2004 HRA RESOLUTION 04-11
Resolution 04-11
November 9, 2004
. Commissioner Pentel introduced the following and moved its adoption:
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RESOLUTION APPROVING CONDITIONAL SALE OF CERTAIN
REAL PROPERTY FOR AN OFFICE CONDOMINIUM PROJECT
(KRJ North Wirth, 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 North Wirth Parkway Redevelopment Plan as adopted in 1978
and amended from time to time; and
WHEREAS, the North Wirth Parkway Redevelopment Plan contemplates the
redevelopment of the East Area in a mix of large scale office, office/warehouse and light
industrial uses; and,
WHEREAS, KRJ North Wirth, L.L.C. would like to develop an office condominium
project of up to 31,500 sq. ft; and
WHEREAS, the Housing and Redevelopment Authority finds the proposed uses a
productive reuse of a contaminated empty lot; 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 guidelinesfor
redevelopment of the North Wirth Parkway 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 9469.029, the HRA has duly given
notice in the form attached as Exhibit A of a public hearing on the proposed sale of the
property legally described as Lot 1, Block 1, North Wirth Parkway 5th Addition and has duly
held said public hearing; and,
NOW, THEREFORE, BE IT RESOLVED, that the HRA does hereby make the
following findings and determinations:
1. Proper published notice of the proposed sale of the Subject Property
described above has been given and a public hearing has been held thereon, all in
accordance with the provisions of Minnesota Statutes 9469.029; and
2. The use of the Subject Property proposed by the Developer is reasonably
within the overall guidelines of the North Wirth Parkway Redevelopment Plan; and
3. The use value of the Subject Property is hereby established as $3.90 per
square foot.
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Resolution 04-11 (Con't.)
November 9, 2004
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 North
Wirth Parkway Redevelopment Plan, sale of the Subject Property to the developer at the
above noted value is appropriate. .
BE IT FURTHER RESOLVED that:
1. The sale of the Subject Property to the Developer on the terms and
conditions set forth in the development agreement attached hereto as Exhibit B is hereby
approved; and
2. The Chair and the Director of the HRA are hereby authorized to execute
the 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 take all
necessary steps to perform the obligations imposed on the HRA under the private
development agreement; and
4. The North Wirth Parkway Redevelopment Plan is hereby amended to the
extent that the Developer's proposal embodied in the private development agreement
attached hereto as Exhibit B so modifies it.
ATTEST:
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Thomas . Burt. Dire r
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Motion for the adoption of the foregoing resolution was seconded by Commissioner
Freiberg; and upon a vote taken thereon, the following voted in favor thereof: Freiberg,
Grayson, Loomis, Pentel and Shaffer; and the following voted against the same: none;
whereupon said resolution was declared duly passed and adopted, signed by the Chair and
his signature attested by the Director.
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Resolution 04-11 (Con't.)
EXHIBIT A
November 9,2004
NOTICE OF PUBLIC HEARING
APPROVAL OF SALE OF LOT 1, BLOCK 1, NORTH WIRTH PARKWAY 5TH ADDITION
TO NORTH WIRTH L.L.C. FOR REDEVELOPMENT
NOTICE IS HEREBY GIVEN that the Housing and Redevelopment Authority (HRA) of
Golden Valley, Minnesota will meet at the Golden Valley City Hall, Council Chambers, 7800
Golden Valley Road, on Tuesday, November 9,2004, at 6:30 p.m. and wiUthenand there
consider the sale and terms of development of the property located on Dahlberg Drive,
north of Highway 55 to North Wirth, L.L.C., for redevelopment pursuant to Minnesota
Statutes Section 469.029. The legal description of the property is as follows:
Lot 1, Block 1, North Wirth Parkway 5th Addition
The proposal is to construct office condominium buildings. All interested parties may
appear in person or by counsel and be heard.
BY THE HOUSING AND REDEVELOPMENT AUTHORITY
/slThomas D. Burt, HRA Director
Resolution 04-11 (Con't.)
EXHIBIT B
November 9, 2004
. KRJ NORTH WIRTH~ LLC PRIVATE DEVELOPMENT AGREEMENT
THIS AGREEMENT, effective as of November _,2004, is made and entered into by and
between the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF
GOLDEN VALLEY, 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 "liRA"), and KRJ NORTH WIRTH, LLC, a Minnesota limited liability
company, with its principal office located at 810 North Lilac Drive, Golden Valley, Minnesota 55422
("Developer").
WHEREAS, the HRA and the City of Golden Valley (the "City") adopted the North Wirth
Parkway Redevelopment Plan (the "Plan") on September 18, 1978, and have since made certain
amendments thereto, for the purpose of redeveloping approximately 110 acres located in the City of
Golden Valley (the "Redevelopment Area"); and
WHEREAS, the Plan is intended to encourage private development of the Redevelopment
Area through various forms of government aid and financial assistance; and
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WHEREAS, Developer has submitted to the HRA a proposal for the purchase from the HRA
of a site in the Redevelopment Area legally described in attached Exhibit A (the "Development
Property"), and the construction on the Development Property of an office condominium project with
a minimum of approximately 27,000 square feet, and a maximum of approximately 31,500 square
feet, together with parking that meets City zoning requirements, and certain other improvements (the
"Project"); and
WHEREAS, the HRA, after public hearing, has approved the Project as being consistent with
the provisions of the Plan; and
WHEREAS, the Development Property is included in a tax increment district created
pursuant to applicable Minnesota Statutes; and
WHEREAS, Minnesota Statutes, Section 469.029, requires the adoption ofa development
agreement between the parties setting forth the mutual rights and obligations of the parties in
accordance with the provisions of the Plan; 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 04-11 (Con't.)
EXHIBIT B
November 9, 2004
TABLE OF CONTENTS
Page
Article I - Definitions .............. ................. .............. ...... ......:...... ...;...... ........... .................. .... ...... 4
1.1 Definitions. . . . : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . .. . .. . . . . . 4
Article II - Representations and Warranties ............................................................................... 6
2.1 Representations andW arranties by the flRA ....................................................6
2.2 Representations and Warranties by Developer .................................................. 7
Article ill - Title and Other Matters ........................................................................................;... 8
3.1 Marketable Title... .............. ..:...... .... .... ..... .... .......... ... .... .......... ................8
3.2 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . ... . . . . . . . . . . . 9
3.3 P. U.D. Approval...................................... ......................... ...;.................. 10
3.4 Real Estate Taxes and Special Assessments....:.........:..................................... 10
3.5 Closing....... .. . .. .. .. .. . . . . . . . . . . .. . . .. . .. .. . . .. . .. .. . . .. . .. .. .... . . . . . . .. .... . .. .. . . . . . .. ..... . . .. . ... 10
3.6 Recording.......................... ................................................................... 11
3.7 Use.................................................................................................... 11
3.8 CondeIIination.... ..... ...:....... ...... .............. .............. ... .... ......... .... .......:..... 11
3 .9 Guaranty....... . . .. . .. . . . . . . . . . . . . . .. . .. .. .. . . . .. .. .. . . .. .. . .. . ... . .. . . .. . .. .. .. .. . . . .. .. .. .. .. . .. .. .. 11
Article IV - Construction ofhnprovements ............................................................................. 12
4.1 Delivery of Development Plans and Construction of Improvements ...................... 12
4.2 Commencement and Completion of Construction......................................... ....12
4.3 Certificates of Completion ........................................................................ 13
4.4 Deposit and Reimbursement of HRA Expenses ............................................... 13
4.5 Security Deposit...................................................................................... 13
4.6 Letter of Credit. . .. . . .. . . . . . . . . . . .. . .. .. . ... . . . . .. . .. .. . .. .. . .. . . . . . . . .. .. .. . .. .. . . .. .. . .. .. . .. .. . . .. 14
4.7 Payment of Taxes, Assessments, Etc..................;......................................... 14
4.8 Payments in Lieu of Taxes.................................. ......~................................ 15
Article V - Insurance.................................................................................. ................ ........ ...... 15
5.1 Insurance. . . . . . . . . .. ... . . .. . . . . . . . . " . . . . '" . . . . . . . .. . . . . .... . .. . . . . . . . . .. .. . .... . .. . . ..... ....... . . .. 15
Article VI - Undertakings of the HRA ..................................................................................... 17
6.1 Sale of Development Property .................................. .................................. 17
6.2 Limitations on Financial Undertakings of the HRA .......................................... 18
6.3 HRA to Maintain Existence... . . .. .. .. .. . .. . . . . . . . .. . . . .. .. . . . .. . . . . .. .. .. . .. . . . . . . . . . ... .. . .. . ... 18
6.4 HRA' s Option to Terminate . . . . . . .. . . .. . .. .. . .. . . . . .. . .. . .. . . . . . . . . . . . .. ... . . . . . . . . . .. .. .. . .. ... 18
Article VII - Mortgage Financing. ......................... ................................................................... 18
7.1 Approval of Mortgage. .. .. .. .. . .. .. .. .... . .. .. .. .. .... ...... . .. . . .. .. .... ... .. .. .. .. .. .... ..... ... 18
7.2 Notice of Default; Copy to Mortgagee.......................................................... 19
7.3 Mortgagee's Option to Cure Defaults ..........................;............................... 19
7.4 HRA's Option to Cure Default on Mortgage ................................................. 20
7.5 Subordinate Liens............ . . . . . . . . . . . .. . . . . . . . . . . . . . .. . . .. . . . . . . . . . . . .. . . . .. . . . . . .. .. . .. .. . .. . . .. 20
Article Vill - Restrictions on Transfer; Indemnification.......................................................... 21
8.1 Restrictions on Transfer.............................. ...................... ........... ............21
8.2 Indemnification....................................................................................... 21
Article IX - Events of Default .......... ......... ........ ......... ...................... ........................................ 22
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9, 2004
9.1 Events of Default Defmed...... . . . . .. . . . .. . ... ... . . .. . . .... .... . . ... . . . .. . . .... .. . . .. . . . . . . .. . . . .. 22
.9.2 Remedies on Default ............................................................................... 22
9.3 No Remedy Exclusive..............................................................................23
904 No Additional Waiver Implied by One Waiver.......................................,........ 24
Article X - Additional Provisions............. ....................................:.......... ........................... ...... 24
10.1 Equal Employment Opportunity ................................................................ 24
10.2 Not for Speculation................................................................................. 24
10.3 Titles of Articles and Sections.................................................................. 24
10. 4 Notices and 'Demands.......... . . . . . .. .. . . .. .. . . .. . . .. . .. . . .. . . . . . . . . .. . . . .. . .. .. . .. . .. . . .. . . .. ... 24
10.5 Counterparts.. . . .. . . .. . .. .. .. . . . . . . . . . . . . .. .. .. . . ... . . . .. . . . .. .. . .. . . . . . . .. .. .. .. .. .. .. . . . . . . . .. .... 25
10.6 Modification....................... ~................................................................ 25
10.7 Interpretation and Amendment.................................................................. 25
10.8 Severability......... . .. . . .. .. . . . . . . . . . .. . . .. . .. . .. .. . . . . . .. ..... .. .. . .. . . . . . .. . .. .. . .. . . . . . . . . ~ .. ... 25
10.9 Duration.. ............. .... .............. .................... ..... .,........... .... .............. .....25
10.10 Binding Effect...................;....................................................:........... 25
10~ 11 Consents ............................................................................................. 25
10.12 Certificates......... .... ................... ................ ......... .'........ ....... ......... ......25
10.13 Time 'of the Essence............................................................................. 25
Article XI - Tennination of Agreement.................................................................................... 26
11.1 Developer's Options to Terminate .......... .. .. .. .. n...... .. .. .. . .. . .. .... ...... .. . .. ....... 26
11.2 Effect of Termination.................. ................. ..................... ..... ................ 26
, Exhibit A - Legal Description........................................................................... 1
Exhibit B - Certificate of Completion .................... ............ ..... .........;........ ...........1
Exhibit C - Preliminary Plans............................................................................ 1
Exhibit D - Tax Increment Note......................................................................... 1
Exhibit E - Limited W arrantyDeed . . . . . . . ... .. . .. . .. . . . . . . .. .. .. . . .. . . . . . . . . . .. .. . .. . .. . . . . . . . . . .. .. .. . 1
Exhibit F - Restrictive Covenant Agreement .......................................................... 1
Exhibit G - Guaranty....................................................................................... 1
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Resolution 04-11 (Con't.)
November 9, 2004
EXHIBIT B
ARTICLE I
Definitions
Section 1.1.
from the context:
Definitions. In this Agreement, unless a different meaning clearly appears
"Agreement" means this KRJ NOlih Wirth, LLC Private Development Agreement by and
between the Housing and Redevelopment Authority in and for the City of Golden Valley, Minnesota,
and KRJ North Wirth, LLC, a Minnesota limited liability company, as the same may be from time to
time modified, amended or supplemented.
"Celiificate of Completion" means aceliification, in the fonn ofthe certificate contained in
Exhibit B attached to and made a part ofthis Agreement, provided to Developer pursuant to Section
4.3 ofthis Agreement upon satisfactory completion ofthe shell ofthe hnprovements without interior
finishing. The HRA shall provide Developer with separate Certificates of Completion for Phase I,
and for each separate building in Phase n and Phase ill.
"City" means the City of Golden Valley, Minnesota.
"Closing" or "Closing Date" means the date upon which HRA conveys the Development
Property to Developer, which shall be on or after the date the Parties have obtained all necessary
consents and approvals required for construction ofthe Improvements, and which the Parties expect
to be on or about March 31, 2005.
"Collnty" means the County of Hennepin, Minnesota.
"Developer" means K.RJ North Wirth, LLC, a Minnesota limited liability company, and its
Sllccessors and assigns under this Agreement.
"Development Plans" means the plans, specifications, drawings, and related documents on all
construction work to be perfonned by Developer on the Development Property, including all on-site
improvements to be perfomled, installed or constructed pursuant to this Agreement. Such plans
include, for each building or other structure to be constructed on the Development Property, at least
the following: (i) site plan; (ii) sanlple elevations and exterior materials; and (iii) landscape plan.
"Development Property" means the real property described as in Exhibit A.
"Event of Default" means an action by Developer listed in Section 9.1 of this Agreement.
"First MOltgage" means any first Pliority mortgage which is secured, in whole or in part, by
Developer's interest in the Development Propelty, Of any portion or parcel thereof, or any
Improvements constructed thereon, and which is a pemlitted encumbrance pursuant to the provisions
of Article VII of this Agreement.
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Resolution 04-11 (Con't.)
EXHIBIT B
November9,2004
"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 on the
Development Property.
"Improvements" means an office condominium project with a minimum of approximately
27,000 square feet, and a maximum of approximately 31,500 square feet. The Improvements shall
be constructed in four phases. . Phase I shall be constructed with a minimum of approximately 10,500
square feet, Phase IT shall be constructed with a minimum of approximately 6,000 square feet, Phase
III shall be constructed with a minimum of approximately 10,500 square feet, and Phase IV, which
shall be optional for Developer, shall be constructed with approximately 4,500 square feet. The
Improvements shall include parking that meets City zoning requirements, and a storm sewer pipe on
the southern part ofthe Development Property to provide for drainage from adjoining property, plus
all other improvements, including fixtures and equipment, to be constructed by Developer upon the
Development Property pursuant to this Agreement, as such improvements are .~efined in the
Development Plans.
''Net Proceeds" means any proceeds paid by an insurer to Developer, the Holder of the First
Mortgage, or the HRA under a policy or policies of insurance to be provided and maintained by
Developer pursuant to Article V 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.
"Phase" or "Phases" means Phase I, Phase II, Phase III and/or Phase IV, as defined in the
definition of Improvements.
"Plan" means the North Wirth Parkway Redevelopment Plan, adopted by the City and the
HRA in September of 1978, and as amended through the date hereof.
"Preliminary Plans" means the plans for the Improvements attached as Exhibit C, which are
hereby approved. No changes, except those deemed minor by the HRA Director, shall be made to
the Preliminary Plans without prior written approval by the HRA.
"Project" means the construction and operation of the Improvements by Developer on the
Development Property pursuant to the terms of this Agreement.
"Purchase Price" means the sum of $3.90 per square foot for each square foot of the
Development Property southeasterly of the railroad tracks currently dividing the Development
Property, as shown on the Preliminary Plans.
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9, 2004
"Redevelopment Area" means the approximately 110 acres located in Golden Valley,
Minnesota that are subject to the Plan.
"State" means the State of Minnesota.
"Tax Increment District" means the Tax Increment Financing North Wirth District No.3.
"Tax Increment Financing Act" means 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 reasonable control of the Party which is to perform, including but notlimited to labor
disputes, unusually severe or prolonged bad weather, acts of God, fire or other casualty, injunctions,
or other court or administrative orders.
ARTICLE II
Representations and Warranties
Section 2.1. Representations and Warranties bv the HRA. The HRA 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 the Tax Increment District constitutes a soils
condition district pursuant to Minnesota Statutes, Section 469.174.
(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.
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Resolution04-11 (Con't.)
EXHIBIT B
November9,2004
(:0 Neither the execution and delivery ofthis 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 any indenture, mortgage, agreement or
instrument of whatever nature to which the HRA is now a party or by which it is bound, or
will constitute a default under any of the foregoing.
(g) 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.
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 limited liability company duly organized and in good standing
under the laws of the State.
(b) Developer is not in violation of any provisions in its organizational documents,
has power to enter into this Agreement and to perform its obligations hereunder and has duly
authorized the execution, delivery and performance ofthis Agreement by proper action, such
that this Agreement is and shall remain binding and enforceable against Developer according
to its terms, subject to laws affecting the rights of creditors generally or principles of equity.
(c) Developer shall construct, operate and maintain the hnprovements upon the
Development Property in accordance with the terms of this Agreement, the Plan and all local,
state and federal. laws and regulations.
(d) 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 results in a
breach of, the terms, conditions or provisions of Developer's organizational documents, or
any indenture, mortgage, agreement or instrument of whatever nature to which Developer is
now a party or by which it is bound, or constitutes a default under any of the foregoing.
(e) There are no legal proceedings pending, or known to be threatened or
contemplated, to which Developer is a party, or to which any property of Developer is
subject, which, if determined adversely, would individually or in the aggregate have a
material adverse effect on Developer's financial position, or prevent or impair Developer's
ability to perform any covenants or obligations under this Agreement.
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9. 2004
(f) Developer has previously delivered to the HRA copies of its most recent financial
statements; since the date of such statements, there have been no changes in Developer's
financial condition which would have a material adverse effect on Developer, or which
would prevent or impair Developer's ability to perform any covenants or obligations under
this Agreement.
(g) Developer will act in good faith and use all reasonable effort to obtain all
consents and approvals required for construction of the Improvements, and Developer will
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 ofthe date hereof, shall be true
and complete as of the Closing Date, and shall survive the Closing Date.
ARTICLE III
Title and Other Matters
Section 3.1. Marketable Title. The HRA agrees to furnish to Developer, within 14 days
following the execution of the Agreement, a commitment for the issuance of an owner's ALTA
policy of title insurance with respect to the Development Property, issued bya reputable title
insurance company, showing marketable title in the HRA subject only to the following (the
"Permitted Encumbrances"):
(a) Building, zoning and similar laws and ordinances.
(b) Mineral rights reserved to the State of Minnesota.
(c) Easements of record which are agreed to by Developer as part of its title review
process;
(d) 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. Any other title costs or policies shall be paid by
Developer.
Developer shall be allowed 15 days after receipt of such commitment to make objections
thereto, such objections to be made in writing or deemed waived. The HRA shall be permitted 60
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Resolution .04-11 (Con't.)
EXHIBIT B
November 9, 2004
. days from and after the date of such objections to cure the same and the HRA hereby undertakes to
cure such defects. If such title objections cannot be cured within 60 days, or such longer period as is
agreed to by Developer, 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 to the extent necessary during the 60-day period. .
Section 3.2. Environmental Matters.
(a) Recognition of Geotechnical and Environmental Conditions. Theparties
recognize that construction of the Improvements on the Development Property must be
accompanied by extensive soil correction and environmental remediation. Developer may
terminate this Agreement, if Developer determines, in its reasonable discretion, that the
Development Property cannot be adequately corrected and remediated to enable the
construction of the Improvements and Developer's intended uses thereof. Developer must
exercise its right to terminate the Agreement under this Section 3.2(a) on or before the date
which is 90 days after the effective date of this Agreement, or the right shall lapse. .
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(b) Information and Investigation; TheHRA has previously made available to
Developer copies of written geotechnical and environmental reports and analyses concerning
the Development Property. Pursuant to an Access Agreement between the Parties, the BRA
has also granted Developer access to the Development Property to perform a geotechnical
and environmental analysis of the Development Property. Subject to the terms and
conditions of this Agreement, Developer shall have responsibility for performing all
additional environmental and geotechnical analyses of the Development Property necessary
to make the determinations required herein.
(c) Development Response Action Plan. Developer has prepared and obtained
approval by the Minnesota Pollution Control Agency ("MPCA") of a development response
action plan ("DRAP") for remediation of the Development Property. Developer shall take all
actions required for remediation of the Development Property under the DRAP, as
subsequently amended, following the Closing.
(d) Performance of Soil Correction and Remediation. Following the Closing
Date and through construction of all of the Improvements, Developer shall perform all soil
correction and environmental remediation necessary for construction of the Improvements in
accordance with this Agreement and the Plan. All such actions by Developer shall be in
compliance with the DRAP and all applicable laws, rules and regulations.
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(e) Reimbursement of Expenses. The HRA shall reimburse Developer for
reasonable out-of-pocket costs and expenses actually incurred by Developer after the
Closing Date for soil correction and environmental remediation of the Development
Property, reasonably required to permit construction of the Improvements. Expenses
eligible for reimbursement are all wetlands mitigation and geotechnical and environmental
remediation, including but not. limited to the following: engineering consulting fees and
expenses, MPCA review costs, soil removal and management, geo-piers, venting of all
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9, 2004
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buildings, removal of buried tanks, parking lot fabric, dewatering, and a construction
management fee of up to 5 % of soil correction and remediation contractor costs. All such
expenses shall be documented by invoices or other billing statements and are limited to a
maximum of $1,163,634. .
Developer may choose to receive reimbursement of eligible expenses directly from
the HRA up to the amount of the Purchase Price, or Developer may add expenses for
environmental remediation made pursuant to the DRAP to the Tax Increment Note attached
as Exhibit D. Any amount which Developer receives as reimbursement from the Purchase
Price, or which Developer adds to the Tax Increment Note, shall be applied against the
overall dollar limit. .
(f) Disclaimer by the HRA. Except as contained herein, the HRA makes no other
representation or warranty, express, implied, or by law, concerning the presence on, in or
under the Development Property, at any time, of any hazardous substances, toxic waste,
pollution or other contamination, and the HRA disclaims any and all liability and
responsibility to Developer in connection therewith.
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Section 3.3. P.U.D. Approval. Developer shall apply to the City for P.D.D. approval for
the Project and shall 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 four Phases. All four Phases
shall be included in the preliminary plan approval. Separate general plan approvals may be provided
for each ofthe Phases, but the proposed schedule for all of the Phases must be provided at the time
of general plan approval for Phase I. Significant changes to any Phase at the time of general plan
approval may require reconsideration ofthe preliminary plan approval.
Section 3.4. Real EstateTaxes and Special Assessments. The HRA repres~nts that no real
estate taxes are due and payable on the Development Property in 2004 or 2005. TheHRA shall pay
in full all special assessments against the Development Property which are levied or pending
(approved by the City Council) as ofthe Closing Date. Any special assessments or real estate taxes
on the Development Property payable after the Closing Date shall be the sole responsibility of
Developer.
.
Section 3.5. Closing. On the Closing Date, the HRA shall deliver to Developer a limited
warranty deed for the Development Property in the form attached as Exhibit E (the "Deed"). The
Deed shall be subject to the Permitted Encumbrances. The Deed shall contain a forfeiture clause
providing for revesting oftitle of the Development Property in the HRA, subject to the rights of the
Holder of a First Mortgage, upon the occurrence of an Event of Default (as defined in Section 9.1
hereof) and expiration of any period of cure such Event of Default provided in Section 9.2 hereof,
prior to issuance ofthe Certificate of Completion for Phase I. Delivery ofthe Deed shall not cause
termination of any provisions of this Agreement, except where expressly provided in this Agreement.
Also at the Closing, Developer shall pay the full Purchase Price to the HRA by cashier's or certified
check. All costs ofthe 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,
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EXHIBIT B
November9; 2004
except for the State deed tax which shall be paid by the HRA on the Closing Date, iilld except that
the HRA shall pay its own attorneys' fees for the Closing. The lIRA shall voluntarily take no actions
to encumber title, or fail to take any action necessary to prevent encumbrance of title, between the
date hereof and date of delivery of the Deed to Developer by the BRA pursuant to this Section.
Also at the Closing, the parties shall execute the Restrictive Covenant Agreement attached as
Exhibit F, which provides. that Developer shall not make any improvements to the portion of the
Development Property northwest of the railroad tracks, as shown on the Preliminary Plans, without
the HRA' s prior written consent, and which shall also provide that the Restrictive Covenant
Agreement may be terminated by Developer by payment to the lIRA of the initial sum of $1.00 per
square foot for each square foot located in said portion of the Development Property.
Also atthe Closing, the HRA shall deliver to Developer the Tax Increment Note attached as
Exhibit D.
Section 3.6. Recording. Developer shall cause the title insurance company to promptly file
this Agreement, the Deed and the Restrictive Covenant Agreement in the office of the Hennepin
County Recorder. Developer shall pay all costs of recording, except the State deed tax which shall
be paid by the HRA on the Closing Date.
Section 3.7. Use. From the Closing Date through December 31,2024, or the date when
this Agreement has been terminated, if earlier, Developer shall devote the Development Property
only to use as office condominiums and related storage as specified in this Agreement, or other uses
consistent with the Plan, and there shall be no unlawful discrimination 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 Developeror 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 ofthis Agreement shall govern, and the approval by the HRA of this Agreement shall
constitute an amendment of the Plan.
Section 3.8. 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, 2024, 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 ofthe Holder of a Mortgage, Developer shall use the entire
condemnation award first to pay the reasonable costs and expenses of such taking, including but not
limited to reasonable attorneys' fees and appraisers' fees, and second to reconstruct the building
Improvements to the extent practicable (or, in the event only a part of the building Improvements
have been taken, then to reconstruct such part) upon the Development Property.
Section 3.9. Guaranty. At the Closing, or the date which is 90 days after the effective date
of this Agreement, whichever is earlier, the Guaranty attached as Exhibit G shall be executed and
delivered to the HRA by each of Richard Martens, Joseph Antonucci, and Kenneth Guenthner.
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9, 2004
ARTICLE IV
Construction of Improvements
Section 4.1. Delivery of Development Plans and Construction ofImvrovements. Within
30 days after the date the City has granted preliminary P.D.D. approval for the Project, Developer
shall deliver the Development Plans for the Improvements to the HRA for approval. If the BRA fails
to approve the Development Plans in its reasonable discretion, Developer shall cooperate wtththe
HRA in making such changes as are required for the HRA's reasonable approval. If the
Development Plans are not approved by the HRA within 60 days after its receipt, either party may
terminate this Agreement.
Developer agrees that it shall construct the Improvements on the Development Property in
substantial conformance with the approved Development Plans . for the Improvements and in
conformance with all applicable City requirements. Developer agrees that the scope and scale of the
Improvements to be constructed and all related work 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. Developer shall
commence construction of the Phase I Improvements promptly following the Closing Date, and shall
diligently prosecute construction to completion. Developer shall complete construction of 100
percent of the shell ofthe Improvements without interior finishing on or before December 31 ~ 2005
for the Phase I Improvements, on or before December 31, 2008 for the Phase II Improvements, and
on or before December 31,2011 for the Phase ill Improvements. The times .provided herein for
commencement and completion of construction shall also be extended to the extent of any
Unavoidable Delays.
Upon completion ofthe storm sewer pipe on the southern part of the Development Property,
in accordance with applicable requirements and this Agreement, as determined by the City Engineer,
the HRA shall reimburse Developer for its reasonable out-of-pocket costs and expenses to construct
the pipe, subject to a maximum of $40,000. All such expenses shall be documented by invoices or
other billing statements.
Subsequent to execution of this Agreement, and until final certification ofthe 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, but not more often than monthly, 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 ofthe Improvements to inspect such construction.
The Holder of a First Mortgage shall not have any obligation to construct or complete
construction of the Improvements while in possession of the Development Property pursuant to
foreclosure, or conveyance by Developer to the Holder of the First Mortgage in lieu of foreclosure,
except as provided in Section 7.3.
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9,2004
Section 4.3. Certificates of Completion.
(a) Promptly after completion in accordance with this Agreement of the
Improvements for Phase I, and thereafter for each separate building in Phase IT and Phase ill,
the HRA will furnish Developer with separate Certificates of Completion, in substantially the
form set forth in Exhibit B attached hereto. Each Certificate of Completion shall be (and it
shall be so provided in the Certificate of Completion itself) a conclusive determination of
satisfaction and tenninatioil of the agreements and covenants in this Agreement with respect
to the obligations of Developer to construct the applicable portion of the hnprovements.
(b) If the HRA shall refuse or fail to provide a 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
ofthis Agreement, and what measures or acts will be necessary, in the opinion of the HRA'
for Developer to take or perform in order to obtain such Certificate of Completion.
Section 4.4 Deposit. and Reimbursement of HRA Expenses. .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, and legal fees and expenses between August 12, 2003 and the earlier
,of (a) the Closing Date, or (b) the date oftermination of this Agreement. At the time the amount of
the Deposit is reduced to $1,000 or less, the HRA shall give Developer written notice, and Developer
shall immediately contribute an additional $5,000 to the Deposit, subject to a maximum contribution
by Developer to the Deposit of $20,000. The HRA shall provide Developer with a reasonably
detailed itemization for any amounts spent from 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. Ifthis
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. Security Deposit. On the date hereof, Developer has delivered to the HRA
$50,000 as a security deposit (the "Security Deposit"). The HRA shall treat the Security Deposit as a
separate account on its books, but the HRA may commingle the Security Deposit with its other funds
for purposes of investment and reinvestment. All interest earned on the Security Deposit shall accrue
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9, 2004
to the HRA. If this Agreement terminates prior to the Closing Date as the result of an Event of
Default by Developer, the Security Deposit shall be applied by the HRA to the payment of all
unreimbursed out-of-pocket expenses paid or incurred by the HRA in connection with the
Agreement, including the reasonable legal fees and expenses incurred by the HRA under this
Agreement as a result of the default by Developer, and the remainder.shall be returned to Developer.
If this Agreement is terminated prior to the Closing Date for any reason other than an Event of
Default by Developer, the HRA shall return to Developer the full amount ofthe Security Deposit. If
the Closing occurs in accordance with this Agreement, the HRA shall apply the Security Deposit to
payment ofthe Purchase Price. The HRA's rights under this Section 4.5 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 applied under
this Section 4.5. The HRA's return to Developer of any unapplied portion of the Security Deposit
after an Event of Default by Developer shall not limit the HRA' s right to seek additional damages or
exercise any other remedy.
Section 4.6. Letter of Credit. At the Closing, or the date which is 90 days after the
effective date of this Agreement, whichever is earlier, Developer shall deliver to the HRA, at
Developer's sole cost and expense, an irrevocable letter of credit in the amount of $200,000, in a
form and issued by a bank previously approved by the HRA, which shall secure all of Developer's
obligations under this Agreement. 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, 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 ineffect or,
if earlier, until a date which is 60 days beyond the contractor's written estimated date for completion
of the shell of the Improvements for Phase I, or Developer shall be in default hereunder with no
opportunity to cure and the HRA may immediately draw upon the l.etter of credit then in effect. Any
letter of credit delivered under this Section shall guarantee completion of the Improvements for
Phase I 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 9.1 hereof (but only after the
expiration of any period to cure provided in Section 9.2), 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 for the Phase I Improvements. Any letter of credit
provided under this Section shall be returned to Developer in the event Developer terminates this
Agreement pursuant to Section 11.1. 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 the HRA's damages are reduced by its recovery under the
letter of credit.
Section 4.7. Payment of Taxes. Assessments. Etc. Following the Closing Date and until
December 31, 2024, 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 with
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9,2004
. 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.
.
.
Section 4.8. Pavments in Lieu of Taxes. Developer also agrees that if Certificates of
Completion for all of Phase I and a minimum of 13,500 square feet of Improvements of Phase II and
Phase ill have not been issued by December31, 2011, Developer shall pay to the HRA, on August
15 of each year beginning in 2012 and continuing until Certificates of Completion for a minimum of
13,500 square feet of Improvements of Phase II and Phase III are issued, or December 31, 2024,
whichever is earlier, an annual sum determined by the following formula:
A x [B - C] x D
For purposes of this formula, the following definitions shall apply:
A = the average assessed market value per square foot for the completed Improvements
(excluding land) as of January 2 of such year
B = 24,000 square feet
C = the number of square feet of completed Improvements as of January 2 of such year
D = the aggregate real estate tax rate for the completed Improvements as of January 2 of such .
year
ARTICLE V
Insurance.
Section 5.1. 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 petcent (100%) of the
insurable value or one 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 ofpolicy;
(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
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Resolution 04-11 (Can't.)
EXHIBIT B
November 9, 2004
.
excess liability policy may be used). The interest of the HRA shall be protected in .
accordance with a clause in form and content reasonably 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,
2024, or when this Agreement has been terminated, if earlier, 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) fusurance against loss and/or damage to the Improvements under a
policy or policies covering such risks as are ordinarily insured against by similar
businesses, including (without limiting the generality of the foregoing) fire, extended
coverage, vandalism and malicious mischief,'explosion, water damage, demolition
cost, debris removal, and collapse in an amount not less than 90 percent of the full
replacement cost of the Improvements, but any such policy may have a deductible
amount of not more than $25,000. No policy of insurance shall be written sothat the
proceeds thereof will produce less than the minimum coverage require,d 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
employed at the Project in amounts not less than the minimum required by statute.
.
(c) All insurance required in this Article V shall be taken out and maintained in
responsible insurance companies selected by Developer which are authorized under the laws
of the State to assume the risks covered thereby. At the first time that any insurance is
required to be in effect hereunder, Developer will deposit with the HRA a certificate or
certificates or binders ofthe respective insurers evidencing that such insurance is in force and
effect. Unless otherwise provided in this Article V, each policy shall contain a provision that
the insurer shall not cancel or modify it without giving written notice to Developer and the
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9,2004
HRA at least thirty (30) days before the cancellation or modification becomes effective.
Upon the lIRA's request, Developer shall furnish the HRA evidence reasonably satisfactory
to the HRA that any policy required hereunder is in effect. In lieu of separate policies,
Developer may maintain a single policy, or blanket or umbrella policies, or a combination
thereof, which provide the total coverage required herein, in which event Developer shall
deposit with theHRA a certificate or certificates of the respective insurers as to the amount
of coverage in force upon the hnprovements..
(d) In the event the Improvements or any portion thereof is destroyed by fire or other
casualty, then Developer shall within sixty (60) days after such damage or destruction, or as
soon thereafter as is reasonably possible, commence to repair, reconstruct and restore the
damaged Improvements to substantially the same or improved condition or utility value as
they existed. prior to the event causing such damage or destruction and, to the extent
necessary to accomplish such repair, reconstruction and restoration, Developer shall, subject
to the rights of the Holder of a First Mortgage, apply the Net Proceeds of any insurance
relating to such damage or destruction to the payment or reimbursement of the costs thereof.
Developer shall complete the repair and reconstruction ofthe hnprovements, whether or not
the Net Proceeds ofinsurance received by Developer for such purposes are sufficient to pay
for the same. Any Net Proceeds remaining after completion of construction shall be
disbursed. to Developer, subject to the rights of the Holder of the First Mortgage. The HRA
agrees to subordinate its rights under this paragraph to the Holder of a First Mortgage, but
only to the extent of amounts owing to the Holder under the First Mortgage.
Notwithstanding the foregoing, if all or a substantial portion ofthe Improvements are
destroyed by the fire or other casualty, Developer shall have the right to raze.to grade the
damaged Improvements and clear all debris resulting therefrom and landscape the
Development Property with trees, shrubs and grass in a manner which is compatible with the
surrounding area and reasonably acceptable to the HRA, or convert the use of the
Development Property to other uses consistent with the Plan.
ARTICLE VI
Undertakings of the HRA
Section 6.1. 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 6.2 below, the following actions:
(a) Sale of the Development Property to Developer pursuant to the Deed on the
Closing Date.
(b) Use reasonable efforts with the City so that the Improvements may constitute a
permitted use under the zoning ordinance of the City.
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9, 2004
. Section 6.2. Limitations on Financial Undertakings of the HRA. The provisions of Section
6.1 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 9.2;
(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 ofthe Closing to occur due to any of the above reasons shall
not constitute art event of default by the HRA.
.
Section 6.3. HRA to Maintain Existence. The HRA covenants and agrees that it shall at all
times do or cause to be done all things within its statutory powers necessary to preserve and keep in
full force and effect its existence, or to assure the assumption of its obligations under this Agreement
by any public body succeeding to its powers.
Section 6.4. HRA' s Option to Terminate. This Agreement may be terminated by theHRA
by written notice to Developer ifthe HRA is in compliance with all material terms of this Agreement
and Closing has not occurred by June 30, 2005; provided, however, that termination of this
Agreement pursuant to this .section 6.4 shall not affect the rights of the HRA to institute any action,
claim or demand for damages suffered as a result of breach or default ofthe terms of this Agreement
by Developer, and termination ofthis Agreement shall not terminate any provision contained herein
which is clearly intended by its meaning to continue thereafter.
ARTICLE vn
Mortgage Financing
Section 7.1. Approval of Mortgage. Any First Mortgage prior to issuance of Certificates of
Completion for all of Phase I and a minimum of 13,500 square feet of Improvements of Phase IT and
Phase ill shall require the prior written approval of the HRA' s Director. Thereafter, Developer may
grant any mortgage without the HRA' s consent. Developer and Holder may rely upon any approval
granted hereunder by the HRA's Director without additional action by the HRA. Approval shall not
be unreasonably withheld or delayed, and shall be given if:
.
(a) the HRA's Director first receives a copy of all mortgage documents; and
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Resolution04-11 (Con't.)
EXHIBIT B
November 9, 2004
.
(b) the HRA' s Director determines that the terms of the First Mortgage conform and
are subject to the terms of this Agreement, except to the extent the HRA agrees to
subordinate its interest to the terms of the First Mortgage.
The Holder of the First Mortgage (or any nominee or agent controlled by the Holder) shall
not be obligated to undertake or continue construction or completion ofthe Improvements while in
possession of the Development Property pursuant to the foreclosure, or conveyance by Developer to
the Holder in lieu offoreclosure, except upon express assumption of such obligation as provided in
Section 7.3, 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 ofthis Agreement, as such are binding on Developer, and such party shall not be entitled
to any additional rights or privileges granted a Holder hereunder.
Section 7.2. Notice of De fault: Copv to Mortgagee. Whenever the HRA shall deliver any
notice or demand to Developer with respect to any breach or default by Developer in its obligations
or covenants under this Agreement, the HRA shall at the same time forward a copy of such notice or
demand to each known Holder of any First Mortgage at the last address of such Holder shown in the
records of the HRA.
.
.
Section 7.3. Mortgagee's Option to Cure Defaults. After any breach or default referred to
in Section 7.2 hereof, each such Holder shall (insofar as the rights of the HRA are concerned and
subj ect 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 7.2 hereof, to cure or remedy such breach
or default and to add the cost thereof to the Mortgage debt and the lien of its 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 this Agreement or the Plan. However, if the breach or
default is with respect to construction ofthe 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 d~ys after the Holder has recei ved notice of such default pursuant to
Section 7.2 hereof, without first having expressly assumed the obligation to the HRA, by written
agreement reasonably satisfactory to the HRA, to complete, in the manner provided in this
. Agreement and in conformance with the Development Plans, the Improvements on the Development
Property. If the Holder enters into an agreement assuming the obligations of Developer under this
Agreement, such agreement shall provide that all obligations of the Holder thereunder shall terminate
at .such time as this Agreement is assigned by the Holder in accordance with the provisions of
Section 8.1 ofthis Agreement or in accordance with the following paragraph. Any Holder who shall
properly complete the Improvements relating to the Development Property shall be entitled, upon
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9, 2004
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 8.1 of this Agreement, if the
Holder of a First Mortgage acquires the interest of Developer under the terms of this Agreement, the
Holder shall be permitted to assign its interest in this Agreement with the consent ofHRA, which
consent shall not be unreasonably withheld, delayed or conclitioned. 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 ofthe proposed assignee and its capacity to perform the obligations remaining to be
performed under this Agreement at the time of such assignment; provided that, after Certificates of
Completion for all of Phase I and a minimum of 13,500 square feet of Improvements of Phase IT
have been issued, the experience ofthe 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 ofthis Agreement, the Deed, and the Plan, and not
to transfer, mortgage or otherwise convey any portion of the Development Property, except as
permitted in this' Agreement.
Section 7.4. BRA'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 thisArtic1e
VII, the Holder, within ten (10) days after it has declared or given notice to Developer of a default,
shall notify the HRA in writing of the default.
The HRA shall have the right to cure any such default which occurs prior to issuance of
Certificates of Completion for all of Phase I and a minimum of 13,500 square feet of Improvements
of Phase IT and Phase ill. The HRA shall have a period of 45 days after notice from a Holder to
effect a cure, provided that the HRA gives the Holder advance written notice of its intent to cure. In
the event of such cure prior to the issuance of Certificates of Completion for a minimum of 13,500
square feet of Improvements of Phase IT and Phase ill, the HRA shall thereupon be entitled, in
addition to and withoutlimitation 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 BRA 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 National Association until such
amounts are paid, and such amounts shall result in the creation of a lien on the Development
Property in favor ofthe HRA, subordinate to the lien of any First Mortgage.
Section 7.5. Subordinate Liens. Until Certificates of Completion for a minimum of13,500
square feet of Improvements of Phase II and Phase ITI have 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,
20
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9, 2004
including, without limitation, a title insurance company, which the HRA reasonably determines is
adequate to protect the interest of the HRA.
ARTICLE VITI
Restrictions on Transfer: Indemnification
Section 8.1. Restrictions on Transfer. Until Certificates of Completion for all of Phase I
and a minimum of 13,500 square feet of Improvements of Phase II and Phase ill have been issued by
the HRA, this Agreement and Developer's interest in the Development Property (or any part thereof)
may not be sold, transferred or assigned by Developer without the prior written consent of the HRA,
which consent may be granted or withheld by the HRA in its sole discretion. The Parties agree that
the terms and conditions hereof run with the land and shall be binding upon their successors and
assigns.
. After Certificates of Completion for all of Phase I and a minimum of 13,500 square feet of
Improvements of Phase IT and Phase III have been issued by the HRA, but prior to December 31,
2024, this Agreement and Developer's interest in the Development Property (or any part thereof)
may be sold, transferred or assigned by Developer, provided that the purchaser, as of the date of such
transfer, is reasonably determined by the HRA to be of sufficient financial condition, experience, and
reputation to perform fully under this Agreement, and the purchaser first agrees in writing with the
HRA, for himself, his heirs, representatives, successors and assigns, to be bound by the terms and
conditions of this Agreement, and not to sell, transfer, mortgage or otherwise assign any portion of
the Development Property except as permitted herein. In that event, Developer shall be released
from any obligation or liability hereunder to the extent ofthe interest purchased. After Certificates
of Completion for all of Phase I and a minimum of 13,500 square feet of Improvements of Phase II
and Phase ITI have been issued by the HRA, but prior to December 31, 2024, this Agreement and
Developer's interest in the Development Property (or any part thereof) may be sold, transferred or
conveyed by Developer free of the foregoing conditions, but, in such event, Developer shall remain
primarily liable for performance of the terms and conditions of this Agreement for the remainder of
its term.
The Parties agree that the terms and conditions hereofrun with the land and shall be binding
upon their successors and assigns. Notwithstanding the foregoing, the Parties also agree that nothing
contained in this Section 8.1 shall prohibit the sale of individual condominium units by Developer,
and that title to such units shall not be encumbered by this Agreement. Upon the sale of an
individual condominium unit by Developer, the provisions of this Agreement and the Deed shall
terminate with respect to such unit.
Section 8.2. 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 actions or omissions by Developer, its employees and agents, in connection with the
Project. This provision shall continue indefinitely after the termination of this Agreement.
21
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9, 2004
ARTICLE IX
Events of Default
Section 9.1. 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.ofthe following events:
. (a) Failure by Developer to perform on the Closing Date as the same may be
extended pursuant to the terms of this Agreement.
(b) Subject to Unavoidable Delays, and extensions agreed to by the Parties, failure by
Developer to commence and complete construction of the Improvements on the
Development Property pursuant to the terms, conditions and limitations of Article N of this
A~~~. .
(c) Until December 31, 2024, failure by Developer to observe or perform any
material covenant, condition, obligation or agreement on its part to be observed or perfon,ned
under this Agreement.
(d) Until Certificates of Completion for all of Phase I and a minimum of 13,500
square feet of Improvements of Phase II and Phase III have 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.
(e) Until Certificates of Completion for all of Phase I and a minimum of 13,500
square feet of Improvements of Phase II and Phase III have been issued, filing. against
Developer in any court, pursuant to any federal or State statute, of a petition in bankruptcy <?r
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.
(f) Until Certificates of Completion for all of Phase I and a minimum of 13,500
square feet of Improvements of Phase II and Phase III have been issued, commencement by
the Holder of any First Mortgage of foreclosure in the event of a default in any ofthe terms
or conditions of the First Mortgage.
(g) Until Certificates of Completion for all of Phase.I and a minimum of 13,500
square. feet of Improvements of Phase II and Phase III have been issued, any merger,
consolidation, liquidation, reorganization or transfer of all or substantially all of Developer' s
assets.
Section 9.2. 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
22
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9, 2004
pursuant to Section 7.1. 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 of60 days' written notice which sets
forth the nature of the default to Developer in the case of an Event of De fault under Section 9.1 (a),
(b), or (c), 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 Agreementand of the Plan):
(a) The HRA may suspend its perfonnance under this Agreement until it receives
assurances from Developer, deemed adequate by the HRA, that Developer will cure its
default and continue its perfonnance under this Agreement. .
(b) Ifthe Event of Default occurs prior to the Closing Date, the HRA may cancel and
rescind this Agreement.
(c) If the Event of Default occurs after Closing Date but prior to. issuance of the
Certificate of Completion for Phase I, the HRA may reenter and take possession of the
Development Property,. revest title to the Development Property in the HRA, and exclude
Developer from possession of the Development Property. The HRA shall thereupon use its
best efforts and act in good faith to sell 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 and expenses incurred by the HRA (less any amount
received by the HRA from any security provided by Developer) including but not limited to
taxes, assessments, utility charges, payments made to discharge any encumbrances orliens,
reasonable attorneys' fees and expenses; second to the Holder" of a.First Mortgage to the
extent of the unpaid mortgage; third to reimburse Developer in an amount equal to the
Purchase Price plus other reasonable acquisition and construction costs incurred by
Developer in connection with the Project including architects' and engineers' expenses; and
the balance to be retained by the HRA.
(d) The HRA may initiate such action, including legal or administrative action, as is
necessary for the HRA to secure performance of any provision of this Agreement or recover
any amounts due under this Agreement from Developer or under any security provided by
Developer.
( e) Sue for damages, provided that any damages shall be reduced to the extent of any
amount recovered by the HRA under any security provided by Developer.
Section 9.3. No Remedv 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
23
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9, 2Q04
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 9.4. No Additional Waiver Implied bv One Waiver. In the evertt any agreement
contained in this Agreement should be breached by any Party and thereafter waived by the other
Party, such waiver shall be limited to the particular breach so waived and shall not be. deemed to
waive any other concurrent, previous or subsequent breach hereunder
ARTICLE X
Additional Provisions
Section 10.1. Equal Employment Opportunity. Developer agrees that during the
construction ofthe Project neither it nor any ofthe contractors will unlawfully discriminate against
any employee or applicant for employment because of race, color, religion, sex, age, national origin,
or political affiliation.
Section 10.2. Not for Speculation. Developer~ s purchase 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 10.3. Titles of Artic1esand Sections. Any titles of the several parts, Articles and
Sections ofthis Agreement are inserted for convenience of reference only and shall be disregarded in
construing or interpreting any of its provisions.
Section lOA. Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand or other communication under this Agreement by either party to the
other shall be sufficiently given or delivered ifit 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
810 North Lilac Drive, Golden Valley, Minnesota55422, Attention: Richard Martens, with
copies to: Susan D. Steinwall, Fredrikson & Byron, P.A., 200 South Sixth Street, Suite 4000,
Minneapolis, Minnesota 55402; and
(b) in the case of the HRA, is addressed to or delivered personally to the HRA to
Housing and Redevelopment Authority In and For the City of Golden Valley, 7800 Golden
Valley Road, Golden Valley, Minnesota 55428, Attention: Director, with copies to Allen D.
Barnard, Best & Flanagan LLP, 225 South Sixth Street, Suite 4000, 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.
24
Resolution 04-11 (Con't.)
EXHIBIT B
. November 9,2004
. Section 10.5. Counterparts. This Agreement may be executed m any number of
counterparts, each of which shall constitute one and the same instrument.
Section 1 0.6~ Modification. lfthe HRA is requested by the Holder of a First Mortgage or by
a prospective Holder of a prospective First Mortgage to amend or supplement this Agreement, or to
subordinate its interest therein, the HRA will, in good faith, consider the request with a view to
granting the same, provided that such request is consistent with the terms and conditions of the Plan.
Section 10.7. 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 10.8. Severability. In the event any provision of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or
. render unenforceable any other provisions hereof.
.
Section iO.9. Duration. This Agreement shall be effective as of the date hereof and shall
continue in full force and effect until December 31, 2024 or, if earlier, the date on which Certificates
of Completion for all of Phase I and for a minimum of 13,500 square feet of Improvements of Phase
II and Phase ill have been issued and all ofthe condominium units therein have been sold to buyers.
This Agreement shall survive the Closing Date and the HRA's delivery of any Deed to Developer.
Upon Developer's request after termination of this Agreement, the HRA shall execute a written
termination agreement in recordable form.
Section 10.10. Binding Effect. Subject to the provisions of Article VIII, this Agreement is
binding upon, and shall inure to the benefit of, the successors and permitted assigns of the Parties.
Section 10.11. Consents. Any consent or approval required of a Party under this Agreement
shall not be unreasonably withheld or delayed.
Section 10.12. Certificates. Upon reasonable request from time to time, the HRA shall
execute and deliver written certificates to parties designated by Developer concerning whether the
Agreement is in effect, whether any defaults exist under the Agreement and other similar matters.
Section 10.13. Time of the Essence. Time is of the essence in the performance by each Party
of its obligations under this Agreement. .
.
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9, 2004
ARTICLE XI
Termination of Agreement
Section 11.1. Developer's Options to Terminate. This Agreement may be terminated by
Developer by written notice to the HRA in the event of any of the following events or conditions,
unless Developer's failure to comply with all materialterms of this Agreement, or Developer's then
existing Event of Default, has caused such event or condition:
(a) Subject to Section 6.2, the HRA fails to comply with any material term of this
Agreement, and, after written notice by Developer of such failure, the HRA has failed to cure
such non-compliance within 60 days of receipt of such notice, or, if such non-compliance
cannot reasonably be cured by the HRA within 60 days, the HRA has not, within 60 days of
receipt of such notice, provided assurances, reasonably satisfactory to Developer, that such
non-compliance will be cured as soon as reasonably possible;
(b) Closing has not occurred by June 30, 2005, unless extended by the Parties;
(c) If Developer's title objections are not waived by Developer or cured by the
HRA pursuant to Section 3.1;
(d) Pursuant to Section 3.2, if Developer determines, in its :reasonable discretion,
that the Development Property cannot be adequately remediated to enable the construction of
the Improvements, or Developer's intended use thereof.
In the event of a default by the HRA prior to the Closing Date which is caused by theHRA' s
failure to pay any amount which it is required to pay under this Agreement, Developer, in lieu of
terminating this Agreement, may pay such amount on behalf of the HRA and reduce the Purchase
Price.
Section 11.2. Effect of Termination. 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 ofthe terms ofthis Agreement by the HRA, and termination
ofthis Agreement shall not terminate any provision contained herein which is clearly intended by its
meaning to continue thereafter. .
26
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9,2004
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 Agreementto
be duly executed in its name and behalf, on or as of the date first above written.
HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF GOLDEN VALLEY
By
Its Chair
And
Its Director
KRJ NORTH WIRTH, LLC
27
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9, 2004
STATE OF MINNESOTA)
) SS.
COUNTY OF HENNEPIN)
The foregoing instrument was acknowledged before me this _ day of
2004, by Scott Grayson, Chair, and Thomas D.. Burt, Director, of the HOUSING AND .
REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY, on behalf
of the organization.
Notary Public
STATE OF MINNESOTA)
) SS.
COUNTY OF HENNEPIN) .
The foregoing instrument was acknowledged before me this _ day of
2004, by , ofKRJ NORTH WIRTH, LLC, a Minnesota
limited liability company, on behalf of the organization.
Notary Public
DRAFTED BY:
Best & Flanagan LLP .
225 South Sixth Street, Suite 4000
Minneapolis, Minnesota 55402-4690
28
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9,2004
EXHIBIT A
LEGAL DESCRIPTION
Lot 1, Block 1 ,North Wirth Parkway 5th Addition, Hennepin County, Minnesota.
A-I
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9, 2004
EXHIBIT B
CERTIFICATE OF COMPLETION
HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF
GOLDEN VALLEY, a public body corporate (the "HRA"), and KRJ NORTH WIRTH, LLC, a
Minnesota limited liability company ("Developer"), previously entered into the KRJ NORTH
WIRTH, LLC Private Development Agr~ement (the "Agreement"), recorded in the Office of the
County Recorder in and for the County of Hennepin and State of Minnesota, as Document Number
, for the following described property:
Lot 1, Block 1, North Wirth Parkway 5th Addition, Hennepin County, Minnesota.
The Agreement contains certain covenants which, if not performed by Developer, or its
successors and assigns, would result in a forfeiture and right of re-entry by the HRA, its successors
and assigns.. As of the date hereof, Developer has performed all of such covenants contained in the
Agreement to the satisfaction of the HRA, including the covenants in ArticleN of the Agreem.ent
requiring completion of the construction of Phase I of the improvements.
NOW, THEREFORE, it is hereby certified that all of the covenants in the Agreement,
including the covenants in Article IV requiring completion of the construction of Phase I of the
improvements, have been duly and fully performed by Developer as of the date hereof and that the
provisions for forfeiture oftitle and right to re-entry by theHRA for breach of such covenants, and
the escrow securing performance thereof, are hereby released absolutely and forever insofar as apply
to the property described above. The County Recorder in and for the County of Hennepin and State
of Minnesota is hereby authorized to accept for recording and to record the filing of this instrument.
This instrument shall be conclusive determination ofthe satisfactory termination of the covenants of
Article IV of the Agreement requiring completion of the construction of Phase I of the
improvements. Notwithstanding the foregoing, those covenants contained in the Agreement which
are to remain in full force and effect until December 31, 2024, shall remain in force and effect until
that date, unless earlier terminated in accordance with the Agreement.
B-1
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Resolution 04-11 (Con't.)
STATEOFMINNESOTA )
) SS.
COUNTY OF HENNEPIN )
EXHIBIT 8
November 9, 2004
HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF GOLDEN VALLEY
By:
Its:
And:
Its:
The foregoing instrument was acknowledged before me this _ day of ,
20_, by Scott Grayson and Thomas D. Burt, respectively the Chair and Director 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
225 South Sixth Street, Suite 4000
Minneapolis, Minnesota 55402-4690
B-2
Resolution 04-11 (Con't.)
EXHIBIT B
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9, 2004
EXHIBIT D
TAX INCREMENT NOTE
The Golden Valley Housing and Redevelopment Authority in and for the City of Golden
Valley (the "HRA"), promises to pay to KRJ North Wirth, LLC ("Developer"), and its permitted
assigns, solely to the extent and in the manner hereinafter provided, the principal amounts listed on
Schedule A attached hereto, together with interest which shall accrue as provided herein, on the
Payment Dates as hereinafter defined. .
This Note is a special and limited obligation and not a general obligation of the HRA, and has
been issued by the HRA pursuant to the KRJ NORTH WIRTH, LLC Private Development
Agreement, dated , 2004, between the BRA and Developer (the "Development
Agreement"), to aid in financing environmental remediation costs incurred and to be incurred by the
HRA and Developer within and for the benefit of Tax Increment Financing North Wirth District
No.3 (the "Tax Increment Financing District"). Capitalized terms used herein and not otherwise
defined herein shall have the meaning given to them in the Development Agreement.
The principal of this Note shall consist of Developer's reasonable out-of-pocket costs and
expenses actually incurred by Developer for environmental remediation, reasonably required to
permit construction ofthe Improvements on the Development Property, but only to the extent such
expenses are described in Section 3.2(e) of the Development Agreement, and not in excess of the
dollar limit contained in the Development Agreement.
Within ten days after the end of each month in which Developer incurs expenses which are
eligible forrepayment under this Note, Developer shall deliver to the BRA an itemized detail for the
expenses incurred in such month, and the amount thereof shall be added as principal to Schedule A.
The HRA shall signify its approval to each addition by the signature of a duly-authorized
representative on Schedule A.
Interest shall accrue at the rate of 6% per annum on any principal amount included in this
Note until paid in full. Interest shall begin to accrue when (1) the Certificate of Completion for
Phase I of the Improvements has been issued, and (2) Developer has incurred reimbursable expenses
described in Section 3 .2( e) of the Development Agreement equal to or greater than the Purchase
Price. Interest shall accrue only on such reimbursable expenses to the extent they exceed the
Purchase Price.
Each payment on this Note shall be by check made payable to Developer and mailed to
Developer at its postal address within the United States which shall be designated from time to time
by Developer.
Principal and interest on this Note shall be payable solely from Tax Increment, as hereinafter
defined, on each February 1 and August I commencing August 1,2007, to andinc1udingFebruary 1,
2027 (the "Payment Dates"). On each Payment Date, the HRA shall apply all Tax Increment to the
D-l
Resolution 04-11 (Can't.)
EXHIBIT B
November 9, 2004
. payment of this Note. All such payments shall be applied first to accrued interest and then to the
principal amount of this Note.
"Tax Increment'~ is defined as all tax increment derived by the HRA from the Tax Increment
District in any calendar year then on hand with the HRA. In the event that Tax Increment is not
sufficient to pay the principal of and interest on this Note when due, the failure ofthe HRA to pay
such principal and interest shall not constitute a default hereunder.
THE HRA MAKES NO REPRESENTATION OR WARRANTY THAT THE TAX
INCREMENT WILL BE SUFFICIENT TO PAY THE PRlNCIP AL OF AND INTEREST ON THIS
NOTE.
This Note and the HRA's obligation to make any payments under this Note shall terminate
upon the earlier of (a) occurrence of an Event of Default by the Developer under the Development
Agreement, which is not cured within the time permitted by the Development Agreement, or (b)
February 1,2027. Any unpaid principal and interest remaining at the time of termination of this
Note shall be considered satisfied and discharged.
.
EXCEPT AS TO THE OBLIGATION TO MAKE PAYMENTS FROM THE TAX
INCREMENT, THE NOTE IS NOT A DEBT OF THE HRA' THE CITY OF GOLDEN VALLEY,
OR THE STATE OF MINNESOTA (THE "STATE"), AND NEITHER THE HRA, THE CITY OF
GOLDEN VALLEY, THESTATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE
LIABLE ON THE NOTE, NOR SHALL THE NOTE BE PAYABLE OUT OF ANY FUNDS OR
PROPERTIES OTHER THAN TAX INCREMENT.
Developer shall never have or be deemed to have the right to compel any exercise of any
taxing power of the HRA or the City of Golden Valley or of any other public body, and neither the
HRA nor the City of Golden Valley nor any director, commissioner, council member, board member, .
officer, employee or agent of the HRA or the City of Golden Valley, nor any person executing or
registering this Note shall be liable personally hereon by reason of the issuance or registration hereof
or otherwise.
This Note may not be assigned by Developer prior to issuance by the HRA of Certificates of
Completion for all of Phase I and a minimum of 13,500 square feet of Improvements of Phase IT,
except that Developer may assign and pledge this Note to secure any loan to finance the costs of the
Project, and may also assign this Note to an assignee of the Development Agreement in an
assignment which meets the requirements of Article vrn of the Development Agreement.
.
D-2
Resolution 04-11 (Con't.)
EXHIBIT B
November 9, 2004
. IN WITNESS WHEREOF, the HRA has caused this Note to be executed by the Chair and
Director ofthe HRA, and has caused this Note to be dated as of , 20_.
Scott Grayson, Chair
Thomas D. Burt, Director
.
.
D-3
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Resolution 04-11 (Con't.)
Date
EXHIBIT B
November 9, 2004
SCHEDULE A
Amount
BRA Sil!nature
D-4
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9,2004
EXHIBIT E
LIMITED WARRANTY DEED
- FOR VALUABLE CONSIDERATION, THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY, a public body corporate created
pursuant to Minnesota Statutes, Section 469.001 et seq. ("Grantor"), hereby grants, bargains and
conveys to KRJ NORTH WIRTH, LLC, a Minnesota limited liability company ("Grantee"), real
property in Hennepin County, Minnesota, described as follows (the "Property"):
Lot 1, Block'l, North Wirth Parkway 5th Addition, Hennepin County, Minnesota.
together with all hereditaments and appurtenances belonging thereto, and also together with any
after-acquired title. Grantor, for itself and its successors and assigns, hereby covenants with Grantee,
and its successors and assigns that it has not made, done, executed, or suffered any act or thing
whatsoever whereby the Property, or any part thereof, now or at any time hereafter, shall or may be
imperiled, charged or encumbered in any manner whatsoever, except for any covenants, conditions,
or restrictions contained in the North Wirth Parkway Redevelopment Plan adopted by Grantor in
1978, as amended (the "Plan"), and any covenants, conditions, or restrictions contained in the KRJ
NORTH WIRTH, LLC Private Development Agreement dated ,2004, between
Grantor and Grantee (the "Agreement").
Provided:
1. It is understood and agreed that this Deed is subjecttothe restrictions, reservations
and encumbrances of record, if any, all building and zoning laws and ordinances, all other local, state
and federal laws and regulations, and the covenants, conditions, restrictions and provisions of the
Agreement. It is also understood and agreed that, prior to December 31,2024, Grantee shall not sell,
transfer, mortgage or otherwise convey the Property, or any part thereof or interest therein, except as
permitted by the Agreement.
Grantee hereby covenants and agrees to begin and diligently prosecute to completion the
development ofthe Property at such times and as otherwise provided in the Agreement. Promptly
after completion of the Improvements (as defined in the Agreement) in accordance with the
Agreement, Grantor will furnish Grantee with a Certificate of Completion, as provided in the
Agreement, which shall be the conclusive determination of satisfaction and termination of the
agreements and covenants in- and pursuant to the Agreement with respect to the obligations of
Grantee to construct the Improvements, and the dates for the commencement and completion thereof.
2. If an "Event of Default" by Grantee, as defined in Section 9.1 of the Agreement,
which is not cured within the period provided in Section 9.2 of the Agreement, exists prior to the
recording of the Certificate of Completion for all of Phase I and a minimum of 13,500 square feet of
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9,2004
Improvements of Phase II and Phase III, as described in the Agreement, then Grantor shall have all of
the rights and remedies specified in Section 9.2 of the Agreement.
3. Grantee hereby agrees to do the following:
(a) Maintain insurance of such types and amounts as specified in Article V of the
Agreement;
(b) Pay real estate taxes and special assessments on the Property when due, ifnot
exempt from such taxes and assessments;
(c) Devote the Property to only such uses as are permitted under the Agreement.
The parties agree that the covenants contained in this Section shall terminate on December
31, 2024, or earlier if provided in the Agreement.
4. There shall be no discrimination in the use ofthe Property by Grantee on account of
race, color, religion, sex, age, national origin, or political affiliation during the period that the Plan
remains in effect.
The parties agree that all of the covenants and restrictions contained in this De.ed shall be
binding upon Grantee, its successors and assigns, for the benefit of Grantor, its successors and
assigns, and shall also be deemed to run with the land.
IN WITNESS WHEREOF, Grantor has caused this Deed to be duly executed on its behalfby
its duly authorized representatives this _ day of , 2004.
HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF GOLDEN VALLEY
By:
Scott Grayson
Its Chair
By:
Thomas D. Burt
Its Director
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Resolution 04-11 (Con't.)
EXHIBIT B
November 9, 2004
.. STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
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The foregoing instrument was acknowledged before me this _ day of ,_,
by Scott Grayson and Thomas D. Burt, respectively the Chair and Director of the Housing and
Redevelopment Authority in and for the City of Golden Valley, on behalf of the Authority.
Notary Public
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EXHIBIT B
November 9, 2004
EXHIBIT F
RESTRICTIVE COVENANT AGREEMENT
This Restrictive Covenant Agreement (the" Agreement") is made this day of
, .2004, by KRJ NORTH. WIRTH, LLC, a Minnesota limited liability company
("Developer").
Developer is the owner of land iJ? the City of Golden Valley (the "City") in Hennepin
County, Minnesota, described in Exhibit A attached hereto and made a part hereof (the II Land ").
The Land is subject to the KRJ North Wirth, LLC Private Development Agreement (the
"Development Agreement") dated , 2004, between Developer and the Housing
and Redevelopment Authority in and for the City of Golden Valley (the "HRA"). As part of the
consideration for the Development Agreement Developer has agreed to subject the Land to this
Agreement.
Developer hereby declares that the Land is subject to the restrictive covenant (the
"Restriction") that without the prior written consent of the HRA, no improvements shall be made
to the Land and the Land shall be maintained as open space. The Restriction shall run with the
Land, shall apply to and bind each and every successor in interest thereof; and is imposed upon the
Land as a servitude in favor of the HRA.
The Restriction shall continue and be binding upon the Developer and its successors and
assigns for a period of thirty years from the date hereof, except that the Restriction may be
terminated at any time upon payment to the HRA of an amount equal to $1.00 per square foot of
the Land (the "Termination Payment"). The amount of the Termination Payment shall increase
3 % per year, compounded annually, from the date of .this Agreement. The Land consists of
square feet. Upon receipt of the Termination ~ayment, the HRA shall execute a
termination of this Agreement in a form proper for filing in the public land.records of Hennepin
County, Minnesota
The Restriction is for the benefit of the HRA, and the power and privilege of enforcement
thereof against any party or parties who shall violate or attempt to violate the same by appropriate
proceedings at law or in equity are granted to the HRA. Failure of the HRA to enforce any part of
this Agreement upon its violation shall in no event be deemed to be a waiver of the right to do so
as to any subsequent violation.
KRJNORTH WIRTH, LLC
By
Its:
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EXHIBIT B
November 9, 2004
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of
2004, by , the General Partner of KRJ North Wirth, LLC, a Minnesota
limited liability company, on behalf of the organization.
Notary Public
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Resolution 04-11 (Con't.)
November.g, 2004
EXHIBIT B
EXHIBIT G
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 KRJ NORTH WIRTH, LLC, a Minnesota
limited liability company ("Developer"), the undersigned ("Guarantor"), hereby guarantees to the
HRA the full and prompt performance, when due, of all covenants, agreements, and obligations of
Developer under the KRJ NORTH WIRTH, LLC Private Development Agreement dated as of
,2004, and any amendments thereto (the "Development Agreement").
. This Guaranty is absolute, unconditional, continuing and irrevocable. This Guaranty is
effective upon delivery to the HRA without acceptance by the HRA and without any further act or
condition. Guarantor's liability under this Guaranty is joint and several with any other guarantors.
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.
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.
This Guaranty shall be binding upon Guarantor and its successors and assigns and shall inure
to the benefit of the HRA and its successors and assigns. This Guaranty may not be waived,
modified, terminated or otherwise changed except by a writing signed by the HRA.
This Guaranty shall be governed by the laws ofthe State of Minnesota. Any dispute or claim
arising under this Guaranty shall be venued exclusively in Minnesota District Court, Hennepin
County, and Guarantor hereby consents to the jurisdiction of such court for all such matters.
Guarantor also agrees that process may be served on Guarantor by service on any officer of
Developer, in addition to any other method permitted by law.
This Guaranty shall terminate at such time as the Certificate of Completion for Phase I of the
Improvements has been issued as provided in Section 4.3 of the Development Agreement.
. Guarantor represents and warrants to the HRA that the personal financial statement he
delivered to the HRA is substantially true and complete as of the date hereof.
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EXHIBIT B
November 9. 2004
IN WITNESS WHEREOF, Guarantor has caused the execution of this Guaranty this
day of , 2004.
THIS INSTRUMENT WAS DRAFTED BY:
Best & Flanagan LLP
225 South Sixth Street, Suite 4000
Minneapolis, Minnesota 55402-4690
011800~60702~06991_12
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