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CC Staff Report 11-10-2014 Dakota Retail-DEED Grant AgreementCITY OF 7700 Market Boulevard PO Box 147 Chanhassen, MN 55317 Administration Phone 952.2271100 Fax: 952.227.1110 Building Inspections Phone: 952,227.11 80 Fax: 952.227.1190 Engineering Phone: 952.227.1160 Fax: 952.227.1170 Finance Phone: 952.227.1140 Fax 952.227.1110 Park & Recreation Phone: 952.2271120 Fax: 952.227.1110 Recreation Center 2310 Coulter Boulevard Phone: 952.227.1400 Fax: 952.227.1404 Planning & Natural Resources Phone: 952.227.1130 Fax: 952.227.1110 Public Works 7901 Park Place Phone: 952.227.1300 Fax: 952.227.1310 Senior Center Phone: 9522271125 Fax: 952.227.1110 Well wwwo i. chan hassen. w. us MEMORANDUM TO: Mayor & City Council FROM: Todd Gerhardt, City Manager DATE: November 10, 2014 6� SUBJ: Approve DEED Grant Agreement for Dakota Retail Property PROPOSED MOTION: The City Council approves the DEED Grant Agreement with Chanhassen Dakota Retail One, LLC. Approval requires a simple majority vote of the City Council. The City Attorney's office is recommending the city enter into a Grant Agreement with Chanhassen Dakota Retail One, LLC. The agreement lays out the terms and conditions of the grant along with the payment schedule, reporting, contract provisions and termination/assignment that are applicable under current regulations. If for some reason the grant is terminated by the state (DEED/Met Council), the city will not be obligated to make any payments to Chanhassen Dakota Retail One, LLC. ATTACHMENT Deed Grant Agreement. gAplan\2014 planning cases\2014 -1 I dall retail (sinclairpcc report 1 1.10 -2014 deed grant agreement.docx Chanhassen is a Community for Life - Providing for Today and Planning forTonnorrow DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT BUSINESS AND COMMUNITY DEVELOPMENT DIVISION GRANT AGREEMENT This Environmental Response Fund Grant Agreement ( "Agreement ") is made this day of 2014 by and between the CITY OF CHANHASSEN a Minnesota municipal corporation ( "City" ), and CHANHASSEN DAKOTA RETAIL ONE, LLC ( "CDRO ") and CENTER COMPANIES, LLC, ( "Center Companies ") (Center Companies and CDRO arc collectively referred to herein as the ( "Applicants "). WHEREAS, the City has obtained a grant from the State of Minnesota acting through the Department of Employment and Economic Development (the "State ") in the amount of $204,600 to assist in reducing the potential threat of harmful contaminants to the public's health and environment in connection with construction of a commercial retail project at 7910 Dakota Avenue, Chanhassen, Minnesota (the "Site "); and WHEREAS, Center Companies has applied for financing to assist in development of a commercial retail project at the Site, which project is known as "Dakota Retail Center" (the "Project ") pursuant to the application for funding incorporated into this Agreement by reference; and WHEREAS, Center Companies has assigned its interest in the Project and all grant funds provided under this Grant Agreement to CDRO and CDRO agrees to accept assignment of Center Companies interest in the grant funds; and NOW, THEREFORE, in consideration of the mutual undertakings, the Parties agree as follows: 1. GRANT AMOUNT AND COMPLETION. The City shall reimburse to CDRO a sum not to exceed the amount set forth in Exhibit A to the extent to which such reimbursements are approved by the City and the State as being in accordance with the requirements of the Grant Agreement. Reimbursement shall be only for expenses incurred in performing activities specified in the Application and as further described in Exhibit A to this Agreement or as approved by the City and the State. The Grant Agreement between the City and the State attached hereto as Exhibit A (hereinafter the "Grant Agreement ") is incorporated, in all respects, into this Agreement. Administrative costs incurred by the Applicants are not eligible for reimbursement. CDRO agrees to complete the Project by December 31, 2016 and within the terms stated herein. Any material change in the scope of the Project, including time scheduled and budget, must be approved in writing by the City and the State. 2. ACCOUNTING AND RECORD KEEPING. For all expenditures of funds made pursuant to this Agreement, Applicants shall keep financial records including properly executed contracts, invoices, and other documents sufficient to evidence in proper detail the nature and 1786790 propriety of the expenditures. Accounting methods shall be in accordance with generally accepted accounting principles. CDRO agrees that the City, the State, the State Auditor, or any of their duly authorized representatives at any time during normal business hours, and as often as they may reasonably deem necessary, shall have access to and the right to examine, audit, excerpt, and transcribe any books, documents, papers, records, etc., which are pertinent to the accounting practices and procedures of CDRO and involve transactions relating to this Agreement. Such materials shall be maintained and such access and rights shall be in force and effect during the period of the Agreement and for six (6) years after its termination or cancellation. 3. PAYMENUDISBURSEMENT SCHEDULE. The City will disburse funds to CDRO pursuant to this Agreement, based on payment request forms as required by the State, submitted by CDRO and approved by the City and State. Payment requests can be submitted once per month and must be accompanied by supporting invoices that relate to activities in the approved Project budget. Subject to verification of adequacy of a written disbursement request and approval of consistency with this Agreement, the City will disburse the requested amount to CDRO without one week after receipt of funds from the State. 4. REPORTING. CDRO shall cooperated and provide information as necessary to fulfill the City obligation to report to the State on the distribution of funds and the progress of the Project covered from the date of the grant award as often and through such dates as the City or the State may require. The reports shall continue through the later of completion of the Project or such later date as the State shall require. The reports shall identify specific goals listed in the application and quantitatively measure the progress of such goals. Reporting forms will be provided by the State. In addition, the required documentation listed in Exhibit A should be supplied as it becomes available. Failure to provide required information will result in the termination of this Agreement. 5. CONTRACTS. CDRO shall include in all contracts provisions that require contractors to comply with all applicable local, state and federal laws and regulations regarding employment and workplace safety. In accordance with the State's policies against discrimination, CDRO agrees that it shall not exclude any person from full employment rights or participation in or the benefits of any program, service, or activity on the grounds of race, color, creed, religion, age, sex, disability, marital status, sexual orientation, public assistance status, or national origin; and no person who is protected by applicable Federal or State laws, rules, or regulations against discrimination shall be otherwise subjected to discrimination. CDRO and any contractors or subcontractors performing services as part of this Agreement shall follow the State's Affirmative Action policies against discrimination. 6. TERMINATION. CANCELLATION AND ASSIGNMENT. This Agreement may be canceled by the City without cause in the event the Grant Agreement is terminated or revoked by the State. In the event of such cancellation, CDRO shall be entitled to payment, determined on a -2- 178679v5 pro rata basis, for work or services satisfactorily performed up to the effective date of such cancellation if and only if the City receives funds from the State for such payment. If the City finds that there has been a failure to comply with the provisions of this Agreement, that reasonable progress has not been made toward commencement or completion of the assessment and/or clean-up activities specified in the application filed by Center Companies and this Agreement, notwithstanding any other provisions of this Agreement to the contrary and after written notice and reasonable opportunity to cure, the City may refuse to disburse additional funds and/or require the return of all or part of the funds already disbursed, to the extent such funds were used for purposes other than activities contemplated by this Agreement. This Agreement may not be assigned without the prior written consent of the City. 7. INDEPENDENT CONTRACTOR. Nothing is intended or should be construed in any manner as creating or establishing the relationship of co- partners between the parties hereto or as constituting CDRO as the agent, representative, or employee of the City for any purpose or in any manner whatsoever. CDRO is to be and shall remain an independent contractor with respect to all services and activities performed under this Agreement. Any and all personnel of CDRO or other persons while engaged in the performance of any work or services required by CDRO under this Agreement shall have no contractual relationship with the City, and shall not be considered employees of the City. Any and all claims that may or might arise under the Minnesota Economic Security Law or the Workers' Compensation Act of the State of Minnesota on behalf of said personnel, arising out of employment or alleged employment including without limitation, claims of discrimination against CDRO, its officers, agents, contractors, or employees shall in no way be the responsibility of the City. CDRO shall defend, indemnify and hold harmless the City, its officials, officers, agents, and employees from any and all such claims irrespective of any determination of any pertinent tribunal, agency, board, commission, or court. Such personnel or other persons shall neither require nor be entitled to any compensation, rights, or benefits of any kind whatsoever from the City, including, without limitation, tenure rights, medical and hospital care, sick leave, Workers' Compensation, Re- employment Compensation, disability, severance pay, and retirement benefits. 8. INDEMNIFICATION. Applicants agree to defend, indemnify and hold harmless the City, its officials, officers, agents and employees from any liability, claims, causes of action, judgments, damages, losses, costs or expenses, including reasonable attorney's fees, resulting directly or indirectly from any act or omission of the Applicants, their contractors or subcontractors or anyone directly or indirectly employed by them, and/or any party that directly or indirectly benefits form the activities specified in this Agreement, and/or anyone for whose acts and/or omissions they may be liable in the performance of the activities specified in this Agreement and against all loss by reason of the failure of Applicants to perform fully, in any respect, all obligations under this Agreement. Applicants agree to defend, indemnify and hold harmless the City, and the successors and assigns of the City, from and against all damages, actions, claims, demands, liabilities, fines, awards, judgments and causes of action, liquidated or unliquidated, whether sounding in tort, contract, whether under common law or under statute, or otherwise, by any private party or governmental agency having jurisdiction, or any judicial or -3- 178679x5 administrative proceeding (hereafter, `Environmental Claim"), arising or claimed to arise out of the Contaminated Site, including, but not limited to, losses, damages or expenses, including attorney's fees, suffered or incurred by the City. If any Environmental Claim relative to the Contaminated Site is made or asserted against the City by any private third party or governmental agency having jurisdiction, the City may either tender the defense of the matter to Applicants, whereupon the Applicants shall defend the matter, without expense to the City, by counsel reasonably satisfactory to the City, or the City may engage counsel, and the fees and costs of such counsel in the defense of such matter shall be borne by Applicants. 9. INSURANCE. In order to protect the City and those listed above under the indemnification provision, CDRO agrees at all times during the term of this Agreement and beyond such term when so required, to have and keep or cause to have and be kept in force, and to cause all contractors to do likewise, the following insurance coverages under either a purchased insurance or self - insurance program: 1. Commercial General Liability on an occurrence basis with Contractual Liability Coverage: Limits General Aggregate $2,000,000 Products - Completed Operations Aggregate $2,000,000 Personal and Advertising Injury $1,000,000 Each Occurrence - Combined Bodily Injury and Property Damage $1,000,000 2. Automobile Liability - Combined single limit each occurrence for $1,000,000 bodily injury and property damage covering owned, non - owned, and hired automobiles. 3. Workers' Compensation and Employer's Liability: a. Workers' Compensation Statutory If the contractor is based outside the State of Minnesota, coverage must apply to Minnesota laws. b. Employer's Liability. Bodily Injury by: Accident - Each accident $500,000 Disease - Policy Limit $500,000 Disease - Each Employee $500,000 4. Professional Liability - Per Claim and Aggregate $1,000,000 The insurance must be maintained continuously for a period of two years after the termination of this Agreement. -4- 178679v5 CDRO shall require that any independent contractors rendering assessment and/or clean-up activities under this Agreement furnish certificates of insurance to CDRO of the insurance coverages listed above, and provide updated certificates as coverages expire. An umbrella or excess policy over primary liability coverages is an acceptable method to provide the required insurance limits. The above establishes minimum insurance requirements. It is the sole responsibility of CDRO to determine the need for and to procure additional insurance which may be needed in connection with this Agreement. Copies of policies shall be submitted to the City upon written request. CDRO shall not commence work until it and any contractors have obtained the required proof of insurance which clearly evidences required insurance coverages. If CDRO fails to furnish proof coverages, if requested by the City, the City may withhold payments and/or pursue any other rights or remedy allowed under the contract law, equity, and/or statute. 10. MERGER AND MODIFICATION. It is understood and agreed that the entire Agreement between the parties is contained herein and that this Agreement supersedes all oral agreements and negotiations between the parties relating to the subject matter hereof. All items referred to in this Agreement are incorporated or attached and are deemed to be part of this Agreement. Any alterations, variations, modifications or waivers or provisions of this Agreement shall only be valid when they have been reduced to writing as an amendment to this Agreement signed by the parties hereto. 11. MINNESOTA LAWS GOVERN. The Laws of the State of Minnesota shall govern all questions and interpretations concerning the validity and construction of this Agreement and the legal relations between the parties and performance under it. The appropriate venue and jurisdiction for any litigation hereunder will be those courts located within the County of Carver, State of Minnesota. Litigation, however, in the federal courts involving the parties will be in the appropriate federal court within the State of Minnesota. If any provision of this Agreement is held invalid, illegal or unenforceable, the remaining provisions will not be affected. 12. ASSIGNMENT. The City approves the assignment of the grant funds provided under this Agreement by Center Companies to CDRO, including grant funds for eligible work completed by or at the direction of Center Companies prior to the execution of this Agreement. Center Companies shall be responsible for all CDRO obligations under this Agreement to the extent applicable to Center Companies for the work completed by Center Companies prior to the assignment of grant funds by Center Companies to CDRO, including, but not limited to providing records and responding to requests for data. -5- 178679v5 CITY OF CHANHASSEN LE Thomas A. Furlong, Mayor in Todd Gerhardt, City Manager Dated: CHANHASSEN DAKOTA RETAIL ONE, LLC 0 Its Chief Manager Dated: CENTER COMPANIES, LLC Its Chief Manager Dated: *Applicants shall submit applicable documentation (articles, bylaws, resolutions or ordinances) that confirm the signatories' delegation of authority. This documentation shall be submitted at the time Applicants return the Agreement to the City. Documentation is not required for a sole proprietorship. -6- 178679v5 EXHIBIT A Grant Agreement [To be attached] -7- 178679v5