HRA 1982 05 20AGENDA
REGULAR MEETING
Chanhassen Housing and Redevelopment Authority
Thursday, May 20, 1982
Chanhassen City Hall, 690 Coulter Drive
City Council Chambers
7:30 p.m.
7:30 p.m. - 1. Call to Order.
2. Approve Minutes of March 18, 1982 Meeting.
3. Adopt Resolution #82 -4 Clarifying Amount of
Assessment Reduction payments.
4. Approve Assessment Agreement with Fluoroware,
Inc., 1501 Park Road.
5. Approve Assessment Agreement with Dayco
Concrete Co., 1340 Park Road.
6. Approve Assessment Agreement with United
Mailing, Inc., 1001 Park Road.
7. Consider Requests for 6 -Month Extension of
Downtown Project,Redeveloper Agreements:
a. Bloomberg Companies
b. Kraus - Anderson
8. Review 1981 Financial Audit Report.
9. Approval of Bills.
10. Old Business.
11. New Business.
9:30 p.m.- 12. Adjournment.
MINUTES
CHANHASSEN HOUSING AND REDEVELOPMENT AUTHORITY
Regular Meeting
March 18, 1982
Call to Order
Acting Chairman Clark Horn called the meeting to order at 7:40 p.m.
Present were Commissioners Horn, Bohn, and Russell. Chairman
Gullickson arrived at 8:00 p.m. Commissioner Whitehill was absent.
Executive Director Martin and Assistant City Attorney Mertz were also
in attendance. Carol Watson, Planning Commission Representative
was also present.
Approval of Minutes
Bohn moved, seconded by Russell, to approve the minutes of the
February 18, 1982 meetina as presented. All voted in favor and the
motion carried.
Special Assessment Reduction Program
Craig Mertz, Assistant City Attorney, presented an overview of the
final revised legal documents which formally establish the Special
Assessment Reduction Program for Chanhassen Lakes Business Park
(Phase I) and all of Park Two.
Chairman Gullickson arrived at this point of the meeting.
Martin highlighted specific elements of the proposed program and
displayed a map of the affected lands on the overhead projector.
Mertz distributed recommended alternative language for Sections
2.03, 2.04, and 3.05 of the proposed HRA Resolution approving
plan modification No. 5. He explained that Mayor Hamilton
requested a change in Section 2.03 and 2.04 following the joint
Council /HRA meeting of February 18, 1982, and that he (Mertz) was
comfortable with the new language from a legal standpoint. The
change to Section 3.05 was recommended to clarify the meaning and
intent of that section.
The Commissioners agreed to accept the suggested modifications to
the Resolution; but decided not to revise the language in Section
6.2 of the Assessment agreement which provides for certain "Remedies
on Default ".
Representatives from Rauenhorst Corporation, including Robert
Worthington, Director of Planning and Governmental Affairs, and
David Sellergren, Legal Counsel, were present to speak in favor of
the proposed special assessment reduction program. Worthinaton
stated that the program would have a very positive impact on
Rauenhorst's ability to develop Chanhassen Lakes Business Park
during the next several years. He said that Rauenhorst is attempting
- to secure small businesses and high technology industries for the
Business Park, and that the program will be the necessary triggering
Page 2
Chanhassen HRA Minutes - March 18, 1982
mechanism to induce new development into
the program would put the Business Park
position compared to industrial parks in
Jonathan, and other nearby communities.
continued, the costs per square foot for
not competitive with nearby parks due to
the Park. He added that
into a very competitive
Eden Prairie, Chaska -
Without the program, he
Business Park lands are
above - normal assessments,
Worthington requested a longer program period than the 5 year
period under consideration by the HRA. He stated that having
the program in effect for an 8 -10 year period would provide for
better flexibility for Rauenhorst, since they are currently
projecting an 8 -10 year period for a complete "build -out" of
the entire Business Park (all phases).
He added that Rauenhorst has been using the last six months to
learn more about the Chanhassen Market Area in general, and more
about Chanhassen in particular, and that Rauenhorst is now prepared
to begin an agressive marketing compaign for development in the
Business Park.
Worthington concluded by saying that he felt that the partnership
between Rauenhorst and the City of Chanhassen under this program
would result in the high quality business development that Chanhassen
is seeking.
Horn and Gullickson both expressed a preference for establishing
the program for a five year period initially, but felt that an
extension of the program would likely be fairly routine in the
future if the program produces good results and is effective.
Russell moved, seconded by Bohn, to adopt Resolution #82 -3
Approving Plan Modification No. 5, with the recommended revisions
to Sections 2.03, 2.04, and 3.05; and also to correct the typo-
graphical error in Section 5.1 of the Assessment Agreement by
eliminating the word "assessed" in the second to the last line
of the first paragraph. All voted in favor of the motion and the
Resolution was approved.
Redevelopment Project Traffic Analysis Report
David Warner, Traffic Engineer for BRW, Inc., presented the
"Traffic Analysis Report for the Downtown Redevelopment Project
Area ", as authorized by the HRA in May, 1981.
Following a discussion of the report's findings, conclusions, and
recommendations, Horn moved, seconded by Russell, to formally accept
the Traffic Analysis Report (dated March, 1982) as presented, with
the addition of traffic comparisons between Chanhassen and Southdale/
Opus II, and to authorize the Executive Director to distribute the
report to the Chamber of Commerce Transportation Task Force and to
other public and non - public groups for use in transportation planning.
All voted in favor and the motion carried
Page 3
Chanhassen HRA Minutes - March 18, 1982
HRA Accounting Services Joint Powers Agreement
Horn moved, seconded by Bohn, to adopt Resolution #82 -2 approving
the Joint Powers Agreement for Accounting Services between
the HRA and the City of Chanhassen, and to authorize the Chairman
and Executive Director to execute the Agreement on behalf of the
HRA. All voted in favor and the motion carried.
Gateway Area Landscape Improvements
Horn moved, seconded by Bohn, to authorize the expenditure of up
to $200 from HRA Account #604 (Ring -Road Improvement Project) for
acquisition of plant materials and black dirt necessary to establish
a flower garden around the base of the City Directional Sign located
at the northwest corner of Highway 5 and Great Plains Blvd. All
voted in favor and the motion carried.
Approval of Bills
Bohn moved, seconded by Russell, to approve the bills as listed on
the HRA Accounts Payable listing dated March 15, 1982. All voted
in favor and the motion carried.
Revision to HRA By -Laws
Horn moved, seconded by Russell, to amend the third paragraph of
Section 5 of the Official By -Laws of the Housing and Redevelopment
Authority as recommended by the Assistant City Attorney by deleting
the words "Secretary- Treasurer" and replacing them with the phrase
"Treasurer for the Authority ". All voted in favor and the motion
carried.
Downtown Project Status Report
Martin reported that Kraus - Anderson is continuing their attempt to
secure grocery and other tenants for their portion of the Downtown
Project. Gullickson suggested that the Carver County Herald be
contacted to run a news article clarifying the financial status of
the Downtown Project.
Adjournment
Horn moved, seconded by Russell, to adjourn the meeting at 9:50 p.m.
All voted in favor and the motion carried.
CHANHASSEN HOUSING & REDEVELOPMENT AUTHORITY
690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA SS317
(612) 937 -1900
MEMORANDUM
TO: Chanhassen HRA .
FROM: Scott A. Martin, Executive Director
DATE: May 14,:1982
SUBJ: Clarification of Amount of Assessment Reduction Payments
(Resolution #82 -4)
Since adoption of the Special Assessment Reduction Program by the
HRA find City Council, I have determined that the program documents
— are too vague in regards to the actual amount of _special assessment
payments which are the obligation of the HRA upon approval of the
assessment agreement.
At issue is the need to clarify in the agreement language the fact
that the HRA's payment obligation pertains to outstanding principle
reduction, even though interest is added if the HRA elects to make
normal installment payments to the City.
The attached Resolution,( #82 -4) along with 5 revised pages for the
standard form assessment agreement, is submitted for your review
and approval in order to clarify this issue.
ATTACHMENTS
1. Letter from Craig Mertz dated "Received May 13, 1982 ".
2. Resolution Clarifying Amount of Assessment Reduction Payments...
3. Revised Assessment Agreement Pages( #4,8,8a,14, and 15)
RUSSELL H. LARSON
CRAIG M. MERTZ
OF COUNSEL
HARVEY E. 5KAAR
MARK C. MCCULLOUGH
Scott A. Martin
Executive Director
Chanhassen HRA
Box 147
Chanhassen MN 55317
Dear Scott:
LARSON & MPJRTZ
ATTORNEYS AT LAW
1900 FIRST BANK PLACE WEST
MINNEAPOLIS, MINNESOTA 55402
May 12, 1982
TELEPHONE
(612) 333 -1511
Re: Assessment Reduction Program
As per your request, I enclose replacement pages number 4,8,8a,14. and
15, all labeled revised 5/11/82, for insertion in the standard form
of assessment agreement. Also enclosed is our proposed resolution
approving the new replacement pages.
The only change on replacement page 4 is the addition of a new
sentence at the end of the definition of "Eligible Assessments."
The change on replacement page 8, consists of the insertion of
a new second paragraph in §3.1. Read together, the changes on
replacement page 4 and 8 clarify that if the authority elects to
make assessment reduction payments in the form of installments,
rather than in one lump sum, the HRA will pay the interest portion
of the redeveloper special assessments in addition to the principal.
Any amounts paid to the City against such interest would not be
a credit against any assessment reduction which the HRA would be
obligated to pay.
- The change on revised page 14 consists of the insertion of a
new second paragraph. This new language is intended to clarify
that if any mortgage holder comes into possession of the redevelop-
- ment property (i.e., because of a mortgage foreclosure) and
challenges the stipulated value of the property for tax purposes,
the redevelopment property is no longer eligible to participate
in the assessment reduction program.
I£ you have any questions, please call.
CITY OF CHANHP1'_SEN
Very truly yours,1`
CRAIG M. MERTZ
Assistant Chanhassen City Attorney
CMM:ner
enc
P.S. Pages 8a and 15 result from the repositioning of the
paragraph on preceding pages and contain no changes in
the text. /CMM
CITY OF CHANHASSEN.
HOUSING AND REDEVELOPMENT AUTHORITY
RESOLUTION
Dated Resolution No. 82 -4
Motion by Commissioner Seconded by Commissioner
RESOLUTION CLARIFYING AMOUNT OF
ASSESSMENT REDUCTION PAYMENTS
AND CLARIFYING NATURE OF COVENANTS
TO BE MADE BY REDEVELOPER
WHEREAS, the Authority by its resolution dated
March 18, 1982, approved plan Modification No. 5, thereby
establishing an assessment reduction program fora portion of
the Downtown Redevelopment District, and
WHEREAS, by said resolution, the Authority approved
a standard form of Assessment Agreement to be used in
connection with said Modification No. 5, and
WHEREAS, it was the intent of this body in approving
Section 3.1 of the standard form of Assessment Agreement, that
the Authority would pay both the interest component and the
principal component of any special assessment installment, but
that only the principal component of such payment would be a
credit against the total of the assessment reduction payment
which the Authority would be obligated to make, and
WHEREAS, it was the intent of this body in approving
Section 7.6 of the standard form of Assessment Agreement that
the covenants of the Redeveloper run with the land and be binding
upon any mortgagee which might come into title to, or possession
of the Redevelopment Property:
NOW, THEREFORE, BE IT RESOLVED, by the Chanhassen
Housing and Redevelopment Authority, as follows:
That the Chanhassen Housing and Redevelopment
Authority hereby approves the revised page number 4, labeled
Rev. 5- 11 -82, and the revised page 8, labeled Rev. 5- 11 -82,
and revised page number 8a, labeled Rev. 5/11/82, and revised
page number 14, labeled 5/11/82, and revised paged number 15,
labeled 5/11/82.
BE IT FURTHER RESOLVED, that this resolution is
adopted not for the purpose of making any substantive changes
in the standard form of assessment agreement, but rather for
the purpose of clarifying the intent of this body in adopting
its resolution of March 18, 1982, approving plan Modification
No. 5.
Attest:
Executive Director
Chairman
Rev. 5/11/82
Market Value previously assigned to the'Redevelopment Property,
and that upon completion of said Minimum Improvements the market
value assigned to the Redevelopment Property shall not be
less than a specified dollar amount stated therein, and that the
Market Value of the Redevelopment Property as of the date of
execution of such certification is a specified dollar amount
stated therein.
"Certificate of Occupancy" means the certification
provided to the Redeveloper, or the purchaser of any part,
parcel or unit of the Redevelopment Property, pursuant to
Section 4.2 of this Agreement.
"City" means the City of Chanhassen.
"Construction Plans" means the plans,-specifications,
drawings and related documents on the construction work to be
performed by the Redeveloper on the Redevelopment Property which
(a) shall be at least as detailed as the plans, specifications,
drawings and related documents which are submitted to the building
inspector of the City, and (b) shall include at least the
following for each building: (1) site plan, (2) foundation plan;
(3) basement plan; (4) floor plan for each floor; (5) cross
sections of each (length and width); (6) elevations (all sides);
(7) landscape plan.
"County" means the County of Carver.
"Date of Execution" means the date on which the
Redeveloper signs this Agreement or the date on which the Agency
signs this Agreement, whichever is later.
"Eligible Assessments" means those special assessments
(and those unlevied lateral unit charges and trunk unit charges)
which are more particularly described in Modification No. 5 to
the Plan, and which have been imposed by the City on tracts of
lands contained within the plats of Chanhassen Lakes Business
Park and Park II in connection with either City of Chanhassen
Improvement Project 78 -3 or in connection with any other City
public improvement project which specially benefits said tracts of
land within said plats. The term "Eligible Assessments" does not
include any building permit fees, any park charges owing to the
City under applicable ordinances, or any availability or connection
charges owing to the City pursuant to Section 444.075 of Minnesota
Statutes or other applicable statutes or pursuant to applicable
City Ordinances, or any sewer availability charges or similar
charges imposed by the Metropolitan Council or Metropolitan
Waste Control Commission or similar governmental unit. The term
"Eligible Assessments" does not include any interest imposed by
the City in connection with special assessments, unlevied lateral
unit charges, or unlevied trunk unit charges.
"Event of Default" means an action by the Redeveloper
listed in Article VI of this Agreement.
-4-
Exhibit A, page 1
Rev. 3/10/82
Rev. 5/11/82
ARTICLE III. ASSESSMENT REDUCTION PAYMENTS.
Section 3.1 Obligation of Agency to Make Assessment Reductio
Payments. Upon completion of the Minimum Improvements and
issuance of the Certificate of Occupancy, the Agency, from the
tax increment generated by the Project shall make payments (in
the manner and in the amount provided hereinafter) in reduction
of the eligible assessments which have been imposed on the
Redevelopment Property and which were unpaid upon the date of
execution of this Agreement.
The Agency, at its option, may satisfy its obligations
to make assessment reductions payments under this Agreement by
either making one lump sum payment or by making a series of
semi- annual payments as individual installments of eligible
assessments become due and owing to the City. In the event
that the Agency elects to make said assessment reduction
payments in the form of a series of semi - annual payments as
individual installments of eligible assessments become due and
owing to the City, the Agency shall also pay the interest imposed
thereon by the City; but only that portion of such interest which
is attributable to that portion of any such installment which
the Agency is obligated to pay under this Agreement. Any such
payments of interest shall not be a credit against the amount
of any assessment reduction payment which the Agency is obligated
to make under this Agreement.
In the case of eligible assessments which have then
already been certified to the County's auditor for collection
with real estate taxes, said assessment reduction payments,
together with any interest which the Agency is obligated to
pay under this 53.1, shall be made directly to the County's
auditor in full or partial satisfaction, as the case may be, of
said eligible assessments.
In the case of eligible assessments which have not
then been certified to the County's auditor for collection with
real estate taxes, said assessment reduction payments, together
with any interest which the Agency is obligated to pay under
this 53.1, shall be made to the City's treasurer in full or
partial satisfaction, as the case may be, of said eligible
assessments.
In the case of eligible assessments which have been
paid by the Redeveloper subsequent to the date of execution
of this Agreement, said assessment reduction payments, together
with any interest which the Agency is obligated to pay under
this §3.1, shall be made directly to the Redeveloper or his
designated successors and assigns.
U-M
Exhibit A, page 2
Rev. 3/10/82
Rev. 5/11/82
Section 3.2 Amount of Assessment Reduction Payment. The
amount any assessment reduction payment made pursuant to this
Agreement shall be equal to the lesser of the following amounts:
(a) the sum of the principal
assessments imposed on
Property, together with
thereon, both principal
computed as of the date
Agreement; or
balance of the eligible
the Redevelopment
accrued interest
and interest being
of execution of this
(b) seven percent (7 %) of the excess of the Minimum
Market Value of the Redevelopment Property and
the Minumum Improvements constructed thereon
as established pursuant to Section 3.3 of this
Agreement over the Market Value of the
Redevelopment Property as of the date of execu-
tion of the Certification By Assessor, and
as certified in said certification.
-8a-
Exhibit A, page 3
xev. .5 /lU /8z
Rev. 5/11/82
(a) in the case of the Redeveloper, is addressed
to or delivered personally to the Redeveloper at
(b) in the case of the Agency is addressed to or
delivered personally to the Agency at Chanhassen
City Hall or at such other address with respect
to either such party as that party may, from time
to time, designate in writing and forward to
the other as provided in this Section.
Section 7.5 Counterparts. This Agreement is executed in any
number of counterparts, each of which shall constitute one and
the same instrument.
Section 7.6 Covenants Running With Land. The recording or
filing of this Agreement with the County Recorder or County
Registrar of Titles shall constitute notice of this Agreement
to any subsequent purchaser or encumbrancer of the Redevelopment
Property, or any part thereof, whether voluntary or involuntary,
and shall be binding upon them. The Redeveloper agrees to
supply the applicable owner's duplicate certificate of title, if
any, so as to permit the recording of a copy of this Agreement
in the office of the Carver County Recorder. It is intended and
agreed that the covenants and agreements set forth in Article V
of this agreement shall be covenants running with the land and
that they shall, in any event, and without regard to technical
classification or designation, legal or otherwise, be binding tQ
the fullest extent permitted by law and equity, for the benefit
and in favor of, and enforceable by the Agency, its successors
and assigns. In the event that any transferee or assignee of
the Redeveloper (including without limitation any mortgagee
taking possession of or title to the Redevelopment Property as a
result of any default in the terms of any mortgage to which the
Redevelopment Property is now subject or may be subject in the
future) breaches any one of the covenants and agreements set
forth in said Article V, the Agency may treat such breach as an
Event of Default as provided in Article VI of this agreement
and may exercise any one or more of the remedies set forth in
§6.2 of this agreement.
IN WITNESS WHEREOF, the Agency has caused this
Agreement to be duly executed in its name and behalf and its
seal to be hereunto duly affixed, and the Redeveloper has caused
— this Agreement to be duly executed in its name and behalf and its
corporate seal to be hereunto duly affixed, on or as of the
date first above written.
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF CHANHASSEN
M
And
(Seal) its
-14-
Exhibit A, page 4
Rev. s /lu /8z
Rev. 5/11/82
A
(Name of Redeveloper)
M
And
(Seal) its
STATE OF MINNESOTA)
) ss.
COUNTY OF CARVER )
The foregoing instrument was acknowledged before me
this day of 19 , by
and --
the an
of the Housing and Redevelopment Authority of the City of
Chanhassen, Minnesota.
Notary Public
County:
My Commission Expires:
STATE OF MINNESOTA)
) ss.
COUNTY OF CARVER )
The foregoing instrument was acknowledged before me
this day of 19 by
and the and
of
a corporation, on behalf of said
corporation.
This Instrument Drafted By:
LARSON & MERTZ
1900 First Bank Place West
Minneapolis, MN 55402
(612) 333 -1511
Notary Public
County:
My Commission Expires:
-15-
Exhibit A, page .5
l -
I
r '
CHANHASSEN HOUSING & REDEVELOPMENT AUTHORITY
U 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN. MINNESOTA 55317
(612) 937 -1900
MEMORANDUM
TO: Chanhassen HRA
FROM: Scott A. Martin, Executive Director
DATE: May 14, 1982
SUBJ: Fluoroware Assessment Agreement (Resolution #82 -5)
Attached for your review and approval is a copy of the Fluoroware
Assessment Agreement for their retroactive participation in the
HRA Assessment Reduction Program.
Fluoroware's market value as Certified by the County Assessor
for the purpose of this agreement is $1,229,900. By subtracting
the vacant land value of $78,300 from the total market value, a
value of $1,151,600 for building and site improvements is arrived
at for computation of the HRA special assessment reduction payment
obligation in the amount of $80,612.
The original assessment for the Fluoroware site was $105,127.11.
Fluoroware has not paid their 1981 assessments or any of their
1981 property tax obligations pending approval of the Assessment
Reduction Program and Fluoroware's inclusion in this program.
Their failure to pay 1981 taxes resulted in an additional $2,818.44
in deliquent property tax penalties. Of this amount, $2,332.38
is attributed to deliquent special assessments. (see attached letter
from Craig Mertz dated May.6, 1982).
Fluoroware has requested that the HRA pay the tax penalties and
then credit this payment against the total assessment reduction
payment due Fluoroware. The attached "second addendum" to their
assessment agreement would provide for such an arrangement.
Recommendation
I recommend adoption of Resolution No. 82 -5 approving the Assess-
ment Agreement as executed by Fluoroware, Inc. on May 3, 1982 and
with the necessary revisions of pages 4,8,8a,14, and 15 to clarify
the amount of the assessment reduction payment.
I recommend denial of Fluoroware's request for HRA payment of
delinquent tax penalties, since the HRA did not advise Fluoroware
to withhold payment of 1981 taxes pending adoption of the Special
Assessment Reduction Program.
Memorandum - Fluoroware
May 14, 1982
Page 2
Finally, I recommend that the HRA -elect to make installment payments
to the City in order to satisfy the special assessment obligation of
$80,612, rather than paying this amount in one lump sum payment.
The current interest rate charged against the unpaid balance is
7%, with assessments levied over a 15 year period. This debt
obligation will be monitored annually in order to determine whether
the principal balance should be prepaid or whether installment
payments should be continued.
.Attachments
1. Resolution #82 -5
2. Letter from Craig Mertz dated April 20, 1982
3. Copy of Assessment Agreement
4. Letter from Craig Mertz dated May 6, 1982; along with proposed
"Second Addendum to Assessment Agreement ".
HOUSING AND REDEVELOPMENT AUTHORITY
OF
CHANHASSEN, MINNESOTA
RESOLUTION APPROVING PARTICIPATION OF
FLUOROWARE, INC. IN ASSESSMENT
REDUCTION PROGRAM
Dated: Resolution No. 82 -5
Motion By Commissioner Seconded by Commissioner
WHEREAS, Fluoroware, Inc. (Fluoroware), the owner
— and developer of Lots 8 and 9, Block 5, Chanhassen Lakes
Business Park, Carver County, Minnesota (the "Subject Property ")
appeared before the Authority on March 20, 1980, and June 5,
1980, and requested that the Authority assist Fluoroware in its
development of the Subject Property by utilizing a portion of
tax increments received by the Authority pursuant to Section 462.585
of Minnesota Statutes to pay a portion of the costs of City of
Chanhassen Project 78 -3 which was assessed against benefited
properties including the Subject Property; and
WHEREAS, the Authority on June 5, 1980 approved such
assistance to Fluoroware in the form of a purchase of the
Subject Property and a subsequent resale of the Subject Property
at a reduced price; and
WHEREAS, the above - described action of June 5, 1980,
was contingent upon the Authority's bond counsel issuing an
approving opinion for such assistance to Fluoroware; and
WHEREAS, Fluoroware, relying on the Authority's action
of June 5, 1980, proceeded to complete its development of the
Subject Property; and
WHEREAS, the Authority by its Resolution No.
dated , 19 , adopted Modification No. 5
to the Chanhassen Downtown Redevelopment Project, thereby
instituting a comprehensive program for the reduction of
certain assessments on certain lands in Chanhassen Lakes
Business Park including the Subject Property; and
WHEREAS, the assessment reduction program described
in said Modification No. 5 is similar in substance to the form
of assistance to Fluoroware which was contemplated by the
Authority in its action of June 5, 1980;
L
NOW, THEREFORE, BE IT RESOLVED„ by the
Chanhassen Housing and Redevelopment Authority, as follows:
1. The participation of Fluoroware in the assessment
reduction program established in Modification No. 5 to the
Plan is hereby approved retroactively provided that
Fluoroware execute an assessment agreement with the
Authority in the form attached hereto and made a part hereof
as Exhibit A.
2. The Chairman and Executive Director of the Authority
are hereby authorized and directed to execute said contract
on behalf of the Authority.
Passed and adopted this day of ,
19 by the Housing and Redevelopment Authority of the City of
Chanhassen, Minnesota.
Attest:
Executive Director
Yes
051
-2-
Chairman
Absent
I
Exhibit A To Be Supplied
( Copy of Approved Assessment Agreement)
` LARSON & MERTZ
ATTORNEYS AT LAW
1900 FIRST SANK PLACE WEST
RUSSELL H. LARSON MINNEAPOLIS, MINNESOTA 55402
CRAIG M. MERTZ
OF COUNSEL April 20, 1982
HARVEY E. SKAAR
MARK C. MCCULLOUGH
^ Scott A. Martin
Executive Director
Chanhassen HRA
Box 147
Chanhassen MN 55317
Dear Scott:
TELEPHONE
(612) 333 -1511
Re: 7% Assessment Reduction Program
As per your instructions, I enclose my proposed assessment a reement
for the Fluoroware property and for the Brockpahler property (Dayco)
Rather than drafting an entirely new contract form for these two
properties, I have prepared an addendum which is attached to each
assessment agreement.
Section 1 of each of the addenda was included because the
buildings in question have been completed and mortgages are of
record. Because the mortgage holder is not a party to the assessment
agreement, the mortgage holder would not be bound to the real estate
valuation floor established in the assessment agreement. Thus
Section 1 provides that if the mortgage holder comes into possession
of the property, any attempt to challenge the real estate tax
floor established by the assessment agreement would constitute a
default.
The Fluoroware assessment agreement makes reference to a January 2,
1980 date. This is the last date on which the Fluoroware property
was valued as a vacant lot. On January 2, 1981, Fluoroware was
valued by the assessor as a partially completed structure. On
January 2, 1982, the Fluoroware property was valued by the assessor
as a fully complted structure.
The Brockpahler assessment agreement makes reference to a January 2,
1981 date. This is the last date on which the Brockpahler property
was valued by the assessor as being a vacant lot. The Brockpahler
property was valued by the assessor on January 2, 1982 as being a
completed structure.
Scott A. Martin
April 20, 1982
Page Two
You will have to supply Exhibit A in each case describing: -the
building.
Please note that Section 3.4 has not been eliminated from either
of the assessment agreements. The redevelopers must still obtain
a certificate of occupancy signed by you as executive director.
This will allow you to make one final verification that the
structures have been completed in accordance with previous City
Council approvals. In addition, the deletion of Section 3.4
would have required a redrafting of the entire assessment agreement
because of the numerous cross- references to that section.
The enclosed assessment agreements and the addenda thereto should
be attached to the resolutions which were included in my letter
of March 12, 1982, and should be submitted to the HRA for approval.
If those resolutions are apptoved, I suggest that you and I meet
with Mr. Zinter for purposes of obtaining his signature on the
Certification by Assessor. Once all signatures have been affixed
to the assessment agreements and the addenda, it will be
necessary to record an original copy of each document with the
County Recorder's office. In order to accomplish this it will
be necessary for the redevelopers to provide you with the owners
duplicate certificates of title for the subject properties. If
you have any questions, please call.
CMM:ner
enc
Very truly yours,
� -;�, ?4,-F
CRAIG M. MERTZ
Assistant Chanhassen City Attorney
CITY 0'
APR2192
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ASSESSMENT AGREEMENT
THIS AGREEMENT, made on or as of the day of
-r 19 by and between The (lousing
as Re%everopnient Authority in and for the City of Chanhassen,
a public body corporate and politic (the "Agency "), established
pursuant to Laws of Minnesota 1947, Chapter 487, as amended,
being ninnesota Statutes, Sections 462.411 - 462.711 (the "Act- "),
and Pluoroware, Inc., a Minnesota corporation
(the "Redeveloper ").
WITNESSETH :
WHEREAS, the Agency was created pursuant to the Act
T and was authorized to transact business and exercise its powers
by a resolution of the City Council of the City of Chanhassen
(the "City "); and
WHEREAS, in furtherance of the objectives of the Act,
the Agency has undertaken a program for the clearance and
reconstruction or rehabilitation of blighted, deteriorated, .
deteriorating, vacant, unused, underused or inappropriately used
areas of the City, and in this connection is engaged in carrying
out a redevelopment project known as the Chanhassen Downtown
Redevelopment Project (the "Project "), in an area (the "Project
Area "), located in the City; and
WHEREAS, as of the date of this Agreement there has
been prepared and approved by the Agency and the City a
redevelopment plan for the Project; and
WHE'RE'AS, the Agency requested the County of Carver
(the "County ") to certify the current assessed value of the
real property within the Project Area pursuant to Section 462.585
of the Act thereby establishing the Project as a tax increment
financing district-; and
WHEREAS, the major objectives of the Redevelopment
Plan are to: acquire for rehabilitation economically or
functionally obsolete or underutilized buildings and land;
provide a redevelopment site of a character that will encourage
future development- of the area and improve sources of public
revenue; elimiate blighting influences which impede potential
development within the aforementioned redevelopment project;
provide maximum opportunity for redevelopment by private enterprise,
consistent with the needs of the City as a whole; encourage
private rehabilitation of structures within the redevelopment
project; and
WHEREAS, in order to achieve the objectives of the
Redevelopment Plan and particularly to,make the land in the
Project Area available for redevelopment by private enterprise
for and in accordance with the uses specified in the Redevelop-
ment Plan, the Agency has determined to provide substantial
aid and assistance to the Project through the sale of bonds to
finance the public costs Vf the redevelopment of the Project
Area; and
WHEREAS, the Agency believes that the redevelopment
of a portion of the Project Area pursuant to this Agreement, and
fulfililment generally of the Agreement, are in the vital and
best interests of the City and the health, safety, morals, and
welfare of its residents, and in accord with the public purposes
and provisions of the applicable state and local laws and
requirements under which the Project has been undertaken and is
being assisted; and
WHEREAS, the Agency has concluded agreements for the
redevelopment of the various properties to be acquired in further-
ance of the Project; and
WHEREAS, said agreements provide recourse for the
Agency should such redevelopment not be completed; and
WHEREAS, Section 273.76(Subd.8) of Minnesota Statutes
empowers the Agency to enter into written assessment agreements
with redevelopers of properties within the Project Area; and
WHEREAS, it is contemplated that pursuant to this
Agreement, the Redeveloper will construct certain minimum
improvements upon the Redevelopment Property; and
WHEREAS, the Agency, and the Redeveloper desire to
establish a Minimum Market Value for the Redevelopment Property
and the Minimum Improvements to be constructed thereon pursuant
to Minnesota Statutes, 5273.76, Subd. 8, and 5462.445, Subd.4 (1,
and 16); and
WHEREAS, the Agency and the Assessor have reviewed
the Construction Plans for the Minimum Improvements; and
WHEI'.EAS, the Assessor, acting pursuant to 5273.76, Subd. 8
Of Minnesota Statutes, has executed a Certification By Assessor
as to the Redevelopment Property and the Minumum Improvements
to be constructed thereon; and
WHEREAS, the original copy of said Certification
By Assessor, or a true and correct copy thereof is attached to
this Agreement as Exhibit- C and made a part hereof:
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-- - NOW, THEREFORE, in consideration of the premises and
the mutual obligations of the parties hereto, each of them
does hereby covenant and agree with the other as follows:
ARTICLE I. DEFINITIONS.
Section 1.1 Definitions' In this Agreement-, unless a different
meaning clearly appears from the context:
"Act" means the Municipal housing and Redevelopment
Act, Minnesota Statutes, Sections 462.411 et seq., as amended.
"Agency" means the housing and Redevelopment Authority
in and for the City of Chanhassen.
"Agreement" means this Agreement, as the same may be
from time to time modified, amended, or supplemented.
"Assessment Agreement-" means any agreement substantially
similar to this Agreement providing for payment by the Agency
of eligible assessments from the tax increments received by
the Agency in connection with the Project.
"Assessment Reduction Payments" means payments made
by the Authority to either the City or to the County's auditor, as
a credit against eligible assessments, pursuant to Article IV
of this Agreement- or pursuant to agreements similar to this
Agreement with other redevelopers of land in the Project Area.
"Assessed Value
value of real property as
accordance with Minnesota
adjusted by any assessor,
of revenue, or any court)
is imposed.
or "Assessed Valuation" means the
determined by the assessor in
Statutes, Section 273.13 (or as finally
board of equalization, commissioner
against which the real Property tax
"Assessor" means the Carver County Assessor or a City
Assessor having the powers of the Carver County Assessor as to
properties within the Project Area.
— "Bonds" means the general obligation bonds or
Obligations issued by the City or the Agency td finance the
costs of the Project including but not limited to the Assessment
Reduction Payments made by the Authority pursuant to Modification
No. 5 to the Plan.
The term "Bonds" shall also include any general
obligation bonds or obligations issued to refund any Bonds.
"Certification By Assessor" means the Assessor's
certification pursuant to Section 273.76, Subd. 8 of Minnesota
Statutes, and Section 3.3 of this Agreement that he has reviewed
the Construction Plans for the Minimum Improvements and the
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!"
Market value previously assigned to the. Redevelopment
and that upon completion of said Minimum Improvements
value assigned to the Redevelopment Property shall not
less than a specified dollar amount stated therein.
Property,
the market
be
"Certificate of Occupancy" means the certification
provided to the Redeveloper,.or the purchaser of any part,
parcel {or unit of the Redevelopment Property, pursuant to
Section 4.2 of this Agreement.
"City" means the City of Chanhassen_
"Construction Plans" means the plans,.specifications,
drawings and related documents on the construction work to be
performed by the Redeveloper on the Redevelopment Property which
(a) shall be at least as detailed as the plans, specifications,
drawings and related documents which are submitted to the building
inspector of the City, and (b) shall include at least the
following for each building: (1) siteplan, (2) foundation plan;
(3) basement plan; (4) floor plan for each floor; (5) cross
sections of each (length and width) ; (6) elevations (all sides);
(7) landscape plan.
"County" means the County of Carver.
"Date of Execution" means the date on which the
Redeveloper signs this Agreement or the date on which the Agency
signs this Agreement, whichever is later..
"Eligible Assessments" means those special assessments
(and those unlevied lateral unit charges and trunk unit charges)
which are more particularly described in Modification No. 5 to
the Plan, and which have been imposed by the City on tracts of
lands contained within the plats of Chanhassen Lakes Business
Park and Park II in connection with either City of Chanhassen
Improvement Project 78 -3 or in connection with any other City
public improvement project which specially benefits said tracts of
land within said plats. The term "Eligible Assessments" does not
include any building permit fees, any park charges owing to the
City under applicable ordinances, or any availability or connection
charges owing to the City pursuant- to Section 444.075 of Minnesota
Statutes or other applicable statutes or pursuant to applicable
City Ordinances, or any sewer availability charges or similar
charges imposed by the Metropolitan Council or Metropolitan
Waste Control Commission or similar governmental unit.
"Event- of Default" means an action by the Redeveloper
listed in Article VI of this Agreement.
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"Market Value" or Market Valuation" means the estimated
fair market value of real property as determined by the Assessor
in accordance with Minnesota Statutes, Section 273.11 (or as
finally adjusted by any assessor, board of equa li ration, cotmnis-
sioner of revenue, or any court).
"Maturity Date"—means the date when the principal of,
premium (if any), and interest on the Bonds are paid in full.
"Minimum Improvements" means those improvements which
are more particularly described on Exhibit A attached hereto and
made a part hereof.
"Minimum Market Value" means Market Value established
pursuant to Section 3.3 of this Agreement.
"Modificatioll No. S" means
the fifth amcncLuent to
the Plan adopted by the Agency establishing a program of Assessment
Reduction Payments and the resolution adopting the same.
"Plan" means the Chanhassen Downtown Redevelopment Plan
as described in the "Chanhassen Downtown Redevelopment Project
Amended Plan, February, 1980, Revised March 20, 1980" booklet,
as further amended from time to time by the Agency.
"Project" means the Chanhassen Downtown Redevelopment
Project as described in the Chanhassen Downtown Redevelopment
Project Amended Plan, February 1980, Revised March 20, 1980"
booklet, as further amended from time to time by the Agency.
"Project Area" means the real. property located within
the boundaries of the entire redevelopment district as described
in Figure 1 contained in the "Chanhassen Downtown Redevelopment
Project Amended Plan, February, 1980, Revised March 20, 1980"
booklet.
"Project 78 -3 Assessments" means the costs of City of
Chanhassen Improvement Project 78 -3 which were specially assessed
against benefited real property pursuant to Chapter 429 of
Minnesota Statutes.
"Real Estate Taxes" means ad valorem,'taxes on real
property pursuant to Chapter 273 of Minnesota Statutes and not
including any special assessments levied pursuant to Chapter 429
of Minnesota Statutes.
"Redeveloper" means Fluoroware Inc. a Minnesota
Qssoration or its successors an assigns.
"Redevelopment Property" means the real property
which is more particularly described on Exhibit B attached hereto
and made a part hereof.
"Redevelopment Plan" means the Plan.
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"State" means the State of Minnesota.
"Substantial Completion" means sufficiently complete,
in accordance with the Construction Plans for the Minimum
Improvements, so that the Redeveloper (or his successors and
assigns) may occupy the work for the use for which the
Minimum Improvements are intended.
"Tax Official" means any CiLy or County assessor,
county.auditor, City, County or State board of equalization,
the comiissioner of revenue of the State, or any state or
federal district court, the tax court of the State, or the
State Supreme Court.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations by the Agency. The Agency makes
the ollowing representations as the bas— i for the undertaking
on its part herein contained:
(a) The Agency is a housing and redevelopment authority
duly organized and existing under the laws of the State.
(b) The Project is a "redevelopment project" within
the meaning of the Act and was created, adopted and approved in
accordance with the terms of the Act.
(c) The Project is a "tax increment district"
created, adopted, certified and approved pursuant to Minnesota
Statutes, Section 462.585.
(d) The Agency has established the Project Area as
a "tax increment- district" and has requested that the County
auditor of the County certify the Assessed Valuation of all
taxable real property in the Project Area pursuant to Minnesota
Statutes, Section 462.585.
(e) The activities of the Agency are undertaken for
the purpose of removing, preventing or reducing blight, blighting
factors, or the causes of blight, and for the purposes of
eliminating or preventing the development or spread of deteriorated
or deteriorating areas.
(f) To finance the cost of the activities to be
undertaken by the Agency, the Agency proposes to use the proceeds
of Bonds issued either by the City or the Agency and to pledge tax
increment generated by the Project Area to the payment of the
principal of and interest on the Bonds.
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Section 2.2 Representations and wartanties by the Redeveloper.
1'116 Redeveloper represents and warrants that:
(a) Tile Redeveloper is a corporation duly organized
and in good standing under the laws of the State of Minnesota,
is not in violation of any provisions of its certificate of
incorporation, its by -laws, or the laws of the State of Minnesota,
has power to enter into this Agreement and has duly authorized
the execution, delivery and performance of this Agreement- by
proper corporate action.
(b) The Redeveloper will construct the Minimum
Improvements in accordance with the terms of this Agreement,
the Plan and all local, state and federal laws and regulations
(including, but not limited to, environmental, zoning, building
code and public health laws and regulations), and in accordance
with the Construction Plans which have been approved by the Agencv.
(c) The Minumum Improvements constitute a permitted
use under the zoning ordinance of the City, a permitted use
under the Plan and the Act.
(d) That at such time or times as may be required by
law, the Redeveloper will have complied with all local, state and
federal environmental laws and regulations, will have obtained
any and all necessary environmental reviews, licenses or
clearances as to the Redevelopment Property, and that Redeveloper
has received no notice or communication from any local, state
or federal official that the activities of the Redeveloper in th e
law or regulation e
Project Area may be or will be in violation of any environmental than those notices or co ml
which the Agency is aware) nunications of
. The Redeveloper is aware of no
facts the existence of which would cause it to be in violation of
any local, state or federal environmental law, regulation or
review procedure or which would give any person a valid claim under
state environmental rights statutes.
(e) The Redeveloper will use its best efforts to
construct the Minimum Improvements in accordance with all
existing local, state or federal energy - conservation laws or
regulations.
(f) The Redeveloper will obtain, in a timely manner,
all required permits, licenses and approvals, and will-m(_ et,
in a timely manner, all requirements of all local, state and
federal laws and regulations which must be obtained or met
before the Minumum Improvements may be lawfully constructed.
(9) `Pile real estate taxes and any installments
Of special assessments levied against the Redevelopment Property
are not in default and that future real estate taxes will be
paid when due.
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ARTICLE III. ASSESSMENT REDUCTION PAYMENTS.
Section 3.1 Obligation of Agency to Make Assessment Reduction
Payments. Upon completion of the Minimum lmprovements and
issuance of the Certificate of Occupancy, the Agency, from the
tax increment generated 13y4 the Project shall make payments (in
the manner and in the amount provided hereinafter) in reduction
of the eligible assessments which have been imposed on the
Redevelopment Property and which were unpaid upon the date of
execution of this Agreement.
In the case of eligible assessments which have
then already been certified to the County's auditor for collection
with real estate taxes, said assessment reduction payments shall
be made directly to the County's auditor in full or partial
satisfaction, as the case may be, of said eligible assessments.
In the case of eligible assessments which have
not then been certified to the County's auditor for collection
with real estate taxes, said assessment reduction payments
shall be made to the City'streasurer in full or partial
satisfaction, as the case may be, of said eligible assessments.
In the case of eligible assessments which have
been paid by the Redeveloper subsequent to the date of execution
Of this Agreement, said assessment reduction payments shall be
made directly to the Redeveloper or his designated successors
and assigns.
The Agency, at its option, may satisfy its
obligations to make assessment reductions payments under this
Agreement by either making a lump sum payment or by making a
series of semi - annual payments as individual installments of
eligible special assessments become due and owing to the City.
Section 3.2 Amount of Assessment Reduction Payment. The
amount o' any assessment reduction payment made pursuant to this
Agreement shall be equal to the lesser of the following amounts:
(a) the sum of the principal balance of the eligible
assessments imposed on the Redevelopment
Property, together with accrued interest
thereon, both principal and interest being
computed as of the date of execution of this
Agreement; or
(b) seven percent (7v) of the excess of the Minimum
Market Value of the Redevelopment Property and
the Minumum Improvements constructed thereon
as established pursuant to Section 3.3 of this
Agreement over the Market Value of the
Redevelopment Property as of the date of execu-
tion of the Certification By Assessor, and
as certified in said certification.
ME
_ Section 3.3 Minimum Market Value to,De Used In Com utinc
Real Estate Taxes. Upon compleLion o the Minimulp Improvements
by the Redeveloper, the Minimum Market Value which shall be
assessed for the Redevelopment Property and the Minimum Improve -
ments thereon shall be One Million Two Hundred Twenty -nine
usand Nine Hundred and no 100ths.Dollars Dollars ( ,p0
hereinafter tl,e Minimum I rket Value ) . The Minimum Market
Value established in this section shall be of no further force and
effect and this Agreement shall terminate on the later of the
two following dates:
(a) the date on which the Donds are retired, or
(b) the date on which all assessment reduction
payments due the Redeveloper (or his
successors and assigns) pursuant to this
Agreement- have been made,
In any event this Agreement shall terminate no later than
November 28, 2007.
shall
Provided, however, that nothing in this Agreement
limit the discretion of the Assessor to assign a market
value to the Redevelopment Property in excess of the Minimum
Market Value set forth in this section, nor prohibit the
Redeveloper from seeking, through exercise of administrative, and
legal remedies, a reduction in market value for property tax
purposes; subject, however, to the restriction that the Redeveloper
shall not seek any reduction in said market value below the
Minimum Market Value, as set forth in this section, during
the term of this Agreement regardless of actual market value which
may result from incomplete construction of the Minimum Improvements,
destruction or diminution by any cause, insured or uninsured,
except in the case of acquisition or reacquisition of the
Redevelopment Property by a public entity.
Section 3.4 Termination of Entitlement to Payment. Notwith-
standing a ny language i t% this greement to the contrary, the
obligation of the Agency to make any assessment reduction payment
to the Redeveloper (or his successors and assigns) shall become
null and void on July 31, 1989 unless the
Redeveloper has obtained a Certificate of Occupancy on or
before said date.
ARTICLE•' IV. CONSTRUCTION OF MINIMUM IMPROVEMENTS
Section 4.1 Const_ -ru_ cti 1 of Minimum Improvements. 1'he
Redeveloper agrees Lhat it wil construct the Minimum Improvements
r on the Redevelopment Property and at all times prior to Maturity
Date will not cause a reduction in the real estate taxes paid
in respect of the Redevelopment Property through:
(a) willful destruction of the Minimum
Improvements or any part thereof, and /or
(b) willful refusal to reconstruct the Minimum
Improvements if or damaged or destroyed property.
r
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\ 3/18/82
Section 4.2 Certificate of Occupancy,.
(a) Promptly after completion of the Minimum
Improvements in accordance with the provisions of this Agreement
the Agency, upon the written application of the Redeveloper, will
furnish the Redeveloper with an appropriate Certificate of
Occupancy executed by the City's Building Official and by the
Agency's Executive Director so certifying. Such certification
by the Agency shall be a conclusive determination of satisfaction
and te,pmination of the agreements and covenants in this Agreement
to construct the Minimum Improvements. Such certification and
such determination shall not constitute evidence of compliance
with or satisfaction of any of the Redeveloper's obligations
to any holder of a mortgage or to any insurer of a mortgage,
securing money loaned to finance the Minimum Improvements, or
any part thereof.
(b) If the Agency shall refuse or fail to provide
any certification in accordance with the provisions of this
Section 4.2 of this Agreement, the Agency shall, within thirty
(30) clays after written request- by the Redeveloper, provide the
Redeveloper with a written statement, indicating in adequate
detail in what respects the Redeveloper has failed to complete
the Minimum Improvements in accordance with the provisions of
this Agreement, or is otherwise in default, and what measures or
acts it will be necessary, in the opinion of the Agency, for
the Redeveloper to take or perform in order to obtain such
certification.
(c) The construction of the Minimum Improvements
shall be deemed to be completed when such Minimum Improvements
are in a state of Substantial Completion as defined in Section
1.1 of this Agreement.
ARTICLE V. REAL ESTATE TAXES.
Section 5.1 Real Estate Taxes. The Redeveloper agrees that,
Upon comp etion o the Minimum Improvements and prior to the
termination date stated in Section 3.3 of this Agreement, it will
not cause a reduction in the Market Value of the Redevelopment
Property and the Minimum Improvements below the amount of the
Minimum Market Value and that it will not seek a reduction in
the value of the Minimum Improvements below the Minimum Market Value:
(1) By seeking administrative review or judicial review
Of the applicability of any tax statute determined by any Tax
Official to be applicable to the Project or the Redeveloper or
raising the inapplicability of any such tax statute as a defense
in any proceedings, including delinquent tax proceedings;
(2) by seeking administrative review or judicial review of the
constitutionality of any tax statute determined by any Tax
Official to be applicable to the Project or the Redeveloper or
raising the unconstitutionality of any such tax statute as a
defense in any proceedings, including delinquent tax proceedings;
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— / (3) by willful destruction of the Redevelopment Property or any
part thereof; (9) by willful refusal td reconstruct damaged or
destroyed property; (5) by requesting the Assessor to reduce the
Market Value or Assessed Value of all or any portion of the
Redevelopment Property; (6) by petitioning the board of
equalization of the City or the board of equalization of the
County to reduce the Market Value or Assessed Value of all or any
portion of the Redevelopment Property; (7) by petitioning the
board of equalization of the State or the commissioner of revenue
Of the State to reduce the Market value or Assessed Value of all
or any. portion of the Redevelopment Property; (8) by maintaining
an act "ion in the District Court of the State or the Tax Court
Of the State pursuant to MinneSOLa Statutes, Chapter 278,
a reduction in the Market Value or Assessed Value of this seeking
Redevelopment Property; (9) by applying to the conunissioner of
revenue of the State requesting an abatement of real property
taxes pursuant to Minnesota Statutes, Chapter 270; and (10)
by maintaining any other proceedings, whether administrative,
legal or equitable, with any administrative body within the City,
the County, or the State or with any court of the State or the
federal government. The Redeveloper shall not, prior to the
Maturity Date, apply for a deferral.o,f property tax on the
Redevelopment Property pursuant to Minnesota Statutes, Section
273.86.
discretion of tile t
AssessorttosassignmtottheaRedevelopment
Property a Market value to the Redevelopment Property in excess
Of the Minimum Market Value established pursuant to Article V
Of this Agreement. However, the Redeveloper is free to contest
said Market Value to t um
he extent that it exceeds the Minim
Market Value to
in 53.3 of this Agreement.
ARTICLE VI. EVENTS OF DEFAULT.
Section 6.1 Events of Default Defined. The following shall
be lEvents of Default "under this Agreement and the term
"Event of Default" shall mean, whenever it is used in this
Agreement (unless the context otherwise provides), any one or
more of the following events (and the Le nn "default" shall. mean
any event which would with the passage of time or giving of
notice, or both, be an "Event of Default" hereunder):
(a) failure of Redeveloper to pay when due any
real estate taxes on the Redevelopment Property;
(b) Failure of the Redeveloper to complete the
Minimum Improvements on or before the date
stated in Section 3.9 of this Agreement.
(c) Failure by the Redeveloper to observe and
perform any covenant, condition, obligation or
oil its part to be observed or performed
hereunder, within thirty (30) days after written
1 -11-
notice to the Redeveloper specifying such
failure and requesting that it be remedied
(or within such other period as otherwise
expressly provided in this Agreement); or
if the failure is by its nature incurable
within such thirty (30) days, failure by
the Redeve -toper to furnish to the Agency
satisfactory assurances that the Redeveloper
can and will cure such failure or failures
within reasonable time.
(d) If the Redeveloper shall admit in writing
its inability to pay its debts generally as they
become due, or shall file a petition in bankruptcy
or shall make an assignment for the benefit of
its creditors, or shall consent to the
appointment of a receiver of itself or of
the whole or any substantial part of the
Redevelopment Property.
(e) If the Redeveloper shall file a petition or
answer seeking reorganization or arrangement under
the federal bankruptcy laws.
(f) If the Redeveloper, on a petition in bankruptcy
filed against it, be adjudicated a bankrupt,
or a court of competent jurisdiction shall enter
an order or decree appointing, without the consent
of the Redeveloper, a receiver of the Redeveloper
or of the whole or substantially all of its property,
or approve a petition filed against the Redeveloper
seeking reorganization or arrangement of the
Redeveloper raider the federal bankruptcy laws,
and such adjudication, order or decree shall not
be vacated or set aside or stayed within sixty
(60) days from the date of entry thereof.
Section 6.2 Remedies on Default. Whenever any Event of
Default referred to in section 9.1 of this Agreement occurs, the
Agency may make any one or more of the following actions:
(a) Cancel and rescind this Agreement.
(b) Withhold the Certificate of Occupancy.
(c) Cancel any pending Assessment Reduction Payments
due under the terms of this Agreement, causing
I forfeiture of such payments in favor of the
Agency.
(d) Take whatever action at law or in equity may
appear necessary or desirable to the Agency to
collect from the Redeveloper full reimbursement
for any Assessment Reduction Payments previously
made pursuant to this Agreement.
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Section 6.3 No Remedy Exclusive. No remedy herein conferred
Upon or reserved to the Agency is intended to be exclusive of
any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every
other remedy given under this Agreement or now or hereafter
existing at law or in equity or by statutes. No delay or omission
to exercise any right or power accruing upon any default shall
impair any such right or power or shall be construed to be a
waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient-. In
order Zo entitle the Agency to exercise any remedy reserved to
it, i0 shall not be necessary to give notice.
Section 6.4 No Additional Waiver Implied b One Waiver. In
the event any agreement containe in this Agreement should be
breached by either party and thereafter waived by the other
party, such waiver shall be limited to the particular breach so
waived and shall not be deemed to Waive any other concurrent,
previous or subsequent breach hereunder.
ARTICLE VII. ADDITIONAL PROVISIONS
Section 7.1 Conflict- of Interest;
In vi u Agency Representatives Not
a y Liable. No menil�er,
of or employee of the
Agency shali have any personal interest, direct or indirect, in
the Agreement, nor shall any such member, official, or employee
participate in any decision relating to this Agreement which
affects his personal interests or the interests of any corporation,
partnership, or association in which he is, directly or indirectly
interested. No member, official, or employee of the Agency shall
be personally liable to the Redeveloper or any successor in
interest, in the event of any default or breach by the Agency
or for any Assessment Reduction Payments which may become due
under the terms of this Agreement_
Section 7.2 Duty of Agency to Act Reasonably. Wherever this
Agreement requires the Agency to approve any action of the
Redeveloper, it is understood and agreed that the Agency will
not unreasonably withhold or delay such approval.
Section 7.3 Titles of Articles and Sections. Any titles of
the several parts, Articles, and Sections of this Agreement are
inserted for convenience of reference only and shall be
disregarded in construing or interpreting any of its provisions.
Section 7.4 Notices and Demands. Except as otherwise
express y provide in tiis Agreement, a notice, demand, or other
_ communication under this Agreement by either party to the other
shall be sufficiently given or delivered if it is dispatched by
registered or certified mail, postage prepaid, return receipt
requested, or delivered personally and
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(a) in the case of the Redeveloper, is addressed
to or delivered personally to the Redeveloper at
Fluoroware, Inc.
Jonathan Industrial Center
Chaska MN 55318
(b) in the case of the Agency is addressed to or
delivered personally to the Agency at Chanhassen
City Hall or at such other address with respect
A to either such party as that party may, from time
to time, designate in writing and forward to
the other as provided in this Section.
Section 7.5 Counterparts. This Agreement is executed in any
number of counterparts, each of which shall constitute one and
the same instrument.
Section 7.6 Notice to Subsequent Purchasers. The recording
or filing of this Ayreement with the County Recorder or County
Registrar of Titles shall constitute notice of this Agreement
to any subsequent purchaser or encumbrancer of the Redevelopment
Property, or any part thereof, whether voluntary or involuntary,
and shall be binding upon them. The Redeveloper agrees to
supply the applicable owner's duplicate certificate of title, if
any, so as to permit the recording of a copy of this Agreement
in the office of the Carver County Recorder.
IN WI'1NESS WHEREOF, the Agency has caused this
Agreement to be duly executed in its name and behalf and its
seal to be hereunto duly affixed, and the Redeveloper has caused
this Agreement to be duly executed in its name and behalf and its
corporate seal to be hereunto duly affixed, on or as of the
date first above written.
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF CHANHASSEN
By
And
i
-14-
a
STATE OF MINNESOTA)
) ss.
.COUNTY OF CARVER )
The foregoing L"S trument was acknowledged before me
this day of , 19 , by
- -
ana
—
of the !io ig and Re evelnt Authority o the City of
Chanh-lssen, Minnesota.
Notary Public
County:
My Commission Expires:
STATE OF MINNESOTA)
) ss.
COUNTY OF CARVER )
The foregoing instrument was acknowledged before me
this 3rd day of
Quernemoen . and Y 1e 82 by Daniel
Stan Gey
of F uoroware, nc. er the president and Vice President
a - hiirineso a co r1 oration on be la of said - - --
corporation. -
This Instrument Drafted By:
LARSON & MERTZ
1900 First Bank Place West
Minneapolis MN 55402
(612) 333 -1511
Notar #P c��
County:
My Commission Expires:
VIRGINIA A. ROWLETTE
NOTARY PUBLIC - MINNESOTA
RAMSEY COUNTY
MY commission expires Sept. 25, 1987
-15-
Exhibit A
"Minimum Improvements" means 60,000 square foot combination
office - warehouse constructed of concrete wall panels.
Exhibit B
Lots 8 and 9, Block 5, "Chanhassen Lakes
Business Park" according to the plat thereof
on file and of record in the office of the
County Recorder, Carver County, Minnesota
(Torrens Certificate No. 12900).
r-
CERTIFICATION BY ASSESSOR
Tax Parcel No.
Street Address
xev. S /lU /82
25 -43- 700 - 0029 -000 &
25 -43- 700- 0030 -000
1501 Park Road
Chanhassen, MN 55317
The undersigned having reviewed the Construction Plans
for the Minimum Improvements and the Market Value assigned to
the Redevelopment Property upon which the Minimum Improvements
are to be constructed pursuant to the attached assessment
agreement, and:being of the opinion that a "Minimum Market
Value" set forth in this Certification appears reasonable,
hereby certifies as follows:
The undersigned Assessor, being legally responsible
for the assessment of the Redevelopment Property (more particularly
described in Exhibit B to the attached assessment agreement)
hereby certifies that the market value assigned to such land
(the Redevelopment Property) and improvements (the Minimum
Improvements) upon completion of construction thereon shall be
not less than One Million Two Hundred Twenty -nine 'Thousand Nine
Hundred and no /100ths Dollars ($1,229,900.00)until termination
of the attached assessment agreement.
The undersigned further certifies that the
value of the Redevelopment Property as of January 2,
Seventy -eight Thousand Three Hundred and no /100ths
($ 78, 300.00 )
market
1980,
For the purposes of this certification, the words
used herein have the definitions uti d in the attached
Assessment Agreement. r
Assessor Fqt Th
nhas
STATE OF MINNESOTA) City of C
COUNTY OF CARVER ) ss.
was
Dollars
The foregoing instrument was acknowledged before me
this 3p day of�Q, , 1982, by
the Assessor for the City of
Chanha s n
Q
No ry P b rc
County:p�
My commission expires: C5 C. ", IRIS
KAREN J.ENGELHARDT
.1•,i4 NOTARY PUBLIC • MINNESOTA
�_ CARVER COUNTY
'y},.• My Cpmmrsamn Expires Oct. 11, 1"S
ADDENDUM TO
ASSESSMENT AGREEMENT
The undersigned parties to an Assessment Agreement
dated , on property legally
described as Lots 8 and 9, Block 5, Chanhassen Lakes Business
Park, Carver County, Minnesota, hereby mutually agree to amend
said contract as follows:
1. It is intended and agreed that the covenants and
agreements set forth in Article V of the above described
assessment agreement shall be covenants running with the land
and that they shall, in any event, and without regard to
technical classification or designation, legal or otherwise,
be binding to the fullest extent permitted by law and equity,
for the benefit and in favor of, and enforceable by the Agency,
its successors and assigns. In the event that any transferee
or assignee of the Redeveloper (including without limitation
any mortgagee taking possession of or title to the Redevelopment
Property as result of any default in the terms of any mortgage
to which the Redevelopment Property is now subject or may be
subject in the future) breaches any one of the covenants and
agreements set forth in said Article V, the Agency may treat
such breach as an Event of Default as provided in Article VI
of said assessment agreement and may exercise any one or more
of the remedies set forth in §6.2 of said assessment agreement.
2. The Minimum Improvements have been completed and
the Redevelopment Property is being included in the Agency's
assessment reduction payment program, as defined in Modification
No. 5, retroactively, pursuant to that certain Agency
Resolution No, dated , which -
resolution authorizes the retroactive participation in said
program by the Redeveloper.
3. Section 3.2 of the above described assessment
agreement is amended to read as follows:
"Section 3.2. Amount of Assessment Reduction Payment.
The amount of any assessment reduction payment made pursuant
to this Agreement shall be equal to the lesser of the following
_ amounts:
(a) the sum of the principal balance of the eligible
assessments imposed on the Redevelopment
Property, together with accrued interest
thereon, both principal and interest being
computed as of January 2, 1980; or
(b) seven percent (70) of the excess of the
Minimum Value of the Redevelopment Property
and the Minimum Improvements constructed thereon
(i.e., $1,229,900) over the Market Value of
the Redevelopment Property as of January 2,
1980 as certified in the Certification by
Assessor (i.e., $78,300). "
4. All other terms and conditions of the Assessment
Agreement remain the same.
Dated this day of
This Instrument
LARSON & MERTZ
1900 First Bank
Minneapolis, MN
(612) 333 -1511
Drafted By:
Place West
55402
1982.
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF CHANHASSEN
(Hereinabove the "Agency ")
0
And
i
FLUOROWARE, INC.
(Hereinabove referred to as the
Redeveloper)
UN
An
r-
STATE OF MINNESOTA)
) ss.
COUNTY OF CARVER )
The foregoing instrument was acknowledged before me
this day of , 1982, by
and
the
and of
the Housing and Redevelopment Authority of the
Minnesota. City of Chanahssen,
Notary Publiq
County:
My Commission expires:
STATE OF MINNESOTA)
)ss.
COUNTY OF CARVER )
The foregoing instrument was acknowledgedbefore me
this 3rd day of May 1982 by
Daniel Quernemoen and Stan Geyer the
President and Vice President of
Fluoroware, Inc. a Minnesota corporation, on behalf of said
— corporation.
N t y Public
Coun y:
My commission expires:
,elf V!P.GIN!A A. ROWLEfTE
t4OTAW iLELIC itINMSOTA
RAMSEY COUNTY
My <ommiscien expires Sept. 25, 1987
RUSSELL H. LARSON
CRAIG M. MERTZ
OF COUNSEL
.--- - HARVEY E. SKAAR
MARK C. MCCULLOUGH
Scott A. Martin
Executive Director
Chanhassen HRA
Box 147
Chanhassen MN 55317
Dear Scott:
LARSON & MERTZ
ATTORNEYS AT LAW
1900 FIRST BANK PLACE WEST
MINNEAPOLIS, MINNESOTA 55402
May 6, 1982
Re: Fluoroware
TELEPHONE
(612) 333 -1511
If the HRA decides to compromise the matter of the 1981 tax penalties,
by paying those penalties and then crediting them against the
total assessment reduction due Fluoroware, two steps must be taken.
First, a further addendum must be signed specifying that the term
"eligible assessments" includes the penalties in question. I enclose
such a document entitled "Second Addendum to Assessment Agreement." 1
Second, when the motion is offered to approve the formal resolution
regarding Fluoroware's participation, that motion should specify
that the second paragraph (on page 2 of the resolution) is modified
by adding the following phrase after the words "Exhibit A ":
", including the first and second addenda thereto."
For your information the penalties on the two tracts, which make u_n
the Fluoroware site, total $2,818.44. $486.06 of that amount is
attributable to the delinquent real estate taxes and $2,332.38 is
attributable to the delinquent special assessments. These penalties
increase further if payment is not made by June 1, 1982.
CMM:ner
enc
Very truly yours,
CRAIG M. MERTZ
Assistant Chanhassen City Attorney
}
:r
t
SECOND ADDENDUM TO
ASSESSMENT AGREEMENT
The undersigned parties, to an Assessment
Agreement, dated , 19 , on
property legally described as Lots 8 and 9, Block 5,
Chanhassen Lakes Business Park, Carver County, Minnesota,
hereby mutually agree to amend said contract as follows:
1. The definition of "Eligible Assessments" in
§1.1 of the above described assessment agreement is amended
by adding the following additional sentence at the end of
said definition:
"The term "Eligible Assessments" includes the late
penalties imposed by the Carver County Auditor on
the Redevelopment Property in connection with the real
estate taxes due and payable in 1981; which penalties
were incurred as a result of delays which prevented
the adoption of Modification No. 5 until 1982."
2. All other terms and conditions of the Assessment
Agreement, as modified by the first Addendum to Assessment
Agreement, remain the same.
Dated this day of , 1982.
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF CHANHASSEN
(Hereinabove the "Agency ")
Im
And
i
FLUOROWARE, INC.
(Hereinabove referred to as the
Redeveloper)
M
And
i
This Instrument Drafted By:
LARSON & MERTZ, 1900 First Bank Place West, Minneapolis, MN 55402
STATE OF MINNESOTA)
) ss.
COUNTY OF CARVER )
The foregoing instrument was acknowledged before me
this day of , 1982, by
— and
the and of
the Housing and Redevelopment Authority of the City of Chanhassen,
Minnesota.
Notary Public
County:
My commission expires:
STATE OF MINNESOTA)
) ss.
COUNTY OF CARVER )
The foregoing instrument was acknowledged before me
this day of , 1982, by
and
the and
of
Fluoroware, Inc.,a Minnesota corporation, on behalf of said
corporation.
Notary Public
County:
My commission expires:
CHANHASSEN HOUSING & REDEVELOPMENT AUTHORITY
690 COULTER DRIVE • P.O. BOX 147 •. CHANHASSEN, MINNESOTA 55317
-u• (612) 937 -1900 -.
MEMORANDUM
TO: Chanhassen HRA
FROM: Scott A. Martin, Executive Director �VI�
DATE: May 14,.1982
SUBJ: Dayco,Concrete Company (David & Carla Brockpahler) Assess-
ment Agreement (Resolution #82 -6)
Attached for your review and approval is the Assessment Agreement
for the participation of Dayco Concrete Company (David & Carla
Brockpahler, owners) in the HRA Special Assessment Reduction
Program.
Based on an Assessor's total Market Value of $423,500, less vacant
land value of $47,100, the HRA's assessment reduction obligation
is $26,348. .($376,400 x 7% = $26,348)
The original assessment against this property was $61,615.65.
This amount was levied over a 15 year period at 78 interest.
Recommendation
I recommend adoption of Resolution #82 -6 approving the Assessment
Agreement as executed by the Brockpahler's on May 6, 1982, including
revised pages numbered 4,8,8a,14 and 15.
I also recommend payment of the HRA's assessment obligation via
the installment method, as opposed to the lump sum payment option.
This obligation will be monitored annually relative to which option
- is best for the HRA in future years.
Attachments
1. Resolution #82 -6
2. Copy of Assessment Agreement
0
II-
HOUSING AND REDEVELOPMENT AUTHORITY
OF
CHANHASSEN, MINNESOTA
RESOLUTION APPROVING PARTICIPATION OF
DAVID W. BROCKPHALER IN
ASSESSMENT REDUCTION PROGRAM
Dated: Resolution No. 82 -6
Motion By Commissioner Seconded by Commissioner
WHEREAS, David W. Brockphaler (Brockphaler), the
owner and developer of Lot 1, Block 1, Chanhassen Lakes Business
Park, Carver County, Minnesota (the "Subject Property "),
appeared before the Authority in 1980, and requested that the
Authority assist him in his development of the Subject Property
by utilizing a portion of tax increments received by the
Authority pursuant to Section 462.585 of Minnesota Statutes
to pay a portion of the costs of the City of Chanhassen Project
78 -3 which was assessed against benefited properties including
the Subject Property; and
WHEREAS, the Authority previously approved such
assistance to Brockphaler contingent upon the Authority's bond
counsel issuing an approving opinion for such assistance; and
WHEREAS, Brockphaler, relying on the Authority's said
action proceeded to complete his development of the Subject
Property; and
WHEREAS, the Authority by its Resolution No.
dated , 19 , adopted Modification No. 5
to the Chanhassen Downtown Redevelopment Project, thereby
instituting a comprehensive program for the reduction of certain
assessments on certain lands in Chanhassen Lakes Business Park
including the Subject Property; and
WHEREAS, the assessment reduction program described
in said Modification No. 5 is similar in substance to the form
of assistance to Brockphaler which was contemplated by the
Authority in its previous action;
NOW, TIiEREFORE, BE IT RESOLVED, by the Chanhassen
Housing and Redevelopment Authority, as follows:
1. The participation of Brockphaler in the assessment
reduction program established in Modification No. 5 to the
Plan is hereby approved retroactively provided that
Brockphaler execute an assessment agreement with the Authority
in the form attached hereto and made a part hereof as Exhibit A.
2. The Chairman and Executive Director of the Authority
are hereby authorized and directed to execute said contract on
behalf of the Authority.
Passed and adopted this day of ,
19 ,'by the Housing and Redevelopment Authority of the
City of Chanhassen, Minnesota.
Attest:
Executive Director
Yes
No
-2-
Chairman
Absent
Exhibit A To Be Supplied
( Copy of Approved Assessment Agreement)
ASSESSMENT AGREENENT
'PHIS ACRLEMl14'P, made on or as of the day of
by and between The dousing
�n3 ItcaevelupnicnL Aul -ority in and for the City of Chanhassen,
a public body corporate and politic (the "Agency ") , established
pursuant to Laws of Minnesota 1947, Chapter 4 87, as amended,
being.-Minnesota Statutes, Sections 462.411- 462.711 (the "Act "),
and DaNid W. Brockpahler and Carla M. Brockpahler, his wife
(the "Redeveloper ").
l4I'1'NLSSLIVII :
WIIUM."AS, the Agency was created pursuanL to the Act
and was authorized to transact business and exlrcise its powers
by a resolution of the City Council of the City of Chanhassen
(t)Ie "City "); and
WliERL•'AS, in furtherance of the objectives of the Act,
the Agency has undertaken a program for the clearance and
reconstruction or rehabilitation of blighted, deteriorated,
deteriorating, vacant, unused, underuscd or inappropriately used
areas of the City, and in this connection is engaged in carrying
out a redevelopment project known as the Chanhassen Downtown
Redevelopment project (the "project"), in an area (the "Project
Area "), located in the City; and
WHEREAS, as of the date of this Agreement there has
been prepared and approved by the Agency and the City a
redevelopment plan for the Project; and
WHEREAS, the Agency requested the County of Carver
(the "County ") to certify the current assessed value of the
real property within the Project Area pursuant to Section 462.585
Of the Act thereby establishing the Project as a tae .increment
fii:ancing district; and
WHEPLAS, the major objectives of the Redevelopmont-
Plan are to: acquire for rehabilitation econoin'cally or
functionally obsolete or underutilized buildings and land;
provide a redevelopment site of a character that will encourage
future developmont of the area and improve sources of public
revenue; elimiato blighting influences which impede potential
development within the aforementioned redevelopmenL project;
provide ma::iinwn opportunity for redevelopment by private enterprise,
consistent with the needs of the City as a whole; encourage
private rehabilitation of structures within the redevelopment
project; and
WHEREAS, in order to achieve Lho objectives of the
Redevelopment Plan and particularly to,make the land in the
Project Area available for in by private enterprise
for and in accordance with the uses specified in the Redevelop-
ment Plan, the Agency has determined to provide substantial
aid and assistance to the Project throug?, the sale of bonds to
finance the public costs Qf ttre redevelopment of the Project
Area; and
WHEREAS, the Agency believes that the redevcl>cnC
of a portion of the Pro om
ject' Area pursuant to this Agreement, and
fulfililment generally of the Agreement, are in the vital and
best interests of the City and the health, safety, morals, and
welfare of its residents, and in accord with the public purposes
and provisions;of the applicable state and local laws and
being assisted; and
requirements under which the Project has been undertaken and is
WHEREAS, the Agency has concluded agreements for the
redevelopment of the various properties to be acquired in further-
ance of the Project; and
Agency should Rsuch redcvelopmenttnotrbelccompletedSeandr the
WHEREAS, Section 273.76(Subd.8) of Minnesota Statutes
empowers the Agency to enter into written assessment agreements
with redevelopers of properties within the Project Area; and
WHL'R &AS, it is contemplated that pursuant to this
Agreement, the Redeveloper will construct- certain minimum
improvements upon the Redevelopment Property; and
WHEREAS, the Agency, and the Redeveloper desire to
establish a Minimum Market Value for the Redevelopment Property
and the Minimum Improvements to be constructed thereon pursuant
to Minnesota Statutes, 5273.76, Subd. 8, and §162.995, Subci.9 (1,
and 16) ; and
WHEREAS, the Agency and the Assessor have reviewed
the Construction Plans for the Minimum Improvements; and
7 WHEREAS, the Assessor, actin urs
9 P icat to By Assessor
Subd. f
of Minnesota Statutes, has e:,ecuL-ed a Certification By Assessor
as to the Redevelopment Property and the Minumum Improvements
to be constructed thereon; and
WHEREAS, the original copy of said Certification
By Assessor, or a true and correct copv thereof is attached to
this Agreement as Exhibit C and made a part hereof:
-2-
NOW, THEREFORE, in considera,Lion of the premises and
the mutual obligations of the parties hereto, each of them
does hereby .covenant- and agree with the other as follows:
ARTICLE I. DEFINITIONS.
Section 1.1 Definitions- In this Agreement, unless a different
meaning clearly appears from the context:
"Act" means the Municipal Iiousing and Redevelopment
Act, Minnesota Statutes, Sections 962.911 et seq., as amended.
"Agency" means the Housing and Redevelopment Authority
in and for the City of Chanhassen.
"Agreement" means this Agreement, as the same may be
from time to time modified, amended, or supplemented.
"Assessment Agreement" means any agreement substantially
similar to this Agreement providing for payment by the Agency
of eligible assessments from the tax, increments received by _
the Agency in connection with the Project.
"Assessment Reduction Payments" means payments made
by the Authority to either the City or to the County's auditor, as
a credit against eligible assessments, pursuant to Article IV
Of this Agreement or pursuant to agreements similar to this
Agreement with other redevelopers of land in the Project Area.
"Assessed Value" or "Assessed Valuation" means the
value of real property as determined by the assessor in
accordance with Minnesota Statutes, Section 273.13 (or as finally
adjusted by any assessor, board of equalization, commissioner
of revenue, or any court) against which the real property tax
is imposed.
"Assessor" means the Carver County Assessor or a City
Assessor having the powers of the Carver County Assessor as to
properties within the Project Area.
"Bonds" means the general obligation bonds or
obligations issued by the City or the Agency to finance the
costs of the Project including but not limited to the Assessment
Reduction Payments made by the Authority pursuant- to Modification
No. 5 to the Plan.
The term "Bonds" shall also include any general
obligation bonds or obligations issued to refund any Bonds.
"Certification By Assessor" means the Assessor's
certification pursuant to Section 273.7G, Subd. 8 of Minnesota
Statutes, and Section 3.3 of this Agreement that he has reviewed
the Construction Plans for the Minimum Improvements and the
-3-
.aq
Market- Value previously assigned to
and that upon completion of said Mi
value assigned to the Redevelopment
less than a specified dollar amount
tile, Redevelopment Property,
aimilm Improvements the market -
Property shall not be
stated therein.
"Certificate of Occupancy" means the certification
provided to the Redeveloper, or the purchaser of any part,
parcel {or unit of the Redevelopment Property, pursuant to
Section 4.2 of this Agreement.
"City" means the City of Chanhassen.
"Construction Plans" means the plans, specifications,
drawings and related documents on the construction work to be
performed by the Redeveloper on the Redevelopment Property which
(a) shall be at least as detailed as the plans, specifications,
drawings and related documents which are submitted to the building
inspector of the City, and (b) shall include at least the
following for each building: (1) site, plan, (2) foundation plan;
(3) basement plan; (4) floor plan for each floor,- (5) cross
sections of each (length and width); (G) elev
an ations (all sides);
(7) landscape pl.
"County" means the County of Carver
"Date of Execution" means the date on which the
Redeveloper signs this Agreement or the date on which the Agency
signs this Agreement, whichever is later.
"Eligible Assessments" means those special assessments
(and those unlevied lateral unit charges and trunk unit charges)
which are more Particularly described in Modification No. 5 to
the Plan, and which have been imposed by the City on tracts of
lands contained within the plats of Chanhassen Lakes Business
Parr and Park II in connection with either City of Chanhassen
Improvement Project 78 -3 or in connection with any other City
public improvement project which specially be said tracts of
land within said plats. The term "Eligi.ble Assessments" does not
include any building permit fees, any Park charges owing to the
City under applicable ordinances, or any availability or connection
charges owing to the City pursuant to Section 444.075 of Minnesota
Statutes or Other applicable statutes or pursuant to applicable
City Ordinances, or any sewer availabilit-v charges or similar
charges imposed by the Metropolitan Council or Metropolitan
waste Control Commission or similar governmental unit.
"Event of Default" means an action by the Redeveloper
r listed in Article VI of this Agreement.
_4_
\.l 1
/ "Market Value" or Market Valuation" mean s
fair market value of real property as determined by the eAssessored
in accordance with Minnesota Statutes, Section 273.11 (or as
finally adjusted by any assessor, board of equalization, cormuis-
sioner of revenue, or any court).
"Maturity Date"-means the date when the principal of,
premium (if any), and interest on the Bonds are paid in full.
"Minimum Improvements" means those improvements which
are more particularly described on Exhibit A attached hereto and
made a part hereof.
"Minimum Market Value" means Market Value established
pursuant to Section 3.3 of this Agreement.
"Modification No. 5" means the fifth amendment to
the Plan adopted by the Agency establishing a program of Assessment
Reduction Payments and the resolution adopting the same.
"Plan" means the Chanhassen Downtown Redevelopment Plan
as described in the "Chanhassen Downtown Redevelopment Project
Amended Plan, February, 1980, Revised March 20, 1980" booklet,
as further amended from time to time by the Agency.
"Project" means the Chanhassen Downtown Redevelopment
Project as described in the Chanhassen Downtown Redevelopment
Project Amended Plan, February 1980, Revised March 20, 19II0"
booklet, as further amended from time to time by the Agency,
"Project Area" means the real property located within
the boundaries of the entire redevelopment- district as described
in Figure 1 contained in the "Chanhassen Downtown Redevelopment
Project Amended Plan, February, 1980, Revised March 20, 1980"
booklet.
"Project 78 -3 Assessments" means the costs of City of
Chanhassen Improvement Project 78 -3 which were specially assessed
against benefited real property pursuant- to Chapter 429 of
Minnesota Statutes.
"Real Estate Taxes" means ad valorem taxes on real
property pursuant to Chapter 273 of Minnesota Statutes and not
including any special assessments levied pursuant to Chapter 429
of Minnesota Statutes.
"Redeveloper" means David W Brockpahler and Carla M.
-Br-acbP- ah1Qr.h.i.a -miIQ , their executors, heirs, or assigns.
"Redevelopment- Property" means the real property
which is more particularly described on Exhibit B attached hereto
and made a part hereof.
"Redevelopment Plan" means the Plan.
-5-
"State" means the State of Minnesota.
"Substantial Completion" means sufficiently complete,
in accordance with the Construction Plans for the Minimum
Improvements, so that the Redeveloper (or his successors and
assigns) may occupy the werk for the use for which the
Minimum Improvements are intended.
"'lax Official" means any City or Countv assessor,
county�,auditor, City, County or State board of equalization,
r the COhnissioner of revenue of the State, or any state or
federal district court, the tax court of the State,
State Supreme Court. or the
ARTICLE II. REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations by the Agencv. The Agency makes
the following representations as the basis or the undertaking,
on its part herein contained:
(a) The Agency is a housing and redevelopment aut
duly organized and existing under the laws of the State, hority
(b) The Project is a "redevelopment project" within
the meaning of the Act and was created, adopted and approved in
accordance with the terms of the Act.
(c) The Project- is a
created, adop "tax increment district"
ted, certified and approved pursuant to Minnesota
Statutes, Section 462.585.
(d) The Agency has established the Project Area as
a "tax increment district" and has req
auditor of uested that the County
the County certify the Assessed valuation of all
taxable real property in the Project Area pursuant
Statutes, Section 462.5II5. to Minnesota
(e) the activities of
the purpose the Agency are undertaken for
of removing, preventing or reduci
factors, or the ng blight, blighting
causes of blight, and [or the purposes of
eliminating or preventing the development or
or. spread of deteriorated
deteriorating areas.
(f) To finance the cost- of the activities to be
undertaken by the Agency, the Agency proposes to use the proceeds
Of Bonds issued either by the City or the Agency and to pledye tax
increment generated by the Project Area to the payment of the
principal of and interest on the Bonds.
-6-
Section 2.2 Representations and Warranties by the Redeveloper.
The Redeveloper represents and warrants that:
(a) The Redeveloper is a corporation duly organized
and in good standing under the laws of the State of Minnesota,
is not in violation of any provisions of its certificate of
incorporation, its by -laws, or the laws of the State of Minnesota,
has parer to enter into this Agreement and has duly authorized
the execution, delivery and performance of this Agreement by
Proper corporate action.
A
(b) The Redeveloper will construct the Minimum
Improvements in accordance with the terms of this Agreement,
the Plan and all local, state and federal laws and regulations
(including, but not limited to, environmental, zoning, building
code and public health laws and regulations), and in accordance
with the Construction Plans which have been approved by the Agency.
(c) The Minumum Improvements constitute a permitted
use under the zoning ordinance of the City, a permitted use
under the Plan and the Act.
(d) That at such time or times as may be required by
law, the Redeveloper will have complied with all local, state and
federal environmental laws and regulations, will have obtained
any and all necessary environmental reviews, licenses or
clearances as to the Redevelopment Property, and that Redeveloper
has received no notice or communication from any local, state
or federal official that the activities of the Redeveloper in the
Project Area may be or will be in violation of any environmental
law or regulation (other than those notices or communication6 of
which the Agency is aware). The Redeveloper is aware of no
facts the existence of which would cause it to be in violation of
any local, state or federal environmental law, regulation or
review procedure or which would give any person a valid claim under
state environmental rights statutes.
(e) The Redeveloper will use its best efforts to
construct the Minimum Improvements in accordance with all
existing local, state or federal energy- conservation laws or
regulations.
(f) The Redeveloper will obtain, in a timely manner,
all required permits, licenses and approvals, and will meet,
in a timely manner, all requirements of all local, state and
federal laws and regulations which must be obtained or met
before the Minumum Improvements may be lawfully constructed.
(g) The real estate taxes and any installments
of special assessments levied against the Redevelopment Property
are not in default and that future real estate taxes will be
paid when due.
-7-
ARTICLE III. ASSESSMENT REDUCTION PA1'TdEN1'S.
Section 3.1 Obligation of Agency to Make Assessment Reduction
issuance. Upon completion o the Minimum Improvements and
issuance of the Certificate of Occupancy, the Agency, from the
tax increment generated by- the Project shall make payments (in
the manner and in the amount provided hereinafter) in reduction
of the eligible assessments which have been imposed on the
Redevelopment Property and which were unpaid upon the date of
execution of this Agreement.
In the case of eligible assessments which have
then already been certified to the County's auditor for collection
with real estate taxes, said assessment- reduction payment,; shall
be made directly to the County's auditor in full or part-iai
satisfaction, as the case may be, of said eligible assessments.
In tile e Of not then been certifiedato tleeCounby'sassessments which have
with real estate taxes, said assessment reduction payments
shall be made to the City'streasurer in full or partial
satisfaction, as the case may be, of Said eligible assessments.
been paid by ti In
which have
Of this Agreement, said assessment reduction payments shall be
made directly to the Redeveloper or his designated successors
and assigns.
The Agency, at its option, may satisfy its
obligations to make assessment reductions payments under this
Agreement by either making a lump sum payment or by making a
series of semi - annual payments as individual installmen1:s of
eligible special assessments become due and owing to the Cit_v.
Section 3.2 Amount of Assessment Reduction Payment. Tho
amount o any assessment reduction payment made pursuant to this
Agreement shall be equal to the lesser of the following amounts:
(a) the sum of the principal balance of the eligible
assessments imposed on the Redevelopment
Property, together with accrued interest
thereon, both principal and interest being
computed as of thy, date of execution of Chi_
Agreement; or
(b) seven percent (7%) of the excess of the Minimum
Market Value of the Redevelopment Property and
the Minumuin Lnprovements constructed thereon.
as established pursuant to Section 3.3 of this
Agreement over the Market Value of the
Redevelopment Property as of the date of execu-
tion of the Certification Iiv Assessor, and
as certified in said certification.
Q�
Section 3.3 Minimum Market Value to Pe Used In Com)utin�
12ea1 L'state Taxes Upon completion of the Ma.nimwn Improvements
by the Redeveloper, the Minimum Market Value which shall be
assessed for the Redevelopment Property and the Minimum Improve-
ments thereon shall be Four hundred Twenty -three Thousand
Five hundred and no/100EIT—s—-
1 ($423,500.00)
hereinafter the tlinimwn Darkel Value . 'Phe Minimum Market
Value established in this section shall be of no further force and
effect and this Agreement shall terminate on the later of the
two following dates:
(a) the date on which th, Dcnds are retired, or
(b) the date on which all assessment reduction
payments due the Redeveloper (or his
successors and assigns) pursuant to this
Agreement have been made.
In any event this Agreement shall terminate no later than
November 28, 2007.
Provided, however, that nothing in this Agreement
shall limit the discretion of the Assessor to assign a market
value to the Redevelopment Property in excess of the Minimum
Market Value set forth in this section, nor prohibit the
Redeveloper from seeking, through exercise of administrative, and
legal remedies, a reduction in market value for property tax
purposes; subject, however, to the restriction that the Redeveloper
shall not seek any reduction in said market value below the
Minimum Market Value, as set forth in this section, during
the term of this Agreement regardless of actual market value which
may result from incomplete construction of the Minimum Improvements,
destruction or diminution by any cause, insured or uninsured,
except in the case of acquisition or reacquisition of the
Redevelopment Property by a public entity.
Section 3_4 Termination of Entitlement to Payment. Notwith-
standing any language in this Agreement to the contrary, the
Obligation of the Agency to make any assessment reduction payment
to the Redeveloper (or his successors and assigns) shall become
null and void on July 31, 19 82, unless the
Reclevcloper has obtained a Certificate of Occupancy on or
before said date.
ARTICLE IV. CONSTRUCTION OF MINIMUM IMPROVEMENTS
Section 4.1 Const= ruction of Minimum Improvements. 1'he
Redeveloper agrees that it will construct the Minimum Improvements
on the Redevelopment Property and at all times prior to Maturity
Date will not cause a reduction in the real estate taxes paid
in respect of the Redevelopment Property through:
(a) willful destruction of the Minimum
Improvements or any part thereof, and /or
(b) willful refusal to reconstruct the Minimum
Improvements if or damaged or destroyed property.
-9-
_ Section 4.2 Certificate of Occupancy.
(a) Promptly after completion of the Minimum
Improvements in accordance with the provisions of this Agreement
the Agency, upon the written application of the Redeveloper, will
furnish the Redeveloper with an appropriate Certificate of
Occupancy executed by the City's Building Official and by the
Agency's Executive Director so certifying. Such certification
by the Agency shall be a conclusive determination of satisfaction
and termination of the agrcemonts and covenants in this Agreement
to co"' the Minimum Improvements. Such certification and
such determination shall not constitute evidence of compliance
with or satisfaction of any of the Redeveloper's obligations
to anv holder of a mortgage or to any insurer of a mortgage,
securing money loaned to finance the Minimum Improvements, or
any part thereof.
(b) If the Agency shall refuse or fail to provide
any certification in accordance with the provisions of this
Section 4.2 of this Agreement, the Agency shall, within thirty
(30) days after written request by the Redeveloper, provide the
Redeveloper with a written statement; indicating in adequate
detail in what respects the Redeveloper has failed to complete
the Minimum Improvements in accordance with the provisions of
this Agreement, or is otherwise in default, and what measures or
acts it will be necessarv, in the opinion of the Agency, for
the Redeveloper to take or perform in order to obtain such
certification.
(c) The construction of the Minimum Improvements
shall be deemed to be completed when such Minimum Improvements
are in a state of Substantial Completion as defined in Section
1.7 of this Agreement-.
ARTICLE V. REAL ESTATE TAXES.
Section 5.1 R_eal Estate 'Faxes. The Redeveloper agrees that,
upon comp etion oT the Minimum Improvements and prior to the
termination date stated in Section 3.3 of this Agreement, it will
not cause a reduction in the Market Value of the Redevelopment
Property and the Minimum Improvements below ttre amount of the
Minimum Market Value and that it will not seek a reduction in
the value of the Minimum Improvements below the Minimum Market Value:
(1) By seeking administrative review or judicial review
Of the applicability of any tax statute determined by any Tax
Official to be applicable Lo the Project- or the Redeveloper or
raising the inapplicability of anv such tax statute as a defense
in any proceedings, including delinquent tax proceedings;
(2) by seeking administrative review or judicial review of the
co;lst-itutional . iLv of airy tax statute deter;nincd by any Tax
Official to be applicable to the Project or the Redeveloper or
raising the unconstitutionality of anv such tax statute as a
defense in any proceedings, including delinquent tax proceedings;
r -10-
r
/ (3) by willful destruction of the Redevelopment Property or any
part thereof; (4) by willful refusal tb reconstruct damaged or
destroyed property; (5) by requesting the Assessor to reduce the
Market Value or Assessed Value of all or any portion of the
Redevelopment Property; (6) by petitioning the board of
equalization of the City or the board of equalization of the
County to reduce the Market Value or Assessed Value of all or any
portion of the Redevelopment Property; (7) by petitioning the
board of equalization of the State or the commissioner of revenue
of the State to reduce the Market Value or Assessed Value of all
or any,portion of the Redevelopment Property, (8) by maintaining
an action in the District Court of ti:e State or the Tax Court
Of the State pursuant to Minnesota Statutes, Chapter 278, seeking
a reduction in the Market Value or Assessed Value of the
Redevelopment Property; (9) by applying to the commissioner of
revenue of the State requesting an abatement of real property
taxes pursuant to Minnesota Statute;, Chapter 2,70; and (10)
by maintaining any other proceedings, whether administrative,
legal or equitable, with any administrative body within the City,
the County, or the State or with any court of the State or the
federal government-. The Redeveloper shall not, prior to the
Maturity Date, apply for a deferral of property tax on the
Redevelopment Property pursuant to Minnesota Statutes, Section
273.86.
Nothing in this Agreement shall limit the
discretion of the Assessor to assign to the Redevelopment
Property a Market Value to the Redevelopment Property in excess
Of the Minimum Market Value established pursuant to Article V
Of this Agreement. However, the Redeveloper is free to contest
said Market value to the e::tont that- it exceeds the Minimum
Ntarket Value established in 53.3 of this Agreement.
AR'T'ICLE VI. EVENTS OF -DEFAULT.
Section 6.1 Events of Default Defined. The following shall
be "Events of Default "wider this Agreement and the term
"Event of Default" shall mean, whenever it is used in this
Agreement (unless the context otherwise provides) , any one or
more of the following events (and the term "default" shall mean
any event which would with the passage of time or giviny of
notice, or both, be an "Event- of Default" hereunder):
(a) Failure of Redeveloper to pay when due any
real estate taxes on the Redevelopment Property;
(b) Failure of the Redeveloper to complete the
Minimum Improvements on or before the date
stated in Section 3.4 of this Agreement.
(c) Failure by the Redeveloper to observe and
perform any covenant, condition, obligation or
on its part to be observed or performed
hereunder, within thirty (30) days after written
-11-
r-
notice to the Redeveloper specifying such
failure and requesting that it be remedied
(or within such other period as otherwise
expressly provided in this Agreement); or
—
if the failure is by its nature incurable
within such thirty (30) days, failure by
the RedevC`Ioper to furnish to the Agency
satisfactory assurances that the Redeveloper
can and will cure such failure or failures
within reasonable time.
— (d)
If the Redeveloper shall admit in writing
its inability to pay its debts generally as they
become due, or shall file a petition in ban };ruptcy
or shall make an assignment- for the benefit of
its creditors, or shall consent to the
appointment of a receiver of itself or of
—
the whole or any substantial part of the
Redevelopment- Property.
(e)
If the Redeveloper shall file a petition or
answer seeking reorganization or arrangement under
the federal
bankruptcy laws.
- (f)
If the Redeveloper, on a petition in bankruptcy
filed against- it, be adjudicated a bankrupt,
or a court of competent jurisdiction shall enter
an order or decree appointing, without the consent
Of the Redeveloper, a receiver of the Redeveloper
'
or of the whole or substantially all of its
-
property,
or approve a petition filed against the Redeveloper
seeking reorganization or arrangement of the
j
Redeveloper under the federal bankruptcy laws,
and such adjudication, order or decree shall not
be vacated or set aside or stayed within sixty
(60) days from the date of entry thereof.
Section 6.2
Default referred
Remedies on Default. Whenever any Lvent of
to Section
Agency may make
1n 9.1 of this Agreement occurs, the
any one or more of the following
actions:
(a)
.Cancel and rescind this Agreement.
(b)
Withhold the Certificate of Occupancy.
(c)
Cancel any pending Assessment Reduction Payments
due under the terms of this Agreement, causing
a forfeiture of such pcivments in favor of the
Agency.
(d)
Take whatever action at law or in equity may
appear accessary or desirable to the Agency to
•
collect from the Redeveloper full reimbursement
for any AssessmL2:1t Reduction Payrents previously
made pursuant to this Agreement-.
-12-
r
1
r-
Section 6.3 No Remedy Exclusive. No remedy herein conferred
upon or reserved to the Agency is intended to be exclusive of
any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every
other remedy given under this Agreement or now or hereafter
existing at law or in equity or by statutes. No delay or omission
to exorcise any right ur }xnver accruing upon any default shall
impair any such right or power or shall be construed to be a
waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient. In
order to entitle the Agency to exercise any remedy reserved to
i.t, i0 shall not be necessary to give notice.
Section 6.4 No Additional Waiver In this by One Waiver. In
the event any agreement containec n this Agreement should be
breached by either party and thereafter waived by the other
party, such waiver shall be limited to the particular breach so
waived and shall not be deemed to waive any other concurrent,
previous or subsequent breach hereunder.
ARTICLE VII. ADDITIONAL PROVISIONS
Section 7.1 Conflict of Interest; Agency Representatives Not
In .L Vi ua y Liable. No member, official or employee of the
Agency she .ia ee any personal interest, direct or indirect, in
the Agreement, nor shall any such member, official, or employee
participate in any decision relating to this Agreement which
affects his personal interests or the interests of any corporation,
partnership, or association in which he is, directly or indirectly
interested. No member, official, or employee of the Agency shall
be personally liable to the Redeveloper or any successor in
interest, in the event of any default or breach by the Agencv
or for any Assessment Reduction Payments which may become due
under the terms of this Agreement.
Section 7.2 Duty of Agency to Act Reasonably. Wherever this
Agreement requires the Agency to approve
any action of the
Redeveloper, it is understood and agreed that the Agency will
not unreasonably withhold or delay such approval.
Section 7.3 Titles of Articles and Sections. Any titles of
the several parts, Articles, and Sections of this Agreement arc
inserted for convenience of reference only and shall be
disregarded in construing or interpreting any of its provisions.
Section 7.4 Notices and Demands. Except as otherwise
express y proviTeh rn t rs Agreement, a notice, demand, or other
communication under this Agreement by either party to the other
shall be sufficiently given or delivered if it is dispatched by
registered or certified mail, postage prepaid, return receipt
requested, or delivered personally and
-l.i-
(a) in the case of the Redeveloper, is addressed
to or delivered personally to the Redeveloper at
Dayro Concrete Com2any
Attention. David W. Brockpahler
1340 Park Road
Chanhassen, MNI 55317
(b) in the case of the Agency is addressed to or
delivered personally to the Agency at Chanhassen
City Hall or at such other address with respect
to either such party as that party may, from time
to time, designate in writing and forward to
t)ie other as provided in this Section.
Section 7.5 Counterparts. This Agreement is executed in any
number of counterparts, each of which shall constitute one and
the same instrument.
Section 7.6 Notice to Subsequent Purchasers. The recording
or ng of this Agreement with the County Recorder or County
Registrar of Titles shall constitute notice of this Agreement
to any subsequent purchaser or encumbrancer of the Redevelopment
Property, or any part thereof, whether voluntary or involuntary,
and shall be binding upon them. The Redeveloper agrees to
supply the applicable owner's duplicate certificate of title, if
any, so as to permit the recording of a copy of this Agreement
in the office of the Carver County Recorder.
IN WITNESS W11ERI'.OF, the Agency has caused this
Agreement to be duly executed in its name and behalf and its
seal to be hereunto duly affixed, and the Redeveloper has caused
this Agreement to be duly executed in its name and behalf and its
corporate seal to be hereunto duly affixed, on or as of the
date first above written.
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF CHANHASSEN
By
• i
And
i
CU
Davi L B gro pa e -`
Car a N . roc • a � er
-14-
STATE OF MINNESOTA)
) ss.
COUNTY OF CARVER )
The foregoing iastrument was acknowledged before me
this day of 19 by
of the Housing aid Redevelopment Authority o the City of
Chanhgssen, Minnesota.
Notary Public
County:
MY ConuniSsion Expires:
STATE OF MINNESOTA)
) ss.
COUNTY OF CARVER )
The foregoing instrument was acknowledged before me
this M) day of , %h_. � , 19 X � , by
David W.. Slockpahler . _ _ _and - Carla M- ]3rocTcpai�r
This Instrument Drafted By:
LARSON & MERTZ
1900 First Dank Place West
Minneapolis MN 55402
(612) 333 -1511
Nol°� ..�.�
y Public --
County: W. "n
My Commission Expires: ALItii.
-15-
an `Xnen(yn eJYI, 6 nox
..
e� NVI-0 Ttle— !��WMOYA
`` ; HiW PIN COUNTY
My e�mTicai4n exn�ra� aas B, 1446
Exhibit A
"Minimum Improvements" means a one -story Office -
Warehouse building consisting of 18,381 sq. ft. in floor area
which is constructed of concrete block exterior walls, and
includes 42 on -site parking spaces and paved access drive,
on a landscaped site containing 2.55 acres in land area.
Exhibit B
Lot 1, Block 1, Chanhassen Lakes Business Park
according to the plat thereof on file and of
record in the office of the County Recorder,
Carver County, Minnesota.
CERTIFICATION BY ASSESSOR
Tax Parcel No. 25 -43 -700- 0001 -000
Street Address ar oa
Chanhassen,MN 317
The undersigned having reviewed the Construction Plans
for the Minimum Improvements and the Market Value assigned to
the Redevelopment Property upon which the Minimum Improvements
are to be constructed pursuant to the attached assessment
agreement, and being of the opinion that a "Minimum Market
Value" set forth in this Certification appears reasonable,
hereby certifies as follows:
The undersigned Assessor, being legally responsible
for the assessment of the Redevelopment Property (more particularly
described in Exhibit B to the attached assessment agreement)
hereby certifies that the market value assigned to such lard
(the Redevelopment Property) and improvements (the Minimum
Improvements) upon completion of construction thereon shall be
not less than Four Hundred Twenty -three Thousand Five Hundred
and no /100ths Dollars unti termina ion oY the
attached assessment agreement.
The undersigned further certifies that the market
value of the Redevelopment Property as of January 2, 1981, was
Forty -seven Thousand One Hundred and no /100ths
($ 47,100.00 ) Dollars
For the purposes of this certification, the words
used herein have the definitions ut -zed in the attached
Assessment Agreement. /
W
I
Assessor or The
STATE OF MINNESOTA)
City of hanhas en
COUNTY OF CARVER ) ss.
The foregoing
this day
instrument was acknowledged before me
,aGCK of
1982, by
'- Chanii<1 e
the Assessor for the City of
N��ary i'iUYlic
County: @4"4uul /
My commission expires: Cv_ . /1j 19gS^'
AREN J.ENGELHARDT
OTAHYNE90TA CONTY
L
Co mnussion t +wires Oct. /1, 1983
aylvlaN....v
W
I
ADDENDUM TO
ASSESSMENT AGREEMENT
The undersigned parties to an Assessment Agreement
dated , 1982, on property legally described
as Lot 1, Block 1, Chanhassen Lakes Business Park, Carver
County, Minnesota, hereby mutually agree to amend said contract
as follows:
1. It is intended and agreed that the covenants and
agreements set forth in Article V of the above described
assessment agreement shall be covenants running with the land
and that they shall, in any event, and without regard to
technical classification or designation, legal or otherwise,
be binding to the fullest extent permitted by law and equity,
for the benefit and in favor of, and enforceable by the Agency,
its successors and assigns. In the event that any transferee
or assignee of the Redeveloper (including without.limitation
any mortgagee taking possession of or title to the Redevelopment
Property as result of any default in the terms of any mortgage
to which the Redevelopment Property is now subject or may be
subject in the future) breaches any one of the covenants and
agreements set forth in said Article V, the Agency may treat
such breach as an Event of Default as provided in Article VI
of said assessment agreement and may exercise any one or more
of the remedies set forth in 56.2 of said assessment agreement.
2. The Minimum Improvements have been completed and
the Redevelopment Property is being included in the Agency's
assessment reduction payment program, as defined in Modification
No. 5, retroactively, pursuant to that certain Agency
Resolution No. , dated , which
resolution authorizes the retroactive participation in said
program by the Redeveloper.
3. Section 3.2 of the above described assessment
agreement is amended to read as follows:
"Section 3.2. Amount of Assessment Reduction Pavment.
The amount of any assessment reduction payment made pursuant to
this Agreement shall be equal to the lesser of the following
amounts:
(a) the sum of the principal balance of the eligible
assessments imposed on the Redevelopment
Property, toqether with accrued interest
thereon, both principal and interest being computed
as of January 2, 1981; or
■
(b) seven percent (7%) of the excess of the
Minimum Value of the Redevelopment Property
and the Minimum Improvements constructed
therein (i.e., $423,500) over the Market Value
of the Redevelopment Property as of January 2,
1981 as certified in the Certification by
Assessor (i.e., $47,1003."
4. Subparagraph (a) of Section 2.2 of the above described
assessment agreement is amended to read as follows:
"(a) the Redeveloper has power to enter into
this agreement."
5. All other terms and conditions of the Assessment
Agreement remain the same. ,
Dated this day of 1982.
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF CHANHASSEN
(Hereinabove the "Agency ")
By
its
And
i
� �J
� Davi —d L�. gro c - pa ler
(Hereinabove the. "Redeveloper ")
I pp /
nt/
Carla M. Brockkkpahler
(Hereinabove the "Redeveloper ")
This Instrument Drafted By
LARSON & MERTZ
1900 First Bank Place Rest
Minneapolis MN 55402
(612) 333 -1511
CHANHASSEN HOUSING & REDEVELOPMENT AUTHORITY
690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
Iml u (612) 937 -1900
MEMORANDUM
TO: Chanhassen Housing and Redevelopment Authority
FROM: Scott A. Martin, Executive Director
DATE: May 14, 1982
SUBJ: United Mailing, Inc. Assessment Agreement `(Resolution 82 -7)
Submitted for your approval is the request of Jerome Carlson
(representing United Mailing, Inc.) for inclusion of the United
Mailing, Inc, project in the HRA Special Assessment Reduction
Program.
The Standard Form Assessment Agreement has not yet been executed
by United Mailing, Inc., but a copy of the signed "Certification
of Assessor" is attached, as is a'proposed "Addendum to Assessment
Agreement" prepared by our Attorney.
The minimum market value of the proposed United Mailing, Inc.
building has been established by the County Assessor based on
projected building utilization over a 4 -year period. These
minimum values are listed by valuation data in the Assessor's
certification which is attached and which will become part of
the Assessment Agreement. An "average" minimum market value of
$2,118,900 has been established by the Assessor for the purposes
Of computing the assessment reduction obligation of the HRA.
With the current vacant land valuation of $137,500 subtracted
from this average valuation, the HRA's assessment obligation
computes to $138,698. ($2,718,900 - $137,500 = $1,982,400 x 7% _
$138,838.)
However, levied and pending special assessments on the United Mailing
site total only $128,483.34. Therefore, the HRA will assume 100%
of the actual assessments upon completion of the project. (No
payments in excess of actual assessments can be made by the HRA
under any circumstances::)
RECOMMENDATION
I recommend adoption of Resolution #82 -7 approving the Assessment
Agreement for the United Mailing,.Inc. building, including the
Addendum and revised pages 4, 8, 8a, 14, and 15 of the Standard
Form Assessment Agreement.
United Mailing
May 14, 1982
Page 2
I also recommend payment of the HRA's Assessment obligation via
the installment method.
Attachments
1. Letter from Craig Mertz dated 5 -6 -82.
2. Resolution No. 82 -7.
3. Addendum to Assessment Agreement.
4. Certification by Assessor.
5. .United Mailing, Inc. Site Plan.
RUSSELL H. LARSON
CRAIG M. MERTZ
_ OF COUNSEL
HARVEY E. SKAAR
MARK C. MCCULLOUGH
Scott A. Martin
Executive Director
Chanhassen HRA
Box 147
Chanhassen MN 55317
Dear Scott:
C
LARSON LAC MERTZ
ATTORNEYS AT LAW
1900 FIRST BANK PLACE WEST
MINNEAPOLIS, MINNESOTA 55402
May 6, 1982
Re: United Mailing
I have received your memo regarding the four -year phasing -in
of the $2,579,900 market value for the United Mailing. With
that memo in mind I have drafted and I enclose the following
documents:
a) Addendum to Assessment Agreement and
_ b) a revised Certification By Assessor;
c) proposed resolution authorizing signing of
the Assessment Agreement.
TELEPHONE
(612) 333 -ISII
All three documents now provide for an initial market value of
$1.6 million, which is gradually increased to $2.5 million dollars.
Steps must be taken prior to Board action to verify the identity of
all owners of the subject property, as all owners must sign the
agreement.
CMM:ner
enc
nVery etruly yours,
CRAIG M. MER ^1Z
Assistant Chanhassen City Attorney
t�
( 91
HOUSING AND REDEVELOPMENT AUTHORITY
OF
CHANHASSEN, MINNESOTA
RESOLUTION
Dated Resolution No. 82 -7
Motion By Commissioner Seconded By Commissioner
RESOLUTION APPROVING ASSESSMENT AGREEMENT
FOR THE
UNITED MAILING BUILDING
WHEREAS,
(the "Redevelopers), owner of the following described real property:
has tendered to this Authority a proposed assessment agreement,
pursuant to Modification No. 5 to the Chanhassen Downtown
Redevelopment Plan, providing for the construction of certain
improvements within the Chanhassen Downtown Redevelopment Project
Area.
NOW, THEREFORE, BE IT RESOLVED, as follows:
1. The Chairman and Executive Director of the Authority are
hereby directed and authorized to execute on behalf of the
Authority said assessment agreement and the addendum thereto in
the form attached hereto and made a part hereof, as Exhibit A.
2. The Chairman and Executive Director are hereby specifically
authorized to make assessment reduction payments pursuant to said
assessment agreement (and the addendum thereto) on the basis of
the average of the four Minimum Market Values set forth in
Section 3.3 of said agreement.
Passed and adopted this day of
198 , by the Housing and Redevelopment Authority of the
City of Chanhassen, Minnesota.
Attest:
Executive Director
Chairman
I
Yes No Absent
-2-
ADDENDUM TO
ASSESSMENT AGREEMENT
The undersigned parties to an Assessment Agreement
dated 19 on property legally
described as
Carver County,
Minnesota, hereby mutually agree to amend said Contract as
follows:
1. It is intended and agreed that the covenants and
agreements set forth in Article V of the above described assess-
ment agreement shall be covenants running with the land and that
they shall, in any event, and without regard to technical
classification or designation, legal or otherwise, be binding
to the fullest extent permitted by law and equity, for the
benefit and in favor of, and enforceable by the Agency, its
successors and assigns. In the event that any transferee or
assignee of the Redeveloper (including without limitation any
mortgagee taking possession of or title to the Redevelopment
Property as result of any default in the terms of any mortgage
to which the Redevelopment Property is now subject or may be
subject in the future) breaches any one of the covenants and
agreements set forth in said Article V, the Agency may treat
such breach as an Event of Default as provided in Article VI
of said assessment agreement and may exercise any one or more
of the remedies set forth in §6.2 of said assessment agreement.
2. Section 3.2 of the above described assessment
agreement is amended to read as follows:
Section 3.2. Amount of Assessment Reduction Payment. The
amount of any assessment reduction payment made pursuant to this
Agreement shall be equal to the lesser of the following amounts:
(a) the sum of the principal balance of the eligible
assessments imposed on the Redevelopment
Property, together with accrued interest
thereon, both principal and interest being
computed as of the date of execution of this
Agreement; or
(b) seven percent (7°s) of the excess of
$2,118,900.00 over $137,500.00.
The foregoing $2,118,900 amount is the average of the Minimum
Market Valuesset forth in Section 3.3 below, and the foregoing
$137,500 amount is the Market Value of the Redevelopment
Property as of the date of execution of the Certification By
Assessor, as certified in said certification.
3. Section 3.3 of the above described Assessment
Agreement is amended to read as follows:
Section 3.3. Minimum Market Value to Be Used In Computing
Real Estate Taxes. Upon completion of the Minimum Improvements
by the Redeveloper, the Minimum Market Value which shall be
assessed for the Redevelopment Property and the Minimum
Improvements thereon shall be as follows:
Valuation Date Minimum Market Value
January 2, 1983 (Taxes payable in 1984) 1,657,900
January 2, 1984 (Taxes payable in 1985) 1,965,200
January 2, 1985 (Taxes payable in 1986) 2,272,500
January 2, 1986
and years there-
- after (Taxes payable in 1987
and thereafter) 2,579,900
The Minimun Market Value established in this section shall be
of no further force and effect and this Agreement shall termi-
nate on the later of the two following dates:
(a) the date on which the Bonds are retired, or
(b) the date on which all assessment reduction
payments due the Redeveloper (or his
successors and assigns) pursuant to this
Agreement have been made.
In any event this Agreement shall terminate no later than
November 28, 2007.
Provided, however, that nothing in this Agreement
shall limit the discretion of the Assessor to assign a market
value to the Redevelopment Property in excess of the Minimum
Market Value set forth in this section, nor prohibit the
Redeveloper from seeking, through exercise of administrative,
and legal remedies, a reduction in market value for property tax
purposes; subject, however, to the restriction that the Redeveloper
shall not seek any reduction in said market value below the
Minimum Market Value, as set forth in this section, during
the term of this Agreement regardless of actual market value which
may result from incomplete construction of the Minimum Improvements,
destruction or diminution by any cause, insured or uninsured,
except in the case of acquisition or reacquisition of the
Redevelopment Property by a public entity.
4. All other terms and conditions of the Assessment
Agreement remain the same.
Dated this day of 1982.
-2-
This Instrument
LARSON & MERTZ
1900 First Bank
Minneapolis MN
(612) 333 -1511
Drafted By:
Place West
55402
THE HOUSING AND
IN AND FOR THE
(Hereinabove th
And
REDEVELOPMENT AUTHORITY
CITY OF CHANHASSEN
e "Agency ")
(Hereinabove referred to as the
Redeveloper)
LA
ff- sro
-3-
STATE OF MINNESOTA)
) ss.
COUNTY OF CARVER )
The foregoing instrument was acknowledged before me
this day of 1982 by
and
the and
of the Housing and Redevelopment Authority of the City of
Chanhassen, Minnesota.
Notary Public
County:
My commission expires:
STATE OF MINNESOTA)
) ss.
COUNTY OF CARVER )
The foregoing instrument was acknowledged before me
this day of , 1982, by
and
the and
of a Minnesota
corporation, on behalf of said corporation.
Notary Public
County:
My commission expires:
CERTIFICATION BY ASSESSOR
United Mailing, Inc. Building
Tax Parcel No.
Street Address 1001 Park Road
Chanhassen, MN 55317
The undersigned having reviewed the Construction Plans for
the Minimum Improvements and the Market Value assigned to the
Redevelopment Property upon which the Minimum Improvements are
to be constructed pursuant to the attached assessment agreement,
and being of the opinion that a "Minimum Market Value" set forth
in this Certification appears reasonable, hereby certifies as
follows:
The undersigned Assessor, being legally regponsible for the
assessment of the Redevelopment Property (more particularly
described in Exhibit B to the attached assessment agreement)
hereby certifies that the market value assigned to such land (the
Redevelopment Property) and improvements (the Minimum Improvements)
upon completion of construction thereon shall be not less than
as follows until termination of the attached assessment agreement:
Valuation Date
January 2, 1983
January 2, 1984
January 2, 1985
January 2, 1986 and years
thereafter
Minimum Market Value
1,657,900
1,965,200
2,272,500
2,579,900
The undersigned further certifies that the market
value of the Redevelopment Property as of the date of execution
of this certification is $137,500.00 (One Hundred Thirty -seven
Thousand Five Hundred and no /100ths Dollars).
For the purposes of this certification, the words used
herein have the definitions utilized in the attached Assessment
Agreement.
STATE OF MINNESOTA)
COUNTY OF CARVER ) Ss-
The foregoing instrument was acknowledged before me this
11tA day of 1982, by
1ct ,Yin the Assessor for the City of
Chanha s,' n.
c'
,.s•� +:,,,
KAREN J. ENGELHARDT
�!�L,•.
:s,
?a(
NOTARY PUBLIC- MINNESOTA
COUNTY
Notary
P�iblicJ
Ca,Rv�
County:
tti'wun/
My Comnussiuii upires Oct. 11, 1085
My commission
expires:
^ CHANHASSEN HOUSING & REDEVELOPMENT AUTHORITY
690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
- (612) 937 -1900
MEMORANDUM
TO: Chanhassen HRA
FROM: Scott A. Martin, Executive Director
DATE: May 13, 1982
RE: Extension of Downtown Project Redeveloper Agreements
As you know, the Downtown Redevelopment Project Redeveloper
Agreements with Bloomberg Companies and Kraus- Anderson are due
to expire on May 27, 1982. Within the past two weeks, I have
received requests from both parties for a six -month extension to
their respective agreements with the HRA. (see attached) These
requests should be acted upon at your meeting of May 20, 1982.
Approval of the six -month extension requests is recommended for
the following reasons:
1. In discussions with the HRA and City Council during meetings
conducted in February and March of this year, both groups
indicated continued support for implementation of the
overall Downtown Redevelopment Project. Approval of the
agreement extension requests will maintain the status
quo (hopefully until the national and state economy improves),
and will provide us with additional time to consider project
phasing alternatives, if necessary.
2. It is unlikely that we could attract another developer(s)
with the capacity to carry -out the planned improvements
in the Downtown Area while the current recession continues.
Retail growth and business expansion is almost non- existent
in Suburban communities right now according to real estate
industry experts and national planning association reports.
3. The two developers involved in this Project are well aware
of the City's Goals and Objectives concerning the "new"
Downtown Chanhassen, and continue to express the desire to
work with the City toward attaining these goals and objectives.
4. The financial position of the Tax Increment District continues
to improve as new development occurs outside the immediate
Downtown area and within the Business Park.
Memorandum - HRA
May 13, 1982
Pace 2
Reassessment of existinS properties within the District
is also addinc substantial dollars to the HRA treasury.
We are anticivatina that actual 1982 Tax Increment revenues
will exceed budgeted revenues by nearly $85,000.
Assuming that Downtown Project construction will start within
the next year or two (or whenever economic conditions are
favorable), excess tax increment dollars should be available
to the HRA which are not yet available or pledged for a
specific purpose. This should provide us with the flexibility
to carry out certain elements of the redevelopment program
without bonding for 100% of our costs.
Representatives of Bloomberg Companies and Kraus - Anderson are
expected to be at next week's meeting to answer questions and
present their requests for your consideration.
If you wish to extend these agreements beyond the May 27th expiration
date, the Attorney should be instructed to prepare the necessary
contract amendment and the Chairman and I should be directed to
execute the amendment on behalf of the HRA.
The City Council must also approve any amendment extending these
agreements.
ATTACHMENTS:
1.
Letter from Dennis J
April 30, 1982
Spalla of Kraus - Anderson dated "Received
2. Letter from William M. McRostie of Bloomberg Companies
dated "Received May 11, 1982 ".
MINNEAPOLIS
2510 Minnehaha Avenue
April 28, 1982
^ Minneapolis, MN 55404
-
Telephone: (612) 721 -4877
HAWAII
^ Suite 1502
Mr. Scott Martin
=inancial Plaza of the Pacific
City of Chanhassen
130 Merchant St.
690 Coulter Drive
^ Honolulu, Hawaii 96813
Chanhassen, MN 55317
Telephone: (808) 537 -6127
Dear Scott:
^
We are requesting a six month extension of our Development
Agreement with the Housing and Redevelopment Authority
of the City of Chanhassen.
As we have reported and reviewed with the Council and HRA
on several occasions this year, the market for tenants and
^
financing is rather difficult. We would like to preserve
our status as developer downtown in order to present alterna-
tive means of achieving the goals of the City until a more
favorable economic climate exists.
We would appreciate your consideration of this request and
presentation to the commission for their approval.
ANDERSON DEVELOPMENT CORPORATION
Dennis J.
Vice Pres
DJS:rm
cc: W. McRostie
L. Knott
CITY c c h ,.a sin
APR 3011w'62
, .,v„ T CF.E
;'.,s, 0 iE! ,r.:...
KRAUS - ANDERSON DEVELORv1ENT CORRORA71ON
HERBERT N. BLOOMBERG
President
RICHARD S. BLOOMBERG
Vice Resident - Treasurer
BLOOMBERG COMPANIES
INCORPORATED
CHANHASSEN, MINNESOTA 55317 — (612) 934 -1500
551 West 78th Street
P.O. Box 100
10 April 1982
Mr. Scott Martin
City of Chanhassen
690 Coulter Drive
Chanhassen, MN 55317
Dear Scott:
CAROLYN M. BLOOMBERG
Vice President
WILLIAM M. McROSTIE
Vice Resident - Genera/ Counsel
We are requesting a six month extension of our Development Agreement
with the Housing and Redevelopment Authority of the City of Chanhassen.
As we have reported and reviewed with the Council and HRA on several
— occasions, this year is not propitious for development. The market
for tenants and financing is rather difficult. We would like to
preserve our status as developer downtown in order to present
alternative means of achieving the goals of the City until a more
favorable economic climate exists.
r
We would appreciate your consideration of this request and presentation
to the Commission for their approval.
Sincerely,
BLOOMBERG COMPANIES INCORPORATED
William M. McRostie
Vice- president and
General Counsel
if
cc: Dennis J. Spalla
• �N�Jddll��k�. FRONTIER LUMBER B• HARDWARE • BLOOMBERG CONSTRUCTION
• CHANHASSEN DINNER THEATRE • CHANHASSEN FURNITURE GALLERIES •
r
CHANHASSEN HOUSING & REDEVELOPMENT AUTHORITY
690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
®u• (61 2) 937-1900
MEMORANDUM
TO: Chanhassen HRA
FROM: Scott A. Martin, Executive Director
DATE: May 14, 1982
SUBJ: 1981 Financial Audit
Attached for your review is a copy of the 1981 Annual.'Financial
Report for the City and HRA, as prepared by DeLaHunt Voto and
Company, Ltd., City Auditors. Also attached are excerpts from
the Auditor's Management Report and Recommendations which pertain
to the HRA.
The HRA has three active funds with December 31, 1981 fund balances
as follows:
Fund 460: Downtown Tax Increment Fund - $88,257
I
This fund is the HRA's operating fund. All tax increment revenues
are receipted.to this fund and transfered to other City funds
for reimbursement of authorized City expenses and repayment
of Bonded Debt.
Fund 306: Tax Increment Bonds of 1981 (Debt Service Fund) - $725,733
This fund was established following last year's bond issue in
order to insure that bonded debt would be retired on schedule.
The existing fund balance represents capitalized interest received
with bond proceeds, plus interest earned through December 31,
1981. The initial interest payment for this bond issue is
7 $558,000, and is due on August 1,`1982.
Fund 604: Ring Road Improvement Fund - $196,920
This fund is the fund to which Bond proceeds (less capitalized
interest) were receipted. Expenditures from Fund 604 are governed
by the budget approved by the HRA and City Council at the time
r the Bonds were sold. To date, these funds have been expended
for the acquisition of Instant Web, purchase option agreements for
,the.: Riviera and Havlik's Mobil Station, and for consulting legal
"'and engineering services. $185,000 of ,the fund balance had been
earmarked for acquisition of the Huber property prior to its
reappraisal (market value was adjusted downward to $154,000)
and prior to the delay in the Downtown Project construction
phase.
r.
Memorandum - Financial Audit
May 14, 1982
Page 2
I will be prepared to review the Annual Financial Report and Auditor's
recommendations with you in more detail at your meeting of May 20,
1982.
ATTACHMENTS
1. Annual Financial Report (December 31, 1981)
2. Management Report & Recommendations (excerpts only)''
CITY OF CHANHASSEN, MINNESOTA
MANAGEMENT REPORT AND RECOMMENDATIONS
December 31, 1981
City of Chanhassen
Management Report, Page 24
ICity Hall Bonds
The City Hall Bonds of 1980 has had the following transactions from inception:
Revenue and Other Increases:
Capitalized interest $ -0-
Property taxes and Homestead Credit 136,531
Total 136,531
Expenditures:
Bond interest 128,021
Paying agent fees 90
Interfund interest 7,240
Total 135,351
Fund Balance - December 31, 1981 $ 1,180
The above interfund interest charge is caused by the absence of a clause in the bond
sale resolution allowing for the deposit of capitalized interest to the bend fund when
these bonds were issued. Bond payments are scheduled for February 1st and August 1st of
each year. No portion of property taxes or homestead credit is received until halfway
through the year. The effect of this situation is to incur a cash overdraft for part of
the year. This fund is charged interfund interest because of the City investment
interest policy and program. To correct this situation, the City did increase the 1981
and 1982 tax levies and expects to increase the 1983 tax levy for this bond issue. These
10 additional tax levies should provide sufficient additional financing to resolve this
situation. We recommend, however, that the City continue to monitor the financing for
this issue to assure full and timely availability of monies for debt retirement.
Tax Increment Bonds
The Tax Increment Bonds of 1981 were sold by the City to fund acquisition and impro-
vement of property in the City's tax increment areas. The payment for these bonds is to
be provided from future tax increment collections. These collections are currently
deposited in the City's Downtown Tax Increment Fund. This fund has been determined by
the City attorney (in a letter dated December 17, 1981) to be under the direct control
11 of the City's Housing and Redevelopment Authority (HRA). The City has a claim on those
4
City of Chanhassen -
Management Report,.Page 25
tax increment proceeds required to meet debt obligations pursuant to an agreement
pledging tax increment proceeds dated June 15, 1981 which reads in part as follows:
The Authority hereby expressly pledges that all tax increment
payments made to the Authority by the Carver County Auditor from
the Project Area and all revenues from land within the Project
Area while owned by the Authority, shall be pledged and assigned
to the City, for the purpose of paying principal of, interest on
and redemption premium, if any, of any and all bonds of the City
which may hereafter be issued by the City for the financing of
public redevelopment costs in the Project Area, provided, however,
that so much of such tax increments and revenues as are needed by
the Authority to reimburse the Authority for its expenditures for
public redevelopment costs of the Project (as identified in the
Redevelopment Plan for the Project Area) may be retained by the
Authority.
The monies for payment of the bond issue is to be received as needed from the H.R.A
Any tax increment collections over this amount is available to be used by the H.R.A. for
expenditures and costs of the Redevelopment Plan for the Project Area. (see later com-
ments regarding the Downtown Tax Increment Fund).
This fund had a balance of $725,733 at December 31, 1981. These monies were accumu-
lated in 1981 as follows:
Bond proceeds (capitalized interest) $ 667,356
Interest on investments 58,377
Total $ 725,733
City of Chanhassen
Management Report, Page 26
Capital Project Funds
Capital Project Funds are designed to account for acquisition or construction of
major capital projects or programs. The City had eleven such funds in 1981 as presented
in Statements 17 and 18 of the Annual Financial Report. The December 31, 1981 fund
balances of the City's Capital Project Funds were as follows at December 31, 1981:,
Fund Balance
Fund
(Deficit)
Sewer Expansion #1
$ 88,099
Water Expansion #1
28,148
Park Acquisition and Development
109,715
Park Improvement Bonds of 1971
84,207
Downtown Tax Increment
88,257
Lotus Lake Park
67,735
Public Works and Municipal Building
28,810
Herman Field P
41,655
East Lotus Lake Park Boat Landing
(3,065)
Economic Development District
(33,319)
Lake Ann Boat Access
(4,995)
Total
$_!495,247
Sewer Expansion #1
The Sewer Expansion #1 Fund receives sewer connection charges which are available
for sewer system improvements. During 1981, the City also received an M.W.C.C. grant
which is being used for an infiltration study.
December 31, 1981.
Water Expansion #1
The study was nearing completion at
The Water Expansion #1 Fund has been serving a dual purpose for the City. Similar
to the Sewer Expansion Fund #1, this fund receives water connection charges. In 1981,
these monies were used to repair /rebuild well #3.
The second function which this fund has been serving is the retirement of bonded
debt. The debt service function should be separate and distinct from the capital pro-
ject process. The bond issue included in this fund was the G.O. Revenue Bonds of 1970.
i
i
i
i
h
r
F7
City of Chanhassen
Management Report, Page 28
Downtown Tax Increment Fund
The City established the Downtown Tax Increment Fund in 1976. The financial acti-
vity through 1979 was limited to preliminary expenses and minor projects. A summary of
transactions from inception of the Downtown Tax Increment Fund through December 31, 19f1
is as follows:
Revenue and Other Sources:
Tax increment collection
Intergovernmental revenue:
State: Homestead Credit
Reduced assess-
ment Aid
Metro Council Grant
Charges for services
Interest on investments
Contingent donations
Total
Expenditures and Other Uses:
Current expenditures
Construction and
acquisition
Interest
Transfers Out:
General Fund
Other Capital Project
.Fund
Reclassification of
contingent donations to
notes payable (with
interest)
Total
Fund Balance (Deficit) -
December 31, 1981
1976
Through
1979 1980 1981 Cumulative
$ 25,626 $ 52,424 $ 160,996 $ 239,046
2,678 2,678
5,815 5,815
5,790 5,790
130 1,738 1,868
2,650 2,650
4,500 4,500
$ 30,256 $ 52,424 $ 179,667 262,347
$ 29,894 $ 33,634 $ 49,335 112,863
7,500 16,018 23,518
1,523 2,359 270 4,152
7,500 7,500
20,724 20,724
5,333 5,333
$ 31,417 $ 64,217 $ 78,456 174,090
S 88.257
As presented in the previous schedule, the City has (in past years) used the
Downtown Tax Increment Fund for activities other than the tax increment project. For
1981, the following transactions occurred which are not tax increment related:
City of Chanhassen
Management Report, Page 29
Total 1981 Expenditures
Deduct Revenue:
Refunds and Reimbursements
Grants - Metro Council
Building Rental
12/31/80 - HRA
Total Revenue
Dept. 155 Dept. 158
Housing and Historic
Redevelopment Preservation Total
$ 13,084 $ 4,814 $ 17,898
5,350
20
1,500
1,520
20
5,350
1,500
d
71
d
T11
Balance
$ 7,294 $
3,294
$ 10,588
Increment
Bond
Debt Service Fund, and its Tax Increment Bond Construction Fund. During
1981, the
City .
The City has
determined that these activities should be
a part of
the City's General
Fund. In order to finance these activities, we concur with
the City's
intention to
transfer $10,588,
from the General Fund to the Downtown Tax
Increment
Fund in 1982.
Historically
and through December 31, 1981, the City has
accounted for H.R.A. /Tax
Increment
Plan
financial activity through its Downtown Tax Increment Fund, its Tax
14
Increment
Bond
Debt Service Fund, and its Tax Increment Bond Construction Fund. During
1981, the
City .
entered into a series of Agreements with its.H.R.A. The apparent effects
d
of these agreements was to transfer authority for the expenditure of Tax Increment tax
proceeds and bond proceeds to the H.R.A. However, liability for the retirement of the Is
tax increment bonds has remained with the City subject to a commitment by the H.R.A. to
transfer to the City sufficient monies to meet annual debt service obligations.
Additionally, the City Council is the governing body which approved the Tax Increment d
Financing Plan which has the effect of removing the future incremental land values from
the tax base of the City and other local government units for the duration of this tax
increment district.
Redevelopment activity and tax increment financing is a highly complex program and
process requiring coordination between the City and the H.R.A. The present financial
structure has evolved since 1976 which was generally the organizational and developmental
state of the City's H.R.A. During this state, legitimate questions arise as to which
organization is responsible for which financial and programmatic activities. However, If
City of Chanhassen
Management Report, Page 30
this organizational State should be considered to be over. Accordingly, firm policies
should be detailed and documented as to the precise financial structure to be followed
in the future for the H.R.A. financial accountability and the ongoing City financial
activity relating to joint City /H.R.A. tax increment program. As the City has ultimate
responsibility for the payment of tax increment bonds and the return of this tax base to
the City and other local government units, we recommend that these documents and /or
Agreements reflect the corresponding overall authority /control of the City. Once these
policies are formalized, they can be adhered to by both organizations.
All transactions of the H.R.A. have been included in the Annual Financial Reports
of the City for 1981 and prior years. As a separate entity, however; certain changes to
current policies and procedures should be reviewed.
• Tax Increment monies and State Aid amounts are now sent directly
to the Treasurer of the H.R.A. of Chanhassen. In order to pro-
perly reflect these transactions, the City should clarify which
entity should be the recipient of tax increments and request
consistent treatment from the State and County.in remitting
these amounts.
• The City currently shares the services of the H.R.A. Director in
using this person in a City planner function. The 1982 split of
time is estimated at 75% H.R.A. and 25% City. The current split
of time (and expenditures) are estimates. This allocation
should be reviewed annually to actual time spent to assure
future reasonable allocation.
• Currently, the H.R.A. is using the City's accounting system and
all checks have been disbursed under normal City procedures. If
these transactions are to be under the authority of the H.R.A.,
certain modifications should be made. The City attorney has
recommended that a joint powers agreement be entered into if the
accounting system is to be shared. Additionally, the Treasurer
of the H.R.A. should be designated as the authorized signee for
H.R.A. checks.
We recommend that the City review the tax increment organization and financing
structure in 1982 and that the City determine and document the precise structure to be
followed in the future.
City of Chanhassen
Management Report, Page 41
Projects Financed by the Tax Increment Bonds of 1981
604 Ring Road Improvements /Acquisition
hi
17
December 31, 1981
Fund Balance
$ 196,920 hd
The Ring Road Improvement Project (604) is the first stage of continuing development
related to the downtown tax increment district. The expenditures to date consist pri-
marily of the acquisition of property. Pending the outcome of the future development, a
portion of the total costs may be assessed to benefiting developers. A summary of the
financial activities of this fund from inception through December 31, 1981, is as
f ollows:
Financial Resources Provided:
Bond Proceeds - Tax Increment Bonds $ 4,025,000
Investment Interest 5,325
Total 4,030,325
Financial Resources Expended:
Project Costs:
Land Acquisition $ 3,545,344
Engineering 136,522
Other Costs 151,539 3,833,405
Fund Balance - December 31, 1981 $ 196,920
Projects To Be Financed
Fund
December 31, 1981
No.
Description
_
Fund Balance
560
North Service Area (N.S.A.)
$ (69,267)
599
Carver Beach Drainage
79 -1
(1,732)
602
Cheyenne - Streets
79 -4
- (2,338)
605
Colonial Grove
80 -4
(194,310)
606
Bluff Creek Drive
80 -5
(4,826)
607
Lake Lucy - Water
81 -1
(9,258)
608
Oien Drainage
81 -4
(31,720)
609
Lotus Trail - Streets
81 -6
(135)
610
American Legion
81 -5
(30,833)
Total -
$(344,419)
City of Chanhassen
. Management Report, Page 48
t Summa
The following is a list of items to be recorded, investigated and /or resolved in
1982:
• Prepare financial forecasts and budgets based on reduced State
Aids. (Special Report)
• Investigate cash management techniques to potentially increase
investment earnings. (Page 6)
• Determine if City policy to charge interest on interfund loans
(overdrafts) of the City's debt service funds is consistent with
bond sale resolutions. (Page 7)
• Review City policy as it relates to developer escrow accounts.
(Page 9)
• Review City policy as it relates to assessment of City
property. (Page 11)
• Establish complete records of specially deferred special
assessments. (Pages 12 to 13)
• Establish City policy to achieve the level of fund balance
required for the General Fund to meet minimum cash flow needs.
(Pages 16 to 19)
• Consider the use of equipment certificates for major equipment
purchases (public works and public safety). (Page 22)
• Review policy and procedures related to the City H.R.A. (Pages 28
to 30)
• Monitor the financial position of the special assessment debt
service funds. (Pages 33 to 39)
• Monitor special assessment construction funds and establish
complete construction project files. (Pages 39 to 43)
- • Continue to monitor utility rates. (Pages 43 to 45)
• Continue efforts to enhance the internal abilities of the financial
accounting system. (Pages 46 to 47)
Respectfully submitted,
do 4L ✓te 9- e4) -
DE LA HUNT VOTO & CO., LTD.
Certified Public Accountants
April 21, 1982
(
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MINNEAPOLIS CHEYENNE DENVER
INVOICE
N01 30921
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City of Chanhassen DATE: .February 28, 1982.
7610 Laredo Drive
Chanhassen, MN 55317
ATTN: Mr. Scott Martin
I
I
JOB NO: 18- 8003, 62 -8020
40 -8107
'1
RE: Engineering /Planning /Surveying Services for Downtown Redevelopment Project
as per Agreement
Per Diem Services - Phase I Work Task 1.7
Period of October, 1981 to February, 1982
Continuing assistance and consultation regarding project staff meetings.
Develop strategy and contingency plans for project. Traffic air and noise
analysis for EAW report.
Classification Hours
Principal
10.00
Associate
4.00
Sr. Professional
1.00
Professional II
43.50
Professional 1
22.00
Technician
7.00
Salary Cost - $1,691.95
Fee - $1,691.95 x 2.0 =
e
$3,383.90
TOTAL AMOUNT DUE $3,383.90
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1MAK 151982
CM Of
BATHER, RINGROSE, WOLSFELD, JARVIS, GARDNER, INC. 2829 UNIVERSITY AVE. S.E. MINNEAPOLIS, AN 55414 PHONE 612 1 3797878
LARSOIV & MERTZ
ATTORNEYS AT LAW
1900 FIRST BANK PLACE WEST
RUSSELL H. LARSON MINNEAPOLIS, MINNESOTA 55402 - _ TELEPHONE
CRAIG M. MERTZ - _
(612) 333 -1511
r- OF COUNSEL April 5, 1982
HARVEY E.SKAAR
M -nPK C. MCCULLOUGH CITY OF CHANHASSEN
Chanhassen HRA I" P; i -P
- c/o Scott A. Martin, Executive Director "� {��
Box 147
Chanhassen MN 55317 APR 61982
rOMAMU +;ITY D. /EL ^O T DEP1
To'professional services rendered in March, 1982, as follows:.
General Legal
— 3/3 accounting services: proof outgoing typing; 3/4 telcon from
City's auditor re accounting procedures for tax increment funds;
3/8 forward insurance endorsement re Instant Web building to agent;
3/9 conf w /SAM rejoint powers agreement for accounting; 3/18 attend
regular HRA meeting:
Total: 3/2 hours $ 211.
A141
HRA-7% HRA -7% Incentive Program
3/1 meeting w /SAM re developer incentives (includes travel time)
meeting at City; 3/8 telcon from Dick Stolz re how 7% program
would work for Fluoroware and review of Fluoroware assessments; work
on amendments to 7% incentive program; 3/9 conf w /SAM re changes in
the documents; work on drafting amendments to 7% program documents;
3/10 review Mayor's comments, review Sellergran comments, telcon
w /Assessor re contract language, telcon w /SAM re same; draft outline
of program; draft cover letter; revise documents further in light
of Sellergren & Hamilton comments; telcon w /Secretary of State's
office and County Recorder re owner of the Dayco properties, and
telcon w /Dayco re same; draft resolution re Dayco participation in
program, revise resolution re Fluoroware participation,dictate
letter to SAM re same; 3/11 proof outgoing typing and make final
revision to the assessment agreement; 3/17 conf w /SAM re changes in
program requested by Sellergren; 3/18 revise resolution per telcon
w /Sellergren, Dave Kennedy and SAM:
Total: 19.7 hours
Commonwealth Parcel 26
$1164.990i50_�3��
3/4 telcon w /SAM re potential for acquisiton of property from
Commonwealth; 3/8 attempt at locating Commonwealth, Inc. officers;
telcon MacKinnon and Hartman; 3/11 conf Gerald Hartman re
acquisition of Commonwelath interest in old Hanus building, review
contract documents:
Total: 2.2 hours
145.20
'Scott A. Martin
Chanhassen HRA
April 5, 1982
Page Two
Summary
General Legal
HRA -7o Incentive Program
Commonwealth Parcel 26
TOTAL:
I declare, under the penalties of erjury,.
is just and correct and that no art thereo
RHL:ner
$ 211.50
1164.90
145.20
$1521.60
tat the above claim
has been paid. e�61�ti
Chanhassen HRA Attorney
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MINNEAPOLIS CHEYENNE DENVER
City of Chanhassen
7610 Laredo Drive
Chanhassen, MN 55317
ATTN: Mr. Scott Martin
INVOICE
NO# 31087
DATE: March 31, 1982
JOB NO: 62 -8020, 40 -8107
RE: Engineering /Planning /Surveying Services for Downtown Redevelopment Project
as per Agreement
Per Diem Services - Phase I Work Task 1.7
Period of March, 1982
Traffic, air and noise analysis for EAW report.
Classification Hours
Principal
3.00
Associate
1.00
Sr. Professional
6.00
Professional II
6.00
Professional .I
1.00
Technician
8.00
Salary Cost - $466.96
Fee - $466.96 x 2.0 =
$ 933.92
TOTAL AMOUNT DUE $ 933.92
CITY n7 CI „111-IA"FN Q
i r PR 191982
r
i BATHER, RINGROSE, WOLSFELD, JARVIS. GARDNER, INC. 2829 UNIVERSITY AVE. S.E. MINNEAPOLIS, MN 55414 PHONE 612 1 379 -7878
LAR80N & MERTZ,
ATTORNEYS AT LAW
l
1 1900 FIRST BANK PLACE WEST
RUSSELL M. LARSON MINNEAPOLIS, MINNESOTA 55402
CRAIG M. MERTZ _
I
or COU "'EL May 3, 1982
MARVET L 6KAAR
MARK C.MCCULLOUG"
i
I
Scott A. Martin
Executive Director
Chanhassen HRA
Box 147
Chanhassen MN 55317
TELEPHONE
(612) 333 -1511
To professional services rendered in April, 1982, as follows:
General Legal QIA
4/6 send memo e Cou ncil resolution; 4/8 telcon w /SAM re
assessment agreements for Dayco, Fluoroware, and United Mailing and
corres to Craig Zinter re same; 4/16 verify ownership and liens on
Fluoroware and Dayco buildings and conf w /Ass't Assessor re before
and after values on buildings; work on addendum to contract forms
(assessment agreements) for Dayco and Fluoroware; 4/19 telcon w /SAM
re assessed values for Fluoroware and Dayco and re presentation of
assessment agreement to HRA; finish Brockpahler assessment agreement
and dictate cover letter to SAM re same; telcon w /SAM re status of
7% program; 4/22 telcon w /Dick Stoltz re penalty on Fluoroware;
4/23 research in MSA re abatements, two:telcons w /Zinter re abating
Fluoroware penalty; telcon w /SAM re same; telcon w /Atty Gen'l office
re same; telcon w /Fluoroware atty re same; dictate letter to their
attorney re same; 4/28 conf w /SAM re status of 7% program:
Attorney time: 9.9 hours: $646.80
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