99-14 HRA Resolution
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Resolution 99-14
November 29, 1999
Commissioner Micks introduced the following and moved its adoption:
RESOLUTION CONDITIONALLY APPROVING SALE OF
CERTAIN REAL PROPERTY IN THE
VALLEY SQUARE REDEVELOPMENT AREA - AREA B
(Brookstone-Vanman L.L.C.)
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 Valley Square Redevelopment
Plan; and
WHEREAS, the Valley Square Redevelopment Plan contemplates mixed
use development in Area B; and,
WHEREAS, Brookstone-Vanman L.L.C. (hereinafter referred to as
"Developer") has made a proposal for the construction of an office retail center of
approximately 38,000 sq. ft. in conjunction with others who are developing for-
sale and rental housing; 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 Valley Square Redevelopment Area; 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 S469.029, 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.i
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 S469.029;
2. The use of the Subject Property proposed by the Development
is reasonably within the overall guidelines of the Valley Square Redevelopment
Plan.
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Resolution 99-14 - Continued
November 29, 1999
3. The use value of the Subject Property is hereby established as
$4.00 per sq. ft.;
4. In consideration of the restrictions on the sale and use of the
Subject Property imposed by Minnesota Statute 9469.029 and the restrictions
imposed by the Valley Square Redevelopment Plan, sale of the Subject Property
to the developer at $4.00 per sq. ft. is appropriate.
BE IT FURTHER RESOLVED THAT subject to delivery by Developer to
the HRA Director on or before 4:30 PM on November 30, 1999 of the Letter of
Credit called for by Section 4.5 of the attached Redevelopment Agreement
(Exhibit C), then:
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 C 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.
4. If the delivery of such letter of credit is not made to the HRA
Director as required above, this approval, authorization and authority granted
hereby is null and void.
ATTEST:
Motion for the ado i n of the foregoing resolution was seconded by
Commissioner LeSuer; and upon a vote taken thereon, the following voted in
favor thereof: Anderson, Bakken, Johnson, Lesuer and Micks; and the following
voted against the same: none, 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 99-14 (Con't.)
EXHIBIT A
November 29,1999
NOTICE OF PUBLIC HEARING
(APPROVAL OF SALE OF CERTAIN REAL PROPERTY TO
THE ROTTLUND COMPANY, INC., BROOKSTONE-VANMAN, LLC,
ANDCOMMONBONDCOMMUNmES
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 Monday, November 29,
1999, at 7:00 PM and will then and there consider the sale and terms of sale of
the following described tract located in Golden Valley, Minnesota, to The
Rottlund Company, Inc., Brookstone-Vanman, LLC, and Common Bond
Communities for redevelopment pursuant to Minnesota Statutes Section
469.029. The legal description is as follows:
Lots 1 and 2, Block 1 and Lots 1 and 2, Block 3, Valley Square 3fd
Addition, Golden Valley, Hennepin County, Minnesota and Maren Lane
extending from the west right-of-way line of Winnetka Avenue to the east
right-of-way line of Golden Valley Road.
The proposal is to construct approximately 132 for-sale-housing units, an
officelretail building of approximately 36,000 sq. ft., and 25 rental housing units.
All interested parties may appear in person or by counsel and be heard.
BY THE HOUSING AND REDEVELOPMENT AUTHORITY
Isl William S. Joynes, HRA Director
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Resolution 99-14 (Con't.)
EXHIBIT B
November 29, 1999
EXHIBIT B
LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY
Lot 2:
Those parts of Lots 1 and 2, Block 3, VALLEY SQUARE 3RD ADDITION,
according to the recorded plat thereof, Hennepin County, Minnesota, and
vacated Maren Lane lying westerly of the southerly extension of the east line of
Lot 2, Block 1, said VALLEY SQUARE 3RD ADDITION, which lie southerly and
easterly of a line described as commencing at the southeast corner of said Lot 2,
Block 1; thence on an assumed bearing of South 1 degree 06 minutes 02
seconds East, along said southerly extension of the east line of Lot 2, Block 1, a
distance of 13.00 feet to the point of beginning of the line to be described; thence
South 88 degrees 53 minutes 58 seconds West a distance of 235.00 feet; thence
South 1 degree 06 minutes 02 seconds East a distance of 188.00 feet; thence
North 88 degrees 53 minutes 58 seconds East a distance of 19.00 feet; thence
South 1 degree 06 minutes 02 seconds East a distance of 149.36 feet to the
south line of said Lot 1 and said line there terminating.
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Resolution 99-14 (Con't.)
EXHIBIT C
November 29,1999
BROOKSTONE -v ANMAN. LLC PRIVATE DEVELOPMENT AGREEMENT
THIS AGREEMENT, effective as of , 1999, 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 BROOKSTONE-V ANMAN, LLC, a
Minnesota limited liability company with its principal office at 7400 Metro Boulevard, Suite
212, Edina, Minnesota 55439 ("Developer"). .
WHEREAS, the HRA and the City of Golden Valley (the "City") adopted the Valley
Square Redevelopment Plan on July 10, 1978, and have since made certain amendments thereto
(as amended, the "Plan"), for the purpose of redeveloping approximately 200 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, Developer has submitted to the BRA a proposal for the development of a
mixed office/retail facility with a minimum of 11,000 square feet of office space, 17,000 square
feet of retail space and 9000 square feet of lower level retail/production/storage space, plus a
parking deck (the "Project"), on a site in the Redevelopment Area owned by the BRA and
legally described in attached Exhibit A; and
WHEREAS, the Project is part of a master plan for the redevelopment of a larger area in
the Redevelopment Area which is referred to herein as Area B-1; and I
WHEREAS, the master plan also provides for the development by another developer of
58 urban townhomes and 74 stacked flats (condominiums) on the central and west portions of
Area B-1 and for the development of 25 units of affordable rental townhomes on the northeast
portion of Area B-1 by a third 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;
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 99-14 (Con't.)
ARTICLE I.
ARTICLE II.
ARTICLE III.
EXHIBIT C
November 29,1999
TABLE OF CONTENTS
Page
Definitions............................... .'...................... .................. ........ ............. 2
Section 1.1. Definitions........................................................................2
Representations and Warranties; Master Plan ...................................... 4
Section 2.1. Representations and Warranties by the HRA. ................. 4
Section 2.2. Representations and Warranties by Developer ................5
Section 2.3. Master Plan. .................... ..... ............... ..... .........................6
Title and Other Matters ......................................................................... 7
Section 3.1 Marketable Title. ......................................~........................ 7
Section 3.2 Survey....................... .................... ............. ............. .......... 7
Section 3.3. Geotechnical and Environmental Analysis. .................... 8
Section 3.4. Platting........................................... ........... .... ...... ............. 8
Section 3.5. P.U.D. Approval. ............................................................. 8
Section 3.6. Closing. ............. ............................................................... 8
Section 3.7. Recording. ................................................. ....................... 9
Section3.8. Real Estate Taxes and Special Assessments.................... 9
Section 3.9 . Use........................... ........... ........... ........ .......................... 9
Section 3.10. Condemnation. ............................................................... 9
Section 3.11. Guaranty................~........................................................ 9
ARTICLE IV. ConstructionofImprovements ........................................................... 10
Section 4.1. Construction ofImprovements. ..................................... 10
Section 4.2. Commencement and Completion of Construction......... 10
Section 4.3. Certificate of Completion. ............................................. 10
Section 4.4. Deposit and Reimbursement ofHRA Expenses. ........... 11
Section 4.5. Escrow Agreement and Letter of Credit.. ...................... 11
ARTICLE V. Assessment Agreement and Payment of Taxes .................................. 12
Section 5.1. Execution of Assessment Agreement. ........................... 12
Section 5.2. Payment of Taxes, Assessments, etc.............................. 12
ARTICLE VI. Insurance ................... .................. ........................................................ 13
Section 6.1. Insurance. ....................................................................... 13
ARTICLE VII. Undertakings of ~e HRA ....................................~.............................. 15
Section 7.1 Sale of Development Property. ....................................... 15
Section 7.2. Limitations on Financial Undertakings of the HRA. ..... 15
Section 7.3. HRA's Option to Terminate. .......................................... 16
ARTICLE VIII. Mortgage Financing ............................................................................ 16
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Resolution 99-14 (Con't.)
EXHIBIT C
November 29,1999
Section 8.1. Approval ofMortgage......................~............................. 16
Section 8.2. Notice of Default; Copy to Mortgagee. ......................... 16
Section 8.3. Mortgagee's Option to Cure Defaults. ........................... 16
Section 8.4. HRA's Option to CureDefault on Mortgage. ................ 17
Section 8.5. Subordinate Liens. ......................................................... 18
ARTICLE IX
Restrictions on Transfer; Indemnification ........................................... 18
Section 9.1. Restrictions on Transfer. ................................................ 18
Section 9.2. Indemnification.. ............................................................ 19
ARTICLE X.
Events of Default ..................~.......................................... ................... 19
Section 10.1 Events of Default Defined. ........................................... 19
Section 10.2. Remedies on Default. ................................................... 20
Section 10.3. No Remedy Exclusive.................................................. 21
Section 10.4. No Additional Waiver Implied by One Waiver.. .........21
ARTICLE XI.
Additional Provisions ................................. :............ ........ ............... .... 21
Section 11.1. Equal Employment Opportunity. ................................. 21
Section 11.2. Not for Speculation. ..................................................... 21
Section 11.3. Titles of Articles and Sections.. ................................... 21
Section 11.4. Notices and Demands., ................................................ 22
Section 11.5. Counterparts.. ...............................................................22
Section 116. Modification. ......................... ........................................ 22
Section 11.7. Interpretation and Amendment. ................................... 22
Section 11.8. Severability.. ................................................................ 22
Section 11.9. Duration.. ..................................................................... 22
Section 11.10. Binding Effect. ........................................................... 23
Section 11.11. Consents.. .............................................. ...,................. 23
Section 11.12. Certificates. ................................................................ 23
ARTICLE XU. Termination of Agreement.................................................................. 23
Section 12.1. Developer's Options to Terminate. ................j.~............ 23
Section 12.2. Effect of Termination................................................... 24
EXHIBITS
A. Legal Description of Development Property
B. Legal Description of Area B-1
C. Assessment Agreement
C-l. Assessor's Certification
D. Certificate of Completion
E. Development Plans
F. Lease
G. Master Plan
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Resolution 99-14 (Con't.)
EXHIBIT C
November 29, 1999
ARTICLE 1.
Definitions
Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears
from the context:
"Agreement" means this Brookstone-Vanman, LLC Private Development Agreement by
and between The Housing and Redevelopment Authority in and for the City of Golden Valley,
Minnesota, and Brookstone- V anman, LLC,a Minnesota limited liability company, as the same
may be from time to time modified, amended or supplemented.
"Area B-1" means the real property currently described in attached Exhibit B, and to be
replatted as Lots 1-9 and Outlot A, P.D.D. No. 86.
"Assessment Agreement" means the assessment agreement to be executed by the HRA
and Developer, and certified by the Assessor for Hennepin County, pursuant to the provisions
and requirements of Minnesota Statutes, Section 469.177, Subdivision 8, establishing the
Assessor's Minimum Market Value for the Improved Parcel, a copy of which is attached hereto
as Exhibit C.
"Assessor's Minimum Market Value" means the agreed minimum market value for
calculation of real estate taxes certified by the Assessor for Hennepin County for the Improved
Parcel pursuant to the Assessment Agreement.
"Certificate of Completion" means the certification in the form of the certificate
contained in Exhibit D 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 for
each separate lot in the Development Property.
"City" means the City of Golden Valley, Minnesota.
"Closing Date" or "Closing" means the date upon which the HRA conveys the
Development Property to Developer, which shall be after the Parties have obtained all necessary
permits, consents and approvals required for construction of the Improvements. The Parties
expect the Closing Date to be on or about April 15, 2000.
"County" means the County of Hennepin, Minnesota.
"Developer" means Brookstone-Vanman, LLC, a Minnesota limited liability company,
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 buildings, roads, driveways, walks, trails, parking and other improvements to be installed or
constructed upon the Development Property pursuant to this Agreement. Such plans shall
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Kesolutlon 99-14 (Con't.)
EXHIBIT C
November 29, 1999
include, at a minimum, for each building or other structure to be constructed on the Development
Property, at least the following: (i) site plan, (ii) floor plan for each floor, (iii) elevation,s (all
sides), (iv) exterior materials, and (v) landscape and drainage plan. The Development Plans are
attached as Exhibit E and are hereby approved. No changes, except those deemed minor by the
HRA Director, shall be made to the Development Plans without prior written approval by the
HRA.
"Development Property" means the real property currently described in attached Exhibit
A, to be replatted as Lot 2, P.D.D. No. 86, but excluding any existing improvements.
"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 a mixed office/retail facility with a minimum of 11,009 square
feet of office space, a minimum of 17,000 square feet of retail space, and a minimum 9f 9,000
square feet of lower level retail/production/storage space, plus a parking deck with a minimum of
147 parking spaces, plus all other improvements, including roads, driveways, walks, trails,
landscaping, 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, but not including tenant improvements.
"Lease" means the ground lease attached as Exhibit F which shall be executed by the
Parties at the Closing to convey the Development Property from the HRA to Developer.
"Loan Amount" means the sum of $4.00 per square foot for the Development Property.
"Master Plan" means the plan approved by the HRA for the redevelopment of Area B, a
copy of which is attached as Exhibit F.
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Resolution 99-14 (Con't.)
EXHIBIT C
November 29, 1999
"Net Proceeds" means any proceeds paid by an insurer to Developer, the Holder ofthe
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.
"~" means either the HRA or Developer.
"Plan" means the Valley Square Redevelopment Plan, adopted by the City and the HRA
on July 10, 1978, and as amended through the date hereof.
"Pro1ect" means the construction and operation of the Improvements by Developer on the
Development Property pursuant to the terms of this Agreement.
"Redevelopment Area" means the approximately 200 acres located in Golden Valley,
Minnesota that are subject to the Plan.
"State" means the State of Minnesota.
"Tax Increment District" means the Redevelopment Area.
"Tax Increment Financing Act" means the statutes located at Minnesota Statutes,
Sections 469.174 through 469.179, inclusive, as amended.
"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 Delays" means actual delays due to events directly affecting the Project
which are beyond the control of the Parties, including but not limited 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 of labor or
materials, injunctions, or other court or administrative orders.
ARTICLE II.
Representations and Warranties~ Master Plan
Section 2.1. Representations and Warranties by the HRA. TheHRA represents and
warrants that:
(a) The HRA has the power to enter into this Agreement and carry out its
obligations hereunder;
(b) The Redevelopment Area constitutes a Redevelopment Project pursuant to
Minnesota Statutes, Section 469.002, and a Tax Increment District pursuant to Minnesota
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Resolution 99-14 (Con't.)
EXHIBIT C
November 29,1999
Statutes, Section 469.042 and is an "existing project" pursuant to Minnesota Statutes,
Section 469.179;
(c) 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;
(d) The Project, as defined and described in this Agreement, is in
conformance with the Plan;
(e) The HRA is the fee owner of the Development Property;
(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
consents and approvals required for 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. Representations and Warranties by Developer. Developer represents and
warrants that:
(a) Developer is a newly-formed Minnesota limited liability company duly
organized and in good standing under the laws of the State. The Project will be its
primary activity.
(b) Developer is not in violation of any provisions in its organizational
documents, has power to enter into this Agreement and to perform its obligatiQns
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.
(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
organizational documents, or any indentl.!.re, 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
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EXHIBIT C
November 29,1999
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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_9bligations under this Agreement.
(e) The Guarantors identified in Section 3.12 have previously delivered to the
HRA's representatives copies of their current personal financial statements which are true
and complete.
(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.
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Section 2.3. Master Plan. The redevelopment of Area B-1 includes three separate
parts. In addition to Developer's Project, the HRA is currently negotiating a Private
Development Agreement with The Rottlund Company ("Rottlund") for the development of 58
urban townhomes on the west portion of Area B-1 and 74 stacked flats (condominiums) on the
central portion of Area B-1. The HRA is also currently negotiating a Private Development
Agreement with CommonBond Communities ("CommonBond") for the development of 25 units
of affordable rental townbomes on the northeast portion of Area B-1. Execution or performance
of such Private Development Agreements is not a precondition to the obligations under this
Agreement. The HRA expects that Rottlund's and Developer's projects will be developed first
and at the same time, and that CommonBond's project will be developed after completion of
Developer's project. The HRA also expects that some of the tenants in the buildings currently
on the Deve!opment Property may be relocated to the buildings currently on the CommonBond
parcel during construction ofthe Developer's project. All of Area B-1 shall be included in a
single, multi-party planned unit development, phased according to the construction schedules for
the three projects.
Attached as Exhibit G is the Master Plan for the redevelopment of Area B-1, prepared by
Rottlund, which addresses the following points: architecture, building materials, grading,
ponding, construction plan, scheduling, streets, utilities, parking, landscaping, treescaping, trails,
park amenities, maintenance of improvements and related items. The Master Plan also describes
the easements which shall be granted by the developers to each other and the City for ingress and
egress, utilities, drainage, parking, internal roads, and other matters. The Master Plan also states
the percentage of the cost to be paid by each developer for any improvements to adjoining public
roads, and to construct the approved pond, trails, and internal roads. The Master Plan is hereby
approved by the HRA, and shall be submitted to the City for its approval. After approval by the
City, the Master Plan shall automatically be incorporated herein and made a part hereof. The
Master Plan shall not be amended thereafter without the consent of Rottlund, the HRA, and the
City. Developer's construction and operation of the Improvements shall conform to the Master
Plan in all material respects while this Agreement remains in effect, except to the extent the
Master Plan conflicts with the terms of this Agreement or requirements of the City.
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Resolution 99-14 (Con't.)
EXHIBIT C
November 29,1999
ARTICLE III.
Title and Other Matters
Section 3.1. Marketable Title. Within 30 days after Developer's execution of this
Agreement, the HRA shall furnish Developer with a commitment for the issuance of an owner's
AL T A policy of title insurance with respect to the Development Property, issued by an
acceptable title insurance company, showing marketable title in the HRA subject only to the
following:
(a) Building, zoning and similar laws and ordinances;
(b) Mineral rights reserved to the State of Minnesota;
(c) Easements of record which will not interfere with Developer's proposed
development and use of the property;
(d) The lien of current real estate taxes, if any;
(e) The rights oflienors and encumbrancers which the.HRA shall terminate
prior to the Closing Date;
(f) Other restrictions, if any, expressly agreed to by Developer, including
those restrictions and reversionary rights contained in this Agreement.
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 from the Deposit pursuant
to Section 4.4. Any other title or policy costs, including the cost of any extended coverage, shall
be paid by Developer.
Developer shall be allowed 15 days from receipt of the commitment to make objections
thereto, 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, 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.
Section 3.2. Survev. . The HRA shall, within 60 days after the execution of this
Agreement, obtain from a registered land surveyor a boundary line survey showing the
Development Property to the nearest hundredth of a square foot, showing existing improvements
and utilities, and also showing all easements of record or in use, all roads and encroachments,
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Resolution 99-14 (Con't.)
EXHIBIT C
November 29,1999
and any gaps or overlaps. Developer agrees to reimburse the HRA for one-half of the cost of the
. survey at the Closing.
Section 3.3. Geotechnical and Environmental Analysis. The HRA has previously
delivered to Developer copies of all written reports and analyses in its possession concerning the
presence of Hazardous Substances known to be on, in, or under the Development Property. The
HRA has no actual knowledge of the existence of any Hazardous Substances on, in or under the
Development Property except as described in such reports and analyses. Pursuant to an Access
Agreement between the Parties, the HRAhas granted Developer access to the Development
Property to perform a reasonably complete geotechnical and environmental analysis of the
Development Property. Developer shall complete such analysis as soon as practicable. In the
event Developer reasonably determines, based upon the results .of the analysis, that construction
of the Improvements is not practicable without material additional cost due to existing soil or
groundwater conditions, or due to the presence of Hazardous Substances on the Development
Property, Developer shall have the option of terminating this Agreement pursuant to Section
12.1(d). Any such termination must occur within 30 days after the execution of this Agreement.
Except as provided in the prior paragraph, the HRA has no representation or warrahty
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
Developer in connection therewith.
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Section 3.4. Platting. Developer shall replat the Development Property as soon as
practicable with the following legal description: Lot 2, P.D.D. No. 86. Developer shan
complete any additional surveying or platting required by the City in order for Developer to
obtain P.D.D. approval from the City for construction of the Improvements. The completion of
platting by Developer shall be a condition of closing.
Section 3.5. P.D.D. Approval. Rottlund has applied to the City for P.D.D. approval for
a single multi-party P.D.D. for the three projects included in the redevelopment of Area B-1.
Developer, at its sole cost and expense, shall cooperate with Rottlund and use its best efforts to
obtain all required approvals as soon as practicable. The P.D.D. shall be phased according to the
construction schedules for the three projects. All three projects will be included in the
preliminary plan approval. Separate general plan approvals may be provided for each of the
projects, but the proposed schedule for all of the projects must be provided at the tim~ of general
plan approval for the first phase. Significant changes to any phase at the time of general plan
approval may require reconsideration of the preliminary plan approval.
Section 3.6. Closing. At the Closing, the HRA shall deliver the Lease to Developer
and the Parties shall execute the Assessment Agreement and any other documents or instruments
reasonably required to complete the Closing, including any easements described in the Master
Plan. Delivery of the Lease shall not cause termination of any provisions of this Agreement or
the Assessment Agreement, except where expressly provided in such agreements.
.
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. The HRA shall voluntarily take no actions to encumber title, or fail to take
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Resolution 99-14 (Con't.)
EXHIBIT C
November 29,1999
any action necessary to prevent encumbrance of title, between the date hereof and date of
delivery of the Lease to Developer by the HRA pursuant to this Section.
Section 3.7. Recording. Developer shall cause the title insurance company to promptly
file this Agreement, the Lease, the Assessment Agreement and any easements in the office of the
Hennepin County Recorder. Developer shall pay all costs of recording.
Section 3.8. Real Estate Taxes and Special Assessments. The HRA shall pay all real
estate taxes which are payable on the Development Property in years prior to the Closing Date.
The HRA shall also pay in full all special assessments which are levied, pending or deferred on
the Development Property as of the Closing Date. The Parties shall pro-rate real estate taxes
which are payable on the Development Property in the year of Closing. Developer shall pay all
other real estate taxes and special assessments which become payable on the Development
Property .
Section 3.9. 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 a mixed office/retail facility and parking deck and
related ancillary uses as specified in this Agreement, or 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 material 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 3.10. 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, 2010, 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. Any remaining condemnation award shall be used to prepay the Lease.
Section 3.11. Guaranty. Developer has delivered to the HRA on the date hereof a
separate Guaranty signed by each of Richard Martens, Cambridge Apartments, Inc., William
Johnson, Jack Holmes, Richard Keeler, and Carey Lyons, which guarantee all of Developer's
obligations under this Agreement, the Lease and the Assessment Agreement.
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ARTICLE IV.
Construction of Improvements
Section 4.1. Construction ofImprovements. 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.
Section 4.2. Commencement and Completion of Construction. Within 60 days after
the Closing Date, Developer shall commence construction of the Improvements. Developer shall
diligently prosecute construction of the Improvements to completion and shall complete
construction of 100 percent of the Improvements, as a percentage of market value, on or before
January 1,2001.
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 HRA, and in compliance with all applicable laws and regulations.
Subsequent to execution of this Agreement, and until certification of the Improvements
pursuant to Section 4.3, Developer shall make reports to the HRA, in such detail and at such
times as may reasonably be requested by the HRA, as to the actual progress of Developer with
respect to construction of the Improvements. Developer also agrees that designated
representatives of the HRA may enter upon the Development Property during the construction of
the Improvements to inspect such construction.
Upon issuance of the Certificate of Completion, the HRA shall reimburse Developer for
out-of-pocket costs and expenses actually incurred by Developer to construct the parking deck
described in the Improvements. All of such expenses shall be documented by invoices or other
billing statements and are limited to a maximum of $635,000.
The HRA shall facilitate the relocation of utilities described in the Master Plan~
Section 4.3. Certificate of Completion.
(a) Promptly after the City's issuance of a Certificate of Occupancy for the
Improvements, the HRA will furnish Developer with a Certificate of Completion, in
substantially the form set forth in Exhibit D 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.
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November 29,1999
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(b) If the HRA shall refuse or fail to provide the Certificate of Completion in
accordance with the provisions of this Section, the HRA 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 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 the Certificate of
Completion.
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Section 4.4. Deposit and Reimbursement of HRA Exoenses. Pursuant to a prior
Reimbursement Agreement between the Parties which is hereby terminated, Developer has
deposited $10,000 with the HRA for the reimbursement of certain out-of-pocket expenses
incurred by the HRA in connection with the Project (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 environmental and
geotechnical testing and consulting, financial analysis, title, and legal fees and expenses between
January 1, 1999 and the earlier of (a) the Closing Date, or (b) the date oftermination of this
Agreement. Each time that the amount of the Deposit is reduced to $2,000 or less, the HRA
shall give Developer written notice, and Developer shall immediately contribute an additional
$10,000 to the Deposit, subject to a maximum contribution by Developer to the Deposit of
$40,000. The HRA shall provide Developer with a reasonably detailed itemization for any
amounts spent from the Deposit; At the Closing, the HRA shall repay to Developer the total
amount of its prior contributions 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 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. Escrow Agreement and Letter of Credit. On the date hereof, the Parties
and U.S. Bank Trust National Association (the "Bank") have executed an Escrow Agreement
and Developer has deposited $260,000 with the Bank pursuant to the Escrow Agreement to
secure Developer's obligations under this Agreement. The HRA's rights with respect to the
Escrow.Agreement 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 its recovery under the Escrow Agreement.
.
At any time after the execution of this Agreement, Developer may deliver to the HRA, at
Developer's sole cost and expense, an irrevocable letter of credit in the amount of $260,000, in a
form and issued by a bank previously approved by the HRA, which shall secure all of
Developer's obligations under this Agreement. Upon delivery of the letter of credit, the escrow
agreement shall terminate and Developer shall be entitled to a return of any funds in the escrow.
Any letter of credit provided under this Section shall provide for expiration in not less than one
year. At least 30 days prior to the expiration of any letter of credit provided under this Section,
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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 4.2.
Any letter of credit provided under this Section shall permit the HRA to draw upon it for
the full face amount thereof in the Event of Default as defined in Section 10.01 hereof (but only
after the expiration of any period to cure provided in Section 10.2), or immediately in the event
Developer fails to comply with any obligation stated in this Section with respect to the
replacement letters of credit. Developer's obligation to maintain a letter of credit under this
Section shall terminate on issuance of the Certificate of Completion to Developer. Any letter of
credit provided under this Section shall be returned to Developer in the event Developer
terminates this Agreement pursuant to Section 12.1. The HRA's rights with respect to the letter
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 to the extent that theHRA's damages are reduced by
its recovery under the letter of credit.
ARTICLE V.
Assessment Agreement and Payment of Taxes
. Section 5.1. Execution of Assessment Agreement. Developer agrees, upon the Closing
Date, to execute 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 Improved
Parcel for calculation of real estate taxes pursuant to Minnesota Statutes, Section 272.01, or any
successor statute. The Assessment Agreement shall be in the form of Exhibit C. Specifically,
Developer shall agree that the land and all improvements thereto comprising the Improved Parcel
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 no less than $2,600,000
on January 2, 2001, and January 2 of every year thereafter until December 31,2010 (for taxes
payable in 2002 and subsequent years), decreased in 2001 and subsequent years by th~ fair
market value of any portion of the Improvements taken in condemnation or by the power of
eminent domain for which reconstruction is impracticable as provided in Section 3.11, and by the
fair market value for any portion of the unimproved Development Property taken in
condemnation or by the power of eminent domain.
. Section 5.2 Payment of Taxes. Assessments. Etc. Following the Closing Date,
Developer agrees to payor cause to be paid, on or before 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 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 determination made pursuant to,
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November 29,1999
any tax statute relating' to the taxation of real property contained on the Development Property
shall be strictly subject to the restrictions contained in this Agreement and 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 orone hundred percent (100%) of the full replacement cost of
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 $2,000,000 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
(iii) 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,
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November 29,1999
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
on or about the Development Property, in the minimum amount for each
occurrence of $2,000,000.
(iii) Worker's compensation insurance respecting all employees of
Developer in amounts not less than the minimum required by statute.
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EXHIBIT C
November 29,1999
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:
(a) Lease of the Development Property to Developer pursuant to the Lease on
the Closing Date;
(b) Vacate Maren Lane if necessary;
(c) Use reasonable efforts with the City so that the Improvements may
constitute a permitted use under the zoning ordinance of the City;
(d) Cooperate with the City and the State to obtain Livable Communities
funds for ponding in Area B-1; and
(e) Any other actions required pursuant to an express provision ofthis
Agreement.
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.
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EXHIBIT C
November 29,1999
Section 7.3. HRA's Option to Terminate. 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
pursuant to this Section 7.3 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 of the 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
HRAts Director. Developer may rely upon any approval granted hereunder by the HRAts
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 consistent with
Section 11.6.
. The Holder of the First Mortgage (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 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 the terms and conditions of this Agreement, as such are binding bn
Developer, and such party shall not be entitled to any additional rights or privileges granted a
Holder hereunder.
.
Section 8.2. Notice of Default: Copy 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
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such breach or default oand to add the cost thereof to the Mortgage debt and the lien of its
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, 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. 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 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, 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 VII, 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;
(b) the elements of the default; and
(c)
the actions required to cure the default.
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November 29,1999
The HRA shall have the right to cure any such default with which occurs prior to
issuance of the Certificate of Completion for the final unit. 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 of the 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 thereot) 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 BRA in its sole
discretion.
After the Certificate of Completion has been issued by the BRA, but prior to December
31,2010, this Agreement and Developer's interest in the Development Property (or any part
thereot) 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, the Lease and the
Assessment Agreement, and the purchaser first agrees in writing with the BRA, for himself, his
heirs, representatives, successors and assigns, to be bound by the terms and conditions of this
Agreement, the Lease, 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 BRA, but prior to December
31,2010, this Agreement and Developer's interest in the Development Property (or any part
thereot) also may be assigned without the consent of the HRA to a person with a verifiable net
worth in excess of $5,000,000. In either event, Developer shall be released from any obligation
or liability hereunder to the extent of the interest purchased. After the Certificate of Completion
has been issued by the BRA, but prior to December 31, 2010, this Agreement and Developer's
interest in the Development Property (or any part thereot) may be. sold, transferred or conveyed
by Developer free of the foregoing conditions, but, in such event, Developer shall remain
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EXHIBIT C
November 29,1999
primarily liable for pei'formance of the terms and conditions of this Agreement for the remainder
of its term.
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 subleasing of the Improvements by Developer to tenants.
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 wrongful actions or omissions by Developer, its employees and agents, in
connection with the Project, except to the extent of any bad faith, gross negligence or intentional
misconduct by the HRA or other person seeking indemnification. This provision shall continue
indefinitely after the 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 perform its obligations on the Closing Date.
(b) After the Closing Date and until December 31, 2010, failure by Developer
to timely pay all real property taxes, assessments or other charges assessed with respect
to the Development Property.
(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, the Lease or the Assessment 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.
19
Resolution 99-14 (Con't.)
EXHIBIT C
November 29,1999
.
(g) Until the Certificate of Completion for the final unit 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, unless Developer is the surviving entity in a merger.
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 10.1 (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 of this 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.
(c) The HRA may, at its option, declare all installments of rent payable under
the Lease for the remainder of the Lease term and the unamortized portion of the Loan
Amount payable under the option to purchase to be immediately due and payable by
Developer.
.
(d) If the Event of Default occurs after the Closing Date but prior to issuance
of the Certificate of Completion, the HRA may reenter and take possession of the portion
of the Development Property, revest title to that portion of the Development P~operty in
the HRA, and exclude Developer from possession of the Development Property. The
HRA shall thereupon use reasonable efforts and act in good faith to sell the De\velopment
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 amortized portion of the Loan Amount received by the HRA
from Developer) including but not limited to acquisition 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 amortized portion of the Loan Amount with respect to the
20
"esOIuuon ~~FI4 {l;On"t.)
EXHIBIT C
November 29, 1999
.
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. Prior to issuance
of the Certificate of Completion, Developer hereby waives any rights under Minnesota
Statutes, Section 504.02, or under any other statute, with respect to any right of
redemption in the event of termination of the Lease under this section.
(e) 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.
(f) Sue for damages, including delinquent taxes levied against the
Development Property, 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 10.4. 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.
ARTICLE XI.
Additional Provisions
Section 11.1. Equal Employment ODDortunity. 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 acquisition of the 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.
21
.
.
.
Resolution 99-14 (Can't.)
EXHIBIT C
November 29.1999
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 7400 Metro Boulevard, Suite 212, Edina, Minnesota 55439, Attention:
Richard V. Martens, Chief Manager, with copies to Howard Kauffman, One Financial
Plaza, Suite 2400, 120 South Sixth Street, Minneapolis, Minnesota 55402.
(b) in the case of the HRA,is addressed to or delivered personally to the BRA
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 LLP, 4000 U.S. 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. Counterparts. 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, the HRA shall agree to subordinate
its interest in the Development Property, this Agreement and the Lease (including its right to
receive rental payments under the Lease), provided the terms of any subordination agreement
conform to Article VIII of this Agreement.
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 shaH 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 HRAts delivery of the Lease and any Deed to Developer.
22
.
.
.
tc\eSOIUlIon l:1l:FI4 (l;On"t.)
EXHIBIT C
November 29,1999
Section 11.10. Binding Effect. Subject to the provisions of Article X, 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 BRA 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. Develol'er'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 BRA 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 BRA fails to comply with any material term of
this Agreement, and, after written notice by Developer of such failure, the BRA has
failed to cure such non-compliance within 60 days ofreceipt of such notice, or, if such
non-compliance cannot reasonably be cured by the BRA within 60 days, the BRA has
not, within 60 days of receipt of such notice, provided assurances, reasonably satisfactory
to Developer, that such non-compliance will be cured assoon as reasonably possible;
(b) Closing has not occurred by June 1, 2000, unless extended by the Parties;
(c) Subject to Section 2.2(f) and Section 2.3, 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;
(d) Subject to Section 3.3, if Developer reasonably determines that
completion of the Project is not feasible due to title defects or soil or environmental
conditions; or
( e) On or before January 31, 2000, if Developer has not received a firm
commitment for at least $3,300,000 of mortgage loan financing to construct the
Improvements.
In the event of a default by the BRA prior to the Closing Date which is caused by the
BRA'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
Loan Amount.
23
.
.
.
Resolution 99-14 (Con't.)
EXHIBIT C
November 29, 1999
Section 12.2. Effect of Termination. Except as provided in Sections 4.4,4.5 and 9.2, if
this Agreement is terminated pursuant to this Article XI, 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 XI 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 of this
Agreement by the HRA.
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
VALLEY
By
Its
And
Its
BROOKSTONE-V ANMAN, LLC
By
Its
And
Its
24
.
.
.
Resolution 99-14 (Con't.)
EXHIBIT C
November 29, 1999
STATE OF MINNESOTA )
) SS
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _ day of _, 1999, by,
, , and ,
of THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF
GOLDEN V ALLEY, on behalf of the organization.
Notary Public
ST ATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ----'- day of _, 1999, by
, , and , of
BROOKSTONE- V ANMAN, LLC, a Minnesota limited liability company, on behalf of the
organization.
Notary Public
DRAFTED BY:
Best & Flanagan LLP
4000 U.S. Bank Place
601 Second A venue South
Minneapolis, Minnesota 55402-4331
66872
25
.
.
.
Resolution 99-14 (Con't.)
EXHIBIT C
November 29.1999
EXHIBIT A
LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY
Lot 2:
Those parts of Lots 1 and 2, Block 3, V ALLEY SQUARE 3RD ADDITION, according
to the recorded plat thereof, Hennepin County, Minnesota, and vacated Maren Lane lying
westerly of the southerly extension of the east line of Lot 2, Block 1, said VALLEY
SQUARE 3RD ADDITION, which lie southerly and easterly of a line described as
commencing at the southeast comer of said Lot 2, Block 1; thence on an assumed bearing
of South 1 degree 06 minutes 02 seconds East, along said southerly extension of the east
line of Lot 2, Block 1, a distance of 13.00 feet to the point of beginning of the line to be
described; thence South 88 degrees 53 minutes 58 seconds West a distance of235.00
feet; thence South 1 degree 06 minutes 02 seconds East a distance of 188.00 feet; thence
North 88 degrees 53 minutes 58 seconds East a distance of 19.00 feet; thence South 1
degree 06 minutes 02 seconds East a distance of 149.36 feet to the south line of said Lot
1 and said line there terminating.
26
.
.
.
Resolution 99-14 (Con't.)
EXHIBIT C
November 29,1999
EXHIBIT B
LEGAL DESCRIPTION OF AREA B-1
Lots 1 and 2, Block 1, and Lots 1 and 2, Block 3, Valley Square 3rd Addition,
Golden Valley, Hennepin County, Minnesota and Maren Lane extending from the
west right-of-way line of Winnetka A venue to the east right-of-way line of
Golden Valley Road.
27
.
.
.
Resolution 99-14 (Con't.)
EXHIBIT C
November 29,1999
EXHIBIT C
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 seq. (the "HRA"), and Brookstone-Vanman, LLC (the
"Developer"), hereby covenant. and agree that the following described property:
(the "Development Property") and the improvements to be
made thereto pursuant to the Brookstone-Vanman, LLC Private Development Agreement
between the parties dated as of , 1999, (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 of a market value of not less than $2,600,000 on
January 2, 2001, and January 2 of every year thereafter until December 31,2010 (for taxes
payable in 2002 and subsequent years), decreased in 2001 and subsequent 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 as provided in Section 3.11 of the
Private Development Agreement, and by the fair market value 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 year2002 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 .ofthe
County Assessor, if any, pursuant to Minnesota Statutes, Section 469.177, Subd. 8, as1!hereafter
amended. If this Assessment Agreement is approved and certified by such Assessor i* the form
attached, this Assessment Agreement shall be filed in the office of the Hennepin Courity
Recorder or in the office of the Hennepin County Registrar of Titles.
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 hereof and shall remain in force
and effect.until December 31, 2010.
28
Resolution 99-14 (Con't)
--
EXHIBIT C
November 29,1999
IN WITNESS WHEREOF, the parties have caused the execution of this Assessment
. Agreement as of this _ day of , 1999.
.
.
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
GOLDEN V ALLEY
By:
Its:
BROOKSTONE- V ANMAN, LLC
By:
Its:
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 V ALLEY, 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 , and , of
Brookstone-Vanman, LLC, a Minnesota limited liability company, on behalf of the organization.
Notary Public
29
.
.
.
Resolution 99-14 (Can't.)
DRAFTED BY:
Best & Flanagan
4000 U.S. Bank Building
601. Second Avenue South
Minneapolis, Minnesota 55402-4331
EXHIBIT C
November 29,1999
30
.
.
.
Resolution 99-14 (Can't.)
EXHIBIT C
November 29, 1999
EXHIBIT C-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 Brookstone- Vanman, LLC 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 $2,600,000 on January 2, 2001, and
January 2 of every year thereafter until December 31, 2010 (for taxes payable in
2002 and subsequent years), decreased in 2001 and subsequent 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 as provided in
Section 3.11 of the Private Development Agreement, and by the fair market value
for any portion of the unimproved Improved Parcel taken in condemnation or by
the power of eminent domain.
Dated: .19_
Hennepin County Assessor
Hennepin County, Minnesota
31
.
.
.
Resolution 99-14 (Con't.)
EXHIBIT C
November 29,1999
EXHIBIT D
CERTIFICATE OF COMPLETION
THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY
OF GOLDEN V ALLEY, a public body corporate (the "HRA"), and Brookstone-Vanman, LLC,
a Minnesota limited liability company ("Developer"), previously entered into the Brookstone-
Vanman, LLC Private Development Agreement (the "Agreement"), recorded in the Office of the
Registrar of Titles in and for the County of Hennepin and State of Minnesota, as Document
Number _, for the following described property:
Section 4.2 of the Agreement contains covenants requiring completion of the construction
of the improvements. It is hereby certified that all of the covenants in the Agreement requiring
completion of the construction of the improvements have been duly and fully performed by
Developer as of the date hereof and that the rights and remedies of the HRA for breach of such
covenants are hereby released absolutely and forever insofar as they apply to the property
described above. The Registrar of Titles 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 Section 4.2 of the Agreement requiring completion of the construction of the
improvements. Notwithstanding the foregoing, the remaining covenants contained in the
Agreement remain in full force and effect.
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF GOLDEN
VALLEY
By
Its
And
Its
32
.
.
.
Resolution 99-14 (Con't.)
EXHIBIT C
November 29,1999
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _ day of
199_, 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 Building
601 Second Avenue South
Minneapolis, Minnesota 55402-4331
33
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EXHIBF 9
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Resolution 99-14 (Con't.)
EXHIBIT C
November 29,1999
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EXHIBIT F
GROUND LEASE
THIS AGREEMENT is made and entered into this _ day of
19_, by and between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND
FOR THE CITY OF GOLDEN VALLEY (the "HRA"), a public body corporate established and
existing under Minnesota Statutes, Section 462.411 et seq., with its principal offices at 7800
Golden Valley Road, Golden Valley, Minnesota 55427, and BROOKSTONE-V ANMAN, LLC,
a Minnesota limited liability company, with its principal offices at 7400 Metro Boulevard, Edina,
Minnesota 55439 ("Developer").
WHEREAS, the HRA and the City of Golden Valley (the "City") adopted the
Valley Square Redevelopment Plan (the "Plan") on July 10, 1978, and have since made certain
amendments thereto, for the purpose of redeveloping approximately 200 acres located in the City
of Golden Valley (the "Redevelopment Area"); and
WHEREAS, the Redevelopment Are,~ has been designated as a tax increment
district pursuant to applicable 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 and Developer, on , 19_, entered into the
Brookstone-Vanman, LLC Private Development Agreement (the "Agreement") for the
acquisition and development by Developer of a portion of the Redevelopment Area (the
"Development Property"), as described in attached Exhibit A); and
WHEREAS, the Agreement provides for the adoption by the parties on the
closing date of a ground lease whereby the HRA will convey the Development Property to
Developer; and
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 99-14 (Con't.)
EXHIBIT C
November 29,1999
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Resolution 99-14 (Con't.)
EXHIBIT C
November 29,1999
ARTICLE I
Definitions
Section 1.1.
appears from the context:
Definitions. In this Agreement, unless a different meaning clearly
"Agreement" means the Brookstone-Vanman, LLC Private Development
Agreement dated , 19_, entered into between the HRA and Developer, as the
same may be amended from time to time.
"Assessor's Minimum Market Value" means the agreed minimum market value
for calculation of real estate taxes certified by the Assessor for Hennepin County for the
Improved Parcel pursuant to the Assessment Agreement.
"Assessment Agreement" means the assessment agreement executed by the HRA
and Developer at closing, and certified by the Assessor for Hennepin County, pursuant to the.
provisions and requirements Minnesota Statutes, Section 273.76, Subdivision 8, establishing the
Assessor's Minimum Market Value for the Minimum Improvements.
"City" meansthe City of Golden Valley, Minnesota.
"Condemnation Award" means the amount remaining from an award to
Developer for the acquisition of title to and possession of the Improved Parcel, or any material
part thereof, after deducting all expenses (including reasonable fees and disbursements of
counsel) incurred in the collection of such award.
"County" means the County of Hennepin, Minnesota.
"Developer" means Brookstone- V anman, LLC, a Minnesota limited liability
company, and its successors and assigns.
"Development Property" means the real property described in Exhibit A of this
Lease.
"Development Property Deed" means a limited warranty deed used to convey the
Development Property from the HRA to Developer pursuant to either Optional Purchase or
Mandatory Purchase of the Development Property by Developer.
"Event of Default" means an action by Developer.listed in Article V of this Lease.
"HRA" means The Housing and Redevelopment Authority in and for the City of
Golden Valley.
"Holder" means the owner of 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 VII of the Agreement.
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Resolution 99-14 (Con't.)
EXHIBIT C
November 29,1999
"Improved Parcel" means the Development Property and the completed Minimum
Improvements.
"Initial Payment Date" means the first date specified in the attached rent schedule.
"Lease" means this ground lease between the parties.
"Lease Term" means the term of the Lease as specified in Section 3.3 hereof.
Agreement.
"Loan Amount" means the sum computed as the loan amount under the
"Mandatory Purchase" means purchase of the Development Property by
Developer from the HRA pursuant to Section 3.3(b) upon the Termination Date.
"Maturity Date" means December 31, 2010.
"Minimum Improvements" means a mixed office/reta.il facility with a minimum
of 11,000 square feet of office space, 17,000 square feet of retail space, and 9,000 square feet of
lower level retail/production/storage space, plus a parking deck with a minimum of 147 parking
spaces, plus all other improvements, including fixtures and equipment, to be constructed by
Developer upon the Development Property pursuant to this Lease and the Agreement, as such
improvements are defined in the construction 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 the Agreement and remaining after deducting
all expenses (including fees and disbursements of counsel) incurred in the collection of such
proceeds. .
"Proiect" means the construction and operations of the Minimum Improvements
by Developer on the Development Property pursuant to the terms of the Agreement.
"Optional Purchase" means purchase of the Development Property by Developer
from the HRA pursuant to Section 3.3(c) prior to the Mandatory Purchase date. I
"Party" means either the HRA or Developer.
"Parties" means the HRA and Developer.
"Pavment Date(s)" means the first day of each month subsequent to the Initial
Payment Date and during the Lease Term, upon which dates Rent shall be due and payable by
Developer pursuant to Section 3.2.
"Plan" means the Valley Square Redevelopment Plan adopted by the City and the
HRA on July 10, 1978, and as amended through the date hereof.
38
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~esOlu{lon ~~-14 (\.,;on't.)
EXHIBIT C
November 29. 1999
"Principal Balancen means the remaining principal balance on the Loan Amount,
as such Loan Amount shall be reduced by the portion of Rent payments applied to the principal
of the Loan Amount as provided in Section 3.3.
"Purchase Price" means the price to be paid to the HRA by Developer for the
Development Property pursuant to Section 3.3 upon exercise of either Optional Purchase or
Mandatory Purchase of the Development Property by Developer.
"Redevelopment Area" means the approximately 200 acres located in Golden
Valley, Minnesota that are subject to the Plan.
"Rent" means the monthly rental payments to be made by Developer to the HRA
pursuant to Section 3.2 hereof.
"State" means the State of Minnesota.
"Tax Increment Bonds" means the general obligation, tax increment bonds which
the City intends to issue to finance acquisition of the Development Property. The term "Tax
Increment Bonds" shall also include any obligations issued to refund the Tax Increment Bonds.
"Tax Increment District" means the Redevelopment Area.
"Tax Increment Financing Act" means the statutes located at Minnesota Statutes,
Sections 273.71 through 273.78, inclusive, as amended.
"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.
3.3(b).
"Termination Date" means the last day of the Lease Term as provided in Section
ARTICLE II
Representations and Warranties
Section 2.1. Representations and Warranties by the HRA. The BRA represents
and warrants that:,~__.
(a) The HRA has the power to enter into this Lease and carry out its
obligations hereunder. .
(b) The HRA has examined this Lease and has determined that its
terms and provisions are in accordance with the objectives embodied in the Plan
and the Agreement and are in the best interests of the City and the health, safety,
morals, and welfare of its residents.
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Kesolution 99-14 (Con't.)
EXHIBIT C
November 29,1999
(c) All of the representations and warranties made by the HRA in the
Agreement are true and complete as of the date hereof.
Section 2.2. Representations and Warranties by Developer. Developer
represents and warrants that:
(a) Developer is a limit~d liability company duly organized and in.
good standing under the laws of the State, is not in violation of any provisions of
its organizational documents, has power to enter into this Lease and to perform its
obligations hereunder and has duly authorized the execution, delivery and
performance of this Lease by proper company action.
(b) Developer will construct, operate and maintain the Minimum
Improvements upon the Development Property in accordance with the terms of
the Agreement, the Plan and all local, state and federal laws and regulations.
(c) Neither the execution and delivery of this Lease, the
consummation of the transactions coptemplated hereby, nor the fulfillment of or
compliance with the terms and conditions of this Lease is prevented or limited by,
or in conflict with or will result in a breach of, the terms, conditions or provisions
of Developer's organizational documents, as amended, 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, threatened or
contemplated to which Developer is a party, or to which any property of
Developer is subject which, if determined adversely to Developer, would
individually or in the aggregate have a material adverse effect on the financial
position of Developer, or prevent or impair its ability to perform any covenants or
obligations under this Lease.
( e) All of the representations and warranties made by Developer inithe
Agreement are true and complete as of the date hereof.
AR TI CLE III
Lease of Development Property
Section 3.1. Lease of the Development Property. As of the date hereof, the
HRA hereby demises and leases to Developer, and Developer hereby leases from the HRA, all of
the Development Property.
Section 3.2. Rent. Subject to Developer's right to exercise its Optional
Purchase of the Development Property pursuant to Section 3.3(G.), Developer agrees to pay to the
HRA at 7800 Golden Valley Road, Golden Valley, Minnesota 55427, or at such other place as
the HRA may, from time to time, designate in writing, Rent for the lease of the Development
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Resolution 99-14 (Con't.)
EXHIBIT C
November 29,1999
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Property, at such times (the "Payment Dates") and in such amounts as specified in the Rent
Schedule attached as Exhibit B and made a part hereof. Such Rent Schedule shall provide for
equal monthly payments calculated to amortize the Loan Amount over a 20-year period (plus the
partial first month), together with interest at the rate of seven percent (7%) per annum.
Notwithstanding anything to the contrary herein, the total Rent shall not exceed twenty-five
percent (25%) of the principal and interest on the Tax Increment Bonds to the Maturity Date.
Section 3.3. Loan Amount and Principal Balance: Lease Term: Optional and
Mandatory Purchase: Purchase Price: Termination of Agreement.
(a) The HRA shall sell the Development Property to Developer for the
Loan Amount, plus interest at the rate of seven percent (7%) per annum on the
outstanding principal balance (the "Principal Balance") of the Loan Amount until
full repayment of the Loan.Amount pursuant to Optional Purchase or Mandatory
Purchase as provided in this Section 3.3. It is the intention of the Parties that, and
the Rent has been calculated such that, the total rent paid by Developer to the
HRA during the Lease Term, plus the Purchase Price paid by Developer to the
HRA pursuant to Optional Purchase or Mandatory Purchase, shall yield to the
HRA the total of the Loan Amount, plus interest on the outstanding Principal
Balance of tJie Loan Amount prior to payment at the rate of seven percent (7%)
per annum.
.
Upon every Payment Date, or upon such later date as the HRA shall
receive in full the Rent due and payable with respect to such Payment Date, the
outstanding Principal Balance shall be reduced by such portion of the Rent paid
upon such Payment Date which shall not represent interest on the Loan Balance.
The portion of each payment of Rent constituting interest on the Loan Balance
shall be the amount so specified on Exhibit C attached hereto. The Amortization
Period used for calculation of interest as described in the preceding sentence shall
be 20 years.
Attached hereto as Exhibit C is a table listing the portion of each Rent
payment which shall be allocable to interest on the Loan Amount and the portion
which shall reduce the outstanding Principal Balance.
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(b) Lease Term: Mandatory Purchase. Subject to the exercise.of
Optional Purchase by Developer subject to Section 3.3(c), the Lease Term shall
commence on the initial payment date of Rent, and shall expire on the. last day of
April 30, 2010 (the "Termination Date"). If Developer has not previously
exercised its option under Section 3.3(c) to purchase the Development Property,
Developer shall be required to purchase the Development Property from the HRA
upon the Termination Date, or upon such date within thirty (30) days prior to or
succeeding the Termination Date as the HRA and Developer shall agree. The
Purchase Price which Developer shall pay to the HRA for the Development
Property upon Mandatory Purchase thereof shall be $1.00 plus the remaining
Principal Balance of the Loan Amount.
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Resolution 99-14 (Con't.)
EXHIBIT C
November 29.1999
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(c) Optional Purchase. Developer shall have the right of Optional
Purchase of the Development Property upon every Payment Date during the
Lease Term prior to the Termination Date. To exercise such right of Optional
Purchase, Developer shall provide to the HRA not less than the thirty (30) days'
written notice of its intention to exercise its right of Optional Purchase. The
Purchase Price which Developer shall pay to the HRA for Optional Purchase of
the Development Property upon any Payment Date shall be the amount of the
outstanding Principal Balance of the Loan Amount as of such Payment Date,
before any adjustment to such Principal Balance made in respect of any Rent due
and payable as of such Payment Date (less any credit to which Developer may be
entitled pursuant to Section 3.5).
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(d) Development Deed; Title; Termination of Agreement. The HRA
agrees that, upon purchase of the Development Property by Developer from the
HRA, pursuant to Optional Purchase or Mandatory Purchase, the HRA shall
convey the Development Property to Developer on a limited warranty deed (the
"Development Property Deed") upon tender of the Purchase Price by Developer.
The Development Property Deed shall be subject to the items described in Section
3.1 of the Agreement, matters created or allowed to occur by Developer, the terms
and conditions of the Agreement, and such other encumbrances as the HRA and
Developer shall mutually agree. Any Development Property Deed granted prior
to issuance of a Certificate of Completion, as provided in Section 4.4 of the
Agreement, shall contain a forfeiture clause consistent with Section 10.2 of the
Agreement providing for revesting of title in the HRA in the event of default
under the Agreement prior to issuance of such Certificate of Completion subject
to any applicable care periods described in the Agreement. The Purchase Price
shall be due and payable in full at closing of the purchase in cash, or by cashier's
or certified check. Except as otherwise specifically provided, delivery of the
Development Property Deed shall terminate this Lease in all respects, except as to
collection of any Rent or other charges owing to the HRA pursuant to this
Agreement and unpaid by Developer; provided, however, that nothing in this
Section 3.3(d) shall pertain to termination of the Agreement or the Assessmen~
Agreement, which shall terminate pursuant to their terms. All costs of the
conveyance of the Development Property to Developer, including any and all ~ees
and charges relating to title insurance upon the development Property, and filiQg
or recording fees and any and all other taxes and charges payable in connection
with such conveyance, ifany, shall be wholly borne by Developer. The HRA
shall voluntarily take no actions to encumber title, or fail to take any necessary
action to prevent encumbrance of title to the Development Property, between the
Closing Date and date of delivery of the Development Property Deed to
Developer by the HRA pursuant to this Section.
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Section 3.4. Condemnation. In the event that title to and possession of the Minimum
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) prior
to purchase of the Development Property by Developer pursuant to Mandatory Purchase or
Optional Purchase, 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,
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Resolution 99-14 (Con't.)
EXHIBIT C
November 29,1999
subject to the rights of the Holder of a First Mortgage, Developer shall use the entire
Condemnation A ward first to pay the reasonable costs and expenses of such taking, including but
not limited to reasonable attorney's fees and appraiser's fees, and second to reconstruct the
Minimum Improvements to the extent practicable (or, in the event only a part of Minimum
Improvements have been taken, then to reconstruct such part) upon the Development Property.
Any remaining Condemnation A ward shall be used to prepay the outstanding Principal Balance.
ARTICLE IV
Miscellaneous
Section 4.1. Liens. Developer shall not suffer or permit any vendoJ's, mechanic's,
laborer's, or materialman's statutory or similar lien to be filed against the demised premises or
any interest of the HRA or Developer therein claimed to arise from materials, goods, services or
labor of any nature supplied or sold to Developer or anyone holding the demised premises or any
part thereof through or under Developer. . If any such lien shall at any time be filed against the
demised premises, Developer shall, within thirty (30) days after notice of the filing thereof, cause
the same to be released and discharged, provided, however, that Developer may contest any such
claim by providing the HRA with a bond, a cash deposit, title insurance guarantee or other
security reasonably acceptable to the HRA.
Section 4.2. Maintenance of Premises. Developer assumes the full and sole
responsibility for the condition, operation, repair, maintenance and management of the demised
premises from and after the commencement of the terms of this Agreement and the HRA shall
not under any circumstances be responsible for the physical performance of any repairs, changes
or alterations whatsoever to the demised premises and the HRA shall not be liable for the cost
thereof. Developer agrees throughout the Lease Term to maintain the Project in good repair and
condition in compliance with all applicable laws and regulations. Developer also agrees to use
its best efforts to prevent any pollution, contamination or hazardous substances from being
deposited or, in or under the Development Property, and to remediate any such conditions which
occur during the Lease Term.
Section 4.3. Compliance With Orders. Ordinances. Etc.
(a) Developer agrees that in the maintenance, operation, use and
occupancy of the demised premises during the Lease Term, Developer will
promptly comply, or will cause all persons claiming by, through or under
Developer to promptly comply, with all laws, ordinances and certificates of
occupancy issued pursuant to any law or by any public officer and the orders,
rules, regulations and requirements of all federal, state and municipal
governments and appropriate departments, commissions, boards and officers
thereof, and of the State Fire Marshal, or any other body hereafter constituted
exercising similar functions, foreseen or unforeseen, ordinary as well as
extraordinary, which may be applicable to the demised premises, the
improvements thereon or the sidewalks, roadways and landscaped areas, curbs
adjoining the demised premises.
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Resolution 99-14 (Can't.)
EXHIBIT C
November 29,1999
(b) Developer shall have the right to contest by appropriate legal
proceedings, in the name of Developer, without cost or expense to the HRA, the
validity of any law, ordinance, certificate, order, rule, regulation or requirement of
the nature in Section 4.3(a) herein referred to, and ifby the terms of any such law,
ordinance, certificate, order, rule, regulation or requirement, compliance therewith
may legally be held in abeyance without the incurrence of any lien, charge or
liability of any kind against the demised premises or any interest of the HRA
therein and without subjecting the HRA to any liability, civil or criminal, of
whatsoever nature for failure so to comply therewith until the final determination
of any proceedings, provided that all such proceedings shall be prosecuted with
all due diligence and dispatch.
Section 4.4. Ouiet En10Yment. the HRA covenants and agrees that Developer, upon
paying the Rent and all other charges provided for herein, and upon observing and keeping the
covenants, agreements and conditions of this Agreement on its part to be kept, shall lawfully and
quietly hold, occupy and enjoy the demised premises during the Lease Term without hindrance-
or molestation of anyone claiming by, through or under the HRA, subject, however, to the
provisions of this Lease and the Agreement.
Section 4.5. Inspection of the Premises. The HRA, and its officials, employees and
agents, shall have the right to inspect the Developer Project at all reasonable times, but not more
often than monthly except in the event of emergency or adverse claims made against the HRA.
Such right shall not have the effect of increasing the HRA's obligations or responsibilities to any
person.
Section 4.6. Cure of Defaults. If Developer shall default in the performance of any
covenant contained herein, the HRA may, after thirty (30) days' written notice to Developer, or
on such notice, if any, as may be reasonable in the circumstances if an emergency exists, perform
the same for the account and at the expense of Developer. If the HRA shall incur any reasonable
expense, including attorneys' fees, in instituting, prosecuting or defending any action or
proceeding by reason of any default of Developer, Developer shall reimburse the HRA for the
amount of such expense. The HRA's action hereunder shall not be deemed a waiver of
Developer's default. Should Developer, pursuant to this Lease, become obligated to reimburse or
otherwise pay the HRA one or more sums of money in addition to the Rent, the amount thereof
shall be deemed additional rent. Notwithstanding the foregoing, the HRA's right to cqre any
default under any mortgage placed by Developer on the Development Property shall qe subject
to Section 8.4 of the Agreement.
ARTICLE V
Events of Default
Section 5.1. 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 use in this
Agreement, anyone or more of the following events:
44
r.t::l:SUIU lIun ~~-14 \ l;onot.}
EXHIBIT C
November 29, 1999
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(a)
Lease.
Failure by Developer to pay when due any amount under this
(b ) Failure by Developer to substantially observe or perform any
material covenant, condition, obligation or agreement on its part to be observed or
performed under this lease.
(c) Default under the Agreement, provided that any period of cure
provided under the Agreement has expired.
Section 5.2. Remedies on Default. Whenever any Event of Default occurs, the HRA,
subject to any rights of the Holder of the First Mortgage agreed to by the HRA pursuant to the
Agreement, or otherwise by written, executed instrument of the HRA, may take anyone or more
of the following actions (but only after provision of sixty (60) days' written notice to Developer
in the case of an Event of Default under Section 5.1(a) or (b), and then only if such an Event of
Default has not been cured within said sixty (60) days or, if such an Event of Default cannot be
cured within sixty (60) days, Developer does not provide assurances to the HRAreasonably
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 of this Agreement and of the Plan):
.
(a) The HRA may suspend its performance under the Agreement and
the Lease until it receives assurances from Developer, deemed adequate by the
HRA, that Developer will. cure its default and continue its performance under the
Agreement and the Lease.
(b) The HRA may, at its option, declare all installments of Rent
payable under this Lease for the remainder of the Lease Term and the Purchase
Price payable on the Termination Date pursuant to Mandatory Purchase under
Section 3.3 to be immediately due and payable, whereupon the same shall become
immediately due and payable by Developer.
.
(c) TheHRA may terminate this Lease, exclude Developer from
possession ofthe Development Property and, upon thirty (30) days' written notice
to Developer, sell all or any part of the Development Property at the best price
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 amortized portion of the Loan Amount
received by the HRA from Developer) including but not limited to acquisition
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 amortized portion of the Loan Amount with respect to the Development
Property, plus the amount of any security paid by Developer to the HRA, plus
45
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Resolution 99-14 (Con't.)
EXHIBIT C
November 29, 1999
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.
Prior to issuance of the Certificate of Completion, Developer hereby waives any
rights under Minnesota Statutes, Section 504.02, or under any other statute, with
respect to any right of redemption in the event of termination of the Lease under
this section.
(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
Lease.
(e) Sue for damages, including delinquent taxes levied against the
Development Property.
Section 5.3. 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 5.4. No Additional Waiver Implied bv One Waiver. In the event any
agreement contained in this Lease 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.
ARTICLE VI
Additional Provisions
Section 6.1. Titles of Articles and Sections. Any titles of the several parts, Articles and
Sections of the Agreement are inserted for convenience of reference only. and shall bel
disregarded in construing or interpreting any of its provisions. i
Section 6.2. 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 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 7400 Metro Boulevard, Suite 212, Edina, Minnesota 55439.
Attention: Richard V. Martens, Chief Manager, with copies to Howard
Kauffman, One Financial Plaza, Suite 2400, 120 South Sixth Street, Minneapolis,
Minnesota 55402.
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Resolution 99-14 (Con't.)
EXHIBIT C
November 29, 1999
(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 Best & Flanagan LLP, 4000 U.S. Bank Place, 601 Second
Avenue South, Minneapolis, Minnesota 55402
or at such other address with respect to either such party as that party may, from time to time,
designate in writing and forward to the other as provided in this Section.
Section 6.3. Counterparts. This Agreement is executed in any number of counterparts,
each of which shall constitute one and the same instrument.
Section 6.4. Law Governing. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.
Section 6.5. 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 6.6. Duration. This Lease shall commence as of the date hereof and shall
continue until such time as the HRA delivers the Development Property Deed to Developer upon
payment of the Loan Amount.
Section 6.7. Survival of the Agreement. Notwithstanding the termination of this Lease
pursuant to payment of the Loan Amount by Developer, the terms and conditions of the
Agreement shall continue in full force and effect for the complete term of the Agreement.
Section 6.8. Restrictions on Transfer. This Lease and Developer's interest in the
Development Property may not be assigned, except as permitted in Section 9.1 of the
Agreement. The parties agree that the terms and conditions hereof run with the land and shall be
binding upon their successors and assigns.
IN WITNESS WHEREOF, the HRA has caused this Ground Lease to be duly executed
in its name and behalf and its seal to be hereunto duly affixed and Developer has caused this
Ground Lease 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
By
Its
47
.
Resolution 99-14 (Can't.)
EXHIBIT C
November 29,1999
BROOKSTONE-V ANMAN, LLC.
By
Its
STATE OF MINNESOTA )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
19 _, by and . ,the
and of THE HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF GOLDEN V ALLEY.
Notary Public
. STATEOFMINNESOTA)
) ss.
COUNTY OF )
.
The foregoing instrument was acknowledged before me this day of
19_, by , the of BROOKS TONE-
V ANMAN, LLC, a Minnesota limited liability company, on behalf of the organization.
Notary Public
48
.
.
.
Resolution 99-14 (Con't.)
EXHIBIT C
November 29, 1999
EXHIBITG
MASTER PLAN
To
DEVELOPMENT AGREEMENTS*
WESLEY COMMONS
GOLDEN VALLEY, MINNESOTA
November 23, 1999
*Rottlund Company Private Development Agreement
Brookstone- V anman, L.L.C.Private Development Agreement
CommonBond Communities Private Development Agreement
Kesolution 99-14 (Can't.)
EXHIBIT C
EXHIBITG
November 29,1999
. INDEX
1. Architecture
2. Building Materials
3. Grading
4. Ponding
5. Scheduling
6. Streets
7. Utilities Plan
8. Parking
9. Landscape Plan
10. Trails
. 11. Park Amenities
.
-
Kesolution 99-14 (Con't.) EXHIBIT C November 29, 1999
EXHIBIT G
•
Architecture
410
.
.
.
Resolution 99-14 (Con't.)
EXHIBIT C
November 29,1999
EXHIBITG
ARCHITECTURE
For sale residential:
David Bernard Builders.and Developers, a division of The
Rottlund Company, Inc.
David Bernard proposes to build 58 New Urban Townhomes
consisting of three-story, multi-unit building clusters, with
areas ranging between 1600 and 1800 square feet.
The unique quality of these townhomes is their ability to
produce densities of approximately 20 units per acre, while at
the same time offering a private garage with direct access to
the unit, a private front entrance and no unit stacked above
another.
In addition to the New Urban Townhomes, David Bernard
proposes to build 74 Stacked Flats homes. The Stacked Flats
consist of three-story, multi-unit building clusters, with areas
ranging from 1400 to 1600 square feet.
An advantageous characteristic of the Stacked Flats is the one
level approach to living, which provides ease of accessibility
for its owners. All units will have private entrances, and the
added convenience of access to an elevator. I!
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Both the New Urban Townhomes and Stacked Flats will have
their own Homeowners Association that will be responsible for
the maintenance of all building exteriors, private drives and
landscaping. Both housing types also incorporate underground
parking with two parking stalls provided for each unit. See
attached plans.
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Resolution 99-14 (Can't.)
EXHIBIT C
November 29,1999
EXHIBITG
Family housing: CommonBond Communities
CommonBond Communities proposes to develop 25
townhomes for families in a higher-density cluster
producing densities of approximately 22 units per acre.
The townhomes will be available in 2 and 3 bedroom, two
story unifs, with exception of lone-story handicapped unit.
The family housing building incorporates 44 underground
parking stalls with direct access to the units. There will
also be one double-stall garage at grade for the
handicapped unit and four surface parking spaces (total of
50). All units are equipped with central gas heat, air
conditioning, and hook-ups for washers and dryers. The
building also integrates a Community room and Advantage
Center, office space, and space for a maintenance work
area and equipment storage. The family housing building
will be managed by CommonBond Communities and their
services. See attached plans.
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EXHIBIT C
November 29,1999
EXHIBITG
Commercial: Brookstonel' Inc.
The master plan for this proj ect currently envisions a three-
level, 37,000 square foot building. There will be 17,000
square feet of retail on the ground floor, 11,000 square feet
of multi-tenant office space on the second floor, and a
lower level with 4,000 square feet of commercial and 5,000
square feet of storage/production space. The building is
designed in a stepped fashion to allow for the use of
interesting architectural details. See attached plans.
November 29, 1999 .\
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EXHIBIT C
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EXHIBITC
EXHIBITG
Building Materials
November 29,1999
.
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Resolution 99-14 (Con't.)
EXHIBITC
November 29, 1999
EXHIBITG
BUILDING MATERIALS
For sale residential:
David Bernard Builders and Develo~
The materials used for the New Urban Townhomes and the
Stacked Flats are maintenance free, including brick and
vinyl lap siding.
Family housing: CommonBond Communities
The two-story, wood framed buildings will be finished in
brick trim, maintenance free siding, and asphalt shingles.
Commercial: Brookstone, Inc.
The three-story, commercial structure at the comer of
Golden Valley Road and Winnetka Avenue will be
designed with the structural steel frame, wood truss roof,
and pre-cast concrete floors, with a steel stud exterior. The
building will be finished with brick and stucco materials,
storefront glass, and aluminum detailing on the main level,
and office window finishing on the second floor. To
integrate into the adjacent residential, the roof will be a
shingled, pitched structure.
Resolution 99-14 (Con't.) EXHIBIT C November 29, 1999
EXHIBIT G
•
Grading
•
.
.
.
Resolution 99-14 (Can't.)
EXHIBIT C
November 29,1999
EXHIBITG
GRADING
David Bernard Builders and Developers will undertake
grading for the for-sale housing and commercial areas at
one time. Grading is scheduled to begin in the spring of
2000. A temporary storm water detention pond will be
completed prior to the start of any other work. Retaining
walls along the creek will be completed in conjunction with
the adjacent housing.
The rental housing site will be rough-graded by the
Housing and Redevelopment Authority in conjunction with
the demolition of the existing retail building (Tower
Square) in the spring of 2001. David Bernard Builders and
Developers will then complete the grading necessary for
the construction of the permanent drainage retention pond.
Grading will be done in accordance with Pioneer
Engineering plans dated November 22, 1999. See attached.
,
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Resolution 99-14 (Con't.) EXHIBIT C November 29, 1999
EXHIBIT G
•
Ponding
•
.
.
.
Resolution 99-14 (Con't.)
EXHIBIT C
EXHIBIT G
November 29,1999
PONDING
Temporary ponding will take place on the site adjacent to
rental housing area until the existing retail center (Tower
Square) is demolished. The temporary ponding will be
completed by April 30, 2000. No other construction will
occur befo~e the temporary pond is in place.
A permanent pond, with retaining walls, will be constructed
by June 15, 2001 following the demolition of the retail'
center and rough grading of the site by the Housing and
Redevelopment Authority.
The ponding will meet or exceed the regulations of the
Bassett Creek Watershed District.
Resolution 99-14 (Con't.) EXHIBIT C November 29, 1999
EXHIBIT G
Scheduling
Resolution 99-14 (Con't.)
EXHIBIT C
EXHIBIT G
SCHEDULING
. For sale residential:
David Bernard Builders and Develo~
A. Development agreement approval
November 1999
B. City approvals and closings
April 2000
C. Site Work
April 2000
D. Temporary Pond
Completed by April 30, 1999
. E. Construction start
May 2000
F. Models open
September 2000
G. Completion of Streets and Trunk Utilities
November 1, 2000
H. First closing on townhomes
November 2000
1. Completion of Pond
June 15, 2001
.
November 29, 1999
Resolution 99-14 (Con't.)
EXHIBIT C
EXHIBIT G
November 29,1999
. J. Final closing on townhomes
September 2002
.
.
.
.
.
Resolution 99-14 (Con't.) EXHIBIT C
EXHIBIT G
Commercial: Brookstone~ Inc.
November 29,1999
A. Development agreement approval
November 1999
B. Preparation of final drawings for permit applications
January/February 2000
C. City approvals and closing
April 2000
D. Start of construction
AprillMay 2000
E. Shell completion and frrst tenant move-in
OctoberlNovember 2000
)
Resolution 99-14 (Con't.)
EXHIBIT C
EXHIBIT G
. Family housing: CommonBond Communities
A. Development Agreement approved
November 1999
B. Application for Housing Tax credits
June 2000
c. Notification of selection
October 2000
D. Preliminary City approvals
March 2000
E. Financing and Final City approval
. February 2001
November 29, 1999
F. Loan closingslLand purchase/construction start
June 2001
G. Construction completed
February 2002
.
Resolution 99-14 (Con't.) EXHIBIT C November 29, 1999
EXHIBIT G
•
Streets
•
•
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.
.
Resolution 99-14 (Con't.)
EXHIBIT C
EXHIBIT G
November 29, 1999
STREETS AND DRIVEWAYS
All streets running throughout the development will be
private. The driveways leading to the upper.and lower
p,arking deck will be constructed and maintained by
Brookstone and will be completed by November 1, 2000.
All other streets and driveways, except for the
CommonBond parcel, will be constructed by David
Bernard Builders and Developers. Those designated as'
streets on the plan will be constructed by November 1,
2000. All driveways and parking areas will be constructed
in conjunction with the adjacent buildings and will be
completed prior to the issuance of a certificate of
occupancy.
Brookstone will provide access easements to David
Bernard Builders and Developers and CommonBond
Communities to their sites. These easements will require
the owners to maintain and repair the facilities and provide
for timely snow removal, with snow removed from the site
if required to provide safe access. No snow storage will be
allowed in the storm water detention pond.
Resolution 99-14 (Con't.) EXHIBIT C November 29, 1999
EXHIBIT G
•
Utilities Plan
•
110
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.
Resolution 99-14 (Con't.)
EXHIBIT C
EXHIBIT G
November 29, 1999
UTILITIES
David Bernard Builders and Developers will undertake the
installation of trunk utilities for the for-sale.housing, rental
housing, and commercial areas of the development. Trunk
utilities include water, sanitary sewer, electricity, natural
gas, and other essential services necessary for the
development. These utilities will be located in a public
utility easement dedicated to the City of Golden Valley.
Individual service connections for each parcel will be
handled by the parties.
The City of Golden Valley and the Housing and
Redevelopment Authority will have the ability to review
uti lity specifications prior to the construction, inspect
during construction and provide fmal acceptance of work
completed. Trunk utilities will be installed following
grading activities with installation complete by November
of2000. Utilities will be installed in accordance with
preliminary Pioneer Engineering plans dated November 22,
1999. See attached.
.:
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.
LEGEND
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.CONCE"T UTILITY PLAN'
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DAVID - BERNARD
BUILDERB . DEVELOPERS
.....c. WESLEY COMMONS
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Resolution 99-14 (Con't.) EXHIBIT C November 29, 1999
EXHIBIT G
Parking
•
.
.
.
Resolution 99-14 (Con't.)
EXHIBIT C
EXHIBIT G
November 29, 1999
PARKING
For sale residential:
David Bernard Builders and Develo~
IJavid Bernard Builders and Developers proposes a total of
132 units with 2 underground parking spaces provided for
each unit, totaling 264 parking spaces. In addition to the
parking provided underneath the buildings, there will be 2
off street parking bays including 17 parking spaces. An
additional 27 parking spaces will also be available by way
of on-street parking. Total parking spaces for the for sale
residential portion will be 308. In addition, some overnight
guest parking will be available in the commercial parking
deck.
Resolution 99-14 (Con't.)
EXHIBIT C
EXHIBIT G
November 29,1999
. Family housing:.CommonBond Communities
.
.
44 underground garage spaces will be provided along with
one double-stall ground level garage for a handicapped
accessible unit, and four surface parking spaces.
The adjacent retail/office center will provide additional
guest parking except from 11 :30 am to 1 :30 pm, Monday
through Friday. This parking includes five parallel spaces
adjacent to CommonBond and spaces in the upper and
lower parking deck to the rear of the center. Parking on the
east, north and south sides of the retail building are not
included in the shared spaces.
.
.
.
Resolution 99-14 (Con't.) EXHIBIT C
EXHIBIT G
Commercial: Brookstone, Inc.
November 29,1999
The parking for the commercial building will be in three
separate areas:
a. Surface parking in the front and sides of the
building - 55 stalls (for retail customers)
b. Surface parking beneath the deck at the rear of the
building - 45 stalls (for employees and destination
oriented customers, plus off peak usage by
overnight guests of adjacent homeowners and
renters)
c. Parking on top of deck at the rear of the building 47
stalls (for overflow retail customer parking and
some employee parking)
Brookstone will build and maintain the parking deck (per
section 4.2 of the Brookstone Private Development
Agreement) and provide easements for use of the
retail/office parking by for-sale and rental housing units
except from 11 :30 am to 1 :30 pm, Monday through Friday.
Parking to the east, north and south sides of the retail
building are not included in the shared spaces.
Resolution 99-14 (Con't.) EXHIBIT C November 29, 1999
EXHIBIT G
•
Landscape Plan
•
.
.
.
Resolution 99-14 (Con't.)
EXHIBIT C
EXHIBIT G
November 29, 1999
LANDSCAPING
A landscaping plan has been generated for the entire
Master Plan development area, along with sample plans for.
each housing type. Individual building/unit plans will be
generated in the future. In addition, we will coordinate all
design plans with current streetscape efforts underway by
the City and coordinate signage in all of the development
parcels with each other and the City. See attached plan.
~
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Resolution 99-14 (Con't.) EXHIBIT C November 29, 1999
EXHIBIT G
•
Trails
•
.
.
'.
Resolution 99-14 (Con't.)
EXHIBIT C
EXHIBIT G
November 29,1999
TRAILS/SIDEWALKS
David Bernard Builders and Developers will build and
maintain a trail along the south side of Bassett Creek that
will have an easement for public use by non~motorized
users (except for public safety and handicapped use).
Easements from the David Bernard and CommonBond
properties will be provided for the trail. Public sidewalks
exist or will be built on the public streets surrounding the
site (on Winnetka, Golden Valley Road and Wisconsin
Avenue).
The trail and private sidewalks related to each component
will be constructed in conjunction with the construction of
the adjacent buildings.
Resolution 99-14 (Con't.) EXHIBIT C November 29, 1999
EXHIBIT G
•
Park Amenities
•
•
.
.
.
Resolution 99-14 (Con't.)
EXHIBIT C
EXHIBIT G
November 29,1999
P ARK AMENITIES
The Valley Square development will incorporate many
park amenities providing for its uniqueness., The center of
the development will accommodate a terminus icon which
will serve as a community center to its residents along with
benches. There will also be an open space between the
parking ramp and for sale housing easterly most building
that will serve as passive park and recreation area. This'
area will include a children's play area open to residents in
the for-sale and rental units.
CommonBond Communities will also have an on-site open
area including playground equipment on the westerly side
of their building open to residents of the for-sale and rental
units. The park will be active and will include play
equipment suitable for children.
Brookstone, Inc. will also incorporate an outdoor terrace
area at the corner of Golden Valley Road and Winnetka
A venue.
.
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.
n.C;)VIUlIUII ~~-Iq. \\.Jon-t.)
l::XHIBIT C
November 29,1999
GUARANTY
FOR VALUABLE CONSIDERATION, and to induce THE HOUSING AND
REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY (the
"HRA") to extend credit and other accommodations to Brookstone-Vanman, LLC, a Minnesota
limited liability company ("Developer"), Richard V. Martens ("Guarantor"), hereby guarantees
to the HRA the full and prompt performance, when due, of all covenants, agreements, and
obligations of Developer under the Brookstone-Vanman, LLC Private Development Agreement
dated as . 1999 (the "Development Agreement"), the
Ground Lease (the "Lease"), 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, the Lease 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, the Lease or the Assessment Agreement.
This Guaranty shall be binding upon Guarantor and his heirs, representatives 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 1he 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 Cpurt,
Hennepin County, and Guarantor hereby consents to the jurisdiction of such court foriall 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.
The liability of Guarantor shall be joint and several with the other Guarantors. No
Guaranty of any other Guarantor shall be modified unless a similar change is made to this
Guaranty .
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.
50
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.
n.\::::lUIU lIUrl ~~- I ~ \ \.Jon-I.)
eXHIBIT C
November 29, 1999
IN WITNESS WHEREOF, Guarantor has caused the execution of this Guaranty this _
day of . 1999.
Richard V. Martens
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
On this _ day of , 19_, Richard V. Martens personally
appeared before me and acknowledged that he executed the foregoing instrument.
Notary Public
51