Loading...
12-15-15 HRA Special Agenda Packet AGENDA Special Meeting of the Housing and Redevelopment Authority Golden Valley City Hall 7800 Golden Valley Road Council Chamber December 15, 2015 5:30 pm Pages 1. Roll Call 2. Winnetka and Medicine Lake Road Project Area: A. Approval of Development Agreement and Interfund 2-47 Loan for Liberty Crossing Project 15-07 B. Reimbursement of HRA Expenditure 48 3. Adjournment city of 4. goldeni , MEMORANDUM valley Housing and Redevelopment Authority 763-593-8002/763-593-8109(fax) Executive Summary For Action Golden Valley Special Housing and Redevelopment Authority Meeting December 15, 2015 Agenda Item 2. A. Consider Resolution Approving Development Agreement and Interfund Loan for Liberty Crossing Project Prepared By Marc Nevinski, Physical Development Director Summary Liberty Crossing Investment Partners, LLC proposes to construct 242 units of multi-family housing at the southeast corner of Medicine Lake Road and Winnetka Ave. The project will include 55 townhome units and 187 market rate apartment units, along with underground parking and a variety of amenities for residents. Currently the site contains a vacant industrial building, a car wash, restaurant, and a multi-tenant building. In addition, the project will create additional flood storage of 5.4 acre feet for the DeCola Ponds sub-watershed area to reduce flooding of streets, businesses, and neighborhoods. The flood storage will be located at the intersection of Medicine Lake Road and Rhode Island Avenue N and will consist of an open pond and underground vault. Two cul-de-sacs will be constructed on Rhode Island Ave to provide access to adjacent properties. Portions of the existing roadway will be removed and used for a trail and flood storage. The parcels proposed for redevelopment were included in the Medicine Lake and Winnetka Redevelopment Project Area by the HRA on July 14, 2015. The HRA and City Council established a redevelopment TIF district in the area on September 1, 2015, to facilitate redevelopment and make the construction of additional flood storage possible. Under the terms of this development agreement, the HRA will incur debt to assist the developer and to fund construction of additional flood storage. The new property taxes (e.g. the tax increment) generated by the development will be used to repay debt. The HRA anticipates selling bonds and borrowing from internal funds to fund the project and using TIF to reimburse the internal funds and pay off the bonds. Development Agreement Summary Highlights include: 1. Payment of$1 million to the developer for a flood storage easement, demolition, and installation of utilities. Payment to occur within seven days of execution of the agreement, including receipt in full amount of acceptable letters of credit. An internal loan from the Storm Utility Fund with the HRA will finance the payment. The loan will be paid back with TIF proceeds. 2. HRA/City to construct flood storage infrastructure with bond and internal loan proceeds. This includes flood storage required to be constructed as a result of the development and the additional flood storage. 3. The development agreement contains a minimum assessment agreement for each parcel in the development to ensure a minimum tax value of the property sufficient to make annual debt service payments. The assessment agreement is subject to the approval of the County Assessor. 4. The developer will submit a letter of credit in the amount of$3.5 million sufficient to cover the costs of public infrastructure and bond or debt issuance until the project is completed. Additionally, the letter of credit required under the PUD Agreement will be pledged to cover bond or debt issuance until the project is completed. It should be noted that proceeds used from internal funds will not be fully secured by letters of credit. At this time, the development agreement is substantially complete and agreed upon. However, there are details requiring further finalization. A final draft of the development agreement will be presented to the HRA prior to the December 15, 2015, meeting. If further modifications are needed after approval, staff requests the HRA authorize its attorney and executive director to make minor changes prior to the execution of the document, but not more than 10 business days following approval. Any significant changes to the agreement would require the review and approval of the HRA. Attachments • Resolution 15-07 approving the development agreement and interfund loan for the Liberty Crossing project (45 pages) Recommended Action Staff recommends the HRA approve Resolution 15-07 approving the development agreement and interfund loan for the Liberty Crossing project, and authorize the attorney and executive director to make minor and technical changes to the development agreement not more than 10 business days following approval. Resolution 15-07 December 15, 2015 Commissioner introduced the following resolution and moved its adoption: RESOLUTION RELATING TO THE LIBERTY CROSSING PROJECT OF THE CITY AND APPROVING THE DEVELOPMENT AGREEMENT AND INTERFUND LOAN THEREFORE BE IT RESOLVED by the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Golden Valley (the "HRA"), as follows: 1. Recitals. (a) The HRA and the City of Golden Valley, Minnesota (the "City") adopted the Redevelopment Plan for the Winnetka and Medicine Lake Road Project Area (the "Plan"), together with the Tax Increment Financing Plan (the "TIF Plan") for Tax Increment Financing District (Redevelopment), Winnetka Avenue North & Medicine Lake Road No. 1 (the "District"); all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.174 to 469.1794, all inclusive, as amended (the "Act"). (b) In accordance with the TIF Plan, the HRA proposes to undertake a project with Liberty Crossing Investment Partners, LLC, a Minnesota limited liability company (the "Developer"), consisting of a five-story apartment building with approximately 187 apartments and approximately 55 townhomes, plus parking, landscaping, utilities and certain other improvements (the "Development"); (c) The Developer proposes that the HRA enter into a Private Development Agreement to construct the Development, attached hereto as Exhibit A (the "Development Agreement"). (d) In connection with the Development, the City has authorized the loan of up to $1,000,000 to the HRA from its Storm Utility Fund or other funds available or so much thereof as may be paid as qualified costs (the "Interfund Loan"). 2. Approval of Development Agreement. The Development Agreement is hereby approved and the Chair and Director are hereby authorized to enter into the Development Agreement by and among the HRA and the Developer. 3. Approval of Interfund Loan. (a) The HRA approves the Interfund Loan. The City shall be reimbursed such amount, together with interest at the rate stated below. Interest accrues on the principal amount from the date of each loan. The maximum rate of interest permitted to be charged is limited to the greater of the rates specified under Resolution 15-07 - Continued December 15, 2015 Minnesota Statutes, Section 270C.40 or Section 549.09, as of the date the loan is made, unless the written agreement states that the maximum interest rate will fluctuate as the interest rates specified under Minnesota Statutes, Section 270C.40 or Section 549.09, are from time to time adjusted. The interest rate shall be 4% and will not fluctuate. (b) Principal and interest ("Payments") on the Interfund Loan shall be paid semi- annually in two (2) equal installments per year, each installment to be paid within ten (10) business days of receipt by the City of property tax revenues from Hennepin County (the "Payment Dates"), commencing on the first Payment Date on which the City has Available Tax Increment (defined below), or on any other dates determined by the City Finance Director, through the date of last receipt of tax increment from the HRA pursuant to the TIF Plan (the "maximum term"). (c) Payments on this Interfund Loan are payable solely from "Available Tax Increment," which shall mean, on each Payment Date, tax increment available after other obligations have been paid for the preceding six (6) months with respect to the Development Property and remitted by Hennepin County, all in accordance with Minnesota Statutes, Sections 469.174 to 469.1799, as amended. Payments on the Interfund Loan may be subordinated to any outstanding or future bonds, notes or contracts secured in whole or in part with Available Tax Increment, and are on parity with any other outstanding or future interfund loans secured in whole or in part with Available Tax Increment. (d) The principal sum and all accrued interest payable under this Interfund Loan are pre-payable in whole or in part at any time by the HRA without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular payment otherwise required to be made under this Interfund Loan. (e) This Interfund Loan is evidence of a loan in accordance with Minnesota Statutes, Section 469.178, subdivision 7, and is a limited obligation payable solely from Available Tax Increment pledged to the payment hereof under this resolution. Steven T Schmidgall, Chair ATTEST: Resolution 15-07 - Continued December 15, 2015 Timothy J. Cruikshank, Executive Director The motion for the adoption of the foregoing resolution was seconded by Commissioner upon a vote being taken thereon, the following voted in favor thereof: and the following voted against the same whereupon said resolution was declared duly passed and adopted, signed by the Chair and the signature attested by the Executive Director. DRAFT 12/11/15 LIBERTY CROSSING PRIVATE DEVELOPMENT AGREEMENT THIS AGREEMENT, effective as of December , 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 seq., with its principal offices at 7800 Golden Valley Road, Golden Valley, Minnesota 55427 (the "HRA"), and LIBERTY CROSSING INVESTMENT PARTNERS, LLC, a Minnesota limited liability company, with its principal office at 5402 Parkdale Drive, #200, Minneapolis, Minnesota 55416 ("Developer"). WHEREAS, the HRA and the City of Golden Valley adopted the Redevelopment Plan for the Winnetka and Medicine Lake Road Project Area (the "Plan"), on July 14, 2015 and September 1, 2015, respectively, for the purpose of redeveloping approximately ten 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; and WHEREAS, the HRA and the City of Golden Valley adopted the Tax Increment Financing (Redevelopment) Plan for Tax Increment Financing (Redevelopment) District within Winnetka and Medicine Lake Road Redevelopment Project Area on September 1, 2015, for the purpose of financing redevelopment within the Redevelopment Area; and WHEREAS, Developer has acquired four parcels in the Redevelopment Area legally described in attached Exhibit A, (the "Development Property"), and has submitted to the HRA a proposal for construction on the Development Property of a five- story apartment building with approximately 187 apartments and approximately 55 townhomes, plus parking, landscaping, utilities 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 parties also intend that the City will construct an underground flood storage vault, two flood storage ponds, and related flood mitigation improvements, which are necessary for the Project (as further described in the P.U.D. Development Agreement), and which will be financed through the sale of Tax Increment Bonds; 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: TABLE OF CONTENTS Page ARTICLE I Definitions 2 Section 1.1 Definitions 2 ARTICLE II Representations and Warranties 5 Section 2.1 Representations and Warranties by the HRA 5 Section 2.2 Representations and Warranties by Developer 6 ARTICLE III Title and Other Matters 7 Section 3.1 Planning Approvals 7 Section 3.2 Site and Public Improvements to be Constructed by Developer 7 Section 3.3 Flood Mitigation Improvements to be Constructed by the City 7 Section 3.4 Payment of Taxes and Assessments 8 Section 3.5 Execution Date Deliveries 8 Section 3.6 Recording 8 Section 3.7 Payments by the HRA 8 Section 3.8 Use 8 Section 3.9 Condemnation 8 ARTICLE IV Construction of Improvements 9 Section 4.1 Construction of Improvements 9 Section 4.2 Commencement and Completion of Private Improvements9 Section 4.3 Certificate of Completion 9 Section 4.4 Deposit and Reimbursement of HRA Expenses 10 Section 4.5 Relocation Benefits 10 Section 4.6 Letter of Credit 10 ARTICLE V Insurance 11 Section 5.1 Insurance 11 ARTICLE VI Undertakings of the HRA 13 Section 6.1 Undertakings 13 Section 6.2 Limitations on Undertakings of the HRA 13 ARTICLE VII Mortgage Financing 14 Section 7.1 Approval of Mortgage 14 Section 7.2 Notice of Default; Copy to Mortgagee 15 Section 7.3 Mortgagee's Option to Cure Defaults 15 Section 7.4 HRA's Option to Cure Default on First Mortgage 16 Section 7.5 Subordinate Liens 16 ARTICLE VIII Restrictions on Transfer; Indemnification 17 Section-8.1 Restrictions on Transfer 17 Section 8.2 Indemnification 17 ARTICLE IX Events of Default 18 Section 9.1 Events of Default Defined 18 Section 9.2 Remedies on Default 18 Section 9.3 No Remedy Exclusive 19 Section 9.4 No Additional Waiver Implied by One Waiver 19 ARTICLE X Additional Provisions 19 Section 10.1 Equal Employment Opportunity 19 Section 10.2 Not for Speculation 19 Section 10.3 Titles of Articles and Sections 20 Section 10.4 Notices and Demands 20 Section 10.5 Counterparts 20 Section 10.6 Modification 21 Section 10.7 Interpretation and Amendment 21 Section 10.8 Severability 21 Section 10.9 Duration 21 Section 10.10 Binding Effect 21 Section 10.11 Consents 21 Section 10.12 Certificates 21 Section 10.13 No Additional Wavier Implied by One Waiver 21 ARTICLE XI Termination of Agreement by Developer 22 Section 11.1 Developer's Options to Terminate 22 Section 11.2 Effect of Termination 22 3 Exhibits: A Legal Description for Development Property B Assessment Agreement C Certificate of Completion D Development Plans E Easement Agreement F Guaranty G Development Agreement (Liberty Crossing P.U.D. #123) 4 ARTICLE I Definitions Section 1.1 Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Agreement" means this Liberty Crossing Private Development Agreement by and between The Housing and Redevelopment Authority in and for the City of Golden Valley, Minnesota, and Liberty Crossing Investment Partners, LLC, a Minnesota limited liability company, as the same may be from time to time modified, amended or supplemented. "Apartment Building" means the separate building containing approximately 187 apartment units to be constructed by Developer on the Development Property. "Assessment Agreement" means the Assessment Agreement attached as Exhibit B, in which Developer shall agree to certain minimum assessed values for the apartments. There shall also be a separate Assessment Agreement for each townhome specifying a minimum assessed value of $105,182 on January 2, 2017, and $140,243 on January 2, 2018 and January 2 of each year thereafter through 2043. All of the Assessment Agreements shall be executed by the Parties on the Execution Date. "Certificate of Completion" means the certification for the Development Property, in the form of the certificate contained in Exhibit C attached to and made a part of this Agreement, provided to Developer pursuant to Section 4.3 of this Agreement upon satisfactory completion of the Improvements. There shall be a separate Certificate of Completion for each lot in the Development Property. "City" means the City of Golden Valley, Minnesota. "City Requirements" means the planning, zoning and permitting requirements and approvals of the City applicable to the Development Property. "County" means the County of Hennepin, Minnesota. "Developer" means Liberty Crossing Investment Partners, LLC, a Minnesota limited liability company, and its successors and assigns under this Agreement. "Development Plans" means the plans, specifications, drawings, and related documents on all construction work to be performed by Developer on the Development Property, including all on-site improvements to be performed, installed or constructed upon the Development Property pursuant to this Agreement. Such plans shall include, at a minimum, for each building or other structure to be constructed on the Development Property, at least the following: (i) site plan; (ii) floor plan for each floor; (iii) elevations (all sides) and exterior materials; and (iv) landscape plan; and shall also include adequate plans, drawings and specifications relating to all utilities, driveways, walks, A-2 parking, and other improvements to be constructed upon the Development Property by Developer. Such plans shall also include the plans, drawings and specifications for the site improvements and public improvements to be constructed by Developer pursuant to the P.U.D. Development Agreement, and the Flood Mitigation Improvements Constructed by the City (as defined in the P.U.D. Development Agreement)pursuant to the P.U.D. Development Agreement. The Development Plans shall comply with all applicable City requirements and other applicable laws and regulations. The Development Plans are attached as Exhibit D, and are hereby approved. "Development Property" means the four parcels described on Exhibit A, to be replatted into separate lots for the Apartment Building and each townhome as part of the City P.U.D. approval process. "Easement Agreement" means the agreement attached as Exhibit E, by which Developer grants to the City, free and clear of all liens and encumbrances, the right to construct and maintain a flood storage pond and flood storage vault on a portion of the Development Property as described in the Easement Agreement. "Execution Date" means the date upon which this Agreement has been executed by both the HRA and Developer. "Event of Default" means an action by Developer listed in Section 9.1 of this Agreement. "First Mortgage" means any first priority mortgage which is secured, in whole or in part, by Developer's interest in the Development Property, or any portion or parcel thereof, or any Improvements constructed thereon, and which is a permitted encumbrance pursuant to the provisions of Article VII of this Agreement. "Guarantors" means Todd L. Schachtman and Steven C. Schachtman. "Guaranties" means the personal guaranties attached as Exhibit F, by which the Guarantors personally guarantee the obligations of Developer under 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 hereon. "Improvements" means: (a) a five-story apartment building with approximately 187 units, plus 221 underground parking spaces and 56 surface parking spaces, (b) approximately 55 townhomes, with garages and surface parking; and (c) all other improvements, including landscaping, utilities, fixtures and equipment, to be constructed by Developer upon the Development Property pursuant to this Agreement and the 3 P.U.D. Development Agreement, as such improvements are defined in the Development Plans. "Net Proceeds" means any proceeds paid by an insurer to Developer, the Holder of the First Mortgage, or the HRA under a policy or policies of insurance to be provided and maintained by Developer pursuant to Article 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 the Winnetka and Medicine Lake Road Project Area, adopted by the HRA on July 14, 2015, and by the City on September 1, 2015, and as amended through the date hereof. "Project" means the construction and operation of the Improvements by Developer on the Development Property pursuant to the terms of this Agreement. "P.U.D. Development Agreement" means the Development Agreement (Liberty Crossing P.U.D. No. 123), between Developer and the City and attached as Exhibit G. "Redevelopment Area" means the approximately ten acres located in Golden Valley, Minnesota that are subject to the Plan. "State" means the State of Minnesota. "Tax Increment Bonds" means the approximately $5,900,000 of tax increment bonds to be sold by the HRA in connection with the Project. "Tax Increment Financing Plan" means the Tax Increment Financing (Redevelopment) Plan for Tax Increment Financing (Redevelopment) District within Winnetka and Medicine Lake Road Redevelopment Project Area. "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 control of the Parties, including but not limited to actions of governmental authorities other than the City or the HRA, labor disputes, shortages of materials, litigation commenced by third parties, unusually severe or prolonged bad weather, acts of God, civil disturbances, accidents, fire or other casualty, injunctions, or other court or administrative orders, or delays in the issuance of governmental licenses 4 or permits provided Developer has timely applied for and diligently pursued such licenses and permits. ARTICLE II Representations 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 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 the HRA according to its terms. (b)The Redevelopment Area constitutes a Redevelopment Project pursuant to Minnesota Statutes, Section 469.002, and the Tax Increment District constitutes a Redevelopment District pursuant to Minnesota Statutes, Section 469.174. (c) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented or limited by, or in conflict with or will result in a breach of, the terms, conditions or provisions of 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. (d)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. (e)The HRA will not modify or otherwise amend the Plan in any manner that materially impacts the rights of Developer under this Agreement without Developer's prior written consent, which will not be unreasonably withheld or delayed. (f) 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, including but not limited to the construction and completion of the Flood Mitigation Improvements Constructed by the City pursuant to the P.U.D. Development Agreement and issuance of the Tax Increment 5 Bonds. City shall construct, operate and maintain the Flood Mitigation Improvements Constructed by the City in accordance with the terms of this Agreement, the P.U.D Development Agreement and all applicable local, state and federal laws and regulations (g) The Project, as defined and described in this Agreement, is in conformance with the Plan. The above representations and warranties are true and complete as of the date hereof, shall be true and complete as of the Execution Date, and shall survive the Execution Date. However, none of the representations and warranties in this Section 2.1 shall be construed to obligate the City or City Council members to support or vote in favor of the approvals necessary for the Project nor shall such representations and warranties be construed to impinge on their due process obligations or the due process rights of the public. Section 2.2 Representations and Warranties by Developer. Developer represents and warrants that: (a) Developer is a Minnesota limited liability company duly organized and in good standing under the laws of Minnesota. (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. (c) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement, is prevented or limited by, or in conflict with or will result in a breach of, the terms, conditions or provisions of Developer's organizational documents, or any indenture, mortgage, agreement or instrument of whatever nature to which Developer is now a party or by which it is bound, or will constitute a default under any of the foregoing. (d) There are no legal proceedings pending, or known to be threatened or contemplated, to which Developer is a party, or to which any property of Developer is subject, which, if determined adversely, would individually or in the aggregate have a material adverse effect on Developer's financial position, or prevent or impair Developer's ability to perform any covenants or obligations under this Agreement. (e) Developer has previously delivered to the HRA's representatives copies of its most recent unaudited balance sheet. Such financial statements are materially true and complete, and there have been no material adverse changes in Developer's financial condition since the date of such statements. 6 (f) Developer has acquired fee title to all of the four parcels in the Development Property. (g) Developer has the financial ability to perform its obligations under this Agreement. (h) Developer shall act in good faith and use its commercially reasonable efforts to obtain all consents and approvals required for construction of the Improvements, and Developer shall comply with all reasonable requirements imposed as conditions for such consents and approvals even if such requirements involve changes to the Development Plans (so long as such changes are not substantial). (i) Developer shall construct, operate and maintain the Improvements upon the Development Property in accordance with the terms of this Agreement, the Plan and all applicable local, state and federal laws and regulations. The above representations and warranties are true and complete as of the date hereof, shall be true and complete as of the Execution Date, and shall survive the Execution Date. ARTICLE III Title and Other Matters Section 3.1 Planning Approvals. Developer shall use commercially reasonable efforts to obtain all necessary approvals from the City for the Project, including final P.U.D. approval and final plat approval, 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). Section 3.2 Site and Public Improvements to be Constructed by Developer. In addition to the structures planned in connection with the Project, Developer is responsible for constructing the site improvements and public improvements described in Sections 5 and 6 of the P.U.D. Development Agreement. Developer hereby guarantees payment to the City or HRA, as the case may be, for all such improvements undertaken by either public body. Section 3.3 Flood Mitigation Improvements to be Constructed by the City. The City will construct the Flood Mitigation Improvements Constructed by the City described in Section 7 of the P.U.D. Development Agreement using the proceeds from the Tax Increment Bonds. The City will commence construction of the Flood Mitigation Improvements Constructed by the City by June 1, 2016 and shall diligently prosecute construction of the Flood Mitigation Improvements Constructed by the City to completion no later than October 1, 2016. The times provided herein for commencement and completion of construction shall also be extended as needed because of any Unavoidable Delays. City acknowledges and agrees that the City will construct and complete the Flood Mitigation Improvements Constructed by the City in accordance with agreed upon plans and specifications and will not interfere with the Improvements. The City may fund other public improvements, other than the Flood Mitigation Improvements Constructed by the City , under Minn. Stat. Ch. 429 as a special assessment project when appropriate in the sole discretion of the City. Costs and allocation to benefiting property owners shall be determined by the City. Developer's assessment shall be not more $500,000. Developer agrees that such amount may be increased due to requests made by Developer or if approved by Developer in a subsequent written document. Developer hereby waives its rights to a public hearing and/or appeal relating to assessments determined to benefit the Development Property. It is currently estimated that the Flood Mitigation Improvements Constructed by the City will have $1,225,000 of private benefit for the Development Property. Section 3.4 Payment of Taxes and Assessments. Developer agrees to pay, when due, all approved assessments and all real estate taxes payable with respect to the Development Property through December 31, 2043. Section 3.5 Execution Date Deliveries. On the Execution Date, Developer shall execute and deliver to the HRA the Assessment Agreements and the Easement Agreement. Developer shall also deliver to the HRA the two executed Guaranties and the Letter of Credit referred to in Section 4.6. The HRA shall counter-sign the Assessment Agreements and the Easement. Section 3.6 Recording. Developer shall promptly record as soon as possible this Agreement, the Easement Agreement and the Assessment Agreements in the office of the Hennepin County Registrar of Titles, prior to any First Mortgage or other mortgage granted by Developer on the Development Property. Developer shall pay all costs of recording. Section 3.7 Payments by the HRA. The HRA shall pay Developer the sum of $1,000,000 within seven days after the Execution Date, such payment to be in consideration for the Easement and to defray Developer's costs for demolition and construction of utilities. Section 3.8 Use. Developer shall (a) operate and maintain the Improvements upon the Development Property in accordance with the terms of this Agreement and all applicable local, state and federal laws and regulations, (b) devote the Improved Parcel only to the uses permitted under Agreement, or such other uses as may be agreed to by the City and the HRA, and (c) not unlawfully discriminate in the use of the Development Property on account of race, color, religion, sex, age, national origin, or political affiliation. Section 3.9 Condemnation. In the event that title to and possession of the building Improvements or any material part thereof shall be taken in condemnation or by the exercise of the power of eminent domain by any governmental body or other person (except the HRA) after the Execution Date, Developer shall, with reasonable 8 promptness after such taking, notify the HRA as to the nature and extent of such taking. Upon receipt of any condemnation award, subject to the rights of the Holder of a First Mortgage, Developer shall use the entire condemnation award first to pay the reasonable costs and expenses of such taking, including but not limited to reasonable attorneys' fees and appraisers' fees, and second to reconstruct the building Improvements to the extent practicable (or, in the event only a part of the building Improvements have been taken, then to reconstruct such part) upon the Development Property. ARTICLE IV Approval of Development Plans and Construction of Improvements Section 4.1 Changes to Development Plans. If Developer desires to make any material change in the Development Plans after their approval by the HRA, Developer shall submit the proposed change to the HRA for its approval, which approval may be granted by the HRA in its sole discretion. Section 4.2 Commencement and Completion of Improvements. Developer shall commence construction of the Improvements by March 1, 2016, and shall diligently prosecute construction of the Improvements to completion. Developer shall complete construction of 100 percent of the apartment building Improvements on or before July 31, 2017, and 100 percent of the townhomes Improvements 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 issuance of the final Certificate of Completion 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 upon reasonable advance notice, provided they do not interfere with construction of the Improvements. The Holder of a 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 Mortgage in lieu of foreclosure, except as provided in Section 7.3 Section 4.3 Certificates of Completion. (a) Promptly after the City's issuance of a Certificate of Occupancy for all of the Improvements for the Apartment Building and each townhome, the HRA will furnish Developer with a Certificate of Completion for the applicable lot, in substantially the form set forth in Exhibit C attached hereto. The Certificate of Completion shall be (and it shall be so provided in the Certificate of Completion itself) a 9 conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement with respect to the obligations of Developer. The Certificate of Completion shall be in recordable form. (b) The HRA shall use commercially reasonable efforts to provide each Certificate of Completion as soon as practicable and the HRA agrees that it will not unreasonably withhold, delay, or condition issuance of a Certificate of Completion. The HRA may refuse to provide a Certificate of Completion only in the event that Developer is in default of a material provision of this Agreement or if the City has not issued a Certificate of Occupancy for the applicable lot. 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 of this Agreement, and what measures or acts will be necessary, in the opinion of the HRA, for Developer to take or perform in order to obtain such Certificate of Completion. Section 4.4 Deposit and Reimbursement of HRA Expenses. Pursuant to that certain Reimbursement Agreement between the HRA and Developer dated October 14, 2015, Developer has previously 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 Reimbursement Agreement shall continue in full force and effect in accordance with its terms. Section 4.5 Relocation Benefits. The Parties currently expect that no relocation benefits shall be payable in connection with the Project. Any relocation benefits which become payable shall be paid by Developer. Section 4.6 Letter of Credit. On the Execution Date, Developer shall deliver to the HRA, at Developer's sole cost and expense, an irrevocable letter of credit in the amount of $3,500,000, in a form and issued by a bank previously approved by the HRA, which shall secure all of Developer's construction obligations under this Agreement until the Improvements have been completed and to be held and released in accordance with this Section 4.6. 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. 10 The amount of the letter of credit may be reduced three (3) times during construction of the Improvements by a percentage of the original amount equal to the percentage by which the Improvements have been completed (based upon a total value of $ ) upon Developer's delivery to the HRA of a certified statement by the contractor stating the percentage completed together with an updated title insurance commitment showing no liens or encumbrances against the Development Property other than those permitted herein. The letter of credit shall be fully released upon completion of the construction of the Improvements. ARTICLE V Insurance Section 5.1 Insurance. a) Developer shall provide and maintain, or cause to be maintained by its contractor, at all times during the process of constructing the Improvements, at the sole cost and expense of Developer and/or its contractor, and from time to time at the request of the HRA, furnish the HRA with proof of payment of premiums on: (1) 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; (2) 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 (3) 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 December 31, 2043, or when this Agreement has been terminated, if earlier, 11 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: (1) Insurance against loss and/or damage to the Improvements under a policy or policies covering such risks as are ordinarily insured against by similar businesses, including (without limiting the generality of the foregoing) fire, extended coverage, vandalism and malicious mischief, explosion, water damage, demolition cost, debris removal, and collapse in an amount not less than 90 percent of the full replacement cost of the Improvements, but any such policy may have a deductible amount of not more than $25,000. No policy of insurance shall be written so that the proceeds thereof will produce less than the minimum coverage required by the preceding sentence, by reason of co-insurance provisions or otherwise, without the prior consent thereto in writing by the HRA. The term "full insurable replacement value" shall mean the actual replacement cost of the Improvements (excluding foundation and excavation costs and other uninsurable items) and equipment. (2) 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. (3) Worker's compensation insurance with statutory 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 which reduces coverage becomes effective. Upon 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 event Developer shall deposit with the HRA a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Improvements. d) In the event the Improvements or any portion thereof is destroyed by fire or other casualty, then Developer shall within 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 12 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 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 Mortgage. The HRA agrees to subordinate its rights under this paragraph to the Holder of a Mortgage, but only to the extent of amounts owing to the Holder under the Mortgage. ARTICLE VI Undertakings of the HRA Section 6.1 Undertakings. As consideration for the construction of the Improvements by Developer on the Development Property, the HRA agrees to complete, subject to the provisions of Section 6.2 below, the following actions: (a) Use reasonable efforts with the City so that the Improvements shall be approved as a P.U.D. by the City; (b) Use reasonable efforts to complete the issuance of the Tax Increment Bonds; (c) Use reasonable efforts so the City completes the Flood Mitigation Improvements Constructed by the City described in Section 7 of the P.U.D. Development Agreement in accordance with the time periods as set forth in this Agreement; and (d) Any other actions required pursuant to an express provision of this Agreement. Section 6.2 Limitations on 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; 13 (c) The HRA and Developer have received all necessary approvals from the City and other authorities to implement this Agreement and to permit Developer to construct, use and maintain the Improvements as contemplated by this Agreement; and (d) The HRA is not the subject of any involuntary court or administrative proceeding seeking to enjoin or otherwise prevent the HRA from taking any action under this Agreement. In the event any of the above conditions are not met then, in that event, the HRA shall provide Developer with a reasonable opportunity to cure or meet such conditions and upon said cure the HRA shall be obligated to fully perform under this Agreement. ARTICLE VII Mortgage Financing Section 7.1 Approval of Mortgage. Any First Mortgage on the Development Property prior to issuance of all of the Certificates of Completion shall require the prior written approval of the HRA's Director, which approval shall not be unreasonably withheld, delayed or conditioned. Developer may rely upon any approval granted hereunder by the HRA's Director without additional action by the HRA. Approval shall not be unreasonably withheld or delayed, and shall be given if: (a) the HRA's Director first receives a copy of all mortgage documents; and (b) the HRA's Director determines that the terms of the First Mortgage conform and are subject to the terms of this Agreement, except to the extent the HRA agrees to subordinate its interest to the terms of the First Mortgage. The Holder of the First Mortgage (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 as binding on Developer, and such party shall not be entitled to any additional rights or privileges granted a Holder hereunder. 14 Section 7.2. Notice of Default; Copy to Mortgagee. Whenever the HRA shall deliver any notice or demand to Developer with respect to any material 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 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 Mortgage debt and the lien of its Mortgage. If a default is not susceptible of cure within such 90-day period, the Holder shall have such period of time as is necessary to cure such default provided the Holder promptly commences the cure and thereafter proceeds to cure such default as soon as reasonably possible and provided such failure to cure within 90 days does not jeopardize the purposes of the Agreement or the Plan. However, if the breach or default is with respect to construction of the Improvements, nothing contained in this Section or any other Section of this Agreement shall be deemed to permit or authorize such Holder, either before or after foreclosure or action in lieu thereof, to undertake or continue the construction or completion of the Improvements (beyond the extent necessary to conserve or protect Improvements or construction already made) for more than 90 days after the Holder has received notice of such default pursuant to Section 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. If the Holder enters into an agreement assuming the obligations of Developer under the Agreement, such agreement shall provide that all obligations of the Holder thereunder shall terminate at such time as the Holder assigns the Agreement in accordance with the provisions of Section 8.1 of the Agreement or in accordance with the following paragraph. Any Holder who shall properly complete the Improvements shall be entitled, upon written request made to the HRA, to a certification by the HRA to such effect in the manner provided in Section 4.3 of this Agreement. In addition to the assignments permitted pursuant to Section 8.1 of the Agreement, if the Holder of a First Mortgage acquires the interest of Developer under the terms of the Agreement, the Holder shall be permitted to assign its interest in the Agreement with the consent of HRA, which consent shall not be unreasonably withheld or delayed. In exercising its judgment as to whether or not to grant such consent, the HRA shall take into account only the financial condition and experience of the proposed assignee and its capacity to perform the obligations remaining to be performed under the Agreement at the time of such assignment. In addition, the Holder may assign its interest at any time without the consent of the HRA to a person with a verifiable net worth in excess of $5,000,000. Any such assignee shall agree in writing with the HRA, for itself and its successors and assigns, to be bound by the terms and conditions of the Agreement, the Assessment Agreements, and the Plan, and not to transfer, mortgage 15 or otherwise convey any portion of the Development Property except as permitted in the Agreement. Section 7.4. HRA's Option to Cure Default on First Mortgag . Any First 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 thereunder, the mortgagee, within ten (10) days after it has declared or given notice to Developer of a default, shall notify the HRA in writing of: (a) the fact of the default; (b) the elements of the default; and (c) the actions required to cure the default. The HRA shall have the right to cure any such default which occurs prior to issuance of all of the Certificates of Completion. The HRA shall have a period of 45 days after notice from a Holder to any such default, cure, provided that the HRA gives Developer advance written notice of its intent to cure. In the event of such cure prior to issuance of the Certificates of Completion, the HRA shall thereupon be entitled, in addition to and without limitation upon any other rights or remedies to which it may be entitled, to reimbursement from Developer or any successor or assignee of any reasonable costs and expenses incurred by the HRA in curing such default. Interest shall accrue on any amounts due the HRA under this paragraph at the reference rate of interest then in effect at U.S. Bank Minneapolis, N.A. 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 all of the Certificates of Completion 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, including, without limitation, a title insurance company, which the HRA reasonably determines is adequate to protect the interest of the HRA. Developer also agrees that this Agreement and the Assessment Agreements will be recorded before any First Mortgage or other mortgage granted by Developer against the Development Property, and that any First Mortgage or other mortgage granted by Developer against the Development Property prior to recording this Agreement and the Assessment Agreements shall be released prior to recording this Agreement and the Assessment Agreements. 16 ARTICLE VIII Restrictions on Transfer; Indemnification Section 8.1 Restrictions on Transfer. Until the Certificates of Completion have been issued by the HRA, this Agreement and Developer's interest in the Development Property may not be sold, transferred or assigned by Developer without the prior written consent of the HRA, which consent may be granted or withheld by the HRA in its sole discretion. After all of the Certificates of Completion have been issued by the HRA, but prior to December 31, 2043, this Agreement and Developer's interest in the Housing 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 to perform fully under this Agreement, and the purchaser first agrees in writing with the HRA to be bound by the terms and conditions of this Agreement, and not to sell, transfer, mortgage or otherwise assign any portion of the Housing 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 the guarantor shall be released from his or its guaranty. After the Certificates of Completion have been issued by the HRA, but prior to December 31, 2043, this Agreement and Developer's interest in the Housing 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 hereof run with the land and, unless and until terminated by the terms of this Agreement, shall be binding upon their successors and assigns. Upon completion of each townhome, Developer may sell the townhome and the purchaser shall take the townhome free of the obligations under this Agreement except for the Assessment Agreement, provided that no Event of Default by Developer has occurred and is then continuing. Section 8.2 Indemnification. Developer hereby agrees to indemnify, defend and hold harmless the HRA, and its officials, officers, employees and agents, against any and all claims, demands, lawsuits, judgments, damages, penalties, costs and expenses, including reasonable attorneys' fees, arising out of any wrongful actions or omissions by Developer, its employees and agents, in connection with the Project, except to the extent of any bad faith, gross negligence or intentional misconduct by the HRA or other person seeking indemnification. This provision shall continue after the termination of this Agreement. The HRA shall give Developer prompt written notice of any matter which could result in a claim for indemnification under this Section, and cooperate with Developer in defense of any such claim. 17 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, any one or more of the following events subject to the applicable cure periods as set forth below in Section 9.2: (a) Until December 31, 2043, 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 December 31, 2043, failure by Developer to timely pay all real property taxes, assessments or other charges assessed with respect to the Development Property. (c) Subject to Unavoidable Delays, and extensions agreed to by the Parties, failure by Developer to commence and complete construction of the Improvements pursuant to the terms, conditions and limitations of Article IV of this Agreement. (d) Until all of the Certificates of Completion 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 all of the Certificates of Completion have been issued, filing against Developer in any court, pursuant to any federal or State statute, of a petition in bankruptcy or insolvency, or for reorganization, or for appointment of a receiver or trustee of all or a portion of Developer's properties, if such proceeding is not dismissed within 90 days after commencement thereof. (f) Until all of the Certificates of Completion have 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 following the expiration of any applicable cure periods in the First Mortgage. (g) Until all of the Certificates of Completion have been issued, any merger, consolidation, liquidation, reorganization or transfer of all or substantially all of Developer's assets, or transfer of a controlling interest in Developer (except for a transfer a controlling interest in Developer to the Excelsior Group or affiliate thereto), except for a merger in which Developer is the surviving entity. 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 pursuant to Section 7.1 of this Agreement, may take any one or more of the 18 following actions (but only if the HRA is not then in default and only after 60 days' written notice to Developer which sets forth the nature of the default to Developer in the case of an Event of Default 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 Agreement and of the Plan): (a) The HRA may terminate this Agreement or 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) 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 letter of credit or other security provided by Developer. (c) Sue for damages, including delinquent taxes levied against the Development Property, provided that any damages shall be reduced to the extent of any amount recovered by the HRA under any security provided by Developer. Section 9.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to the HRA is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. Section 9.4 No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Agreement should be breached by any Party and thereafter waived by any other Party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. ARTICLE 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. 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 19 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 the Agreement by either party to the other shall be sufficiently given or delivered if it is in writing dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally; and, (a) in the case of Developer, is addressed to or delivered personally to Developer at: Liberty Crossing Investment Partners, LLC 5402 Parkdale Drive, #200 Minneapolis, Minnesota 55416 with copies to: Drew M. Zamansky Zamansky Professional Association 3901 IDS Tower 80 South 8th Street Minneapolis, MN 55402 (b) in the case of the HRA, is addressed to or delivered personally to the HRA to Housing and Redevelopment Authority In and For the City of Golden Valley: 7800 Golden Valley Road Golden Valley, Minnesota 55427 Attention: Director with copies to: Allen D. Barnard Best & Flanagan LLP 225 South Sixth Street, Suite 4000 Minneapolis, Minnesota 55402-4690 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. 20 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 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 10.9 Duration. This Agreement shall be effective as of the date hereof and shall continue in full force and effect until December 31, 2043, or until such earlier date as this Agreement is terminated in accordance with the terms and conditions set forth herein. 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. The Parties agree that the terms and conditions of this Agreement shall run with the land. Section 10.11 Consents. Any consent or approval required of a Party under this Agreement shall not be unreasonably withheld, conditioned 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 this Agreement is in effect, whether any defaults exist under this Agreement and other similar matters. Section 10.13 No Additional Waiver Implied by One Waiver. In the event any term contained in this Agreement should be breached by any Party and thereafter waived by any other Party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. 21 ARTICLE XI Termination of Agreement by Developer Section 11.1 Developer's Options to Terminate. In addition to any other rights to terminate contained in this Agreement, this Agreement may be terminated by Developer by written notice to the HRA if Developer is in compliance with all material terms of this Agreement and no Event of Default by Developer is then existing, and 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. Section 11.2 Effect of Termination. Except as provided in Sections 4.5 and 8.2, if this Agreement is terminated pursuant to this Article XI, this Agreement shall be from such date forward null and void and of no further effect; provided, however, that termination of this Agreement pursuant to this Article XI shall not affect the rights of Developer to institute any action, claim or demand for equitable relief or for damages suffered as a result of breach or default of the terms of this Agreement by the HRA. [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK; SIGNATURE PAGE FOLLOWS] 22 IN WITNESS WHEREOF, the HRA has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed and Developer has caused this Agreement to be duly executed in its name and behalf, on or as of the date first above written. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY By: Steven Schmidgall, Chair And Timothy J. Cruikshank, Director LIBERTY CROSSING INVESTMENT PARTNERS, LLC By: Todd Schachtman, Chief Manager STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of December, 2015, by Steven Schmidgall, Chair, and Timothy J. Cruikshank, Director, of THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY, on behalf of the organization. Notary Public 23 STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of December, 2015, by Todd Schachtman, Chief Manager of Liberty Crossing Investment Partners, LLC, a Minnesota limited liability company, on behalf of the limited liability company. Notary Public DRAFTED BY: Best & Flanagan LLP (ADB) 225 South Sixth Street, Suite 4000 Minneapolis, Minnesota 55402-4690 Downloads\2015\Schachtman\Liberty Crossing Private Development Agreement-2201362-6.ZPAComments.a1.doc 24 EXHIBIT A LEGAL DESCRIPTION FOR DEVELOPMENT PROPERTY Parcel 1: Lot 1, Block 1, Golden Valley VFW Post Number 7051, according to the plat thereof, Hennepin County, Minnesota. Being Registered land as is evidenced by Certificate of Title No. 1409819. Parcel 2: Lot 2, Block 1, McTac Addition, according to the recorded plat thereof, Hennepin County, Minnesota. Being Registered land as is evidenced by Certificate of Title No. 1409820. Parcel 3: The West 374 feet of the North 205 feet of the South 860 feet of the Northwest Quarter of the Northwest Quarter of Section 29, Township 118, Range 21, except the West 33 feet thereof, according to the United States Government Survey thereof, Hennepin County, Minnesota. Being Registered land as is evidenced by Certificate of Title No. 1409821. Parcel 4: Lot 1, Block 1, McTax Addition, according to the recorded plat thereof, Hennepin County, Minnesota. Being Registered land as is evidenced by Certificate of Title No. 1409822. To be replated as: Lots 1-57, Block 1, Liberty Crossing P.U.D. No. 123, Hennepin County, Minnesota. 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 seq. (the "HRA"), and Liberty Crossing Investment Partners, LLC, a Minnesota limited liability partnership ("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 Private Development Agreement (the "Development Agreement") between the parties dated as of December , 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 not less than $13,112,720 on January 2, 2017, and not less than $26,225,441 on January 2, 2018, and January 2 of every year thereafter until December 31, 2043 (for taxes payable in 2018 and subsequent years), 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 (the "Assessor's Minimum Market Value"). Any capitalized term not defined herein shall have the meaning set forth in the Development Agreement. 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. Notwithstanding anything to the contrary contained herein, during the term of this Agreement, Developer shall have the right to seek a reduction of the market value of this Improved Parcel for property tax purposes above the Assessor's Minimum Market Value stated above. Upon execution by the parties, this Assessment Agreement shall be presented to the Hennepin County Assessor pursuant to Minnesota Statutes § 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 Registrar of Titles. 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. B-1 This Assessment Agreement is effective as of the date hereof and shall remain in force and effect until December 31, 2043. IN WITNESS WHEREOF, the parties have caused the execution of this Assessment Agreement as of this day of December, 2015. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY By: Steven Schmidgall, Chair By: Timothy J. Cruikshank, Director STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of December, 2015, by Steven Schmidgall, Chair, and Timothy J. Cruikshank, Director, of THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY, on behalf of the organization. Notary Public B-2 LIBERTY CROSSING INVESTMENT PARTNERS, LLC By: Todd Schachtman, Chief Manager STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of December, 2015, by Todd Schachtman, Chief Manager of Liberty Crossing Investment Partners, LLC, a Minnesota limited liability company, on behalf of the limited liability company. DRAFTED BY: Best & Flanagan LLP (ADB ) 225 South Sixth Street, Suite 4000 Minneapolis, Minnesota 55402-4690 B-3 EXHIBIT 1 LEGAL DESCRIPTION B-4 EXHIBIT 2 ASSESSOR CERTIFICATION 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 Liberty Crossing, Investment Partners, LLC, pursuant to the Private Development Agreement; 5. He has reviewed the market value previously assigned to the Development Property upon which such improvements are to be constructed; and 6. The undersigned assessor, being legally responsible for the assessment of the above described Development Property upon completion of the improvements to be constructed thereon, hereby certifies that the market value assigned to the Improved Parcel (as defined in the Assessment Agreement) and the improvements thereto upon completion shall be not less than $13,112,720 on January 1, 2017, and not less than $26,225,441 on January 2, 2018, and January 2 of every year thereafter until December 31, 2043 (for taxes payable in 2018 and subsequent years), 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 THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY, a public body corporate (the "HRA"), and LIBERTY CROSSING INVESTMENT PARTNERS, LLC, a Minnesota limited liability company ("Developer"), previously entered into the Liberty Crossing Private Development Agreement (the "Agreement"), recorded in the Office of the Registrar of Titles in and for the County of Hennepin and State of Minnesota, as Document Number , for the following described property: It is hereby certified that all of the covenants in the Agreement with respect to (lot or building) have been duly and fully performed by Developer as of the date hereof and that the rights and remedies of the HRA for breach of such covenants with respect to (lot or building) are hereby released absolutely and forever insofar as they apply to the property described above. The Registrar of Titles in and for the County of Hennepin and State of Minnesota is hereby authorized to accept for recording and to record the filing of this instrument. This instrument shall be conclusive determination of the satisfactory termination of the Agreement with respect only to such lot or building. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY By: Steven Schmidgall, Chair By: Timothy J. Cruikshank, Director c-I STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of , by Steven Schmidgall and Timothy J. Cruikshank, 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 (ADB) 225 South Sixth Street, Suite 4000 Minneapolis, Minnesota 55402-4690 C-2 EXHIBIT D DEVELOPMENT PLANS (to be supplied) D-1 EXHIBIT E EASEMENT AGREEMENT E-1 EXHIBIT F 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 LIBERTY CROSSING, INVESTMENT PARTNERS, 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 Liberty Crossing Private Development Agreement dated as of December , 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 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 pay or reimburse the HRA for all reasonable 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 his or its heirs, representatives, 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. This Guaranty shall automatically terminate at such time as all of the Certificates of Completion for the Improvements have been issued as provided in Section 4.3 of the Development Agreement. F-1 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. IN WITNESS WHEREOF, Guarantor has caused the execution of this Guaranty this day of December, 2015. (Print Name) (Signature) F-2 EXHIBIT G DEVELOPMENT AGREEMENT (LIBERTY CROSSING P.U.D. #123) A-2 THIS INSTRUMENT WAS DRAFTED BY: Best & Flanagan LLP 225 South Sixth Street, Suite 4000 Minneapolis, Minnesota 55402-4690 011800/315002/2201362 6 Downloads\2015\Schachtman\Liberty Crossing Private Development Agreement-2201362-6.ZPAComments.a1.doc F-3 c i ty of S iYi k golden11 MEMORAMEMORANDUM valley Housing and Redevelopment Authority 763-593-8002/763-593-8109(fax) Executive Summary For Action Golden Valley Special Housing and Redevelopment Authority Meeting December 15, 2015 Agenda Item 2. B. Reimbursement of HRA Expenditure Prepared By Sue Virnig, Finance Director Summary The following expenditure will paid by the HRA: Liberty Crossing $1,000,000 $1,000,000 HRA Expenditures: 9400 Winnetka and Medicine Lake TIF Fund $1,000,000 $1,000,000 Recommended Action Motion to approve payment of$1,000,000 to Liberty Crossing Investment Partners, LLC (check #4072).