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04-21-15 HRA Special Agenda Packet AGENDA Special Meeting of the Housing and Redevelopment Authority Golden Valley City Hall 7800 Golden Valley Road Council Ghamber April 21, 2015 5:30 pm Pages 1. Roll Call 2. Approval of Agenda 3. Highway 55 West Redevelopment Area 2-55 A. Development Agreement with Golden Villas, LLC 4. Adjournment M�L�Y'� �� 4 Housing and Redevelopment Authority 763-593-8002/763-593-8109(fax) Executive Summary For Action Golden Valley Housing and Redevelopment Authority Special Meeting April 21, 2015 Agenda Item 3. Consider Development Agreement with Golden Villas, LLC Prepared By Marc Nevinski, Physical Development Director Summary Golden Villas, LLC is proposing to construct a 162 unit apartment building at 9220 and 9130 Golden Valley Road. These parcels are currently occupied by the former bowling alley and one story office building. Currently, the project received preliminary PUD approval on September 16, 2014. In 2012, a Tax Increment Financing (TIF) Renewal and Renovation District was established as part of a different development proposal, to fund infrastructure improvements in the area to enhance the attractiveness and safety of the area for businesses and residents. As part of the current development proposal, the developer has requested TIF assistance in the redevelopment of the two parcels. HRA staff has reviewed the request and negotiated the attached development agreement. The TIF district is a fifteen year Renewal and Renovation District. The increment generated is proposed to be used for two purposes. First, the increment will help fund public improvements in the area. These include: � A reconstructed slip-ramp to and from Highway 55 to improve safety at the intersection of Golden Valley Road and Decatur Avenue. � The installation of sidewalk along both sides of Golden Valley Road, Decatur Avenue, and 7th Avenue North to Boone Avenue. � Pedestrian street lighting. The City will sell bonds to pay for the construction of the public improvements and repay them with a combination of increment and assessments to benefiting parcels. Construction is expected to occur in 2017. Secondly, the developer has requested TIF assistance to help defray the costs associated with redevelc�pment. Staff has negotiated the attached agreement, which is summarized as follows: � Increment will first be used to pay HRA costs and obligations (Bonds) associated with the project. � The developer will be reimbursed for TIF up to eligible costs per Minnesota Statutes. The 2.6 million reimbursement is a pay-go-note as described in Exhibit E. � The development agreement obligates the developer to a minimum assessment or valuation of the project to ensure that enough increment is generated to cover HRA costs and obligations as described in Exhibit B. Total project value is $24,043,000. Project plans are included in the development agreement as Exhibit D. The project will include 162 apartment units ranging from "alcove" to two bedrooms, an outdoor pool and terrace, fitness center, bike storage, and underground parking. The project is expected to break ground by early next year, if not sooner, and be ready for occupancy in 2017. Attachments � Golden Villas, LLC Private Development Agreement (49 pages) • TIF District and Project Area Map (1 page) • Public Improvement Plans (2 pages) Recommended Action MOTION to authorize the Chair and Director to sign the Golden Villas, LLC Private Development Agreement. GOLDEN VILLAS, LLC PRIVATE DEVELOPMENT AGREEMENT THIS AGREEMENT, effective as of ,2015,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 s�., with its principal offices at 7800 Golden Valley Road, Golden Valley, Minnesota 55427 (the "HRA"), and GOLDEN VILLAS, LLC, a Minnesota limited liability company, with its principal office 1907 Wayzata Boulevard, Wayzata, Minnesota 55391 (collectively, "Developer"). WHEREAS, the Redevelopment Plan for Highway 55 West Redevelopment Area (the "Plan")was adopted by the HRA on October 9, 2012, and by the City of Golden Valley(the"City") on December 18, 2012, for the purpose of redeveloping approximately 26.28 acres located in the City of Golden Valley (the "Redevelopment Area"); and WHF,REAS, the Tax Inerement Financing Plan for Tax Increment Financing(Renewal and Renovation) No. 1 was adopted by the HRA on October 9, 2012 and by the City on December 18, 2012 and amended by the HRA on October 14, 2014 and by the City on December 2, 2014 (the "Plan") for the purpose of financing renewal and renovation in an area of approximately 4.46 acres within the Redevelopment Area; and WHEREAS, Developer has submitted to the HRA a proposal for the purchase from private parties of two parcels in the Redevelopment Area legally described in attached Exhibit A (the "Development Property"), and the construction on the Development Property of a six-story, approximately 162 unit market-rate apartment building,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, Minnesota Statutes, Section 469.029, requires the adoption of a development agreement between the parties setting forth the mutual rights and obligations of the parties in accordance with the provisions of the Plan; 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: 2 TABLE OF CONTENTS Pa e ArticleI - Definitions..................................................................................................................5 1.1 Definitions............................................................................................................................5 Article II - Representations and Warranties................................................................................7 2.1 Representations and Warranties by the HRA.......................................................................7 2.2 Representations and Warranties by Developer.....................................................................8 Article III—Approvals and Other Matters..................................................................................9 3.1 P.U.D. Approval...................................................................................................................9 3.2 Development Plans...............................................................................................................9 3.3 Closing Date Deliveries........................................................................................................9 3.4 Recording............................................................................................................................10 3.5 Use......................................................................................................................................10 3.6 Condemnation.....................................................................................................................10 Article IV - Construction of Improvements..............................................................................10 4.1 Development Plans and Construction of lmprovements....................................................10 4.2 Commencement and Completion of Construction .............................................................10 4.3 Certificate of Completion...................................................................................................11 4.4 Deposit and Reimbursement of HRA Expenses.................................................................l 1 4.5 Letter of Credit ...................................................................................................................12 ArticleV - Insurance.................................................................................................................13 5.1 Insurance.............................................................................................................................13 Article VI - Undertakings of the HRA......................................................................................15 6.1 Undertaking........................................................................................................................15 6.2 Limitations on Financial Undertakings of the HRA...........................................................15 6.3 HRA's Option to Terminate...............................................................................................15 Article VII - Mortgage Financing..............................................................................................16 7.1 Approval of Mortgage ........................................................................................................16 7.2 Notice of Default; Copy to Mortgagee ...............................................................................16 7,3 Mortgagee's Option to Cure Defaults.................................................................................16 7.4 HRA's Option to Cure Default on Mortgage .....................................................................17 7.5 Subordinate Liens...............................................................................................................18 Article VIII - Restrictions on "I'ransfer; Indemnification...........................................................18 8.1 Restrictions on Transfer......................................................................................................18 8.2 Indemnification...................................................................................................................19 Article IX— Developer Events of Default.................................................................................19 9.1 Events of Default Defined..................................................................................................19 9.2 Remedies on Default ..........................................................................................................19 9.3 No Remedy Exclusive ........................................................................................................20 9.4 No Additional Waiver Implied by One Waiver..................................................................20 3 Article X - Additional Provisions .............................................................................................20 10.1 Equal Employment Opportunity.......................................................................................20 10.2 Not for Speculation...........................................................................................................21 10.3 Titles of Articles and Sections..........................................................................................21 10.4 Notices and Demands.......................................................................................................21 10.5 Counterparts......................................................................................................................21 10.6 Modification .....................................................................................................................21 10.7 Interpretation and Amendment.........................................................................................21 10.8 Severability.......................................................................................................................21 10.9 Duration............................................................................................................................22 10.10 Binding Effect.................................................................................................................22 10.11 Consents..........................................................................................................................22 10.12 Certificates......................................................................................................................22 10.13 Time of the Essence........................................................................................................22 Article XI - Termination of Agreement ....................................................................................22 11.1 Developer's Options to Terminate....................................................................................22 11.2 Effect of Termination .......................................................................................................23 ExhibitA - Legal Description.....................................................................................................1 Exhibit B - Assessment Agreement............................................................................................l Exhibit C - Certificate of Completion........................................................................................1 ExhibitD - Preliminary Plans......................................................................................................l Exhibit E - Tax Increment Note...................................................................................................1 ExhibitF - Guaranty....................................................................................................................1 4 ARTICLE I Definitions Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Agreement" means this Golden Villas, LLC Private Development Agreement by and between the Housing and Redevelopment Authority in and for the City of Golden Valley,Minnesota, � and Golden Villas, LLC, a Minnesota limited liability company, as the same may be from time to time modified, amended or supplemented. "Assessment Agreement"means the Assessment Agreement attached as Exhibit B,in which Developer shall agree to certain minimum assessed values for the Project, and to be delivered by Developer to the HRA at the Closing Date. "Certificate of Completion"means a certification, in the form of the certificate contained in Exhibit C attached to and made a part of this Agreement,provided to Developer pursuant to Section 4.3 of this Agreement upon satisfactory completion of the shell of the Improvements without interior finishing. � "C�" means the City of Golden Valley, Minnesota. "Closin�" or"Closing Date"means the date on which Developer completes its purchase of all of the Development Property and Developer shall promptly notify the HRA of the Closing Date when it is scheduled and when it is completed. "Coun " means the County of Hennepin, Minnesota. "Developer" means Golden Villas, I,LC, a Minnesota limited liability company, and its successors and assigns under this Agreement. "Development Plans"means the plans,specifications,drawings,and related documents on all construction work to be performed by Developer on the Development Property, including all on-site improvements to be performed, installed or constructed pursuant to this Agreement. The Development Plan shall be consistent with the Preliminary Plans attached as Exhibit D. Such plans shall include, for each building or other structure to be constructed on the Development Property,at least the following: (i) site plan; (ii) sample elevations and exterior materials; and (iii) landscape plan. "Development Property" means the real property described in Exhibit A. "Event of Default" means an action by Developer listed in Section 9.1 of this A�;reement. 5 "First Mort�a�e"means any first priority mortgage which is secured, in whole or in part,by Developer's interest in the Development Property, or any portion or parcel thereof, or any Improvements constructed thereon,and which is a permitted encumbrance pursuant to the provisions of Article VII of this Agreement. "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 a six-story apartment building with approximately 162 market-rate units and a minimum of approximately 246,272 s9uare feet with underground tenant parking and all other improvements, including fixtures and equipment, to be constructed by Developer upon the Development Property pursuant to this Agreement, as such improvements are defined in the Development Plans and this Agreement. The Improvements shall include parking that meets City zoning requirements. "Net Proceeds"means any proceeds paid by an insurer to Developer, the Holder of the }�'irst 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. "Party"means either the HRA or Developer. "Plan" means the Redevelopment Plan for Highway 55 West Redevelopment Area, as hereafter amended. "Preliminary Plans"means the plans for the Project attachEd as Exhibit D,which are hereby approved. No material changes shall be made in the Preliminary Plans by Developer without the HRA's prior written consent. "Project" means the construction and operation of the Improvements by Developer on the Development Property pursuant to the terms of this Agreement. "Redevelopment Area" means the approximately 26.28 acres located in Golden Valley, Minnesota that are subject to the Plan. "State" means the State of Minnesota. 6 "Tax Increment District" means the Tax Increment Financing (Renewal and Renovation) District No. 1506. "Tax Increment Financing Act" means Minnesota Statutes, Sections 469.174 through 469.179, inclusive, as amended. "Tax Increment Note" means the promissory note attached as Exhibit F,, in which the HRA agrees to make payments to Developer of a portion of the tax increment received by the HRA on the Project, and to be delivered by the HRA to Developer immediately after the Closing Date. "Tax Official"means any City or County Assessor; County Auditor; County or State Board of Equalization; the Commissioner of Revenue of the State; or any State or Federal District Court, the Tax Court of the State or the State Supreme Court. "Unavoidable Delavs"means actual delays due to events directly affecting the Project which are beyond the reasonable control of the Party which is to perform,including but not limited to labor disputes,unusually severe or prolonged bad weather,acts of God,fire or other casualty,injunctions, or other court or administrative orders. Unavoidable delays shall also include subsurface soil conditions but only until the date when the HRA first offers bonds relating to the Project. ARTICLE II Ret�resentations and Warranties Section 2.1. Representations and Warranties by 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 renewal and renovation 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) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented or limited by,or in conflict with or will result in a 7 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. (fl 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 of this 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 Improvements 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. 8 (� Developer has no significant assets or liabilities at this time, and there are no conditions 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. 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. ARTICLE III Approvals and Other Matters Section 3.1. P.U.D. Ap rp oval. Developer shall apply to the City for P.U.D. approval for the Project and shall use its best efforts to obtain all consents and approvals required for construction of the Improvements as soon as practicable. 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). Developer hereby waives its rights to a public hearing and/or appeal relating to assessments for sidewalks, streets, street lights and other public improvements that arise from the Project. Developer agrees to pay, when due, all approved assessments and all real estate taxes payable with respect to the Development Property. Section 3.2. Development Plans. Within 60 days after the date of this Agreement, Developer shall submit the Development Plans to the HRA for approval. Developer shall make any changes reasonably requested by the HRA, provided the requested changes are consistent with the Plan, the Preliminary Plans, and the City's P.U.D. approval process. The HRA shall approve the final Development Plans within 30 days after submission by Developer, or if later, within 30 days after any final revisions. Section 3.3. Closing Date Deliveries. Immediately after the Closing Date,the HRA shall execute and deliver to Developer the Tax Inerement Note, and the parties shall execute and deliver the Assessment Agreement. Also immediately after the Closing Date, the Guaranty attached as Exhibit F shall be executed and delivered to the HRA by Bradley Hoyt. As a condition to receipt of any payment under the Tax Increment Note, Developer shall deliver to the HRA an itemized statement,together with copies of invoices or receipts, showing that it has incurred eligible expenses described in Minnesota Statutes, Section 469.176 equal to or greater than the amount of the payment then due on the Tax Increment Note, and that have not previously been reimbursed by payment under the Tax Increment Note. 9 Section 3.4. Recording. Developer shall cause the title insurance company to file this Agreement and the Assessment Agreement in the office of the Hennepin County Recorder on the Closing Date. Developer shall pay all costs of recording. At its option, Developer may record a Memorandum of Development �greement, in lieu of this Agreement, in a form approved by the HRA Section 3.5. Use. From the Closing Date through February 1, 2033, or the datc when this Agreement has been terminated,if earlier,Developer shall devote the Development Property only to use as a market rate apartment building 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 Developer or the Development Property without Developer's consent, which consent shall not be unreasonably withheld or delayed. To the extent that there are any conflicts between this Agreement and the Plan, the provisions of this Agreement shall govern,and the approval by the HRA of this Agreement shall constitute an amendment of'the Plan. Section 3.6. 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 February l,2033, Developer shall,with reasonable promptness after such taking,notify the HRA as to the nature and extent of such taking. Upon receipt of any condemnation award, subject to the rights of the Holder of a Mortgage,Developer shall use the entire condemnation award first to pay the reasonable costs and expenses of such taking, including but not limited ta 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. If the condemnation renders building the Improvements impracticable,Developer shall have no further obligations under this Agreement. ARTICLE N Construction of Improvements Section 4.1. Development Plans and Construction of Improvements. 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 Improvements by March 31, 2016, and shall diligently prosecute construction to completion no later than March 31,2018. Developer shall complete construction of 10 66.67 percent of the shell of the Improvements on or before December 31,2016,and 100 percent of the shell of the Improvements without interior finishing on or before March 31, 2017. The times provided herein for commencement and completion of construction shall also be extended as needed because of any Unavoidable Delays. Subsequent to execution of this Agreement,and until final certification of the Improvements pursuant to Section 4.3,Developer shall make reports to the HRA, in such detail and at such times as may reasonably be requested by the HRA,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 of the 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. Section 4.3. Certificate of Completion. (a) Promptly after completion in accordance with this Agreement of the Improvements, the HRA will furnish Developer with a Certificate of Completion, in substantially the form set forth in Exhibit C attached hereto. The Certificate of Campletion shall be (and it shall be so provided in the Certificate of Completion itsel� a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement with respect to the obligations of Developer to construct the applicable portion of the Improvements. (b) If the HRA shall refuse or fail to provide the Certificate of Completion in accordance with the provisions of this Section, the HRA shall, within 10 days after written request by Developer, provide Developer with a written statement, indicating in adequate detail in what respects Developer has failed to complete the Improvements in accordance with the provisions of this Agreement, or is otherwise in default under the terms of this Agreement, and what measures or acts will be necessary, in the opinion of the ��RA, for Developer to take or perform in order to obtain the Certificate of Completion. Section 4.4 Deposit and Reimbursement of HRA Expenses. Pursuant to the Reimbursement Agreement dated September 9, 2014, which is superseded and replaced by this Agreement,Developer has deposited$20,000 with the HRA for the reimbursement of certain out-of- pocket expenses incurred by the HRA in connection with the Project(the"Deposit"). The$20,000 is non-refundable. Each time the amount in the Deposit is reduced to $5,000 or less, the HRA shall give Developer written notice and Developer shall immediately contribute an additional $10,000 to the Deposit. The HRA shall treat the Deposit as a separate account on its books, but the HRA may commingle the Deposit with its other funds for purposes of investment and reinvestrnent. All interest earned on the Deposit shall accrue to the HRA. The Deposit shall be applied by the HRA for 11 the payment of out-of-pocket legal, appraisal, engineering, financial consultant, environmental, surveying,platting,and other costs and expenses incurred by the HRA in connection with the Project until the earlier of: (a)the date of termination of this Agreement,or(b)issuance of the C�rtificate of' Completion. The HRA shall provide Developer with a reasonably detailed itemiaation for any amounts spent from the Deposit. After payment to the HRA of all amounts reimbursable to it under this Agreement, the HRA shall refund to Developer, without interest,the lesser o£ (a)the amount then in the Deposit,or(b)the amount of contributions made by Developer to the Deposit in excess of $20,000. If this Agreement terminates prior to the issuance of the Certificate of Completion as the result of an Event of 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. Letter of Credit. On the Closing Date, Developer shall deliver to the HRA,at Developer's sole cost and expense, an irrevocable letter of credit in the amount of$250,000, 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 in effect 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, or Developer shall be in default hereunder with no opportunity to cure and the HRA may immediately draw upon the letter of credit then in effect. Any letter of credit delivered under this Section shall guarantee completion of' the Improvements by Developer in accordance with the Development Plans, and in accordance with Section 4.2. Any letter of credit provided under this Section shall permit the HRA to draw upon it for the full face amount thereof in the Event of Default as defined in Section 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 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. 12 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 percent(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 non-reporting form on the so-called "all risk" form of policy; (ii) Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations and contractual liability insurance)together with an Owner's and Contractor's Protective Policy with limits against bodily injury and property damage of not less than $2,000,000 for each occurrence(to accomplish the above-required limits,an umbrella excess liability policy may be used). The interest of the HRA shall be protected in accordance with a clause in form and content 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 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 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 February 1,2033,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) Insurance against loss and/or damage to the Improvements under a policy or policies covering such risks as are ordinarily insured against by similar businesses,including(without limiting the generality of the foregoing)fire,extended coverage, vandalism and malicious mischief, explosion, water damage, demolition cost, debris removal, and collapse in an amount not less than 90 percent of the full 13 replacement cost of the Improvements, but any such policy may have a deductible amount of not more than$25,000. No policy of insurance shall be written so that the proceeds thereof will produce less than the minimum coverage required by the preceding sentence, by reason of co-insurance provisions or otherwise, without the prior consent thereto in writing by the HRA. The term "full insurable replacement value" shall mean the actual replacement cost of the Improvements (excluding foundation and excavation costs and other uninsurable items) and equipment. (ii) Comprehensive general public liability insurance, including personal injury liability for injuries to persons and/or property,including any injuries resulting from the operation of automobiles or other motorized vehicles on or about the Development Property, in the minimum amount for each occurrence of$2,000,000. (iii) Worker's compensation insurance with statutary coverage. (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 of the 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 HRA at least 30 days before the cancellation or modification becomes effective. ilpon the HRA'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 avent Developer shall deposit with the HRA a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Improvements. (d) In the event the Improvements or any portion thereof is destroyed by fire or other casualty, then Developer shall within 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 of the Improvements,whether or not the Net Proceeds of insurance received by Developer for such purposes are sufficient to pay for the same. Any Net Proceeds remaining after completion of construction shall be disbursed to Developer, subject to the rights of the Holder of the First Mortgage. The HRA agrees to subordinate its rights under this paragraph to the Holder of a First Mortgage, but only to the extent of amounts owing to the Holder under the First Mortgage. 14 AR'TICLE VI Undertakin�s of the HRA Section 6.1. Undertakin�. As consideration for the construction of the Improvements by Developer, the HRA agrees, subject to the provisions of Section 6.2 below: (a) to use reasonable efforts with the City so that the Improvements shall be approved as a PUD;and(b)to 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 6.2. Limitations on Financial Undertakings of the HRA. The HRA shall have no � obligation to Developer under this Agreement to take any action provided for in this Agrecment � except upon existence of the following conditions: (a) Developer has satisf ed 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 of the Closing Date to occur due to any of the above reasons shall not constitute an event of default by the HRA. Section 6.3 HRA's Option to Terminate. This Agreement may be terminated by the HRA by written notice to Developer if the HRA is in compliance with all material terms of this Agreement and Closing Date has not occurred by September 30, 2015; provided, however,that termination of this Agreement pursuant to this Section 6.3 shall not affect the rights of the HRA to institute any action, claim or demand for damages suffered as a result of breach or default of the terms of this Agreement by Developer, and termination of this Agreement shall not terminate any provision contained herein which is clearly intended by its meaning to continue thereafter. 15 ARTICLE V1I Mort�ge Financing Section 7.1. Approval of Mort�a�e. Any First Mortgage prior to issuance of the Certificate of Completion sha11 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 withaut additional action by the HRA. Approval shall not be unreasonably withheld or delayed, and shall be given if: (a) the HRA's Director first receives a copy of all mortgage documents; and (b) the HRA's Director determines that the terms of the First Mortgage conform and are subject to the terms of this Agreement, except to the extent the HRA agrees to subordinate its interest to the terms of the First Mortgage. The Holder of the First Mortgage (or any nominee or agent controlled by the Holder) shall not be obligated to undertake or continue construction or completion of the Improvements while in possession of the Development Property pursuant to the foreclosure,or conveyance by Developer to the Holder in lieu of foreclosure, except upon express assumption of such obligation as provided in Section 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 of this Agreement, as such are binding on Develaper, and such party shall not be entitled to any additional rights or privileges granted a Holder hereunder. Section 7.2. Notice of Default; Copv to Mortgagee. Whenever the HRA shall deliver any notice or demand to Developer with respect to any breach or default by Developer in its obligations or covenants under this Agreement,the HRA shall at the same time forward a copy of such notice or demand to each known Holder of any First Mortgage at the last address of such Holder shown in the records of the HRA. Section 7.3. Mortga�ee'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 subject to any rights of the Mortgagor under such Mortgage)have the right,at its option,for a period of 90 days after notice of such default pursuant to Section 7.2 hereof,to cure or remedy such breach or default and to add the cost thereof to the Mortgag�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 ��alder 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 16 default is with respect to construction of the Improvements,nothing contained in this Section or any other Section of this Agreement shall be deemed to permit or authorize such Holder,either before or after foreclosure or action in lieu thereof,to undertake or continue the construction or completion of the Improvements(beyond the extent necessary to conserve or protect Improvements or construction already made)for more than 90 days after the Holder has received notice of such default pursuant to Section 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 Properry. 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 accordanee with the provisions of Section 8.1 of this Agreement or in accordancc with the following paragraph. Any Holder who shall properly complete the Improvements relating to the Development Property shall be entitled, upon written request made to the HRA.,to a certification by the HRA to such effect in the manner provided in Section 4.3 of this Agreement. In addition to the assignments permitted pursuant to Section 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 of HRA, which consent shall not be unreasonably withheld,delayed or conditioned. In exercising its judgment as to whether or not to grant such consent, the HRA shall take into account only the financial condition and experience of the proposed assignee and its capacity to perform the obligations remaining to be performed under this Agreement at the time of such assignment;provided that, after the Certificate of Completion for the Improvements has been issued,the experience of the proposed assignee shall no longer be a factor considered by the HRA as to whether or not grant such consent. In addition,the Holder may assign its interest at any time without the consent of the HRA to a person with a verifiable net worth in excess of$5,000,000. Any such assignee shall agree in writing with the HRA, for itself and its successors and assigns, to be bound by the terms and conditions of this 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. HRA's Option to Gure Default on Mort�a�e. Any Mortgage executed by Developer with respect to the Development Property, or any Improvements thereon, shall provide that,in the event that Developer is in default under any Mortgage authorized pursuant to this Article VII,the Holder, within 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 the Certificate of Completion for the Improvements. 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 the Certificate of Completion for the Improvements, the HRA shall thereupon be entitled, in addition to and without limitation upon any other rights or remedies to which it may be entitled,to reimbursement from Developer or any successor or assignee of any costs and expenses incurred by the HRA in curing such default. 17 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 of the HRA, subordinate to the lien of any First Mortgage. Section 7.5. Subordinate Liens. Until the Certificate of Completion has been issued, Developer agrees that it will not create, incur, assume or suffer any security interest, mortgage, pledge, lien, charge, or encumbrance upon the Development Property except for a First Mortgage permitted under this Article. Developer may,at its own expense, in its own name and iri good faith, contest any involuntary lien, charge or encumbrance and not be in default hereunder provided Developer first posts a bond or provides other security to the HRA or to the Holder,or to an agent of the Holder, including, without limitation, a title insurance company, which the HRA reasonably determines is adequate to protect the interest of the HRA. ARTICLE VIII Restrictions on Transfer• Indemnification Section 8.1. Restrictions on Transfer. Until the Certificate of Completion has been issued by the HRA, this Agreement and Developer's interest in the Development Property (or any part thereo� 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 the Certificate of Completion has been issued by the HRA, but prior to February 1, 2033, this Agreement and Developer's interest in the Development Property (or any part thereofj 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 of the interest purchased and Bradley Hoyt shall be released from his guaranty, After the Certificate of Completion has been issued by the HRA, but prior to February 1,2033,this Agreement and Developer's interest in the Development Property (or any part thereo� 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 hereof run with the land and shall be binding upon their successors and assigns. 18 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 wrongful actions or omissions by Developer, its employees and agents,in connection with the Project. This provision shall continue for six (6) years after the termination of this Agreement. ARTICLE IX Devel�er 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, any one or more o�the following events: (a) Until February 1, 2033, failure by Developer to observe or perform any material covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement. (b) Until the Certificate of Completion has been issued, filing by Developer in any court,pursuant to any federal or State statute,of a petition in bankruptcy or insolvency,or for reorganization, or for the appointment of a receiver or trustee of all or a portion of Developer's property, or an assignment by Developer for the benefit of creditors. (c) Until the Certificate of Completion has been issued, filing against Developer in any court,pursuant to any federal or State statute, of a petition in bankruptcy or insolvency, or for reorganization, or for appointment of a receiver or trustee of all or a portion of Developer's properties, if such proceeding is not dismissed within 120 days after commencement thereof. (d) Until the Certificate of Completion has been issued, commencement by the Holder of any First Mortgage of foreclosure in the event of a default in any of the terms or conditions of the First Mortgage. (e) Until the Certificate of Completion has been issued, any merger, consolidation, liquidation, reorganization, transfer of all or substantially all of Developer's assets, or transfer of a controlling interest in Developer, unless the remaining entity satisfies Section 8.1 of this Agreement. Section 9.2. Remedies on Default. Whenever any Event of Default occurs, the HRf1, subject to any rights oi' the Holder of a First Mortgage which has been approved by the HRA pursuant to Section 7.1 of this Agreement, may take any one or more of the following actions (but only if the HRA is not then in default and only after provision of 60 days' written notice which sets forth the nature of the default to Developer in the case of an Event of Default under Section 9.1(a), 19 (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 Agreement and of the Plan): (a) The FIRA may suspend its performance under this Agreement until it receives assurances from Developer, deemed adequate by the HRA, that Developer will cure its default and continue its performance under this Agreement. (b) If the Event of Default occurs prior to the Closing Date,the HRA may cancel and rescind this Agreement. (c) The HRA may 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. (d) Sue for damages,provided that any damages for the HRA shall be reduced to the extent of any amount recovered by the HRA under any security provided by Developer. Section 9.3. No Remed�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 ar power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof,but any such right and power may be exercised from time to time and as often as may be deemed expedient. Section 9.4. No Additional Waiver Implied b�One Waiver. In the event 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 of the Project neither it nor any of the contractors will unlawfully discriminate against any employee or applicant for employment because of race,color,religion,sex,age,national origin, or political affiliation. 20 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 Articles and Sections. Any titles of the several parts, Articles and Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions, Section 10.4. 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 if it is in writing dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally; and, (a) in the case of Developer,is addressed to or delivered personally to Developer at 1907 Wayzata Boulevard, Suite 250, Wayzata, MN 55391, Attn: Traci Tomas,with copies to EntrePartner Law Firm,PLLC,4470 West 78`" Street Circle,Suite 210,Bloomington,MN 55435, Attn: Michael J. Mergens; 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 55427,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. Section 10.5. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 10.6. Modification. If the HRA is requested by the Holder of a First Mortgage or by a prospective Holder of a prospective First Mortgage to amend or supplement this Agreement, or to subordinate its interest therein, the HRA will, in good faith, consider the reguest 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. Severabilitv. 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. 21 Section 10.9. Duration. This Agreement shall be effective as of the date hereof and shall continue in full force and effect until February 1, 2033. 7'his Agreement shall survive the Closing Date. Upon Developer's reguest after termination of this Agreement, the HRA shall execute a written termination agreement in recordable form. Section 10.10. Bindin E� ffect. 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 ihe 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. 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 follawing events or conditions, unless Developer's failure to comply with all material terms of this Agreement,or Develop�r'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 September 30, 2015, unless extended by the Parties; and (c) The City does not approve the final Planned Unit Development for the Project by September 29, 2015, unless extended by both Parties. 22 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 of the terms of this Agreement by the HRA,and termination of this Agreement shall not terminate any provision contained herein which is clearly intended by its meaning to continue thereafter. {signatures appear on following pa�e} 23 IN WITNESS WHEREOF,the HRA has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed and Developer has caused this Agreement to be duly executed in its name and behalf, on or as of the date first above written. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY By: Steven T Schmidgall, Chair By: Thomas D. Burt, Director GOLDEN VILLAS, LLC By: Traci Tomas, Chief Manager 24 STATE OF MINNESOTA ) ) SS. COUN"TY OF HENNF,PIN ) The foregoing instrument was acknowledged before me this_day of , 2015, by Steven T Schmidgall, Chair, and Thomas D. Burt, Director, of the HOUSINU 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 , 2015, by Traci Tomas, Chief Manager of GOLDEN VILLAS, LLC, a Minnesota limited liability company, on behalf of the organization. Notary Public � DRAFTED BY: Best& Flanagan LLP (ADB) 225 South Sixth Street, Suite 4000 Minneapolis, Minnesota 55402-4690 25 EXHIBIT A LEGAL DESCRIPTION 9130 Olson Memorial Hi�way: West 211 14/100 feet of East 291 14/100 feet of that part ofNW '/4 of SW '/a lying South of MPLS Watertown Road and North of State Highway No. 55, Hennepin County, Minnesota, according to the recorded plat thereof. 9220 Olson Memorial Highway: That part of NW '/4 of SW '/a lying East of West 749 8/10 feet thereof and West of East 291.14 feet thereof North of State Highway No. 55 and South of Watertown Road, Hennepin County, Minnesota, according to the recorded plat thereof. A-1 EXHIBIT B ASSESSMENT AGREEMENT FOR VALUABLE CONSIDERATION, The Housing and Redevelopment Authority in and for the City of Golden Valley,Minnesota,a public body corporate established pursuant to Minnesota Statutes, Section 469.001 et se�. (the"HRA"),and Golden Villas,LLC,a Minnesota limited liability company("Developer"),hereby covenant and agree that the property described in Exhibit 1 attached � hereto and made a part hereof(the "Development Property") and the improvements to be made thereto pursuant to the Golden Villas, LLC Private Development Agreement between the parties dated as of , 2015 (the "Improved Parcel"), with respect to which any real estate taxes, or taxes in lieu thereof which are levied or assessed and payable by Developer, shall be assessed to be of a market value of$2,250,000 as of January 2, 2016, not less than$ 18,032,350 on January 2, 2017, and not less than $24,043,000.00 on January 2, 2018, and January 2 of every year thereafter until December 31, 2031 (for taxes payable in 2017 and subsequent years), increased in 2017 and in any year thereafter by $148,414 for each apartment unit in excess of 162 units constructed thereon by Developer, and decreased in any year by the fair market value of any portion of the improvements taken in condemnation or by the power of eminent domain far which reconstruction is impracticable as provided in the Development Agreement, and by the fair market value for any portion of the unimproved Improved Parcel taken in condemnation or by the power of eminent domain (the "Assessor's Minimum Market Value"). During the term of this Assessment Agreement, Developer shall not seek a reduction of the market value of the Improved Parcel for property tax purposes below the Assessor's Minimum Market Value stated above, regardless of actual market values which may result from incomplete construction of improvements to the Improved Parcel,or from destruction or diminution thereof by any cause, insured or uninsured, except in the case of acquisition or reacquisition of any portion of the Improved Parcel by a public entity. Upon execution by the parties,this Assessment Agreement shall be presented to the Hennepin County Assessor pursuant to Minnesota Statutes, Section 469.177, Subd. 8,as hereafter amended. If this Assessment Agreement is approved and certified by such Assessor in the form attached as Exhibit 2,this Assessment Agreement shall be filed in the office of the Hennepin County Recorder or in the office of the Hennepin County Registrar of T'itles. The parties hereby covenant and agree that the obligations imposed hereunder shall be deemed with respect to the Development Property to be covenants and restrictions running with the land,and shall constitute burdens and benefits to the HRA and Developer,their successors,assigns, grantees and all other parties hereafter owning or holding any interest in the Development Property or any portions thereof. This Assessment Agreement is effective as of the date hereof and shall remain in force and effect until February l, 2033. B-1 IN WITNESS WHEREOF, the parties have caused the execution of this Assessment Agreement as of this day of____ ____ ___, 201 S. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY By: Steven T Schmidgall, Chair By: Thomas D. Burt, Director GOLDEN VILLAS, LLC By: Traci Tomas, Chief Manager STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this_day of ____,2015, by Steven T Schmidgall, Chair, and Thomas D. Burt, Director, of THE HOUSING AND RF,DEVEI,OPMEN'T AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY,on behalf of the organization. Notary Public STATE OF MINNESOTA ) ) SS. COUN'I'Y OF HENNEPIN ) The foregoing instrument was acknowledged before me this_day of ,2015,by Traci Tomas, Chief Manager, of GOLDEN VILLAS, LLC, a Minnesota limited liability company, on behalf of the company. Notary Public B-2 DRAFTED BY: Best & Flanagan LLP (ADB) 225 South Sixth Street, Suite 4000 Minneapolis, Minnesota 55402-4690 B-3 EXHIBIT 1 LEGAL DESCRIPTION 9130 Olson Memorial Hi�hway: West 211 14/100 feet of East 291 14/100 feet of that part ofNW'/4 of SW '/4 lying South of MPLS Watertown Road and North of State Highway No. 55, Hennepin Count��, Minnesota, according to the recorded plat thereof. 9220 Olson Memorial Hig;hway: That part of NW '/4 of SW '/4 lying East of West 749 8/10 feet thereof and West of East 291.14 feet thereof North of State Highway No. 55 and South of Watertown Road, Hennepin County, Minnesota, according to the recorded plat thereof. B-4 EXHIBIT 2 ASSESSOR CF,RTIFICATION FORM The undersigned,being the duly qualified and acting Hennepin County Assessor, hereby certifies that: 1. He is the assessor responsible for the assessment of the Development Property described in the foregoing Assessment Agreement; 2. He has read the foregoing Assessment Agreement; 3. He has received and read a copy of the Private Development Agreement; 4. He has received and reviewed the architectural and engineering plans and specifications for the improvements agreed to be constructed on the Development Property by Golden Villas,LLC pursuant to the Private Development Agreement; 5. He has reviewed the market value previously assigned to the Development Property upon which sueh improvements are to be constructed; and 6. The undersigned assessor, being legally responsible for the assessment of the above described Development Property upon completion of the improvements to be constructed thereon, hereby certifies that the market value assigned to the Improved Parcel (as defined in the Assessment Agreement) and the improvements thereto upon completion shall be $2,250,000 as of January 2, 2016,not less than$18,032,350 on January 2,2017,and not less than$24,043,000.00 on Tanuary 2, 2Q 18,and January 2 of every year thereafter until December 31,2031 (for taxes payable in 2017 and subsequent years), increased in 2017 and any thereafter year by$148,414 for each apartment unit in excess of 162 units constructed thereon by Developer, and decreased in any year by the fair market value of any portion of the improvements taken in condemnation or by the power of eminent domain for which reconstruction is impracticable as provided in the Development Agreement,and by the fair market value for any portion of the unimproved Improved Parcel taken in condemnation or by the power of eminent domain. Dated: , 20 Hennepin County Assessor Hennepin County, Minnesota B-5 EXHIBIT C CERTIFICATE OF COMPLETION HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY, a public body corporate (the "HRA"), and UOLDEN VILLAS, LLC, a Minnesota limited liability company("Developer"),previously entered into the GOLDEN VILLAS, LLC Private Development Agreement (the "Agreement"), recarded 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: See Attached Exhibit A As of the date hereof,Developer has performed all of its agreements and covenants contained in the Agreement to the satisfaction of the HIZA, including the covenants in Article IV of the Agreement requiring completion of the construction of the improvements. NOW, THEREFORE, it is hereby certified that all of the covenants in the Agreement, including the covenants in Article IV requiring completion of the construction of the Improvements, have been duly and fully performed by Developer as of the date hereof and that the letter of credit 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��ennepin and State of Minnesota is hereby authorized to accept for recording and to record the �ling of this instrument. This instrument shall be conclusive determination of the satisfactory termination of the covenants of Article IV of the Agreement requiring completion of the construction of the improvements. Notwithstanding the foregoing,those covenants contained in the Agreement which are to remain in full force and effect until February 1, 2033, shall remain in force and effect until that date, unless earlier terminated in accordance with the Agreement. Dated: HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY By: Steven T Schmidgall, Chair And: Thomas D. Burt, Director G1 STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this_day of _, 20_, by Steven T Schmidgall 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 1NSTRUMENT WAS DRAFTED BY: Best &Flanagan LLP (ADB) 225 South Sixth Street, Suite 4000 Minneapolis, Minnesota 55402-4690 G2 EXHIBIT D PRELIMINARY PLANS D-1 _ ,.: � �`,��' r / ,�� .� /~ � � -��p�,..��v��.:.- ��, � �7,� ""a . !�� +c �� :�l�� t �u �%l�r�� ,,-".r'�. � � ' !� � i i// ��f.!!"�r M �� rw;� .�._�� 46��„►.�. �/ ►! �' �' r^rsea��,^��,. ► � f� 1�� •�,nk�._.... ,�..-.� ,.,,� � =�1 "��i =-1� ''�t' ��S F � �� /1�� i ��, a �. 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Outdoor � � i Bike I Parking � ' ^ Lobby I � � _ 1 BR+ 1 BR+ 1 BR+ 1 BR+ 1 BR+ 1 BR+ 1 BR+ 1 BR+ Bidg Maintenance � I � o 0 0 0 0 0 0 0 0 Scooter/ � I 872 SF 872 SF 872 SF 872 SF 872 SF 872 SF 872 SF 789 SF Moped I —$ Leasing Down to P1 Parkin �$ � Parking I I I �TfBSh o o5toraae o 0 0 0 ° �� I I I Move In � Reycle 3,ZZo sF Mech Elec Rm � I � I � a s o e s o 0 28 I � Area I � i 28,706 � I � I Sf � 0 0 0 0 0 0 0 � I I [, __ 2 0_ Above I ___ I _-— _ I � 5 � Resident Pool Equip �� —__ _——— � � � Bike Parking ____— I � --_ �___ ---� _.—� _ — _ _ — I L— � � '----------$ Z_— � , — � I — _ _ — _ � � — — � � — � � ` S�d<1'=40' � a i�m w � 4.10.2015 STREET LEVEL PLAN � Golden Valley 558�169 Concept Design archi[ects r- - - - - - - - - - - - - - - - - - — - - � I I � I � I I 2 BR � 1,099 SF z BR I I 1,073 SF � gR 1 BR 1 BR 1 BR Alcove 1 BR 1 BR 2 BR 1 BR 2 BR I � 7 gR �� 748 SF 748 SF 762 SF 803 SF 680 SF 747 SF 789 SP ��071 SF 757 SF 1,188 SF I 748 SP — I � ❑ �Alcove Dav Soa 1 BR 1 BR 1 BR 2 BR 1 BR 1 BR StOf � BR DEN � Tr �,144 SF 74S SF 748 SF 48 SF 1,100 SF 748 SF 748 SF � 948 SF 645 SF � BR � �, � I 1 BR Fitness 740 SF � 748 SF 1,099 SF � 2 BR 2 BR I i BR Amenity Terrace �,>>9 sF 1,087 SF � 748 SF I � Pool � lub Rm 2 BR i 1,383 SF 2nd Exit i,087 SF from Pool Deck � � — �� _ � I _ — � — � � _ _ �� _ _ — I-- - - - - - �- - - � ^ N ��<,•=b � 7 il � � � 4.10.2015 LEVEL 2 PLAN � �n��N��t Golden Valley 55&169 Concept Design Z Q J � � � � J W � W J � — — — — — � — — — � — � — — Z� � � � I 1 � � I Z ,� LL � 1 s - W N . 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Terrace I Ir � I I � L————J ——————————-� 2 BR 2 BR � �— I 1,087 SF ��183 SF L J I � � � � � _ _ � � - - �� (- - - - - - ---�� _ — � ��.,�.a � a ,�� 4.10.2015 LEVEL 6 PLAN � Golden Valley 55&169 Concept Design archi[ea< � _ _ _� '_ —.._ _.._ _ _ _. _ — i j � �,J; _�_ _ _ — — _ ..._ —.— _ — — — _ _ ( � ' � � � . . ��. �� . . �. � I . � ., -. '.c). .. ,... ,. ., . . � ..„ . _ � . I . I . . � . .. . . . . . . . . . . _ . . - � � �N I s ----� � � I 2 � � i � o -� � o Area o � . I a z,s s o _ Up to Street Level I SF � o 0 0 0 0 1 0 0 0 o Water/Elec o I I � I $ „ � � __I_ ^ o 0 0 0 0 2 � o 0 0 0 0 � I 112 Spaces @ P1 - I C � I Mech � � � � 3 � � � � ° MUA � g I _ - - —-- - � � � _ I ', ', A I L--——--------� — — _ _ �, I - - � I � — � � — � � L-- — — — — — ---1— , — � ��e,�_a � 0 I� � 4.10.2015 PARKING LEVEL P1 PLAN ,��n��e�t. Golden Valley 55&169 Concept Design Area Summary Use Total GSF Parking GSF Other Lobby Apt GSF RSF Units Parking* Level Pl , Parking 42,350 42,350 � �_ 112 _- ---- _ __-- - --- levell . Parking 47,427 28,590 4,875 5,721 I 8,241 6,893 � 8 54 - - -- _ __ - -- ._ i- _ __ __ Level2 Residential 31,424 4,785 I 26,753 23,175 27 Level3 Residential 31,424 ' ', 31,663 27,371 ' 32 Level4 ' Residential 31,424 ' 31,663 27,371 32 — _ - �--- — .. - -- ___ —__ _- Leve15 Residential 31,424 ' 31,663 27,371 32 Level6 Residential 30,801 750 30,324 25165 31 Total 246,274 70,940 10,410 5,721 160,307 137,346 162 166 "Does not include 57 surface parking spaces Unit Distribution Summary Level Alcove 1 Bedroom 1 BR DEN 2 BR Total Levell 0 0 8 0 8 Level2 2 16 1 8 27 Level3 3 19 1 9 32 Level4 3 19 1 9 32 Leve15 3 19 1 9 32 Level6 3 19 2 7 31 Total 14 92 14 42 162 % 9% 57Y 9% 26% . 4.10.2015 METRICS a��n��e<<. 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I � �.s ,,� ,, . � ��' �� -tr x. �� y� ��e� �� ,' � i��i�� -,_. - . a�. �� x'1� � ! � �' ' II � • � _ � u � �„� , . ,�' �„� `� �i I • III l� I� '' ' :i��,'�� .,�,�` r• �,..J �� 1,�. ,e � I� - ��:��-�t`"�`� �� ' '�r � . �,.. � ; �Cini.`d�• 9 � ..N� I ��I) �� .r � � �C,}" •1,r, '�� '..3P. 1 L'� � � �\S� � '. �5 ' ��,� �� .� =t �= T ��1 eS' � � �. . • •- • - • -• �- • EXHIBIT E TAX INCREMENT NOTE The Golden Valley Housing and Redevelopment Authority in and for the City of Golden Valley (the "HRA"), promises to pay to Golden Villas, LLC ("Developer"), and its permitted assigns, solely to the extent and in the manner hereinafter provided, the principal amount of Two Million Six Hundred Twenty-Two Thousand Seventy and no/100`�'Dollars($2,622,070.00),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 Golden Villas,LLC Private Development AgreemEnt,dated ,2015,between the HRA and Developer(the"Development Agreement'"),to aid in financing costs incurred and to be incurred by the Developer within and for the benefit of Tax Increment Financing District No. 1506(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. � Interest shall accrue at the rate of 5.50%per annum on the unpaid principal until paid in full. Interest shall begin to accrue when the Certificate of Completion for the Improvements has been issued. 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 b�designated from time to time by Developer. Principal and interest on �his Note shall be payable solely from Net Tax Increment, as hereinafter defined,on each August 1 and February 1 commencing August 1,2017,to and including February 1, 2033 (the "Payment Dates"). On each Payment Date, the HRA. shall apply all Net Tax Increment to the payment of this Note. All such payments shall be applied first to accrued interest and then to the principal amount of this Note. "Net Tax Increment"is defined as the tax increment actually received by the HRA from the Tax Increment Financing District solely with respect to the Project in any calendar year,after: (a)the deduction taken by the Minnesota State Auditor, (b)a 10%deduction by the HRA from the amount remaining after the deduction by the State Auditor for administrative costs, and (c) a deduction to pay annual debt service on the bonds relating to the public improvements for the Project. In the event that Net Tax Increment is not sufficient to pay the principal of and interest on this Note, the failure of the HRA to pay such principal and interest shall not constitute a default hereunder. As a condition to receipt of any payment under this Note,Developer shall deliver to the I-IRA an itemized statement, together with copies of invoices or receipts, showing that it has incurred eligible expenses described in Minnesota Statutes, Section 469.176 equal to or greater than the amount af the payment then due on the Note, and that have not previously been reimbursed by payment under this Note. F.,-1 THE HRA MAKES NO REPRESENTATION OR WARRANTY THAT THE NF,T TAX 1NCREMENT WILL BE SUFFICIFNT TO PAY THE PRINCIPAL OF AND 1NTEREST ON TI�IS 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, 2033. 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 NET TAX INCREMENT,THE NOTE IS NOT A DEBT OF THE HRA,THF.,CITY OF GOLDEN VALLEY, OR THE STATE OF MINNESOTA(THE"STATE"),AND NEITHER THE HRA,THE CITY OF GOLDEN VALLEY,THE STATE NOR ANY POLITICAI�SUBDIVISION THEREOF SHALL BE LIABLE ON "THE NOTE,NOR SI�ALI. THF,NO'I�E BE PAYABLE OUT OF ANY FLTNDS OR PROPERTIES OTHER THAN NET TAX INCREMFNT. 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 the Certificate of Completion for the Improvements, 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 VIII of the Development Agreement. No assignment shall be valid unless the HRA has been notified in writing at least 10 business days in advance. IN WITNESS WHEREOF,the HRA has caused this Note to be executed by the Chair and Director of the HRA as of this day of , 2015. Steven 1' Schmidgall, Chair Thomas D. Burt, Director E-2 EXHIBIT F GUARANTY FOR VALUABLE CONSIDERATION, and to induce THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDFN VALI.�:Y (the "HRA") to extend credit and other accommodations to GOLDEN VILLAS, 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 GOLDEN VILLAS, LLC Private Development Agreement dated as of , 2015, and any amendments thereto (the "Development Agreement"). This Guaranty is absolute,unconditional,continuing and irrevocable unless released pursuant to the Development Agreement. 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 a11 defenses, elaims and setoffs of Developer. The liability of C'Juarantor hereunder shall not be affected by any extensions,rsnewals,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 pay or 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 of the State of Minnesota. Any dispute or claim arising under this Guaranty shall be venued exclusively in Minnesota District Court, Hennepin County, and Guarantor hereby consents to the jurisdiction of such court for all such matters. Guarantor also agrees that process may be served on Guarantor by service on any officer of Developer, in addition to any other method permitted by law. This Guaranty shall terminate at such time as the Certificate of Completion for 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. F-1 IN WITNESS WHEREOF, Guarantor has caused the execution of this Guaranty this day of , 2015. Bradley Hoyt THIS 1NSTRUMENT WAS DRAFTED BY: Best & Flanagan LLP � 225 South Sixth Street, Suite 4000 Minneapolis, Minnesota 55402-4690 011800/312001/1933290_4 �'-2 �� 800 s,os � Project Area sso Tax Increment Financing District G� y Q n Proposed Project � 710 835 � � � z N 62� 64� > � T �' 730 74 i�J � L � m � �o, � �� m _ _ � � �� y � L] � �1 � Z �re � � �,��° � � z �� sz4o 9,qo � �' c� 8845 � � �^� � �x � z �� $9�� 605 Q � �'1 � *�� 9300 �I J �'� 9200 9050 9000 8806 0 � � 932 9310 � � �� 9210 9110 600 � �'�. 9400 � `' "� �x£" (� (� asas _w;�.� C � 9325 0 8 0 O � ��., ... � 9300 a � o�� . � � � � Fz, k ,:tr. . �;,4�. � � 2 �r`'y o � : � ,, ;� �-�� ,� � �,. „, � �.! �� e..� � �.,� �� 8815 � � �a ��i.., '' � w �Fronta�e 439 � 440 0 O , � Qi�O�. . f�, ..,. ` � 8951 8945 433 Q� �' �, S 31 9031 433 Z' L 432 8811 ^ti � 9141 (� 424 423 � 424 �� a .. 421 9147 Q (� 416 � O w '�$ 347 � 410 8928 8920 8912 415 (� � 9131A Q 408 T 345 - Wa I I �7� N^ � � 9143 9201 33g � 400 ` , 91318 893 892 8917 8901 y W 8913 8909 Sources: Print Date:M77/2015 88q5 8835 � -Hennepin County Surveyors OKce/a 9131 C 9131 D 325 � Property Lines(2015) -Cify of GolAen Valley Ior all othei layers 9145 o ,So 30o soo e 9145 r ld a Feet ^F 9145E � �� V�� 1LV�1�.d�� I��C�I� � � m z 0 m r � i � 0 _ Z � � � D ,� �;�; � � ❑PTIONAL HAWK f'l SYSTEM #9400 #9326 #9310 #9300 #9110 #9050 93,981 sf 62,538 sf 40,244 sf 57,709 sf " 212 769 sf �• � , �.. ,�� 59,283 s S9 F �� ISOS' �5•1' 178.3' �� 156.3' 101.5' 3 � GOLDEN VALLEY RD E - %/ �. � 136.2' 169,5' io9.z- 26 •�' zii.r so.o� iis.a �, �� #9010 #9300 #9220 #9130 20,135 sf �� OPTIDNAL WALK 30,1285 � y �� f 66,300 sf 45,821 sf � �� EXTENSION � -�,.f � , ; ; #9325 '� 9384 sf UNASSIGNED 15,644 sf � z6,206 sf N\G�w A,� 55 i�—�'� �w� ��'.�,.`� �� `` \\\`�_ �—� \l� r.va d� � � M ` \\__ xs� � � � j�y�n�u�4� �� n . - B N A E _ �=� -2 ' ��.��.' � 0 `�i'..............� �...�� , b N � � � o `° � � �. � a W . � Q . � o �+ � d � a v; o � � � � xe v O � 1 � N � �..� fh � a0 N p � CO � l0 N' Yt �D XL M � � � . n � � .. . .. ~ `;. � :c;: o DECATUR AVE �� x.v; -�,,.. � � s r� � N � � o � � , _? °� � o Z � . � , � , W . �o J o J � n � � � �(/ � �' Z � N � l`l w � M O � p � � N p p ` J O `� N ' � . � � � : � W : � p p� Q N 01 I� Yt c-1