess. I'd ~ to g~. into some ~sion, .lx~u~e we lmven't had any yet. .' . · .. Boyle: Okay. .. Economic Development Authority -' JanuarY. 28, 1999 Senn: I don't want to just jump to me if anybody else. Boyle: Oh, go fight ahead. Please. Senn: As far as the creation of this district goes, I think before we can really take an action on saying we'd create this district, I think we need to fully understand the ramifications of the existing district through the decertifieation process as it relates', like I say in the existing district. We have enough problems there. We don't need to.compound them in.' any way, Shape or form by actions on this district. As far as the overall project goes', I .mean if you take the whole concept in total, you know I think this looks like overall a good project but in my mind the reason it's overall a good project and deserving of a TIF. lobk is the housing. The affordable housing and it seems to me if we're going to create a district here, or a TIF District here, I think what I'd like to see is a contractual commitments up front for the affordable housing rather than commitments up front for more industrial with the future promise of maybe some housing, which is what we've got now. Under at least the prop~.sed scenario. I think it's a big assumption to assume there will be affordable housing there simply because of the zoning. One thing I guess I want to take exception with in here is the point that the developer himself would receive zero benefits from our authorizing a special assessment dislxict. I mean that, you know if I need to go to the black board that's not true, I'll show you. I mean essentially when you create a special assessment district, we're paying the special assessments. So the developer charges. $2.00 a square foot for the land and says you know it's fully improved land so pay $2.00 a square foot for it. Then you don't have any special assessment liability. If the person had special assessment liability, the developer could only charge $1.00 a square foot for the land and the other dollar would go from the owner to pay for special assessments. So the developer does benefit from special assessment write down on the land because he doesn't change the market rate for the land. I mean it's the same thing that's'going on Out'in Gateway fight now. Oateway's marketing property at $2.25 a square foot up to $4.50 a square foot, based on it being fully improved, which means municipal facilities and systems are there. And then you mm around and say okay and here's the TIF that's how it will do it. They couldn't get that amount of money for that property on a basis that somebody would have to come in and put the improvements in place. They could get it if they paid for it out of their pocket and tamed around and charged the same price for the land, but again that's a profit. Pure and simple. So I don't accept that rationale and argument in here but the, you know coming kind of full circle around to me again the key issue in this area, especially as far as that site goes given the very limited number of potential sites that we have, and I'm going to say you know potential sites in a lot of different ways. Potential sites as it relates to affordable housing. I mean affordable housing is not an unc0ntroversial issue. And . where you put it is not an uncontroversial issue. Okay. This site is one of maybe a couple in the entire city, two or three in the entire city that probably could be approached as affordable housing.. without a great deal of controversy. And to me that's the key element of the whole project even going forward, or at least in terms of the interest of the city and that ought to be again like I say' the contractual commitment up front. That'that be the project that we're funding and what we're doing. And if there's something that comes in effectively off of the industrial to help us do that, and to lend increment to that affordable homing, you know then I could see meshing the industrial into it. But otherwise I don't see the benefits to the city. In doing that. And so I think we should, I mean on this basis basically I guess the tree reality is~ the industrial will go aheM. Economic Development Authority - January 28, 1999 They'll make their money on the land. The land developer will'sell it off. We'll have industrial there and we'll have a future housing site with absolutely no guarantees it will even end up being affordable housing. Because there's .abs0' lutely nothing that could stop the owner fi'om going in and developing market rate housing on it. Because we don't have any control over there. And so I think that control ought to be put on up front witli the TIF project, with the affordable housing contract in place so that's just my comments. : Boyle: Any timber discussion? Mancino: Don, can you talk a little bit about.the decettification and taking it out of the District No. 1. What that will do to it or do you want'to come back with that information? -- . . Ashworth: I would prefer making sure that I'm correct in what I'm telling you. I think that generally the property is probably being shown at $30,000.00 to $~40,000.00 an acre by Orlin because it's really undeveloped. Times the total number of acres. I. would rather, get you the ' '. correct information_ Mancino: Okay. And how does the development, the industrial development help the high density and if we want to do affordable housing? ' Ashworth: Well'my first thought there would be one of, you ~m use the increment to write down costs of improvements that can be shown to be directly of benefit to like the housing project. And I think that's another good reason to do it as a public i .m?rovement project. Put the special assessments against it and that's going to force the developer into doing something with the property. The carrot can be dangled in front of him that basically says we will pay those costs if you will take whatever portion of this pwject and make it affordable. The cost of the assessments are so high that you cannot just simply sit there and sit on it. Right now he's been' able to do that because he has not been able to access the property because there's been no road. Once those assessments go on he will have to market it. Can I guarantee you that it won't go market? No, but I think it's going to be a pretty good carrot to take and dangle in front of him to make it affordable. Or some portion of it. Senn: Help me out when you say him, who are you talking about? Ashworth: Patton- Senn: Okay, but I mean Eden Trace is doing, I mean F. Aen Trace has an option on the Redmond parcel and they'll be the owner of that in developing the industrial: Mr. Patton'is doing, I mean he owns the other parcel and at least from what I know has no intention of selling it at this time. So I mean that would be under separate ownership and separate development and everything else and will have nothing to do with the Eden Trace project. .. . Ashworth: Correct. But what I'm saying is, if you put S $500,000.00 to $700,000..00 assessment against somebody, they simply cannot afford to continue to ..sit on the property. Espec. ially when · . Economic Development Authority -.January 28, 1999 they would then have the opportunity to access the property and to develop it which it currently doesn't really have. Senn: But isn't that a hell of a risk7- I mean the risk is yes, you are going to force him to develop it but as what? There's absolutely no guaran~ this could be affordable hous'.mg. In fact fight now in the current marketplace it would develop almost overnight in market rate housing. Because there's such a demand for new market rate homing projects right now. In fact there's ...on the outskirts of town looking'for them fight now. Not for affordable housing but for market rate housing. So I mean all you're doing is effectively creating the ide.~il situation for that to go ahead and happen and we haven't accomplished.what we want to accomplish. I mean that's why we created the policy we created. Harping on affordable housing as being the main stay, the driving force, the way that we should be focusing the TIF. . . Mancino: Well absolutely but Don was talking about the carrot that would be there once it was established. Senn: And the carrot is. Mancino: Just a minute, let him. Ashworth: Todd and I will get a hold of Mr. Patton.' We've talked to him many times over the years and I can assure you that as we start in the various hearing processes, he will assuredly be in front of you and we will be providing updates' and he can take and say yes, we're kind of agreeing with staff that we can do something or no, we can't. You know but I assure you he will be in front of you before the whole process is completed. Before you authorize the project. Boyle: I think we have to start somewhere with this and it seems to me the starting point is putting a plan together coming back to the EDA with some sort of a plan and that's the stage that we're at tonight. We either agree to have them go forward., as I understand it, and come back with a plan or stymie it at this point and say no. We're not interested. .. Senn: The plan that's being requested Gary only relates to industrial development for Eden Trace. I have no other plan. I mean we have no other proposal even in front of us, or even being suggested. Boyle: Okay. Isn't that what we're asking? Senn: So what I'm saying is it's more appropri.ate to wait until we have an affordable housing proposal in front of us and then tie it all together and do it. Then we have true eontml'of the situation and we can put tree carrots in and We can assure that it will happen..This way you'.re never going to assure it happens. It's a real'crap shoot.. ' Boyle: You believe there should be another proposal coming forth before we put together an economic development plan, is that what you're saying Mark7 Economic Development Authority -.January 28, 1999 Senn: I think if we are going to proceed with looking at a plan. to form a district, the driving force to do that should be a proposed affordable housing project on the housing porti.on of this site and it can include the other parcels too which are industrial parcels which can lend increment in and help us put together a scenario we'd want to on an affordahle housing and overall district project. And give us all the controls that we would want and achieve what we want tn achieve in relationship to the affordable hous'mg.. Boyle: Do you have a comment on that Don? .. Ashworth: Well I think what you have here is ki~ of a chicken and an egg situation. I mean- face it, Mr. Patton has owned the land for at least 15 years that i,m aware of. I think 1978, somewhere in there. That's closer to 20 years.' And has continued to talk about he really, can't do anything without, with that because he doesn't have this road thing, otc. I think that moving ahead with plans to show him we're going to move ahead with this whole road .thing, but we'd like you as a partner. ! think we can get his attentio~ If by the time we get towards the point Of' actually authorizing the project, and we don't have that agreexn. C~mt, then you as a group make a decision, okay. DO we want to pull the plug at this point in time or does it look as though we're going to be able to bring him to the plate or not? Boyle: That's kind of the way I read it too I guess. Mancino: I would too, the only clarity would be that I would feel uncomfortable with Eden Trace you know we're kind of starting the project. and putting together a plan and I think that they would know how important it is from our EDA and what we've decided tO. really focus on in affordable housing, that that part of the' equation is extremely important and must be a component of it. That is one of the major benefits for our city that we as Chanlmssen are really focused on, is the affordable housing for our city as we see new development, re~il, low wage development coming in and we need to house that part of our city. -So the component for it to work right may need the industrial development but also it is as equally important to have the high density. I think we need to talk about pe~,entages here because I think there may be different feelings philosophically when we do affordahle and high density. Is it 20%, etc. But I wouldn't want F. xien Trace to feel that we would go ahead not knowing or not focusing on that affordable housing part. Does that sound?. Bohn: Yeah... Mancino: And I don't know if there are partner/or ~etworking we can start that action and get that... (There was a tape change at this point in the discussion.. ) ...' - . · . .-. Engel moved, Bohn seconded that the EDA authorize staff to prepare an economic development plan that would encompass the Eden Trace development, including those parcels abutting the south side of Lake Drive. Once the plan is complete, staff will · . Economic Development Authority - January 28, 1999 resubmit such to the EDA for approval of initiating the public hearing process. All voted in favor and the motion carried. CONSIDER APPROVAL OF RESOLUTION FOR 1999 LEGISLATIVE WORK. Ashworth: ...$76,000.00. 2001 is showing an increment of $2,446,000.00. Maneino: How come it drops so much from that7 Ashworth: That's because you're only collecthag a partial during that 20011 2 and 3 and it represents the bonds that were outstanding prior to May of 1988. If we were able, and this time I am correct in '88 and not '98. But if we were able to collect the full increment for those three years, we would have more than sufficient dollars to pay off that $2.7 million deficit. Mancino: How come we can only collect half? Ashworth: Because we can only collect for bonds that were outstanding prior to May of 1988 that went beyond the 2000 timeframe. So we will Collect the full increment, and it doesn't really drop down to zero. In fact in the year 2001 we will be getting a check for let's say roughly 5 million 4. But as far as what we can use of that, the most we can use is the $2,446,000.00 and here's the real sad kicker out of it and that is that almost the entire difference will be sent'via a check to School District #112 and the following year the State of Minnesota Will reduce the amount of aids to the school district by that same. Let's say we send them a check for $3 million this year or in 2001. In 2002 the State aid formula will kick in and take the $3 million away from them. So I mean it's not like gee, by us keeping this $3 million and helping to solve our problem we're hurting the school district, we're not. Mancino: Because it will reduce the school district, the contribution to the school district. Boyle: That's fmc. Other questions? Senn: So effectively are you asking for our authorization tonight to go to the legislature then and seek their approval to allow collection of the increment for those three years? · Ashworth: We will bring back, each step in the process, as we're starting to get a feeling from Ann Reston and Amber Rice-Scott and right on down the line, as to what wordage they may find acceptable, we will bring that back to you and we will seek your authorization to continue in that direction. You know if they say well no, we can't support getting the increment in this fashion 'but we can support another fashion, we'll then come back to you and say we're not getting support if we went this direction but we are getting support if we go another direction. Senn: Why are you choosing this route instead ofjust simply extending the district7 Ashworth: Oh, you mean to extend it for another yea_O : 10' Economic Development Authority- January.28; 19~9 Senn: To go to the legislature and ask for extension of the district. *. Ashworth: That's another option. -. .. .- -'" ... . Senn: What I'm saying, why are you deciding bn this optio~ versus than .. Ashworth: Well I only wanted to clarify, because these years we are collecting the'full increment and you have continued to be an advocate of let's get this .thing over with as quickly as possible so my natural conclusion is. Senn: Use within what we've got. Ashworth: Yes. Stay with what was already, the years we're already col'leering. A~ldng you to . support. Going for one more year. Maybe it isn't palatable. Mancino: I'd rather do it early. Senn: You know under that scenario then, with the three years though, if it's a $2.5 million problem, you've got it covered. What if it's .a $5. million problem? .. .. - Ashworth: I would anticipate, based on initial discussions with Ron Batty that the Suggested wordage that the legislature will come back with would be the allowance for us to take and collect that increment in those three years.. The difference between what I call full increment and what is now partial, but only to the extent that it pays for existing bo .nded debt that has failed because of actions of the State legislature. They will not allow us to do new pr?je~. They will not allow us to consider, well I'd love to do the h~ry but they're not going to let you do that. Senn: No, I understand that but in what you we~ Saying before, a~)rcling to your 'estima~, taking full increment off these for the tht~ years and smffis going to bring in about $2.7 which will more than solve the $2.5 problem. But if we have a $5 million problem, We're still going to be sitting with a $2.3 million shortfall. · . Mancino: Well then maybe we have to go back and ask for the extra year. Senn: Well no but that's what I'm asking how... · . . . Mancino: Or the other option is tO take it out 0fthe council's paychecks.. " .. . . . . Senn: That would take a hundred years, to even get. close to it. But what I'm saying Don is you.- can't go to the legislature once now and go back in three' years, and say you want,, oops we still ' have a problem. You've got to deal with it all at once now as you're going to the.legislature and view the whole picture. So if it's a $5'million proble~ we need a solution that will take up the $5 million problem. Not one which will just simply take up the $2.5 million problem.. · . 11 Economic Development Authority - January 28, 1999 Ashworth: And I fully agree with you, and I hope you followed me in terms of the legislature's only going to let us take care of whatever the problem is so the 2 ½ in my scenario, 5 in yours. But let's add them up a little bit. 2001, 2 million 4. Well that's $3 million less than what we're actually collecting. 2002, $4 million 2..That's a million, just say roughly a million more than what was collected. So now we're up to $4 million. The next year's roughly $3 million. That's another $2 ½ million. So if just taking my. solution; would take care of a $5 ½ million problem if that truly were to occur, but I don't see where it's going to but'futura legislature could take an reduce rates again. Boyle: Any further questions7 Comments? Discussion7 ... Senn: I'll move that we authorize staff to approach the legislature on extending TIF, or on rewriting components of TIF District 1 to achieve, to see if we can obtain full increment during the years 2001, 2 and 3 on the basis that any additional increment obtained throUgh that approval would go to directly reduce only bonded indebtedness. Mancino: I'll second that. Boyle: Discussion? Senn moved, Manclno seconded that the EDA approve the resolution authorizing Kennedy & Graven to act on the EDA's behalf to request special legislation to extend the Hfe of TIF District No. 1 to obtain full increment during the years 2001, 2002, and 2003 on the basis that any additional increment obtained through this approval would go to directly reduce only bonded indebtedness. All voted in favor, except Labatt who abstained, and the motion carried. Labatt: I wanted to abstain just...whole discussion. Mancino: Can I just ask one question? Don, when do you think that will be? Ashworth: Well we're starting to make contacts right now. We've already Contacted Oliver and Workman to alert them to the problem. I'm guessing immediately. And many, we're not alone. I mean there's. Mancino: Oh I know. Ashworth: There's a number of other cities that are akeady over there and going througE We were at a deficit position because Carver County is so much slower so I needed to present these numbers to you so you would know what kind of a problem we have but I physically got the phone call at 11:00 this morning and Laurie toldme, well Don.' Here's the number but I'm not ' real confident, we could have some minor adjustments. I said I don't care about minor adjustments. I needed numbers for the EDA tonight so. .12 Economic Development Authority - January 28, 1999 Mancino: Well we appreciate th~ At the TEF sgrninar I went/o, ~ worn a lot'of Cities there, and Councilman Senn was thoro, that they did say tint a lot of the cities hadn'.t figured out yet you know what the deficit would be and the League of Minnesota Cities really hadn't he~crd ' much yet. So you're being proactive in bringing us there. Thank ypU.' " Boyle: Thank you. CONSIDER Tile ASSISTANCE FOR PHASE IH~ ENTERT~ PROSECT. Boyle: Todd, are you going to brief us on this one? ~t: Sure. Mr. Chairman, EDA members. At 6ur last meeting there were several questions brought up. Staff put an emphasis on that meeting to give you a bac~und on what I would say are the planning type issues. Architectural style, parking layout, traffic, and uses. At this' meeting we're going to concentrate on the numbers so what I'd like to do is to answer your questions that were raised at the last meeting. Give some history on how this project all got · started, and then take some time and use the big board and show you the numbers that staff has ' come up with in this proposal. At our last meeting there was a question regarding the breakdown of ownership for the proposed movie theater development. The oWnership is Bob Copeland, Ray Mithun, Jr and Mike D.elaney. There was als0 a question that Mr. Copeland had'marked the TIF application incorrectly and that thc applicant'had filed for bankmp~ and Mr. Copeland and his partners have never been involved in a bankruptcy or loan default. As to the third question, I explained in detail the public purpose of why the EDA should consider giving this project. In your packet under Attachment #1, Mr. Copeland has gone through his analysis of why TIF assistance should bc used for thi.~ .l~roject based on the public purpose guidelines under TIF laws. Staff had also completed the advantages and disadvantages.of the project. Some of the . advantages that staffhad highlighted was the improved overall aesthetics of this area. Chaxenfly I' have laid out a couple ofpictures of how the area looked here in the last couple of weeks and for EDA members, if you haven't driven by there lately. Entrance to the city's night and weekend activity and drawing over 250,000 patrons each year. You know with over 6,000. employees in our business park, our restaurants and businesses do a very good job during the noon hour in '- servicing, or being serviced by those employees in our business park. At night our downtown area is a little slower and putting in additional theaters that would provide additional night activity and drawing patrons to our downtown businesses. With the proposed project you would . see an additional 10,000 square feet of additional retail that the city currently docan't have and would provide services to our residents and businesseS. Providing TIF assistance may provide for a higher qual/ty building than what our existing codes may provide. And improve the utilization of the property. Currently right now it's used as a howling center and bar and with the additional 10,000 square fcct of retail and the additional movies,-there can be a questi .on that we already have 8 and 8 more you know, what benefit does that have betides bring/ng more people to the downtown. So that's kind of an advantage/~~~ but definitely the 10,000 square feet of additional retail would be an advantage. Each project would be a pay as you go without sharing the tax increment from the Timber Lounge..and hotel expansion. I'll exp~ that in more detail as I go up to the board and who how that can work. Some disadvantage to the project It does need a substantial amount of economic investment on the EDA's behalf. A loss ofb0wling. .. · · 13 .. Economic Development Authority - January 28, 1999 in the community as a recreational activity. There's no question in the original plan that having a restaurant and a bowling center and a little bit of retail, it really lent itself to a true type. entertainment situation. Increase in traffic Can be good for the patrons. Can be bad if this project is really successful and that we may have to put a'signal out onto Market, additional costs' associated with that. That's it. That's all I could come up with for advantages and disadvantages. Right now I'd kind of like to go through the'numb.em unless the EDA members have any questions on my preliminary report. Boyle: Any questions at this time or should we let Todd go further? Gerhardt: How we got to this point, started back approximately 6 years ago when we started with the Highway 5 corridor group..The Highway'5 corddo, r group...to look at how can Highway 5 develop in this community. What sites should we.preserve and with the assistance of Bill Morrish from the University of Minnesota Landscape School, he came out and assisted us in windows in the rooms and corridors to preserve along that highway and the group got on a bus and drove up and down the corridor. They could see which of those creeks and tree lines that they wanted to preserve. And one of the other things that that group highlighted as they were driving up and down the corridor and as they sat out here at the intersection of Market and Highway 5 was how unattractive the bowling alley and the back of the Dinner Theater and the presence that showed to individuals sitting at that intersection. So through the efforts of Bloomberg Company, Dan Dahlen, Lotus Realty and the HRA at that time, we sat down with the owners to try to work out a deal where we could come in andpay for the necessary parking lot improvements and facade improvements on the bowling alley...retail center. Frontier Building. And as we moved along, this was all going to be one project. And with that, as we got into it deeper and deeper, the bowling center with some of the issues of changing ownership and filing bankruptcy led to, we had to start separating the projects individually. Bloomberg wanted to work his... The movie theater wanted to get going right away and Dan Dahlen...was working with Pauly's in trying to get his package together. So everybody wanted to kind of be treated separately and we brought it back to the I-IRA and City Council and said yes. We could separate these. Well, what also got separated in that process is that we got away from the original architectural treatments that were originally approved. And everybody else thought that they needed to do the improvements that would work for the tenants that they were working with and that would fit in their budget. So where we're at now is, as you drive by out there, you can see Bloomberg's retail space is starting to take shape. They've got the brick out there. They've got the new windows in and starting to see the mansard go up and it's to me... The movie theater is open. It's operational. Mancino: It's got a sign. Gerhardt: It has a sign. Engel: Does it have all the letters working? Gerhardt: It has the letters on the sign and Mr. Copeland feels that for him to stay a vital part in the downtown area for the long term, he feels he needs 8 more theaters to stay up with what the 14 Economic Development Authority- Sanua~ 28, 1999. market is doing. I don't know if that's correct or not but Mr. c0peland feeh it's important And with that we encouraged Mr. Copeland to include retail as a part of it. This is a mixed typo use. It's a mix proposed and we asked him that he include that and he has agreed to do that and that he would do the retail out front with the...in concert with the movie theater. Now with that, what I'd like to do is just explain to everybody that. hasn't been here since the be~rming of kind of how tax increment, how this mx increment district got created. How the money flows from. there and also how Mr. Copeland and I have talked over the last couple of months of how we kind of changed the deal and how he wants to stand alone and take his own increment from both of those. Mancino: Todd could you include, Mr. Chair if thi~ is okay. Could you include one other thing. Could you talk a little bit about two '.things that I'guess I'm getting old but a little bit about parking and the, you know what we have done as a city to increase the parking and about the road that would continue over the Bloombe~ property and how that would flow. Okay. At the end of the money, the fiscal part if you could also talk about parking and kind of, I g~ very mixed up who owns what as far as the parldng part and !mrq'ovements that have already been made just at the end. Thank you. Gerhardt: Well back in 19, I think it was 95. The HRA at that time agreed-to create a new tax increment district. When you create a new tax increment district, you first have to decertify the bowling center, the movie center phase I, hotel expamion, Timber Lounge and Bloomberg retail. All those properties were included in the orig/nal downtown tax increment district and...we're dealing with so what happened is that...took those parcels Out of that original downtown tax increment district. What happens when you. do that is these properties in 1995, you established a new base value. What that base value does is TimberLounge in 1995 was paying $19,000.00, no. Timber Lounge was $6,000.00... The hotel expansion, before the hotel was here there was a vacant piece of land and they were paying $2,901.00 in taxes. The retail, Bloomberg Companies. This property .was paying $49,669.00 in taxes. The bowling center was pay/ng $67,000.00 in taxes. The movie theater was paying $19,000.00... And so these dollar amounts were coming to the downtown TIF district and that totaled $146,175.00. When we decertified that district this money is now going to the school district. It's going to the county. It's going to'the city. And it's going to other. This $146,000.00 is-now being paid to those jurisdictions. Now what's happened since then is the Timber Lounge has remodeled and they are, Mancino: Under percentages for school, .county, city is what the m)rmal percentage is. It's just regular tax, property taxes7 Gerhardt: 50% school County, 30%.. City', 18%...and then 2% other. Timber Lounge is now creating $19,057.00 in increment. Hotel expansion is ~ $64,904.00 in increment. Bloomberg Companies will be creating $30,927.00. And movie theater Phase I will be $40,458.00. The old plan the bowling center was going to Create $30,927.00. So that's a grand total of $186,273.00. And with Mr. Copeland's proposed development, that has intensified the use of that than what was originally propo~, with the restaurant, bowling center and'little bit of retail. He will now be creating $105,000~00...s0 with that $.105,000.00 would, if he was to - receive the $105,000.00 to write down. What we're' trying to aecompli~ here is the 15 Economic Development Authority - January 28, 1999 improvements that are proposed for B10omberg Companies. What we're trying to pay off'is the $360,000.00 worth of improvement forparking lot, landscaping and facade treatment for Bloomberg. On the movie theater portion it was $540,000.00. And the bowling center it's $665,000.00. Senn: Well stick the other two in too. Hotel expansion and conference rooms. So you have the whole picture. · . Gerhardt: Well, okay. Theirs are, it's three years of this. At this time it's three years. Bohn: From '95. Gerhardt: This times three years. This is roughly $60,000.00. Engel: 58. 57,000. Clayton Johnson: Are you on the Timber Lounge? Gerhardt: Yes. Clayton Johnson: What were you showing for tha~/ Mancino: Increment of 19. Gerhardt: That has gone up this year. Senn: What we're talking about is the incentive that went back to each project and it's three years worth of increment which is approximately $60,000.00. Mancino: ...60 for the Bloomberg was for what? Gerhardt: It was to offset the facade 'unprovement here along the front, and the parking lot improvements here. Mancino: So 540. Gerhardt: 540 was for facade improvements here, boardwalk. When I say facade...and parking lot. Mancino: And parking lot. And 6657 Gerhardt: 665, facade, boardwalk, par.king lot improvements. Senn: That was in the original plan. - 16 Economic Development Authority - Sanumy 28, 1999 Gerhardt: Mancino: In the original plan. Alright, thank you. · . CFhere was a tape change at this point in the discussiom) Mancino: ...so we get that increase fix~m thc 18 to thc 25%. Gerhardt: The increase referendum dollar amount would go to the school district... Mancino: Okay. Let me ask you mother way. If Somebody Came. in, a '.diff~ applicant came in and developed the bowling center privately/ Didn't want any money. 'How would that, the taxes generated, would they be any different? Would the market value be any different than what we're seeing here? I mean does that make sense7 Gerhardt: Does it intensify it more? Mancino: Yeah. To intensify the use more. Gerhardt: Yeah, I mean if you put some AAA.office stuff in there, y6u could.g~t the price up there. You know some real class A office space would pay probably more than a movie theaters. Retail space maybe like Byerly's would probably pay more. Mancino:...trying to understand that. Ashworth: If that were to happen then you'd have two choices. You could take those dollars because you'd still be collecting them, and pay off any existing loans, notes that you have and therefore collapse those early. Or take that particular parcel and decerfify it and put it right back on the tax role immediately. Gerhardt: Your two choices hcre...take these guys out of the equation and you take the- increment from here and here and you pay Bloomberg off earlier, YOU could do a. couple of things. You could take this and pay Mr. Copeland off eaHier or you could take this and there's two little buildings over here on the back side of the Dinner Thoale~ that yOU haVen't dealt with yet. And do something over there and try to encourage an office building to come in there. Or you could just put these on thc tax rolls is another opti'on... So wha~ we do is come in, number one we decertify this district and everything, came back on, you would come in here and say;. Laurie down'at the auditor's office, we've decided to decer~ these three properties and we'd like them back on tax rolls again. -. .'- Maucino: Does it cost us to keep d~f-ying? '- ' ' -- Gerhardt: Just attorney fees ..... " . . .. · . Mancino: That costs us. . '. ' . . -.: .. 17 : · ' Economic Development Authority- January 28, 1999 Boyle: A portion of that 25%. Gerhardt: Yeah a portion. Not all of it. .'. Senn: Why would you ever decertify it when you could use that money and go back into District I where you took it out of in the first place to help solve the deficit problem7 Gerhardt: Yep, you could do that too. Senn: I mean by the first decertification and taking it out of the district in the first place, if you hadn't done that, fight now a majority of the $2.5 problem wouldn't exist. So I mean it's just, if you want the whole history. Mancino: That's water over the dam. Hey, the 25%, are we limited? Gerhardt: Then you don't have problem in the future. Mancino: The 25%, do we, are there any limitations on where we can use if/ The money that we make in the administration fee, the 25%, does it have to stay in the district? I mean. .. Gerhardt: Yes. Mancino: Okay. Gerhardt: 10% can be used for administrative costs. The other 15% can be used anywhere within this red line. Mancino: And only there. Gerhardt: Only there. Boyle: It's very thorough. Thank you. Mancino: Very good. Thank you. Oh! ...can you talk a little bit about, Todd I'm concerned about a couple things. And the road. The road going through, and you know will we be at some point down the road, will the city have to come into play and upgrade the road? I mean what improvements are going to again fall back as part of this project and all that kind of stuff? .. Gerhardt: ...needed to work that out an issue regarding...I'know we had to deal with the access issue here. But how this wasn't included as a part o~' the project. Mancino: That's just a din road now. Can we keep it the way it is, all the way through there? i8 ~onomic Development Authority - Januaxy 28, i'999 .. Ashworth: ...this type of a cul-de-sac fashion and we did'it in such a fashion so that the road came in. You come back up in here. IfBloomberg wanted to take and ~m,m'ove these, they could have access off of that roadway because ..... · Clayton Johnson: No, a little history there was that we originally wanted...first attempt to develop the property and put the road through .and the previous HRA didn't want to put the road through. So when we came with the plan that we're currently working.on, it's intended that everything would be served off'Market Bouloval'd'- ;. " Bohn: That's not true. We wanted the road through but we didn't want to pay for it. Vemelle Clayton: ... Mancino: So where are we now with the road? I want to explain the road because I think it's important. Gerhardt: Our road fight-of-way stops right at the entrance, the first entrance into the'parking lot. The City Council as a part of the approval of this vacated the road, we had road right-of-way up here. They' vacated so we could expand the. park~... But we never had, we never had right-of- way that would take us all the way over here. Clayton John~qon: For one thing the Dinner Theater's not...The Dinner Theater's still in District 1. Gerhardt: Right, the Dinner Theater isn't but the two smaller buildings and see the PID number for this goes all the way over here. It's like an upside down Florida. Mancino: But Todd, what you have told us, I again it's my memory but is that the road will go all the way through. Gerhardt: Will go all the way through once this property is developed. Mancino: Oh, okay. So you're saying with thi~.new developmem adding, and I'm just going to call it bowling because we've already done movie phase I..The bowling part that you will not be able to, there will not be an improved road whatsoever going out to the east? Boyle: Not as a result of the imrrrovement Of the' bowling alley. . . · . Mancino: We will not be paralleling those two things? - . .. Gerhardt: I think that's going to be an issue as this thing goes back through planning commission and city council process through this b' .eeause we did talk about there would be another potential access, if I remember right,'wben we talk about traffic that we needed,., we needed something to go through here., be it a paved drive or som~ to alloW a...access 19 Economic Development Authority - January. 28, 1999 because of the mount of traffic generated from these people to go out. We didn't want thom all to go out one way. We wanted it to be diverted to a second alternative so. Mancino: Public safety concern, etc. Gerhardt: Well for engineering, yep. Everybody. Mancino: Yeah, and will there, I'm sorry I don't want to get into too much detail but I just want to make sure that all these things are out in front and who is going to end up paying for improving that road and etc because again that .may be added cost due.to improving the bowling alley. And just everybody needs to know that. Gerhardt: I think it's already included in these figures here. Mancino: But the 665 has jumped to $1.3 million. Gerhardt: Well that's interest. That's with the interest. The $1,390,000.00 is interest. That's thc total payments over the 22 years. The $1,390,000.00. That includes all the interest that... Mancino: That was 14 years. Gerhardt: Okay. Mancino: I just want to know how much we have to pay. Okay. Gerhardt: Well if it's over the 14 years, including the interest and everything, it's $1,390,000.00. Mancino: Gerhardt: Because it's not really 665 because we're going to end up paying 1.3. · · With interest. Mancino: Yeah, that's what I'm saying. That's what our obligation as a city will be. Not $665,000.00. It will be $1.3 million so when that bowling alley is improved we will have paid $1.3 over 14 years. Okay. Gerhardt: Interest and principal. · · Mancino: And we don't know yet who has responsibility and haven't talked about the east access. . Bob Copeland: The private parties have responsibility. We'll be responsible for... Mancino: For not only the easernent but the upgrade and everything.. .. Bob Copeland: Right. Economic Development Authority - January 28, 1999 Mancino: Okay. Bob Copeland: It'd be a private paved, access. ~cino: Okay, thank you. -. Senn: Say Todd if there's any additional inftslffi'~llto such as semaphores or'anything like that are required in any of the connection points here or anything else like that, there's absolutely no money...for that? Gerhardt: Well you could use the excess increment for the 15%...- .- Senn: I'm not talking about the upper. I'm talking about now what you're talking about down here. Down here there's basically no dollars in anywhere them to fund any'infrasmmm_ne improvements if they're necessary or semaphores or whatever. Gerhardt: Nope. It's parking lot improvements, facade and boardwalk and sign. · . Bob Copeland: We hired a traffic engineer who determined that a stop light would n0_t be . .. Gerhardt: And that was with the east access though right7 I've been working numbers the last two weeks. I haven't been thinking traffic. Boyle: Well let's, thank you Todd. Let's continue with questions then at this point. Linda, do you have something? Jansen: I don't have any questions, no. Engel: I don't have any. You got them. Good job. Boyle: Nancy. Mancino: My only other one about parking. I just want to make sure that park and ride will stay there and that the work that's been done to date and 1.ooking at it that we have no problems keeping the park and ride there and co, you. know both uses work out,- Gerhardt: Park and ride has a permanent' easement that. Mancino: How much of the parking lot does the 6ity own7 Can you kind of show thatT..-. You mean they get to go to the, if the movie thea~r goes in there,..they get to go to the movie free? .. : Gerhardt: Well...Here's Market. Here's th~ enli~ce to the bowling cgnter. This is that iong entrance here. And so they have an easement that rum..'.tl~ 1~ thr~ row~ of the ~g... · · · · .. · -. · .... Economic Development Authority- January 28,.1999 ' · · . Mancino: And that easement is because we as a city own that land or Southwest has bought it7 Gerhardt: HRA owned it. Mancino: HRA still owns that. We own that land, okay. Okay. Gerhardt: Right now Southwest Metro, which will be an issue when this. retail comes in. They've been parking like this. And so they're supposed to be parking outside this line so we've had discussions with Southwest Metro...to basically .renegotiate some of the parking'in that area. Retail may want some of the parking over in this area and we'll... Once we have an approved project and know what the uses are, we're going to sit down with Southwest Metro and try to work out this parking scenario. Mancino: Thank you. Boyle: Bohn: Jim, questions. · · Yes...part of that building going to stay or is that going to be torn down? Gerhardt: I understand the entire building will be tom down. Boyle: Steve. Labatt: My only question was that road and the cost... Boyle: Mark Senn, I didn't mean to pass you. You had already asked some questions but let's come back, I'm sure you have some more. Senn: Not in terms of the parking. Does this project as it's now configured meet or not meet parking requirements? . · . . · . Gerhardt: I believe we are short by, I don't remember the number offhand. But we are short, I know it's less than 100. Senn: But it's around 100 though if I remember correctly. Gerhardt: Yeah. Somewhere around there, yep. Boyle: Didn't we address that last time? I thought we were· were not short. .. Senn: We were short according to Parldng requiremeni;s.,' · .'.I was Under the' impression we 22 Economic Development Authority - Jan'uary 28, 1999 Mancino: Yeah because Sharmin said her figures were wrong and she'came back to us and gave us a sheet Councilman Senn that said that her, it was in the Minutes that I read that were attached. That her first cal~tion~ were incorrect. I don't have.that sheet, though but I think in the Minutes I can't remember where. Let's see. Engel: You mean 700 rather than the 900... Mancino: There you go. But again we can kind of address that and make sure that that's. Gerhardt: Yeah, I mean the parking, we .decided, I thOught at the last'm~g that the parldng issues, you know a lot of the architectural style and things were'going to be more addressed at the planning commission level. I'm sorry that I'm not up to date on the parking. -. Boyle: At the beginning of your presentation, Todd .you had recommended that We focus on the numbers tonight. The economic portion of this recommendation and I think that's a very good recommendation and I think we probably should stay in thoso guidelines and focus towards that arena as it applies to our authority. Mancino: ... '. -. · . Boyle: And that's in the ballparlc - Gerhardt: Well I won't bring back anything that moves these numbers up any higher. Boyle: Promise? Has the tape nm out? Gerhardt: Probably. Boyle: Mark, were there further questions before we? Ifthexe are no further questions we'll move on to comments then. Or discussion~, excuse me. Go ahead. Bob, would you like to come up and? Bob Copeland: Well Vemelle and I... · . Boyle: Okay, excuse me. Vemelle.' Vernelle Clayton: I just have to make one comment on this sheet. It ties in with this project., There are good things on this sheet as well and as you .beat your head against the wall, there's one that Don handed out earlier, go out and stand out in the streqt., and look up.and d0wfi. Check · what we have out there. Main Street is something I think we're all proud of and it wouldn't there if you didn't have this problem. Also want to point out that we've never had enough chance to toot our horn here, and I'm wearing a different hat now. I'm wearing a Market Square.hat.. You have a million two that came in in 1997 and that Was a result of the c0.~. effort on the part . of the former liRA's to lend those folks 700'some thousand' dollars ~o co/xect the problem at Market Square which was partly due to the fact that. a bridge had been buried there and it was '23 Economic Development Authority - January 28, 1999 returned to you at a million two which I think is about as good an investment during that period of time that the city made. It was basically 10% per year and it paid .cash then since. So there are good things with TIF. There are lots of mysteries with TIY. There are complexities with TIF and basically it comes down to how can we serve best the economic welfare of the city of · Chanhassen. Todd explained a lot of things'that I thought I might explain and so I Certainly am not going to go back over it but there are a couple tl~ings that I just want to mention. When the district, when the old district was decertified and we created this new district one of the things that we had to do was prove that it warranted being created and to do that a certain percentage of the buildings had to be in a sense sub-par. That's an abbreviation or summary of various criteria that you have to go through to see just exactly what you have to have a redevelopment district.' One of the buildings that was sub-par and helped the district become qual. ified was, and I haven't. seen the wonderful picture but I think you have a picture of the problem we're trying to correct. So to some extent it would be somewhat incongruous at this point, having Used that building as a reason for creating the district in the first place, not to give TIF to this particular project to in fact correct the problem for which we created the district. We have had explanations of pay as you go. I think it's fairly clear. I think you've done a good job of expl .aining that. I had meant to explain it because it's not really pay as you go from a developer's perspective. It's go, pay and then get. You go with the project. You pay for the project, which is one of the reasons you have more interest than you might have if you just went out and bought a house. Bought a house for $100,000.00. You pay off what? 200 some thousand. Here you pay a little more because there's a lag time. He's going to pay his taxes. The first year he'll pay taxes on the old rate. The next year he'll pay taxes on the new rate from wlfich the TIF is extracted and the following year he'll get the money. So they're filling that gap. You have a little more interest on this than you otherwise would have. The city on the other hand has very little risk in what it has to pay out. It doesn't pay out anything that it doesn't get. It only pays what it gets. It passes it through. So with that I think that I want to talk a little bit about how we came, we've been on the...of a dilemma a little bit with this project and what we've talked to you folks about. The first meeting we came to you with plans and with a plea and with an explanation as to why we needed the TIF. How we met the but for. We had planned then for the next meeting simply to answer the questions that were left when the request was tabled. In the meantime we have a couple new folks on the group here and so we felt we needed to go back over a few things, but we're still taking to heart the comment and the general agreement and understanding that we're focusing on economic issues and we aren't so much focusing on the architecture as Todd and you folks just discussed and so while the plans are here, are they here where they can see them. I don't know what's up here. I don't know what they're looking at... So we have the plans so you .can see what will be proposed. You see it in it's form as it will be presented to the planning commission,' but not necessarily as things go from time to time as it will be when you come out of the planning commission. So that is the direction that everyone has decided to take here to go through planning.., you folks first see frankly what kind of building these folks can afford. The but for, so while to some extent we thought well okay we've had the project approved beforel We're not asking for any more money. Perhaps this is kind of-an easy task. And perhaps it should be since we are meeting what the goals of the district were to create, to clean up this awful looking building. On the other hand we do recognize, and it's reasonable for you to revisit the issue because there has been changes. Some of the changes have somewhat clouded the vision. Some of them are reasonable to explore more thoroughly. The question though that we have to ask for 24 Economic Development Authority - January 28, 1999 --. is if it's going to be built without TIF, what is the but for. Part of the but for is very .easy to answer. Bob has put together a list of, an analysis of the numbers. How it Works. How it doesn't work. The rest ofthe but for though is a little more subjective and it's One that does affect the overall economy of what happem here in the city because but for the TIF Bob has two choices. He can cancel the purchase agreement and go with his eight screens and we've' left at the city with the ugly building for, in my jnd~mnen, t, at least another couple of years. That's because of the time it takes to get another group put together. Invariably the other group that we get put together, they put together, the other, whoever puts together, will come back to you and say, okay. We want to do this now and but for'the TIF, we'll not do it. So you might find yourself fight back where we are today if the TIF is not given to these folks, on a'plan that we can have in place. Get the taxes paid sooner. Speaking of paying taxes, one of the risks here is that this particular building that we're dealing with at the moment has been the one that's been the least reliable for paying taxes period. The other alternative is that, that Bob has, is to go ahead but with a lesser building. Lesser in intricacy of design. Lesser in quality. And something that probably would not be as aesthetically pleasing and therefore would not have as good an impact on our downtown as a TIF sponsored building would have. So let's discuss a few of the Other issues then that have clouded the issue. First of all, on the project that you Were originally providing the TIF it was to redo the parking lot, redo the facade, add a boardwalk and there was a mixed use of retail, bowling and restatmmt. The current use is retail, a little bit more movie and at the request of the city I should remind you, no restauranL So the questiOn'is, is this a viable, economic development that should be supported? The question is not, did we support the prior plan because there was a restaurant and now there is none because the restaurant was removed at the request of the city. The question is not did we support it before because there was a bowling alley and now there is none because the city's files and ours is full of reasons why the bowling alley is not a very good, an economic investment. While there have been several offers that have come forward with a thought they might take a crack at managing a new bowling alley, each of them has come away saying it would take more money than you could recover in any reasonable period of time to bring the bowling alley up to speed. They also come forward with the response that 24 lanes, which this is, is the bare minimum that you can have in one facility and expect to be a success. Even if it were a success, the value of the rents that a successf~ bowling alley can pay are so low that it does not enhance the value of the building. If you know buildings value in commercial, commercial buildings values are determined by the mount of rent that is paid. The question is not either did we split the prior project because the ~ of the retail component because now we have something that in fact has more retail. And so to the question is this a viable economic development that should be supported when comparing it with a prior proposal, the answer is yes. Some other questions have come up and this has come to where there is difficulty on our part in trying to answer questions because we can only respond to what we've heard. We haven't heard a whole lot of questions but we have heard a couple of questions. One is math and we will deal with that when we get to the planning commission unless someone has a comment and a reason to talk about it tonight. We'll respond to that at the planning commission. 'The other is use and we've heard a variety of reasons why romantically we'd like to Stay with what we have. But that's sort of a, and I too went through that with this project." We've all gone through a period of what one experiences is 'somewhat like a death in a family. First you're sad.. Then you're mad. And then you get to the part where okay, let's get On with life. So we all went through a period of okay, this isn't quite what we had in mind before. We don't have...up front.- Economic Development Authority - January 28, 1999 We don't have the cute boardwalk. We don't have all the little things that we planned to have inside. But we don't have that because it wasn't economically viable and we won't have it because the folks that do those sorts of things need more space than would be available if it were left that way and I just talked about how a bowling alley is not very economically viable. True, it's one less thing you can do in downtown Chanhassen but it's not economically viable. The other area is, the other thought that we've heard and someone else is going to talk a little bit about that but I would just mention a little bit...as Bob told you last time when we were here, they are closing eight screen movie theaters in many locations because they are too small to compete. Sixteen screens do lots of little things for us, .in addition to making sure that we have an investment that has already been made more secure. We will see bett~ movies. There is a thing going on I understand in the movie industry where if you have fewer than 20, you don't get some of the first nm movies. But if you have 20 and you can consistently assure that vendor that you'll be taking those movies, they put you on the list for all the good movies. The other issue on the regional draw is one that I love to talk about but I think Steve wants to talk about it a little bit and so I will just say, in my summary on that, that we are a regional draw. Steve can talk about some of the institutions that we have here in town. Some of the businesses that we have here in town that are regional draws and I can only say to you fi'om my experience that I would hope that you would take the same approach as I do in my business which is I'm responsible for bringing a fairly large number of businesses and tenants to this town. I feel responsible for their success. We as a city are responsible for encouraging and bringing these folks to town and we need to follow through to make sure that they succeed. It's not known to most people that most businesses here in town are not making a whole lot of money. They knew that, most of them. The ones that don't know, we counsel with them and tell them that I hope that you have a reserve so you can live through the lean years until you get to the point that you want to be. But most folks here in Chonhassen are positioning themselves. They're positioning themselves for our future growth and they're positioning themselves for the growth from around the region that will come from them. And you'd be surprised how many folks in town here rely on a region and not just Chanhassen. In fact there are more people in town doing business that rely on more than Chanhassen, and always will, than rely on just Chanhassen. If we had businesses, only businesses in Chanhassen that relied on Chanhassen businesses, we would get by with strip centers. One of the businesses that I just learned of and it's kind of interesting so I'll pass it on is a business that moved here from Excelsior and that's the Sampler. She has people coming here from Japan. If they are ia the United States, they come to her store. And that is truly a regional shopping center so, first they don't have any money anywhere to spend so I don't know why we care about that. But so in smrmmry I do think we do have to think of a broad view. Not short view. Commitments that are previously made to folks and just what this will do economically for our city and I think it's exciting. You all know I worked on the other plato I liked that plan but I think it's terribly exciting to put Chanhassen on the map with a 16 screen theater. Boyle: Thank you Vemelle. YOU commented, Steve did you have some comments? Steve Berquist: I'm Steve Berquist. I live at 7207 Frontier Trail. I really didn't know I was going to be introduced, nor did I know for sure that I was going to 'make comments. I thought perhaps that I would and I have made some notes. Not necessarily ih any particular order so you'll have to bear with me as I go through them. The first thing I want to tell you, I want to'be Economic Development Authority- Sanuaty 28, 1999 completely up front about this is, and I'm not here as a former councilmembcr or EDA member. I'm not here as a mechanical contractor, the HVAC contractor that did the original theater, although we did. I have no idea whether we've even'looked at anything regarding the tear down and the rebuild. I'm not here in that regard. You'll have to just weigh in my comments acco~gly and if you think I'm biased, you;re ccrtainly welcome to discard them. But I assure you I'm up here as a citizen. The first note that I made, oh the other thln_,~ l.Wallted to do. ! really wanted to bring a piece of a computer paper with the fold Out so I could...have them all fold out like I did at the original, at the State of the City thing. Everybody just groaned...' Anyway, the Senn: I'm kind of glad you didn't do that. Steve Berquist: Well it would have been funny. But that's alright. Vemelle talks 0n the regionality issue. We are a regional draw. We have the Target We have the Byerly's. We have Other draws, the Dinner Theater. Many, many reasons for people in all areas of this part of the suburb ring to come to Chanhassem The decision regarding our regionality Was made far before I sat there or you sit there. Now, in my .opinion, the question is how do we in.~re the vitality of our, of what we have created as our regionality.. So I'm worried about that. I'm conc/emed that the multiplexes of commercial theaters, I've got to make sure I read my notes here. I'm concerned that in the event that this project does not go forward, that what could happen, again, as a citizen, is that 4-5 years down the road that we'll be sitting here, you'll be sitting there talking to some other developer about the redevelopment of not only the bowling alley, but also what is currently the existing 8 screen theater. And flora a citizens point of view, I would hate to have to look at that reinvestment again. I don't want that to happen. I don't look at this as corporate welfare. I know at some point somebody had made that comment. This is not corporate welfare in my opinion. Again, increment is only returned to the developer if the valuation per tax dollars are generated. Do we got an eye sore there? This is, Jim you're nodding your head. You know,. everybody knows what that place looks like. I mean to us, who drive it every day, who look at it every day, we have a tendency to look right past it. But believe me the people that come through Chanhassen that live in other areas and look at that building, don't look right past it. It's an ugly eye sore and it needs to be cleaned up. Let's see my stan~ items here. I want to talk very briefly about other communities continuing to offer incentives, and other communifi~ even looking to annex land for the enhancement of their commercial~ industrial tax baso. I think we're foolish if we don't believe that they're going to be offering tax increment to, on that land. To help themselves remain economically viable. Now I say that not only with this project in mind, but this is a comment that I thought of when you were talking about the original proposal with Eden Trace. Not that I don't think'affordable housing is a very important component to incl~ with the project but I don't want to sell the tax increment tool Short. I'm afraid with the hot button, the hot phrase being affordable housing, that that may happem I look at this project that's before you as a movie theater expansion and the retail component and.I think back on the original project that we all looked at and fell in love with. The Frontier Building, the movie theater, the Pauly's restaurant. We all loved it. We all thought it was a great thing for.Chanhassem We looked forward to how much it was going to draw our downtown together. How many people it was going to bring to our downtown. How it was going to'affect our economic vitality. I look now at this project and I really believe that this is a better project. This is a superior project to. 27' Economic Development Authority - January 28, 1999 what we agreed to back in 1996 but never came to fruition. And I would urge the commissioners to work towards an agreement with the developer and get this thing going. Lastly, two quick points. Three quick points. The Mayor mentioned the revenue. Tax revenue flow into the city, and I just wanted to, I'm sure it's all on the forefront of your minds but you need to keep in mind the other benefits associated with the vitality of that area. We have a significant piece of land on the other side of Highway 5 that is largely at this point undeveloped.' We have the CR James piece that for lack of investment is just sitting there vacant currently. Nobody wants to take the risk to put anything on it. We've got the Boston Market piece that went down, for whatever reason. It's down. With the enhancement of this particular area, there's my phone, pardon me. Engel: Now that's staying in touch. Steve Berquist: I told him to call me if he needed me, and he just sounded like he wanted to hear me say hello. Anyway. It's kind of nice when a 12 year old calls his dad, isn't it? Boyle: Especially when he's at the podium. Steve Berquist: There will be other activities and values received by the citizens of Chanhassen with this project, in my opinion. They won't necessarily be tangible, and I know you all believe that. I simply bring it up. The other thing is that $1.3 million is a case scenario which from what I heard represents a lot of very conservative or worse case criteria. Is that right? $1.3. That $1.3 million represents a lot of worse case stuff. And lastly, and partly leastly, the park and ride. You talk about the park and ride. There was no benefit to the park and ride with the old proposal. We simply had a restaurant there in the existing building and a movie theater. This park and ride, again if you look at the retail element of it, that is a component of it, stands to benefit. It will still be there number one, and the services that typically will serve a park and fide, and Mark you're very privy to those being on the Southwest Metro 'Council down there for the development on Highway 5. We stand a good chance of going in that retail and being benefited by the park and ride as well. So that wasn't part of the original concept. I think it's a superior project to what we had originally, and I would urge you to strongly consider supporting it. Boyle: Steve, I think there's a couple questions. Nancy. Mancino: Yeah I just wanted to draw from you. You said, you thought it was a superior project than the original one in '96 and you just said one of it's due to the retail on the west Side being close to the park and fide, I understand. And I didn't get your other key points on why you think it is better than the original one. Steve Berquist: One of the big reasons is that we get a new building out of it. You know the old-. thing, while made out of, you know built like a bunker, comes down and gets.replaced by something that's new. Mancino: I just wanted to make sure I got your key points on why you think this is better than the other one. 28 Economic Development Authority - January 28, .1999 . Steve Berquist: Well the other thing that I thought about mentioning that I didn't want to necessarily. I think Vemelle mentioned the fact that there was some dis.' eussion regarding the loss of a restaurant. To me that's not a bad deal.- If you look'at the resta~ we have in town now. Adding one more, ! don't necessarily think that's a good deal for us. Any other ques. tion~? Thank you for your indulgence. .. . . Boyle: Thank you Steve. Clayton Johnson: For those who are new, I'm Clayton Johnmm with the Bloomberg Companies. And the next door neighbor to this project. And Todd I want to compliment you.' That was a great presentation and I think it was very helpful, particularly to the new members and it's helpful even to us who have been through the whole thing. But I thing we support the project obviously because we're the next door neighbor. We've been active in the development of all of downtown since 1986, but also in thi.q whole site. The original hotel, the hotel expansion, the meeting rooms and so on and we're currently wrapping up the Frontier improvement. I don't know if you've been back there in the last few day~ but it's actually starting to look like something. But the other reason that we support it is that we are very interested in taking this thing to the next step, which is the area behind the Dinner Theater which we know is everybody;s concern and Brad, from Lotus' office and myseffhave continued to work with a major dever.oper and a major tenant on a large office building for that spot and we are encouraged by them to continue, and we're going to probably be at the next meeting to make a preliminary presentation. So we're actively pursuing that and we hope that your support for'thi.q project continues. Boyle: Thank you. John Rice: I didn't plan on saying anything. Boyle: Well everybody else has, you might as well. John Rice: Let silence be taken as objection- My name is John Rice. My office is in the Frontier Building, 551 West 78t~ Street. As some of you may know I'm the attorney for Bloomberg Companies and I've been here before on various projects. I have some other history which Don might or might not remember. I sat in the closing on the first .development and sale of'the bowling alley, representing one of the parties in there. And it has, it needs some help now. But anyway, it would be a vast improvement on that building. That building and it's current use is a drag. The taxes itself are, the usage has demonstrated that it's not going to be economically viable. Mr. Copeland here has already made a substantial investment in the first stage of the cinema. He's made a substantial investment and he chooses putting his o .wn'money in to expand that same investment in the downtown to make that improvement' next door to his own buildi~. And I would think that that would be a s~ificant .factor indicating that there's some good faith work and investment to be clone by him alld m'erits your approval. Besides that it's going to work favorably for the overall improvements of the'entire south side there:that faces on Highway' : . . : · . · 29 Economic Development Authority - January 28, 1999 Boyle: Thank you. I think at this point, let's open it up now for questions please. And again, let's focus on the economic portion if we could please. I'll start on my right side, Mark. Engel. Or Senn, if you'd like to begin. Senn: I'll have you come back to me... Boyle: Alright, Linda. Jansen: I have one question. In mention to the eight screen theaters actually being closed down and that they can't compete. When did that trend start? I'm looking at the cinema just having opened and now it's not viable. Bob Copeland: When we started to plan the cinema there in about 1994... Boyle: Bob, it might be best so this gets on. Thank you. Bob Copeland: When we started planniug the existing cinema there in 1994, eight screens was kind of a big deal. At least we thought it was. But since then there is a national trend that is towards larger and larger complexes. More and more screens. And what's happening is that 16 has somehow become sort of a magic number that if you're smaller than 16, you're in jeopardy of not surviving. The 8 screen cinema down in Burnsville is closed. There's one in Edina that will be closed in the coming year. It's an 8 screen cinema. And we're hearing about this and we're seeing it all around the country and 8 just is not a viable number any longer and so this is just a development that's happened I'd say in the last 3 or 4 years, but it's accelerating. And there are going to be fewer movie theaters with larger numbers of screens at those fewer theaters. Jansen: And so as we're looking at some of the smaller markets, and of course trying to familiarize myself with your business I was going through the paper. As I'm looking at all of these smaller theaters in smaller communities, and meaning even our size, you're forecasting that those will be closed because our population will be traveling into say an Eden Prairie where maybe they would put 16 screens. Making us less viable. Bob Copeland: Well that's right. There probably will be a 16 screen plus cinema in Eden Prairie in the coming years. I think that's inevitable. But what we're concerned about is that in the coming years there may be a 16 screen at some Other community that would be closer than we could withstand. And the smaller numbers of screen cinemas in smaller communities will probably survive. We have a 7 screen cinema in Buffalo that we _think will do fine. But at the, this, Chanhassen is closer in to where the population is and the smaller ones that are where the population are are not going to survive. The Brookdale Cinema just closed this month. Four screens. It's going to happen. And it's a national trend and it's not something that we relish. It's not something that we, you know anybody's promoting but that's you know the way it's going. Mancino: What's a single reason for that? I mean why would I want to go outside of my own city of Chanhassen that has an 8 screen theater to go to a 16 one 10 miles away? I mean what do 30 Economic Development Authority - January 28, 1999 they say is the draw7 Is it because everybody in my family eau go to a different, you know go to a different movie in the same building? Bob Copeland: That's one of the things. But even with 8 screens here in Chanhassen, we can't play all the movies. We can't get them all.' You know there are. youknow a handful of movies that we don't have right now because we only have 8 screens so we can't show'all the movies; So there might be some movies that you want to see that we .don't have. .. ' Mancino: You mean I have to wait a week to see before you get the new ones? Bob Copeland: Well no, but we won't be getting them, Mancino: Oh! You won't be getting them a~ all? . Bob Copeland: Right. For example if you want to see Waking Ned D .evine. I mean you have to go down to some other place to see that. And if you want to see Life is Beautiful. Mancino: I have to go to the Lagoon. Bob Copeland: Or some other place. But the big reason though is that the larger, newer cinemas with stadium seating and in some cases bigger screens which we would intend to have here is have one big auditorium with a very large screen, they are drawing people. People are driving by the smaller ones and they're going to those. Mancino: Yeah, no. I can understand that... Bob Copeland: And it's not everybody's taste. Some people say well that wouldn't be for me. I wouldn't do that but people are doing that. Jansen: The theaters that are open now, and you have to forgive me. I'm not a big movie goer, but don't I recall seeing, don't you have the stadium seating in the existing cinema? Bob Copeland: In 4 of the 8 auditoriums we have s~_dium seating, yes. Jansen: Okay. And are they the oversized screens or the big screens? Bob Copeland: Well I would say no. They're just average size screens. . . . Jansen: Okay. Thank you. ' .. ... · Boyle: You ready Mark? Excuse me Bob. Does anYb°dY.else have any questions for Bob while he's at the podium. Questions of Bob? Okay. I had one but ! forgot what it was. Engel: I don't have questions. Just a few comment8 but I'm going to'wait until; are you ready, to go Mark? 31 Economic Development Authority- January 28, 1999 Senn: No. Engel: No? Boyle: Go ahead. · EngeI: Well, I just watched this for a number of years before I got'on council or EDA and to me the gain from the commercial viability 0fjust our core downtown, in and of itself, is probably enough reason for me to approve it. Just that. And I think it's very pretentious on our part to sit here and think that under market conditions that property is going to redevelop, given it's demonstrated staying power to not do so. And it's certainly been uglier than the amount of years I've just been here but I've about had it with that place myself. So I don't believe there's any market condition that says that's going to change. If that's the case, I believe it would have happened by now and I don't see anybody else stepping up to the plate and I know it may not be perfect but it's not our property. We've got to deal with what we get and it's betier than anything we've gotten so far. I think if we get this, we get closer to that office building, tower, center, complex, whatever you want to call it behind the Dinner Theater. Again it's that incrementalism. We're sneaking up on it. But we're not going to get it with this there, in my opinion. You wouldn't get me to build an office building there with that thing around. And it's all better than the existing use. It just is. That's not even debatable. It's not cash out of pocket. We're not being asked for a loan. It's incremental tax dollars. It's a win for us. It may not be a win for everybody but it is a win for the city so I'm going to approve it. Boyle: Thank you. Right to the point. Appreciate that. Jansen: Can I ask yet another question? It actually came up from something Mark said. I'm recalling, and I spent two days going through the history on this project and Mr. Gerhardt was wonderful. This is my second presentation of the numbers so he made sure I understood them perfectly clear. But one of the things I recall reading was, at least one other approach to the project that seemed to stall and then fail because of the existing financial situation of the bowling alley owners. Wasn't there a whole complicated process where the purchase just couldn't be made and the project stalled and stopped because of that? Or we would have something there now? Gerhardt: One of the deals was that Pauly would be included in on it. Dan Dahlen would be included in it and Dan would rent back basically from himself the bowling element and it wasn't a marketable deal. You couldn't take it to a bank and it failed. Jansen: So it was more the financial situation of the property that stopped the deal or we:d have something there now? Gerhardt: ... Jansen: Okay. 32 Economic Development Authority- Janua~ 28, 1999 ' Gerhardt: Bowling is difficult, it's diffi~t/0 ~ a bowling ahoy to starve aJad'pay'over $2.00 a square foot in taxes. $3.00 a square foot in taxes.' And for them to survive there. 'And the amount of space that you need for a bowling alley, Tbere's'24'lanes and then'the space.in-" between. You just have way too much square footage to really afford to pay $15.00~$12.00 a . square foot in a lease and still make money. Jansen: So is the first project that's come before the EDA or the I-IRA as far as demolishing the building completely and putting up a new busines, s? Okay. SO it's really the first time it's been looked at that way. Okay. And then the other part' that of course I keep rem/~ and we ~ mentioning is the eye sore of the existing building and taking a good look at it and your pictures - show it beautifully with the paint peeling off of the facade. I brought the questio~ Up.and it was with staff as to whether or not there is an ordinance that, in place that actually addresses those things because if we're actually coming at it and saying you know this thing is an eye sore. It's detracting from being able to bring businesses into the downtown. If we weren't replacing it... (There was a tape change at this point in the discussion.) Ashworth: ...passes that referendum, these businesses will be taxed for that And the money will go directly to the school district. Or it would go directly'to us. Boyle: Well does the 25% remain? I mean the 25% is there year a!kr year after year, right? That goes right back to the city, is thi.~ correct? Where does the 25% come? Ashworth: I think that Todd had mentioned, the 10% can be used for any type of purpose whatsoever. The 15% has to kind of stay within that boundary area that is totally up to us. In other words it doesn't have to benefit these parti~ owners. Boyle: Okay. As long as that district is, okay I understan& Mancino: So I think what Councilman Senn is Saying that the 15% has to stay within the district. If it were regular property taxes, it would not have to stay in that distri~ It could be used over all in the city anywhere and so that it wouldn't have to just stay in the district. We could use it anywhere you have a little bigger universe to decide whereas thi.~ has to stay just right there. Is that what you're, part of your point? ' -. '- - - .. . .. .. .. Senn: Only 10% of the revenues coming'0ff~ pmj~ can go Outside of this very small district ' area. 1 (PA. Okay. So what I was saying was not relating to capital referendums Or Whatever.' What I was saying was normal ongoing city operating needs as the city grows, whatever.'. As ou~ infrastructure ages, as it requires more mainteoanee and everything else as we have more needs '- developed because of our population growth, okay we have increased services. We have increased operating costs. Okay our percentage of the overall tax rate will probably increase. As it increases, okay you will not recover any increase off these lxoperfies.. So they will not be paying their fair share towards any of those future increaseS, in .relationship to stress or .. · . · · · . .... · . . . 33 Economic Development Authority - January 28, 1999 infrastructure maintenance and...whatever within the'city so when the area is not doin~ that, or bigger properties end up doing that, that means the other properties pay more. Mancino: The original base value. The blue numbers. Ger~t: ...that will continue to... Mancino: And if there is a school referendum that does go tO the school district, but there is no money, no green money that goes to the county.. So the people who really lose out as it Were I- guess, from the tax increment districts, and actually in'the latest newsletter from the county, the people that actually lose out or the agency that actually loses out is the county. And then they come back to us as the city and say, we lost all this money. How will you make it up to us? I mean using numbers...other side of that. Senn: Well it's more complicated than that. Much more complicated. The county's not the only negative you know. Mancino: But I mean then we enter into agreements on county roads, etc. Again, just everything. Boyle: Mark, you still have the floor if you would like. Senn: No, I'm done. Boyle: Linda. Jansen: I guess tagging onto what Councilman Senn said when he's saying the right project. And again not thinking of the cinemas as being the wrong type of a business or project, but when I look at that property and realize that for the 14 year period and the 22 year periOd that it won't be on the tax roils. That yes, we'd like to get it on as soon as poss~le. In 14 or 22'years, is there a possibility that there will be a business or a developer that would come in and not need the to develop the property? Might there be an oppartunity for there to be a development that could go in and that could immediately get onto the tax roils? Maybe I'm reacting a little bit more in that direction having just come through the whole election and the campaign process and hearing over and over again, you know taxes, taxes, taxes and wanting to bring that number down on the property owners. TIF definitely is' one'of those issues that you end up having.' discussions on and . watching where the EDA is taking the funding and going more towards the affordable housing to' get workers into towm It's not that we're'needing, we don't hax;e enough workers. It's not that' we're now needing to attract businesses..Though I'm not .saying you know no to ~ommercial. I'm saying if we're at a point in the development of Chanhasseo that lmsine~ses are coming into the community, and especially into our downtown area becaUse'of the way it's developed with . · .. you know all the hard work that all of you have gone to, we've got this property. We're limited in the amount of property that is available for development now in the downtown. Do we want,. 34. Economic Development Authority- January 28, 1999 should we be taking public money to help in the exp .ansion of the business when what the community and the vision has been for this property is multi-use. And again I reali~.e that we don't dictate what businesses go in there. That that's not what we're here for but it's what are we going to take the public dollars and use them towards. So as I read through all of the TIP' information and policy information, this being a redevelopment district, we're looking at an expansion of an ex/sting business which is exciting for the community. Is that the fight place for public dollars and TIF dollars. It's not within that realm 0fredevelopment. We're looking at an ugly building that's sitting here. If we step up to the plate and do something with that versus feeling that we have to commit to a 14 and a 22 year commitment of the one chunk being the $665,000.00, and the $1.4 million, that's an extravagant investment of public money into an area, but that's not what the public has had the vision for it. We're straying from that. We're spending their money on something that wasn't envisioned for. Just some of the questions that came up as I was comparing TIF policies, this area, the vision of Chanhassen. Maybe I'm less impatient because I haven't been sitting up here seeing this property. I Wasn't involved in the first one and looking at the downtown area, I'm looking at all the things that this community needs, wants, should have that TIP' could go.to because they're not here, and we're looking at should we be making the business decision to finance the expansion of a business? That's not what we're here for either. We're not to be making those types of entrepreneur type decisions. But again, just a few of the things that I hit as I was going through that, They seem in conflict. You know definitely wanting businesses in town to succeed. But that's a business purpose. That's private, not public. Boyle: Some good points. Thank you. Mancino: Well I kind of want to build on that and I'm not really...just because I think I feel like a lot of the other members on the commission and that is that, I really do believe in redevelopment and I believe in the very first point that we have in the new TIF policy which is compatibility of the proposed project with the city's overall development plans and objectives. And there's no question that this area has been a focus for the Highway 5 and for the city council. As we on the planning commission saw this project in '94, so it has been a focus for redevelopment and committing dollars for the project. So I am not philosophically opposed to using TIF for some particular spot redevelopment. At all. Although I want to caution us from what something that Councilmember Jansen just said. And I kind of smiled because I hadn't thought about it and that is in this area, and this is a major redevelopment area that Clayton has talked about and that we can see is, and if you don't mind I'm going to get up .... to make sure that we understand that as we...that hopefully the rest of this will be developed too. Soon. And it is...are we ready to be committed to take the same thinking and philosophy over to this area too.. . Boyle: Do we dare not do that? .. Mancino: So you know I just want to put that on the table that that is something that you know . hopefully in the next few years that we'll be looking at too and philosophically where do we come down as an EDA as far as using TIF. ' ' Economic Development Authority - January 28, 1999 Boyle: In other words you feel maybe we're s~ a precedent onithis one? For let's assume an office building does come, and they come in and they want TIF. Well you gave TIF here. You give here. Hey, each issue is new. I don't believe this sets a precedent. I think the past .comes . more to this. Senn: ...from what she said, you have to listen to what she said. On a pure pre, n_ ise, philosophically is redevelopment, okay. If that's the premise that you're deciding this on, then you are philosophically saying that you're going to continue this... Boyle: I don't agree. Senn: ...for redevelopment purposes... Engel: A person can change their mind. Mancino: That's what I'm asking because. Boyle: Philosophically you're saying. Mancino: Yeah, philosophically and again I'm not trying to, if this is an eye sore, you know these two buildings are eye sores because now we've got, we've got everybody down here. We're using this road, etc. I just want to make sure that we thought about it and we all feel comfortable with it because again the same argument for the eye sore could be down here. Engel: I think that goes without saying. Boyle: Can I just make a comment there? Let's just assume that this doesn't go in and another use comes in and they request some assistance. Do we say cops. I'm sorry. We're going' to wait another two years because you can't afford it. We:re going to hold fight. We're going to hold tight because we're not going to give TIF assistance any more for comm~ development. And we don't care what kind of business you got in here, we're not going to give it. Is that a fair philosophical assumption? Senn: Well there is a philosophical assumption that says development will occur regardless of what you throw at it, yes. But it's a matter of time. I mean Byerly's Wanted to be in Chanhassen regardless of whether we subsidized it or not.' They got kicked out of several other sites. It was the only one left, okay. So you're kind of kiddlnE yourselves if yeu think it wouldn't be, okay. : But I mean essentially you have to ask yourself the question What's the premise you're doing it on and how big, or how deep are you digging your hole? If you go with a project like this on a pure premise of effectively redevelopment, which is the only premise that appears to me you can go on. Then you go down the way and you say but we're going to look at this one differently. I don't know how you're going to do that because (a), it's going to be redevelopment and in all probability it's going to be something other than something. that's going to produce nothing more - ' than a bunch of minimum wage jobs. Which this project's 0nly doing. There won't be a single job in that place that's not minimum wage probably. : Economic Development Authority - January 28, '1999 Mancino: Well I just want to make sure we don't"go' from one ex.ti'eme to the other. Say no redevelopment that we're using T1F or all redevelopment that we're using TIF. Engel: I want every project on it's own. Mancino: And every project on it's own and talk about that for a few minutes because I don't want us to get into again going to the extremes"on either. I mean I think that's a good conversation to have .... those things that it must bring the city that We'feel TIF should be used for. And again, because this is going to come up again, whether it's just, you know we're talking about extremes fight now so I'd like to talk about some Of those gray areas and why even this one in particular is important. Engel: And I just wanted, this body by it's very nature is fluid. It is going to change so whatever long term policy we would put in place is really going to be subjected to the thinking of the people sitting in these chairs the next time One'comes up. So by default they almost live in a case by case basis. So philosophically I love that. I think the long term vision, something for the city. That's great. But the fact is everybody that moves into these seats is going tO. look at what they've got and they're going to decide based on the way they feel about it right now. Regardless of what the policy is. Jansen: Making comment to that, as one of the new kids sitting up here. Prior to this meeting the reason that I went back on all of the history and went back to the Vision 2002 was to make sure that I don't want to implement a major change. That's not why I'm here. I'm here because there's a vision and there's a course that's being gone down and I need to make sure that I'm on board with that and one of the things that as an EDA that you've done recently is you've changed your focus and so I'm getting on board with a new focus and now this project's coming along and to me it's out of sync with where your new focus is. I'm trying to get myself onto the new course and you've got a transition going on here: Because I'm looking at these 2, 3 year projects. The hotel expansion and the Timber Lounge and those to me are a better comparison to this project. So I look at the 3 years and the mount of money that went into those compared to 14 years and 22 years and it's wow. Engel: See and I look at it, and I don't want to use the word utopian because that denigrates it but it's the only word I can think of for now so I'm going to leave it there but it's not that bad when I use that word. I mean I look at it from a reality perspective. Is it better or is it worse7 And regardless of what we think, we might wait another year. We might wait two years. The next one doesn't quite do it for us. Maybe it's three years. 'How many years has it been there7 207 257 I don't know. And I've watched these guys come up here over the last couple years, I don't see anybody nipping at their heels to grab .this parcel.of land out from underneath their feet and snap it up and do a better deal. I'm kind of waiting to see the next drawing, I haven't seen one yet. It tends to tell me that there's some reality as to what that thing can viably support and what people are willing to put into it. If somebody had another deal on the table and was coming right on the door behind him, I'd be willing to look at it. I've been waiting two years., I haven't 3'/ Economic Development Authority - January 28, 1999 seen it. They don't own exclusive rights to'redevelop in Cha~sen and i don't see anybody stepping up with another offer. -. · . Senn: Mark they haven't been able to develop in two years because ofbankruP.~. .. Engel: You know what, that's all part of the deal Mark. That's what I was saying.. Senn: That's not part of the market. When you're asking $2 million from each property trying to bring it down and then... · . Boyle: Vemelle, you have some eomment~.' Wo~id you like to?" ' Vemelle Clayton: ...the bankruptcy that has kept this from being sold.. Lots of reasons, mostly economic and. Senn: Vemelle, okay. If you want to get up then le~'s debate it because when a thing's fled up in bankruptcy, when there's judgments against it, when the security position for closing on it, you can't sell a piece of property. If you can tell me .any differently there as a professional real estate person I'd like you to put that on the record...how much you .know 'about the real estate profession. Vemelle Clayton: I'll put it on the record. I'll speak slowly enough so that what you say can be on the record too. But I'll be happy to put it on the record. This property, has not been in bankruptcy that long. We spent a lot of time before it went into bankruptcy trying to get it sold. We had problems getting enough money generated on an income stream on'the...to get any kind of a loan. That was a problem. Senn: ...security interest. They were in default on. That was the problem. Vemelle Clayton: That's not true. He had the money. Senn: We were the one who had the security interest The City. They were in default Vernelle Clayton: We can go back and go through all the ~ents that we had and what you're saying isn't true. Plain and simple. Gerhardt: Mr. Chairman I'd just like to add one other point. I'm not trying to skew anything · here but you know there is, could be other potential users that you might not want there other than movies. There are other permitted uses in the area that might go in there that are less attractive than a movie theater. So that is also a gamble.' I just want you to make sure that you understand that. It could be a lawn and sports shop:. It could be a big tobacco store. You know other things like that. Just so you understand that you're weighing what you see here .against something in the future which might be something that you don't like. Okay. Or worse than what this is, okay. You know just don't think the next project will be better than this. You've got to keep that in the back of your mind.. " '" '. - 38 Economic Development Authority - Sanuary 28, 1999 Engel: Todd, and I'm going to answer that. I mean you're going down a path there that I think is in response to sort of a premise that's being said here that we're analyzing this use. That doesn't make it to my radar screen. This debate about a movie theater and whether we need it or not and whether we should subsidize the expansion of an existing business. That doesn't make it to the radar screen in my opinion. It is a gigantic, it is a huge improvement over what we presently have. That's the bottom line, in my opinion. Again I guess I'm preaching a choir already. We. know where we stand on this. It's a huge improvement over what we already have. I don't think we should be debating the uses because we're getting into that slippery, that's a slippery slope. What's next? We can't make that call. Boyle: Yeah, excuse me Sim. Bohn: We created this new district with the idea of redeveloping it and that's What we were going to do. Redevelop it. Regardless if it's a movie theater or another bowling alley Or what it was, but we were going to rebuild. That's why we created this new district and that's what we should be doing is redeveloping. Saying that we're just adding onto the movie theater. Redeveloping the bowling alley that's going down the tubes. We are redeveloping and that's what our job is as a HRA or EDA, is to redevelop that area, And taking it from a bowling alley, an addition to a movie theater, that's what we're supposed to be doing. Boyle: I guess I would like to take, excuse me Nancy just a minute, take that just a little bit further because at the time, the purpose was designated and at one point in time there were other people sitting here that says yeah, we think that a restaurant and a bar and a bowling alley combined is ideal and we're willing to help in the financing of that. Now the fact that that's not part of the mix, you have now a movie theater with 10,000 square feet of retail space, which I think is a big plus by the way that hasn't been mentioned before and I think it adds to it. It doesn't change the scenario from where we were four years ago, or five. Mancino: Well Jim just answered one of the points that I was trying to make when I was standing up there and that is, if we as an EDA, I mean to again be proactive and decide philosophically that we want to go in and redevelop a place, let's be, and I'm ta__lk-ing about it for Don and Todd, let's be very proactive and say here is the area we want to redevelop it like has been done here. We haven't moved on into the next area. Gerhardt: At the next meeting I will bring. Mancino: Okay. Let's be proactive and say where it is we want to redevelop it and then counter to Councilman Engel, because I'm probably 360, I'm the opposite end of Councilman Engel. I do think that use is important. We spent lots of time talking about use and what kind of use we want in our downtown and what kind of services and the mix of uses, etc. It is extremely important to me along with the redevelopment and focusing in on that. So'as an EDA we should make sure that we are proactive if there is an area that we want to focus in and say with some TIF dollars we will go into partnership and be again very proactive about that and spend some time doing that and say you know why is it important to us. Don? Eeono~¢ Development Authority - January 28, 1999 Ashworth: In going along, I totally agree.with'you. And I also. agree with Councilman senn in that some of these things could have happened privately ~ I was part of the negotiations on Byerly's, the Chanhassen State Bank, Festival Foods. I cam guarantee you if they would have come in, in each and every ease, they wanted to be out on the highway. They had already, not purchase agreements but what are the initial agreements you enter into. It was because of our efforts to say we want you in downtown that we brought Byerly's downtown. Because of our efforts we could put Chanhassen State Bank who also had an option on property out there. Similar with Festival Foods. So I agree with'you, we could take and ensure that this property gets developed in the way that we want it developed. :' Mancino: Then, may I ask more7 Did you want to go on7 Boyle: No, but what helps us assure that that happens the way we want it to happen, and that's utilizing TIF, is that correct? Excuse me, now you earn Mancino: Let's figure it up front. One of the very important reasons that Ithink we use TIF in a redevelopment is for the quality of the facility to be built, etc, and I have concerns about that I want to make sure that if we do go ahead with'this, that the planning commission and some conceptual concerns that I have with one, quality, of materials. I have some very big concerns about when the movie theater stops there, that there is, in the original on the east side of the movie theater there were supposed to be two retail That was original, original of '94. So again it brought energy around that comer and again would focus it in going up the alley way into the hotel and Timber Lounge. It would be, bring energy around the Bloomberg retail. So I'm very, very concerned with that comer and I thinlc a big lesson that wc'vc probably all learned is doing these things in phases and not knowing what's going to go on next. Because I think that the boardwalk just stopping now from what I can see is a concern again in materials and then how we deal with that whole eastern part is a very big '.concern for me. And it to me doesn't have the quality. I don't see it meeting that quality test which ~ if it goes through I would like to see come back to the EDA to make sure that it does do that. After going through planning. I don't think we need to sit here and do that at all but a/t. er going through plmming. Boyle: Do you feel Nancy then that thoro is more control if there is TIF involved than if there is not TIF involved? Mancino: Well you know. Boyle: Control meaning we have more control of the quality and the appearance, 'etc. Mancino: Well we can decide to have tl~ or not to som~ degree. Thi~ is in the Highway 5 corridor so there is a lot of control because it is in the Highway 5 eorri~ already. I mean architectural materials, etc. So as far as 1 look at it is the use of TIF goes even. over and above the Highway 5. But then again I don't think it's fair for an applicant to'then go to planning and say, don't worry about TIF. They do need to know that we are involved with the project and that we do expect and we have it right down here, that it has to meet our high quality. '- Economic Development Authority - January 28, 1999 Boyle: Could we assume that the quality of the materials and the appearance might not be as good if it does not have TIF? Mancino: Well you know, I don't know. Obviously, and I said to Bob...you know he did not want to use EFIS because he didn't think that the material would hold up and then we did the pre, cast and now we're back to EFIS and so I'm kind of, you know we went back and forth on that. So I'm concerned about quality of materials, etc and that's something that I want the planning commission to look at. Jansen: And Mayor and Chairman, I did ask that question of staff as one of my concerns, realizing that there was a vision for the entire project and they did go and they referred to the Highway 5 corridor study and in getting back to me said, that because of the parameters withir! that study they felt confident that however this project comes to them, 'they will be able to guide it because there does need to be the consistency. And that in fact it would give the, if they went with the Highway $ corridor ordinances, it would give more green space.to that area so it changes it some. It actually in some of the ordinances it's a fitch stricter than we're actually applying with the current facade, parking and boardwalk parameters. That was staff's feedback to me. Mancino: Well I would like to make sure that it at least, you know it fulfills the Highway 5 corridor and then builds upon that. And I think that (hat's how we, and I think a lot of us saw and still feel that the Richfield Bank that Bob was involved in and the new, the Byerly's complex, and the Chanhassen Bank are just... (There was a tape change at this point in the discussion.) Mancino: ...I mean I think that that's a key component of it. I kind of feel like we have, we're pretty sure about parking but we'll want to make sure that that happens too. Engel: My understanding was that they were prepared to go to that'route anyway but if you want to. Senn: We probably should put it into it. Engel: That's fine. I don't think they have any problem with that. I'll add that. Boyle: How would that be worded again, I'm sony. Why don't we. : Gerhardt: The tape wasn't on so if you could ju.st repeat it one more time. . Engel: Again huh. Okay, I'm going to be briefer this time. Move approval 0fprivate redevelopment agreement for Phase II per staff's' details with Chanhassen Cinema, modifying existing private redevelopment for Phase I and add that it's contingent on architectural approval by the EDA and road and access approval as well. Access from the east per Mayor Mancino's request. And the retail is included with the movie as one development, not phased. Period. 41 Economic Development Authority - January 28,· 1999 Boyle: The motion has been redefined. May I have a second to the revised motion? Sim continues to second. Is there further discussion? Engel moved, Bohn seconded that the Economic Development Authority approve the ' Private Redevelopment Agreement for Phase H (Movie and Retail as one development, not phased) with Chanhassen Cinema, LLC and their request for $1,389,854 in city assistance and modify the existing Private Redevelopment For Phase I (existing movie) with . Chanhassen Cinema, LLC and reducing the Limited Revenue Note to $1,066,3i9 contingent approval of the architecture and access from the east by the EDA. All voted in favor, except Senn and Jansen who opposed, and the motion carried with a vote of 5 to 2. APPROVAL OF BILLS: Boyle: That brings us up to the bills. Time to pay the bills. May I have a motion to approve the bills as listed? I don't have it. Labatt: I'll make a motion to approve the bills. Boyle: Before that, are there questions regarding the bills to sm_fi? Engel: None here. Boyle: Linda, Mark, do you have any questions on the bills that you'd like to address with staff at this time? Jansen: No. Boyle: Steve7 Jim? Bohn: No. Labatt: No. Boyle: May I have a motion to approve the bills as presented. Labatt: I'll make a motion to approve the bills as presented. Mancino: Second. Labatt moved, Manclno seconded that the Economic Development Authority approve the bills as presented. Ail voted in favor and the motion carried. -- · · 42 Economic Development Authority - January 28, 1999. ECONOMIC DEVELOPMENT AUTHORITY PRESENTATIONS: Boyle: We do have a Economic Development'Authority presentations and we're going to let you raise a question about your meeting nights, Mayor if you would pleas e. Mancino' Oh, okay. I have a question for the members. I don't know if it works with everyone's schedule but I recently volunteered to be on the Southwest Transit Commission and they have their monthly meetings the third Thursday of the month so I am wondering if we could possibly change our meetings to the same time but the fourth Thursday of the month? If that works for people. Engel: No objections here. Bohn: Works for me. Boyle: I have no problem. Labatt: No problem. Jansen: Fine with me. Mancino: Is that fine with you? Jansen: Yes. Engel: So I take this needs scheduling changes. Mancino: Councilman Senn, does that work for you? Boyle: Okay, Todd. We will officially change, we will change the official meeting date to the fourth Thursday of each and remain at 6:30 for the time being. Is that? Engel: That works well. Boyle: Is that okay? I mean does anybody want to go to 6:00? No? Okay. Gerhardt: I understand that in April we've got one, we've got five Thursdays So the 22~d, everybody has that? Boyle: The fourth, is that the fourth Thursday then? · 43 Economic Development Authority - January 28, 1999 Engel: Which will still be one week always after Southwest Metro so'it won't be a problem for Nancy. Hers is always the third so as long as we just stay fora'fit it shouldn't matter how many Mancino: Thank you... Todd, what were you talking about another.project' coming in in this -. . . Gerhardt: Well Brad Johnmn has called me and wants time on the EDP; schedule to talk about the office building that they was proposed there. The MLT building. And I guess MI.,T is still looking and would like to make a presentation to the EDA regarding that proposal. Engel: MLT would? Gerhardt: First Industrial and Brad John~on~ Lotus Realty. Engel: So is MLT a part of that? Gerhardt: I'm not sure. He referenced it that MI, T was still looking so I'm not sure. Boyle: This is not MLT is what. Gerhardt: MLT would be a tenant in the building. Boyle: Oh I see. First Industrial is... Gerhardt: ...I don't think MLT wants to own the building. Engel: So Brad acting with First Industrial. Boyle: What size building are we looking at Todd? Gerhardt: I'm not sure. I haven't seen a proposal. He called me and I told him~-I said let's wait and see what happens here on Thursday night and take.it from here. Mancino: I would, I would still like to advance my'philosophy that again instead of looking at . things in phases, you and I talked about this a little bit. Or just. one buil~ at a time, we look at areas where we want to redevelop and keep thinking a little.bigger like this because. · . Boyle: We kind of tried to do thi.~ on this parcel. " · . . .. Mancino: I know and the only thing I can say is, '.as you look at, 'and this. is always hindsight. 20/20 hindsight. I mean I know that, but if the whole movie theater comply, had been you know that whole thing, just think. We could have a, I was drivir~.by it tonight and I thought gosh, you know. Put the entrance fight here, it could have been this whole side and...so again, looking at things as a whole, just not one piece. So I just thought if you had ...... -.. -. · ·.. . .." .-..- . . . . -. · . · Economic Development Authority - January 28, 1999 Boyle: Todd, when this comes before the planning ~mmission, would you let us know. I mean I personally would like to sit in on it. Not that...but if you would let us know. Tha. t gives us a little bit a heads up so when they do come back to'us, we know what has transpired and maybe cut through a little of the mud before. I personally Would like to see that. Gerhardt: ...I will make sure that Karen sends out the information on the movie theater to Jim and Gary so they can see it and put a date on there when... Boyle: We're adjourned. Chairman Boyle adjourned the Economic Development Authority meeting. Submitted by Don Ashworth Economic Development Director C YOF CHINamEN 690 Gty Cv~ter Drive, PO Box147 Cha~uen, Mim~ota 55317 H~one 612.93Z 1900 Gourd £ar 612.93Z5739 fitgineering F,~r 612.93Z9152 Public &fay Fax' 612.934.2524 Web u,u,utci, cl,,anl~assen, mn. us MEMORANDUM TO: Economic Development Authority -. FROM: Don Ashworth, Executive Director DATE: April 12, 1999 SUB J: Klingelhutz Easeme/ff Acquisition- - '- Background - In the mid 1980s, the Council approved plans and specifications for the new Great Plains Boulevard,'West 78th Street, and Market Boulevard road, utility, parking lot, etc. improvement projects. Approximately 50.parcels were identified as being acquired for either the malign or ~xpanded right-of-way. Three of the parcels involved the railroad at each of the two intersections (two separate parcels at Great Plains Blvd.). Railroads are exempt from typical, state eondenmafion powers and are notorious for'their n0~iveness. All of the crossings required 5-10 years.to be finalized (the Hwy. 101 crossing is still not complete). Activities Following Mr. KlingelhuW/Mr. Sehlenk's Pui'ehase of the Property - As noted above, the railroad crossing at Great Plains Blvd. involved two separate parcels. During the 5-10 year negotiation period with the railroad, Mr. Klingelhutz and Mr. Sehlenk purchased the northerly parcel setting up.a whole new round of legal and engineering questions. Finalize. ' g the city's right to Use this property (water, U-ail, sign~ etc.) has not been a top'priority reco~ the history of events and the fact that the two new owners needed to complete various legal/engineering activities to ensure clean rifle. However, the city attorney, Mr. Klingelhutz, and myself, believe that we cannot perpetuate problems. created by the railroad (three changes in a .ttomeys at Roger's Offic,~ has not helped the situation). Mr. Klingelhutz did own the pmpmW directly north-of the railroad property at the time of the initial project (.mid-1980s) and .we did negotiate and approve the acquisition of the e~mnd~ right-of-way across his property at a cost -. of $3.20 per square foot. '" . . . ... Current Position - The p~ed easi~nent area is'66' x 37' or 2:400 square feet Both Mr. Klingelhutz and myself can identity comparable lafid sales at $10 per square foot or more. I told A1 that I could not recommend payment Of $24,000. He agreed, but was concerned that a lower amount may affe~ the future sale of . the remainder (much larger) portion of the property. I offeaxxla compromi~. which I would recxnnmend as a potential solution to our current dilemma, i.e. Mr. Klingelhutz would donate the west~!y half of the 2,400 square foot parcel to the city and we would pay $ I 0 l~r square foot for the' easterly 1,220 square feet of the · . EDA April 12, 1999 Page 2 parcel [Note: Considering the $3,000 in attomeys/engixteering fees paid by Mr. Klingelhutz, the net mount being paid by the EDA is approximately $0.50 per square foot more than we paid to virtually every property in the mid-1980s]. .. Recommendation - Approval of the attached C_nmat Of Easement is recommended with the condition that the west half of the subject property be donated to the city and that the EDA will purchase the east haifofthe property for $12,200. The city attorney's office has verified that the property is unencumbered. ATTACHMENTS 1. Aerial photo of property. 2. Grant of Easement. g:~'ngrqclingelhutz property-e.doc GRANT OF EASEMENT THIS GRANT OF EASEMI~NT is made on this day of ,1999, by AL H. KLINGELHUTZ and MARY JANE KLINC, ELWt~Z, husband and wife, AND GERALD W. SCm.ENK and LOIS A. SCI~.ENK, husband and wife, (hereinafter referred to as the "Grantors"), to the CITY OF CHANiqASSEN, a Minnesota Municipal Corporation, the Grantee (hereinafter referred to as the "City"). WItEREAS, Grantors are the owners in fee simple of real property in Carver County, Minnesota, which is legally described on Exhibit A attached hereto ("Subject Property"); WHEREAS, Grantee desires to use a portion of the Subject .Property for the construction and maintenance of landscaping, lighting, public walkway, signage, utilities and other public purposes, which is legally described on Exhibit A attached hereto ("Easement Area"). NOW, THEREFORE, in consideration of the sum of One Dollar ($1.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Grantors: 1. F, asement. Grantors hereby grant unto the City, its successors and assigns, forever, a permanent easement for utilities, landscaping, lighting, public walkway, signage, and other public purposes, over, across, on, under, and through the Easement Area. This easement shall permanently mn with the title to the Subject Property and 68783.02 Rev: 11201~ shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors and assigns, including, but without limitation all subsequent owners of the Subject Property and all persons claiming under them. This easement shall include the rights of the City, its contractors, agents, servants, and assigns, to enter upon the easement premises at all reasonable times to construct, reconstruct, inspect, repair, maintain, remove said signage, lighting, public walkway, and landscaping over, across, on, under, and through the Subject Property. 2. Maintenance of Landscaping, Lighting. and Signage. The City shall be solely responsible for all costs of installation, repair, maintenance, removal and insurance associated with any landscaping, lighting, public walkway, or signage placed in the Easement Area. 3. Use of Subject Property. Grantors hereby agree that they will not perform or allow or cause the construction of any improvements on the Subject Property which could damage or obstruct the Easement Area or interfere with the City's access to or the City's right to construct, maintain and repair the landscaping, lighting, public walkway, signage, or other public structures on the Subject Property. 4. Termination. If Grantee allows the sign to significantly deteriorate or moves the sign to a new location outside the Easement Area, Grantor may remove the sign after giving Grantee 60 days notice of its intent to remove the sign and an opportunity to replace or repair the sign, and this Easement shall terminate upon its removal. 68783. O;~ Rev: 1/?.0/99 2 · Warranty of Title. Grantors represent and warrant to the City that they are the only owners of fee simple title to the Easement Area, and that there are no owners of mortgages, contract for deed, leases, rental agreements, occup~ agreements, or nay other enctanbrances or verbal or written agreements of any nature whatsoever affecting rifle to the Easement Area. Grantors, on behalf of themselves, their successors, heirs, and assigns hereby indemnify and hold harmless the City against and from any and all claims for loss, damage, or expense which may be incurred or asserted by Grantors or any party whose consent is required to be obtained hereunder, in connection with this Grant of Easement or Grantee's use of the Easement Area pursuant to this Grant of Easement. 6. Governing Law. This Grant of Easement shall be construed and governed by the laws of the State of Minnesota. IN TESTIMONY Wltle. REOF, the Grantors hereto have signed this agreement this day of , 1999. GRANTORS: A1 H. Klingelhutz Mary Jane Klingelhutz Gerald W. Schlenk Lois A. Schlenk 6871~3.02 Rev: 1/20/99 STATE OF MINNESOTA COUNTY OF The foregoing instrument was acknowledged before me this day of , 1999, by A1 H. Klingelhutz and Mary Jane Klingelhutz, husband and wife, Grantors. Notary Public · Gt2The foregoing instrument was acknowledged before me this day of , 1999, by Gerald W. Schlenk and Lois A. Schlenk, husband and wife, . DRAFTED BY: Campbell Knutson Professional Association 317 Eagandale Office Center 1380 Corporation Center Curve Eagan, Minnesota 55121 (612) 452-5000 AMP ~AUDRE'Y JEAN I:LEISCHMAN orl ICIAL (.:()MM. # 10bTg02 Nol,'u ,/ Public · CaliJ~ma '"~ RlVtR$1l)[' COUNTY My Commission Expire.'~ 68783,02 Rev: 1/20/99 to Legal Descriotion of Subiect Prooertv: That part of the Northwest Quarter of the Northeast Quarter of Section 13, Township 116, Range 23, Carver County, Minnesota, described as follows: Commencing at the northwest comer of said Northwest qua r of the Northeast Quarter, thence on an assumed bearing of South 00 degrees 27 minutes 31 seconds West along the west line of said Northwest Quarter of the Northeast Quarter, a distance of 233.81 feet to the point of beginning; thence South 87 degrees 40 minutes 34 seconds East, a distance of 297.36 feet; thence South 03 degrees 15 minutes 07 seconds West, a distance of 87.54 feet to the northwesterly line of the former Chicago, Milwaukee, St. Paul and Pacific Railroad right of way; thence southwesterly along said northwesterly line on a non-tangential curve, concave to the north, having a central angle of 09 degrees 29 minutes 50 seco~, a radius of 1809.86 feet, a distance of 300.00 feet to the intersection with the west line of said Northwest Quarter of the Northeast Quarter; thence North 00 degrees 27 minutes 31 seconds East along said west line, a distance of 146.05 feet to the point of beginning. AND All that part of the former Chicago, Milwaukee, St. Paul and Pacific Railroad Company's real property in the Southwest Quarter of the Southeast Quarter of Section 12, and in the Northwest Quarter of the Northeast Quarter of Section 13, all in Township 116 North, Range 23 West in the Town of Chanhassen, Carver County, Minnesota, lying northwesterly of a line parallel to and distant 50 feet northwesterly of, as measured perpendicular to, the centerline between said Railroad Company's existing main tracks, more particularly described as follows: Beginning at the intersection of the west line of the Northwest Quarter oi' the Northeast Quarter of said Section 13 with a line parallel to and distant 50 feet northwesterly of, as measured perpendicular to, the centerline between said existing main tracks; thence northeasterly along said parallel line, a distance of 1450 feet, more or less, to a point on the east line of the Southwest Quarter of the Southeast Quarter of said Section 12; thence northerly along the east line of the Southwest Quarter of the Southeast Quarter of said Section 12, a distance of 200 feet, more or less, to a point on the northwesterly line of said real property; thence southwesterly along the northwesterly line of said real property, a distance of 390 68783.02 Rev:l/20/90 feet, more or less, to a point on the south line of the Southwest Quarter of the Southeast Quarter of said Section 12; thence westerly along the south line of the Southwest Quarter of the Southeast Quarter of said Section 12, a distance of 80 feet, more or less, to a point on the northwesterly line of said real property; thence southwesterly along the northwesterly line of said real property, a distance of 1060 feet, more or less, to a point on the west line of the Northwest Quarter of the Northeast Quarter of said Section 13; thence southerly along the west line of the Northwest Quarter of the Northeast Quarter of said Section 13, a distance of 75 feet, more or less, to the point of beginning. EXCEPTING THEREFROM that part thereof which lies east of the east line of the west 401.26 feet of the Northwest Quarter of the Northeast Quarter of said Section 13. Legal Description of Easement Are~: That part of west 66.00 feet of the Northwest Quarter of the Northeast Quarter of Section 13, Township 116, Range 23, Carver County, Minnesota, that lies north of the south line of the north 413.64 feet of said Northwest Quarter of the Northeast Quarter and south of the northwesterly line of the former Chicago, Milwaukee, St. Paul and Pacific Railroad. 68783.02 Rev: 1/20/~ 6 1099-S - PROCEEDS FROM REAL ESTATE TRANSACTIONS CAMPBELL KNUTSON, Professional Association 1380 Corporate Center OLrve, Suite 317 Eagan, MN 55121-1200 FED ID# 41-1562130 TRANSFEROR'S NAME(S): ADDRESS' SSN# (IF HUSBAND AND WIFE-ONLY 1 SSN NEEDED) IF PARTNERSHIP -- FEDERAL TAX ID// 1, e DATE OF CLOSING: / / GROSS PROCEEDS $ 3. LEGAL DESCRIPTION: , TRANSFEROR RECEIVED OR WILL RECEIVE PROPERTY OR SERVICES AS PART OF THE CONSIDERATION? 5. BUYER'S PART OF REAL ESTATE TAX- $ t~87~.02 Rev: 1/20/99 7 Thomas J. Campbell Roger N. Knutson Thomas M. Scott Elliott B. Knetsch Suesan Lea Pace CAMPBELL KNUTSON Professional Association Attorneys at Law (651) 452-5000 Fax (651) 452-5550 January 26, 1999 Joel J. Jamnik Andrea McDowell Poehler Matthew K. Brokl* John F. Kelly Matthew J. Foil Marguerite M. McCarron Mr. Al H. Klingelhutz 8601 Great Plains Boulevard Chanhassen, Minnesota 55317 Re: City of Chanhassen Easement Dear Mr. Klingelhutz: Don Ashworth asked that I send you the enclosed Easement Agreement proposed for your property located near the northeast intersection of West 78th Street and the former Chicago, Milwaukee, St. Paul & Pacific Railroad right of way. According to a title report prepared by Dakota County Abstract, Gerald Schlenk also holds an interest in the property and he and his wife will also need to execute the Easement Agreement. Please forward this Agreement to the Schlenks for their review and execution. Please contact me as soon as possible with any questions you have regarding the Easement Agreement. Very truly yours, CAMPBELL KNUTSON Professional Association Andrea McDowell Poehler AMP:cjh Enclosure Suite 317 * Eagandale Office Center · 1380 Corporate Center Curve · Eagan, MN 55121 Date 1999 TO WHOM IT MAY CONCERN: Any proceeds received from the City of Chanhassen concerning the Grant of Easement to the City of Chanhassen and now owned jointly by Gerald W. Schlenk and Lois A. Schlenk and Al II. Klingelhutz and Mary Jane Klingelhutz shall be deemed as belonging to A! I-L and Mary Jane Klingelhutz as if the property were already divided. Lois A. Schlenk State of (~t~,~'-'. ) County of ) foregoing instrument was acknowledged before me this t day of r~ ,1999 by Gerald W. Schlenk and Lois A. Schlenk, husband and wife. OMM #10~7902 ~ No~ Public - Cahf~n,a 1.. CffYOF 690 Ci{y Cv,tr irive, PO Bo~147 Chapel, Minnr, ota 55317 Phone 612.93Z 1900 Gvitral Fax' 612.93Z5739 .E~tlineering Fax' 612.93Z9152 l~tblic Safe. lax' 612.934.2524 ~b wu,u: cl. chanfiassen, m,.,s · . TO: Economic Devel~ent Authority · . .. FROM: Todd Oeflmrdt, Asst, Executive Director . . . DATE: April 12, 1999 SUB J: Consider Assigning the Oary Kirt Loan (I-lanm Facility) to Gary Brown .- Back in 1992, the HRA purchased the I-Ianus facility from Gary. Kirt to allow the HRA to redevelop the site. Included in the transaction was a repurchase agreement with Mr. Kirt and the terms included the HRA giving Mr. Kirt a promissory note with a principal value of $820,000 (Note: This was increased from $795,000 to $820,000 as incentive to reroof the building), interest rate of 10% amortized over 30 years and a balloon paym~t'0f 100% of the outstanding note after 15 years (see Attachment #1). The HR executed the repurchase agreement with Mr. Kirt in February of 1998. Since our closing'on the propo~, .Mr. Kirt has been negotiating with Mr. Gary Brown (tenant in the Hanus ~W.)'regarding hi~ option to purchas, e bin portion of the building and validity of his leas~. This past February of 1998, Mr. Kirt and Mr. Brown have cxrme to terms With each of their respective claims. Howev~, this'agreement also involv~ some concession on behalf of the EDA. 'Charrently, Mr. Kirt's .promissory note does not allow for the assignment and assumption of the ~ mortgage. - · Mr. Kirt and Mr. Brown'are reques.' ting the following'action: :- ;. ; -. · s · , . 1. EDA's consent to an assignm.ent~and assumption of the note and outs/an 7) to Mr. Brow ' - .. :. · . · . $25,000 of option money/bat EDA collected from 1993.to 1998 aS.' part of 'Mr. Brown's lease which called for $525 of the monthly rent share be paid towards the option to purc .base. Mrl Brown's portion of the building (see Attachment $f2):' . . · · Reduce the balloon payment of the m~rtgage from 15 years to 5 years and a deduction in the interest rate Chang, cl..fix)m fixed rate of :.- . .. - . : . . EDA April 12, 1999 Page 2 10% to the follo .wing: ' ' l't year - 12% year - 10% year - - '8% year - 6% year - 4% RECOMMENDATION' Average 8% . · Staff would recommend approval of the consent'to an assi~tmment and assumption of the note and outstanding mortgage to Mr. Brown at the same fixed rate of 10%, with the balloon payment of $781,537.83 due on May 1, 2004. The EDA also agrees to pay Mr. Brown the $25,000 of option money collected during our 5 years of ownership. ATTACHMENTS 1. Amortization schedule 2. Brown's lease 3. Letter from Mr. Kirt's attorney dated February. 2, 1997 4. Purchase agreement dated October 9, 1992 5. Repurchase agreement dated October 9, 1992 6. Promissory note dated December, 1997 7 Mortgage dated December, 1997 g:~tmin~tg~mus idrt to brown-e.doe Amortization schedule Payments to be made yearl~ Principal '~.-:.:'~820~ 000...00::~. Interest rate -!:!:~-~:ii::.:~!~.~.:.?.;.~t 0; .00% Years Pymt Amount 88,984.98 yr beg baJ ~rnt int pd end bal 1 820,000.00 88,984.98 ~,000.00 4,994.98 815,015.0:) :) 815,015.0'2 8~,984.98 81,501.50 5,48~.48 809,~q1.~4 :3 809,5:31.54 8~,984.98 80,95,.'3.15 6,0:31.8:3 80~,499.71 4 8C~,499.71 88,984.98 80,::349.97 6,6:35.01 '796,864.70 5 796,8r:~.70 88,984.98 79,686.47 7,:)98.51 789,5r::~.19 6 789,566.19 86,984.98 78,956.6:) 8,0:)8.:38 781,5:37.8:3 7 781,5:37.8~ 86,984.98 78,15:3.78 8,8:31.:)0 8 77:),706.6:3 86,984.98 77,:)70.66 9,714.:3:). 76:),99:).:31 9 76:),99:).:31 86,984.98 76,;799.Z3 10,685.75 75:),:306.56 10 7,5;?.,:306.56 86,984.98 75,:):30.r:d~ 11,754.:32 740,55:).:)4 11 740,55:).~)4 86,984.98 74,055.22 1:),9:~9.76 7:)7,62'2.48 1:) 727,622.48 86,984.98 7:),76:).:)5 14,:)22.7:3 71:3,:399.75 1:3 71:3,:399.75 86,984.98 71,:3:39.98 15,645.00 697,754.75 14 697,754.75 86,984.98 69,775.48 17,:)09.50 680,545.:)5 15' 680,545.:)5 86,984.98 68,054.5:3 18,9:30.45 661,614.80 16: 661,614.80 86,984.98 66,161.48 :)0,8:):3.50640,791.:30 17 640,791.30 86,984.98 64,079.1:3 99,905.85 617,885.45 18 617,885.45 86,984.98! 61,788.5.5 25,196.46 59:),689.0'2 19 59:~,689.0:) 86,984.98 59,:)68.90 :)7,716.08 564,97:).84 ~ 564,97:).94 86,984.98 56,497.:)9 :30,487.69 5:34,485.25 :)1 5:34,485.:)5 86,984.98 5:3,448.5:3 :3:3,5:36.45 500,948.80 22 500,948.80 86,984.98 50,094.88 :36,890.10 464,058.70 ~ 464,058.70 86,984.98 46,405.87 40,579.11 42~3,479.59 24 42~,479.59 86,984.98 4:),:347.96 44,6:37.02 :378,84:).57 25 :378,94:).57 86,984.98 :37,884.:)6 49,100.7:) :3:)9,741.85 28 ::~9,741.85 86,984.98 :3:),974.19 54,010.79 275,7:31.06 27' 275,7:31.06 86,984.98 27,57:3.11 59,411.87 :)16,:319.19 28 :)16,:319.19 86,984.98 :)1,6:31.9:) 65,:35.'3.06 150,9r:~.1:3 28 150,966.1:3 8~,984.98 15,096.61 71,888.:37 79,077.76 ::30 79,077.76 88,984.98 7r907.78 79r077.:)0 0.56 I :),609,549.40 1~789,549.96 819,999.44 Amorl .! ' ~,{n T.~n.qm in ~n,l. nnd nnternd lnt. o thin ~"1;11 A unc~rntlon, n~ Gem.or, nnd _ O~K~ ~lZ~ ~ ....... nN Tenanb. I ~ ~e0 eq,,nc~ feet at~nelmd hereto end ln~r~rated herein, ]prated n,t~' beLn; e ~rt ~ the p~{l~q kn~ hy the Iddree= o~ · ~ ~'T ~ ~ ~.' ~ , , , City o~ ~anhnnn~n, Co~ty o~ Carver, ELate or, HLnnelo~e. . ~. T~N. ~e t~ o~ this /,same will ~ for a ~rJ~ o~ ~ y~ar(m), c~epel.g a~ of the _/er day o( ~~ . . 9~, to te~mina~e ~ the ' the ~mi.~ Pgemineg to be used tot any other ~~ee without the ~ior ~n.ent o~ , Tenmn~ nh~]l nob d~ nc ~lt anybh/ng to ~ done in or a~ut the D~eed PxiMting nr .vailmhl. ra~M ue fi~e ur u~har inmurnncM u~ ~ Buildi.g o~ any. o~.ite c~tente or caune e~neellabion ol any innuranee ~liey ~er/ng the Putlding or eat ~rt thhc~ o~ any o~ it ~tentn. ~nant ehall ~t do .~it anything to be done in or e~ub '~O'(~mile~ Premises ~i~ viii'in any Wuilding or in~ure or annoy thm'~;or.~i~o~'all~.the ~i,~=~iel'to ~ ' used f~ any ~~r, ~ral, un~lwfUl,"~-~( ~e~i~able ~r~im'~t'~ll. " '' ,.~ ~ : t ,,'/il,'. · . . . , · ~ "1 . , · 7. m,J~ --- " ......... --~'~:- -- '. , . ' ,.' ~'~l. - ~n,nt.lt the ~-n,nt in g~ re, ir end in ~, . .leon end tent.arable ~lt/~ e~ et .. re~esented ~ ~lord. · .. , re~,lntio, ,u~ In for~ or vhluh ~y harealteF ~ enn~t~ ~ ~lgeted. ~lurd ~,rr~nt. to ~,ant ti,et ~o ~i,~ Pr~loea, 1, theiF .iotl~ 8tara, h,t vlthout regard to th~ t,.~! for whiuh Tenant viii ,.. the ~ll~ Pr~io~ 1 {~ec~ding ,entenue o[ thio ~ragra~, . Tenant' hrp~ a~e~, the' Omlu~.ln their ~dltion exinting RI of ~h{ date :of exem, tt~ her~l, ~}~-,'to:~.. ,, , . ' deflulo~le. ~ et the time bi · a~e~a~ o~ the U~l,ed ~~0 . ' ; :"{,.. : ..,~ ~'.' I,. .{ ', ,~ 'l_, "{'t ': . :'. ' , '-: ':ii, "~ M,. t,,,,t' ,ii ~'{~titiH-i t, the forth on'Bxhib/t'O,-%whiuh.:.uee end I~t1' lhili ~l ~ploy~fO' ~l~l,"~l~' invi~e.,~ ~f~uoe Ohall'.~ ~' vith '.'~et~f~snte, 'levitiCal '0~~ ~l~l" and |l ahd". the exterior I~t the building, I-- Lessor shall mnlnt".alfl fire aff~J axbsndea, w2varag® innuranee on the ~,1,,-. -..~ 1~..ale ex.nee. .... ~ ~'~,;-.V"~:V,, .~, ',:,~ ';,.~.'h~.';. . .'~ ~, · . '.~ t ~.. ' ' · ~1.~.,. '" ~'~' ' . '" .'. ( ~. n, g~ ~di~l~:.n.~ vhen tented~ .~Lna~f~az. and tear and 1~..~ . ( t:' .. ~..~,&.; " ' '"' '. . ~ , '.~. ~o any established building sign .~8~nrd~ity sign ordinaries l~ ~ m~ ~ ;,,',~ ~,:~{,~,~ · ~ , IS. 'prge~~~. Venan~ agrees ~lthi. ten (10} days after r~ee~ 't~.tefor~ by ~ssor to eweeu~e ~n re~rdab~e fern a.d al.lives to ~eeor' effect, (b) ~he date oF ~,neeMfl~ of the' term of this ~ame, (a) tha~ m~ t' ...' : is ~id eur~en~ly ~tth,,~ any off-se~ ~ defense thereto, (d) the ~~ rent, if o,y, ~ld J, advance and (3}'tha~ there are no un,tH defnUltl ~' .. ~..or o~ .~a~ing ~hone claimed by Tennn~, ' ' 16, ATT~lfftt3Tt'. Tenant shall, in ihs event nny proe~.~.rltng, are bro~h~. ~,rehqler u~n any Bush foreclosure or sale and re~nlse such' r aser il the .. ~sno~ ~dez khan ~ane, ', ' l~emlned Pr.mi... for the co. duet of it. buineon or fre~ any autlvLty, ~ork or other khtng d~e, ~rml~ed~ or suffered ,by the Tenan~ in a~ a~u~ ~he . · ,,lldlng, and fr~ ant ~ Blt ,1alms arising fr~:any.bteaeh oc defaut~ in the ~rfo~n~ et nay ~bligntl~ ~ Tennn~en ~rb'~o '~ I'~rto~ed ~der ~he te~s at thio ." ~ployee, gue.~, or legatee ~x~nses~ and liabilities in,sired'In "~,.o~t~' vl~h nny ou~ slain any .. },~'.!}' ~ ne~l~ oe pro,ending brough~ '[~Jl~W]~oakisflut~rf.to ~ndlord~ Tennn~ hereby, liMas,alt rink of de.go-go ~tty.' l~]lo~her.~s. ~.~lordOt .egtlgenee~ a.d ,-Tenan~..hereby .sAve. at~ alaAM~.An' .,i, I " "l ~LJi~!IA, ..1~,'.~:' ,t : ' · · ~'~: ', ' ,~'" ~"..' ar y; re.siting, tr~ tfirll e~pl os/on, tailing tli o_' fir' till...,} ;:t~,'['l ~ vnll~rlngs~ ;~'~".{ or tala ~/eh or Dl~/ng ~rks therein d I~ ! ~ S t f "' ~, · ~ ., .~j . · i ee · . e · Stl,~.r place or resulting from any other eauae ~hatnoever, unless amused ~. the , negli~n~ o~ ~l~d, its mg~tm, wervmn~e~ ~%~em. ... , ,. .. ' '~ ': ' ' "'" 'lilt1..Il ' .' ' 'i ' · · e ;.' ' ~.an~ shall 9t~e ~p~ ~i~ ~ ~1o~ In sane of ft~ ~ ~~'.. * in the ~nleed Pr~le~ or in the ~lldl~ ~ of defeats t~rein fi~uree or ~i~.~ theruf, -' ' '. ' :- - : 1~ ' ' ' ' , . ' · · , ..' extenel, e thereo~0.~vid~ t~e mrtvo~ ~ true~ee n--d In aid oF trust de~o onax~aVr~ ~ re~iue tho ~aoe of ~nant In t~ or t~etee ~y elect to hay. this I~aeo ~ ~lor lien to Ate ~t~gee ~ ~ of tru.~; a~ In the event of n~ elea~i~ a~ ~ ~tlff~tln ~ M ~rtvngek or trustee to ~nn.~ to that effe~, thte bag. shall ~ ~d ~lor ex-~ute vha~ever /natr,JMnte My ~ roqulr~ to ~arry out the Intent of thio ii,': · · all or any ~r~ of the premises by the ~nan~ An ~hlblted. .. , ~. DEFAULT. If Tennn~ shall ~raul~ An any o~ J~e ~lig4tl~e ~ler thio ~ane, a.~ u~n failure ~o ~,re that default v/thin ten (10) d~ye fail.lng the vri~ten ~Jce thereof ~, th, ~ane of ~l~id ~n~, ~ vt~hin ~y .(~0) days of vritten .o~l~ ~hereoF An ~he e~n~ u~ any uther kin~ of default, ~geor shall have the ~i~ o~ exer~el~ any ~e or rare of the Sell.lng reMdieot la) Peelarlng tl, I. l~.ase terminated vithmtE release oF liability of the T*.nan% for the ren~ due for ~o reminder o[ the term w damages for breach of this ~aeel . lb) Aceeleratl~ o~ rents due ami ~yabt. esr tho real.er of ~ ," , j,: tern a~ declaring ~e om to M,l~iotely due and ~%abiel ., 'l II -0 .. - .- '~ :~' ~l .."~, ': lo) Re-entry u~ the ~niee8 a~l~ to law vith~k forfoitu~ · . .,.,,.... . (~ ~. .' . . t' ~'," ~ ~ ~ ~J~ ~]~L..~' '~ ~ (dj' Ll~lgo~i~ for ~11~1~ of~,~tO~e~ - .~ :.:-~-~:~:.::~ -~' '~ ~'~',- ~%~'(e) Any oth~ rlvhto '~- .re~i6of.~l,gal ~ equitabte,.e~lleble ~: .'..:. · .... ._ -.. .., .; . . _,. · . . . - .. .{,.~. . . . . ., ,...., , J" "' In the event of 8elaUlt ~ ~nant" bare.era ~.nr ~all'~b ntltl~ ~ ~ ~,~. romper ettorney'o fees a~ ~to,: .. '"' =:.-,*' ,- - : . . . ~'.'~ - -e4 · ,.. . -- -- -- v.- · .v ' - · . , · . . : - . . · , . -. ., · . - ,~. · - . . . . f ':> {. . .. -, ,:... . , ' '~ili '~~~l~, ~In ~o e~t'of deetru,~l~ ~ drove ~ fife .~' 'j..f,;~.';~.--r other ~uee ~toh e~at~lly interferes'v/th ~nont'e ~~n~ o~ uoe of .; ~'~,'.~.j' the-~leee, thio Lease shall -te~lnate/'.ee of the date of ~ld ~r.~, - ,--i"-- . ' , . z · - .. 4. · · }, i iI j{,~ · '- . ~i,1 termination shall he without pre~liee . to mutual si.imm or-liabilities . existing e. of tha~ da~e. . .: ~.., ..... I" 2~. ~A~ ~O~. L.n~or WBF~n~8 ~O Tenon~ tho qule~ a~ ~n~nble'.. · un~o~n~ of the pres/oeo, provided hnl.~ ~rforao i~. obi/gB~LKl., heronries.....;: .:'.L:"' . ..~':'..;<:.~.'~ {o} Tpnanh° flil.g ~ vol.,,tary ~tltl~ In ~nkrul,tuy, or "'' "' "t,' (b) ~he fll ln~ or an lnvolu, t~ry ~tltl~.l. ~nkrupt~y or the ~lll.g ' ' · I, of a p~titimn for the appointment of s r.oeiwr against Tenants ' ,, ~,~: either of wliJch in I~ot . dismllled° wiLhin thirty {JO} days 'eSter ' '{'~ if{. mieh filing, or · ., Any e#aig.m,ne ~ Tpn,ntes interest Jn thin t~npe, whether . ; v, lu, tary or involuntary, without t~ndlord'e prior written , ~h~ll c~etltuto a hrea~.h c)f tl.{~ i. naso hy Tenant. lql.~uld W. andlord eleo~ to the dJff~renue ~tvaen th. I,.lan~e o~ the rent due er tn hecta due heralder a.~ the re.tnt value of the ~emieed Premise. for the remaieder of the term herein d~tsed. 24. ~I~.E~A. TIOH{. Tenant eh, Il not make nny improvPme.t# or alter. SlueS to the premiss, without the prior explioit written ~oneent o! L~Saor. In tho event luch improvements or att.reticle are mede, Tenant shall hold LOller. harmleue fr~ any and ~ll ex~nge, slate, or liability arising th.retry, of whatsoever kl~ on8 .~.re, ~ ~vooever arising, lnul~ing ~hnnia'g Lien filing or foreulooure end ettar.ey°o fees, . I . Th'e ~ranting by l,...or o! eone~.t to Tenant to make 8uuh ebon, e! or improvements or elteratlo, s .hall not ha uonednt o! tho lessor to have ltl interest in the premises eub~eot to Heuhanio'e Lions. 25. LEAf{.~r.b.lHpR_OV_EH~, Tenant .hdli iaaa.hold JmproveMnt8 on the-lea0ed pr~mioeo~ which ore Bo ~.tr,tuted or installed,, at the pole outlined on ~hlbit "c". Lessor eh. ii. be held hormlesa fr~ any expense or . .loam &risin~ therefrom. ', · · · ' 'i i'., ' 'S' ' ' ~ '.' ! ' ; I , -. ! ,' ~,-'m"-".~"'i the ~ealty shall ~.li~ the ~zo~rty of ~dnlfl~.~and shall ~ ze~ It To.nato· ' tJ', .~' . ....., ,,..,. .. ..... .., , "*'l" '' : ..... : ' · m- ' I . ~ -- ~ ~ _ , · , ]{-.. 't'~ioi~l oral.mafia a~ regulo~i~o.'rell~ing to their ~eo~ati~ · q" I , ~ ,' I , .. . ~~nuleo of the ~emiteo, '; ~.~,. '..' .... ~4{.{. :.:': ' ' ':;. ....:4. ~:. ,. ,: · "--" ~ ,':,l.r' . ' ' - '", : ~'.',~ ' {g.' JlA~~{ U~B. Tenn.t' shall mk{'~o tme of the premioef o~'~rfy ~ · -. ' any latlvltiee un said premises th0t ~bld bo haEard~us tv othe~l~ including ! · ~.rg~. · . .. · ..~ '".. ~h,k ~ht. bna, 10 u~lfled nnd tn fell for~ n~ effea~ ~ if ~lft~, .' .. . ~llfl~, l~ In fell force 8~ effeat0 o~ the date to ~leh ~ho ~ u~ ~r' '" ~nrg~ heralder ore ~l~ in ~nn~,.ff say, ~' lb) eak~l~l~ ~, b . T~nnnteo .kn~J~ge~ thor- are no u~r~ de,nutS, ~ t~ · ~r~ of ~~d .". ~rti~ of the real ~o~r~y of ~~ tho bises Premises ore a ~r~. · 21. ~~TI~. l,n,dlor~ ,hall ~y for ,It ve~er, gna, he~, ltgh~ ~r, .. . 32. Op~Tl~ BXr~E~. ~ring en~h full or ~rtinl ~alp~er year during the Term of thil ~a,~ Agreement0 ~nan~ aha11 ~y tn ~ndlord, se Mdtti~l mental, an ~~ ~mt ~n ~he Real ne hereinafter defin~J ~r square f~ of ren~ahle area In the Bulldl~. ~l~Jplle~ ~ ~he amber or ~ace fee~' 'or ren~abl~ area In the ~tot prorated for the ~rifl~ ~ha~ Tenan~ ~pied ~he Praises. " l~n(llord shall, al, ring ~.ach year during th~ Term or thin I~ane Agreement, give. Tenant an entimatp, of ~ratlng ~neea o~ Real e,tate ~xee ~yoble ~r a~Jare f~ of rental,In area for the ~i~ salem]ar year. ~nant l~ll an an ~dJtiflnal nev, tal, oleg vith it. ~hly Hint~n Rental re,,ired hpr~der, ~--t~lfth (J/12J of ~ cutlets1 ~ratl~ b~eee ,~.e~ently adjusted for the fail,lng'year ~reuant to Shit ~ragre~, . Ag n~n al ~,,lhle meter the /xpira~l~ of each eal~er yearo ohsll determine, a~ ~rtiey to ~nan~ ~he · ~b~t ~ra~lng ~Ho Estate ~=ee for the previ~e ~ar ~r ~aro f~t of rentable area In Building a~ ~he ~~ appliaabio te.~he Praises. If n~ otat~ '~ ';.~'",' t~at ~,ant'e share of ~rati~'b~flfee aM Reel Satire ~ne otto . ..f.t:., .: :ovorp~n~ ohall ~ rafted'to ~,~f l~. tho o~ 6f oa~ ~l~ar 1' e".lI ' ...~-i '"tho ro~ of on ~Ju,t~t 1, the folJ~lh~ ~e8ro, eo~l~ted ~retl~ b~oo. ~' ~ le, l Ett8tO ~xet or at tho ~ ,f ~te'~m, :,- ' .~' ~ ..~:.-;~.~: :. . . ,' .: . . . .. , . : - - :;...,~ -- -~e total of 011 ~axee, r~,, ~,rgei, OM: ileeefent,, ' geMral ' aM ordinary o~' extraordinary, foroe,n ~ ~e~n, levied ~ i~~ ~ the '):~' ~ildlng. All ~ete and ex~noee fn~rr~ ~ ~lord durLng ne~Le~/~o fo~ :. , -- ? ? . ~M "meal E.~.~e Taxa.'. AM .la4 he~eine'.k~a~ln~ ~nee.~ ~1~ ei~ w~e~,.... · ...,...~'~ ~I~" ~td oc l~urrod ~ LnMXord vl~' ~l~o~ .J ~ ~ho Build,nv ~tim 'l'li~l~M~-: :: . ." ~J~ '. - pr~l~w~.retl It~l~i Jlwll I~ I~lllSn~lttI ~., lhF oJhil ', /IJ oitumt~ ~leh vita ~.utt tn i rMuotion'o~4~rating I.~ol.,4 "' -" ~ ' .e~re~s~lol, oF, a~~ing e~aff oF ~Mlord~ * ~e ~lord wrran~e'~,ia~ aeut''''''~ :' a pruden.t owner, would in aking deoleio, e .regarding management of acs~a~ ir#i. . . : ' : i f, ' ~ . ' ' 33.' ~IW~ ~ATW, In tho ~en~ el ~ taking of ~ll or any ~ el the . ', , terminate as of the date of .aid ~klng wit~t further liability there~ ~ :." · ,,;. ~lther Imorty, but without, prw~ud/oe to oleimt'exieting e. of the date :~; , t.kinV e~ Tenant shall have ~, right{ olaim, or title to oar prt of.laid .j-I "j~" ' ' -~rd' ~.tion ,or the value of, .ny._u era of , ~?. ,,, ava in ~de ~, ~xptred ~ .thai ~eo. ,." ',, ' '"-" "'"~'~' . l~' *. j}~t y... I ,. ., , , , · .: '. ' ' -' ~nen~.ohalt ~ entitle{ to any,award }to. T.n~nt roy Joel o~.~.inen, i~ ;" {{yI ..{. - . the ~oe~ o~ re--a1 o~ inve,toFy 8n~ e~l~~ free and ulcer o~ lay OllM of ~,.' ' ' - ~,,or, . . .,: '~ ..., ~~/~ . { I :' = 3S, ~ITI~ U~_~~~ V~fl ~olu.l~ or terminsti~ ·- ' ....... ' . L'~ · {~ll,~ ~nan~ ohall t,,r. over tho pre~ise, to ~goor in bM-al~U ~diti~, ~:~, k',:.].'~. 1. o~.tantially ~ .a~ ~diti~ so emitted st the date horst, reachable ',~ '~ ~'~{'. t' ~ar ena tear )e,~pted. If 8.y ~rmittld'rMal by Tena.~ of trade fittu..{~.,' , ~ · ' ' ~ 'e' ~[ll{;hi~" , o.~' I -J b, . ''" · ~-'" '"-. { ",'lJlJ'ql};l':-' . l'l t i~l{ ',~. ,'7l.~' ' ' d~ ",{" '',. ~ ', T 'f ' ~ B~ .; .., ' , J .... I ~ · '.~: . '. · 's .~..' ........ '~'' - .J ' 13t,' A~ or ~ZSb,: Ta~ng'~ ~eaeeet~ of the ' ~el6~'('~wioel' ~~,. ' p~,,- · fi of"takinV ~eeeeel~ ~'~ant, 'la ~,4elea., .~.~der the MIHo .~ j.;: · -, ' ;. .. · ~ ~ .~KS'..'..' ' · '": . ,; '.,.;,~,~,'~' .. , :., ~ ~.' ~.,, ~,~ - . . ~ ~ ' t. .' i . i ' i ' ,., . , ,~., "'.~:il~,...... . .. . . · · · · 3~1. G~/A.__.__~_ITr~ ~ IC._XI. IlI]I.~_~.~. .The GuAranty nnd I~hiblt, A, B, C, 8mt O ore au integral pert of thif Lease. · 3g. LANDLf~D ·ALII. I~ the event of eels of the I~r(Jiwqrty by Landlord o~..i.. · " other trmna[~-~f ~'-[L-~e, Tenant ogress-to etf~fn to,the perahneer, · . . ...-: '~; . 'r..i :::'~j · · :~..'.' · ~' -'.~ · ,~'"~l?':.:':."::?i rh~loed P~e,t.ed (ol~oving the_ .xptretion~f,~e tern of thi. Lesee~:L4Bdteed~f~..~~.~ my0 It: t~a option, ~onvert aueh~aaaupenol~ ln~o--oi~her · holding :. eq~f ~o, th to ~onth or · holding over for ·,three-umtnh period, u,der the:eeue;torue$.~: nad m2v,Jitlcms na prevailed during ~he Inet.month of the term dell. lid, qtith'b:[~:~' e~eel~lOn of rent. vhieh el,mil be &k & monthiyirst:e of I.B time 'that payable,. during the lost month or the ~rm. demised,. Landlord may give. ~o Tenant tm~lae: '.'.. :f of lie i,tentlofl to ·revert m~h mmtinued a~'ul~nry into a ~ldlng mr fm .~' ~th to,~th ~ a ~ldinv ~r for a thr~~th prJ~ vlthin ten (10) dale foll~ln~ tho oxplratl~ of th, te~: of~'~lo Lense, ~i~ ~ifl t~ll ~ ,' eff~tiv~ ~vfthe~a~lnV th,~ Tenan~ my' bye sooted tho bie~ Prni#o - . ~rior to the Vlvi~ of ouch ~tl~. If e~h Mtlffo fa ~ Vf~ ~ ~1~, no, lee to vacate, a~ Tenan~ shall ~Y ~1~ on ~n~ ~at to i ~orato :. .here of ~l~e IB~ ~h'~ ren~ for ~he ~rlM of eo~unl ~u~n~. ~n In~ ~ . m~y ln~ur os · result or lush holding (war, ln~lt~ting, but not limited ~o, '. damages incurred beam, aa of leas o~ a proop0otive m,m~es~or tenant. Xn the ~:i:~,~' event ~hat Tenant is eith~.r · (:~ : ' if ~nnn~ .h, ld ~lnue to ~~..~he ~t,~ Pr~i,~u foll~J~ .the ' ~h ~enon~y or Tpn~n~ c,n~inued in ~,~n~y ~o[l~f~ ~he expiration of ~he origins1 ~era Of this ~aae. 41. RULES_~RKmATI~J~..Tenan~ shall nhld~ by, k~,p, a~ ~erve ail' z~ao~abl, rules, and regula~l~, ~luh'~l~d may Mke fr~ ~imo ~o ~l~ for 'i~',' . parking of vphlolee, end the presdrvaEian'o£ good order there/n~ &e veil al for 1'i ,~ ' the ~venie~o of ~her tenente,'~~nte," e~ visitors ~ the Buildi~. ': ... '..?---~': ~ ~ltmred ~rklng ohall ~ de~erm[n~ by ~~o~ for eaah ~an~ ~ 8 btam ~ "'. - ..,'"' ~]~l~.~'de~ol~,end ~o(l) as fir0~ ~Um ren~'~l.8~ ~1~ lease is t[~, . ;' ;1', (.' ,., ~ ~ ' · · . · , . . ., · · · I ;'i I d, i ?his Agreement. shall be Jade a part o£ and incorporated into th~ Lea'se Agrn-mnnt: dated ~ ~' , 19~, . Lessor agreeR t. hat it will be responsible for any liability arising out o£ any haRsrdous waste oontamJna~lon or disoovery' oF any Jla?.fqrdoU~ mfl~.~rials on the sub,eot property or materials related ~.o the suh~ec~ property. /,asset agrees t. ha~ any requ/remen~, i mafia ~y any governmnn~nl body ~., ,o~ hnxardnun vflnt~ o~ ~la~o~ isnunn ~hf111. be satisfied by I[ Lennee exncc~non hLn op~Lon Figh~n und~ ~he Lease, l.es8o~ nhnT1 remain liable ~or ~h~ above, the prnp~c~y [o~ fl p~rJod no~ ~o Gxceed I years. [ -- GUARAII'I'f ' ' ' , The ,n,l~r,lgn~.~1, f~.r g,'~¢! nnd vn].unbl, c. onn~d~r~q~.Jon, tim rneelp% mhd " n,fflcl~ney o~ vhl~h lfl h~reh~ neknowtedged, d~. hereby u,~ondl~l~nlly I~ .: . ~ ', i i · -J~ 'l ~ T~nnn~ of nil .~. d,~ l.~.,or nnd ~he ~ro~p~' futl~ and ~ple~n ~rformanfl of :' .~ .I .. f o. 't all obll~n~t~n~ of thp Tenant ~r~u~n~ to the Leane he~n ~uo Renlty Services, I _ _ . : ,'i · i. ,.- I 'i EXHIBIT E FURTIIER PROVISIONS AND AGR£EMENT.% '4 I ' EXHIBIT C · PARCEL NO. 1 That part of the Northwest Quarter of the Northeast Quarter of Section 13, Township 116, Range 23, Carver County, Minnesota described as follows: Commencing at the Northwest corner of said Northwest Quarter of the Northeast Quarter~ t~ence on an assumed bearing ~f South along the West line of said Northwest Quarter of the Northeast Quarter, a distance of 722.70 feet; thence on a bea~ing of East, a distance of 396.00 feet to the point of beginning of the tract to be described; thence on a bearing of North along the East line of the West line of the West 396.00 feet of said Northwest Quarter of the Northeast Quarter, a distance of 276.75 feet to the intersection with a line being 43.50 feet southerly of and parallel with the centerline of existing tracks; thence northeasterly along said parallel line, a distance of 463.84 feet along a non-tangential curve concave to the Northwest, having a central angle of 4 degrees 36 minutes 11 seconds, a radius of 5773.15 feet and the chord of said curve bears North 70 degrees 43 minutes 58 seconds East; thence South 0 degrees 01 minutes O0 seconds West a distance of 224.75 feet to the northerly right-of-way line of State Trunk Highway No. 5% thence South 59 degrees 28 minutes O0 seconds West along said northerly right-of-way line, a distance of 438.32 feet to the intersection with a line bearing South 73 degrees 39 minutes O0 seconds East from a point of beginning; thence North 73 degrees, 39 minutes 00 seconds West, a distance of 62.66 feet to the point of beginning. Except the East 167.0 feet as measured at right angles to the East line of the above described tract. (ABSTRACT) PARCEL NO. 2 That part of the Northwest Quarter of the Northeast Quarter o.f Section 13, Township 116, Range 23, Carver County, Minnesota described as follows: Commencing at the northwest corner of said Northwest Quarter of the Northeast Quarter; thence on an assumed bearing of South along the west line of said Northwest Quarter of the Northeast Quarter a distance of 722.70 feet; thence East a distance of 361.89 feet to the point of beginning of the land to be described; thence East 34.11 feet; thence North 169.09-feet to the old southerly right-of-way line of the Chicago Milwaukee and St. Paul Railroad Company hereinafter described; thence southwesterly along said right-of-way line to the intersection with a line bearing North from the point of beg'inning; thence South a distance of 160.98 feet to the point of b~ginning; Said old southerly right-of-way line is described as follows: Commencing at the northwest corner of said Northwest Quarter of the Northeast Quarter= thence on an assumed bearing of South along the west line of said Northwast Quarter of the. Northeast Quarter a distance of 551.52 feet= thence northeasterly, a distance of 1338.26 feet along a nontangential curve concave to the northwest to the point of beginning of the line to be described, said having a central angle of'13 degrees 16 minutes 54 seconds, a radius of 5773.15 feet and the chord of said cur~e bears North 70 degrees 27 minutes 44 seconds East for 1335.27 feet= said curve being 43.50 feet southerly of and parallel- with the' center line of the existing Chicago Milwaukee, St. Paul and Pacific Railroad Company's main track~ thence southwesterly and westerly a distance of 1382.14 feet along a nontangential curve concave to the northwest having a central angle of 38 degrees 26 minutes 26 seconds a radius of 2060.08 feet, and the chord of said curve bears South 68 degrees 05 minutes 17 seconds West for 1356.36 feet to the west line of said Northwest Quarter of the Northeast Quarter and said line there terminating. (ABSTRACT) ADD~NDIIM TO oP'rTON D~T~D October 1, lqnl It t~ unr~er.~oo~ by ~he npf. ionee in t;l~r, rip[ion ~gr.eemen[ ~~ n~oher 1, laql, hef, veen ~ncy ~rnwn ("Op~innee") .- and ~ry V, ~n~ t.l~ureon P, ~tr[ ("Op~tonor~") [h~ Op~ionora hav~ >~cu~e~ ~h~ Opti~n A~r~em-n~. Jn an~icipaf, ion of ~r~nsfer ~atM -nnveyanc. ~.o f.h- np~ionorm from ~lini~.-r~ ~,tfe ia pinto a~ ~oon a~ fl~ ~.tm~ ~nn he nchP~l~l~ wl~.h ~he ~t~te company, ) (. 7-? -~ .J_~ ..... ~ '' ....... EXHIBIT D HYPOTHETICAL EXAMPLE OF CALCULATIO~ OF PURCHASE PRICE INCLUDING COST OF UNAMORTIZED IMPROVEMENTS REQUIRED BY THE CITY OF CHANHASSEN (ASSUMES PURCHASE AT END OF LOAN TERM) Purchase Price Less Earnest Money Balance Due Less application of $525.00/month from 4/90 through 8/95 Balance Due Plus hypothetical balance of unamortized improvements (see below) Balance..Due $180,000.00 $ 10,000.00 $170,000.00 $ 34,125.00 $134,875.00 $ 6,000.00 $'140.,875.00 Assume cost of landscaping, awnings, etc., as currently proposed by the City is Assume amount financed through ta~ increment financing is Balance to be paid Brown prorata portion @ 20% $100,000.00 $. 70,000.00 $ 30,000.00 $ .6,000.00 LOTUS REALTY SERVICES $45 WEST 78th STREET, P.O. BOX 100 CHANHASSEN, MINNESOTA 55317 (6~ 2) 934-4538 LOTUS REALTY SERVICES 545 WEST 78th STREET, P.O. BOX 100 CHANHASSEN, MINNESOTA 55317 (6~ :2) 934.4s38 June 13, 1991 Hr. Thomas A. McGrath President Tol I Company 451 Taft St. NE Ninneapolis, MN ~~/J Dear Tom: This will confirm our earlier conversation regarding the procedure for payment of future rents for your Chanhassen facility. Consistent with our earlier cprrespondence to all of the tenants of the building, you should make all payments to Kirt Properties, whose address is 39'50 Highway ~7, St. Louis Park Minnesota 55416. . . According to the terms of your lease the monthly'payment fOr'the- balance of 1991 will be $3,380.79, which includes your base rent of $5.85/SF, $2.20/SF amortized leasehold improvements, '$1.30/SF estimated taxes and $.90/SF CAM and .insurance. YoU will be provided with a year-end accounting along with a bill for any deficiency or a credit for any overage paid, based upon your obligation to pay 21.6% of actual costs for taxes, insurance and CAM. I set forth the calculations because I believe that the Lease Addendum is somewhat confusing on its face. I was advised that the intent was that your base rent be calculated on 3968 sq. feet and that your CAM, taxes and insurance would be calculated based on 21.6% of the total building square footage· You have advised us that it will not be necessary to send monthly statements, but that should any correspondence be necessary, it should be addressed to you at the address above· Since an agreement has now been reached regarding the responsiility for the work performed by Gary Hoehn and/or his subcontractors, there appears to be only the following items to be satisfied: · Resurfacing of parking lot and removal of fence no later than August 1, 1991. (Paragraph 1. of Lease Addendum).. · Signage above tenant's space as part of the exterior improvements to be compIeted by September, 1991. (Paragraph 5. of Lease Addendum). The sign you now have above your entrance is, I understand, considered a temporary sign. · -2- · Determining Toll's contribution toward the cost of screening the southeast corner of the building· This is the area where Toll installed a vent as required by the City. Tom Muehlberg was prepared to have the plantings replaced prior to occupancy (which was a condition the City placed on its permitting installation of your sign on the south side)· However, the City required much more extensive screening than the anticipated replacing of the previously existing shrubs and it was decided that the screening would be undertaken as a part of the overall landscaping, building exterior, signage and parking area plan. We already have invested a great deal of time in developing a plan which will satisfy the City's requirements and are in the process of having the initial plans for the parking lot, the signage and the landscaping revised for presentation to the City. We are working toward meeting the deadlines set forth in the lease; however, current plans for the City's involvement may require scheduled hearings before City and/or HRA commitments can be finalized. The timetable at this po/nt is extremely tight. I As we have discussed with'Tom Muelberg, however, while the city's interest and involvement in the process may make the completion take longer, the final result will be a much more aesthetically pleasant site. We have enjoyed having a part in bringing 'Toll Company to Chanhassen and wish you a very successful venture. If you have any questions, please be sure to call. Yours truly, Vernelle Clayton cc. Gary V. Kirt ~ oi¥1~ T~I&L iPl~d~LItT S. TODD RAPP l~mm ~l.n,lalm AYmNUm iurr~ 44)1 AP'Pi=~ VAi m g'y,, MINNL~OTA a~l Z4 ~OBIMfl.~ ~11) dU.l~kTj Thomas $~tt Campbell, Knul~mn, P.A. 1380 Corpo~ Center Curve, Suit= 317 P. al~, MN 55121 VIA FAC~IMiLI~ & U.,~, MAIL (651~50) RE: Gary Kirtv. G.ry Br~wn Court File No. C~-P~-! 94 My Fil. No, 1250/02 Dc~r Mr. Scott: Thc trial of t, he above~ntltlml re. rater w~ nontinu~ by Sudt~ Davle~ in C,r~r County November. $lnc~ then Mr. Kirt ired Mr. Brown h~ve neilotie~! ~ Contingent ~Ilomcnt and ~ Conti~gem Pumhi~e Agreement which hav~ the potential ~ m~ol~ aL[ i~ue~ pending botween them and, also, all issues related to thc potential liability of tho Housing and Itedevelopm~nt A~e~ for tim City of Chan~son. In their Contingent $cttlemen~ Altruement, Mr. KI~ ~d Mr. Bm~ ~ ~ to dismi~ thor ~sp~dve cl~s ~ ~e ~~ ~on ~ p~J~i~ ~ ~ ~ ~ u mut~] rol~_~e of~l c~ whi~ a~ ~c C~~n ~ (~ch w~ ~~ ~ 1997 wi~out ~ju~c) lf~ Han~ Bulling is ~,ld to Mr. ~wn. ~e ~e of ~ b~l~nB~ in t~, is ~tin~t u~m ~A's ~llingn~ to allow ~ ~ii~ Mr. Ki~ of ~y f~ liability ~~~. You will rmall that whea Mr. Kid repurr, ha~ci the H~us Building he ~i~ ~m t~ Cky Brown ~ ~~on oft~s~ ~~ ~ ~ l~ld o~~ ~ B~'s ~ & Auto. At s~e time, Mr. ~ ~iv~ ~nfir~tion from t~ CiW ~ t~ I~ d~ ~ ~~ og ia o~e~hip of ~o buil~n~ it h~ ~~d $525,~ ~ mo~ ~ ~ Bm~ m be ~i~d ~00~1 ~"3ggV'Rlqt-'R3 ~-,,-,,- 'T'Tgg,TRV3 0ggg Rgb, ZTg .Trot C'.;~:ZT tT'H.~ 88/C0,'~0 I.a~W ~H'Fll~lw S. TODD RAPP Thomas gr.,oR February 2, I ~J9 Page 2 again~t any purchase prlr~ paid by Brown pursuant ta an October 1, 1991 Option Agreeme~lt. It is my understanding that, during the period oft[me ofRRA ownet~lp, over $33,000 was ;ollr~ted by the lIRA from Gat), Brown which amount would b~ a credit against the pumhu= price for property referenced in tho October 1, 1991 Option A~reomem involving Brown. If the parties intended sale and convey~ur~ of the Hanua BuUdLng la r~~ because ~c H~ will ~t ~nscnt to a oomplete usslgnment ~d aaa~ption of~e mo~g~e, ~e~ effiy m~utab will ~ ~ renew ~d p~suc li~g~iou ~ l~ ~cl~ion. If ~[s o~, ~ given ~ ~timony ot Mr. Todd O=rh~t at ~s d~o~iflon ~ ~ ~e mawr, w~in he pw~d~ ~atl~nony con~icti~ ~e msur~s he ~ve in ~a Decem~r 23, 1997 oo~pon~n~ ~ Mr. Kirt, it ia a ce~~ ~at ~. Ktrt will dit'~t me to amid the pl~Jnga ~ ~e mater ~ asse~ dire~ claim age,at ~= City o~C~h~sen. PIc~ ~pt my ~m~n~flon th~ ~js b not a desir~ ~ull, but it i~ n n~~ one ~der ~e c~a~s, ~e CI~'~ ~ooperatlon at ~ia 8me, hoover, can completely p~nt such an out--me, given ~e coating~t agr~~ts whioh ~ve ~n Fully execumd b~c~ ~. Brown a~ ~. ~ Therefore, ~L this time, 1 re.~p~tfully e~ £otmsily request tlnL the Chanhassen HR~ evide,~ce its will'el, ness to r. onsemt to an m~sigoment and auumptinn of the Note and Mortgage which Wm executed in very r..arJy 1998 by Mr. Kht under cttcumstnnc~ whr. m ~1 obligation~ thereunder will be exclusively a~sumed by Mr. Brown. ! also respc~U'ully request t~t tho HRA make reimbur~ment to Mz. Kirt jn the amount o£ $25,000 of the more than $33,000 ooUcct~d by the $IRA from Brown since surviving Opfitm Agreement is in part a motivating factor in the contemplate, d sale. I enclose a duplicate copy of this r, orte~pondanc~ for you to transmit promptly to Mr. rJerha~dt so l~t he is advised of thc tequ~ts contained herein. Please I',el free to conlact me after you have l~ad att opportu~ty to consider this =otrespoodeace. Vet'y truly you~, STR/~g I~nclo~urc c.~: Oary V. Klrt REAL ESTATE PURCHASE ~,GREEMENT THIS AGREEMENT (the "Agree,.me~t") made and entered into.this AND I~EDEVELOPMENT AUTHORITY IN AND FOR T~ CITY OF C~SEN, a public body Corporate and politic under the laws of the State of Mir~nesota, with offices at 690 Coulter Drive, Chanhassen, Minnesota 55317 (referred to herein as the "Buyer"), and GARY V. KIRT, a married person (the "Seller"). In consideration of the mutual covenants and agreements herein, it is hereby mutually agreed by Seller ~nd Buyer as follows: SECTION 1. S~LE AND PURCHASE OF LAND 1.1) Seller shall sell'to Buyer and Buyer shall purchase from Seller, upon the terms and ~onditions hereof, the following property (all-collectively referred to as ~he "subJ'ect property" ): 1.1.1) The land in Carver County, Chanhassen-(the "City"), Minnesota, legally described on Exhibit "A" to be attached hereto and incorporated herein, together with all right, title, and interest in and to any roads or alleys adjoining or servicing such.land, rights-of-way, or easements appurtenant thereto, and in and to any ditch, water, or riparian rights and claims appurtenant thereto, and to any unpaid award with respect thereto (the "Land")~ 1.1.2) Any. improvements located on the Land~- 1.1.3) All rents, leases, contract rights, causes of action, permits, licenses, and other rights relating to the Land and Improvements (the "Contract Rights")~ and 1.1.4) All right, title, and interest of Seller in and to any plans, specifications, surveys, studies, reports, renderings, or drawings pertaining to the subject property r09/24/92 ~ ~ and Improvements, including environmental, marketing and related matters (the "Drawings") . SECTION 9_. PURCHASE PRICE 2.1) The purchase price for the subject property ('the :. "Purchase Price") shall be Seven Hundred Twenty-five Thousand and 00/100 Dollars ($725,000.00) and-shall be paid as follows: $225,000.00 cash paid by Buyer at closing; $500,000.00 by Buyer assuming payment of the mortgage note on the subject property in favor of Ministers Life, a Mutual Life Insurance Company. The foregoing amount shall be adjusted at closing to reflect the actual unpaid principal balance of each mortgage note. .. SECTION 3. TITLE MATTERS 3.1) Seller, at its own expense, shall cause to be .. furnished to Buyer within twenty (20) days hereof a current commitment for the issuance of & 1987/1990 ALTA Form B owner's ! policy of title insurance (the "Commitment") issued by Title Company acceptable to Buyer i"Title") in the amount of the Purchase Price, committing to insure that Buyer will have good and marketable title.to the subject property, ~free of any and all standard and other exceptions to title, except matters to which Buyer may consent in writing. 3.2) In the event any exceptions are listed in the : Commitment for title insurance, if the ~same results from any voluntary action by the Seller, the Seller shall promptly cause , the exception to be removed. With regard to any other exceptions, if the Seller fails to remove the same within the time allowed for closing on the subject property, the Buyer shall have the right to terminate this Agreement as the Buyer's sole · and exclusive remedy. SECTION 4. CLOSING 4.1) The closing (the "Closing") shall be at a location designated by Buyer, and shall occur within ninety (90) days after the execution of this agreement (the "Closing Date"). 4.2) On the Closing Date, Seller shall deliver to Buyer possession of the subject property vacant and free of any and all debris. 'Until possession is delivered to Buyer, Seller shall keep and maintain the subject property in a neat..and orderly condition and shall not alter or damage any part thereof. 4.3) On the Closing Date, Seller shall execute and/or deliver to Buyer: 4.3.1) A duly executed warranty deed, free from any exceptions other than the mortgage in Ministers Life Insurance Company dated November 8, 1991, and recorded November 20, 1991, as Document No. 129553; . 4.3.2) A customary affidavit that there are no unsatisfied judgments of record, no actions pending in any state or federal courts, no tax liens,'and no bankruptcy proceeding filed against Seller, and no labor has or materials have been furnished to the subject property for which payment has not been. made, and that to the best of Seller's knowledge there are no unrecorded interests relating to the subject property; 4.3.3) Estoppel certificates executed by all tenants of the subject property for all tenancies affecting the subject property on a form acceptable to Buyer; 4.3.4) The purchase agreement for the repurchase of the subject property on the form attached hereto as Exhibit IlBII , , 4.4) Seller shall pay at Closing all the general real estate taxes levied against the subject property due and payable for all years prior to the year of closing, together with any unpaid installments of special assessments due therewith ("Taxes"), and any Taxes deferred. Seller and Buyer shall pro- rate the payment of general real estate taxes and special assessments levied against the subject property due in the year of Closing. Buyer shall assume payment of unpaid special assessments due for all years subsequent to the year of Closing. 4.5) Seller shall pay at Closing: 4.5.1) state deed tax; 4.5.2) all costs associated with the issuance of the title insurance commitment including commitment service charges, including state and federal Judgment searches, tax searches, bankruptcy searches, and property inspection fees; 4.5.3) recording fees for corrective instruments required to remove encumbrances and place marketable title in Buyer's name; 4.5.4) all fees and costs owed'to Ministers Life and its consultants to effectuate a transfer of Seller's rights to Buyer pursuant to tha terms of the mortgage encumbering the subject property. ! ! 4.6) Buyer shall pay at Closing: . 4.6.1) A transfer fee in the amount of $18,500.00 to Lotus Realty Services.- 4.6.2) $25,000.00 to Seller, plus.'interest (if any interest has accrued 'on the foregoing am6unt pursuant to the Escrow Agreement described below) in consideration of Seller assigning Seller's rights to Buyer under that certain Escrow Agreement dated November 8, 1991, between Seller and Ministers Life. The aforementioned payment to Seller shall only be made if said Escrow Agreement has not been terminated as of the Closing Date. 4.6.'3) title insurance premium fees; 4.6.4) all recording fees and charges relating to the filing of the deed; ' 4.7) Seller and Buyer shall equally share the closing fee charged by the title company, if any. SECTION 5. COVENANTS't REPRESENTATIONS t AND ~ARRANTIES OF SELLER 5.1) Seller, as an inducement to Buyer to enter into this Agreement, and as part o'f the consideration therefor, represents, warrants, and covenants with Buyer and its successors and assigns that: 5.1.1) There are no leases, options, purchase agreements, rights to redeem, tenancy agreements, or rights of occupancy, written or verbal, and no person or party has, or will have any rights of adverse possession, regarding the subject property except as set forth on Exhibit "C"~ 5.1.2) Seller will maintain in force insurance against public liability from such risk and to such limits as in accordance with prudent business prac. tice and suitable to the subject property-from the date hereof to the Closing Date ~ 5.1.S) Neither Seller, nor to the best Of Seller's knowledge, has anyone..at any time: .. i) "released" or actively or passively consented to the' "release" or "threatened release" of any Hazardous Substance (as defined below) from any "facility" or "vesse.~" located on or used in connection with the subject property~ ..or ii) taken any action in "response" to a "release" in connection with the subject property~ or iii) otherwise en~aged in any activity or omitted to take any action which c0uld subject Seller or Buyer to claims for intentional or negligent torts, strict or absolute liability, either pursuant to statute or common law, in connection with Hazardous Substances (as defined below) located in or on the subject property, including the generating, transporting, treating, storage, or manufacture of any Hazardous Substance (as defined below). The terms set within quotation marks above shall have the meaning- given to them in the Comprehensive Environmental Response and Liability Act, 42 U.S.C. Sec. 9601 et seq., as amended ("CERCLA") and any state .environ- mental laws. ..Hazardous Substances" means hazardous waste, toxic substances, formaldehyde, urea, polychlorinated biphenyls, asbestos, petroleum, natural gas, synthetic gas usable for fuel or mixtures thereof, any materials related to any of the foregoing, and substances defined as "hazardous substances , "toxic substances", "hazardous waste", "pollutant", or "contaminant" in CERCLA, Resource Conservation and Recovery Act as amended, 41 U.S.C. Sec. 9601 et seq., the Hazardous Materials Transporta%fon Act, 49 U.S.C. Sec. 1801 et seq., the Clean Water Act, 33 U.S.C. Sec. 1251 et seq., any state laws regarding environmental matters, or any regulations promulgated pursuant to any of the foregoing statutes. Seller shall indemnify Buyer, its successors and assigns, against, and shall hold Buyer, its successors and assigns, harmless from, any and all losses, liabilities, claims, fines, penalties, forfeitures, damages, administrative orders, consent agreements and orders, and the costs and expenses incident thereto, including, without limitation, reasonable attorneys' fees, consultants' fees and laboratory fees, which may at any time be imposed upon, incurred by or awarded against Buyer as a result of or in connection with the breach of any of the above representations and warranties, whether such breach is discovered before or after closing. Each of the above representations and warranties shall survive the closing. Consummation of this Agreement by Buyer with knowledge of any such breach by Seller shall not constitute a waiver or release'by Buyer of any claims arising out of or in connection with such breach; 5.1.4) Neither Seller, nor to Seller's knowledge, has any entity or person at any time installed, used, or removed any underground storage tank on or in connection with the subject property; .,' ! 5.1.5) That there are no wells located, on the subject property. 5.2) The covenants, representations, and warranties contained in Section 5 shall be deemed to benefit Buyer and its successors and assigns and shall survive any termination or expiration of this Purchase Agreement or the giving of the Deed. Ail of Seller's covenants, representations and warranties in this Agreement shall be true as of the date hereof (and shall be a condition precedent to the performance of Buyer's obligations hereunder) and as of the Closing Date. If Buyer discovers that any such covenant, representation, or warranty is not true, Buyer may elect prior to closing, in addition to any of its other rights and remedies, to cancel this Agreement, or Buyer may postpone the Closing Date up to ninety (90). days to allow time for correction. Buyer shall not be deemed to have waived any · . claims for breach of warranty if Buyer consummates the transaction set forth in this Agreement with the knowledge that one or more of Seller's warranties are false. 5.3) Seller is, or by Closing will be, the sole owner of fee simple absolute title to the subject property, has all requisite power and authority to execute and deliver this Agreement and the documents listed in Section 4 above. 5.4) Notwithstanding anything to the contrary contained herein, Buyer acknowledges that the subject property has been used as a truck and automobile repair facility for the past several years. SECTION 6. ENVIRONMENTAL INVESTIGATION AND TESTING Buyer and its agents Shall have the right, at'its sole . . option, to enter the subject property without charge and at all reasonable times, to perform such environmenta~ investigation and tests as Buyer may reasonably deem appropriate. If Buyer investigates and tests the subject property pursuant to this section, Buyer shall pay all costs and expenses of such investigation and testing and shall hold Seller harmless from all costs and liabilities arising out of Buyer's activities. If the · purchase and sale contemplated by this Agreement is not closed, Buyer shall repair and restore any damage to the subject property caused by Buyer's environmental investigation or testing, at .Buyer's expense, and shall return the subject property to · substantially the same condition as existed prior to such entry. SECTION 7. CONTINGENCIES · 7.1) The obligations of Buyer under this Agreement are contingent upon each of the following (the "Contingencies"): 7.1.1) The representations and warranties of Seller set. forth in Section 5 of this Agreement must' be true as of the date of this Agreement and on the Closing Date, and Seller shall have delivered to Buyer at Closing a certifi- cate dated the Closing D&te, signed by Seller, certifying that such representations and warranties are true as of the Closing Date. 7.1.2) Buyer shall have determined Qn or before the Closing Date, that it is satisfied, in its-.sole discretion, with the results of and matters disclosed by any environ- mental investigation or testing of the subject property. 7.1.3) Buyer approving all lease agreements and the tenancies for the subject property. 7.1.4) Ministers Life consenting to the transaction described herein. / If the contingencies set forth in this section hav. e not been satisfied on or before the Closing Date, then Buyer may, at Buyer's option, terminate this Agreement by giving notice to Seller on or before the Closing Date. The contingencies are for the sole and exclusive benefit of Buyer, and Buyer shall have the right to waive the contingencies by giving notice to Seller. SECTION MISCELLANEOUS~ 8.1) The covenants and representations made by Seller shall survive the Closing of this transaction.' 8.2) Except for the transfer fee owed by Buyer to Lotus Realty in the amount of $18,500.00, Seller hereby indemnifies Buyer for any claim, cost, or damage related to any brokerage fee due because of this Agreement. 8.3) Any notice, demand, or request which may be permitted, required or desired to be given in connection herewith shall be in writing and sent by certified mail, hand delivery, overnight mail service such as Federal Express, or Western Union telegram or other form of telegraphic co~munication, directed to Seller or Buyer.' Any notice shall be deemed effective when delivered to the party to whom it is directed. Unless other addresses are given in writing, notices shall be sent to Seller or Buyer at the applicable address stated onthe first page of t~is Agreement - with a copy of any notice to Buyer also delivered to James R. Walston, Campbell, Knutson, Scott & Fuchs, P.A., 317 Eagandale Office Center, 1380 Corporate Center Curve, Eagan, Minnesota .. 55121. / 8.4) Time shall be of the essence in this Agreement. Where any date or time prescribed by this Agreement falls on a Saturday, Sunday or statutory holiday, such date or t~me shall automatically be extended to the next normal ~usiness day. 8.5) Each party hereto shall promptly, on the request of the other party, have acknowledged and delivered to the other party any and all further instruments and assurances reasonably requested or appropriate to evidence or'give effect to the provisions of this Agreement. · · 8.6) This Agreement represents the entire agreement of the parties with respect to the subject property and all prior agreements, understandings, or negotiations between the parties are hereby revoked and superseded hereby. No representations, , warranties, inducements, or oral agreements have been made by any of the parties, except as expressly set forth herein, or in other contemporaneous written agreements. This Agreement may not be changed, modified or rescinded, except by a written agreement signed by both parties hereto. Seller and Buyer shall have-the right to modify, amend, or cancel this Agreement w~thout the consent or approval of any real estate broker or agent. Under no circumstances, including, without limitation, any default(s) of Seller and/or Buyer under this Agreement, will: (a) any real estate broker or agent be entitled to any commission (or any portion of the Earnest Money) unless the Closing actually occurs, or to any notice under this Agreement; or (b) Buyer have any liability and/or obligation for paymen~ of any commission o~ other compensation to any real estate broker or agent regarding / this Agreement. . 8.7) If Buyer defaults under any of the terms hereof, then Seller shall have the right, in addition to whateger other remedies are available to Seller at law or in'equity, including without limitation, specific performance, damages, including attorney's fees, to cancellation of this Agreement. 8.8) If Seller defaults under any of the terms hereof, including, without limitation, the delivery of marketable title to the subject property as set forth in Section 4 hereof, and any o.f Seller's representations, covenants, and warranties in Section 5 ~ereof, then Buyer shall have the right, in addition to whatever other remedies are available to Buyer at law or in equity, including without limitation, specific performance, damages, including attorneyts fees, to cancellation of this Agreement. 8.9) If any provision of this Agreement is declared void or unenforceable, such provision shall be deemed severed from this Agreement, which shall otherwise remain in full force and effect. 8.10) Failure of any party to exercise any right or option arising out of a breach of this Agreement shall not be deemed a waiver of any right or option with respect to any subsequent or different breach, or the continuance of any existing breach. 8.11) This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, personal representatives, successors and assigns. 8.12) This Agreement shall be construed in accordance with the laws of the State of Minnesota. 8.13) At Buyerts request, a memorandum of th~s Agreement shall be executed by Buyer and Seller and filed of record in .. Carver County, Minnesota. · IN WITNESS WHEREOF, the parties hereto h~ve executed this Agreement as of the day and year first above written. BUYER: HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CHANHASSEN BY: · AND Don Ashwor , Exec. Director SET.T,~.~: Kirt STATE OF MINNESOTA COUNTY OF CARVER The foreg~g instrument was acknowle~f~ ,m~. thi~ .~ day of ~~~~____, 1992, by~z~.~, ^~.. ~ , ahd by Don Ashworth, respectively the Chairperson-and Executive · Director of the Housing and Redevelopment Authority in and for' the City of Chanhassen, a public body corporate and politic under the laws of the State of Minnesota, on its behalf. ( SS. _tThe foregoing ~ns,trument was acknowledged before me this ~0~ day of ~>~~W , 1992, by G~Y y. KIRT, a married p~rson. DRAFTED BY: Campbell, Knutson, Scott & Fuchs, P.A. 1380 Corporate Center Curve,.Suite 317 Eagan, Minnesota 55121 (612) 452-5000 , / E~IBIT t~ REAL ESTATE PURCHASE AGREEMENT LEGAL DESCRIPTION OF THE SUBJECT PROPERTY= EXHIBIT B TO REAL ESTATE PURCHASE AGREEMENT THIS AGREEMENT (the "Agreement") made and entered into this day of . , 1992, by and between the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF ~%I~HA~SEN, a public body corporate and politic under the laws of the State of Minnesota, with offices at 690 Coulter DriVe, Chanhassen, Minnesota 55317 (referred to herein'as the "Seller"), &nd ~RY V. KIRT, a married person (the "Buyer"). In consideration of the mutual covenants and agreements herein, it is hereby mutually agreed by Seller and Buyer as follows: SECTION 1. SALE ;tND PURCHASE OF 1.1) Seller shall sell to Buyer and Buyer shall purchase from Seller, upon the terms and conditions hereof, the following property (all collectively referred to as the "subject property" ): 1.1.1) The land in Carver County, Chanhassen (the "City"), Minnesota, legally described on Exhibit "A" to be attached hereto and incorporated herein; 1.1.2) Any improvements on the land existing at the date of closing; and 1.1.3) All rents, leases, contract rights, 'causes of action, permits, licenses, and other rights relating to the Land and Improvements (the "Contract Rights"). SECTION 2. PURCHASE PRICE · 2.1) The purchase price for the subject property (the "Purchase Price") shall be Eight Hundred Twenty-five Thousand and 00/100 Dollars ($825,000.00) and shall be paid as follows: r10/01/92 $ 30~000.00 as nonrefundable earnest money, the receipt o£ which is hereby acknowledged l and $795,000.00 by Buyer executing a promissory note and purchase money mortgage in favor Of Seller on a for~ acceptable to Seller. The payment of the promissory note shall be amortized over thirty (30) years but shall be due and payable in full fifteen (15) years after such promissory note is executed. The interest rate on said note shall be ten percent (10%) per ann-~. In the event of a default under the promissory note, the Buyer's liability under the note shall be limited to a maximum of $135,000.00 and shall only arise after Seller has foreclosed its interest in the subject property. SECTION 3. TITLE NATTBR~ 3.1) Seller shall cause to be furnished to Buyer within twenty (20) days hereof a current co~itment for the issuance of a 1987/1990 ALTA Form B owner's policy of' title insurance (the · . · . "Co~itment") issued by Title Company acceptable to Buyer ("Title") in the amount of the Purchase Price, committ£ng to insure that Buyer will have good and marketable title to the subject property, subject to the standard and other exceptions to title existing on the date Seller acquired fee title to the subject property, and except matters to which Buyer may consent writing. 3.2) In the event any exceptions not listed in 3.1 are listed in the Commitment for title insurance, if the same results from any voluntary action by the Seller, the Seller shall promptly cause the exception to be removed. With regard to said exceptions, if the Seller fails to remove the same within the time allowed for closing on the subject property, the Buyer shall -2- have the right to terminate this Agreement as the Buyerts sole and exclusive remedy. BEOTION 4. CLOSINO 4.1) The closing (the "Closing") shall be at a location designated by Buyer, and shall occur no sooner than April 1, 1994, and no later than October 1, 1995 (the "Closing Date"). · 4.2) On the Closing Date, Seller shall deliver to Buyer possession of the subject property. 4.3) On the Closing Date, Seller shall execute and/or deliver to Buyer: 4.3.1) A duly executed warrahty deed, subject only to exceptions listed in Section 3.1 of this Agreement and subject to easements and declarations granted to the City of Chanhassen by Seller for right of way, drainage, utility and landscaping purposes~ and 4.3.2) A customary affidavit that there are no unsatisfied Judgments of record, no actions pending in any state or federal courts, no tax liens, and no bankruptcy proceeding filed against Seller, and no labor has or materials have been furnished to the subject property for which payment has not been made, and that to the best of Seller's knowledge there are no unrecorded interests relating to the subject property. 4.4) Seller shall pay at Closing all the general real estate taxes .levied against the subject property due and payable for all years prior to the year of closing, together with any unpaid installments of special assessments due therewith ("Taxes"). Seller and Buyer shall pro-rate the payment of general real estate taxes and special assessments levied against the subject property due in the year of Closing. Buyer shall assume payment of unpaid special assessments due for all years subsequent to the year of Closing. -3- · 4.4.1) Occupancy.at time of repurchase closing shall produce net revenue to cover at least 105% of debt service. 4.5) Seller shall pay at Closing: 4.5.1) state deed tax; and 4.5.2) recording fees for corrective instruments required to remove encumbrances and place marketable title in Buyer's name. 4.5.3) Seller shall pay at Closing any fees or charges that may be imposed by Ministers Life to permit transfer of title to Buyer, if any. 4.6) Buyer shall pay at Closing: 4.6.1) title insurance service charges, c_o~mitment fees and premium fees; and 4.6.2) all recording fees and charges relating to the filing of the deed. 4.7) Seller and Buyer shall equally share the closing fee charged by the title company, if any. 5.1) SECTION 5. l~O Wl%RR~NTIES OF ~'ELLER Seller, as an inducement to Buyer to enter into this Agreement, and as part of the consideration therefor, represents, warrants, and covenants with Buyer and its successors and assigns that: 5.1.1) Neither Seller, ,nor to the best of Seller' s knowledge, has anyone at any time: t) "released" or actively or passively consented to tho U=eleane" or Uthreatened releasen of any Hazardous Substance (as defined below) from any "facilityn or #vessel" lo~ated on or used ill connection with the subject property; or ii) taken any action in "responsen to a. "release" in Connection with the .ubJect property; or iii) otherwise engaged in any activity or omitted to take any action which could subject Seller or Buyer to claims for intentional or negligent torts, strict or absolute liability, either pursuant to · -4- statute or common law, in connection with Hazardous Substances (as defined below) located in or on the subject property, including the generating, transporting, treating, storage, or manufacture of any Hazardous ~ubstance (as defined below). The terms set within quotation marks above shall have the meaning given to them in the Comprehensive Environmental Response and Liability Act, 42 U.S.C. Sec. 9601 et sea., as amended ("CERCLA") and any state enviro~-- mental laws. "Hazardous Substances" means hazardous waste, toxic substances, formaldehyde, urea, polychlorinated biphenyls, asbestos, petroleum, natural gas, synthetic gas usable for fuel or.mixtures thereof, any materials related to any of the foregoing, and substances defined as "hazardous substances", "toxic substances", "hazardous waste", "pollutant", or "contaminant" in CERCLA, Resource Conservation and Recovery Act as amended, 41 U.S.C. Sec. 9601 e_~t sea., the Hazardous Materials Transportation Act, 49 U.S.C. Sec. 1801 et sea., the Clean Water Act, 33 U.S.C. Sec. 1251 et seq., any state laws regarding environmental ma%-~ers, or any regulations promulgated pursuant to any of the foregoing statutes. Seller shall indemnify Buyer, its successors and assigns, against, and shall hold Buyer, its successors and assigns, harmless from, any and all losses, liabilities, claims, fines, penalties, forfeitures, damages, administrative orders, consent agreements and orders, and the costs and expenses incident thereto, including, without limitation, reasonable attorneys' fees, consultants' fees and laboratory fees, which may at any time be imposed upon, incurred by or awarded against Buyer as a result of or in connection with the breach of any of the above representations and warranties, whether such breach is discovered before or after closing. Each of the above representations and warranties shall survive the closing. Consummation of this Agreement by Buyer with knowledge of any such breach by Seller shall not constitute a waiver or release by Buyer of any claims arising out of or in connection with such breach; 5.1.2) Notwithstanding the foregoing, Seller warrants that there are no wells located on the subject property. 5.2) Other than the representation and warranty set forth in 5.1.1 and 5.1.2, Seller acknowledges that it is purchasing the subject property in an as-is condition with no faults. -5- BECTION 6. MIBCELLJtNEOUB 6.1) Any ~ottce, demand, or request which may be permitted, required or desired to be given in connection herewith shall be in writing and sent by certified mail, hand delivery, overnight mail service such as Federal Express, or Western Union telegram or other form of telegraphic communication, dire=ted to Seller or · Buyer. Any notice shall be deemed effective when delivered to the party to whom it is directed. Unless other addresses are given in writing, notices shall be sent to Seller or Buyer at the applicable address stated on the first page of this Agreement with a copy of any notice to Buyer also delivered to James R. Walston, Campbell, Knutson, Scott & Fuchs, P.A., 317 Eagandale Office Center, 1380 Corporate Center Curve, Eagan, Minnesota 55121. 6.2) Time shall be of the essence in this Agreement: Where any date or time prescribed by this Agreement falls on a Saturday, Sunday or statutory holiday, such date or time shall automatically be extended to the next normal business day. 6.3) Each party hereto shall promptly, on the request of the other party, have acknowledged and delivered to the other party any and all further instruments and assurances reasonably requested or appropriate to evidence or give effect to the provisions of this Agreement. 6.4) This Agreement represents the entire agreement of the parties with respect to the subject property and all prior agreements, understandings, or negotiations between the parties -6- are hereby revoked and superseded hereby. No representations, warranties, inducements, or oral agreements have been made by any of the parties, except as expressly set forth herein, or in other contemporaneous written agreements. This Agreement may not be changed, modified or rescinded, except by a written agreement signed by both parti~s hereto. . 6.5) If Buyer defaults under any of the terms hereof, then Seller shall have the right, in addition to whatever other remedies are available to Seller at law or in equity, including without limitation, specific performance, damages, including attorney's fees, to cancellation of this Agreement. 6.6) If Seller defaults under any of the terms hereof, including, without limitation, the delivery of marketable title to the subject property as set forth in Section 4 he'eof then Buyer shall have the right, in addition to whatever other remedies are available to Buyer at law or in equity, including · without limitation, specific performance, damages, including attorneyts fees, to cancellation of this Agreement. 6.7) If any provision of this Agreement is declared void or unenforceable, such provision shall be deemed severed from this Agreement, which shall otherwise remain in full force and effect. 6.8) Failure of any party to exercise any right or option arising out of a breach of this Agreement shall not be deemed a waiver of any right or option with respect to any subsequent or different breach, or the continuance of any existing breach. · -7- 6.9) This Agreement shall inure to the benefit of and be binding upon the parties hereto and t~eir respective heirs, personal representatives, successors and assigns. · 6.10) This Agreement shall be construed in accordance with the laws of the State of Minnesota. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. SELLER: BUYER: HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CHANHASSEN BY: ~ Its rpersor~ AND ,~ _ STATE OF MINNESOTA ) ( SS. COUNTY OF CARVER ) .~. _~.~_ The forego~J~g in_strument was acknowledaed before me this day of .~:~~f~_~_~, 1992, by ~ ~. ~ , and by Don Ashworth, respectively the Chairperson-and Executive Director of the Housing and Redevelopment Authority in and for the City of Chanhassen, a public body corporate and politic under the laws of the State of Minnesota, on its behalf. NOTARY PUBLI~MINN~ I -8- STATE OF MINNESOTA ) ( ss. _=The foregoing~gstrument was acknowledged before me athis ~" day of Oc-~b~' , 1992, by GARY V. KIRT, married person. NO~RY PUBLIC DRAFTED BY: Campbell, Knutson, Scott & Fuchs, P.A. 1380 Corporate Center Curve, Suite 317 Eagan, Minnesota 55121 (612) 452-5000 -9- to ~ E~T&TE P~E ~C~REEN:ENT LBGJLL DEBCR~PTTON OF TB:E SUBJECT PROPERTYI 0 m 0 ~ 0 0 · // c~ o o o o o o o o O~ O~ · · .i Schedule A t. eual De~dpUo. Continued P'He No.: 9 8038 PoXJ. cy Number 24-0011- PARCEL NOs it That parb of the Hort:hwest Guarl:er of tho Norbheast Quarter of Sect/on 13, Township 116, Range 23, Caxver County, J(~meso~a described as fellowes Cc~mencJ.ng at the Northwest corner of said Northwest Quart:er of the Northeast Quarter; thence on an assumed bearing of Sou~h along ~he West l~no of said Northwest 0ua~cer of the Northeast Qua_~cer, a distance of 722.-70 £ee~cl ~henco on a bearing of East, a distance of 396.00 feet to the point of beginning of the tract to be described; thence on & bearing of North &long the East line of the West line of the West 396.00 feet of said Northwest Quarter of the Northeast Quarter, a distance of 276.75 feet' to the intersection with a l~n~ being 43.50 feet southerly of and parallel with tho centerline of existing traokal thence northeasterly along said parallel line, a distance of 463.84 feet along a non-tangential curve concave to the Northwest, having a central angle of 4 degrees 36 minutes 11 seconds, a radius of S773.1S f~et and the chord of said curve bears North 70 degrees 43 minutes 58 seconds East~ thence Sooth 0 degrees 01 minutes 00 seconds West a distance of 224.75 feet to the northerly right-of-way line of State Trunk Highway No. 5; thence Sooth 59 degrees 28 minutes 00 seconds West along said northerly right-of-way line, a distance of 438.32 feet to the intersection with a line bearing South 73 degrees 39 minutes 00 seconds East from a point of beginning; thence North 73 degrees, 39 minutes 00 seconds West, a distance of 62.66 feet to the point of beginning. Except the East 167.0 feet as measured at right angles to tho East line of the above described tract. PARCEL NO. 2 t That part of the Northwest Quarter of the Northeast Quarter of Sect/on 13, Township 116, Range 23, Carver County, Minnesota described as follows: Co~menolng at the northwest corner of said Northwest Quarter of theNortheaet Quarter; thence on an assumed bearing of South along the west line of said Northwest Quarter of the Northeast Quarter a distance of 722.70 feeti thence East a distance of 361.89 feet to the point of beginning of the land to be described~ thence East 34.11 feet~ thence North 169.09 feet to the old sootherly right-of-way line of the Chicago Milwaukee and St. Paul Railroad Company hereinafter described~ thence soothwesterly along said right-of-way line to the intersection with a line bearing North from the point of beginningl thence Sooth a distance of 160.98 feet to the Point of beginning~ Said old sootherly right-of-way line is described as follows s Co~menoing at the northwest corner of la~Ld, Northwe~ ~uarter of the Northeast Quarter/ thence on an assumed bearing of South along the west line of said Northwest Quarter of the Northeast Quarter a distance of 551.52 feet! thence northeasterlF, a distance of 1338.26 feet along a nontangential curve concave to the northwest to the point of beginning of the line to be described, said having a central angle of 13 degrees 16 minutes $4 seconds, a radius of 5773.15 f~et and the chord of said curve bears North 70 degrees 27 minutes 44 seconds East for 1335.27 feet! said curve being 43.50 feet southerly of and parallel with the center line of the existing Chicago Milwaukee, St. Paul and Pacific Railroad Company's main trackl thence soothwesterly and westerly a distance of 1382.14 feet along a nontangential curve concave to the northwest having a central angle of 38 degrees 26 minutes 26 seconds a radius of 2060.08 feet, and the chord of said serve bears Sooth 68 degrees 05 minutes 17 seconds West for 1356.36 feet to the west line of said Northwest Quarter of the Northeast Quarter and said line there terminating. Abstract. REAL ESTATE REPURCHASE AGREEMENT THIS AGREEMENT (the "Agreement") made and entered into this ~ day of ~t.'.~a~_._ , 1992, by and between the HOUSIN~ AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CHANHASSEN, a public body corporate and politic under the laws of the State of Minnesota, with offices at 690 Coulter Drive, Chanhassen, Minnesota 55317 (referred to herein as the "Seller"), and ~ARY V. KIRT, a married person (the "Buyer"). In consideration of the mutual covenants and agreements herein, it is hereby mutually agreed by Seller and Buyer as follows: SECTION 1. SALE AND PURCHASE OF L~qD 1.1) Seller shall sell to Buyer and Buyer shall purchase from Seller, upon the terms and conditions hereof, the following property (all collectively referred to as the "subject property"): 1.1.1) The land in Carver County, Chanhassen (the "City"), Minnesota, legally described on Exhibit "A" to be attached hereto and incorporated herein; 1.1.2) Any improvements on the land existing at the date of closing; and 1.1.3) All rents, leases, contract rights, causes of action, permits, licenses, and other rights relating to the Land and Improvements (the "Contract Rights"). SECTION ~. PURCHASE PRICE 2.1) The purchase price for the subject property (the "Purchase Price") shall be Eight Hundred Twenty-five Thousand and 00/100 Dollars ($825,000.00) and shall be paid as follows: r10/01/92 $ 30,000.00 as nonrefundable earnest money, the receipt of which is hereby acknowledged~ and $795,000.00 by Buyer executing a promissory note and purchase money mortgage in favor ~f Seller on a form acceptable to Seller. The payment of the promissory note shall be amortized over thirty (30) years but shall be due and payable in full fifteen (15) years after such promissory note is executed. The interest rate on said note shall be ten percent (10%) per annum. In the event of a default under the promissory note, · the Buyer's liability under the note shall be limited to a maximum of $135,000.00 and shall only arise after Seller has foreclosed its interest in the subject property. SECTION 3. TITLE MATTERS 3.1) Seller shall cause to be furnished to Buyer within twenty (20) days hereof a current' ~ommitment for the issuance of a 1987/1990 ALTA Form B owner ts policy of' title insurance (the "Commitment-) issued by Title Company acceptable to Buyer ("Title") in the amount of the Purchase Price, co~it'ting to insure that Buyer will have good and marketable title to the subject property, subject to the standard' and other exceptions to title existing on the date Seller acquired fee title to the subject property, and except matters to which Buyer may consent in writing. 3.2) In the event any exceptions not listed in 3.1 are listed in the Co~itment for title insurance, if the same results from any voluntary action by the Seller, the Seller shall promptly cause the exception to be removed. With regard to said exceptions, if the Seller fails to remove the same within the time allowed for closing on the subject property, the Buyer shall -2- have the right to terminate this Agreement as the Buyer's sole and exclusive r~medy. 4.1) SECTION 4. CLOSING The closing (the "Closing") shall be at a location designated by Buyer, and shall occur no sooner than April 1, 1994, and no later than October 1, 1995 (the "Closing Date"). 4.2) On the Closing Date, Seller shall deliver to Buyer possession of the subject property. 4.3) On the Closing Date, Seller shall execute and/or deliver to Buyer: 4.3.1) A duly executed warranty deed, subject only to exceptions listed in Section 3.1 of this Agreement and subject to easements and declarations granted to the City of Chanhassen by Seller for right of way, drainage, utility and landscaping purposes; and 4.3.2) A customary affidavit that there are no unsatisfied Judgments of record, no actions pending in any state or federal courts, no tax liens, and no bankruptcy proceeding filed against Seller, and no labor has or materials have been furnished to the subject property for which payment has not been made, and that to the best of Seller's knowledge there are no unrecorded interests relating to the subject property. 4.4) Seller shall pay at Closing all the general real estate taxes levied against the subject property due and payable for all years prior to the year of closing, together with any unpaid installments of special assessments due therewith ("Taxes"). Seller and Buyer shall pro-rate the payment of general real estate taxes and special assessments levied against the subject property due in the year of Closing. Buyer shall assume payment of unpaid special assessments due for all years subsequent to the year of Closing. -3- 4.4.1) Occupancy.at time of repurchase closing shall produce net revenue to cover at least 105% of debt service. 4.5) Seller shall pay at Closing: 4.5.1) state deed tax; and 4.5.2) recording fees for corrective instruments required to remove enc,~m~rances and place marketable title in Buyer' s name. 4.5.3) Seller shall pay at Closing any fees or charges that may be imposed by Ministers Life to permit transfer of title to Buyer, if any. 4.6) Buyer shall pay at Closing: 4.6.1) title insurance service charges, commitment fees and premium fees; and 4.6.2) all recording fees and charges relating to the filing of the deed. 4.7) Seller and Buyer shall equally share the closing fee charged by the title company, if any. SECTION 5. NO W/~D.P, ANTIES OF SELLER 5.1) Seller, as an inducement to Buyer to enter into this Agreement, and as part of the consideration therefor, represents, warrants, and covenants with Buyer and its successors and assigns that: 5.1.1) Neither Seller, .nor to the best of Seller's knowledge, has anyone at any time: i) "released" or actively or passively consented to the "release" or "threatened release" of any Hazardous Substance (as defined below)-from any "facility" or "vessel" located on or used in connection with the subject property; or ii) taken any action in "response" to a "release" in Connection with the subject property; or iii) otherwise engaged in any activity or omitted to take any action which could subject Seller or Buyer to claims for intentional or negligent torts, strict or absolute liability, either pursuant to -4- statute or common law, in connection with Hazardous Substances (as defined below) located in or on the subject property, including the generating, transporting, treating, storage, or manufacture of any Hazardous Substance (as defined below). The terms set within quotation marks above shall have the meaning given to them in the Comprehensive Environmental Response and Liability Act, 42 U.S.C. Sec. 9601 et seq., as amended ("CERCLA") and any state environ- mental laws. "Hazardous Substances" means hazardous waste, toxic substances, formaldehyde, urea, polychlorinated biphenyls, asbestos, petroleum, natural gas, synthetic gas usable for fuel or mixtures thereof, any materials related to any of the foregoing, and substances defined as "hazardous substances", "toxic substances", "hazardous waste", "pollutant", or "contaminant" in CERCLA, Resource Conservation and Recovery Act as amended, 41 U.S.C. Sec. 9601 e_~t s_~., the Hazardous Materials Transportation Act, 49 U.S.C. Sec. 1801 et seq., the Clean Water Act, 33 U.S.C. Sec. 1251 et seq., any state laws regarding environmental matters, or any regulations promulgated pursuant to any of the foregoing statutes. Seller shall indemnify Buyer, its successors and assigns, against, and shall hold Buyer, its successors and assigns, harmless from, any and all losses, liabilities, claims, fines, penalties, forfeitures, damages, administrative orders, consent agreements and orders, and the costs and expenses incident thereto, including, without limitation, reasonable attorneys' fees, consultants' fees and laboratory fees, which may at any time be imposed upon, incurred by or awarded against Buyer as a result of or in connection with the breach of any of the above representations and warranties, whether such breach is discovered before or after closing. Each of the above representations and warranties shall survive the closing. Consummation of this Agreement by Buyer with knowledge of any such breach by Seller shall not constitute a waiver or release by Buyer of any claims arising out of or in connection with such breach; 5.1.2) Notwithstanding the foregoing, Seller warrants that there are no wells located on the subject property. 5.2) Other than the representation and warranty set forth in 5.1.1 and 5.1.2, Seller acknowledges that it is purchasing the subject property in an as-is condition with no faults. -5- SECTION 6 · MISCELLANEOUS 6.1) A~y notice, demand, or request which may be permitted, required or desired to be given in connection herewith shall be in writing and sent by certified mail, hand delivery, overnight mail service such as Federal Express, or Western Union telegram or other form of telegraphic co~unication, directed to Seller or Buyer. Any notice shall be deemed effective when delivered to the party to whom it is directed. Unless other addresses are given in writing, notices shall be sent to Seller or Buyer at the applicable address stated on the first page of this Agreement with a copy of any notice to Buyer also delivered to James R. Walston, Campbell, Knutson, Scott & Fuchs, P.A., 317 Eagandale Office Center, 1380 Corporate Center Curve, Eagan, Minnesota 55121. 6.2) Time shall be of the essence in this Agreement. Where any date or time prescribed by this Agreement falls on a Saturday, Sunday or statutory holiday, such date or time shall automatically be extended to the next normal business day. 6.3) Each party hereto shall promptly, on the request of the other party, have acknowledged and delivered to the other party any and all further instruments and assurances reasonably requested or appropriate to evidence or give effect to the provisions of this Agreement. 6.4) This Agreement represents the entire agreement of the parties with respect to the subject property and all prior agreements, understandings, or negotiations between the parties -6- are hereby revoked and superseded hereby. No representations, warranties, inducements, or oral agreements have been made by any of the parties, except as expressly set forth herein, or in other contemporaneous written agreements. This Agreement may not be changed, modified or rescinded, except by a written agreement signed by both parties hereto. . 6.5) If Buyer defaults under any of the terms hereof, then Seller shall have the right, in addition to whatever other remedies are available to Seller at law or in equity, including without limitation, specific performance, damages, including attorney's fees, to cancellation of this Agreement. 6.6) If Seller defaults under any of the terms hereof, including, without limitation, the delivery of marketable title to the subject property as set forth in Section 4 hereof then Buyer shall have the right, in addition to whatever other remedies are available to Buyer at law or in equity, including without limitation, specific performance, damages, including attorney's fees, to cancellation of this Agreement. 6.7) If any provision of this Agreement is declared void or unenforceable, such provision shall be deemed severed from this Agreement, which shall otherwise remain in full force and effect. 6.8) Failure of any party to exercise any right or option arising out of a breach of this Agreement shall not be deemed a waiver of any right or option with respect to any subsequent or different breach, or the continuance of any existing breach. -7- 6.9) This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, personal representatives, successors and assigns. 6.10) This Agreement shall be construed in accordance with the laws of the State of Minnesota. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. SELLER ~ BUYER HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CHANHASSEN BY: AND Don Ashwo ' rector STATE OF MINNESOTA ) ( ss. OUNTY OF CA,YEa and by Don Ashworth, respectively the Chairperson and Executive Director of the Housing and Redevelopment Authority in and for the City of Chanhassen, a public body corporate and politic under the laws of the State of Minnesota, on its behalf. t ~..,]- - CARVER COUNTY -8- STATE OF MINNESOTA ) ( SS. cou~ o~' ~,~. ~ )  The foregoing~pstrument was acknowledged before me this day of O~-~v' ., 1992, by G~Y V. KIRT, a married person. PUBLIC DRAFTED BY: Campbell, Knutson, Scott & Fuchs, P.A. 1380 Corporate Center Curve, suite 317 Eagan, Minnesota 55121 (612) 452-5000 NOTARY PUBLIC - MINNESOTA HENNEPIN COUNTY -9- That part of the Northwest Quarter of the Northeast Quarter of Section 13, Township 116, Range 23, Ca=vet County, H£nnesota described as follows: Commencing at the Northwest corner of said Northwest Quarte'~ of the Northeast Quarter; thence on an assumed bearing of South along the west line of said Northwest Quarts= of the Northeast Quarter, a distance of 722.70 feet; thence on a bearing of East, a distance of 396.00 feet to the point of beginning of the tract to be described; thence on a bearing of North along =he East line of the West line of the West 396.00 feet of said Northwest Quarter of the Northeast Quarter, a distance of 276.75 feet to the intersection w~=h a l~ne being 43.50 f.e~ southerly of and parallel with the of existing =racks; thence northeasterly along said parallel Line, a dis=ante of 463.84 fee= along i non-~angential curve concave =o =he Northwest, hav~ng a central angle of 4 degrees 36 m/nu~l. 11 seconds, a radius of 5773.15 feeu and the chord of said curve be&=. No=th 70 d~ree. 43 m~nu=e. 58 seconds Ee.=; ~hence South 0 d~=~. 01 minutes 00 seconds We.~ a distance o~ 224.75 f~C =o Cbs northerly =igh=-of-~ay Line ~f Stare T~nk Highway No. 51 ~hence Sou~h S9 degrees 28 .inures 00 seconds Wes= ,long s,id right-of-way Line, a d~s=ance of 438.32 fee= =o =he ln=e=~ec=ion with a l~ne bee=Lng Sou~h 73 degrees 39 minutes O0 .ecoa. East from a ~ln~ of beginnLngl ~hence No=th 73 d~reee, 39 m~nu~e. 00 seconds Wes=, a dis=.nce of 62.66 fee= Co the ~= 0f ~Lnning. Excep~ ~e Etn~ 167.0 fee~ aa measured AC =igh~ ~ngle. ~o ~he EA.~ lane o~ ~ demc=~ .. . . . .. P~CEL ~. 2 ~ · - Tha~ pa~ of ~he No~h~.= ~=e~ of ~he No=rheas= ~=e= of Sea/on 13,-T~shLp ~e 23, C~= ~un=y, H~nneso=a ~sc=~ as foLlow.~ · -. .' ' ~ : -- C~enc~g ,= the no==h~.= co=ne= of said-No~h~.= ~==~r 6f =h~o~ea.= ~=~ ~" =hence on An issued bearing of South ~o~ =he wes= Line of said No~s~ ~~e= of =he No=rheas= ~a~e= A dis=Ante of 722.70 feeCl =hence E,.= A.d~s=~oe of. 361.89 "'=o. =he ~nt of begi~lng of the ~a~ =o ~ descr~ed~ ~hence Ets= 34.11 fe~ =hence . ' No=th 169.09 fee~ to =he old .ou=~=ly =Lgh=~f~ay line of =he Chic~ ~lwaukee and -- S~. Paul ~il~ ~~y hereinafter described; thence .ou=h~s=~ly-~o~ said . 'b~lnni~}. =hence South a d~s=~ce of 160.98 fee= =o =he ~in= of .. SAid old .uutherLy right-of-way Line L. descried as foLL~.~ . ~~ncing &= =he .no~h~.= co=ne= of said No~hwes= ~a~e= of =he No,bets= =hence on an ...u~ bearing of South along =he wes= line of said Nor=h~.~ ~a==e= of the No=~hea8~ ~Ar~e= a d~s~ce of 551.52 fee~; ~hence northeasterly, A distance of 1338.26 fee= along a nonsenses=iai ~e concave =o =he no==h~.= =o =he ~lnc of beginning of the line =o be de.c=~, said having a central angle of 13 degrees 16 m~ute..S4 esters, i radius of S773.15 fee= ~ =he chord of said cu~e bearl Nor:h 70 degrees 27 m~u=el 44 geco~l EAI= fo= 1335.27 fee=; said cu~o being 43.50 fee= southerly of ~ ~alLel wLCh =he cen~e= line of the existing Chicago Milwaukee', St. d~s=ance of 1382.14 fee= along · non=~genCiAL curve concave Co Cbs no~hwe.= having a central angle o~ 38 degrees 26 minutes 26 seconds a radius of 2060.08 fee=, and ~o ~he ~s~ ~lne of said No=~hwes~ ~a~e= of ~he No~hea.~ Qu~e= ~nd said Line :here EXHIBIT "A" Mortgage and Security Agreement and Fixture Financing Statement da~ed ~;ovembe= B, 1991, filed November 20, 1991, a9 Document No. 129553, Office of =he County Records=, Carver County, Minnesota, executed by Gary V. Kit= and Maureen P. Kit=, husband and wife =o ~inisters Life - a Mutual Life Insurance Ccmgany, a Minnesota corporation in the original Drincipal amount of $508,$00.00 · Grantees (Buyers) do hereby assume and agree to pay said mortsage ~ccordin8 to its terms and conditions. Assi~_=~nU of R~n=s and Leases da=ed November 8, 1991, filed November ~0, 1991, as D¢cumen~ No. 129554, Office of the County Recorder, Carver Minnesota, executed by Gary %'. Kit= to Ministers Life, a Mutual Life 'nsurance Comgan.! in the original principal amount of $508,$00.00 Grante~s (Buyers) do hereby assume and agree to pay sa~d mortgage according its terms and condi~ons, Opt/on Agreement re=crded December 30, 1991, as Document No. 130699, O ..ice =he County Recorder, Carver County, Minnesota, between Gary Brown, and Gary V. Kit= and Maureen P. Kit=, .husband and wif2, No righ~ of access exists.from a portion of premises ~o State Highway No. 5, as evidenced by final certificate dated July'26, 1967, filed November ~, i967, recorded in Book 7 Miscellaneous, page 40 Mineral and mineral r£gh~s reserved by Chicago, Milwaukee, S~. Paul and Pacific Railroad Company, a Wisconsin corporation, by Documen~ da=ed September 15, 1977, filed October 2~, 1977, recorded in Book 136, page 514 as Document No. 35239, Office of the County Recorder, Carver County, Miflnesota Sewer Line Easement togs=her with right of way ingress and egress in favor of the Village (now City) cf Chanhassen dated January 18, 1971, filed February 2, 1971, recorded in Book 103 of Deeds, page 83 over that tract of land 15 feet in width, the cents=line of which is describe~ as follows: Co~encing at the northwest corner of the northwest L/4 of the northeast i/4 cf Section 13-116-23~ thence southerly along =he west line of said northwest 1/4 of the northeast 1/4 a distance of 730.2 feet to the beginning of the cents=line to be described~ thence easterly, deflectlnf =o the left 90· 00' a distance of 396.00 feet] thence Southeasterly del!erring ~o the right !6~ 21' a distance of 80.0 fee= and there terminating. EXHIBIT "B" PRO .M!~SORY NOTE $820,000.00 Chanhassen, Minnesota December 31,. 1997 FOR VALUE RF. CEIV~J~, the undersigned, GARY V. ~CiRT ('Borrower') hereby agrees and promises to pay to the order of the HOUSING AND REDEVELOPM~NT AUTHORITY IN AND FOR THE CITY OF Ci:I~~~, a public body corporate and politic under the laws of the state of Minnesota, or its assigns ("Holder"), at its office at 690 Coulter Drive, ~sen, Minnesota 55317, or such other place as Holder, or its assigns, may from time to _time designate, the principal sum of Eight Hundred Twenty Thousand and No/100 Dollars ($820,000.00) and to pay interest on the unpaid principal balance, from the date hereof until this Note is fully paid, at the rate of ten percent (10%) per annum. Both the principal balance and interest thereon shall be payable in coin or curren~ which at the time of pa}tm_ ent is legal tender for the payment of public or private debts in the United States Of ,America. .Commencing February 1, 1998 payments of principal and interest in the amount of Seven Thousand Two Hundred Forty-eight and 75/100 Dollars ($7,248.75) shall be made monthly on the first day of each month on the assumed amortization of thirty (30) years. Said payments of principal and interest on that basis shall continue on the first day of each month until February 1, 2013. Notwithstanding anything contained herein to the contrary, the entire outstanding principal balance of Six Hundred Sixty-one Thousand Six Hundred Fourteen and 80/100 Dollars ($661,614.80), together with accrued interest and any other amounts due hereunder, shall be due and payable in full on February 1, 2013. In the event that Borrower shall voluntarily or involuntarily cause, suffer or permit any mortgage, pledge, encumbrance or lien, other than a lien being contested by appropriate legal proceedings, to be imposed or remain outs .rending on the Premises or the granting of any security interest therein, except as granted in connection with the Mortgage and this Note and except as set forth in Exhibit "A" attached hereto, without the written consent of Holder being first obtained, then at the sole option of Holder, Holder may declare the entire amount of unpaid principal and accrued intent due and payable in full and call for payment of the same in full at once. However, in the event of a transfer or conveyance of the Premises (as defined herein) by Holder as permitted under Section 1.6 of the Mortgage (described herein) the entire outstanding principal balance of Seven Hundred Seventy-two Thousand Seven Hundred Six and 63/100 Dollars ($772,706.63) evidenced by this Note shall be due and payable in full on February 1, 2005. The outstanding principal balance evidenced by this Note may be prepaid in full or in part without penalty or premium at any time during the term of this Note. Any prepayment shall be made on thirty (30) days advance written notice to Holder. Partial prepayments shall be applied against the outstanding principal balance of this Note and shall not extend or postpone the due date of any subsequent monthly installments or change the amount of such installments unless Holder shall agree otherwise in writing. Per diem interest shall be computed on the basis of a three hundred sixty (360) day year but shall be payable on the actual days elapsed during the term of this Note. This Note is secured by a Mortgage dated of even date herewith (the "Mortgage") by which Borrower has granted to Holder a ftrst mortgage lien on and security interest in the premises, as therein defined, located in Carver County, Minnesota (the "Premises"). The terms of the Mortgage securing this Note are incorporated herein by reference and made a part hereof. A default under the terms of any said instrument shall be deemed an event of default under the terms of this Note. It is agreed that time is of the essence in the performance of this Note. Upon the occurrence of an event of default in the payment of principal or interest hereon or upon the occurrence of any other event of default hereunder or in the Mortgage, Holder shall have the right and option to declare, without notice, all remaining unpaid principal and accrued interest evidenced by this Note immediately due and payable. Holder may exercise this option to accelerate at any time during the occurrence of any event of default described above regardless of any forbearance by Holder. Any monthly installment payment not made by Borrower within twenty (20) days of the due date shall be subject to a late payment charge equal to five percent (5 %) of the monthly payment. The late charge shall apply individually to all payments past due and there will be no daily adjustment and shall be used to defray the costs of Holder incident to collecting such late payment. This provision shall not be deemed to excuse a late payment or be deemed a waiver of any other rights Holder may have, including the right to declare the entire unpaid principal and interest immediately due and payable. All payments made under this Note shall be applied frrst to interest, second to any late charges due hereunder, and then to principal, except that if any advances 4~2z0 2 made by Holder due to the occurrence of an event of default hereunder or under the terms of any instrument securing the Note are not repaid on demand, any moneys received, at the option of Holder, may first be applied to repay such advances and the balance, if any, shall be applied on account of any installments then due. Upon the occurrence of an. event of default.as described above and if the same is referred to an attorney for collection or any action at law or in equity is brought with respect hereto, Borrower shall pay Holder all expenses and costs of collection, including but not limited to attorneys' fees. Borrower, all guarantors and all other persons liable for all or any pan of, the indebtedness evidenced by this Note severally waive presentment for payment, protest and notice of nonpayment and dishonor. From time to time, without affecting the obligations of Borrower under this Note and the Mortgage, and without giving notice to or obtaining the consent of Borrower or such guarantors, and without liability on the pan of Holder, Holder may, at Holder's option, extend the time for payment of sums due under this Note, reduce payments thereon, release anyone liable for the payment of any portion of the indebtedness evidenced by this Note, accept a renewal of the Note, modify the terms and time of payment of the indebtedness evidenced by this Note, join in any extension or subordination agreeme.nt, take or release' other or additional security, and agree in writing with Borrower to modify the. rate of interest or period of amortization of this Note or change the amount of the monthly installments payable hereunder. All agreements between Holder and Borrower are hereby expressly limited so that in no contingency or event whatsoever, by reason of acceleration of maturity of the indebtedness evidenced hereby or otherwise, shall the amount paid or agreed to be paid to Holder for the use, forbearance, loaning or detention of the indebtedness evidenced hereby exceed the maximum permissible under applicable law. If from any circumstances whatsoever, fulfillment of any provisions hereof or of the Mortgage shall involve transcending the limit of validity prescribed by law, then the obligation to be fulfilled shall automatically be reduc~ to the limit of such validity and if from any circmnstances Holder should ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be in excess of such highest lawful rate shall be applied to the reduction of the principal balance evidenced hereby, to the payment of interest or returned to Borrower, at the option of Holder. This provision shall control every other provision of all agreements between Borrower and Holder and shall also be binding upon and available to any subsequent holder or endorsee of this Note. ,~32zu 3 No delay or omission on the part of Holder in exercising any right hereunder shall operate as a waiver of such right or of any ot~er remedy under this Note. A waiver on any one occasion shall not be construed as a bar to or waiver of any such right or remedy on a future occasion. The remedies of Holder, as provided herein and in the Mortgage, shall be cumulative and concurrent and may be pursued singularly, successively Or together at the sole discretion of Holder and may be exercised as often as the occasion therefor shall arise. Notwithstanding any provision herein to the contrary, in the event of defaglt under this Note, the Borrowers liability to Holder or the liability of any assignee of the Borrower under this Note shall be limited to a maximum sum of One Hundred Thirty-five Thousand and No/100 Dollars ($135,000.00) and shall only arise after Holder has foreclosed its interest in the Premises at a sheriff's sale. In the event Borrower sells, conveys, transfers, further mortgages or encumbers or disposes of the Premises, or any part thereof, or any interest therein, or agrees so to do, or in the event that any interest in the Premises is sold, conveyed, transferred, mortgaged or encumbered without the written consent of Holder being first obtained (or except as provided in section 1.6 of the Mortgage), then at the sole option of Holder, Holder may declare the entire amount of unpaid principal and accrued interest due and payable in full and call for payment of the same in full at once. IN WITNESS WHEREOF, the undersigned has executed this Note as of the day and year first above written. BORROWER: ASSUMPTION AGREEMENT THIS AGR~=MENT, rnade and executed to be effective as of this 21st day of October, 1992, byand between MINISTERS UFE - A MUTUAL UFE INSURANCE COMPANy, a Mlnnasota corpomtk~ ('Mortgagee'), whose address Is c/o Washington Square Capital, Inc., 1500 Northstar West, 625 Marquette A~enue South, Minneapolis, Minnesota 55402; GARY ~( K]R'I;, who Is married to Maumen P. K]rt ('Mortgagor'), and whose add _re~__ Is c/o D.C. Bell Investment Co., 3915 Hlghva~ 7, St. b3uis Park, Minnesota 55416; and the HOUSING AND REDEVELOPMENT NJTHORrrY IN AND FOR THE CITY OF CHANHASSEN, a pubic body corporate and politic under the laws of the State of Minnesola ('Pumham~, 'whose address'Is 690 Coulter Drive, Chanhassen, Minnasola 5E,317. P~EUMINARY STATEMENT OF FACI'~: A. Mortgagor has heretofore executed and delivered to Mortgagee, Its promissory note dated November 8, 1991, In the original principal amount of Five Hundred Elght Thousand Five Hundred and no/100 ($508,500.00) Dollars, reference being made to the promissory note for a statement of the terms and condrdons therein (-Note'). B. As security for the repayment of the Note, Mortgagor has heretofore exeaJted and delivered to Mortgagee the following documents (hereinafter referred to as the fl.oan Documents"): A certain Mortgage and Security Agrasmem and Fixture Financing Statement dated November 8, 1991, flied In the Office of the County Recorder of Carver count~ Minnesota, as Document No. 1295.53 (hereinafter referred to as the 'Mortgage'); and A certain Asslgnmem of Rents and Leases dated No~ember 8, 1991, flied in the Office of the County Recorder of ~ Count~.4 Minnesota, as Document NO. 129554 (hereinafter referred to as the ~slgnment of Rents'); and Certain Rnanclng 8tateme~ flied In the Office of the Secretary of State of Minnesota as Instrumem No. 1457965, and In the office of the Uniform Commercial Code DIviskm of Carver Count~ M. Innesota as Document No. 79668 (hereinaflar referred to as the 'Financing Statements'). C. The Loan Documents create a lien upon certain real property situate in the County of Carver State of'Minnasota, mom fully described In Exhibit ~' attached hereto and made a party hereof (the 'Real Property') and grant and perfect a security Interest In certain personal property mom fully Identified therein ('Personal Property'), (said Real. Property and Peraonai Property being hereinafter referred to as the 'Premises'). O. In order to assure completion of certain work on' the Pmrnlsee. Mortgagor has deposited In escrow with Washington Square Capital, Inc. ('Escrowee') the sum of 1Wenty. Flve ~ and no/100 November 8, 1991 entered lmo by and between Mortgagor, Mortgagee and Escrowee ('Escrow Agreement'). E. Pursuant to an Agmemem betwean Mortgagor and Purchasm; the Pumhaser Is acquiring the Premises, subject to the lien of and security Interest created by the Loan Documents and the rights and Interests of the Mortgagee thereunder. E Pursuant to the Mortgage. the Mortgagor has the right to transfer the Premises one time subject to Mongagee~ appro, eJ of certain terms and condlttons of the Uansfer. (3. The Mortgagee is agreeable to consenting to the terms and conditions of the conveyance of the Premises to Purchaser on the condition that the Purchaser assume the Note, the Loan Documents and the Escrow Agreement and certain other conditions, all as more fully contained in this Agreement. NOV~ THEREFORE, In consideration of the consent to the sale of the Premises, and for other good and valuable consideration, the receipt of which Is' hereby acknowledged, It Is agreed by the parties as follows: , 1, CONSENT TO SALE 1.1. The Mortgagee consents to the sale and transfer of the Premises to Purchaser all subject to the terms and conditions of this Agreement and the terms of the Note and the Escrow Agreement and the lien of and security Interest created by the loan Documents. 1.2. No right or remedy conferred upon or reserved to the Mortgagee is Intended to be ex=luslve of any other remedy or remedies available pursuant to the Note, the Escrow Agreement, the loan Documents and this Agreement, but each and every remedy shall be cumulative and shall be In addition to each and every other remedy given thereunder or hereunder. No waiver, amendment, release or modtficatlon of this Agreement and the obligations hereunder shall be established by conduct, custom or course of dealing, but only by an Instrument In. writing duly ex~3uted by the Mortgagee. 1.3. Mortgagee does not release either the Mortgagor or any parties to the Note and any of the guarantees and securities thereof, and nothing contained In this Agreement shall be deemed a waiver or substitution of release of the unconditional, absolute, pfimary and unconditional obllgatlon of the Mortgagor and .such other parties for the payment and performance of the Note, the Escrow Agreement, and the lean Documents. ASSUMPTION Purchaser acquires the Premises subject to the lien of the Loan Documents and assumes the Note and the obligations of Mortgagor under the Loan Documents.and agrees to pay the Note In accordance with. Its terms and to. keep and perform all of the obligations of Mortgagor under the loan Documents. 3, ES(~R(;;)W ~,~REEMENT 3.1. Mortgagor assigns, transfers and conveys to Purchaser all of Its fights In and obligations under the Escrow Agreement and Purchaser accepts such assignment and assumes Mortgagods obligations · under the Escrow Agreement and agrees to keep and perform all of the obligations of Mortgagor under the Escrow Agreement. 3.2. Mortgagee. Mortgagor and Purchaser agree that any funds to be released by Escrowee to Mortgagor pursuant to the Escrow Agreement shall be disbursed to Purchaser and authorize and direct Escrowee to disburse any such funds to Purchaser rather than Mortgagor. MISCELLANEOUS 4.1. This Agreement Is delivered in and shall In all respects be construed according to the laws of the State of Minnesota. -2- 4.2. This Agreemem and each and'every part hereof shall be binding upon the pmtle8 hereto and their heirs, representative, admlnlamtom, aucc~=om and assigns and shall Inure to the benefit of each and every future Holder of the Nate Including any sucoeasom and assigns of the Mortgagee. 4.3. Any notices to which the "Mortgagor' under the Mortgage shall be entitled to receive pumuant .to the terms of the Mortgage shall hereafter be addmssad to the Purchaser at the address of the ~ as set forth in the Preamble to this Ag .mement. No ~ need hereafter be sent to Mortgagor and Mortgagor walvas any requlmme~, that any notices under the Note or Loan Documents be sent to IL All notices shall be given In the manner rKluired by the Mortgage. The consents provided for herein shall not be deemed a consent or an agreement by the Mortgagee to any futura such sale, transfer, conveyance, encumbrance or mortgage, or a waiver of any of the rights of the Mortgagee under the Note and Loan Documents to dectare any future Sale. transfer, conveyance, encumbrance or mortgage an event of default under the Loan Documents and to enforce the remedies provided by the Mortgage. 4.5. Pumhasar agrees upon request of the Mortgagee to execute and deliver such further Instmment~ financing statements under the Uniform Commercial Code and other assurances and to do such further acts as may be reasonably necessary or proper to carry out mom effectlv~ the purposes of this Agreement and without limiting the foregoing to make subject to the lien of the Loan Documents any property agreed to be subjected hereto or covered by the granting clause of the Loan Documents. 4.6. Nothing herein shall be construed to be a novation of the Note and the Loan documents and It Is Intended that the Mortgagee shall continue to be entitled to all the prlorltlas existing under the Mortgage as of the date first executed and del~. 4.7. This Agreement may be executed In any number of counterparts wtth the same effect as If all partlas hereto had signed the same document. Ail such coumerparts shall be construed together and shall constitute one Instrument, but In making proof hereof It shall only be necessary to produce one such counterpart. IN WITNESS Will. EREOF, the partlas hereto caused this Agmemem to be exacuted as of the date and year first above written. ST/Ii:rE OF MINNESOTA COUNTY OF HENNEPIN ) )= ) MINISTERS UFE -A MUTUAL UFE INSURANCE COMPANY;, a Minnesota corporation By ' ' The f~r~golng ~stru .~mt was acknowledged before me~fle ~ ! day of~ , lgg2, by-'_/~_~ __~, ~~.J' , the ~/~/.)z~.~~ Ministem Ufe- A Mutual Life Insurance Company~a Mlnneso{a corporation, on' behalf of the on. / ' -..: :.v~ ' ' ' · i::' . -" ',' ~"~,F~pmSAl~.li, l~7 ~ Maumen P. Kirt STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing Instrument was acknowledged before me thls,~,~--~ay of 992, by Gary V. Kirt and Maumen R Klrt, husband and wife. Notary Public -4- HOUSING AND REDEVELOPMENT NJTi-IORITY IN AND FOR THE CITY OF CHANHASSEN, a public the State of Minnesota By Its Chai~n By Don Ashworth Its Executive Director STATE OF MINNESOTA COUNTY OF HENNEPIN ) ) The foregoing Instrument was acknowledged before me this day of ,1992, by , the Chairperson of Housing And Redevelopmer~ ~ In And For The City Of Chanhassen, a public body corporation and politic under the laws of the State of Minnesota on behalf of the public body corporation and politic. Notary Public STATE OF MINNESOTA COUNTY OF HENNEPIN ) ) The foregoing Instrument was acknowledged before me this day of ,1992, by Don Ashworth, the Executive Director of Housing And Redevelopment Authority In And For The city Of ci~n~n, a public body corporation and politic under the laws.of the State of MlnnesoM on behalf of the pulsIlc body corporation and poiltlc. THIS DOCUMENT WAS DRAFTED BY: OPPENHEIMER WOLFF & DONNELLY 3400 PI.7~_ VII 45 South Seventh Street Minneapolis. MN 55402 -$- 6Z~200%468X%39~LSSO-J~;R.IEV~Xo-xg-g2~bb EXHIBIT A PARCEL NO. 1 That part of the Northwest Quarter of the Northeast Quarter of Section 13, Township 116, Range 23, ~r County, Minnesota described as follow,~: Commencing at the Nor~twve~ comer of said Northwest Quarter of the Northeast Quarter. thence on an assumed beadng of South along the West line of said Norttwvest Quarter of the Northeast Quarter. a distance of 722.70 feet: thence on a bearing of East. a distance of 396.00 feet to the poir~ of beginning of the tract to be described; thence on a bearing of North along the East line of ~e West line of the West 396.00 feet of said Norttw~est Quarter of the Nortl~east Quarter. a distance of 276.75 feet to the intersection wit~ a line being 43.50 feet southerly of and parallel witl~ the centerline of existing tracks: thence northeasterly along said paraJlel line. a clistance of 4~3.84 feet along a nontangentlal curve concave to the Northwest. having a centraJ angle of 4 clegmes 36 minutes 11 seconds, a radius of 5773.15 feet and the ct~orcl of said curve bears Nortl't 70 degrees 4,3 minutes 58 seconds East: thence South 0 clegmes 01 minutes 00 seconos West a distance of 224.75 feet to ti're northerly rlgl'~-of.way line of State Trunk Highway No. 5; thence Soutl~ 59 degrees 28 minutes 00 secor~s West along said northerly right-of.way line. a distance of 438.32 feet to the interse~ion wit~ a line beadng South 73 degrees 39 minutes 00 seconds East from a point of beginning; thence Nort~ 73 clegrees. 39 minutes 00 seconds West: a distance of 62.66 feet to the point of beginning. Except the East 167.0 feet as measured at right angles to tl~e East line of Me above described trac=. That part of the Northwest Quarter of the Nortl~eas~ Quarter of Section 13. Township 116, Range 23, Carver Count"y, Minnesota clescdbed as follows: Commencing at the northwest comer of said Northv~st Quarter of the Northeast Quarter: thence on an assumed beadng of South along the west line of said Nortl'twest Quarter of the Northeast Quarter a distance of 722.70 feet; thence East a distance of 361.89 feet to the point of beginning of the land to be described: thence East 34.11 feet: thence North 169.09 feet to the old southerly right-of.way line of the Chicago Milwaukee and St. Paul Railroad Com.oany hereinafter described: t~ence southwesterly along said dght..of-way line to the intersection with a line bearing North from the point of beginning; thence South a distance of 160.98 feet to the point of beginning; Said old southerly d(~nt-of.way line is described as follows: Commencing at the northwest comer of said Nortl~west Quarter of the Northeast Quarter;, thence on an assumed bearing of South along the we~ line of said Northwest Quarter of the Northeast Quarter a distance of 551.52 feet: thence northeasterly, a distance of 1338.26 feet along a nontangentlal curve concave to the norttwvest to the poir~ of beginning of the line to be described, said having a cent'mi angle of 13 degrees 16 minutes 54 seconds, a radius of 5773.1,5 feet and the chorcl of said curve beam North 70 degrees 27 minutes 4.4 seconds East for 1335.27 feet: said curve bein~ 4,3.50 southerly of and parallel wit~ ~e center line of the existing Chicago Mlhuaukee. St. Paul and Pacific Railroad Company~ main tract; thence soutl'w~slerly and westerly a distance of 1382.14 feet along a nontangenflal curve concave to the nonl'wve~ having a central angle of 38 degrees 26 minute-, 26 seconds a radius of 2060.08 feet, and the chon:l of said curve bears South 68 degrees 05 minutes 17 seconds West for 1356.36 feet to ~ west line of said Northwest Quarter of the Northeast Quarter of said line there terminating. MORTGAGE THIS INDENTURE (herein 'Mortgage'), made and effqctive this 31st day of December, 1997 between GARY V. KIRT, a single person,"'wHose address is ('Mortgagor~) and AND FOR THE CITY OF CHANHASSEN, a public body corporate and politic under the laws of the state of Minnesota, whose post office address is 690 Coulter Drive, Chanhassen, Minnesota 55317 (~Mortgagee ~). · WITNESSETH, that the said Mortgagor, in consideration of the debt hereinafter described and for other good and valuable consideration, the receipt of which is hereby acknowledged, does hereby MORTGAGE, GRANT, BARGAIN, SELL AND CONVEY unto the said Mortgagee, its successors and assigns, forever, the following property located in Carver County, MinneSOta, hereinafter referred to as the 'Premi.~es': All the tracts or parcels of real property lying and being in the County of Carver, State of Minnesota, all as more fully described in Exhibit WA * attached hereto and made a part hereof, together with all the estates and rights in and to the real property and in and to lands lying in streets, alleys and roads adjoining the real property and all buildings, structures, improvements, fixtures and annexations, access rights, easements, rights of way or use, servitudes, licenses, tenements, hereditaments and appurtenances now or hereafter belonging or pertaining to the real property; and B. PERSONAL PROPERTY Together with all buildings, equipment, fixtures, improvements, building supplies and materials and personal property now owned or hereafter acquired and now or hereafter attached to, located in, phced in or necessary to the use of the improvements on the Premises, including, but without being limited to, all machinery, fittings, fixtures, apparatus, equipment or articles used to supply heating, gas, electricity, air conditioning, water, light, waste disposal, power, refrigeration, ventilation and fire and sprinkler protection, as well as all elevators, escalators, overhead cranes, hoists and assists, and the like, and all furnishings, supplies, draperies, maintenance and repair equipment, floor coverings, carpets, appliances, air conditioners, screens, storm windows, blinds, awnings, shrubbery and plants (it being understood that the enumeration of any specific articles of property shall in no way be held to exclude any items of property not specifically enumerated), as well as renewals, replacements, proceeds, additions, accessories, increases, parts, fittings and substitutes thereof, together with all interest of Mortgagor of any such items herea~er acquired, all of which personal property mentioned herein shall be deemed fixtures and accessory to the freehold and a part of the realty and not severable in whole or in part without material injury to the Premises; and C. J'UDG~~S AND AWARDS Together with any and all awards or compensation made by any governmental or other lawful authorities for the taking or damaging by eminent domain of the whole or any part of the Premises, including any awards for a temporary taking, change of grade of streets or taking of access. AND THE SAID MORTGAGOR, for himself, his successors and assigns, does covenant with the Mortgagee, its successors and assigns, that Mortgagor is lawfully seized of the Premises and has good right to sell and convey the same; that the Premises are free from all encumbrances except as may be stated as Permitted Encumbrances in Exhibit "A" of this Mortgage; that the Mortgagee, its successors and assigns, shall quietly enjoy and possess the Premises; and that the Mortgagor will warrant and defend the title to the same against all lawful claims not specifically excepted in this Mortgage. TO HAVE AND TO HOLD THE SAME, together with the possession and right of possession of the Premises, unto the Mortgagee, its successors and assigns, forever. PROVIDED, NEVERTHELESS, that if the Mortgagor, the Mortgagor's successors or assigns, shall pay, or cause to be paid, to the Mortgagee, its successors or assigns' (a) The sum of Eight Hundred Twenty Thousand and No/100 Dollars ($820,000.00), according to the terms of that certain Promissory Note in said principal amount ("Note~) of even date herewith, the terms and conditions of which are incorporated herein by reference and made a part hereof, together with any extensions, modifications or renewals thereof, due and payable with interest thereon at the interest rate set forth therein, the balance of said principal sum, together with interest thereon, being due and payable in any event on February 1, 2013. Notwithstanding the foregoing, in the event Mortgagor conveys the Premises as permitted under Section 1.6 herein, the Indebtedness Secured Hereby, as defined herein, shall be due and payable in full on February 1, 2005. ~a269 2 (b) Shall repay to the Mortgagee, its successors or assigns, at the times demanded and with interest thereon at the same rate specified in Note, all sums advanced in protecting the lien of this Mortgage, in payment of taxes on the premises, in payment of insurance premiums covering improvements thereon, in payment of principal and interest on prior liens, in payment of expenses of attorneys' fees herein provided for and all sums advanced for any other purpose authorized herein; and (c) Shall keep and perform all of the other covenants and agreements herein contained; then this Mortgage shall become null and void and shall be released at Mortgagor's expense. The sums of money referred to in (a)-(c) shall also be referred to as 'the Indebtedness Secured Hereby'. AND IT IS FURTHER COVENANTED AND AGREED AS FOLLOWS: ARTICLE ONE ~ECTION 1.1 Mortgagor Will duly and punctually pay or cause to be paid . each and every installment of principal and interest on Note and all other Indebtedness Secured Hereby, as and when the same shall become due, and shall duly and punctually perform and observe all of the covenants, agreements and provisions contained herein and in the Note. SI~CTION 1.2 Mortgagor agrees that Mortgagor will keep and maintain the Premises in good condition, free from any waste or misuse, and will comply with all requirements of law, municipal ordinances and regulations, restrictions and covenants affecting the Premises. SECTION 1.3 Mortgagor agrees to keep the Premises free from mechanic's, materialmen's and other liens; keep the Premises free from levy, execution or attachment, and upon request will exhibit to Mortgagee satisfactory evidence of such payment and discharge, except as provided in Section 1./i hereof. SECTION 1.4 Mortgagor will pay when due and before any penalty all taxes, assessments, water charges, sewer charges and other fees, taxes, charges and assessments of every kind and nature whatsoever assessed or charged against or constituting a lien on the Premises or any interest therein, or the Indebtedness Secured Hereby ("Impositions"); and will upon demand furnish to the Mortgagee proof of the payment of any such Impositions. SECTION 1.:5 Mortgagor agrees to promptly notify Mortgagee of and appear in and defend any suit, action or proceeding that affects the value of the Premises, the Indebtedness Secured Hereby or the rights or interest of Mortgagee hereunder. The Mortgagee may elect to appear in or defend any such action or proceeding and Mortgagor agrees to indemnify and reimburse Mortgagee from any and all loss, damage, expense or cost arising out of or incurred in connection with any such suit, action or proceeding, including costs of evidence of title and reasonable attorneys' fees. ' SECTION 1.6 In the event that Mortgagor shall voluntarily or involuntarily cause, suffer or permit any mortgage, pledge, encumbrance or lien, other than a lien being contested by appropriate legal proceedings, to be imposed or remain outstanding on the Premises or the granting of any security interest therein, except as granted in connection with the Note and this Mortgage and except as set forth in Exhibit "A" attached hereto, without the written consent of Mortgagee being first obtained, then at the sole option of Mortgagee, Mortgagee may declare the entire amount of unpaid principal and accrued interest due and payable in full and call for payment of the same in full at once. Provided Mortgagor is not in default under any term or condition of this Mortgage or under the Note, Mortgagor, shall be permitted to transfer or convey Mortgagor's interest in the Premises to a third party on or before April 1, 1998 (three months after closing) without eoment of Mortgagee. In the event Mortgagor transfers or conveys his interest in the Premises by April 1, 1998 as provided herein: (a) the term of the Note and the Maturity Date of this Mortgage shall be February 1,200:5; Co) Mortgagor's liability to Mortgagee of One Hundred Thirty-five Thousand and 2qo/100 Dollars ($135,000.00), in the event of default as provided in the Note, shall not be released or otherwise terminated; (c) assignee shall be liable to the Mortgagee under the Note for One Hundred Thirty-five Thousand and No/100 Dollars ($13:5,000.00) in the event of default as provided in the Note; and (d) Mortgagor provides written notice to Mortgagee thirty (30) days prior to the closing of such conveyance or transfer. ARTICLE TWO SECTION 2.1 Mortgagor shall obtain and keep in full force and effect during the term of this Mortgage, at Mortgagor's sole cost and expense, insurance against loss by fa'e, lightning and risk customarily covered by standard extended coverage endorsement, including the cost of debris removal, all in the amounts of not less than the full insurable value or full replacement cost of the improvements on the premises, whichever is greater. Such insurallce policies shall be written on form.~ and with |nsurance companies satisfactory to Mortgagee, shall name as the in.tared parties the Mortgagor and the Mortgagee as their interests may appear, shall be in amounts sufficient to prevent the Mortgagor from becoming a co-insurer of any loss thereunder and shall include a satisfactory mortgagee chuse in favor of the Mortgagee with loss procex~s under any such policies to be made payable to the Mortgagee. SECTION 2.2 Mortgagor will give the Mortgagee prompt notice of any action, actual or threatened, in condemnation or eminent domain and hereby assigns, transfers and sets over to the Mortgagee the entire proceeds of any award or chim for damages for all or any part of the Premises taken or damaged under the power of eminent domain or condemnation. The proceeds or any part thereof shall be applied upon or in reduction of the Indebtedness Secured Hereby then most remotely to be paid, whether due or not, without the application of any prepayment premium, or to the restoration or repair of the Premises, the choice of application to be reasonably agreed upon by Mortgagor and Mortgagee, provided Mortgagor is not in default hereunder, in which instance the choice of application shall be solely .at the discretion of the Mortgagee. SECTION 3.1 If the Mortgagor shall fail to comply with any of the covenants or obligations of this Mortgage, the Mortgagee may, but shall not be obligated to, without further demand upon Mortgagor, and without waiving or releasing Mortgagor from any obligation in this Mortgage contained, remedy such failure, and the Mortgagor agrees to repay upon demand all sums incurred by the Mortgagee in remedying any such failure, together with interest on all such sums advanced at a rate equal to that then in effect under the terms of the Note. All such sums, together with interest as aforesaid, shall become additional Indebtedness Secured Hereby, but no such advance shall be deemed to relieve the Mortgagor from any failure hereunder. SECTION 3.2 Mortgagor will permit the Mortgagee's authorized representatives to enter the Premises at all times for the purpose of inspecting the same; provided the Mortgagee Shall have no duty to make such in.,5)ections and shall not incur any liability or obligation for making or not making any such inspectiOns. SECTION 3.3 Each right, power or remedy herein conferred upon the Mortgagee is cumulative and in addition to every other fight, power or remedy, express or implied, now or hereafter arising, available to Mortgagee, at hw or in equity, or under any other agreement, and each and every right, power and remedy herein set forth or otherwise so existing may be exercised from time to time as often and in such order as may be deemed expedient by the Mortgagee and shall not be a waiver of the right to exercise at any time thereafter any other right, power or remedy. No delay or omission by the Mortgagee in the exercise of any right, power 'or remedy arising hereunder or arising otherwise shall impair any such right, power or remedy or the right of the Mortgagee to resort thereto at a later date or be construed to be a waiver of any default or event of default under this Mortgage or the Note. ARTICLE FOUR SECTION 4,1. It shall be an event of default under this Mortgage if (a) the Mortgagor shall fail to pay any principal or interest on the Note when and as the same become due (whether at the stated maturity or at a date fixed for any installment payment or any accelerated payment date or otherwise), and such failure continues for a period of twenty (20) days; or (b) the Mortgagor shall fail to pay when due any other Indebtedness Secured Hereby, and such failure continues for a period of thirty (30) days; or (c) the Mortgagor shall fail to comply with or perform any other term, condition or covenant of this Mortgage, and such failure shall continue for a period of thirty (30) days after written notice thereof; or (d) the Mortgagor shall further mortgage or encumber or dispose of the Premises, or any part thereof, or any interest therein, or agree so to do, except as provided in Section 1.6; or (e) the Mortgagor shall make an assignment for the benefit of their creditors, or shall admit in writing an inability to pay their debts as they become due, or shall file a petition in bankruptcy, or shall be adjudicated a bankrupt or insolvent, or shall file a petition seeking any relief under any present or future bankruptcy or insolvency statute, law or regulation or shall ftc an answer admitting to or not contesting the material allegations of a petition filed against either of them in such proceedings, or shall not within sixty (60) days after the filing of such a petition have the same dismissed or vacated, or shall seek or consent to or acquiesce in the appointment of any trustee, receiver or liquidator of a material part of their properties, or shall not within sixty (60) days after the appointment without their consent or acquiescence of a trustee, receiver or liquidator of any material part of their properties have such appointment vacated. SECTION 4,2 If an event of default shall occur and be continuing, the Mortgagee may immediately and without notice to the Mortgagor declare the entire unpaid principal balance of the Note, together With all other Indebtedness Secured Hereby, to be immediately due and payable and thereupon all such unpaid principal balance of the Note, together with all accrued interest thereon and all other Indebtedness Secured Hereby, shall be and become immediately due and payable and the Mortgagor hereby authorizes and fully empowers the Mortgagee to foreclose this 43~69 6 Mortgage by judicial proceed~s or by advertisement with full authority to sell the Premises at public auction and convey the same to the purchaser in fee simple all in accordance with and in the manner prescribed by hw, and out of the proceeds arising from sale and foreclosure to retain the principal and interest due on the Note and the Indebtedness Secured Hereby, together with all such sums of money as Mortgagee shall have expended or advanced pursuant to this Mortgage or pursuant to statute, together with interest thereon as herein provided and all costs and expenses of such foreclosure, including lawful attorneys' fees, with the balance, if any, to be paid to the persons entitled thereto by hw. SECTION 4.3 In the event Mortgagee shall have proceeded to invoke any fight, remedy or recom'se permitted under thi.~ Mortgage and shall thereafter elect to discontinue or abandon the same for any reason, Mortgagee shall have the unqualified right to do so and in such event Mortgagor and Mortgagee shall be restored to their former positions with respect to the Indebtedness Secured Hereby. This Mortgage, the Premises and all rights, remedies and recourse of the Mortgagee shall continue as if the same had not been invoked. SECTION 5.1 When all Indebtedness Secured Hereby has been paid, this Mortgage and all assignments herein contained shall be void and this Mortgage shall be released by the Mortgagee at the cost and expense of the Mortgagor, otherwise to remain in full force and effect. SECTION 5.2 This Mortgage is made and executed under the laws of the State of Minnesota and is intended to be governed by the laws of said State. SECTION 5.3 This Mortgage and each and every covenant, agreement and other provision hereof shall be binding upon the Mortgagor and the Mortgagor's successors and assigns, including without limitation each and every from time to time record owner of the Premises or any other person having an interest therein, shall mn with the land and shall inure to the benefit of the Mortgagee and its successors and assigns. SECTION 5.4 The unenforceability or invalidity of any provision hereof shall not render any other provision or provisions herein contained unenforceable or invalid. 4' IN WITNESS WHEREOF, the Mortgagor has caused these presents to be executed as of the date first above written. MORTGAGOR: ~~ STATE OF MINNESOTA) ) SS. COUNTY OF4/e~,<,z~ ) The foregoing instrument was acknowledged before me this ,5'~ 199~, by GARY V. KIRT, a single person. . day of THOt~S p. ~c~.ANUS NOTARY PUBLIC-MINNESOTA HENNEPIN COUNTY My Co~uion ~pir~ J~. al, 2~ Notary Public THIS INSTRU~NT WAS DRAFTED BY: CAMPBELL KNUTSON Professional Association 317 Eagandale Office Center 1380 Corporate Center Curve Eagan, Minnesota 55121 Telephone: (612) 452-5000 43~69 8 PAR~ NO. 1: That part of the No~est Quarter of the Northeast Quart.. er of Section 13, Township i16, Range 23, Carver County, M,--,'~ota described as follows: Commencing at the.Northwest comer of said Northwest Quarter of the Northeast Qus_,iar;, thence o__n an ass,?.ed bearing of South along_ the West l{-e of said Northwest Quanar of the Northeast Q .ua~. er, a .d}sta~. ce of 72Z'/0 feet; thence.on a bearing of East, a. distance of 396.00 feet to the .p. om..t.of b_e~n_,_~n_g of the .t~. ct to be des_cnbed; thence on a bearing of North along the East liue of me west :l~o.u0 feet of smd Northwest Quarter of the Northeast Quarter, a distance of 276.75 feet to.th.~ intersection with a H-e being 43.50 feet southerly of andparallelwith the centerline of emsting tracks; thence northeasterly along said paratlel Hue, a distance of 463.84 feet along a non-tangential curve concave to the Northwest,-having a central angle of 4 degrees 36 rain/ires 11 seconds, a radius of 5773.11/feet and the chord of said-curve bears North ?0 degrees 43 minutes 58 seconds East; thence South 0 degrees 01 ,-,-utes 00 seconds West a distance of 224./5 feet to the northe, rllt_.right-of-way.Une of State ~ Highway No. 5; thence South 59 degrees 28 m~"utes_ 00 se. concls west along said northerly right-of-way line, a distance of 438~32 feet to the intersection 'with a llne bearing South 73 degrees 39 minutes 00 seconds East from a point of belguning; thence North 73 degrees, 39 mi-utes 00 seconds .W.~t, a distance of 62.66 feet tb thc ooint-of bemlnuinll. Except the East 167.0 feet as measured at right angles to the East Hue of the above described - tract. PAR~ NO. 2: That part of the Ne.rte..west Quarter of the Northeast Quarter of Section 13, Township 116, Range 23, Carver County, Mi-nesota described as follow~: Commencing at the .northwest corner of said Northwest Quarter of the Northeast Quarter; thence in an ,s~,med beanng of South along the west llne of said Northwest Quarter of the Northeast _ Quarter a distance of 72Z70 feet; thence East a a{-_,tance of 361.89 feet to the point of beginning of the land to be descn'bed; thence East 34.11 feet; thence North 169.09 feet to the old southerly_ described right-of-way line of the Chical{o .Milwaukee and SL Paul R-ilroad Company hereinafter ; thence sou .tl~westerly along smd right-or-_way line to the intersection with aline bearing North from the point of beginn{ng; thence. South a distance of 160.98 feet to the point of beC-nine. Said old southerly right-of-way line is descn'bed as follows: . . Commencing at the.northwest comer of said Northwest Quarter of the Northeast ~ thence on an assumed bearing of South along the west line of said Northwest Quarter of the Northeast Quarter a .d~s_tauce of 551.52 feet; thence northeasterly, a distance of 1338.26 re. et along a nontang.ential curve concave to the northwest to the point of beginning of the h,,e to be des?n_'bed, said having a central angle of 13 degrees 16 m{m,tes I/4 seconds, a radi~us of 5773.15 feet ~ the ch.ord of said curve bears North 70 degrees 27 minutes 44 seconds Hast for 13352.7 feet; saki curve being 43.50 feet south~ly of and parallel with the center llne of the exis _ting Chicago .l~lilwaul~e, St.. l~/ufl and Yadfie Rafl/oad Company's main track; thence southwesterly and westerly a _ distance iff 1382.14 feet along a nontangential curve concave to the northwest having a. central angle of 38 degrees 26 minutes 26 seconds a radius of 2060.08 feet, and the chord of said ~ bears South 68 degrees 05 mi-utes 17 seconds West for 135636 feet to the west line Of said Northwest Quarter of the Northeast Quarter and said line there terminating. PERMITTED ENCUMBRANCES: 1 ~ort~aSe and Sccudty Agreement and Fixture _Finenc~ Statement dated · Nove2nSer 8,1991, ftl~ November 20,1991, ss Document No. 129553, ORlco of mo CountyRecorder, Ctrvcr O~n~, Mlnnesot~ executed by Gary V. Xln and Maure. en P. Kfrt, husband and wife to Ministers Lifo. · Mut~tl I. ifo Insttt'm~m Comp~any, · Minnesota torpor·don In the orlgflml prin~pal amount o! A~ _S!~_d m ~'he Minnesota Mutual Life Xnsurance CompA~ by ~,.,~t dared Zun¢ 30,1993, iliad November 5,1993 ss Document No. 1~611, Oifu:~ of th~ County Recorder, Carver County, Mtrmesota. 9_. AsslSnment of Rents and L~ues dated November 8, lg91, flied Nov~nb~ 20, 1.~. f, as Document No. 129554, OlH~:e o.f the Couixty Recorder, Carwr ~, Minnesota executed .by Gary ¥. Kirt to lvttnat~ Life, · Mutual Ltfe Insttran~ Company in the orl~nal prfn~pal amount o! A~i ~s~_d to The Minnesota Mutual Life l~urance Company by s.ulsnment_ dated June 30,1993, flied November 5,1993, ss Document No. L5"/6 f.2, Offi~ o~tim County Recorder, Carver County, Minnesota. 3 · .Terms end Condftfom of As~umptlon Asreement by ~nd bern, cea M/m~ Mutual Life lnsuran:e Compan)~ (mort·asea); Oar9 V. Kirt, who ts mm-tied to. Maureen P. Kirt (mortsnsor'), a~ the H~5~ns an,~ Redavelopn~nt Authority In · and for the City of C~t~th-ss~n dated October 21, lg92, ~ October ~, .1992, as Document No, 1414~9, Office of the County Recorder, Carvm' County, Minnesota. ~. Option Agr~_cment recorded Dceemb~30, lg91, .as Document 12069g, (:}Rico of th~ County Recorder, Carver County, Mtnaesote, tmtween O.aD, Brown, Op .tlone~ and GetTV. Kirt and M,,urcen P, Kirt, husband smd wife, Opttonors. · ~. Easement for public right of way street and utility purposes Irt favor of,,t~ City_of Cha~ss~en dated February 12, IF/8, flied Pcbrua~ry 26,1F/8, In Book L3F D_ccds, p_a~e 206, as Docu.mentN0; 367~..7., O.1~. of. the C .og....nty_R~. ~. rder, Carver county, Ivllnnesotn, over mat poruon et_mo rl~_t-ot-vmy o_t me umz~o, Milwaukee, St. P,,Ul & P,,ciflc-Raltro,,d In theNortlm,~t Quarter et me rmrmea~ Ouerter of Section 13, Township 116 North, Range 23 V/~t of the 5th Pdn~. pal Mcrldlnn, ns described in Book-W' of Deeds, pnl~e 484, ORlco of tho County . Recorder, Carver County, Minnesota and Book'%'" of DeeRs, pn~ 228, ORice thc CountyRecorder, Carver County~ Minnesota which lf~ Soudierly of.a. lkm.. 4:L50 feet-Southerly of. measured radially, to and parallel with tl~ center ttn~ e. xistfng ernst bound'main _track of said R.aflroed, .and If. nS WesterlLo.~ a_ ~ 3_~._~d feet Easterly o~, me··tired et · ri&bt an~te to ann paralleI with thc west ~ Northwest ~uarter of Northeast Quarter. Together with an e. asement for public r{~t of way., street and utility purposes over, un,er and ·c~o~ trot pm of fl~t ·bo~ des~bedpmp.~ty..bo.u .n~ On thc North by · line 43_q0 feet Southerly o: mcasure~ raomay to, ann ptrau with tho center]tee of the extstlns East bound msia tract of saldRallroa~i; On the V/est by a lln~ 396.00 feet-Easterly of,_messured at a ~ght an~le to, ~ . parallel with tSe W~t llrtc of said Northwest ~utrter ot'Northesst Qum-ter; un mo ~outh by a line 83.50.feet Southerly of, measured radially to, and parallel with tho center l{rm og thc exlst[nl~ Past hound main tract of sa[d Rnilroad; On thc P.~st by the East line and Its Northerly extension o1~ Block 10 Plat of the Village o! ChS. nhassen.. 6. ~o right of access exists from · port[on of premises to Stato X-Ill~hwa~ .N.o....=~, ss evidenced by Flntl Certificate dated July 27,1967, flied Novemt~er 7., l~_.-I, Document No. 02528, Office of the County Recorder, Carver Coun.ty, Minnesota. (Affects Parce.11) 7 · Mineral and mineral dghts reserved by C~lcnso, Mllwaukee,.St. Paul ·.nd Railroad Company, a Wtscomfn co.q~..rad..on,.'.~..km_tru.m_ent .dated Sap..t~er iF/7, filed Oc(ober 25,1977, recordeo ia ttno~'~- et ].~ee~ls, psse :,pt ~ Document No. 35239, Office of the County Recorder, Ca. rv~r County, Mkmesota. (Affects Parcel 1) 8 · Sewer Line Easement together with rl~.t of way ingress and caress tn favor of tim ' %'Ill·se (now City) of Ch~'thmen da%ed .~anua~/1~ 1. F/l_, fil~ Febru _mT 3,1F/l, receded in Book-"KD" of Deeds, pase 83, Office of the Cmmty Reco..rder, County~_Mi.nn. esot· over that tract oil·nd L~ feet In width, the centerttn~ o~wm~n is des6rt%ed ss follows: ' Commencfna st the northwest comer of the Northwest Ouartar of the Northerner Ouarter of S-action 12-116-23; thence southerly .·.lens the west ltne of sal.d Northwe.tt Qu·rter of the Northeast Quarter & ~ttttanco of 730.2 feet to me beslnnlns of the centerl[ne to be der, cn%ed;.thence easterly, .deflect_tn· to.thg.l~. ~0' a distan~ of 396.00 feet; thence Soul·easterly deflecttns to the ri·hr a dfstancce of 80.0 feet and there terminating. 9 · Subject to rfShts of ten·aU under uttre~orded 1 0. SubJect_tg. unrecorded Asree~t to Plat R~el Property dated.N....ov~mb~.l., 19~1, nmo~ cl~ of Chanha~n, Lotus R~alty_S. ervi .c~ In~ 0 _ar~. ¥. tun ~ P. Klrt, husband and wife, and Min~ten Lt[e,· Mutual Lt~5 Inatran~ Comp·n;'. .o 11. 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