1e Century 2000 Partners, Arboretum Business Park
if:.-
CITY OF
CHANHASSEN
MEMORANDUM
TO: Don Ashworth, City Manager
o City Center Drive, POBox 147 FROM:
';banbassen, Minnesota 55317
Pbone612.937.1900 DATE:
Gmeml Fax 612.937.5739
:ngineering Fax 612.937.9152 SUBJ:
'Iblic Safety Fax 612.934.2524
J'eb U'U'u'.ci.cballbassfJI.mn.us
Todd Gerhardt, Assistant City Manager
November 4, 1998
Consider Approval of a Private Redevelopment agreement with
Century 2000 Partners LLP
Attached for the city council's review is a Private Redevelopment Agreement
between the City ofChanhassen and Century 2000 Partners, LLP (see
Attachment #1). The city council created TIF District No.6 in May 1997 (see
Attachment #2). In conjunction with the creation of this district, the Tax
Increment Plan incorporated the city's current three year incentive program for
businesses meeting one of the following qualifications:
1. Discourage business from moving to another state or municipality;
2. Increase employment in the state;
3. Preserve and enhance the tax base of the state.
Century 2000 meets two of the three qualifications. They will be enhancing the
tax base by approximately $203,090 per year and creating at least 50 new jobs.
Century 2000 is proposing to construct a 113,600 sq. ft. office/warehouse facility
on Lots 3 & 4, Block 1, Arboretum Business Park 2nd Addition.
Attached you will also find the Century 2000 Partners application for tax
increment financing. The application includes the following information:
1. Statement of Public Purpose (see Attachment #3).
2. Description of Project (see Attachment #4).
3. Plans and Drawings of Project (see Attachment #5).
4. Description of the Company (see Attachment #6).
5. Legal Opinions (none needed).
6. Investment Bank Letter of Feasibility (see Attachment #7).
7. Market Analysis (the applicant did not have a professional market analysis
done).
8. Pro Forma Analysis (none submitted).
9. Financial Statements (none submitted).
10. Zoning and Planning Analysis (see Attachment #8).
'City afChanbassen. A groteiflg comlllullity witb dei/II Mc!. qUi/lit)' sc/iools, a c!JilI7I/illg dou,/ltOll'n, tbril'hzg busiaessc.', and beautifit! pinks. A gitliJ plilee to liz'/', work, i/nd play
Mr. Don Ashworth
November 17, 1998
Page 2
II. Applicant Fee (staff received the TIF application fee of $2,000 and a deposit
of$IO,OOO for costs and expenses related to drafting the Private
. Redevelopment Agreement).
12. Demonstration of Past Projects (see Attachment #9).
The applicant completed the "But For" worksheet and the results show that ifit
were not for the TIF, the project would return 10.9% versus 13.1% after receiving
the TIF assistance (see Attachment #10).
The estimated amount of incentives available total $304,635.87 based on the city
policy of three years worth of taxes minus fiscal disparities and school aid
contributions (see Attachment #11). The city would make payments back to
Century 2000 Partners, LLP on a "pay as you go" plan based on the new taxes
generated from their facility:
2000
2001
2002
$101,545.29
$101,545.29
$101,545.29
Total Incentives
$304,635.87
RECOMMENDATION
Staff recommends approval of the Private Redevelopment Agreement with
Century 2000 Partners, LLP and their request for $304,635.87 in city assistance.
ATTACHMENTS
I. Private Redevelopment Agreement
2. Location Map District
3. Statement of Public Purpose
4. Description of Project
5. Plans. and Drawings of Project
6. Description of Company
7. Investment Bank Letter
8. Zoning and Planning Analysis
9. Demonstration of Past Projects
10. TIF Application/But For Analysis
11. Development Proposal/Estimated Taxes
g:\admin\tg\century2000pra.doc
Kennedy & Graven, Chartered
Execution Copy
CONTRACT
FOR
PRIV ATE REDEVELOPMENT
BY AND BETWEEN
THE CITY OF CHANHASSEN
AND
CENTURY 2000 PARTNERS, LLP
,1998
This document was draftcd by:
Kcnnedy & Graven, Chartcred
470 PilIsbuI)' Center
200 SOLlth Sixth Street
i\Iinncapolis, MN 55402
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... ,.ti"ichd){' I) t
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Section 1.1.
Section 2.1.
Section 2.2.
Section 3.1.
Section 3.2.
Section 3.3.
Section 3.4.
Section 3.5.
Section 3.6.
Section 3.7.
Section 3.8
Section 3.9.
Section 3.10.
Section 3.11.
Section 3.12.
Section 4.1.
Section 4.2.
Section 5.1.
Section 5.2.
Section 5.3.
Section 6.1.
JB:J-150768
CH13S-36
TABLE OF CONTENTS
ARTICLE I
Definitions
Defini ti ons ....................................................................................................... 2
ARTICLE II
Representations and \Varranties
Representations by the City............................................................................. 4
Representations by the Redeveloper... ....... ............................ ..... ........ ............ 4
ARTICLE III
Acquisition and Conveyance of Property
Acquisition of Redevelopment Property....... ...... ....... ...... ........ ............. .......... 6
Conveyance of the Redevelopment Property................................................. 6
Time of Acquisition and Conveyance... ............. ............... .......... .................... 6
Ti tl e .... .. ..... . ..... . . . ... . . . . . . .. . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . .. . . . . . .. . ... .. 6
Soil Conditions................................................................................................ 7
Purchase Price..... ............................................................................................. 7
Taxes and Special Assessments ...................................................................... 7
Other Costs...................................................................................................... 7
Property Reconveyed As Is .............................................................................7
Tem1ination ..................................................................................................... 7
Hearing Prior to Sale ....................................................................................... 8
Assessl11ent Agreen1ent ......................... ..... ............... ......... ... ........ .................. 8
ARTICLE IV
Public Assistance
Construction of the Minimum Improvements ................................................ 9
Fom1 of Public Assistance............................................................................... 9
ARTICLE V
Tax Increment
Tax Increment Certification................ ....... ................ ................................... 10
Real Property Assessment ............. ..............................................................,. 10
Wage and Job Covenants .............................................................................. 10
ARTICLE VI
Additional Provisions
Equal Employment Opportunity................................................................... I I
1
Section 6.2.
Section 6.3.
Section 6.4.
Section 6.5.
Section 6.6.
Section 6.7.
Section 6.8.
Section 6.9.
Section 6.10
SIGNATURES
TESTIMONIALS
SCHEDULE A
SCHEDULE B
SCHEDULE C
SCHEDULE D
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CH13S-36
Restrictions on Use.......... ....... ....... ......... ........ ........... ......................... ........... 11
Provisions Not Merged With Deed............................................................... 11
Notices and Demands ............................ ........................................................ 11
Disclaimer of Relationships ..... ............................ ........... .......... ............ ........ 11
Covenants Running with the Land................................................................ 11
Modifications........ ........... ....... ........ ........... .......... .......... ........ ........................ 12
Counterparts....... ............. ....... ....... .......... ..................... ......... ......................... 12
Tem1ination ................... ...... ........................... ........... ......... ................... .... .... 12
Assignn1ent .............. ..... .... .......................... ............. ......... ....... ......... ............ 10
REDEVELOPMENT PROPERTY LEGAL DESCRIPTION
ASSESSMENT AGREEMENT AND ASSESSOR'S CERTIFICATION
[Blank]
[Blank]
II
CONTRACT FOR PRIVATE REDEVELOPMENT
THIS AGREEMENT, made on or as of the day of , 1998, by and
between THE CITY OF CHANHASSEN, a Minnesota municipal corporation (hereinafter referred
to as the "City") and CENTURY 2000 PARTNERS, LLP, a Minnesota limited liability partnership
(hereinafter referred to as the "Redeveloper"),
WITNESSETH:
WHEREAS, the City has created and established Development District No. 6 (the
"District") pursuant to Minnesota Statutes, ~~ 469.124 through 469.154 (the "Act") and has created
within the District, Tax Increment Financing District No.6.1 (the "Tax Increment District") also
pursuant to the Act; and
WHEREAS, the City has further adopted its development district progran1 (the "Program")
for the District describing the objectives of the Program and the public assistance needed within the
District to carry out the objectives of the Program; and
WHEREAS, there has been presented by the Redeveloper to the City for its consideration a
proposal for the development of a office/industrial facility within the District on property located
within the Tax Increment District; and
WHEREAS, the City has reviewed the Redeveloper's development proposal and has
determined that the development, if completed, would serve to accomplish the objectives of the
Program.
WHEREAS, in order to achieve the objectives of the Program the City has deteffi1ined to
provide aid and assistance to the Redevelopment Property in the fOffi1 of land writedown assistance;
and
WHEREAS, the City intends to fund the land writedown assistance by using tax increments
generated from the Redevelopment Property and the improvements to be constmcted thereon; and
WHEREAS, the City believes that the redevelopment of the District pursuant to this
Agreement, and fulfillment generally of this 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
Program has been undertaken and is being assisted.
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:
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1
ARTICLE I
Definitions
Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears
from the context:
"Act" means Minnesota Statutes, Sections 469.001-469.154 (foffi1erly Municipal Housing
and Redevelopment Act, Minnesota Statutes, Sections 462.411-462.711), as amended.
"Agreement" means this Agreement, as the same may be from time to time modified,
amended, or supplemented.
"Assessed Market Value" or "Assessed Market Valuation" means the market value of real
property as determined by the county assessor of the county in accordance with Minnesota Statutes,
Section 273.11 (or as finally adjusted by the assessor, board of equalization, commissioner of
revenue, or any court).
"Available Tax Increment" means any Tax Increment remitted to the City in the years 2000
through 2002 inclusive after deducting therefrom the following amounts:
i) payments previously made pursuant to Section 4.2 of this Contract: and
ii) any amounts needed to make pa)111ents to a school district pursuant to
~vlinnesota Statutes ~ 469.177, subd. 10.
"City" means the City of Chanhassen, a i'",linnesota municipal corporation and statuto!)' city
according to the laws of the State of Minnesota.
"Closing" means the completion of the transaction contemplated in this Agreement between
the parties hereto.
"Construction Plans" means the plans, specifications, drawings and related documents on
the construction work to be perfoffi1ed by the Redeveloper on the Redevelopment Property which
shall be at least as detailed as the plans required to be submitted to the building inspector of the
City.
"Limited Revenue Tax Increment Note" or "Note" means the limited, special obligation of
the City to pay to Redeveloper, from tax increments generated from the Redevelopment Property,
an annual dollar amount, as provided in Section 4.2 of this Agreement and the Note attached as
Schedule D.
"Minimum Improvements" means the improvements described in the Preliminary Plans
containing a office/warehouse facility of approximately 1 13,600 square feet.
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"Preliminary Plans" means those plan sheets and other descriptive material which are
identified in the attached Schedule E.
"Redeveloper" means Century 2000 Partners, LLP a Minnesota limited liability partnership,
or its successors and assigns.
"Redevelopment Property" means the real property, a legal description of which property is
contained on the attached Schedule A.
"Tax Increment" means that portion of the real property taxes paid with. respect to the Tax
Increment District which is remitted to the City as tax increment pursuant to the Tax Increment Act.
"Tax Increment Act" means Minnesota Statutes, Sections 469.174-.179, as the same may be
amended from time to time.
"Termination Date" means the date when the Assessment Agreement has tem1inated
according to its terms.
"Tax Official" means any city or county assessor; county auditor; city, county or state board
of equalization, the commissioner of revenue of the state, any state or federal district court, the tax
court of the state, or the State Supreme Court.
"Unavoidable Delays" means delays which are the direct result of acts of God, unforeseen
adverse weather conditions, labor disputes, fire or other casualty to the Minimum In1provements,
litigation commenced by third parties which, by injunction or other similar judicial action causes
delays, acts of any federal, state or local governmental unit (other than the City in enforcing its
rights under this Agreement), City defaults as to the Redeveloper's delays, Redeveloper defaults as
to the City's delays, or other matters which are not within the control of the Redeveloper as to the
Redeveloper's delays or not within the control of the City as to the City's delays.
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ARTICLE II
Representations and Warranties
Section 2.1. Reoresentations bv the City. The City makes the following representations as
the basis for the undertaking on its part herein contained:
(a) Subject to matters described in Section 5.4 of this Agreement, the City has the right,
power and authority to execute, deliver and perform its obligations according to this Agreement and
all other documents to be executed by the City pursuant hereto. The City assures the Redeveloper
that the individuals who execute this Agreement and all other documents executed by the City or on
behalf of the City are duly authorized to sign the same on behalf of the City and to bind the City
thereto.
(b) Subject to satisfaction of the tem1S and conditions of this Agreement, the City will
convey the Redevelopment Property to the Redeveloper for development in accordance with the
tem1S of this Agreement.
(c) Neither the City, nor, to the best of the City's knowledge, any entity or person has, at
any time (i) "released" or actively or passively consented to the "release" or "threatened release" of
any Hazardous Substance (as defined below) on or under or that would affect the environmental
condition of the Redevelopment Property; or (ii) taken any action in "response" to a "release" in
connection with the Redevelopment Property; or (iii) otherwise engaged in any activity or omitted
to take any action which could subject the City or Redeveloper to claims for intentional or negligent
torts, strict or absolute liability, either pursuant to statute or common law, in connection with
Hazardous Substances (as defined below) located in or on the Redevelopment Property, including
the generating, transporting, treating, storage, or manufacture of any Hazardous Substance (as
defined below). The terms set within quotation marks above shall have the meaning given to them
in the Comprehensive Environmental Response and Liability Act, 42 U.s.e. S 9601 et seq., as
amended ("CERCLA") and any state environmental laws. "Hazardous Substances" means
hazardous waste, toxic substances, formaldehyde, urea, polychlorinated, biphenyls, asbestos,
petroleum, natural gas, synthetic gas usable as fuel or mixtures thereof, any materials related to any
of the foregoing, and substances defined as "hazardous substances", "toxic substances", "hazardous
waste", "pollutant", or "contaminant" in CERCLA 42 U.s.e. S 9601 ~., the Resource
Conservation and Recovery Act as amended, the Hazardous Materials Transportation Act, 49
U.s.e. S 1801 et seq., the Clean Water Act, 33 U.s.e. S 1251 et seq., any state laws regarding
environmental matters, or any regulations promulgated pursuant to any of the foregoing statutes.
Section 2.2. Representations bv the Redeveloper. The Redeveloper represents that:
(a) The Redeveloper has the right, power and authority to execute, deliver and perform
its obligations according to this Agreement.
(b) If the Redeveloper constl1lcts the Minimum Improvements on the Redevelopment
Property, it will do so in accordance with the terms of this A~reement, and all local, state and
federal laws and zoning, building coele and public health laws and regulations.
]Gf)-15076g
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(c) If constructed, the Minimum Improvements will have a market value of not less
than $3,976,000 inclusive of the value of the Redevelopment Property but exclusive of the value of
any improvements currently located on the Redevelopment Property.
(d) As of this date, the Redeveloper has received no notice or communication from any
local, state or federal official that the activities of the Redeveloper or the City in the Project Area
may be or will be in violation of any environmental law or regulation. 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. In the event that the City is required to take any
action to obtain any necessary permits or approvals with respect to the Redevelopment Property
under any local, state or federal environmental law or regulation, the Redeveloper will cooperate
with the City in connection with such action.
(e) If the Redeveloper constructs the Minimum In1provements, it will use its best efforts
to do so in accordance with all applicable local, state or federal energy conservation laws or
r~gula.tions.
(1) Neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the tem1s and
conditions of this Agreement is prevented, limited by or con11icts with or results in a breach of, the
tem1S, conditions or provisions of any restriction or any evidences of indebtedness, agreement or
instrument of any evidences of indebtedness, agreement or instrument of whatever nature to which
the Redeveloper is now a party or by which it is bound, or constitutes a default under any of the
foregoing.
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ARTICLE III
Acquisition and Conveyance of Property
Section 3.1. Acquisition of Redevelopment Propertv. The Redeveloper represents that it
has as of the date of this Agreement obtained title to or options to acquire title to the
Redevelopment Property. Subject to the terms of this Agreement, the City agrees that it will,
subsequent to the Redeveloper's acquisition of title to the Redevelopment Property, acquire the
Redevelopment Property from the Redeveloper. The conveyance from the Redeveloper to the City
shall be by a standard quit claim deed. Immediately after the City's acquisition of the
Redevelopment Property, the City shall, by quit claim deed, reconvey such property to the
Redeveloper for development in accordance with the terms of this Agreement. The cost to the City
of acquiring the Redevelopment Property and conveying such property to the Redeveloper shall be
paid in accordance with the terms of Section 3.6 of this Agreement.
Section 3.2. Conveyance of the Redevelopment Property. The City shall reconvey title to
and possession of the Redevelopment Property to the Redeveloper under a quit claim deed. The
conveyance of and the Redeveloper's use of the Redevelopment Property shall be subject to all of
the conditions, covenants, restrictions and limitations imposed by this Agreement. The conveyance
of title to and the Redeveloper's use of the Redevelopment Property shall also be subject to building
and zoning laws and ordinances and all other applicable local, state and federal laws and
regulations.
Section 3.3. Time of Acquisition and Convevance. (a) The City shall, subject to all
applicable provisions of law and preconditions to closing contained in this Agreement, if the
Redeveloper is not then in default under the terms of this Agreement, acquire the Redevelopment
Property from the Redeveloper and simultaneously reconvey the Redevelopment Property to the
Redeveloper. The Redeveloper shall take possession of the Redevelopment Property the day of
execution and delivery of the deed by the City.
(b) Unless otherwise mutually agreed by the City and the Redeveloper, the execution
and delivery of all deeds shall be made at the principal office of the City.
Section 3.4. Title. (a) Prior to and as a condition to the City's obligation to acquire the
Redevelopment Property, the Redeveloper shall furnish the City with evidence reasonably
acceptable to the City that Redeveloper has marketable title to the Redevelopment Property. The
City shall have no obligation to take any action to clear defects in the title to the Redevelopment
Property.
(b) The City shall take no actions to encumber title to the Redevelopment Property
between the moment the City acquires to the moment on which the City's Deed is delivered to the
Redeveloper, it being understood that such conveyances will occur simultaneously. The City
warrants to the Redeveloper that there are no unsatisfied judgmenL';, tax liens or other matters that
will become liens or encumbrances on the title to the Redevelopment Property as a result or the
City's ownership thereof.
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Section 3.5. Soil Conditions. The Redeveloper acknowledges that the City makes no
representations or warranties as to the condition of the soils on the Redevelopment Property or its
fitness for construction of the Minimum Improvements or any other purpose for which the
Redeveloper may make use of such property. The Redeveloper further agrees that it will
indemnify, defend, and hold harmless the City, its governing body members, officers, and
employees, from any claims or actions arising out of the presence, if any, of hazardous wastes or
pollutants on the Redevelopment Property, which result from the performance of this Agreement by
the City.
Section 3.6. Purchase Price. (a) The City shall pay the Redeveloper as purchase price for
the Redevelopment Property the aggregate principal amount of $304,635.87. Such payment shall
be made entirely and exclusively in accordance with the terms of the Limited Revenue Tax
Increment Note ("Note") in substantially the form of the attached Schedule D. The Note is to be
executed by the City and delivered to Redeveloper at Closing.
(b) The purchase price to be paid by the Redeveloper for the reconveyance of the
Redevelopment Property from the City shall be $1.00.
Section 3.7. Taxes and Special Assessments. Redeveloper shall pay all taxes and
installments of special assessments due and payable in years prior to the year of closing.
Redeveloper shall pay all installments of taxes and special assessments due and payable in the year
of Closing. Installments of special assessments due and payable in future years shall be
responsibility of Redeveloper.
Section 3.8. Other Costs. No cost, fee or other payment relating to any real estate
transaction of any nature shall be payable by the City to any person or entity; and except as
otherwise set forth in this Agreement, the City's entire obligation in connection with the purchase
and sale of the Redevelopment Property shall be payment of the purchase price in accordance with
the provisions of the Note and reconveyance of the Redevelopment Property as provided in this
Agreement.
Section 3.9. Property Reconveyed As Is. Redeveloper acknowledges that the City shall
have no obligation to perform any site work in connection with the proposed transaction or
otherwise. The City's only obligation hereunder is to reconvey the Redevelopment Property to the
Redeveloper in the condition in which it was conveyed to the City. All site work, including,
without limitation, grading, soil preparation and demolition of all structures and improvements
shall be done by the Redeveloper at Redeveloper's cost.
Section 3.10. Tern1ination. In the event that all the preconditions to Closing have not been
satisfied or waived by the party in whose favor the precondition runs, either party may give the
other party ten day written notice of such defaults. If the other party does not cure such default
within such ten day period, this Agreement may be declared null and void by either party and
thereupon, neither party shall have any obligation or liability to the other hereunder, provided, if the
default is such that it cannot reasonably be cured \vithin ten days, Redeveloper shall be entitled to
such additional time to cure such default as is necessary in the exercise of reasonable diligence.
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In the further event that the closing does not occur on or before the first business day that is
30 days after the date of this Agreement, unless such ,date is extended by mutual written agreement
of the parties, this Agreement shall automatically become null and void and thereupon neither party
shall have any obligation or liability to the other hereunder.
Section 3.11. Hearine Prior to Sale. As a further precondition to the City's obligations
hereunder, the City shall hold all hearings and make all findings as may be required by law as a
precondition to the transaction contemplated herein.
Section 3.12. Assessment Aereement. At Closing, and as a precondition to the City's
obligations, the parties shall execute an Assessment Agreement and the City shall secure the
Assessor's Certification all in substantially the foml of the attached Schedule C. At the time of
execution, the instrument must have been executed by the county assessor. Subsequent to
execution by the parties, the instrument shall be recorded as provided for in the instrument.
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ARTICLE IV
Public Assistance
Section 4.1. Construction of the Minimum Imorovements. Subject to the terms and
conditions of this Agreement, the Redeveloper agrees to purchase the Redevelopment Property and
if it constructs the Minimum Improvements on the Redevelopment Property, it will do so
substantially in accordance with the Construction Plans. Should the Redeveloper construct the
Minimum Improvements, it agrees to maintain, preserve and keep them in good repair and
condition, subject to reasonable wear and tear and casualty excepted. Notwithstanding anything to
the contrary set forth in this Agreement, the Redeveloper has no obligation to construct the
Minimum Improvements. The Construction Plans must reasonably conform to the Preliminary
Plans unless such nonconfom1ity is approved by the City. The City agrees that it will promptly
consider any proposed amendment to the Construction Plans, will not unreasonably withhold its
approval of such proposed amendments and will approve the same if the amended plans: i) do not
indicate a reduction in the market value of the improvements; and ii) in the reasonable judgment of
the City, such amendment is in confom1ity with the applicable land use regulations of the City.
Section 4.2. Fom1 of Public Assistance. Upon the issuance by the building official of a
Certificate of Occupancy for the Minimum Improvements, but only of the Redeveloper has not
committed an event of default under this agreement for which cure has not occurred, the City shall
become obligated to make land writedown payments to the Redeveloper in accordance with the
tem1S of the Note which is attached hereto as Schedule D. The City's obligation under this
Agreement to make payments to the Redeveloper is entirely limited to the tem1S of the Note.
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ARTICLE V
Tax Increment
Section 5.1. Tax Increment Certification. The City has established the Tax Increment
District pursuant to the Tax Increment Act.
Section 5.2. Real Property Assessment. The Redeveloper shall not cause the
Redevelopment Property to be removed from the public tax rolls or to become exempt from
assessment for general real estate taxes by reason of any conveyance, lease, abatement or other
action until the Tem1ination Date.
Section 5.3. Wa!.?:e and Job Covenant,>. (a) By no later than two years after the first date on
which the Redeveloper receives any payment pursuant to Section 4.2, there shall be employed on
the Redevelopment Property at least 50 employees and the gross annual wages for all such
employees shall be no less than $1,000,000. Until it is established that Redeveloper or tenants
occupying the Redevelopment Property have attained those goals, the Redeveloper shall annually
submit to the City a written report each year after completion of the Minimum Improvements
describing employment and wages in sufficient detail to enable the City to detem1ine compliance
with this Section.
(b) The Redeveloper must meet the job and wage levels described in paragraph (a) at
least one time before the end of that two year period following the first payment of tax increment, in
accordance with Section 4.2, or the Redeveloper shall repay the City, upon written demand from the
City, any payments made to the Redeveloper under Section 4.2. Nothing in this Section shall be
construed to limit the City's other remedies hereunder. Nothing in this Agreement shall be deemed
as imposing an obligation on the Redeveloper to achieve the employment and wage requirements
contained in Paragraph (5.4(a) morc than one time.
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ARTICLE VI
Additional Provisions
Section 6.1. Equal Employment Opportunity. The Redeveloper, for itself and its
successors and assigns, agrees that in the event the Minimum Improvements are constructed as
provided for in the Agreement, it will comply with all applicable federal, state and local equal
employment and nondiscrimination laws and regulations.
Section 6.2. Restrictions on Use. The Redeveloper agrees for itself, and its successors and
assigns, and every successor in interest to the Redevelopment Property, or any part thereof, that the
Redeveloper, and such successors and assigns, shall devote the Redevelopment Property to, and
only to and in accordance with, the land use regulations of the City of Chanhassen in effect on the
date of the issuance of a building pem1it for construction of Minimum Improvements. The
Redevelopment Property will be devoted only to uses which will entitle it to Tax Increment
treatment at all times that the Redeveloper is entitled to receive payments of Available Tax
Increment pursuant to the provisions of the Limited Revenue Tax Increment Note attached to this
Agreement as Exhibit D.
Section 6.3. Provisions Not Men!ed With Deed. None of the provisions of this Agreement
are intended to or shall be merged by reason of any deed transferring any interest in the
Redevelopment Property.
Section 6.4. Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand, or other communication under the Agreement or the deed by either
party to the other shall be sufficiently given or delivered only if it is dispatched by registered or
certified mail, postage prepaid, return receipt requested, or delivered personally; and
(a) in the case of the Redeveloper, is addressed to or delivered to the Redeveloper at
3610 County Road 101, Wayzata, Minnesota 55391, Attention: Thomas Kordonowy, and
(b) in the case of the City, is addressed to or delivered personally to the City at 690 City
Center Drive, Box 147, Chanhassen, Minnesota 55317, 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 6.5. Disclaimer of Relationships. The Redeveloper acknowledges that nothing
contained in this Agreement nor any act by the City or the Redeveloper shall be deemed or
construed by the Redeveloper or by any third person to create any relationship of third-party
beneficiary, principal and agent, limited or general partner, or joint venture between the City and
the Redeveloper.
Section 6.6. Covenanl>; Runninf! with the Land. The tem1S and provIsIons of this
Agreement shall be deemed to be covenants running with the Redevelopment Property and shall be
binding upon any Sllccessors or assigns or the Redeveloper and any future owners or encumbrances
JI3 D-15076S
C][ 135.36
11
of the Redevelopment Property; but shall terminate and shall no longer affect the Redevelopment
Property from and after the Termination Date;
Section 6.7. Modifications. This Agreement may be modified solely through written
amendments hereto executed by the Redeveloper and the City.
Section 6.8. Counteroarts. This Agreement may be executed III any number of
counterparts, each of which shall constitute one and the same instrument.
Section 6.9. Termination. The Redeveloper and the Redevelopment Property shall be
released from this Agreement and the Redeveloper's obligations hereunder on the Termination Date
and the City shall execute and deliver to the Redeveloper a release, in recordable form, evidencing
such termination and release.
IN WITNESS WHEREOF, the City has caused this Agreement to be executed in its
corporate name by its duly authorized officers and sealed with its corporate seal; and the
Redeveloper has caused this Agreement to be executed in its corporate name as of the date first
above written.
THE CITY OF CHA1\THASSEN, MINNESOTA
(SEAL)
By:
Its lvlayor
And:
Its City lvlanager
J[3D.I.'07G,
CI [I.".'..~G
12
STATE OF MINNESOTA )
) ss.
COUNTY OF CARVER )
On this _ day of , 1998 before me, a Notary Public within and for said
county, appeared and to me personally known, who
being by me duly sworn, did say that they are respectively the Mayor and City Manager of the City
of Chanhassen, Minnesota, a municipal corporation under the laws of the State of Minnesota, on
behalf of the corporation.
Notary Public
JDD-15076S
ClIl ~5-~6
13
REDEVELOPER:
CENTURY 2000 PARTNERS, LLP
By Touchstone Group V LLP
Its Managing Partner
By:
Its:
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _ day of
1998, by , a partner of Touchstone V Group LLP, a Minnesota
limited liability partnership, and a partner of Century 2000 Partners, LLP, a Minnesota limited
liability partnership on behalf of such limited liability partnership.
Notary Public
J8J).15i!7!iS
CIII.".30
14
SCHEDULE A
to
CONTRACT FOR PRIVATE REDEVELOPMENT
REDEVELOPMENT PROPERTY LEGAL DESCRIPTION:
Lots 3&4, Block 1, Arboretum Business Park 2nd Addition Carver County Minnesota
JBD-150768
CH135-36
A-I
SCHEDULE B
ASSESSlVIENT AGREEMENT
and
ASSESSOR'S CERTIFICA TION
By and among
THE CITY OF CHAi\HASSEN
and
CENTURY 2000 PARTNERS,LLP
This Document \Vas drafted by:
KENNEDY & GRA YEN, CHARTERED
.+70 Pillsbury Center
IvIinneapo]is, Minnesota 55.+02
2BD-150768
('11135.36
B-1
THIS AGREEMENT, dated as of this _ day of , 1998, by and between the
CITY OF CHANHASSEN, a Minnesota municipal corporation (the "City") and CENTURY 2000
PARTNERS, LLP a Minnesota limited liability partnership, (the "Redeveloper").
WITNESSETH, that
WHEREAS, on or before the date hereof the City and Redeveloper have entered into a
Contract for Private Redevelopment (the "Contract") regarding certain real property located in the
County of Carver, pursuant to which the City is to acquire certain property, hereinafter referred to
as the Redevelopment Property and legally described in Attachment A hereto; and
WHEREAS, it is contemplated that pursuant to said Contract the Redeveloper will
construct a 113,600 square foot office/warehouse facility upon the Redevelopment Property; and
WHEREAS, the City and Redeveloper desire to establish a minimum market value for said
lanu and the improvements to be constructed thereon, pursuant to Minnesota Statutes Section
469.177, Subdivision 8; and
WHEREAS, the City and the County Assessor for Carver County, have reviewed the
preliminary plans and specifications for the improvements which it is contemplated will be erected;
NOW, THEREFORE, the parties to this Agreement, in consideration of the promises,
covenants and agreements made by each to the other, do hereby agree as follows:
1. The minimum market value which shall be assessed for the land described in
Attachment A, with the Minimum Improvements and other improvements constructed thereon shall
upon substantial completion be not less than $3,976,000. The parties to this Agreement expect that
the construction of the above-referenced improvements will be substantially completed on or before
December 31,1998.
2. The minimum market value herein established remains in full force and effect until
the earlier of: i) December 31, 2006; or ii) the date on which the City is no longer entitled to
receive tax increment with respect to the Tax Increment District 6.1 for the Redevelopment Area, at
which time this Agreement shall terminate. City shall provide Redeveloper with a release in
recordable, form evidencing tem1ination of this Agreement.
3. This Agreement shall be promptly recorded by the Redeveloper with a copy of
Minnesota Statutes Section 469.177, Subdivision 8, set forth in Attachment B hereto. The
Redeveloper shall pay all costs of recording.
4. Neither the preambles nor provisions of this Agreement are intended to, nor shall
they be construed as, modifying the tem1S of the Contract between the City and the Redeveloper.
No provision of this Agreement shall be interpreted to limit or restrict the Redcvelopcr from
appealing valuations of the Redevelopment Property for real estate purposes which exceed
$3,976,000.
HlDl5076S
C1l136.36
B-2
5. This Agreement shall inure to the benefit of and be binding upon the successors and
assigns of the parties.
JDDI5076S
Clll'6-36
B-3
CITY OF CHANHASSEN
By:
Its Mayor
By:
Its City Manager
CENTURY 2000 PARTNERS, LLP
B yTouchstone Group V LLP
Its Partner
By:
Its:
STATE OF MINNESOTA )
) ss
COUNTY OF CARVER )
The foregoing instrument was acknowledged before me this _ day of
1998, by and , the Mayor and City Manager,
respectively, of the City of Chanhassen, a Minnesota municipal corporation, on behalf of the
corporation.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this _ day of , 1998,
by a partner of Touchstone Group V, LLP, a Minnesota limited
liability partnership and a partner of Century 2000 Partners, a Minnesota limited liability
partnership, on behalf of such limited liability partnership.
Notary Public
JG i) 15070S
C11130-30
B-4
CERTIFICATION BY COUNfY ASSESSOR
The undersigned, having reviewed the plans and specifications for the improvements to be constructed
and the minimwn market value assigned to the land upon which the improvements are to be constructed, and
being of the opinion that the minimwn market value contained in the foregoing Agreement appears reasonable,
hereby certifies as follows: The undersigned Assessor, being legally responsible for the assessment of the above
described property, hereby certifies that the minimwn market value assigned to such land and improvements
commencing on December 31, 1998 (to be calculated on January 2, 1999) shall not be less than $3,cJ76,0CfJ until
termination of this Agreement.
~)#' }/}I / '
l'/;'/(L-~t-v ]( ///1(;[(,.\ /
Assessor for Caive~ COlmty, ~esota
, '
STATEOFML"IT\BOTA )
) ss
COUNfY OF CARVER )
The foregoing instnunent was acknO\vledged before me this jj^" day of / ., ie., ,/>'ls;by
(' ,./ /I" If). Ie f. ~ , the COlmty Assessor for Carver COlmty, Minnesota.
~_':.-;.c;,~~ {/ IA{ti,;"{",
Notary ~blit '
JBD 15076S
ClI136.36
e-~
Legal Description of Land
REDEVELOPMENT PROPERTY:
Lots 3&4, Block 1,Arboretum Business Park 2nd Addition,
J80150768
C1 I 136-36
B-6
ATTACHMENT A
Carver County, Minnesota
A IT ACHMENT B
Section 469.177, Subd. 8. Assessment agreements. An authority may, upon entering into a
development or redevelopment agreement pursuant to section 469.176, subdivision 5, enter into a
written assessment agreement in recordable form with the developer or redeveloper of property
within the tax increment financing district which establishes a minimum market value of the land
and completed improvements to be constructed thereon until a specified termination date, which
date shall be not later than the date upon which tax increment will no longer be remitted to the
authority pursuant to section 469.176, subdivision 1. The assessment agreement shall be presented
to the county assessor, or city assessor having the powers of the county assessor, of the jurisdiction
in which the tax increment financing district is located. The assessor shall review the plans and
specifications for the improvements to be constructed, review the market value previously assigned
to the land upon which the improvements are to be constructed and, so long as the minimum market
value contained in the assessment agreement appears, in the judgment of the assessor, to be a
reasonable estimate, shall execute the following certification upon such agreement:
The undersigned assessor, being legally responsible for the assessment of the above-
described property upon completion of the improvements to be constmcted thereon,
hereby certifies that the market value assigned to such land and improvements upon
completion shall not be less than $
Upon transfer of title of the land to be developed or redeveloped from the auth0l1ty to the
developer or redeveloper, such assessment agreement, together with a copy of this subdivision,
shall be filed for record and recorded in the office of the county recorder or filed in the office of the
registrar of titles of the county where the real estate or any part thereof is situated. Upon
completion of the improvements by the developer or redeveloper, the assessor shall value the
property pursuant to section 273.11, except that the market value assigned thereto shall not be less
than the minimum market value contained in the assessment agreement. Nothing herein shall limit
the discretion of the assessor to assign a market value to the property in excess of the minimum
market value contained in the assessment agreement nor prohibit the developer or redeveloper from
seeking, through the exercise of administrative and legal remedies, a reduction in market value for
property tax purposes; provided, however, that the developer or redeveloper shall not seek, nor shall
the city assessor, the county assessor, the county auditor, any board of review, any board of
equalization, the commissioner of revenue or any court of this state grant a reduction of the market
value below the minimum market value contained in the assessment agreement during the tern1 of
the agreement filed of record regardless of actual market values which may result from incomplete
construction of improvements, destruction or diminution by any cause, insured or uninsured, except
in the case of acquisition or reacquisition of the property by a public entity. Recording or filing of
an assessment agreement complying with the tern1S of this subdivision shall constitute notice of the
agreement to any subsequent purchaser or encumbrancer of the land or any part thereof, whether
voluntary or involuntary, and shall be binding upon them.
J[1DI'07!iS
CI I 136-36
B-7
SCHEDULE C
$304,635.87
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
THE CITY OF CHANHASSEN
LIMITED REVENUE TAX INCREMENT NOTE
The City of Chanhassen (the "City"), hereby acknowledges itself to be indebted and, for
value received, promises to pay to the order of Century 2000 Partners, LLP a Minnesota limited
liability partnership or its assigns ("Developer"), solely from the Available Tax Increment generated
by the Redevelopment Property described in Exhibit B hereto, (the "Redevelopment Property"), and
Minimum In1provements located on such parcel, to the extent and in the manner hereinafter
provided, the amount of this Note, being $304,635.87 on the Payment Dates (as hereinafter defined)
or such greater amount, if any, which the City is required to pay in accordance with the terms of this
Note.
Each payment on this Note is payable without interest and in any coin or currency of the
United States of America which on the date of such payment is legal tender for public and private
debts and shall be made by check or draft made payable to Developer and mailed to Developer at its
postal address within the United States which shall be designated from time to time by Developer.
The Note is a special and limited obligation and not a general obligation of the City, which
has been issued by the City to aid in financing a "project", as defined in Minnesota Statutes Section
469.174, of the City consisting generally of defraying certain capital and administration costs
incurred and to be incurred by the City within and for the benefit of its Redevelopment Project (the
"Project"), and Tax Increment Financing District (the "District").
EXCEPT AS TO THE OBLIGATION TO MAKE PAYMENTS FROM TAX
INCREMENT, THE NOTE IS NOT A DEBT OF THE CITY OF CHANHASSEN, OR THE
STATE OF MINNESOTA (THE "STATE"), AND NEITHER THE CITY OF CHANHASSEN,
THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON THE
NOTE, NOR SHALL THE NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES
OTHER THAN AVAILABLE TAX INCREMENT, AS DEFINED BELOW.
Any payments on this Note which are due on any Payment Date shall be payable solely
from and only to the extent that the City shall have received as of such Payment Date "Available
Tax Increment." For the purpose of this Note, "Available Tax Increment" means any Tax
Increment generated as a result of real property taxes paid in the years 2000 through 2002 inclusive
and received by the City as a result of real property taxes paid during the six (6) month period
preceding a Payment Date, after deducting therefrom the following amounts:
H3 [) 150768
ell 1.'6-36
C-l
(i) any amounts needed to make payments to a school district pursuant to
Minnesota Statutes, ~ 469.177, subd. 10.
(ii) any amounts required to make fiscal disparities contributions and school aid
contributions.
For the purposes of this Note, "Tax Increment" means the portion of the real property taxes
generated with respect to the Redevelopment Property and Minimum Improvements constructed on
the Redevelopment Property which is remitted to the City as Tax Increment pursuant to Minnesota
Statutes S 469.174-469.179.
For purposes of this Note, a "Payment Date" shall mean each of the Scheduled Payment
Dates set forth on Exhibit A attached hereto, and each additional Payment Date required in
connection with any extension of the term of this Note as set forth below, because of changes made
in Minnesota Statutes ~S 469.174-469.179. Notwithstanding anything to the contrary in this Note,
on each of the Payment Dates, the City shall pay to Developer all of the Available Tax Increment;,
but in no event shall the aggregate of all such payments be in excess of $ 304,635.87. To the extent
that on any Payment Date the City is unable to make a payment from Available Tax Increment
equal to the Scheduled Payment due on such date as a result of having received, as of such date,
insufficient Available Tax Increment, such failure shall not constitute a default under this Note and,
except as provided below, the City shall have no obligation under this Note, or otherwise, to
subsequently pay any such deficiency. If, and only if, on any Payment Date there is insufficient
Available Tax Increment to make the Scheduled Payment due on such date and such insufficiency
is a result of changes made in Minnesota Statutes ~~ 469.174-469.179 subsequent to the date of the
Contract for Private Redevelopment dated between the City and Developer (the
"Redevelopment Contract"), the amount of such deficiency in the Scheduled Payment shall be
deferred and shall be paid on the next Payment Date on which the City has Available Tax
Increment in excess of the amount necessary to make the Scheduled Payment due on such Payment
Date, and if such deficiency has not been paid in full by the final Scheduled Payment Date set forth
on Exhibit A attached hereto, the Note shall nonetheless tem1inate and the City shall have no
obligation to make payment of such deficiencies.
This Note shall not be payable from or constitute a charge upon any funds of the City of
Chanhassen, and the City shall not be subject to any liability hereon or be deemed to have obligated
itself to pay hereon from any funds except the Available Tax Increment, and then only to the extent
and in the manner herein specified.
Developer shall never have or be deemed to have the right to compel any exercise of any
taxing power of the City or of any other public body, and neither the City nor any council member,
officer, employee or agent of the City, nor any person executing or registering this Note shall be
liable personally hereon by reason of the issuance or registration hereof or otherwise.
This Note shall not be transferable or assignable, in whole or in part, by Developer without
the prior wri llen consent of the Ci ty.
H3D15076S
CI I t:0\1'-~6
C-2
This Note is given subject to the limitation contained in Section 5.4 of the Redevelopment
Contract.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required
by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be
performed precedent to and in the issuance of this Note have been done, have happened, and have
been performed in regular and due form, time, and manner as required by law; and that this Note,
together with all other indebtedness of the City outstanding on the date hereof and on the date of its
actual issuance and delivery, does not cause the indebtedness of the City to exceed any
constitutional or statutory limitation thereon.
IN WITNESS WHEREOF, the city councilor the City of Chanhassen has caused this Note
to be executed by the manual signatures of the Mayor and the City Manager of the City and has
caused this Note to be dated as of
Nancy Mancino, Mayor
,City Manager
HlDIS076S
CII136-~6
C-3
EXHIBIT A
Scheduled Payment Dates
and Amounts of Scheduled Payments
Scheduled
Payment Dates
Scheduled
I
Payments
July 31,2000
December 31, 2000
July 31,2001
Dccember 31, 200 1
July 31,2002
Dccember 31,2002
$50,772.64
50,772.65
50,772.64
50,772.65
50,772.64
50,772.65
'Scheduled payments are to be made up to these amounts but only from f\\'ailablc Tax
Increment.
JGD1'(JjoS
CIll.~f>.3o
C-4
EXHIBIT B
Description of Redevelopment Property
Lots 3&4, Block 1, Arboretum Business Park 2nd Addition, Carver County
.
][l[)15076S
C! I 136-~6
C-s
SCHEDULE D
Preliminary Plans
Collectively the ABP II drawings prepared by Smuckler Architects, Notch Engineering
and Schoell & Madsen, Inc., titled: Cl C2, TO, AD, A1.l, A1.2, A1.3, A2, A3, A4, A5,
A6, Sl, S2, S3, S4, S5, and S6 all of which are dated July 20,1998
J[3DI:;07(;S
CIII_;(;-~(;
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STATEMENT OF PUBLIC PURPOSE
The property will employee 50 employees with annual wages 0[$1,000,000.
. I '.~ .~''.,J
fl" .} /' :' ""....1" -~
~ /1,/'.," ,_'_~,/,~ .'i- {: .~ ,
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DESCRIPTION OF PROJECT
A 115,520 square foot multi-tenant office/warehouse situated in the southeast quadrant of the
intersections of Highways 5 & 41.
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COMPANY BACKGROUND
Steiner Development Inc. has owned and managed industrial real estate for 20 years. Steiner
Development manages approximately 2M square feet of industrial space in the Twin Cities. Over the
past 10 years the company has developed, built and leased 824,000 square feet. Most recently the
company built a 101,600 sf building immediately to the south of the current project.
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------
...--
.-----
11/04/98 12:36 FAX 6126671344
. .
10/08/98 10:22 FAX 6124737058
NORWEST BANKS
STEINER DEVELOPMENT INC.
@ 0011003
@002
,~-
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October 6,1998
~
Norwest Bank Minnesota, N. A.
Specialized Business Group
Commercial Real Estate
Old St. Anthony Office
425 East Hennepin Avenue
Minneapolis, Minnesota 55414-2077
612/667-1346
Fsx: 6121667-1344
.......
.-.
NORlin5i' BANKS
.-..
....1lII
Mr.David Distad
Controller
Steiner Development.,inc.
3610 South Highway 101
Wayzata,.MN 55391
Re: Loan RequestJ Chanhassen Office-Warehouse Project
Dear Dave.
The following are our thoughts concerning possible general terms for the before-
mentioned requested loan. This is not a commitment and should not be construed as
such. Credit approval would be sought only after we have arrived at 8 mutually acceptable
structure.
Borrower: Century 2000 Partners ll.P consisting of Touchstone Group V LLP(50%) and
Arboretum Partners ILP(50%) .The Touchstone Group consists of individuals from
Steiner Development,Inc.and the Arboretum Partners consist oftbe owners of the lead
tenant of the subject project-
Loan Amount:$4,645,OOO Interim construction! nllni~perm loan not to exceed the lesser of
85% of the project's direct costs or 75% ofits appraised value
Pre-leasing Requirement: 44.883 sq.ft. of the 115,520 sq,ft. project is to be pre-leased to a
tenant acceptable to Norwest, prior to any fundicg under the construction loan. Also.all
other tenants must be acceptable to Norwest.
Collateral: First real estate mortgage and assignment of rents and leases on the subject
115,520 sq.ft. office Iwarehouse project to be built in the SE Quadrant ofHWY 5 and Cty
RdAl in Ch3Bka,Mn.
C(uuIt."'S*'1
Loan Purpose: Loan proceeds would be used to construct tbe subject 115.520 sq.ft.
office/warehouse project in Chanhassen.MtL
Loan Term: 18 months total to include the following:
6 months to build
6 months to lease-up
~' ,.1 ......J.. >'-,
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To .
Co./Dept.
Co.
Phone 1/
Phone 1/
~ -2..1052
Fax It
11/04/98 12:37 FAX 6126671344
10/08/98 10:22 FAX 6124737058
NORWEST BANKS
STEI~~R DEVELOPMENT INC.
,-
6 month conditional extension option conditioned upon the project being at
breakeven leasing.Th~er~the loan may be converted to a 3 year term
assuming a75% LTV and a 1.25 DSC at that time.
Gtlarantees: Joint and several guarantees from Thomas Kordonowy, Richard Lang. David
Kordonowy. Richard Distad. Frederick Richter. Joe Smith III, Tim Burns and Robert
F orsland
Pricing: Norwest base rate plus 1/2% floating plus 1/2% origination fee for initia112
months plus 1/4% fee for the 6 month extension.
. The tenn loan will be amortized over 20 years and priced at a market spread over
treasuries of comparable maturities.
Other: An appraisal of the project would be required. Norwest would engage an
Appraiser from its list of approved Appraisers.
An acceptable Phase 1 environmental assessment report would be required.
To the extent a flood certificate indicates that the project is in a flood zone,
borrower would have to agree to buy flood insurance.
Borrower to pay all costs and expenses incurred by Norwest in connection with the
negotiation and preparation of the loan documents,Expenses would include legal fees,
appraisal fees, title insurance fees and mortgage registration taxes etc.
Sincerely~
~6t'~
Wmston B.Dolland .
Vice President
The foregoing is hereby agreed to :
Century 2000 Partners LLP
By: ~1.1~
Its: p a,../rJev
Date:
10 -B.qg
[4J 0021003
@003
r:ITY OF
CBANHASSEN
i ;0'
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PC DATE: 4/15/98
,j"",.....e...,'~-.~.n.rr?:'
CC DATE: 5/11/98
CASE: Site Plan #98-4
STAFF REPORT
PROPOSAL:
Request for site plan review for a 50,400 square foot building as one of two office-
industrial-warehouse buildings or one building up to 113,600 sq. ft., Arboretum
Business Park 2nd Addition
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LOCATION:
Northwest comer of Century Boulevard and Coulter Boulevard
APPLICANT:
Steiner Development
3601 Highway 101 South
Wayzata, MN 55391
(612) 473-5650
..
PRESENT ZONING:
PUD, Planned Unit Development
ACREAGE:
4.76 acres
or
9.16 acres
FLOOR AREA RATIONS:
0.24 FAR
0.28 FAR
ADJACENT ZONING
AND LAND USE:
N - PUD
S - PUD, Coulter Boulevard, Heartland America Building
E - PUD, Century Boulevard
\V - PUD
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2000 LAND USE PLAN:
Office/Industrial
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Arboretum Business Park 2nd Addition
April 15, 1998
Page 2
PROPOSAL/SUMMARY
The applicant is requesting that the city review two separate development proposals for the site.
The first alternative proposes a 50,400 square foot building on 4.76 acres with future building
area for a second building approximately the same size as the first. The second building would
be reviewed under a separate site plan review process. The second alternative is for a 113,600
square foot building on 9.16 acres.
The 50,400 square foot building is 320 feet long by 160 feet deep. Building height is 24 feet to
the top of the parapet. The 113,600 square foot building is 720 feet long by 160 feet deep.
Building height is 30 feet to the top of the parapet. Both buildings have similar architectural
details. The building material consists of painted, smooth finished tilt-up concrete panels with
reveals along the public sides of the buildings and painted raked finished tilt-up concrete panels
in the loading dock area. The primary building color is called Whole Grain (tan) with base and
entry areas called Coffee Tan (dark tan) and accents will be Terra Cotta.
Though similar in appearance to the first building built in the development, there are several
differentiating features to the building elevation including entry features that are raised above the
parapet line, topped with metal coping and contain additional detailing above doorways, diamond
shaped accent reveals along the length of the building, and concrete reveals along the top of the
building. Staff treated this site plan proposal and the previous proposal as twin sentinels for
Century Boulevard which create a sense of place in the development. However, the PUD
requires that the development demonstrate a higher quality of architectural standards and site
design. From an overall development standpoint, this requires that buildings be diversified and
differentiated within the entire project. Therefore, staff will not support additional buildings that
incorporate the same materials or design elements as the first two site plan proposals.
The development design standards state that all walls shall be given added architectural interest
through building design or appropriate landscaping. The buildings shall have varied and
interesting detailing. Staff is recommending that the building entrances project out from the
body of the building to provide significant visual relief in a manner and at intervals in keeping
with the size, mass, and scale of the wall and its views from public streets to incorporate
additional architectural details.
All roof mounted equipment shall be screened by walls of compatible appearing material or
camouflaged to blend into the building or background. Wood screen fences are prohibited. The
applicant has not provided details about the location, size, or parapet height above roof for the
city to review to analyze the screening of such equipment. We are hereby notifying the applicant
of the screening requirement.
Staff is recommending approval of site plan #98-4 subject to the conditions of the staffrep0l1.
Arboretum Business Park 2nd Addition
April 15, 1998
Page 3
BACKGROUND
On July 28, 1997, the City Council approved the following: the ordinance for PUD #92-6
rezoning approximately 154 acres from Agricultural Estate, A2, to Planned Unit Development,
PUD, and the PUD #92-6 granting final plat approval for Arboretum Business Park.
On June 9,1997, the City Council approved site plan #97-6 for Heartland America, a 101,600
square foot office industrial building on Lot 3, Block I, Arboretum Business Park.
GENERAL SITE PLAN/ARCHITECTURE
The development must comply with the Development Design Standards for Arboretum Business
Park (attached).
GRADING
The site was previously rough graded in conjunction with Phase I Arboretum Business Park.
Therefore, only minor site grading will be necessary for the building pad and parking lot
construction. The grading plan overall is in general conformance with the development plan for
Arboretum Business Park.
Given the site's topography, bel111ing will not be achieved along Century Boulevard. The site is
actually anywhere from one to ten feet above Century Boulevard.
DRAINAGE
In conjunction with Phase I of the City's public improvement project for Arboretum Business
Park, stonn sewer improvements have been installed along Century Boulevard. Phase II of
Arboretum Business Park will include street and utility improvements to accommodate this site.
The storm sewers proposed on the site plan will need to be redesigned to coordinate with the
City's public improvement project. Detailed stonn drainage calculations including drainage area
maps for a 10-year, 24-hour st0l111 event shall be submitted to the City Engineer for review and
approval prior to issuance of a building permit.
UTILITIES
Municipal sanitary sewer and water has been extended in conjunction with the City's Public
Improvement Project No. 97-1 along a portion of Cenhlry Boulevard adjacent to the site.
However, no individual sanitary sewer or water service has been extended at this time to service
the lots. In conjunction with Phase II of the City's public improvement project individual sewer
and water services will be extended to the lots. The applicant's engineer shall coordinate with the
Arboretum Business Park 2nd Addition
April IS, 1998
Page 4
City's project engineer the appropriate locations for the sewer and water services and adjust the
site plan accordingly.
STREETS/P ARKING LOTS
The City's Public Improvement Project No. 97-1 will be completing a portion of Century
Boulevard up to the east leg of Coulter Boulevard this spring. The applicant has submitted a
petition to the City to extend Century Boulevard and Coulter Boulevard west of Century
Boulevard. Without this improvement project the site plan shall be considered premature since
there will be inadequate utility improvements and street systems to accommodate this
development.
The drive aisle widths throughout the project appear to be in confonnance with City Code. Staff
recommends that the truck access onto Coulter Boulevard be increased from 26 feet wide to 30
feet wide to accommodate truck traffic. In addition, the turning radius onto Coulter Boulevard
needs to be increased to accommodate turning movements. Industrial driveway aprons will be
required at all access points onto city streets. The City has a standard plate (5207) which should
be utilized.
EROSION CONTROL
The grading, drainage and erosion control plan needs to be modified to incorporate erosion
control fence and erosion control blanket on slopes in excess of 3: 1. All storm sewer inlets shall
be protected with silt fence, hay bales or rock filter dikes until the parking lot has been paved
with a bituminous surface.
LANDSCAPING
Landscape requirements by ordinance include buffer yard plantings, boulevard plantings, and
parking lot landscaping. The applicant has two proposals and each will be reviewed for
landscaping.
Proposal #1 (50,400 sq. ft. building)
This proposal has two phases and while the landscaping requirements will be the same for each
phase, the quantities representing the requirements will differ for each depending on street
frontage and parking lot size.
Minimum parking lot landscape requirements:
7,444 ft2 landscape area (8% of vehicular
use area)
15 overstory trees
Arboretum Business Park 2nd Addition
April 15, 1998
Page 5
Add two landscape peninsulas in easterly
parking
All landscape peninsulas require trees
Boulevard tree requirements (1 tree per 30' street frontage):
Century Blvd. 16 trees
Coulter Blvd. 13 trees
Buffer yard plantings:
(2 canopy, 4 understory, and 6 shrubs per
100 linear feet, plant unit multiplier 0.8)
Century Blvd., buffer yard B, 20' width:
8 overstory trees
16 understory trees
24 shrubs
West side of property, buffer yard B, 30':
4 overs tory
8 understory
12 shrubs
The applicant has not met minimum landscape requirements witb the landscape plan submitted
with Proposal # I. Staffrecommends the applicant revise the landscape plan to meet minimum
requirements for parking lot landscape, boulevard trees and buffer yard plantings.
Proposal #2 (113.600 sq. f1. building:)
The single building proposal cbanges only the parking lot landscaping requirements.
Minimum parking lot landscape requirements:
9,810 ft2 landscape area
39 overstory trees
Add five landscape peninsulas to east
parking
Boulevard tree requirements (I tree per 30' street frontage):
Century Bh.d. 32 trees
Coulter Blvd. 13 trees
Buffer yard plantings:
(2 canopy, 4 understory, and 6 shrubs per
100 linear feet, plant unit multiplier 0.8)
Century BInI.. buffer yard B, 20' width:
16 overstory trees
Arboretum Business Park 2nd Addition
April 15, 1998
Page 6
32 understory trees
48 shrubs
West side of property, buffer yard B, 30':
8 overs tory
16 understory
24 shrubs
Along northern property line:
13 overs tory trees
The applicant has not met minimum landscape requirements with the landscape plan submitted
with Proposal #2. Staff recommends the applicant revise the landscape plan to meet minimum
requirl'ments for parking lot landscape, boulevard trees and buffer yard plantings.
The western side of the proposed building has loading docks that will face two neighboring uses.
The proposed landscaping includes evergreens concentrated at the northern and southern ends
with minimal evergreens along the western prope11y line. Additional evergreens should be added
to the proposed groupings to allow the planting to wrap around the northern and southern
landscape corners and in the southwest corner of the site to provide more screening of the
loading areas from the street. Neighboring buildings may not need to be screened as heavily if
they too have loading docks in the same area.
The applicant shall install foundation plantings around the perimeter of the building as required
by city ordinance.
LIGHTING/SIGNAGE
Lighting for the interior of the business center should be consistent throughout the development. A
decorative, shoe box fixture (high pressure sodium vapor lamps) with a square ornamental pole
shall be used for area lighting. All light fixtures shall be shielded. Any wall mounted lighting shall
be shielded from direct off-site view. Light level for site lighting shall be no more than Y2 candle at
the property line.
All freestanding signs be limited to one monument sign per street frontage. The sign shall not
exceed eighty (80) square feet in sign display area nor be greater than eight (8) feet in height. The
sign treatment is an element of the architecture and thus should reflect the quality of the
development. The signs should be consistent in color, size, and material throughout the
development. The applicant should submit a sign package for staff review. Wall sign shall be
pennitted per city ordinance for industrial office park site. All signs shall require a separate sign
pernlit.
Arboretum Business Park 2nd Addition
April 15, 1998
Page 7
PARKS AND RECREATION
The applicant shall pay full trail fees per city ordinance for all lots in the Arboretum Business
Park.
MISCELLANEOUS
The applicant should meet with the Building Official as early as possible to discuss commercial
building pennit requirements.
The preliminary Grading, Drainage & Erosion Control Plan and Utility Plan have inaccurate
COnlp:\::S roses.
Trash storage shall be incorporated within the structure. Each unit will provide its own trash
containers and recycling facility.
The City's boulevards must be restored with sod. The landscaping proposed along the westerly
slopes of the site should incorporate landscape materials which will help secure the steep slopes.
The site is currently platted as an outlot. The applicant will need to final plat the site to
Arboretum Business Park 2nd Addition. In addition, an addendum to the existing Development
Contract/PUD Agreement will be necessary. Final plat documents need to be submitted to the
City a minimum of three weeks prior to final plat consideration by the City Council.
SITE PLA:\' FINDINGS
In evaluating a site plan and building plan, the city shall consider the development's compliance
with the following:
(I) Consistency with the elements and objectives of the city's development guides,
including the comprehensive plan, official road mapping, and other plans that may
be adopted;
(2) Consistency with this division;
(3) Preservation of the site in its natural state to the extent practicable by minimizing
tree and soil removal and designing grade changes to be in keeping with the
general appearance of the neighboring developed or developing or developing
areas;
(4) Creation of a harmonious relationship of building and open space with natural si te
features and with existing and future buildings having a visual relationship to the
development;
Arboretum Business Park 2nd Addition
April IS, 1998
Page 8
(5) Creation of functional and harmonious design for structures and site features, with
special attention to the following:
a. An internal sense of order for the buildings and use on the site and
provision of a desirable environment for occupants, visitors and general
community;
b. The amount and location of open space and landscaping;
c. Materials, textures, colors and details of construction as an expression of
the design concept and the compatibility of the same with adjacent and
neighboring struchlres and uses; and
d. Vehicular and pedestrian circulation, including walkways, interior drives
and parking in terms of location and number of access points to the public
streets, width of interior drives and access points, general interior
circulation, separation of pedestrian and vehicular traffic and arrangement
and amount of parking.
(6) Protection of adjacent and neighboring properties through reasonable provision
for surface water drainage, sound and sight buffers, preservation of views, light
and air and those aspects of design not adequately covered by other regulations
which may have substantial effects on neighboring land uses.
Finding: Subject to the revisions contained in the staff report, the proposed site plan is
consistent with all plans and specifications and development design standards for the
Arboretum Business Park Planned Unit Development.
PLANNING COMMISSION UPDATE
As part of their presentation to the Planning Commission, the developer incorporated staffs
recommendation to project the entrance features (five feet) out from the face of the building.
This was exactly what staff envisioned. The change created a varied facade breaking up the flat
surface of the building and at the same time differentiating this building from the Heartland
building to the south.
The Planning Commission held a public hearing on April 15, 1998 to review the proposed site
plan(s). A motion to approve the 50,400 square foot building or the 113,600 square foot building
failed unanimously. A second motion was made recommending approval of the 50,400 square
foot building only. The second motion passed unanimously subject to the conditions of the staff
report and the addition of conditions:
Arboretum Business Park 2nd Addition
April 15, 1998
Page 9
18. All roof mounted equipment shall be screened with walls of compatible appearing
material or camouflaged to blend in the building or background.
19. The applicant and staff shall present to City Council a detailed presentation of all
pedestrian and trail connections with the site.
The Planning Commission explained that they were not against the developer having a larger
building on the site. Rather, they did not like the architectural style of the building. They stated,
"we're becoming really weary of how Chanhassen is starting to look with all these warehouses."
If the developer wants a larger building, they should try additional architectural treatments, rather
than cGntinuing the same long expanse of wall, broken intennittently by entrance features, but no
other significant relief. The Planning Commission had an expectation that development within
the PUD would be of a higher quality and incorporate additional architectural features than in
standard industrial warehouse areas. They felt that the larger building did not meet that
expectation.
Staff believes that condition 18 is already incorporated in the design standards for Arboretum
Business Park by standard e. Building Materials and Design which contains this same language
as well as a prohibition against the use of wood screen fences. In addition, rather than adding
condition 19 to the conditions of approval (which would duplicate Design Standard i. 2.), staff
will present the City Council with our recommendation for trail connections. Trails shall be
located on the east side of Century Boulevard and on the south side of the Coulter Boulevard
extension west of Century Boulevard. Staff is recommending that the applicant provide a
pedestrian connection from the southeast comer of the building to the intersection of Century
Boulevard and Coulter Boulevard west of Century Boulevard. Pedestrians could then cross to
the south side of Coulter Boulevard and use the cross walk to cross Century Boulevard. Within
the site, a pedestrian area will be provided between the building and the parking lot.
RECOMMENDA TION
Staff recommends that the City Council adopt the following motion:
"The City Council approves Site Plan #98-4 for a 50,400 sq. f1. building or a 113, 600 sq. ft.
building, site plan prepared by Smucker Architects dated March 10, 1998, subject to the
following conditions:
1. The development must comply with the Development Design Standards for Arboretum
Business Park.
Arboretum Business Park 2nd Addition
April IS, 1998
Page 10
2. The building entrances shall project out from the body of the building to provide significant
visual relief in a manner and at intervals in keeping with the size, mass, and scale of the wall
and its views from public streets.
3. The applicant shall enter into a site plan agreement with the City and provide the necessary
security to guarantee erosion control, site restoration and landscaping.
4. The site plans shall be redesigned to reflect the proposed street and utility improvements
proposed with Phase I of the City's public improvement project for Arboretum Business Park.
5. All driveway access points shall be constructed in accordance with the City's industrial
J~.i veway detail plate No. 5207. Drive aisle widths to the truck parking lot shall be increased
to 30 feet wide and the turning radiuses onto Coulter Boulevard expanded to accommodate
truck turning movements.
6. Erosion control fence shall be installed and maintained around the downstream side of the
site until all disturbed areas have been revegetated and removal is authorized by the City.
Storm sewer inlets shall be protected with silt fence, hay bales and/or rock filter dikes until
the parking lot has been paved with a bituminous surface.
7. The City's boulevards must be restored with sod. The landscaping plan shall incorporate
landscape material suitable for a 2: I slope.
S. Site plan approval is contingent upon the City authorizing and awarding a project for Phase II
public improvements for Arboretum Business Park and final plat approval for Arboretum
Business Park 2nd Addition.
9. Detailed storn1 drainage calculations including drainage area maps for a 10-year, 24-hour
stonn event shall be submitted to the City Engineer for review and approval prior to issuance
of a building permit.
10. Commencement of construction for this development is contingent on the recording of a final
plat for Arboretum Business Park 2nd Addition.
II. The applicant shall provide areas for bicycle parking and storage on site.
12. The applicant shall work with staff to revise the landscape plan to meet minimum
requirements for parking lot landscape, boulevard trees and buffer yard plantings as specified
in the staff report. Alternate I would require a minimum of27 shade trees, 24 ornamental or
conifer trees, and 36 shrubs. Alternate 2 would require a minimum of 63 shade trees, 48
omamental or conifer trees, and 72 shrubs. The buffer yard on the west of the site shall
incorporate native grasses and wildflower mix as ground cover.
Arboretum Business Park 2nd Addition
April IS, 1998
Page II
13. Additional evergreens shall be added to the northern and southern landscape peninsulas at the
comers of the building and at the southwest comer of the site to provide more screening of
the loading areas from the street.
14. Each landscape peninsula must have one shade tree. Landscape peninsulas less than 10 feet
in width must have aeration tubing installed.
IS. The applicant shall install foundation plantings around the perimeter of the building as
required by city ordinance.
16. Or: the utility plan, off the northwest comer of the Phase II part of the buildings, a hydrant is
shown directly in the center of the driveway off Century Boulevard. Please provide a
hydrant off of the northwest and the northeast comer of the phase I building. Please provide
hydrant off the west side of the phase 2 building. Move the hydrant on the south side of the
phase 2 building to the southwest comer of the building.
17. Chanhassen Fire Depat1ment/Firc Prevention Division policics will need to be revicwed and
followed during the course of the project."
A TT ACH?vIENTS
I. Development Review Application
2. Reduced Site Plan and Landscaping Plan 50,400 sq. ft. Building
3. Reduced Site Plan and Landscaping Plan 113,600 sq. ft. Building
4. Reduced Building Elevations 50,400 and 113,600 sq. ft. Buildings
5. Reduced Building Elevation Steiner Heartland
6. Arboretum Business Park PUD Plan
7. Memo from Greg Hayes to Robert Generous dated 3/31/98
8. Memo from Steve Kirchman to Bob Generous dated 4/6/98
9. Memo from Dave Hempel to Bob Generous dated 4/8/98
10. Plans dated March 10, 1998
11. Planning Commission Minutes of 4/15/98
g:\pIJnbg' 3rb,1[cIUI11 business pJrk bldg 2.doc
STEINER DEVELOPMENT PROJECTS
Square
Project Location Year Feet
Edenwoods Business Center Eden Prairie 1987 165,866
Trustee Group Chaska 1989 29,867
Trustee Group I Chaska 1988 39,840
F airfield Ventures Fairfield, OH 1989 15,000
MainStreet Exchange Waconia 1990 20,161
Ridgevie\v Medical Place Waconia 1997 20,091
Mammoth Industries Chaska 1994 230,000
Skyridge Business Center Minnetonka 1996 47,100
Osborne Conunerce Center I Fridley 1996 101,600
Osborne Commerce Center II Fridley 1997 53,000
Heartland Building Chanhassen 1998 101,600
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UILDING FEATURES
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0,637 Square Feet Available
8' Clear Height
1 Docks, 1 Drive-in Available
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>ivisible to 6,492 Square Feet
.80 Volt, 3 Phase Power
36 Parking Spaces
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Development, Inc.
3610 County Road 10
Wayzata, MN 55391
(612) 473-5650
11/10/98 16:00 FAX 6124737058
JF CHANHRSSEN
STEIr\'ER DEVELOPMENT INC.
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FROM CITY OF CH~NH~SSEN
113.21.1998 15:58
P. 5
Business N~me: C e-t,.dvh'"j ?-o(JcJ fMfnu;J u,tJ
Address: ! ~ {f (0 C()),lAAh; I~ tu/, Wtlfzdlr.lhtJ S~1q
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Location of~roposed Development: L-o~s ~ +l--\ I ~\r.xX- I,
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Type(partn~shlp. etc.): Pa,viuMs Iv.. f? .
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Project Cost Breakdown:
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Telephone: ;
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Nat;ure of Bislness:
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Total: $
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Date:
HISTORY OF ArfLICANT
I. Have yo~ ever filed bankruptcy? YeL-- No.....6.
If yes, ptovide details on separate sheet.
.
2. Have yob ever defaulted on any loan commitment? Yes_ No..l2..
If yes, p~vide details on separate sheet.
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3. Have yo~ ever applied for conventional financing for the projoct? Yes~ No_
If YOSt prlovide details on separate sheet. If no, why not? ,
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4. Ll~t fina~cial references: Name/Address/Contact
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5. Other Infom1fltion pertinont to your application:
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6. Nama of Counsel:
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FROM CITY OF CHRNHRSSEN
18.21.1998 15:59
P. 6
,
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INFO~AT[ON CONCERNING APPLI<;ANT'9 PROPOSED PROJECT FOR EXISTING
I~US'OUAL D~VEl,OPMENT LOCATED IN TIP DISTRIC't~(N~it~~~1 Wc;tbcr. 2w2~ HenncDln
I Countv. 3-1: Gateway. 6-1: end Entert8fnm~nt District. 4l,
I. Is the prOposed project a new facility or rohabflitatlon andlor expansion of existing fAcility?
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2. Industria'1lCommer<:ial:
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3. What is the present employment of your firm?
4. What WJ~I tho employment be at oompletion of project?
5. Estimate6 Project Cost? ~ lfl 7DO/~OC>
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.
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6. What is ~e princip.1 business or product of the company?
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7. Potential I other use of pro po sod dovelopmont?
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8. Will this ~evelopm~nt attract other related industries? Yes1- No_
How?
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9. Whataro' the proposed financing arrangemonts? \.A:f..it'e(,~tt'1
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August 4, 1998
DEVELOPMENT PROPOSAL FOR
STEINER CORPORATION
113,600 Square Feet Office/Warehouse Facility
Lot 3, Arboretum Business Park 1st Addition
Chanhassen, Minnesota - Carver County
New Minimum Market Value:
$3,976,000.00
- 150,000.00
$3,826,000.00
x 3.5%
$ 133,910.00
+ 3,675.00 (150,000 x 2.45% = 3,675)
$ 137,585.00
x 147.611% Local tax ratc
$ 203,090.59 Total propcrty taxes
72 School aid/Fiscal disparities contribution
$ 101,545.29 Total Annual Inccntives
Payments
2000
2001
2002
$10 \,545.29
$101,545.29
$10\'545.29
Totallncentivcs
$304,635.87
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