98-09 HRA Resolution
Resolution 98-9
October 13, 1998
. Commissioner Anderson introduced the following and moved its adoption:
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RESOLUTION CONDITIONALLY APPROVING SALE OF CERTAIN
REAL PROPERTY IN THE GOLDEN HILLS REDEVELOPMENT AREA
(Duke Realty Limited Partnership)
WHEREAS, the Housing and Redevelopment Authority in and for the City of Golden
Valley (hereinafter "HRA") and the City Council for the City of Golden Valley (hereinafter
"City") have approved the Golden Hills Redevelopment Plan; and
WHEREAS, the HRA negotiated a development agreement with MEPC American
Properties, Inc. to develop property in the Golden Hills Redevelopment Area; and,
WHEREAS, in a sale of all of its assets, MEPC American Properties, Inc. assigned
this agreement first to MEPC 0&1, Inc. and subsequently to Duke Realty Limited
Partnership; and,
WHEREAS, Duke Realty Limited Partnership (hereinafter referred to as
"Developer") has made a proposal for the construction of an office building of a minimum
of 220,000 square feet in the central area; and
WHEREAS, The HRA has reviewed the terms of the proposal made by the
Developer and they appear to be reasonable and within the overall guidelines for
redevelopment of the Golden Hills Redevelopment Area as modified herein; and
WHEREAS, the HRA has determined the use value of the real property
contemplated by the Developer's proposal; and,
WHEREAS, pursuant to Minnesota Statutes 9469.029, the HRA has duly given
notice in the form attached as Exhibit A of a public hearing on the proposed sale of the
property legally described in Exhibit B attached hereto (hereinafter the "Subject Property")
and has. duly held said public hearing.
NOW, THEREFORE, BE IT RESOLVED, that the HRA does hereby make the
following findings and determinations:
1. Proper published notice of the proposed sale of the Subject Property
described above has been given and a public hearing has been held thereon, all in
accordance with the provisions of Minnesota Statutes 9469.029; and
2. The use of the Subject Property proposed by the Development is
reasonably within the overall guidelines of the Golden Hills Redevelopment Plan; and
3. The use value of the Subject Property is hereby established as $7.50 per
square foot; and
Resolution 98-9 - Continued
October 13, 1998
. 4. In consideration of the restrictions on the sale and use of the Subject
Property imposed by Minnesota Statute ~469.029 and the restrictions imposed by the
Golden Hills Redevelopment Plan, sale of the Subject Property to the developer at $7.50
per square foot is appropriate.
BE IT FURTHER RESOLVED that:
1. The sale of the Subject Property to the Developer on the terms and
conditions set forth in the development agreement attached hereto as Exhibit "B" is hereby
approved; and
2. The Chair of the HRA and the Director of the HRA are hereby authorized
to execute the development agreement and any other necessary documents and close the
sale of the Subject Property to the Developer pursuant to the terms and restrictions
provided hereby; and
3. The Director of the HRA is hereby authorized and empowered to perform
the obligations imposed on the HRA under the private development agreement; and
4. The Golden Hills Redevelopment Plan is hereby amended to the extent
that the Developer's proposal embodied in the private development agreement attached
hereto as Exhibit "B" so modifies it.
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ATTEST:
Motion for the adoption of the foregoing resolution was seconded by Commissioner
LeSuer; and upon a vote taken thereon, the following voted in favor thereof: Anderson,
Bakken, Johnson and LeSuer; and the following voted against the same: Micks;
whereupon said resolution was declared duly passed and adopted, signed by the Chair
and her signature attested by the Director.
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Resolution 98-9 - Continued
October 13, 1998
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EXHIBIT A
NOTICE OF PUBLIC HEARING
(APPROVAL OF SALE OF REAL PROPERTY TO MEPC 0 & I INC. FOR
REDEVELOPMENT)
NOTICE IS HEREBY GIVEN that the Housing and Redevelopment Authority (HRA)
of Golden Valley, Minnesota will meet at the Golden Valley City Hall, Council Chambers,
7800 Golden Valley Road, on Tuesday, July 14, 1998, at 7:00 PM and will then and there
consider the sale and terms of development of the property which is north of Interstate 1_
394, west of Xenia Avenue, south of Golden Hills Drive and east of the Soo Line Railroad
tracks, Golden Valley, Minnesota, to MEPC 0&1 Inc. for redevelopment pursuant to
Minnesota Statutes Section 469.029. The legal description of the property is as follows:
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That part of Government Lots 3,4,5 and 6, Section 4, Township 117, Range 21,
Hennepin County, Minnesota lying southeasterly of the easterly right of way line of
the Soo Line Railroad, and lying northerly of a line 33.00 feet southerly of and
parallel with the East-West Quarter line of said Section 4 and lying westerly and
southerly of a line described as commencing at the East Quarter Corner of said
Section 4; thence South 87 degrees 36 minutes 43 seconds West, assumed
bearing, along said Quarter line of Section 4, a distance of 620.69 feet; thence
South 2 degrees 23 minutes 17 seconds East a distance of 33.00 feet to said line
lying 33.00 feet southerly of and parallel with the East-West Quarter line of Section
4 and the point of beginning of the line to be described; thence North 2 degrees 23
minutes 17 seconds West a distance of 33.00 feet; thence North 10 degrees 11
minutes 41 seconds West a distance of 197.95 feet; thence North 21 degrees 57
minutes 51 seconds West a distance of 95.97 feet; thence northerly a distance of
285.33 feet, along a tangential curve concave to the east having a radius of 862.43
feet and a central angle of 18 degrees 57minutes 21 seconds; thence North 3
degrees 00 minutes 30 seconds West, tangent to said curve, a distance of 17.84
feet; thence westerly a distance of 46.82 feet, along a tangential curve concave to
the southwest having a radius of 30.00 feet and a central angle of 89 degrees 24
minutes 51 seconds; thence South 87 degrees 34 minutes 39 seconds West,
tangent to last described curve, a distance of 274.22 feet; thence North 86 degrees
35 minutes 21 seconds West a distance of 98.39 feet; thence South 87 degrees 34
minutes 39 seconds West a distance of 244.14 feet to said easterly right. of way line
of the Soo Line Railroad and said line there terminating.
The proposal is to construct an office building of at least 210,000 sq. ft., and either a 7000
sq. ft. restaurant or a XXX room hotel and related parking. All interested parties may
appear in person or by counsel and be heard.
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BY THE HOUSING AND REDEVELOPMENT AUTHORITY
/s/ William S. Joynes, HRA Director
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
DUKE REALTY PRIVATE DEVELOPMENT AGREEMENT
THIS AGREEMENT, effective as of October 13, 1998, is made and entered into by and
between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY
OF GOLDEN V ALLEY, a public body corporate established and existing under Minnesota
Statutes, Section 469.001 et seq., with its principal offices at 7800 Golden Valley Road, Golden
Valley, Minnesota 55427 (the "HRA"), and Duke Realty Limited Partnership, an Indiana limited
partnership, with its Minnesota office located at 1550 Utica Avenue South, Suite 120,
Minneapolis, Minnesota 55416.
WHEREAS, the HRA and the City of Golden Valley (the "City") adopted the Golden
Hills Redevelopment Plan (the "Plan") in October of 1984, and have since made certain
amendments thereto, for the purpose of redeveloping approximately 100 acres located in the City
of Golden Valley (the "Redevelopment Area"); and
WHEREAS, the Redevelopment Area has been designated as a tax increment district
pursuant to applicable Minnesota statutes; and
WHEREAS, the Plan is intended to encourage private development of the
Redevelopment Area through various forms of government aid and financial assistance; and
WHEREAS, the HRA previously designated MEPe American Properties, Inc.
("MEPC"), as developer for a site in the Redevelopment Area legally described in attached
Exhibit A (the "Development Property"), and shown on the sketch attached as Exhibit B, and
MEPC has entered into an agreement to sell and assign substantially all of its assets in the City to
Developer; and
WHEREAS, Developer has submitted to the HRA a proposal for the development of an
office building with a minimum of 220,000 square feet (the "Project"), on the Development
Property; and
WHEREAS, the HRA is the fee owner of part of the Development Property; and
WHEREAS, as soon as reasonably feasible, the HRA shall acquire the remainder of the
Development Property by quick take condemnation and street vacation, and then demolish
existing buildings and replat the Development Property into a new lot legally described as
follows: Lot 1, Block 1, Golden Hills West Fifth Addition, for sale to Developer; and
WHEREAS, the HRA, after public hearing, has approved the Project as being consistent
with the provisions of the Plan; and
WHEREAS, Minnesota Statutes, Section 469.029, requires the adoption of a
development agreement between the parties setting forth the mutual rights and obligations of the
parties in accordance with the provisions of the Plan;
Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
. NOW, THEREFORE, in consideration of the foregoing, and in consideration of the
mutual terms and conditions contained herein, the parties hereby agree as follows:
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
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TABLE OF CONTENTS
Page
ARTICLE I Definitions ...................... ........ ..... .... ............................................... ...... .......1
Section 1.1. Definitions........................... .......................................1
ARTICLE II Representations and Warranties ..................................................................3
Section 2.1. Representations and Warranties by the BRA ............3
Section 2.2. Representations and Warranties by Developer ..........4
Section 2.3. Preliminary Activities ................................................5
Section 2.4 Foundation and Site Plans..........................................7
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ARTICLE III Title and Other Matters....... .................................................................. .......7
Section 3.1. Marketable Title .................................................... .....7
Section 3.2. Replatting and Rezoning............................................8
Section 3.3. Condemnation of the Development Property ............8
Section 3.4. Environmental Matters...............................................8
Section 3.5. Real Estate Taxes and Special Assessments ..............9
Section 3.6. Deed ... .................... ......................................... ...........9
Section 3.7. Recording ............................................................. ......9
Section 3.8. Use .... ..... .......... ........................................... ................9
Section 3.9. Condemnation ............... .............................................1 0
Section 3.10. Future Development................................................... 1 0
Section 3.11. Guaranty .....................................................................10
ARTICLE IV Construction of Improvements.. ..... ............................................... ..............1 0
Section 4.1. Construction of Improvements ..................................10
Section 4.2. Commencement and Completion of Construction.....ll
Section 4.3. Certificate of Completion ..........................................11
Section 4.4. Deposit and Reimbursement of BRA Expenses ........12
Section 4.5. Completion Letter of Credit................;......................12
ARTICLE V Assessment Agreement and Payment of Taxes ...........................................13
Section 5.1. Execution of Assessment Agreement ........................13
Section 5.2 Payment of Taxes, Assessments, Etc. ........................14
AR TI CLE VI Insurance
Section 6.1.
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Insurance ....................................................... .............14
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ARTICLE VII Undertakings of the BRA ............................................................................16
Section 7.1. Sale of Development Property...................................16
Section 7.2. Limitations on Financial undertakings of the BRA...17
Section 7.3. BRA to Maintain Existence .......................................17
Section 7.4. BRA's Option to Terminate....................................... 17
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
ARTICLE VIII Mortgage Financing ................;...................................................~...............18
Section 8.1. Approval of Mortgage................................................ 18
Section 8.2. Notice of Default; Copy to Mortgagee ......................18
Section 8.3. Mortgagee's Option to Cure Defaults........................ 18
Section 804. HRA's Option to Cure Default on Mortgage............. 19
Section 8.5. Subordinate Liens ........................................ ..............20
ARTICLE IX Restrictions on Transfer; Indemnification...................................................20
Section 9.1. Restrictions on Transfer .............................................20
Section 9.2. Indemnification ........... ..................................... ..........21
ARTICLE X
Events of Default
Section 10.1.
Section 10.2.
Section 10.3.
Section 1004.
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Events of Default Defined..........................................21
Remedies on Default......... ................ ....................... ..22
No Remedy Exclusive............................................... .23
No Additional Waiver Implied by One Waiver .........23
ARTICLE XI Additional Provisions. ... .................................................................... ..........24
Section 11.1. Equal Employment Opportunity................................24
Section 11.2. Not for Speculation ....................................................24
Section 11.3. Titles of Articles and Sections ...................................24
Section 1104. Notices and Demands ................................................24
Section 11.5. Counterparts .....t.......................................... ...............24
Section 11.6. Modification................................................ ...............24
Section 11.7. Interpretation and Amendment ..................................25
Section 11.8. Severability................................................................25
Section 11.9. Duration .....................................................................25
Section 11.10. Binding Effect............................................................25
Section 11.11. Consents ......................................................... ............25
Section 11.12. Certificates .................................................................25
ARTICLE XII Termination of Agreement ..........................................................................25
Section 12.1. Developer's Options to Terminate.............................75
Section 12.2 Effect of Termination......... ........................ ................26
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Exhibits:
A
B
C
D
E
F
G
H
Resolution 98-9 - Continued
Legal Description
Sketch of Development Property
Certificate of Completion
Preliminary Plans
Demolition Specifications
Limited Warranty Deed
Guaranty
Assessment Agreement
EXHIBIT B
October 13, 1998
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
ARTICLE I
Definitions
Section 1.1
from the context:
Definitions. In this Agreement, unless a different meaning clearly appears
"Agreement" means this Duke Realty Private Development Agreement by and between
The Housing and Redevelopment Authority in and for the City of Golden Valley, Minnesota, and
Duke Realty Limited Partnership, an Indiana limited partnership, as the same may be from time
to time modified, amended or supplemented.
"Certificate of Completion" means the certification for the Development Property, in the
form of the certificate contained in Exhibit C attached to and made a part of this Agreement,
provided to Developer pursuant to Section 4.3 of this Agreement upon satisfactory completion of
the Improvements.
"City" means the City of Golden Valley, Minnesota.
"City Rights ofWav" means the road rights of way included in the Development
Property which are owned by the City and which the HRA expects will be vacated by the City
for the benefit ofthe adjacent property owners, subject to retained easements for existing
utilities.
"Closing Date" or "Closing" means the date upon which the HRA conveys title and
possession to the Development Property to Developer, which shall be on or after the date that (a)
the HRA has acquired title and exclusive possession to all ofthe Development Property, (b) the
Parties have obtained all necessary consents and approvals required for construction of the
Improvements, and (c) the HRA has completed the demolition of existing improvements on the
Development Property and the remediation of any Hazardous Substances on the Development
Property, or has provided assurances reasonably acceptable to Developer that such remediation
will be completed in a manner which will not create any material expense, liability or delay for
Developer. The Parties expect the Closing Date to be on or about September 1, 1999.
"County" means the County of Hennepin, Minnesota.
"Developer" means Duke Realty Limited Pa~nership, an Indiana limited partnership, and
its successors and assigns under this Agreement.
"Development Plans" means the plans, specifications, drawings, and related documents
on all construction work to be. performed by Developer on the Development Property, including
all on-site improvements to be performed, installed or constructed upon the Development
Property pursuant to this Agreement. Such plans include, for each building or other structure to
be constructed on the Development Property, at least the following: (i) site plan; (ii) foundation
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
plan, (iii) basement plans, (iv) floor plan for each floor; (v) elevations (all sides) and exterior
materials; and (vi) landscape plan.
"Development Property" means the real property described in Exhibit A of this
Agreement. As soon as reasonably feasible, the HRA shall replat the Development Property into
a new lot, legally described as follows: Lot 1, Block 1, Golden Hills West Fifth Addition.
"Event of Default" means an action by Developer listed in Section 10.1 of this
Agreement.
"First Mortgage" means any first priority mortgage which is secured, in whole or in part,
by Developer's interest in the Development Property, or any portion or parcel thereof, or any
Improvements constructed thereon, and which is a permitted encumbrance pursuant to the
provisions of Article VIII of this Agreement.
"Hazardous Substances", as used in this Agreement, means pollutants, contaminants,
toxic or hazardous waste or any other substances, the removal of which is required or the use of
. which is restricted, prohibited, penalized or otherwise regulated by "Environmental Law," which
term means any federal, state or local law or ordinance relating to pollution or the protection of
the environment and includes without limitation asbestos, petroleum products and underground
storage tanks.
"Holder" means the owner of the First Mortgage.
"HRA" means The Housing and Redevelopment Authority in and for the City of Golden
Valley.
"Improved Parcel" means the Development Property and the completed Improvements
thereon.
"Improvements" means an office building with a minimum of 220,000 square feet, with
parking that meets the City Zoning Code requirements, plus all other improvements, including
fixtures and equipment, to be constructed by Developer upon the Development Property pursuant
to this Agreement, as such improvements are defined in the Development Plans.
"Net Proceeds" means any proceeds paid by an insurer to Developer, the Holder of the
First Mortgage, or the HRA under a policy or policies of insurance to be provided and
maintained by Developer pursuant to Article VI of this Agreement and remaining after deducting
all expenses (including reasonable fees and disbursements of counsel) incurred in the collection
of such proceeds.
"Parties" means the HRA and Developer.
"Party" means either the HRA or Developer.
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
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"Plan" means the Golden Hills Redevelopment Plan, adopted by the City and the HRA in
October of 1984, and as amended through the date hereof.
"Preliminary Plans" means the plans for the Project.. attached as Exhibit D and hereby
approved. No changes, except those deemed minor by the HRA Director, shall be made to the
Preliminary Plans without prior written approval by the HRA.
"Proiect" means the construction and operation of the Improvements by Developer on the
Development Property pursuant to the terms of this Agreement.
"Purchase Price" means the sum of $7.50 per square foot for each square foot in the
Development Property.
"Redevelopment Area" means the approximately 1 00 acres located in Golden V alley,
Minnesota that are subject to the Plan.
"State" means the State of Minnesota.
"Tax Increment Financing Act" means the statutes located at Minnesota Statutes, Sections
469.174 through 469.179, inclusive, as amended.
"Tax Increment Financing Plan" means the Tax Increment Financing Plan for City of
. Golden Valley.
"Tax Official" means any City or County Assessor; County Auditor; County or State
Board of Equalization; the Commissioner of Revenue of the State; or any State or Federal
District Court, the Tax Court of the State or the State Supreme Court.
"Unavoidable Delavs" means actual delays due to events directly affecting the Project
which are beyond the control of the Parties, including but notlimited to actions of governmental
authorities other than the City or the HRA, labor disputes, unusually severe or prolonged bad
weather, acts of God, civil disturbances, accidents, fire or other casualty, shortage oflabor or
materials, injunctions, or other court or administrative orders.
ARTICLE II
Representations and Warranties
Section 2.1 Representations and Warranties bv the HRA. The BRA represents and
warrants that:
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(a) The HRA has the power to enter into this Agreement and carry out its
obligations hereunder, and has duly authorized the execution, delivery and performance
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
of this Agreement by proper action, such that this Agreement is and shall remain binding
and enforceable against the HRA according to its terms.
(b) The HRA has the financial capacity to perform its obligations under this
Agreement.
(c) The Redevelopment Area constitutes a Redevelopment Project pursuant to
Minnesota Statutes, Section 469.002, and a Tax Increment District pursuant to Minnesota
Statutes, Section 469.042, and is an "existing project" pursuant to Minnesota Statutes,
Section 469.179.
(d) The HRA has examined this Agreement, and has determined that its terms
and provisions are in accordance with the objectives embodied in the Plan, and are in the
best interests of the City and its residents.
(e) The Project, as defined and described in this Agreement, is in
conformance with the Plan.
(f) There are no legal proceedings pending, or known to be threatened or
contemplated, to which the HRA is a party, or to which any property of the HRA is
subject, which, if determined adversely, would individually or in the aggregate have a
material adverse effect on the HRA's financial position, or prevent or impair the HRA's
ability to perform any covenants or obligations under this Agreement.
(g) The HRA shall act in good faith and use reasonable efforts to obtain all
court orders, consents and approvals required for its acquisition of the Development
Property and the performance of its other obligations under this Agreement.
The above representations and warranties are true and complete as of the date hereof, shall be
true and complete as of the Closing Date, and shall survive the Closing Date.
Section 2.2 Reprl:?sentations and Warranties bv Developer. Developer represents and
warrants that:
(a) Developer is a limited partnership organized and in good standing under
the laws of the state of Indiana, and qualified to do business and in good standing under
the laws of the state of Minnesota.
(b) Developer is not in violation of any provisions in its limited partnership
agreement, has power to enter into this Agreement and to perform its obligations
hereunder, and has duly authorized the execution, delivery and performance of this
Agreement by proper action, such that this Agreement is and shall remain binding and
enforceable against Developer according to its terms.
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
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(c) Neither the execution and delivery of this Agreement, the consummation
of the transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, is prevented or limited by, or in conflict with or
will result in a breach of, the terms, conditions or provisions of Developer's limited
partnership agreement or any indenture, mortgage, agreement or instrument of whatever
nature to which Developer is now a party or by which it is bound, or will constitute a
default under any of the foregoing.
(d) There are no legal proceedings pending, or known to be threatened or
contemplated, to which Developer is a party, or to which any property of Developer is
subject, which, if determined adversely, would individually or in the aggregate have a
material adverse effect on Developer's financial position, or prevent or impair Developer's
ability to perform any covenants or obligations under this Agreement.
(e) Developer has previously delivered to the HRA copies of its most recent
financial statements, prepared in accordance with generally accepted accounting
principles; since the date of such statements, there have been no changes in Developer's
financial condition which would have a material adverse effect on Developer, or which
would prevent or impair Developer's ability to perform any covenants or obligations
under this Agreement.
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(f) Developer shall act in good faith and use its best efforts to obtain all
consents and approvals required for construction of the Improvements, and Developer
shall comply with all reasonable requirements imposed as conditions for such consents
and approvals even if such requirements involve changes to the Development Plans (so
long as such changes are not substantial).
The above representations and warranties are true and complete as of the date hereof, shall be
true and complete as of the Closing Date, and shall survive the Closing Date.
Section 2.3 Preliminary Activities. Promptly after the execution of this Agreement by
both Parties, the HRA, after consultation with Developer, shall prepare a work plan and
estimated budget for each of the following activities, and commence and proceed diligently to
complete such activities on or before December 28, 1998, subject to the HRA's legal rightto do
so:
(a)
Property;
Obtain appraisals of each of the separate parcels in the Development
(b) Obtain (after court proceedings under Minn. Stat. Sec. 117.041 if
necessary) Phase I and Phase II environmental reports on each of the separate parcels in
the Development Property, and deliver copies of such reports to Developer;
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(c) Prepare, after consultation with Developer, a remedial action plan for
remediation of any Hazardous Substances discovered on the Development Property as a
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
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result of the Phase I and Phase II reports, if the HRA reasonably determines that the
Minnesota Pollution Control Agency ("MPCA") is likely to require such a plan, and
deliver a copy of the plan to the MPCA and Developer, and also deliver a copy of any
responses from the MPCA to Developer;
(d) Retain a relocation consultant to begin work concerning the relocation of
current occupants of the Development property;
( e) Obtain and deliver to Developer a survey from a registered land surveyor
showing the Development Property to the nearest hundredth of a square foot, and also
showing all easements of record or in use, all roads and encroachments and any gaps.or
overlaps;
(f) Obtain after review and approval by Developer of the scope of the work, a
geotechnical soil analysis ofa reasonable sample of the Development Property, assuming
construction of a 220,000 square foot office building, and deliver a copy of the analysis
to Developer, together with a statement of the maximum amount to be reimbursed to
Developer for soil correction pursuant to Section 4.2;
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(g) Obtain and deliver to Developer a commitment for the issuance of an
owner's ALTA policy of title insurance with respect to the Development Property,
together with copies of any referenced documents, issued by an acceptable title insurance
company showing marketable title in the HRA subject only to the following:
1. Building, zoning and similar laws and ordinances;
11. Mineral rights reserved to the State of Minnesota;
111. Easements of record which will not interfere with Developer's
proposed development and use of the property;
IV. The lien of current real estate taxes, if any;
v. The rights of fee owners, lienors and encumbrancers which the
HRA shall terminate prior to the Closing Date;
vi. Other restrictions, if any, expressly agreed to by Developer,
including those restrictions and reversionary rights contained in this Agreement.
(h) Obtain City approval for construction of an offsite regional pond for
drainage and retention of stormwater from the Development Property, at no cost to
Developer.
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(i) Deliver the Development Plans to the HRA, which shall be consistent with
the Preliminary Plans, the previously delivered foundation plan and site plan, and
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
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Developer's obligations under this Agreement. The HRA shall promptly notify
Developer that the Development Plans are approved or not approved. The HRA' s
approval of the Development Plans shall not be unreasonably withheld or delayed.
Developer shall use its best efforts to obtain the HRA's approval of the Development
Plans by the Commitment Date.
The commitment shall include searches for bankruptcies; state and federal judgments; tax
and other liens; and for all special assessments, levied, pending (approved by the City Council),
or deferred. The commitment shall include full mechanic's lien coverage, shall delete any
exceptions for the rights of parties in possession and survey matters, and shall include copies of
all documents referred to therein. The cost and expense of the title commitment and the title
policy, based upon the Purchase Price only, shall be paid by the HRA. Any other title costs or
policies, including costs for extended coverages, shall be paid by Developer.
The cost of the preliminary activities shall be shared equally, with Developer's share paid
from the Deposit and the HRA' s share paid from its separate funds, except that the cost of the
geotechnical soil analysis shall be paid solely by Developer.
On or before January 7, 1999, (the "Commitment Date"), either Party may elect to
terminate this Agreement for any reason or no reason, and without liability to the other Party
except to the extent of any prior breaches or defaults under this Agreement by the terminating
Party. Such termination shall be effected by delivery of a written notice to the other Party in the
. manner provided in Section 11.4.
2.4 Foundation and Site Plans. On or before November 15, 1998, Developer shall
deliver to the HRA a foundation plan and site plan for the Improvements, which shall be
consistent with the Preliminary Plans and Developer's obligations under this Agreement.
ARTICLE III
Title and Other Matters
Section 3.1 Marketable Title. Developer shall be allowed 30 days after receipt ofthe
commitment described in Section 2.3(g) to make objections to the title insurance commitment,
such objections to be made in writing or deemed waived. The HRA shall use reasonable efforts
to cure any objections prior to the Closing Date by eliminating them as part ofthecondemnation
of the Development Property or in some other reasonable manner, or the HRA shall obtain the
agreement of the title insurance company prior to the Closing Date to insure over the objections.
If the HRA fails to complete either of those actions prior to the Closing Date, and Developer
does not waive such objections, then Developer shall have the right to terminate this Agreement
by giving written notice thereof to the HRA. The Closing Date shall be extended for a
reasonable period to the extent necessary for the HRA to cure the objections.
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
Section 3.2 Replatting and Rezoning. Prior to the Closing Date, the HRA shall replat
the Development Property into a new lot describe.4 as follows: Lot 1, Block 1, Golden Hills
West Fifth Addition. The replatting shall be reasonably consistent with the approved
Development Plans. The HRA shall consult with Developer regarding the final location of the
easements and replatting of the Development Property and shall give Developer's wishes due and
fair consideration prior to a final decision. Developer agrees to cooperate with such replatting
and to sign any new plat if necessary. The cost of the replatting shall be shared equally, with
Developer's share payable from the Deposit.
Promptly after the Commitment Date, Developer, at its sole cost and expense, shall apply
to the City for P.D.D. approval for the Project, and shall use its best efforts to obtain such
approval as soon as practicable.
Promptly after the Commitment Date, Developer shall apply for a rezoning of the
Development Property for commercial use which will permit an office building, hotel and
restaurant, and which may require a conditional use permit for a restaurant with liquor.
Section 3.3 Condemnation of the Development Property. Within 30 days after the
Commitment Date, the HRA shall commence acquisition of all of the Development Property by
negotiated purchase or quick-take condemnation. The HRA shall use reasonable efforts to
complete the acquisition of all of the Development Property without unreasonable delay or
expense. The HRA also agrees to relocate all existing tenants and occupants of any property
which is the subject of a condemnation proceeding, in accordance with Minnesota law. All
payments to affected property owners and occupants shall be the HRA's sole responsibility.
The HRA also agrees to demolish the buildings and other improvements on the
Development Property, at its sole cost and expense, prior to the Closing Date in accordance with
the specifications attached as Exhibit F.
Section 3.4 Environmental Matters. To the extent required by applicable law or
regulation, the HRA agrees to remediate any Hazardous Substances known to be on, in, or under
the Development Property on or before the Closing Date. In connection therewith, the HRA
shall comply with all plans, orders, regulations or requirements issued by the MPCA, or any
other regulatory agency with jurisdiction in the matter, concerning the presence of Hazardous
Substances known to be on, in, or under the Development Property on or before the Closing
Date. The cost of such remediation shall be shared equally, with Developer's share payable from
the Deposit. Except as provided hereby, Developer agrees that subsequent to the Closing Date it
shall comply, at its sole cost and expense, with all plans, orders, regulations or requirements
concerning the Development Property issued by the MPCA, or any other regulatory agency with
jurisdiction in the matter, except to the extent caused by the HRA's failure to comply with its
obligations under this paragraph.
Subject to the foregoing paragraph, the HRA makes no representation or warranty,
express or implied, concerning the presence on, in or under the Development Property of any
Hazardous Substances, and the HRA disclaims any and all liability and responsibility to
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
Developer in connection therewith. Such disclaimer shall not be construed to release or relieve
the HRA from liability or responsibility to any parties, private or public, other than Developer, in
connection therewith.
Section 3.5 Real Estate Taxes and Special Assessments. The HRA shall be
responsible for payment of all real estate taxes which become due and payable on any parcel in
the Development Property in the year of the filing of the condemnation petition (which petition
shall not be filed prior to January 2, 1999) with respect to such parcel; real estate taxes due and
payable on a parcel which is acquired by negotiated purchase shall be pro rated between the
parties on the date of Closing. The HRA shall pay in full all special assessments against the
Development Property which are levied or pending (approved by the City Council) as of the
Closing Date. Developer shall pay all other real estate taxes and special assessments.
Section 3.6 Deed. Upon tender to the HRA on the Closing Date of the Purchase Price
for the Development Property from Developer, the HRA shall deliver to Developer a limited
warranty deed for the Development Property in the form attached as Exhibit G (the "Deed").
The Deed shall be subject to the restrictions, reservations and encumbrances of record, if any
(except those to which Developer has objected), all building and zoning laws and ordinances and
all other local, state, and federal laws and regulations, the terms and conditions of this
Agreement, and such other encumbrances as the HRA and Developer shall mutually agree. The
Deed shall contain a forfeiture clause providing for revesting of title of the Development
Property in the HRA, subject to the rights of the Holder of a First Mortgage, upon the occurrence
ofan Event of Default (as defined in Section 10.1 hereof) and expiration of any period to cure
such Event of Default provided in Section 10.2 hereof prior to issuance of the Certificate of
Completion. The Purchase Price shall be due and payable in full at closing in cash, or by
cashier's or certified check. Delivery of the Deed shall not cause termination of any provisions
of this Agreement or the Assessment Agreement, except where expressly provided in such
agreements. Except as provided in Section 3.1, all costs of the conveyance of the Development
Property to Developer, including any and all fees and charges relating to such conveyance, and
filing or recording fees and any and all other taxes and charges payable in connection with such
conveyance, if any, shall be wholly borne by Developer, except for the State deed tax which shall
be paid by the HRA on the Closing Date, and except that the HRA shall pay its own attorneys'
fees. The HRA shall voluntarily take no actions to encumber title, or fail to take any action
necessary to prevent encumbrance of title, between the date hereof and date of delivery of the
Deed to Developer by the HRA pursuant to this Section.
Section 3.7 Recording. Developer shall cause the title insurance company to promptly
file the Agreement, the Deed, and the Assessment Agreement in the office of the Hennepin
County Recorder. Developer shall pay all costs of recording, except for the State deed tax which
shall be paid by the HRA on the Closing Date.
Section 3.8 Use. From the Closing Date through December 31, 2010, Developer shall
(a) operate and maintain the Improvements upon the Development Property in accordance with
the terms of this Agreement, the Plan and all local, state and federal laws and regulations, (b)
devote the Improved Parcel only to use as an office building as specified in this Agreement, or
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
such other uses as may be agreed to by the City and the HRA, and (c) not unlawfully
discriminate in the use of the Development Property on account of race, color, religion, sex, age,
national origin, or political affiliation. If the Plan is subsequently amended in a niaterial respect,
such amendment shall not bind Developer or the Development Property without Developer's
consent, which consent shall not be unreasonably withheld or delayed. To the extent that there
are any conflicts between this Agreement and the Plan, the provisions of this Agreement shall
govern, and the approval by the HRA of this Agreement shall constitute an amendment of the
Plan.
Section 3.9 Condemnation. In the event that title to and possession of the building
Improvements or any material part thereof shall be taken in condemnation or by the exercise of
the power of eminent domain by any governmental body or other person (except the HRA) after
the Closing Date but prior to December 31,' 20 1 0, Developer shall, with reasonable promptness
after such taking, notify the HRA as to the nature and extent of such taking. Upon receipt of any
condemnation award, subject to the rights of the Holder of a First Mortgage, Developer shall use
the entire condemnation award first to pay the reasonable costs and expenses of such taking,
including but not limited to reasonable attorneys' fees and appraisers' fees, and second to
. reconstruct the building Improvements to the extent practicable (or, in the event only a part of the
building Improvements have been taken, then to reconstruct such part) upon the Development
Property.
Section 3.10 Future Development. The Parties have discussed the construction of
additional improvements on the Development Property by Developer consisting of a hotel, a
restaurant, or an additional or expanded office building. Developer has been unable to complete
its plans for such additional improvements due to circumstances beyond its control, and the
Parties are not able to complete agreement on the construction of such additional improvements
at this time. The HRA agrees that it will consider, reasonably and in good faith, any future
proposal by Developer to construct additional improvements on the Development Property
consisting of a hotel, restaurant, or an additional or expanded office building, provided that such
proposal is consistent with the terms of this Agreement and the Plan.
Section 3.11. Guaranty. On the Commitment Date, Developer shall deliver to the HRA
an executed copy of the Guaranty attached as Exhibit G.
ARTICLE IV
Construction of Improvements
Section 4.1 Construction of ImlJrovements. Developer agrees that it will construct the
Improvements on the Development Property in substantial conformance with the approved
Development Plans for the Improvements and in conformance with all applicable legal
requirements. Developer agrees that the scope and scale of the Improvements to be constructed
shall not be significantly less than the scope and scale of the Improvements as detailed and
outlined in the Development Plans.
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
Section 4.2 Commencement an~ Completion of Construction. Promptly after the
Closing Date and completion of the demolition, Developer shall commence construction of the
Improvements. Developer shall diligently prosecute construction of the Improvements to
completion and shall complete construction of 67 percent of the Improvements, as a percentage
of market value, by January 1,2001, provided that if Closing does not occur by September 1,
1999, (but before the termination date of June 1, 2000) Developer shall be required to complete
only 20 percent ofthe Improvements by January 1, 2001. In any event, Developer shall
complete 100 percent of the Improvements by January 1,2002.
The times provided herein for commencement and completion of construction shall also
be extended to the extent of any Unavoidable Delays. All work with respect to the
Improvements to be constructed or provided by Developer on the Development Property shall be
in substantial conformity with the Development Plans as submitted by Developer and approved .
by the BRA, and in compliance with all applicable laws and regulations.
Upon issuance of the Certificate of Completion, the BRA shall reimburse Developer for
out-of-pocket costs and expenses actually incurred by Developer after the Closing Date for soil
correction on the Development Property reasonably required to permit construction of the
Improvements, and approved in advance by the BRA. All such expenses shall be documented by
invoices or other billing statements and are limited to the maximum amount determined pursuant
to Section 2.3(f).
Subsequent to execution of this Agreement, and until certification of the Improvements
pursuant to Section 4.3, Developer shall make reports to the BRA, in such detail and at such
times as may reasonably be requested by the BRA, as to the actual progress of Developer with
respect to construction of the Improvements. Developer also agrees that designated
representatives of the BRA may enter upon the Development Property during the construction of
the Improvements to inspect such construction.
Section 4.3 Certificate of Como let ion.
(a) Promptly after completion of the Improvements in accordance with the provisions ofthis
Agreement, the BRA will furnish Developer with a Certificate of Completion, in
substantially the form set forth in Exhibit C attached hereto. Such Certificate of
Completion shall be (and it shall be so provided in the Certificate of Completion itself) a
conclusive determination of satisfaction and termination of the agreements and
covenants in this Agreement with respect to the obligations of Developer to construct the
Improvements on the Development Property. The Certificate of Completion shall be in
recordable form.
(b)
If the BRA shall refuse or fail to provide a Certificate of Completion in accordance with
the provisions of this Section, the BRA shall, within ten (10) days after written request
by Developer, provide Developer with a written statement, indicating in adequate detail
in what respects Developer has failed to complete the Improvements in accordance with
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
the provisions of this Agreement, or is otherwise in default under the terms of this
Agreement, and what measures or acts will be necessary, in the opinion of the HRA, for
Developer to take or perform in order to obtain such Certificate of Completion.
Section 4.4 Deposit and Reimbursement ofHRA Expenses. Pursuant to a prior
Reimbursement Agreement between the HRA and Developer's predecessor which is hereby
terminated, Developer has deposited $25,000 with the HRA for the reimbursement of certain out-
of-pocket expenses incurred by the HRA in connection with the Project (the "Deposit").
Developer hereby contributes an additional $25,000 to the Deposit. The HRA shall treat the
Deposit as a separate account on its books, but the HRA may commingle the Deposit with its
other funds for purposes of investment and reinvestment. All interest earned on the Deposit shall
accrue to the HRA. The Deposit shall be applied by the HRA for the payment of out-of-pocket
expenses relating to this Agreement and paid or incurred by the HRA for appraisal, financial
analysis, environmental testing and consulting, environmental remediation, geotechnical testing.
and consulting, surveying, title, platting, legal fees and expenses, or relocation consulting
between April 1, 1998 and the earlier ofCa) the Closing Date, or (b) the date of termination of
this Agreement. The Parties agree to share such expenses equally. Developer's share of the
expenses will be paid from the Deposit, and the HRA' s share of the expenses will be paid from
its separate funds. Each time that the Deposit is reduced to $10,000, and the HRA has spent
from its own funds an amount equal to the amount spent from the Deposit, the HRA shall give
Developer written notice, and Developer shall immediately contribute an additional $25,000 to
the Deposit, subject to a maximum contribution by Developer to the Deposit pursuant to this
Agreement and the Reimbursement Agreement of$300,000. The HRA shall provide Developer
with a reasonably detailed itemization for any amounts spent from the Deposit. Developer shall
receive a credit against the Purchase Price on the Closing Date for any amount contributed by it
to the Deposit. If this Agreement is terminated prior to the Closing Date for any reason other
than a default by Developer, the HRA shall return to Developer any amount remaining in the
Deposit in excess of any Developer's share of accrued expenses remaining to be paid. If this
Agreement terminates prior to the Closing Date as the result of a default by Developer,
Developer shall forfeit its right to the return of any funds from the Deposit. The HRA's rights
under this Section 4.4 shall not limit any other remedy to which it is entitled under this
Agreement or at law or equity due to an Event of Default by Developer, except to the extent that
the HRA's damages are reduced by any amounts received under this Section 4.4.
Section 4.5 Completion Letter of Credit. On the Commitment date, Developer shall
deliver to the HRA, at Developer's sole cost and expense, an irrevocable letter of credit issued by
a bank previously approved by the HRA with a face amount equal to $3,400,000. Such letter of
credit shall provide for expiration on October 1, 1999. In the event Closing Date has not
occurred by September 1, 1999, Developer shall at that time provide the HRA with a
replacement letter of credit which shall extend at least 30 days beyond the Closing Date as
projected by the parties, or Developer shall be in default hereunder and the HRA may
immediately draw upon the letter of credit then in effect. At the Closing; Developer shall deliver
to the HRA, at Developer's sole cost and expense, an irrevocable letter of credit issued by a bank
previously approved by the HRA with a face amount equal to $1,700,000, and which shall extend
for a period of at least one year. Upon delivery at Closing by Developer of the $1,700,000 letter
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
of credit, the HRA shall surrender to Developer the $3,400,000 letter of credit. The amount of
the $1,700,000 letter of credit may be reduced by $567,000 upon Developer's delivery to the
HRA of a certified statement by the contractor stating that one-third of the Improvements have
been completed together with executed lien waivers or other receipts of payment, and may
subsequently be reduced by an additional $567,000 upon Developer's delivery to the HRA ofa
certified statement by the contractor stating that two-thirds of the Improvements have been
completed, together with executed lien waivers or other receipts of payment.
At least 30 days prior to the expiration of any letter of credit provided under this Section,
Developer shall provide the HRA with a replacement letter of credit which shall extend at least
one year beyond the expiration date of the letter of credit then in effect or, if earlier, until a date
which is 60 days beyond the contractor's written estimated date for completion of the
Improvements, or Developer shall be in default hereunder with no opportunity to cure and the
HRA may immediately draw upon the letter of credit then in effect. Any letter of credit
delivered under this Section shall guarantee completion of the Improvements by Developer in
accordance with the Development Plans, and in accordance with Section 4.3. Any letter of credit
provided under this Section shall permit the HRA to draw upon it for the full face amount
thereof, upon the occurrence of an Event of Default as defined in Section 10.1 of this Agreement
(but only after the expiration of any period to cure such Event of Default provided in Section
10.2), or immediately in the event Developer fails to comply with any obligations stated in this
Section with respect to replacement letters of credit. Developer's obligation to maintain a letter
of credit under this Section shall terminate upon issuance of the Certificate of Completion to
Developer. The letters of credit provided by Developer under this Section shall be returned in
the event Developer terminates this Agreement pursuant to Section 12.1. The HRA' s righ,ts with
respect to the letters of credit provided under this Section shall not limit any other remedy to
which it is entitled under this Agreement or at law or equity, except as the HRA's damages are
reduced by its recovery under the letters of credit.
If the amount of the letter of credit is paid to the HRA upon an Event of Default by
Developer, the HRA agrees to pay to Developer any amount by which the amount paid to the
HRA exceeds the HRA's total unreimbursed and recovered costs, expenses, fees, taxes, charges,
and damages related in any way to the Development Property or the Project, as determined by
the HRA in its reasonable discretion.
ARTICLE V
Assessment Agreement and Payment of Taxes
Section 5.1 Execution of Assessment Agreement. Developer agrees to execute upon
the Closing Date and deliver to the HRA an Assessment Agreement for the Development
Property, pursuant to the provisions of Minnesota Statutes, Section 469.177, Subdivision 8,
specifying the Assessor's Minimum Market Value which shall be assessed upon the
Development Property and the Improvements thereon for calculation of real estate taxes pursuant
to Minnesota Statutes, Section 272.01, or any successor statute. The Assessment Agreement
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
shall be in the form of Exhibit H. Specifically, Developer shall agree that the. Development
Property and the Improvements thereon with respect to which any real estate taxes, or taxes in
lieu thereof which are levied or assessed and payable by Developer, shall be assessed to be of a
market value of $ 14,740,000 as of January 1,2001 (or $4,400,000 if Closing does not occur by
September 1, 1999 but on or before the termination date of June 1, 2000), and a market value of
$22,000,000 as of January 1, 2002, and as of each January I thereafter, for taxes payable through
December 31, 2010, increased on January 1,2002 and each January 1 thereafter by $100.00 for
each square foot of building improvements in excess of 220,000 square feet, and decreased on
such dates by the fair market value of any portion of the building improvements taken in
condemnation or by the power of eminent domain for which reconstruction is impracticable as
provided in Section 3.9, and by Developer's cost for any portion of the unimproved Improved
Parcel taken in condemnation or by the power of eminent domain. In the event the Development
Property is subdivided by Developer into separate lots in connection with the construction of
other improvements, the Assessment Agreement shall continue to apply to the lot on which the
Improvements are situated, and to none of the other lots.
Section 5.2 Payment of Taxes. Assessments. Etc. Following the Closing Date,
Developer agrees to payor cause to be paid, on or prior to their due dates, all real estate taxes,
assessments, water, sewer and other charges, which become due and payable on or before
December 31, 2010 with respect to the Development Property or any part thereof. Developer
agrees that this obligation creates a contractual right on behalf of the HRA which shall allow the
HRA to sue Developer to collect delinquent real estate taxes and any penalty or interest thereon
and to pay over the same to the County.
Developer may, at its expense, in its own name and in good faith, contest any such taxes,
assessments and other charges; provided, however, that the rights of Developer to seek
administrative or judicial review of the application of, or any detennination made pursuant to,
any tax statute relating to the taxation of real property contained on the Development Property
shall be strictly subject to the restrictions contained in the Assessment Agreement.
ARTICLE VI
Insurance
Section 6.1
Insurance.
(a) Developer shall provide and maintain, or cause to be maintained, at all times
during the process of constructing the Improvements, at its sole cost and expense, and,
from time to time at the request of the HRA, furnish the HRA with proof of payment of
premIUms on:
i. Builder's risk insurance, written on the so.called "Builder's Risk
Completed Value Basis", in an amount equal to one hundred percent (100%) of
the insurable value or one hundred percent (100%) of the full replacement cost of
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
.
the Improvements at the date of completion, with a deductible amount of not more
than $25,000, and with coverage available in nonreporting form on the so-called
"all risk" form of policy;
ii. Comprehensive general liability insurance (including operations,
contingent liability, operations of subcontractors, completed operations and
contractual liability insurance) together with an Owner's and Contractor's
Protective Policy with limits against bodily injury and property damage of not less
than $5,000,000 for each occurrence (to accomplish the above-required limits, an
umbrella excess liability policy may be used). The interest of the HRA shall be
protected in accordance with a clause in form and content satisfactory to the
HRA; and
111. Worker's compensation insurance, with statutory coverage.
The policies of insurance required pursuant to clauses (i) and (ii) above shall be in
form and substance reasonably satisfactory to the HRA and shall be placed with
financially sound and reputable insurers licensed to transact business in the State. The
policy of insurance required pursuant to clause (i) above shall contain an agreement of the
insurer to give not less than thirty (30) days' advance written notice to the HRA and
Developer in the event of cancellation of such policy or change affecting the coverage
thereunder.
.
(b) Upon completion of construction of the Improvements and prior to
December 31, 2010, Developer shall maintain, or cause to be maintained, at its sole cost
and expense, and from time to time at the request of the HRA shall furnish proof of the
payment of premiums on insurance as follows:
i. Insurance against loss and/or damage to the Improvements under a
policy or policies covering such risks as are ordinarily insured against by similar
businesses, including (without limiting the generality of the foregoing) fire,
extended coverage, vandalism and malicious mischief, explosion, water damage,
demolition cost, debris removal, and collapse in an amount not less than 90
percent of the full replacement cost of the Improvements, but any such policy may
have a deductible amount of not more than $25,000. No policy of insurance shall
be written so that the proceeds thereof will produce less than the minimum
coverage required by the preceding sentence, by reason of co-insurance provisions
or otherwise, without the prior consent thereto in writing by the HRA. The term
"full insurable replacement value" shall mean the actual replacement cost of the
Improvements (excluding foundation and excavation costs and other uninsurable
items) and equipment.
.
ii. Comprehensive general public liability insurance, including
personal injury liability for injuries to persons and/or property, including any
injuries resulting from the operation of automobiles or other motorized vehicles
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
.
on or about the Development Property, in the minimum amount for each
occurrence of $5,000,000.
lll. Worker's compensation insurance respecting all employees of
Developer in amounts not less than the minimum required by statute.
(c) All insurance required in this Article VI shall be taken out and maintained
in responsible insurance companies selected by Developer which are authorized under the
laws of the State to assume the risks covered thereby. At the first time that any insurance
is required to be in effect hereunder, Developer will deposit with the HRA a certificate or
certificates or binders of the respective insurers evidencing that such insurance is in force
and effect. Unless otherwise provided in this Article VI, each policy shall contain a
provision that the insurer shall not cancel or modify it without giving written notice to
Developer and the HRA at least thirty (30) days before the cancellation or modification
becomes effective. Upon the HRAts request, Developer shall furnish the HRA evidence
satisfactory to the HRA that any policy required hereunder is in effect. In lieu of separate
policies, Developer may maintain a single policy, or blanket or umbrella policies, or a
combination thereof, which provide the total coverage required herein, in which event
Developer shall deposit with the HRA a certificate or certificates of the respective
insurers as to the amount of coverage in force upon the Improvements.
.
(d) In the event the Improvements or any portion thereof is destroyed by fire
or other casualty, then Developer shall within 180 days after such damage or destruction,
commence to repair, reconstruct and restore the damaged Improvements to substantially
the same or improved condition or utility value as they existed prior to the event causing
such damage or destruction and, to the extent necessary to accomplish such repair,
reconstruction and restoration, Developer shall, subject to the rights of the Holder of a
First Mortgage, apply the Net Proceeds of any insurance relating to such damage or
destruction to the payment or reimbursement of the costs thereof. Developershall
complete the repair and reconstruction of the Improvements, whether or not the Net
Proceeds of insurance received by Developer for such purposes are sufficient to pay for
the same. Any Net Proceeds remaining after completion of construction shall be
disbursed to Developer, subject to the rights of the Holder of the First Mortgage. The
HRA agrees to subordinate its rights under this paragraph to the Holder of a First
Mortgage, but only to the extent of amounts owing to the Holder under the First
Mortgage.
ARTICLE VII
Undertakings of the HRA
.
Section 7.1 Sale of Development Property. As consideration for the purchase of the
Development Property and construction of the Improvements by Developer, the HRA agrees to
complete, subject to the provisions of Section 7.2 below, the following actions:
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
(a) Use reasonable efforts to acquire the Development Property for sale to
Developer pursuant to the Deed on the Closing Date;
(b) Use reasonable efforts with the City to cause the vacation of the city
Rights of Ways and objectionable easements;
(c) Use reasonable efforts with the City so that the Improvements may
constitute a permitted use under the zoning ordinance of the City;
(d) Use reasonable efforts with the City so that Developer is not required to
construct a stormwater retention pond on the Development Property; and
( e) Any other actions required pursuant to an express provision of this
Agreement, including remediation of Hazardous Substances and demolition of existing
improvements.
Section 7.2 Limitations on Financial Undertakings of the HRA. The provisions of
Section 7.1 of this Agreement notwithstanding, the HRA shall have no obligation to Developer
under this Agreement to take any action provided for in this Agreement except upon existence of
the following conditions:
(a)
Developer has satisfied all conditions precedent under this Agreement;
(b) No Event of Default has occurred and is then continuing beyond the cure
period provided in Section 10.2;
(c) The HRA and Developer have received all necessary approvals from the
City, the County Assessor and other authorities to implement this Agreement; and
(d) The HRA is not the subject of any court or administrative proceeding
seeking to enjoin or otherwise prevent the HRA from taking any action under this
Agreement.
The Parties agree that the failure of the Closing to occur due to any of the above reasons
shall not constitute an event of default by the HRA.
Section 7.3 HRA to Maintain Existence. The HRA covenants and agrees that it shall
at all times do or cause to be done all things within its statutory powers necessary to preserve and
keep in full force and effect its existence, or to assure the assumption of its obligations under this
Agreement and the Development Agreement by any public body succeeding to its powers.
Section 7.4 HRA's Option to Terminate. (a) This Agreement may be terminated by
the HRA by written notice to Developer if the HRA is in compliance with all material terms of
this Agreement and Closing has not occurred by June 1,2000. Termination of this Agreement
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
pursuant to this Section 7.4 shall not affect the rights of the HRA to institute any action, claim or
demand for damages suffered as a result of breach or default ofthe terms of this Agreement by
Developer.
ARTICLE VIII
Mortgage Financing
Section 8.1 Approval of Mortgage. Any First Mortgage on the Development Property
prior to issuance of the Certificate of Completion shall require the prior written approval of the
HRA's Director. Developer may rely upon any approval granted hereunder by the HRA's
Director without additional action by the HRA. Approval shall not be unreasonably withheld or
delayed, and shall be given if:
(a) the HRA's Director first receives a copy of all mortgage documents; and
(b) the HRA's Director determines that the terms of the First Mortgage
conform and are subject to the terms of this Agreement, except to the extent the HRA
agrees to subordinate its interest to the terms of the First Mortgage.
The Holder of the First Mortgage on the Development Property (or any nominee or agent
controlled by the Holder) shall not be obligated to undertake or continue construction or
completion of the Improvements while in possession of the Development Property pursuant to
the foreclosure, or pursuant to conveyance by Developer to the Holder in lieu of foreclosure,
except upon express assumption of such obligation as provided in Section 8.3, provided that
nothing in this Section or in any other section of this Agreement shall be deemed or construed to
permit any Holder to devote the Development Property or any portion thereof to any use, or to
construct any improvement, other than those uses or improvements permitted by this Agreement.
Further, any party who obtains any interest in all or any portion of the Development Property
from or through any Holder, except for any nominee or agent controlled by the Holder, whether
through foreclosure sale or otherwise, shall be strictly subject to theterms and conditions of this
Agreement, as such are binding on Developer, and such party shall not be entitled to any
additional rights or privileges granted a Holder hereunder.
Section 8.2 Notice of Default Copv to Mortgagee. Whenever the HRA shall deliver
any notice or demand to Developer with respect to any breach or default by Developer in its
obligations or covenants under this Agreement, the HRA shall at the same time forward a copy
of such notice or demand to each known Holder of any First Mortgage at the last address of such
Holder shown in the records of the HRA.
Section 8.3 Mortgagee's Option to Cure Defaults. After any breach or default referred
to in Section 8.2 hereof, each such Holder shall (insofar as the rights of the HRA are concerned
and subject to any rights of the Mortgagor under such Mortgage) have the right, at its option, for
a period of 90 days after notice of such default pursuant to Section 8.2 hereof, to cure or remedy
such breach or default and to add the cost thereof to the Mortgage debt and the lien of its
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
Mortgage. If a default is not susceptible of cure within such 90-day period, the Holder shall have
such period of time as is necessary to cure such default provided the Holder promptly
commences the cure and thereafter proceeds to cure such default as soon as reasonably possible
and provided such failure to cure within 90 days does not jeopardize the purposes of the
Agreement or the Plan. However, if the breach or default is with respect to construction of the
Improvements on the Development Property, nothing contained in this Section or any other
Section of this Agreement shall be deemed to permit or authorize such Holder, either before or
after foreclosure or action in lieu thereof, to undertake or continue the construction or completion
of the Improvements (beyond the extent necessary to conserve or protect Improvements or
construction already made) for more than 90 days after the Holder has received notice of such
default pursuant to Section 8.2 hereof, without first having expressly assumed the obligation to
the HRA, by written agreement reasonably satisfactory to the HRA, to complete, in the manner
provided in this Agreement and in conformance with the Development Plans, the Improvements
on the Development Property. If the Holder enters into an agreement assuming the obligations of
Developer under the Agreement, such agreement shall provide that all obligations of the Holder
thereunder shall terminate at such time as the Agreement is assigned by the Holder in accordance
with the provisions of Section 9.1 of the Agreement or in accordance with the following
paragraph. Any Holder who shall properly complete the Improvements relating to the
Development Property shall be entitled, upon written request made to the HRA, to a certification
by the HRA to such effect in the manner provided in Section 4.3 of this Agreement.
In addition to the assignments permitted pursuant to Section 9.1 of the Agreement, if the
Holder of a First Mortgage acquires the interest of Developer under the terms of the Agreement,
the Holder shall be permitted to assign its interest in the Agreement with the consent of HRA,
which consent shall not be unreasonably withheld or delayed. In exercising its judgment as to
whether or not to grant such consent, the HRA shall take into account only the financial
condition and experience of the proposed assignee and its capacity to perform the obligations
remaining to be performed under the Agreement at the time of such assignment; provided that,
after the Certificate of Completion has been issued, the experience of the proposed assignee shall
no longer be a factor considered by the HRA as to whether or not grant such consent. In
addition, the Holder may assign its interest at any time without the consent of the HRA to a
person with a verifiable net worth in excess of $5,000,000. Any such assignee shall agree in
writing with the HRA, for itself and its successors and assigns, to be bound by the terms and
conditions of the Agreement, the Deed, the Assessment Agreement, and the Plan, and not to
transfer, mortgage or otherwise convey any portion of the Development Property except as
permitted in the Agreement.
Section 8.4 HRA's Option to Cure Default on Mortgage. Any Mortgage executed by
Developer with respect to the Development Property, or any improvements thereon, shall provide
that, in the event that Developer is in default under any Mortgage authorized pursuant to this
Article VIII, the mortgagee, within ten (10) days after it has declared or given notice to
Developer of a default, shall notify the HRA in writing of:
(a)
the fact of the default;
-19-
Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
.
(b)
the elements of the default; and
(c)
the actions required to cure the default.
The HRA shall have the right to cure any such default which occurs prior to issuance of
the Certificate of Completion. The HRA shall have a period of 35 days after notice from a
Holder to effect a cure, provided that the HRA gives Developer advance written notice of its
intent to cure. In the event of such cure prior to the issuance of the Certificate of Completion, the
HRA shall thereupon be entitled, in addition to and without limitation upon any other rights or
remedies to which it may be entitled, to reimbursement from Developer or any successor or
assignee of any costs and expenses incurred by the HRA in curing such default. Interest shall
accrue on any amounts due the HRA under this paragraph at the reference rate of interest then in
effect at U.S. Bank Minneapolis until such amounts are paid, and such amounts shall result in the
creation of a lien on the Development Property in favor of the HRA, subordinate to the lien of
any First Mortgage.
.
Section 8.5 Subordinate Liens. Until the Certificate of Completion has been issued,
Developer agrees that it will not create, incur, assume or suffer any security interest, mortgage,
pledge, lien, charge, or encumbrance upon the Development Property except for a First Mortgage
permitted under this Article. Developer may, at its own expense, in its own name and in good
faith, contest any involuntary lien, charge or encumbrance and not be in default hereunder
provided Developer first posts a bond or provides other security to the HRA or to the Holder, or
to an agent of the Holder, including, without limitation, a title insurance company, which the
HRA reasonably determines is adequate to protect the interest ofthe HRA.
ARTICLE IX
Restrictions on Transfer: Indemnification
Section 9.1 Restrictions on Transfer. Until the Certificate of Completion has been
issued by the HRA, this Agreement and Developer's interest in the Development Property (or any
part thereof) may not be sold, transferred or assigned by Developer without the prior written
consent of the HRA, which consent may be granted or withheld by the HRA in its sole
discretion.
.
After the Certificate of Completion has been issued by the HRA, but prior to December
31,2010, this Agreement and Developer's interest in the Development Property (or any part
thereof) may be sold, transferred or assigned by Developer, provided that the purchaser, as of the
date of such transfer, is reasonably determined by the HRA to be of sufficient financial
condition, experience, and reputation to perform fully under this Agreement and the Assessment
Agreement, and the purchaser first agrees in writing with the HRA, for itself, its heirs,
representatives, successors and assigns, to be bound by the terms and conditions of this
Agreement, the Deed, the Assessment Agreement, and the Plan, and not to sell, transfer,
mortgage or otherwise assign any portion of the Development Property except as permitted
herein. After the Certificate of Completion has been issued by the HRA, but prior to December
-20-
.
.
.
Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
31, 2010, this Agreement and Developer's interest in the Development Property (or any part
thereof) also may be assigned without the consent of the HRA to a person or entity with a
verifiable net worth in excess of $5,000,000. In either event, Developer shall be released from
any future obligation or liability hereunder to the extent of the interest purchased. After the
Certificate of Completion for a Lot has been issued by the HRA, but prior to December 31, 2010,
this Agreement and Developer's interest in the Development Property (or any part thereof) may
be sold, transferred or conveyed by Developer free of the foregoing conditions, but, in such
event, Developer shall remain primarily liable for performance of the terms and conditions of
this Agreement and the Assessment Agreement for the remainder of their respective terms.
_The Parties agree that the terms and conditions hereof run with the land and shall be
binding upon their successors and assigns. The Parties also agree that nothing contained in this
Section 9.1 shall prohibit the leasing of the Improvements by Developer, and nothing contained
in this Section 9.1 shall prohibit the sale, transfer or assignment by Developer of the
Development Property (or any part thereof) to a general partnership, limited partnership or
limited liability partnership in which Developer has at least a 51 percent interest as a general
partner.
Section 9.2 Indemnification. Developer hereby agrees to indemnify, defend and hold
harmless the HRA, and its officials, employees and agents, against any and all claims, demands,
lawsuits, judgments, damages, penalties, costs and expenses, including reasonable attorneys'
fees, arising out of any actions or omissions by Developer, its employees and agents, in
connection with the Project, except to the extent of any bad faith or intentional misconduct by the
HRA or other person seeking indemnification. This provision shall continue for seven years
after the termination of this Agreement, or indefinitely for any matter as to which the HRA has
given Developer notice within seven years after termination of this Agreement.
ARTICLE X
Events of Default
Section 10.1 Events of Default Defined. The following shall be "Events of Default"
under this Agreement and the term "Event of Default" shall mean, whenever it is used in this
Agreement, anyone or more of the following events:
(a) Failure by Developer to pay the Purchase Price or otherwise perform its
obligations on the Closing Date.
(b) After the Closing Date and until December 31, 20 I 0, failure by Developer
to timely pay all real property taxes, assessments or other charges assessed with respect to
the Development Property.
-21-
Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
.
(c) Subject to Unavoidable Delays, and extensions agreed to by the Parties,
failure by Developer to commence and complete construction of the Improvements
pursuant to the terms, conditions and limitations of Article IV of this Agreement.
(d) Until December 31,2010, failure by Developer to observe or perform any
material covenant, condition, obligation or agreement on its part to be observed or
performed under this Agreement.
(e) Until the Certificate of Completion has been issued, filing by Developer in
any court, pursuant to any federal or State statute, of a petition in bankruptcy or
insolvency, or for reorganization, or for the appointment of a receiver or trustee of all or a
portion of Developer's property, or an assignment by Developer for the benefit of
creditors.
(f) Until the Certificate of Completion has been issued, filing against
Developer in any court, pursuant to any federal or State statute, of a petition in
bankruptcy or insolvency, or for reorganization, or for appointment of a receiver or
trustee of all or a portion of Developer's properties, if such proceeding is not dismissed
within 90 days after commencement thereof.
.
(g) Until the Certificate of Completion has been issued, commencement by
the Holder of any First Mortgage of foreclosure in the event of a default in any of the
terms or conditions of the First Mortgage.
(h) Until the Certificate of Completion has been issued, any merger,
consolidation, liquidation, reorganization or transfer of all or substantially all of
Developer's assets.
Section 10.2 Remedies on Default. Whenever any Event of Default occurs, the HRA,
subject to any rights of the Holder of a First Mortgage which has been approved by the HRA
pursuant to Section 8.1 of this Agreement, may take anyone or more of the following actions
(but only if the HRA is not then in default and only after provision of 60 days' written notice
which sets forth the nature of the default to Developer in the case of an Event of Default under
Section lO.1(a), (b), (c), or (d), and then only if such an Event of Default has not been cured
within said 60 days or, if such an Event of Default cannot be cured within 60 days, Developer
does not provide assurances to the HRA reasonably satisfactory to the HRA that such an Event of
Default will be cured as soon as reasonably possible and that it will not jeopardize the purposes
ofthis Agreement and of the Plan):
(a) The HRA may suspend its performance under this Agreement until it
receives assurances from Developer, deemed adequate by the HRA, that Developer will
cure its default and continue its performance under this Agreement.
.
(b) If the Event of Default occurs prior to the Closing Date, the HRA may
cancel and rescind this Agreement.
-22-
Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
.
(c) Ifthe Event of Default occurs after Closing Date but prior to issuance of
the Certificate of Completion, the HRA may reenter and take possession of the
Development Property, revest title to the Development Property in the HRA, and exclude
Developer from possession. The HRA shall thereupon use reasonable efforts and act in
good faith to sell the Development Property at the best price reasonably obtainable
(provided such sale is permitted by applicable law) and as soon as reasonably possible,
such sale to be on such terms and conditions as the HRA deems reasonable and
appropriate to satisfy the provisions of the Plan. The HRA shall apply the proceeds of
such sale first to reimburse the HRA for all costs, expenses, fees, charges and damages
incurred by the HRA with respect to the Development Property (less any amount received
by the HRA from any security provided by Developer and less the Purchase Price
received by the HRA from Developer) including but not limited to acquisition costs,
remediation costs, taxes, assessments, utility charges, payments made to discharge any
encumbrances or liens, reasonable attorney's fees and expenses; second to the Holder of a
First Mortgage to the extent of the unpaid mortgage with respect to the Development
Property; third to reimburse Developer in an amount equal to the Purchase Price with
respect to the Development Property, plus the amount of any security paid by Developer
to the HRA, plus other reasonable. acquisition and construction costs incurred by
Developer in connection with the Project including architects' and engineers' expenses
with respect to the Development Property; and the balance to be retained by the HRA.
.
(d) The HRA may initiate such action, including legal or administrative
action, as is necessary for the HRA to secure performance of any provision of this
Agreement or recover any amounts due under this Agreement from Developer or under
the Escrow Agreement or any other security provided by Developer.
(e) Sue for damages, including delinquent taxes levied against the
Development Property, and lost future tax increments, provided that any damages shall be
reduced to the extent of any amount recovered by the HRA under any security provided
by Developer.
Section 10.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to
the HRA is intended to be exclusive of any other available remedy or remedies, but each and
every such remedy shall be cumulative and shall be in addition to every other remedy given
under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or
omission to exercise any right or power accruing upon any default shall impair any such right or
power or shall be construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient.
Section lOA No Additional Waiver Implied by One Waiver. In the event any
agreement contained in this Agreement should be breached by any Party and thereafter waived
by any other Party, such waiver shall be limited to the particular breach so waived and shall not
. be deemed to waive any other concurrent, previous or subsequent breach hereunder.
-23-
.
.
.
Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
ARTICLE XI
Additional Provisions
Section 11.1 Equal Em?lovment Opportunity. Developer agrees that during the
construction of the Project neither it nor any of the contractors will unlawfully discriminate
against any employee or applicant for employment because of race, color, religion, sex, age,
national origin, or political affiliation.
Section 11.2 Not for Speculation. Developer's purchase ofthe Development Property,
and its undertakings pursuant to this Agreement, are and will be used for the sole and express
purpose of redevelopment of the Development Property and not for speculation in land holdings.
Section 11.3 Titles of Articles and Sections. Any titles of the several parts, Articles and
Sections of this Agreement are inserted for convenience of reference only and shall be
disregarded in construing or interpreting any of its provisions.
Section 11.4 Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand or other communication under the Agreement by either party to the
other shall be sufficiently given or delivered if it is in writing dispatched by registered or
certified mail, postage prepaid, return receipt requested, or delivered personally; and,
(a) in the case of Developer, is addressed to or delivered personally to
Developer at 1550 Utica Avenue South, Suite 120, Minneapolis, Minnesota 55416, Attn.
Regional Vice President, with copies to David C. Sellergren, Doherty, Rumble & Butler,
3500 Fifth Street Towers, 150 South Fifth Street, Minneapolis, Minnesota 55402;
(b) in the case of the HRA, is addressed to or delivered personally to the HRA
to Housing and Redevelopment Authority In and For the City of Golden Valley, 7800
Golden Valley Road, Golden Valley, Minnesota 55428, Attention: Director, with copies
to Allen D. Barnard, Best & Flanagan, 4000 First Bank. Place, 601 Second Avenue South,
Minneapolis, Minnesota 55402-4331.
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 11.5 Counter:parts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section 11.6 Modification. If the HRA is requested by the Holder of a First Mortgage
or by a prospective Holder of a prospective First Mortgage to amend or supplement this
Agreement, or to subordinate its interest therein, the HRA will, in good faith, consider the
request with a view to granting the same, provided that such request is consistent with the terms
and conditions of the Plan.
-24-
.
.
.
Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
Section 11.7 Interpretation and Amendment. This Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota. This Agreement constitutes the
entire agreement of the Parties on the subject matter hereof, superseding any prior oral or written
agreements. This Agreement can be modified only by a writing signed by both Parties.
Section 11.8 Severability. In the event any provision of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate
or render unenforceable any other provisions hereof.
Section 11.9 Duration. This Agreement shall be effective as of the date hereof and shall
continue in full force and effect until December 31, 2010. This Agreement shall survive the
Closing Date and the HRA's delivery of any Deed to Developer.
Section 11.10 Binding Effect. Subject to the provisions of Article IX, this Agreement is
binding upon, and shall inure to the benefit of, the successors and permitted assigns of the
Parties.
Section 11.11 Consents. Any consent or approval required of a Party under this
Agreement shall not be unreasonably withheld or delayed.
Section 11.12 Certificates. Upon reasonable request from time to time, the HRA shall
execute and deliver written certificates to parties designated by Developer concerning whether
this Agreement is in effect, whether any defaults exist under this Agreement and other similar
matters.
ARTICLE XII
Termination of Agreement
Section 12.1 Developer's Options to Terminate. In addition to any other rights to
terminate contained in this Agreement, this Agreement may be terminated by Developer by
written notice to the HRA if Developer is in compliance with all material terms of this
Agreement and no Event of Default by Developer is then existing; and
(a) Subject to Section 7.2, the HRA fails to comply with any material term of
this Agreement, and, after written notice by Developer of such failure, the HRA hasfailed
to cure such non-compliance within 60 days of receipt of such notice, or, if such
non-compliance cannot reasonably be cured by the HRA within 60 days, the HRA has
not, within 60 days of receipt of such notice, provided assurances, reasonably satisfactory
to Developer, that such non-compliance will be cured as soon as reasonably possible;
(b)
Closing has not occurred by June 1, 2000, unless extended by the Parties;
-25-
.
.
.
Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
(c) If Developer's title objections are not waived by Developer or cured by the
HRA pursuant to Section 3.1;
(d) Subject to Section 2.2(f), if Developer does not receive prior to the
Closing Date all approvals and consents from governmental authorities which are
reasonably required for construction and use of the Improvements; or
(e) Subject to Section 3.2, if Developer fails to obtain rezoning of the
Development Property.
In the event of a default by the HRA prior to the Closing Date which is caused by the
HRA's failure to pay any amount which it is required to pay under this Agreement, Developer, in
lieu of terminating this Agreement, may pay such amount on behalf of the HRA and reduce the
Purchase Price.
Section 12.2 Effect of Termination. Except as provided in Sections 4.4 and 9.2, if this
Agreement is terminated pursuant to this Article XII, this Agreement shall be from such date
. forward null and void and of no further effect; provided, however, that termination of this
Agreement pursuant to this Article XII shall not affect the rights of Developer to institute any
action, claim or demand for damages suffered as a result of breach or default of the terms ofthis
Agreement by the HRA.
-26-
.
.
.
Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
IN WITNESS WHEREOF, the HRA has caused this Agreement to be duly executed in its
name and behalf and its seal to be hereunto duly affixed and Developer has caused this
Agreement to be duly executed in its name and behalf, on or as of the date first above written.
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF GOLDEN
V ALLEY
By
Its
And
Its
DUKE REALTY LIMITED PARTNERSHIP, BY DUKE
REAL TY INVESTMENTS, INC., ITS GENERAL
PARTNER
By~t"
:dl~~' &~
I~~e\\~~ c;=-~-'~<~~:r'
-27-
Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
.
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
Sal . The foregoing instrument was acknowledged before me thiJ (tf.y ofOtfl6ft, 1998, by
Ol1,,-LJ~hosDl1, ('JlOtV' ,and Uj,[I,om). Sottl'J ~;'(2cf7)V- ,of
THE HOUSING AND REDEVELOPMENT AUTHORI Y IN AND FOR THE CITY OF
GOLDEN V ALLEY, on behalf of the organization.
QptLCJ-'
.
JUDITH A. NALLY ,
HOTARYPUBUO-IIINNE1Oa
HENNEPIN COUNlY
My Com.I", ExpI....... 11. 2OCO
.
w
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
. (J 'd The foregoing instrum~t was acknowledged before me thi~iday ofar~, 1998, by
;W, If. 'J;,,//''rfJr, and H.f/~ r ;:=:'/IT, . respectively the U't::e A,s.!.., /~. 11,,.. hl'll~f.I..
and IJgygl'l'~r s..'1 hP.1~Wuke Realty Investments, Inc., the general partner o(Duke
Realty Limited P ership, on behalf of the limited partnership.
Notary Public
.
DRAFTED BY:
.
AlLEN D. BARNARD I
NCnMY PUIUC-M1NNEaoTA
HENNEPIN COUNTY
My CaluII.... ExpIr.. Jan. 31, 2llOO
..
Best & Flanagan LLP
4000 U.S. Bank Building
601 Second Avenue South
Minneapolis, Minnesota 55402-4331
11800\960703\ccb\docs\DukeRealty PrivateDevelpmentAgr.doc
.
-28-
Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
.
EXHIBIT A
LEGAL DESCRIPTION
PROPOSED PROPERT'f DESCRIPTION
.
.
That part of Government Lots 3, 4, 5 and 6, Section 4,
Township I 17, Range 21, Hennepin County, Minnesota lying
southeasterly of the easterly right of way line of the Soo Line
Railroad. and lying northerly of a line 33.00 feet southerly of
and paralle! with the East-West Quarter line of said Section 4
and lying westerly and southerly of a line described os
commencing at the East Quarter Corner of said Section 4;
thence South 87 degrees 36 minutes 43 seconds West,
assumed bearing. along said Quarter line of Section 4, a
distance of 620.69 feet; thence South 2 degrees 23 minutes
17 seconds East 0 distance of 33.00 feet to said line lying
33.00 feet sou therly of and parallel with the East-West
Quarter line of Section 4 and the point of beginning of the
line to be described; thence North 2 degrees 23 minutes 17
seconds West a distance of 33.00 feet; thence North 10
degrees I I minutes 41 seconds West a distance of 197.95
feet; thence North 2 I degrees 57 minutes 5\ seconds West 0
distance of 95.97 feet; thence northerly a distance of 285.33
feet, along a tangen tial curve concave to the east having a
radius of 862.43 feet and a centrol angle of 18 degrees 57
minutes 21 seccnds; thence North 3 degrees 00 minutes 30
seconds West. tange.-, t to said curve. a distance of 17.84
feet; thence westerly a. distance of 46.82 feet, along a
tangential curve concave to the southwest having a radius of
30.00 feet and a centrel angle of 89 degrees 24 minutes 51
seconds; thence South 87 degrees 34 minutes 39 seconds
West. tangent to last described curve, a distanCe of 274.22
feet; thence North 86 degrees 35 minutes 21 seconds West a
distance of 98.39 feet; thence South 87 degrees 34 minutes
39 seconds West a distance of 244.14 feet to said easterly
right of way line af the 500 line Ra::road and said line there
terminating.
.
Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
EXHIBIT B.
. SKETCH OF REDEVELOPMENT PROPERTY
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e- GOLDEN HILLS REDEVELOPMENT CENTRAL AREA
----
~-=-:= DEVELOPMENT PROPERTY
.
.
.
Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
EXHIBIT C
CERTIFICATE OF COMPLETION
THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY
OF GOLDEN V ALLEY, a public body corporate (the "HRA"), and DUKE REALTY LIMITED
PARTNERSHIP, an Indiana limited partnership ("Developer"), previously entered into the Duke
Realty Private Development Agreement (the "Agreement"), recorded in the Office of the County
Recorder in and for the County of Hennepin and State of Minnesota, as Document Number
, for the following described property:
Lot 1, Block 1, Golden Hills West Fifth Addition, Hennepin County, according to the
recorded plat thereof.
The Agreement contains certain covenants which, if not performed by Developer, or its
. successors and assigns, would result in a forfeiture and right of re-entry by the HRA, its
successors and assigns. As of the date hereof, Developer has performed all of such covenants
contained in the Agreement to the satisfaction of the HRA, including the covenants in Article IV
of the Agreement requiring completion of the construction of the improvements.
NOW, THEREFORE, it is hereby certified that all of the covenants in the
Agreement, including the covenants in Article IV requiring completion of the construction ofthe
improvements, have been duly and fully performed by Developer as of the date hereof and that
the provisions for forfeiture of title and right to re-entry by the HRA for breach of such
covenants, and the escrow agreement securing performance thereof, are hereby released
absolutely and forever insofar as they apply to the property described above. The County
Recorder in and for the County of Hennepin and State of Minnesota is hereby authorized to
accept for recording and to record the filing of this instrument. This instrument shall be
conclusive determination of the satisfactory termination of the covenants of Article IV of the
Agreement requiring completion of the construction ofthe improvements. Notwithstanding the
foregoing, the remaining covenants contained in the Agreement remain in full force and effect.
C-l
.
.
.
Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF GOLDEN
V ALLEY
By:
Its:
And:
Its:
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _ day of , 19 --' by
and , respectively the and
of The Housing and Redevelopment Authority in and for the City of Golden Valley, on behalf of
the Authority.
Notary Public
THIS INSTRUMENT WAS DRAFTED BY:
Best & Flanagan LLP
4000 U.S. Bank Place
601 Second Avenue South
Minneapolis, Minnesota 55402-4331
C-2
.
.
~__L___-----------------------
GOLDEN HILLS DRIVE
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EDWARD FARR
ARCHITECTS INC
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Auaust 5. 1998
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Resolution 98-9 - Continued
EXIBmt3tJ B
October 13, 1998
PRELIMINARY PLANS
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Resolution 98-9 - Continued
EfRffiilfTIP
October 13, 1998
PRELIMINARY PLANS
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
EXHIBIT E
DEMOLITION SPECIFICATIONS
The professional wrecking by a licensed contractor of any buildings, structures, tanks or
manmade objects. It consists of the removal of all hazardous/toxic waste materials from site
(other than materials in the soil or groundwater) to a licensed landfill area (licensed in the
disposal of toxic waste materials) prior to demolition work.
All work shall be complete and include the capping or removal of existing utilities, except
those to be relocated, and the wrecking and removal of all footings, foundations, floor slabs,
subsurface tanks, buried utility lines sized in excess of 6" in diameter, steps, stoops, private
sidewalks, site lighting poles, driveways and provide for a clean compacted (95% Proctor
Density) granular type fill in all excavations resulting from demolition.
All piping, heating plants, fuel storage tanks, appliances and other debris shall be removed
from site to a licensed landfill area.
All work shall be performed in conjunction with State, City and/or local ordinances and
reasonable restrictions.
E-l
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
EXHIBIT F
LIMITED WARRANTY DEED
FOR V ALUABLE CONSIDERATION, THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY, a public body corporate
created pursuant to Minnesota Statutes, Section 469.001 et seq. ("Grantor"), hereby grants,
bargains and conveys to Duke Realty Limited Partnership, an Indiana limited partnership
("Grantee"), real property in Hennepin County, Minnesota, described as follows (the "Property"):
Lot 1, Block 1, Golden Hills West Fifth Addition, Hennepin County, according to the
recorded plat thereof.
together with all hereditaments and appurtenances belonging thereto. Grantor, for itself and its
successors and' assigns, hereby covenants with Grantee, and its successors and assigns that it has
,not made, done, executed, or suffered any act or thing whatsoever whereby the Property, or any
part thereof, now or at any time hereafter, shall or may be imperiled, charged or encumbered in
any manner whatsoever, except for any covenants, conditions, or restrictions contained in the
Golden Hills Redevelopment Plan adopted by Grantor in 1984, as amended (the "Plan"), and any
covenants, conditions, or restrictions contained in the Duke Realty Private Development
Agreement dated , 1998, between Grantor and Grantee or Grantee's assignor (the
" Agreement").
Provided:
1. It is understood and agreed that this Deed is subject to the restrictions,
reservations and encumbrances of record, if any, all building and zoning laws and ordinances, all
other local, state and federal laws and regulations, and the covenants, conditions, restrictions and
provisions of the Agreement. It is also understood and agreed that, prior to December 31, 2010,
Grantee shall not sell, transfer, mortgage or otherwise convey the Property, or any part thereof or
interest therein, except as permitted by the Agreement.
Grantee hereby covenants and agrees to begin and diligently prosecute to completion the
development of the Property at such times and as otherwise provided in the Agreement.
Promptly after completion of the Improvements (as defined in the Agreement) in accordance
with the Agreement, Grantor will furnish Grantee with a Certificate of Completion, as provided
in the Agreement, which shall be the conclusive determination of satisfaction and termination of
the agreements and covenants in and pursuant to the Agreement with respect to the obligations of
Grantee to construct the Improvements, and the dates for the commencement and completion
thereof.
2. If an "Event of Default" by Grantee, as defined in Section 10.1 of the Agreement,
which is not cured within the period provided in Section 10.2 of the Agreement, exists prior to
F-l
Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
. the recording of the Certificate of Completion, then Grantor shall have all of the rights and
remedies specified in Section 10.2 of the Agreement.
3. Grantee hereby agrees to do the following:
(a) Maintain insurance of such types and amounts as specified in Article VI of
the Agreement;
(b) Pay all real estate taxes and special assessments on the Property when due
and not seek or cause a reduction in such taxes, except as permitted under
the Agreement;
(c) Devote the Property to only such uses as are permitted under the
Agreement.
The parties agree that the covenants contained in this Section shall terminate on
December 31, 2010.
4. There shall be no discrimination in the use of the Property by Grantee on account
of race, color, religion, sex, age, national origin, or political affiliation during the period that the
Plan remains in effect.
.
The parties agree that all of the covenants and restrictions contained in this Deed shall be
binding upon Grantee, its successors and assigns, for the maximum benefit of Grantor, its
successors and assigns, and shall also be deemed to run with the land.
IN WIlNESS WHEREOF, Grantor has caused this Deed to be duly executed on its
behalf by its duly authorized representatives this _ day of , 19_.
.
F-2
Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
.
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF GOLDEN
V ALLEY
By:
Gloria Johnson
Its Chair
1
By:
William S. Joynes
Its Director
'EOFMINNESOTA )
) SS.
\JTY OF HENNEPIN )
'he ~going instrument was acknowledged before me this _ day of , 19-, by
a J.on and William S. Joynes, respectively the Chair and Director of The Housing and
velopment Authority in and for the City of Golden Valley, on behalf of the Authority.
Notary Public
; INSTRUMENT WAS DRAFTED BY:
& Flanagan LLP
U.S. Bank Place
)econd Avenue South
leapolis, Minnesota 55402-4331
\960703\ccb\docs\DukeRealtyPrivateDevelopmentAgr.doc
.
F-3
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
EXHIBIT G
GUARANTY
FOR VALUABLE CONSIDERATION, and to induce THE HOUSING AND
REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN V ALLEY (the
"HRA") to extend credit and other accommodations to Duke Realty Limited Partnership, an
Indiana limited partnership ("Developer"), Duke Realty Investments, Inc., an Indiana corporation
("Guarantor"), hereby guarantees to the HRA the full and prompt performance, when due, of all
covenants, agreements, and obligations of Developer under the Duke Realty Private
Development Agreement dated as . 1998 (the "Development
Agreement"), and the Assessment Agreement related thereto (the "Assessment Agreement").
This Guaranty is absolute, unconditional, continuing and irrevocable. This Guaranty is
effective upon deliver to the HRA without acceptance by the HRA and without any further act or
condition.
Guarantor waives notice, demand and opportunity to cure any default by Developer, and
any and all defenses, claims and setoffs of Developer. The liability of Guarantor hereunder shall
not be affected by any extensions, renewals, modifications, waivers, or releases granted to
Developer, or by any other act or thing other than performance in full by Developer under the
Development Agreement and the Assessment Agreement.
Guarantor shall payor reimburse the HRA for all costs and expenses (including reasonable
attorneys' fees and expenses) incurred by the HRA in enforcement of this Guaranty. Guarantor
shall not exercise or enforce any right of payment, reimbursement or subrogation available to it
against Developer during any period in which there is a default under the Development
Agreement or the Assessment Agreement.
This Guaranty shall be binding upon Guarantor and its successors and assigns and shall
inure to the benefit of the HRA and its successors and assigns. This Guaranty may not be
waived, modified, terminated or otherwise changed except by a writing signed by the HRA.
This Guaranty shall be governed by the laws of the State of Minnesota. Any dispute or
claim arising under this Guaranty shall be venued exclusively in Minnesota District Court,
Hennepin County, and Guarantor hereby consents to the jurisdiction of such court for all such
matters. Guarantor also agrees that process may be served on Guarantor by service on any
officer of Developer, in addition to any other method permitted by law.
This Guaranty shall terminate at such time as the Certificate of Completion has been
issued as provided in Section 4.3 of the Development Agreement.
Guarantor represents and warrants that it owns a controlling interest in the Developer.
G-l
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.
Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
IN WITNESS WHEREOF, Guarantor has caused the execution of this Guaranty this
day of . 19_"
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
DUKE REALTY INVESTMENTS, INC.
By
Its
Onthis_dayof , 19_, a of Duke
Realty Investments, Inc. personally appeared before me and acknowledged that he executed the
foregoing instrument on behalf of the corporation.
Notary Public
G-2
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
EXHIBIT H
ASSESSMENT AGREEMENT
FOR VALUABLE CONSIDERATION, The Housing and Redevelopment Authority in
and for the City of Golden Valley, Minnesota, a public body corporate established pursuant to
Minnesota Statutes, Section 469.001 et sea. (the "HRA"), and Duke Realty Limited Partnership,
an Indiana limited partnership (the "Developer"), hereby covenant and agree that the following
described property: Lot 1, Block 1, Golden Hills West Fifth Addition, Hennepin County,
Minnesota (the "Development Property"), and the improvements to be made thereto pursuant to
the Duke Realty Private Development Agreement between the parties dated as of
, 1998, (the "Improved Parcel"), with respect to which any real estate
taxes, or taxes in lieu thereof which are levied or assessed and payable by the Developer, shall be
assessed to be ofa market value of $14,740,000 as of January 1,2001 (or $4,400,000 if Closing
does not occur by September 1, 1999 but on or before the termination date of June 1, 2000), and
a market value of $22,000,000 as of January 1, 2002, and as of each January 1 thereafter, for
taxes payable through December 31,2010, increased on January 1,2002 and each January 1
thereafter by $100.00 for each square foot of building improvements in excess of220,000 square
feet, and decreased for all years by the fair market value of any portion of the building
improvements taken in condemnation or by the power of eminent domain for which
reconstruction is impracticable as provided in Section 3.9 of the Private Development
Agreement, and by the Developer's cost for any portion of the unimproved Improved Parcel
taken in condemnation or by the power of eminent domain (the "Assessor's Minimum Market
Value").
Commencing with taxes payable in the 2002 and thereafter during the term of this
Assessment Agreement, the Developer shall not seek a reduction of the market value of the
Improved Parcel for property tax purposes below the Assessor's Minimum Market Value stated
above, regardless of actual market values which may result from incomplete construction of
improvements to the Improved Parcel, or from destruction or diminution thereof by any cause,
insured or uninsured, except in the case of acquisition or reacquisition of any portion of the
Improved Parcel by a public entity.
Upon execution by the parties, this Assessment Agreement shall be presented to the
Hennepin County Assessor, or to the Golden Valley City Assessor having the powers of the
County Assessor, if any, pursuant to Minnesota Statutes, Section 469.177, Subd. 8, as hereafter
amended. If this Assessment Agreement is approved and certified by such Assessor in the form
of attached Exhibit H-l, this Assessment Agreement shall be filed in the office of the Hennepin
County Recorder or in the office of the Hennepin County Registrar of Titles upon transfer of title
of the Development Property from the HRA to the Developer.
H-l
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
The parties hereby covenant and agree that the obligations imposed hereunder shall be the
personal obligations of the parties and shall also be deemed with respect to the Development
Property to be covenants and restrictions running with the land, and shall constitute burdens and
benefits to the HRA and the Developer, their successors, assigns, grantees and all other parties
hereafter owning or holding any interest in the Development Property or any portions thereof.
This Assessment Agreement is effective as of the date hereofand shall remain in force
and effect until December 31, 2010.
IN WITNESS WHEREOF, the parties have caused the execution of this Assessment
Agreement as of this day of , 19
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
GOLDEN V ALLEY
By:
Its:
DUKE REALTY LIMITED PARTNERSHIP
BY DUKE REALTY INVESTMENTS, INC.,
ITS GENERAL PARTNER
By:
Its:
H-2
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
STATE OF MINNESOTA
)
) SS.
)
COUNTY OF HENNEPIN
The foregoing instrument was acknowledged before me this _ day of
,19_, by , the
of THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF
GOLDEN VALLEY, on behalf of the organization.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this_ day of
,19_, by , the
of Duke Realty Investments, Inc., the general partner of Duke Realty Limited Partnership, on
behalf of the limited partnership.
Notary Public
DRAFTED BY:
Best & Flanagan LLP
4000 U.S. Bank Place
601 Second Avenue South
Minneapolis, Minnesota 55402-4331
H-3
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Resolution 98-9 - Continued
EXHIBIT B
October 13, 1998
EXHIBIT H-l
ASSESSOR'S CERTIFICATION
The undersigned, being the duly qualified and acting Hennepin County Assessor, hereby
certifies that:
1. He is the assessor responsible for the assessment of the Development Property
described in the foregoing Assessment Agreement;
2. He has read the foregoing Assessment Agreement;
3. He has received and read a copy of the Private Development Agreement;
4. He has received and reviewed the architectural and engineering plans and
specifications for the improvements agreed to be constructed on the Development
Property by Duke Realty Limited Partnership pursuant to the Private
Development Agreement;
5.
He has reviewed the market value previously assigned to the Development
Property upon which such improvements are to be constructed; and
6.
The undersigned assessor, being legally responsible for the assessment of the
above-described Development Property upon completion of the improvements to
be constructed thereon, hereby certifies that the market value assigned to the
Improved Parcel (as defined in the Assessment Agreement) and the improvements
thereto upon completion shall not be less than the following: $14,740,000 as of
January 1,2001 (or $4,400,000 if Closing does not occur by September 1, 1999
but on or before the termination date of June 1, 2000), and a market value of
$22,000,000 as of January 1, 2002, and as of each January 1 thereafter, for taxes
payable through December 31, 2010, increased on January 1,2002 and each
January 1 thereafter by $100.00 for each square foot of building improvements in
excess of 220,000 square feet, and decreased for all years by the fair market value
of any portion of the improvements taken in condemnation or by the power of
eminent domain for which reconstruction is impracticable, and by the cost for any
unimproved portion of the Improved Parcel taken in condemnation or by the
power of eminent domain.
Dated:
, 19
Hennepin County Assessor
Hennepin County, Minnesota
H-4