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04-12-16 HRA Agenda Packet AGENDA Regular Meeting of the Housing and Redevelopment Authority Golden Valley City Hall 7800 Golden Valley Road Council Chamber April 12, 2016 6:30 pm Pages 1. Roll Call 2. Approval of Agenda 3. Approval of Minutes - Regular Meeting - January 12, 2016 2-4 4. Approval of Bills: 5 Reimbursement of City Expenditures City of Golden Valley $51,691.33 TOTAL $51,691.33 Bill Summanr: General Fund $42,537.99 North Wirth Capital Project Fund 603.17 Hightway 55 West $5,971.47 Winnetka-Medicine Lake 2,578.70 TOTAL $51 691.33 5. Receipt of March 2016 Financial Reports 6-8 6. Public Input - Consideration of Brookview Community 9-11 Center Financing A. Staff Presentation B. Public Input C. Resolution Approving the Issuance of Lease Revenue Obligations (Community Center Project), Series 2016 16-03 7. Winnetka and Medicine Lake Road Project Area: 12-78 A. Resolution Relating to the Liberty Crossing Project of the City and Approving the Development Agreement and Interfund Loan Therefor 16-04 8. Adjournment REGULAR MEETING OF THE HOUSING AND REDEVELOPMENT AUTHORITY January 12, 2016 Pursuant to due call and notice thereof, a regular meeting of the Housing and Redevelopment Authority of the City of Golden Valley, Hennepin County, Minnesota, was held at 7800 Golden Valley Road in said City on January 12, 2016 at 6:30 pm. The following members were present: Commissioners Joanie Clausen, Larry Fonnest, Shep Harris, Steve Schmidgall and Andy Snope. Also present were HRA Director Timothy Cruikshank and Administrative Assistant Judy Nally. Election of Officers The HRA Bylaws provide for the annual election of the HRA Chairperson and Vice Chairperson to serve a one year term. Chair Schmidgall opened the nominations. MOVED by Fonnest, seconded by Harris and motion carried to nominate Schmidgall for the office of Chair. MOVED by Fonnest, seconded by Harris and motion carried to nominate Clausen for the office of Vice Chair. Schmidgall accepted the nomination for Chair and Clausen accepted the nomination for Vice Chair. Approval of Aqenda MOVED by Snope, seconded by Clausen and motion carried unanimously to approve the agenda as submitted. Approval of Minutes - Reqular Meetinq - October 13, 2015 and Special Meetinq - December 15, 2015 MOVED by Snope, seconded by Harris and motion carried unanimously to approve the Regular Housing and Redevelopment Authority minutes of October 13, 2015 and the Special Housing and Redevelopment Authority minutes of December 15, 2015 as submitted. Approval of Bills MOVED by Clausen, seconded by Snope and motion carried unanimously to approve the bills as submitted. Housing and Redevelopment Authority January 12, 2016 Page 2 Receipt of December 2015 Financial Reports Sue Virnig, Finance Director, answered questions from the Commissioners. MOVED by Clausen, seconded by Harris and motion carried unanimously to receive and file the December 2015 Financial Reports. Adoption of 2016 General Fund Budqet Sue Virnig, Finance Director, answered questions from the Commissioners. Commissioner Fonnest introduced the following resolution and moved its adoption: RESOLUTION 16-1 RESOLUTION OF THE HOUSING AND REDEVELOPMENT AUTHORITY (HRA) ADOPTING THE 2016 GENERAL FUND BUDGET The motion for the adoption of the foregoing resolution was seconded by Commissioner Harris and upon a vote being taken thereon, the following voted in favor thereof: Clausen, Fonnest, Harris, Schmidgall and Snope and the following voted against the same: none, whereupon said resolution was declared duly passed and adopted, signed by the Chair and his signature attested by the Director. Desiqnation of Depositories Commissioner Snope stated that he is obtaining from the vote as his wife works for Wells Fargo. Commissioner Harris introduced the following resolution and moved its adoption: RESOLUTION 15-2 RESOLUTION DESIGNATING DEPOSITORIES FOR HRA FUNDS The motion for the adoption of the foregoing resolution was seconded by Commissioner Fonnest and upon a vote being taken thereon, the following voted in favor thereof: Clausen, Fonnest, Harris and Schmidgall; and the following abstained: Snope, and the following voted against the same: none, whereupon said resolution was declared duly passed and adopted, signed by the Chair and his signature attested by the Director. Adiournment MOVED by Snope, seconded by Fonnest and motion carried unanimously to adjourn the meeting at 6:39 pm. Housing and Redevelopment Authority January 12, 2016 Page 3 Steven T Schmidgall, Chair ATTEST: Judy Nally, Administrative Assistant �:l��' E�� ' �� ;Y w�� ' " '° �%ii � �,y �,�� „ ��„ � y `y� d � '�'�° �"�� rr i Housing and Redevelopment Authority 763 593 8002/763 593 8149(fax) Executive Summary For Action Golden Valley Housing and Redevelopment Authority Meeting April 12, 2016 Agenda Item 4. Reimbursement of City Expenditures Prepared By Sue Virnig, Finance Director Summary As of March 31, 2016 the following expenditures were paid by the City on various check registers and need to be reimbursed by the HRA: City Expenditures: Amount 1000 Best & Flanagan (December Legal)* $5,285.35 1000 Best & Flanagan (January Legal)* 11,653.70 1000 Best & Flanagan (February Legal)* 6,491.25 1000 Hennepin County (TIF Fees) 1,148.49 1000 Wilson Development Services (Relocation)* 25,342.79 1000 Dorsey and Whitney 1,769.75 $ 51,691.33 HRA Expenditures: 9000 General Fund ($40,052.39-Global One Deposit) $42,537.99 9250 North Wirth #3* 603.17 9300 Hwy 55 West* 5,971.47 9400 Winnetka-Medicine Lake * 2,578.70 $51,691.33 *Asterisk items are reimbursed by deposits held for developers. Recommended Action Motion to approve reimbursing the City of Golden Valley$51,691.33 (check#4075). �� C��` �m�. � >� � � ,��, �� y� Housing and Redevelopment Authority 763 593 8002/763 593 8109(fax) Executive Summary For Action Golden Valley Housing and Redevelopment Authority Meeting April 12, 2016 Agenda Item 5. Receipt of March 2016 (unaudited) Financial Reports Prepared By Sue Virnig, Finance Director Summary Attached is the March 2016 Financial Reports for Housing and Redevelopment Authority (HRA) review. Staff will address questions from the HRA before or at the meeting. Attachments • HRA General Fund Budget Report (1 page) • HRA Capital Project Funds Report (1 page) Recommended Action Motion to receive and file the March 2016 HRA Financial Reports. HRA of Golden Valley General Fund March 2016 Budget Report (unaudited) Percentage Of Year Completed 50% Over % Of 2016 Jan-Mar YTD (Under) Budget Revenue Budget Actual Actual Budget Received Transfer from TIF Funds: Golden Hills 0 0.00 0.00 0.00 Interest Earnings (2) 0 0.00 0.00 0.00 Fund Balance 19,000 0.00 0.00 (19,000.00) Totals $19,000 0.00 0.00 (19,000.00) 0.00% Over % Of 2016 Jan-Mar YTD (Under) Budget Expenditures Budget Actual Actual Budget Expended Legal Services (1) $6,000 2,485.60 2,485.60 (3,514.40) 41.43% Audit 12,000 0.00 0.00 (12,000.00) 0.00% City Overhead 0 0.00 0.00 0.00 Miscellaneous 1,000 0.00 0.00 (1,000.00) Totals $19,000 2,485.60 2,485.60 (16,514.40) 13.08% Notes: (1) Includes November to date billings from Best & Flanagan. (2) Interest will be allocated at year end. HRA Of Golden Valley Capital Pro�ect Funds 2016 Financial Report 9300 9400 9250 Hwy 55/ Winnetka North West Med Lk Rd Wirth #3 Cash Balance @ 1/01/16 $0.00 $0.00 $0.00 Add: Receipts: Interest Lease revenue . _ _ Increment on Deposit 0.00 Less: Expenditures: City of Golden Valley (1) TIF Payment-Hennepin County 0.00 0.00 Cash Balance @ 3/31/16 $0.00 $0.00 $0.00 (1) Breakdown on City Expenditures Memo ��1 C�� . �� :� � � �� Housing and Redevelopment Authority 763-593-8002/763-593-8109(fax} Executive Summary For Action Golden Valley Housing and Redevelopment Authority Meeting April 12, 2016 Agenda Item 6. Brookview Community Center Replacement A. Staff Presentation B. Public Input C. Resolution Approving the Issuance of Lease Revenue Obligations (Community Center Project), Series 2016 Prepared By Sue Virnig, Finance Director Rick Birno, Director of Parks & Recreation Summary Staff will present information about the Brookview Community Center replacement including history of the building, timeline, preliminary designs of the new center, and financing. After the presentation, the HRA should open the meeting for public input. This is not a public hearing but each individual willing to speak should state their name and address for the record. Once public input has ended, the HRA should consider the Resolution. Attachments • Resolution Approving the Issuance of Lease Revenue Obligations (Community Center Project), Series 2016 (2 pages) Recommended Action Motion to adopt Resolution Approving the Issuance of Lease Revenue Obligations (Community Center Project), Series 2016. Resolution 16-03 April 12, 2016 Commissioner introduced the following resolution and moved its adoption: RESOLUTION APPROVING THE ISSUANCE OF LEASE REVENUE OBLIGATIONS (COMMUNITY CENTER PROJECT), SERIES 2016 BE IT RESOLVED by the Board of Commissioners of the Housing and Redevelopment Authority of the City of Golden Valley (the "Authority"), as follows: WHEREAS, the Authority is authorized by Minnesota Statutes, Section 469.012, subdivision 1 h, to undertake redevelopment projects; and WHEREAS, the Authority is authorized by said section and Section 471.64 to make any of its land in a redevelopment project available for use by public agencies by sale, lease or otherwise; and WHEREAS, the Authority proposes to undertake a project (the "Project") consisting of the construction of a new community center facility located adjacent to the existing community center on land in the City of Golden Valley, Minnesota (the "City"); and WHEREAS, it is proposed that the Authority issue its lease revenue obligations (the "Obligations") pursuant to Minnesota Statutes, Section 469.033 for the purpose of financing all or a portion of the costs of the Project; and WHEREAS, the Obligations will be payable from lease payments received under a Lease Purchase Agreement (the "Lease"), befinreen the Authority and the City, and no Bonds shall constitute a debt of the Authority within the meaning of any constitutional or statutory limitation nor shall the full faith, credit and taxing powers of the Authority be pledged thereto; and WHEREAS, under the Lease, the City is to pay to the Authority sufficient money each year to pay the principal of, premium, if any, and interest on the Obligations, and the City is to provide the cost of maintaining the Project in good repair, the cost of keeping the Project properly insured, and any payments required for taxes and any expenses incurred by the Authority in connection with the Project; and NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Authority, as follows: Section 1 Authorization and Sale. 1.1 This Board acknowledges, finds, determines and declares that it is in the best interests of the Authority to undertake the Project and to issue the Obligations in an amount not to exceed $18,500,000. Resolution 16-03 - Continued April 12, 2016 1.2 Sale. The Authority has retained Springsted Incorporated ("Springsted") as independent financial advisor in connection with the sale of the Obligations. In consultation with staff of the Authority and City, Springsted has recommended the Authority negotiate the sale of the Obligations with an underwriter (the "Underwriter"), and that the Underwriter be chosen through a competitive selection process. The Chair and Authority Director are authorized to proceed with the selection of an underwriter through a competitive selection process and approve such other matters relating to the terms and the timing of sale thereof as may be necessary and shall oversee the preparation of an Official Statement and other offering documents to be negotiated with the Underwriter. The law firm of Dorsey & Whitney LLP, in Minneapolis, Minnesota, is hereby appointed as bond counsel for purposes of this issue of Obligations. Section 2. Lease Agreement; Other pocuments. Bond counsel is authorized to prepare forms of the Lease, ground lease and any other documents necessary in connection with the issuance of the Obligations (the "Documents"). The officers of the Authority are hereby authorized to do all acts and things required of them by or in connection with this Resolution and the Lease for the full, punctual and complete performance of all the terms, covenants and agreements contained in the Obligations, the Lease and this Resolution. The Chair and Authority Director are authorized to approve the execution and delivery of the Documents and the Obligations. The Chair and Authority Director are authorized to approve the Official Statement by which the Underwriter will offer the Obligations for sale to the public. The Chair and Authority Director are also authorized and directed to execute such other instruments as may be required to give effect to the transactions herein contemplated. Steven T Schmidgall, Chair ATTEST: 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. �t�� .� _. , � , ,� � � Housin and Redevelo ment Authorit �� r Y 763-593-8002/763-593-8109(fax) Executive Summary For Action Golden Valley Housing and Redevelopment Authority Meeting Apri) 12, 2016 Agenda Item 7. Winnetka and Medicine Lake Road Project Area - Liberty Crossing Project -Approval of Amended Development Agreement and Interfund Loan Prepared By Marc Nevinski, Physical Development Director Summary The HRA is asked to consider approval of a new resolution and revised development agreement with Liberty Crossing Investment Partners, LLC. A development agreement was approved by the HRA in December of 2015, however, the developer was unable to close on private financing in the time frame expected. The development agreement was not signed and the project did not commence as anticipated, resulting in the need to revise the development agreement. The developer proposes to construct 242 units of multi-family housing at the southeast corner of Medicine Lake Road and Winnetka Avenue. 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, 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 North and will consist of an open pond and underground vault. Two cul-de- sacs will be constructed on Rhode Island Avenue to provide access to adjacent properties. A portion of the existing Rhode Island Avenue 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, using TIF to reimburse the internal funds and pay off the bonds. The resolution approves the revised development agreement and rescinds Resolution 15-07 which was adopted in December. The resolution also authorizes an interfund loan and loan terms. A second interfund loan resolution will be necessary in the future as part of the project financing package. 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. Revisions to the development agreement include: 1. The developer will commence construction of the improvements by May 31, 2016. Townhomes will be completed by June 30, 2017. The apartment will be completed by October 31, 2017. 2. Flood mitigation improvements will be completed by the City by October 31, 2017. 3. Developer must close on its financing and deliver to the HRA all required securities by May 1, 2016 or the development agreement will terminate. Attachments • Resolution Relating to the Liberty Crossing Project of the City and Approving the Development Agreement and Interfund Loan Therefor (64 pages) Recommended Action Staff recommends the HRA adopt Resolution 16-04 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 16-04 April 12, 2016 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 THEREFOR 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 Golden Hills 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"); and (d) In connection with the Development, the City has authorized by written resolution dated December 15, 2015, the loan of up to $1,000,000 to the HRA from the City's Storm Utility Fund or other funds available or so much thereof as may be necessary to pay qualified costs of the Development under the Act (the "InterFund Loan"). 2. Approval of Development Aqreement. 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. This approval and authorization supersedes the approval and authorization provided by Resolution No. 15-07 of the HRA. 3. Approval of Interfund Loan. (a) The HRA approves the Interfund Loan in the amount of up to $1,000,000 in one or more tranches. The City shall be reimbursed as provided below from Available Tax Increment (as defined below) for the actual amount(s) loaned, together with interest at the rate of 4%, which does not exceed the greater of the rates specified under Minnesota Statutes, Section 270C.40 or Section 549.09, as of the date the loan is authorized. Interest accrues on the principal amount from the date of each tranche. (b) Principal and interest ("Payments") on the outstanding Interfund Loan balance shall be paid semi-annually in two (2) equal installments per year, each installment to be deemed paid within ten (10) business days of receipt by the City of property tax revenues from Hennepin County (each a "Payment Date"), 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: 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. -2- LIBERTY CROSSING PRIVATE DEVELOPMENT AGREEMENT THIS AGREEMENT, effective as of , 2016, is made and entered into by and befinreen 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 se�c., 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, utitities 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 other sources; 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 Paqe ARTICLEI 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 Section3.6 Recording ............................................................................. 8 Section 3.7 Payments by the HRA .......................................................... 8 Section3.8 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 Improvements..9 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 ARTICLEV 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.......................................................... 19 Section 9.3 No Remedy Exclusive......................................................... 19 Section 9.4 No Additional Waiver Implied by One Waiver..................... 19 i ARTICLE X Additional Provisions ........................................................................ 20 Section 10.1 Equal Employment Opportunity........................................ 20 Section 10.2 Not for Speculation ........................................................... 20 Section 10.3 Titles of Articles and Sections........................................... 20 Section 10.4 Notices and Demands ...................................................... 20 Section 10.5 Counterparts.....................................................................21 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 ................................................................. 22 Section10.11 Consents ........................................................................22 Section 10.12 Certificates...................................................................... 22 Section 10.13 No Additional Wavier Implied by One Waiver................. 22 ARTICLE XI Termination of Agreement by Developer......................................... 22 Section 11.1 Developer's Options to Terminate .................................... 22 Section 11.2 Effect of Termination......................................................... 22 ii 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) iii 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 Buildinq" means the separate building containing approximately 187 apartment units to be constructed by Developer on the Development Property. "Assessment AgreemenY' 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 $133,255 on January 2, 2017, and $177,673 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. "C�" 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, parking, and other improvements to be constructed upon the Development Property by 2 Developer. Such plans shall also include the pians, 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. Deve�opment 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 AqreemenY' 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 Mortqaqe" 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 AgreemenY' 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 AcY' 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 Delavs" 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 4 other court or administrative orders, o� delays in the issuance of governmental licenses 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 bv the HRA. The HRA represents and warrants that: (a) The HRA has the power to enter into this Agreement and carry out its obligations hereunder 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. (fl 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 5 the Flood Mitigation Improvements Constructed by the City pursuant to the P.U.D. Development Agreement and issuance of the Tax Increment Bonds. (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 bv 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 (fl 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 Planninq 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 Citv. 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 and other sources. The City will use commercially reasonable efforts to complete construction of the Flood Mitigation Improvements to be Constructed by the City no later than October 31, 2017, subject to Unavoidable Delays, in accordance with agreed upon plans and specifications and in a manner that will not interfere with the Improvements. 7 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 $1,500,000. 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 Recordinq. 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 bv 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, free and clear of all liens and encumbrances, 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, creed, religion, sex, age, national origin, political affiliation, sexual orientation, marital status, familial status, disability, public assistance status or local human rights commission activity. 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 promptness after such taking, notify the HRA as to the nature and extent of such taking. 8 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 Chanqes 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 May 31, 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 October 31, 2017, and 100 percent of the townhomes Improvements on or before June 30, 2017. The times provided herein for commencement and completion of construction shall also be extended as needed because of any Unavoidable Delays. Developer shall provide the HRA with receipts for all expenses incurred by Developer relating to demolition or construction of utilities for the Project, within a reasonable period of time after such expenses are incurred. 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 9 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 itselfl a 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 befinreen 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 "DeposiY'). 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 and shall also deliver to the City, as required under the P.U.D. Development Agreement, irrevocable letters of credit and/or cash deposits in the aggregate amount of $2,000,000, with all such letters of credit referred to herein in a form and issued by a bank or banks previously approved by the HRA, and all such letters of credit and/or cash deposits 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 Agreement, subject to the terms of the P.U.D. Development Agreement regarding the release and retainage of the letters of credit and deposits made thereunder. Any letter of credit referred to in this Section shall provide for expiration in not less than one year. At least 30 days prior to the expiration 10 of any letter of credit referred to in 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. The balance of any letters of credit and/or cash deposits referred to in this Section shall be fully released upon completion of the construction of the Improvements, subject to the terms of the P.U.D. Development Agreement regarding the release and retainage of the letters of credit and deposits made thereunder. 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. 11 b) Upon completion of construction of the Improvements and prior to December 31, 2043, 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: (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. 12 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 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 Undertakinas of the HRA Section 6.1 Undertakinqs. 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; 13 (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 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 Mortqaqe Financinq Section 7.1 Apqroval of Mortgaqe. 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 14 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. Section 7.2. Notice of Default; Copy to Mortgaqee. 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. Mortqaqee'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 15 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 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 Mortgage. 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. The Holder may exercise any of its rights and remedies during the 45-day period which do not interFere with the HRA's right 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, the Assessment Agreements and the Easement Agreement 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 16 recording this Agreement, the Assessment Agreements and the Easement Agreement shall be released prior to recording this Agreement, the Assessment Agreements and the Easement Agreement. 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 thereofl 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 itself and its 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 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 thereofl 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 17 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. 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. (fl 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. (g) Until all of the Certificates of Completion have been issued, any merger, consolidation, liquidation, reorganization or transfer of all or substantially 18 all of Developer's assets, or transfer of a controlling interest in Developer (except for a transfer of a controlling interest in Developer to the Excelsior Group or an entity controlled by Excelsior Group), 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 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 Remedv Exclusive. No remedy herein conferred upon or reserved to the HRA is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. Section 9.4 No Additional Waiver Implied bv One Waiver. In the 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. 19 ARTICLE X Additional Provisions Section 10.1 Equal Emplovment 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, creed, religion, sex, age, national origin, political affiliation, sexual orientation, marital status, familial status, disability, public assistance status or local human rights commission activity. 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 the Agreement by either party to the other shall be su�ciently 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 20 Attention: Director with copies to: Allen D. Barnard Best & Flanagan LLP 60 South Sixth Street, Suite 2700 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 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 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. 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. This Agreement and the P.U.D. Development Agreement shall automatically terminate on May 1, 2016, if Developer has not closed on the financing required for it to complete the Project and delivered to the HRA and the City all of the letters ot credit and cash deposits required under this Agreement and the P.U.D. Development Agreement by that date, provided, however, that such termination shall not release Developer from its obligation to pay the HRA and the City any money then owed by Developer under any agreement with the HRA or the City, and such termination shall not limit any claim any Party has for a breach of this Agreement or the P.U.D. Development by any other Party that occurred prior to the date of such termination. 21 Section 10.10 Bindin�ect. 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 bv 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. ARTICLE XI Termination of Aqreement bv 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 , 2016, 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 , 2016, 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) 60 South Sixth Street, Suite 2700 Minneapolis, Minnesota 55402 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, McTac Addition, according to the recorded plat thereof, Hennepin County, Minnesota. Being Registered land as is evidenced by Certificate of Title No. 1409822. To be replatted 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 se�c.. (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 , 2016 (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 $11,873,500 on January 2, 2017, and not less than $23,747,000 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. Nofinrithstanding 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 B-1 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 December 31, 2043. IN WITNESS WHEREOF, the parties have caused the execution of this Assessment Agreement as of this day of , 201�. THE HOUSING AND REDEVE�OPMENT 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 , 2016, 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 , 2016, 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 ) 60 South Sixth Street, Suite 2700 Minneapolis, Minnesota 55402 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 $11,873,500 on January 1, 2017, and not less than $23,747,000 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-1 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) 60 South Sixth Street, Suite 2700 Minneapolis, Minnesota 55402 G2 EXHIBIT D DEVELOPMENT PLANS (to be supplied) D-1 EXHIBIT E EASEMENT AGREEMENT 1. LIBERTY CROSSING INVESTMENT PARTNERS, LLC, a Minnesota limited liability company ("Grantor") is the owner of the Property in Hennepin County, Minnesota, described in Exhibit A ("Grantor's Property") attached hereto, hereinafter referred to as the "Easement Property" and reflected on the sketch attached as Exhibit B. 2. CITY OF GOLDEN VALLEY, a Minnesota municipal corporation (hereafter referred to as "Grantee"); and Grantor have entered into a Private Development Agreement dated , 2016 and filed for record in the Office of the Hennepin County Registrar of Titles as Document No. 3. Pursuant to said Private Development Agreement, Grantor, in consideration of $1.00 and other valuable consideration, receipt of which is hereby acknowledged, and in further consideration of the agreements contained herein, hereby grants and conveys to Grantee an exclusive easement for purposes of walkways, trails, open space, utilities, drainage, flood storage and ponding, including construction and maintenance thereof, over, under and across all of the Easement Property. 4. Grantor agrees to provide Grantee access to the Easement Property over any private driveway or road located on Grantor's Property. 5. The parties hereto from time to time will execute, acknowledge and deliver such further assurances of the Easement as may be necessary, convenient or desirable for the purposes of clarifying, better locating, releasing or further defining the nature, extent and location of the Easement. 6. This instrument may be executed by the parties in counter-parts. 7. This agreement is binding on and shall inure to the benefit of the heirs, successors and assigns of the parties hereto, and shall run with the lands benefitted and burdened herein. [SIGNATURE PAGE ATTACHED] E-1 Executed as of this day of , 2016 by: 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 , 2016 by Todd Schachtman, Chief Manager of LIBERTY CROSSING INVESTMENT PARTNERS, LLC, a Minnesota limited liability company, Grantor, on behalf of the company. Notary Public Executed this day of , 2016 by: E-2 CITY OF GOLDEN VALLEY By: Shepard M. Harris, Mayor By: Timothy J. Cruikshank, City Manager STATE OF MINNESOTA ) ) SS COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of , 2016 by Shepard M. Harris, Mayor, and Timothy J. Cruikshank, City Manager of the City of Golden Valley, a Minnesota municipal corporation, on behalf of the corporation. Notary Public THIS INSTRUMENT DRAFTED BY: BEST & FLANAGAN, LLP (mvp) 60 South Sixth Street, Suite 2700 Minneapolis, MN 55402 E-3 EXH�BIT'A Thak�a€t c�f Lc�t 5T� �lock 1, Ll�ERTY �ROSSi�t� PU'[J �!{7 °C23, �ceo�ding ta the rec�rded pl�t th�rec�f, Hennepin C�c�nty, f�linnesc�da,described as foCEows: Can�m�ncing�t the rtorthv�rest c4rner af s�id Lat 57�rrhich is on the sc�uth line crf (V1ed'icine L�ke F2��d; th�er�c� South 8� d�gr�e.� 58 minufe� 59 secands E�st, �tc�n� said scauth ii��te �nd th� rrc�rth line �fi s�ic! L�at �7, €� d;iatance c�f 52.�5 feet ic� th� p�int caf b�;ginnir�g; thence coniinuing �Quth ��degrees 58 mitiute�5�sectinds E�st, �long �ai�#nartf� lii�e, a dist�nce �f 23`1.83 feet t� an angle poit�t tn s�id narth line„ then�e S�ufh 44 d�gr��s 59 r��i��utes 47 secan�s East;�io��g tt�e nvstheasl Eir��f said Lot �7, � ciistanc�crf `I 1.3� feei ta �nn �ngf�; p+�int in the east iine of said Lat 57,thertce sotathe�ly �fang s�id e�st line fo the sou#h line of the t�o�tFr 17 f�et c�f Lot 56, ��id Blcrck 1; thence c�n a bearin� of West, along s�id �ot�th line af the N�rt�w 17 fie�t, � �isiar�ce Qf 253_26 feet; thence c�n � be�r�i�g o�Nmrth a di�tance c�f 1�1�.54 feet to fhe�vesterly ext�nsi�rn o�the sout�r Eirr� of Lc�t 13, s�id Block 1; thence c�n � bsa�ing of East, along said wes�#eriy exl�r�sion anci �1ong t#�e souih Iine of Lots `E 3, '14, °I5 and "1 t�, s�id Bloek �1, a di�t�r�ce e�fi '137.t�7 feet tc� fhe sout�eaat cc�rner+�f s�id Lot 1b; fhenc� an � be�ring crf�t�rCh, �Ic�ng the e�st lii�re of L+�ts �1�, �1, � and t, s�i�i Bl�ek 1, �nd thetr exter�sit�ns a di�tanc� �fi �43_Ofl fi�et tc� thz no�he�st �n�er of said Lc�t I, thes�ce on a be�ring of UVest, �l��g the nc�rth C�ne af Lot� 1, 2, 3 end 4, s�id �fcack `[, �nd the westerly �xtensia�n of the �ortt� ��ne of said Lcat 4� � distance �f 123.79 feet; therrce on � b�arir�g of Ncrrth a distanc�of 3Q_[l6 feet ta the point of�eginning� E-4 EXht161T � - - �x .,ti;, ,�n � ;t...,,,.. . :";, ' 1 . ��'�� r I�e� u�rr�iM .K��s,��.s€�azv c�ws��nna �s�• �w peglnchsg ; yC�B&3 sne:�caGtis I),r M a9adldrro I.�*uR ao�t! � ��" - �. 589'SB"33 F 7Jfi R4 �� h�ay�rz �..,� � ,%^'l'l�.r .:,."'7"."�' , .��5 ��'�'"€��'�i(:� , �tacqt9s��:R ra� .nz ��a .. 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P�rvt:q�.:�l.f6FRP7 L�.CkSS:hG Pilf7 NCT/.7:3'.... .,•, CIMSL EGGW:ERS Nfi1 UVYJ SliA4:YGfi5 .wu rwrw'.�.�amr€30.�M+r;w'��v..�as•rw,au�.fas�r��i�sz-�.t E-5 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 ("Guarantors"), hereby guarantee 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 , 2016, 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. Guarantors' liability under this Guaranty is joint and several with any other guarantors. Guarantors waive notice, demand and opportunity to cure any default by Developer, and any and all defenses, claims and setoffs of Developer. The liability of Guarantors 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. Guarantors 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. Guarantors 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 Guarantors and their 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 Guarantors represent and warrant to the HRA that the personal financial statement they delivered to the HRA are substantially true and complete as of the date hereof. IN WITNESS WHEREOF, Guarantors have caused the execution of this Guaranty this day of , 2016. Steven Schachtman Todd Schachtman F-2 EXHIBIT G DEVELOPMENT AGREEMENT Liberty Crossing P.U.D. #123 AGREEMENT dated this day of , 2016, by and befinreen the City of Golden Valley, a Minnesota municipal corporation (the "City"), and Liberty Crossing Investment Partners, LLC, a Minnesota limited liability company (the "Developer"). 1. Reauest for Development Approval. The City has approved a Planned Unit Development (PUD 123) known as Liberty Crossing, pursuant to Ordinance No. 569, adopted by the Golden Valley City Council on July 21, 2015, a copy of which is attached hereto as Attachment One, as amended by the City Council on November 4, 2015 (the "Ordinance"), for the property which is legally described on Attachment Two, attached hereto and hereby made a part hereof(hereinafter referred to as the "Subject Property"). The development of the Subject Property in accordance with the Planned Unit Development and the Ordinance is hereinafter referred to as the "Project". 2. Conditions of Development Approval. The City has approved PUD 123 on the following conditions: a. The plans prepared by Tanek, submitted to the City May 21 and June 8, 2015, and September 29 and October 9, 2015, shall become a part of this approval (hereinafter referred to as "Final Plans") and the Project shall conform thereto. b. The recommendations and requirements outlined in the memo from the City Fire Department, dated June 15, 2015, shall become a part of this approval and the Project shall conform thereto. c. The recommendations and requirements outlined in the memo from the Engineering Division, dated June 18, 2015, shall become a part of this approval and the Project shall conform thereto. d. Public bicycle racks or similar facilities for the parking/storage of a minimum of 14 bicycles shall be provided at the Subject Property, based on a calculation of 5% of the 276 parking spaces required for the apartment building. e. All signage must meet the requirements of the City's Sign Code (Section 4.20). f. A title review by the City Attorney is necessary prior to approval of the Final Plat. g. The Final Plat shall include "P.U.D. No. 123" in its title. h. A park dedication fee of$60,100 shall be paid before release of the Final Plat. G-1 i. A neighborhood communications plan regarding the construction schedule must be established prior to issuance of a building permit, and the Developer shall perform its responsibilities under such plan thereafter. j. This approval is subject to all other state, federal, and local ordinances, regulations, or laws with authority over the Project. 3. Additional Obliqations of Developer. a. The Developer shall demolish and remove all existing structures, pavements, and utilities on the Subject Property necessary to facilitate construction of the Project. b. The Developer must submit final construction plans consisting of a stormwater management plan (also known as grading, drainage, and erosion control plan) and utility plan for review and approval by the City Engineer before any site permits can be issued. c. The Developer shall grant easements to the City necessary to accommodate trails and walkways, open space, drainage, utilities, flood storage and ponding, and maintenance access to the Flood Mitigation Improvements Constructed by the City (defined below in Section 7) as per the Final Plans, as such plans may be amended in final construction plans approved by the City. d. The Developer must submit to the City a proposed Final Plat showing the dedication of all public right-of-way and easements necessary to construct the Project. e. The private streets shall be owned and maintained by the Developer and/or future homeowners association. The private streets must be designed and constructed by the Developer to a minimum seven (7) ton per axle capacity. f. The Developer must provide a construction schedule and phasing plan as part of the final construction plan submittal, for the review and approval of the City's Physical Development Department. This plan must show and describe the temporary parking, staging, access, and any other proposed activities relating to the phased construction of the Project. g. The Developer must continue to cooperate and work with the City on the final design of the Flood Mitigation Improvements Constructed by the City. h. An operation and maintenance plan is being developed for the Flood Mitigation Improvements Constructed by the City as part of the Project. Because the underground flood storage vault (which is part of the Flood Mitigation Improvements Constructed by the City) is utilized by the Developer for stormwater quality treatment purposes, the Developer must sign an agreement with the City regarding the Developer's share of responsibility for the long-term inspection, maintenance, and replacement costs for the underground flood storage vault which is part of the Flood Mitigation Improvements Constructed by the City. i. The Developer must provide the City maintenance access to the underground flood storage vault by constructing and maintaining public trails and walks located within dedicated easements for drainage and G-2 utility, maintenance access, and walkway purposes, all as approved by the City Engineer, which approval shall not be unreasonably withheld, delayed or conditioned. j. Copies of all recorded easements or agreements befinreen the Developer and adjacent property owners for access, signage, parking, and any other arrangement must be provided to the City, prior to the issuance of building or site permits, and shall be subject to the review and approval of the City, which approval shall not be unreasonably withheld, delayed or conditioned. k. Either now or in the future, if the townhouses in the Project become owner-occupied, the Developer or its successors and assigns must submit the homeowners association governing documents (including the declaration of covenants, conditions, restrictions and easements) to the City for review and approval prior to recording, which approval shall not be unreasonably withheld, delayed or conditioned, and must submit copies of final documents upon recording. I. The Developer must enter into a recordable maintenance agreement (the "Maintenance Agreement") with the City, before the issuance of building permits, setting forth the responsibilities of the Developer or its successors and assigns, or future homeowners association, for the following: i. Maintenance of the private streets and sidewalks, and certain public use trails within the Project, including pavement preservation and replacement, and regular street sweeping and snow removal. ii. Maintenance of the storm sewer system and stormwater quality treatment facilities, not including the underground flood storage vault that is part of the Flood Mitigation Improvements Constructed by the City, serving the Project. iii. Cost participation in the long-term inspection, maintenance and replacement of the underground flood storage vault that is part of the Flood Mitigation Improvements Constructed by the City utilized by the Developer for stormwater quality treatment purposes. The City will own and be responsible for the inspection, maintenance and replacement of the underground flood storage vault that is part of the Flood Mitigation Improvements Constructed by the City, but the Developer shall be responsible for a percentage of the inspection, maintenance and replacement costs based on the contributing drainage area or volume of the Project, or similar mutually agreed upon methodology. iv. Maintenance and future replacement of any retaining walls, if any, constructed adjacent to and supporting the streets, walkways and structures located on proposed Lots 1-16 and Lot 57, Block 1 of the Project. v. Maintenance of retaining walls constructed within the public right- of-way of Rhode Island Avenue to support the underground parking garage entrance for the apartment building. G-3 vi. Maintenance of any vegetation, landscaping, obstructions, or improvements approved by the City to be installed within public easements or right-of-way as part of the design of the Project. vii. Maintenance of improvements and/or amenities, if any, that will be owned by the Developer (or future homeowners association) and located on the real property that is subject to the Easement Agreement (as defined in the HRA Agreement [defined below]), according to the Final Plans, as such plans may be amended in accordance with the terms herein. viii. The Maintenance Agreement shall be recorded against the Subject Property, and shall have priority over all mortgage liens to which the Subject Property may be subject. m. The Developer, or its agent, shall obtain one Inflow and Infiltration Certificate of Compliance for the apartment building within the Project and one Inflow and Infiltration Certificate of Compliance for each of the townhomes upon completion of the sanitary sewer service installation, prior to occupancy of any buildings in the Project. n. The Developer shall provide the City satisfactory evidence that it is the fee owner of the Subject Property. o. Any agreements or other documentation required hereunder to be submitted by the Developer to the City or approved by the City (including without limitation any easements) shall be acceptable to the City in form and substance. p. The Developer shall obtain the required permits from the City and other governmental authorities as required for the construction of the Project. q. The Developer shall pay all required fees and costs incurred by the City related to the review and processing of the PUD application, including legal and professional consulting costs. 4. Development Plans. The Subject Property shall be developed in accordance with the Final Plans, original copies of which are on file with the City's Physical Development Department, which plans may be amended and updated by the final plans prepared by Momentum Design Group to be submitted by Developer for City's approval in connection with the building permit and, to the extent the Final Plans are so amended or updated, the term "Final Plans" as used herein shall refer to such plans as amended or updated. 5. Site Improvements Installed bv Developer. The Developer shall install or cause to be installed and pay for the following with respect to the Project, hereinafter referred to as "Site Improvements Installed by Developer." The financial securities required for Site Improvements Installed by Developer are discussed later in this Agreement. a. Setting of Lot and Block Monuments. b. Surveying and staking of work required to be performed by the Developer. c. Installation of gas, electric, communications, and cable lines prior to building occupancy. Developer must place these facilities underground G-4 and utilize joint trench construction for all private utilities and communications facilities serving the Project. d. Installation of all sanitary sewer services and water services from the mains to the buildings as shown on the Final Plans, or as may be amended in final construction plans approved by the City. e. Installation of the storm sewer system and stormwater quality filtration basins as shown on the Final Plans, and as may be amended upon review of the Bassett Creek Watershed Management Commission or in final construction plans approved by the City. f. Construction of private streets and parking areas. g. Installation of sidewalks and trails as shown on the Final Plans. h. Installation of commercial driveway entrances and residential driveway aprons that meet City standards. i. Installation of lighting (street, parking lot, and area lighting) to serve the Project. j. Construction of structural retaining walls on the Subject Property and within portions of public right-of-way, as shown on the Final Plans, or as may be amended in final construction plans approved by the City. k. The grading and compaction, erosion control, tree replacement and landscaping, all of which shall be made in accordance with Final Plans. I. Performance of the work required by the Developer under the Landscape Plan the Developer submitted to the City's Physical Development Department with respect to the Project. 6. Public Improvements Constructed bv Developer. The Developer shall install or cause to be installed and pay for the following, hereinafter referred to as "Public Improvements Constructed by Developer." The financial securities required for Public Improvements Constructed by Developer are discussed later in this Agreement. a. The Developer must design and construct the sanitary sewer mains and manholes which extend into and throughout the Subject Property, generally following the alignment of the private streets, located within public easements or right-of-way. The design is subject to review and approval of the City Engineer. Upon completion of construction and acceptance by the City, and expiration of a one-year warranty period following acceptance, the City will own and maintain the sanitary sewer mains and manholes upon the competition and the City's final acceptance of the Public Improvements Constructed by Developer. b. The Developer must design and construct the watermains, hydrants, valves and related structures which extend into and throughout the Subject Property, generally following the alignment of the private streets, located within public easements or right-of-way. The design is subject to review and approval of the City Engineer. Upon completion of construction and acceptance by the City, and expiration of a one-year warranty period following acceptance, the City will own and maintain the watermains, valves, hydrants, and the portion of the water services extending from the mains to the curb stop valves, including the curb stop valves. G-5 c. The Developer must fully remove and reconstruct the public sidewalk located along Winnetka Avenue North from the south boundary of the Subject Property to the north boundary of the Subject Property and the public sidewalk located along Medicine Lake Road immediately adjacent to the Subject Property. The public sidewalks must meet City and ADA accessibility standards. Upon completion and acceptance of the work, the sidewalks are to be owned and maintained by the City. The timing of the removal and reconstruction of the Medicine Lake Road sidewalk must be coordinated with the City because it is adjacent to the Medicine Lake Road Flood Storage Pond which will be constructed by the City and is discussed later in this Agreement. d. The Developer must properly restore pavement excavated during construction of the Project on that portion of Winnetka Avenue North and Medicine Lake Road adjacent to the Subject Property as specified by the Hennepin County Transportation Department. e. The necessary environmental remediation, if any, as required by law and as recommended by environmental reports/assessments issued to the City, for that portion of the Subject Property where the Public Improvements Constructed by Developer will be located. 7. Flood Mitiqation Improvements Constructed bv Citv. The City will design and construct the Flood Mitigation Improvements Constructed by the City (defined below), subject to applicable laws, on a portion of the Subject Property using the proceeds from the Tax Increment Bonds, and any other sources, in accordance with the terms of the Liberty Crossing Private Development Agreement between the Developer and the Golden Valley Housing and Redevelopment Authority ("HRA") with respect to the Subject Property ("HRA Development Agreement"), including in accordance with the time periods set forth in Section 3.3 of such agreement. The Flood Mitigation Improvements Constructed by the City will generally consist of the design, construction, and construction observation of flood storage facilities and related improvements, and include the following items, which will be constructed by the City in substantial conformance to plans and specifications prepared by the City's consultant engineer and in accordance with HRA Development Agreement, subject to applicable laws: a. Underground flood storage vault and associated utility work. b. Medicine Lake Road Flood Storage Pond generally located in the northeast corner of the Project. This work includes: i. Excavation and grading. ii.Construction of maintenance access and recreational trail. iii. Storm sewer and other utility work necessary to facilitate construction of the pond. iv. Permanent vegetation establishment, including a native vegetation buffer (minimum 10 feet wide) adjacent to the normal water level. G-6 v. May include other structural and natural amenities such as retaining walls, railings, benches, signs, trees and landscaping. vi. Long-term inspection and maintenance of these facilities will be outlined in the Maintenance Agreement referred to above. c. Rhode Island Avenue Flood Storage Pond generally located within the Rhode Island Avenue right-of-way. This work includes: i. Removal of a portion of Rhode Island Avenue North and abutting sidewalk, adjacent to the proposed apartment building ii.Construction of cul-de-sacs at the north and south termination points of Rhode Island Avenue. iii. Relocation of utilities under Rhode Island Avenue including the Metropolitan Council Environmental Services sanitary sewer force main, City watermain, sanitary sewer, storm sewer and other public utilities. iv. Excavation and grading the area where the roadway and sidewalk are removed. v. Establishment of permanent vegetation, including native vegetation buffers in areas near wetlands and water bodies, consistent with City and Watershed requirements. vi. Construction of a shared maintenance access and recreational traiL vii. May include other structural and natural amenities such as lighting, benches, signs, retaining walls, railings, and trees and landscaping. viii. Long-term inspection and maintenance of these facilities will be outlined in the Maintenance Agreement referred to above. d. The necessary environmental remediation, if any, as budgeted by the City, as recommended by environmental reports/assessments issued to the City and as required by law, for that portion of Subject Property and the Rhode Island Avenue right-of-way where the Flood Mitigation Improvements Constructed by the City will be located. 8. Special Assessments for Public Improvements Constructed bv Developer. The City will construct the Flood Mitigation Improvements Constructed by the City using the proceeds from the Tax Increment Bonds and any other sources in accordance with the terms of the HRA Development Agreement. The City may also fund other public improvements related to the Subject Property and the Property, 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. Special Assessment to the Subject Property shall be not more than $1,500,000 for such other public improvements (other than the Flood Mitigation Improvements Constructed by the City). 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 G-7 hereby waives its rights to a public hearing and/or appeal relating to assessments determined to benefit the Project. 9. License. The Developer, and its successors and assigns, hereby grant the City, its agents, employees, officers and contractors a license to enter the Subject Property, during the site development, including construction, and all time thereafter, to perform all work and inspections applicable thereto and contemplated under this Agreement. 10. Propertv Fees, Charqes and Assessments. The Developer shall pay all applicable fees, charges, and assessments for PUD 123, the Project and the Subject Property. The fees shall include, without limitation, the following: a. Park Dedication Fee. The Developer is assessed a Park Dedication Fee of$60,100 per City Code. Payment in full is required prior to the City's signing and release of the Final Plat and the issuance of any building permits. b. Legal Fees. It is anticipated that the City will incur legal fees and associated costs related to the drafting and recording of easements and agreements for this PUD. The Developer shall submit a cash deposit (escrow) in the amount of $10,000 for attorney's fees and costs and legal processing fees and costs. Payment in full is required prior to the City's signing and release of the Final Plat and the issuance of any building or site permits. The City shall treat the deposit as a separate account on its books. All interest earned on the deposit shall accrue to the City. When any amount becomes due and payable for such fees or costs, the City shall deduct the amount from the deposit upon the City's receipt of invoices for the same. If the amounts due and payable exceed the amount then on deposit with the City to pay such fees and costs, the Developer shall, upon the City's written request, again promptly deposit an additional $10,000 with the City for attorney's fees and costs and legal processing fees and costs, with such additional deposit to be held and applied in the manner set forth in this paragraph. After the payment of all such amounts, the City, within thirty (30) days, shall refund to the Developer the balance of the deposit, if any, without interest. c. Other Fees. The Developer understands that the Developer will be required to pay for the Subject Property fees, charges and assessments in effect at the time of issuance of building permits. The rates for each of these items will be set according to the current rate structure at the time the building permit is issued. 11. Financial Securities for Site Improvements Installed bv Developer. The Developer shall submit to the City a cash deposit or stand-by irrevocable letter of credit in a form acceptable and issued by a local banking institution acceptable to the City Attorney for the following: G-8 a. 125% of the estimated cost to furnish and install all plant materials identified in the Landscape Plan for PUD 123 (calculated at $83,000 x 125% _ $103,750) which will be on file in the Physical Development Department ("Landscape Security"). This letter-of-credit or cash deposit shall be reduced or released to the Developer only upon the completion of the Improvements (as defined in the HRA Development Agreement) and the issuance of the final Certificate of Completion (as defined in the HRA Development Agreement) for the Project; provided, however, if such final certificate is issued less than one year after the City's final acceptance of the landscape and plant materials installed per the landscape plan, then in all events thirty-three percent (33%) of the Landscape Security will be retained by the City for a full one-year warranty period following the City's final acceptance of the landscape and plant materials to ensure survival of the plant materials. The remaining balance of the Landscape Security will be released following the City's acceptance of the one-year warranty inspection. Within thirty days after the notice by Developer of conclusion of the one-year warranty period, City agrees to perform a warranty inspection of the subject landscape and plant materials. Within ten additional days City will provide Developer with either a list of corrections or final release documentation (provided by Developer) suitable for releasing the 33% retainage. If corrections are required and upon notice by Developer that the corrections have been made, the ten-day inspection and ten-day notification or release will be followed. The City shall treat any cash deposit under this Section as a separate account on its books and the deposited funds shall be held, at the City's election, at the Minnesota Municipal Money Market Fund or a depository institution selected by the City in accordance with City policies and City Council resolutions, in either event in account or fund type(s) selected by the City. All account and fund fees and charges shall be paid from the deposit. All interest accrued on any such deposit shall be reported under Developer's tax identification number, shall be deemed part of the deposit made under this Section, and shall only be disbursed to the Developer upon the Developer being entitled to a full release of the entire deposit made under this Section. 12. Financial Securities for Public Improvements Constructed bv Developer. The Developer shall submit to the City a cash deposit or stand-by irrevocable letter of credit in a form acceptable and issued by a local banking institution acceptable to the City Attorney for the following: a. $1,796,250 for the Public Improvements Constructed by Developer ("Security for Public Improvements Constructed by Developer"). This letter of credit or cash deposit shall be reduced or released to the Developer only upon the completion of the Improvements (as defined in the HRA Development Agreement) and the issuance of the final Certificate of Completion (as defined in the HRA Development Agreement) for the G-9 Project; provided, however, if such final certificate is issued less than one year after the City's final acceptance of the Public Improvements Constructed by Developer, then in all events five percent (5%) of the Security for Public Improvements Constructed by Developer will be retained by the City for a full one-year warranty period following the City's final acceptance of the Public Improvements Constructed by Developer. Within thirty days after the notice by Developer of conclusion of the one- year warranty period, City agrees to perform a warranty inspection of the subject construction. Within ten additional days City will provide Developer with either a list of corrections or final release documentation (provided by Developer) suitable for releasing the 5% retainage. If corrections are required and upon notice by Developer that the corrections have been made, the ten-day inspection and ten-day notification or release will be followed. The City shall treat any cash deposit under this paragraph as a separate account on its books and the deposited funds shall be held, at the City's election, at the Minnesota Municipal Money Market Fund or a depository institution selected by the City in accordance with City policies and City Council resolutions, in either event in account or fund type(s) selected by the City. All account and fund fees and charges shall be paid from the deposit. All interest accrued on any such deposit shall be reported under Developer's tax identification number, shall be deemed part of the deposit made under this paragraph, and shall only be disbursed to the Developer upon the Developer being entitled to a full release of the entire deposit made under this paragraph. b. Developer shall submit a cash deposit (escrow) for construction observation services in the amount of$100,000. When any amount becomes due and payable for construction observation services, the City shall deduct the amount from the deposit upon the City's receipt of invoices for the same. After the payment of all such amounts, the City shall refund to the Developer the balance of the deposit, if any. A letter of credit may not be deposited for this financial security. The City shall treat the cash deposit under this paragraph as a separate account on its books and the deposited funds shall be held, at the City's election, at the Minnesota Municipal Money Market Fund or a depository institution selected by the City in accordance with City policies and City Council resolutions, in either event in account or fund type(s) selected by the City. All account and fund fees and charges shall be paid from the deposit. All interest accrued on any such deposit shall be reported under Developer's tax identification number, shall be deemed part of the deposit made under this paragraph, and shall only be disbursed to the Developer upon the Developer being entitled to a full release of the entire deposit made under this paragraph. In the event the Developer provides a letter of credit pursuant to any of the foregoing provisions of this Agreement, it shall concurrently therewith deliver to the City an executed letter-of-credit deposit agreement in form G-10 and substance acceptable to the City. If the event the Developer elects to satisfy more than one of the security deposit requirements under this Agreement by depositing letters of credit (to the extent the Agreement permits letters of credit to satisfy deposit requirements), the Developer may satisfy such requirements by depositing a single letter of credit, provided the initial stated amount of such single letter of credit equals the total cumulative amount of the required security deposits that are being satisfied with the single letter of credit. Notwithstanding anything to the contrary in this Agreement and the HRA Development Agreement, this Agreement and the HRA Development Agreement shall automatically terminate on May 1, 2016, if Developer has not closed on the financing required for it to complete the Project and delivered to the HRA and the City all of the letters of credit and cash deposits required under this Agreement and the HRA Development Agreement by that date, provided, however, that such termination shall not release Developer from its obligation to pay the City any money then owed by Developer under any agreement with the HRA or the City, and such termination shall not limit any claim any party has for a breach of this Agreement or the HRA Development Agreement by any other party that occurred prior to the date of such termination. If the City incurs any expenses or costs as a result of an Event of Default (defined below), the City may draw upon any securities then on deposit with the City in an amount necessary to pay or reimburse the City for any such expenses or costs incurred by the City as a result of such Event of Default, in accordance with this Agreement. To the extent the securities on deposit are insufficient to pay any such expenses or costs, the Developer will be responsible for the payment of such expenses or costs and the City will bill the Developer for such expenses or costs as they occur, in accordance with this Agreement. The City's rights with respect to any letter-of-credit or cash deposit provided hereunder shall not limit any other remedy to which the City is entitled under this Agreement or at law or equity, except to the extent that the City damages are reduced by its recovery from the securities on deposit. If after an Event of Default, all of the Developer's obligations hereunder are completed by the Developer in accordance with this Agreement (or by the City acting on the Developer's behalf in accordance with this Agreement) and all Event(s) of Default have been cured, then the City shall release all remaining securities on deposit to the Developer in the manner set forth in this Agreement. 13. Developer's Default. Upon an Event of Default (defined below), the City shall be entitled to all the remedies permitted by law or equity. Without limiting the foregoing, with respect to an Event of Default by the Developer as to any of the work to be performed by it hereunder, the City may, at its option, perform the work and the Developer shall promptly reimburse the City for any expense incurred by the City, provided the Developer is first given notice of the work in G-11 default, not less than five (5) days in advance, provided such five (5) day advance notice period shall be shortened in the event the City needs to take earlier action to protect public safety or is otherwise authorized to act with respect to the Subject Property under applicable law before the expiration of such five (5) day period. The Developer grants the City full authority and a license to act as set forth in the previous sentence following an Event of Default, and it shall not be necessary for the City to seek a court order for permission to enter the land. When the City does any such work, the City may, in addition to its other remedies, levy the cost in whole or in part as a special assessment against the Subject Property. The Developer waives its right to notice of hearing and hearing on such assessments and waives the right to appeal such assessments pursuant to Minnesota Statutes, Section 429.081. The following shall be an "Event of Default" under this Agreement: (i) the failure by the Developer to pay when due and invoiced the amounts required to be paid by Developer under any provision of this Agreement and such failure continues for a period of sixty (60) days following written notice from the City to Developer; or (ii) failure by the Developer to observe and perform any covenant, condition or obligation on its part to be observed or performed under this Agreement and such failure continues for a period of sixty (60) days following written notice from the City to Developer; provided the Developer's obligation to deposit and maintain securities with the City under Sections 11 and 12 of this Agreement shall not be subject to any such notice and cure period. 14. Responsibilitv for Costs. a. Except as otherwise specified herein, the Developer shall pay all documented costs incurred by it or the City in conjunction with the approval of the PUD and ensuring compliance with the Final Plans, including but not limited to reasonable legal, planning, engineering and inspection fees and expenses incurred in connection with approval and acceptance of the PUD, the preparation of this Agreement and other legal documents, and all reasonable costs, expenses, legal, engineering and planning fees incurred by the City in reviewing the application and related documents, and in monitoring and inspecting the progress of the Project. b. The Developer shall indemnify and hold the City and its officers, employees and agents harmless from claims for damages sustained or costs directly incurred resulting from development of the Project, construction and operation, except for such damages or costs resulting from the gross negligence, intentional misconduct or intentional violation of this Agreement or applicable laws and ordinance by the City, or its officers, agents or employees. c. The Developer shall reimburse the City for reasonable costs incurred in the enforcement of Developer's obligations under this Agreement, including engineering, building official, planning and attorney's fees, and for the City's performance of Developer's obligations under this Agreement in the event that the Developer fails to commence or complete such obligations on a timely basis or as otherwise required herein. G-12 d. The Developer shall pay in full all documented bills submitted to it by the City for obligations properly incurred under this Agreement within sixty (60) days after receipt; if the bills are not paid on time, the City may halt all development work and construction on the Property until the bills are paid in full, and may draw on any of the security deposited hereunder to discharge such obligations. Bills not paid within sixty (60) days shall accrue interest at the rate of eight percent (8%) per year. 15. Failure to Pav. In addition to any other remedies permitted by law, in the event the Developer fails to pay any amount payable to the City hereunder when due following the expiration of applicable cure periods as set forth in this Agreement, the City may charge such amount, in whole or in part, as a special assessment against the Subject Property. 16. Miscellaneous. a. The Developer represents to the City that, to the best of Developer's knowledge, the development of the Subject Property as contemplated herein complies with all City, county, metropolitan, state and federal laws and regulations including, but not limited to: subdivision ordinances, zoning ordinances and environmental regulations. b. Third parties shall have no recourse against the City under this Agreement. c. In addition to any other remedies available to the City, the existence and continuance of any breach of any term of this Agreement by the Developer shall be grounds for denial of building permits, including for any portion of the Subject Property sold to third parties. d. If any portion, section, subsection, sentence, clause, paragraph or phase of this Agreement is for any reason held invalid, such decision shall not affect the validity of the remaining portion of this Agreement. e. The action or inaction of the City shall not constitute a waiver or amendment to the provisions of this Agreement. To be binding, amendments or waivers shall be in writing, signed by the parties and approved by written resolution of the City Council. The City's failure to promptly take legal action to enforce this Agreement shall not be a waiver or release. f. This Agreement, any amendments hereto, and conditions of the Ordinance are binding on all successors and assigns of the Developer, shall run with the land and shall be recorded against the title to the Subject Property. This Agreement must be recorded in the appropriate Hennepin County land records at the expense of the Developer and a copy of the recorded executed Agreement provided by the Developer to the City. This Agreement shall have priority over all mortgage liens to which the Subject Property may be subject. The Developer shall provide evidence satisfactory to the City that, when this Agreement is recorded, it is prior to all mortgage liens to which the Subject Property may be subject. In the event there are any mortgage liens having priority over this Agreement, G-13 the City shall require the Developer to obtain an acceptable subordination agreement from the holders of the applicable mortgage liens, the City's acceptance of such subordination agreement not to be unreasonably withheld or denied. g. Developer, its successors and assigns, agree to provide the execution of amendments to this Agreement, as are necessary to effect the recording and priority hereof. After the Developer has completed all the work and obligations required of it under this Agreement, at the Developer's request, the City will execute and deliver a release to the Developer as for the obligations related to such work. h. Each right, power or remedy herein conferred upon the City is cumulative and in addition to every other right, power or remedy, express or implied, now or hereafter arising, available to the City, at law or in equity, or under any other agreement, and each and every right, power and remedy herein set forth or otherwise so existing may be exercised from time to time as often and in such order as may be deemed expedient by the City and shall not be a waiver of the right to exercise at any time thereafter any other right, power or remedy. i. Developer may not assign this Agreement, and the Developer's rights and obligations under this Agreement may not be assigned, without the written permission of the City, which permission will not be unreasonably withheld, delayed or conditioned. The City agrees it will consent to an assignment of the Developer's rights and obligations under this Agreement (including an assignment by operation of law, foreclosure, or deed in lieu of foreclosure) to an assignee that has acquired and assumed all of the Developer's rights and obligations under the HRA Development Agreement in accordance with the terms and conditions of the HRA Development Agreement, provided such assignee shall also assume all of the Developer's rights and obligations under this Agreement pursuant to an assumption agreement reasonably acceptable in form and substance to the City. j. The Developer represents to the City that , with respect to itself(and with respect to thirds parties, to its actual knowledge,) no material misrepresentations have been or will be made, nor has any materially inaccurate information was or will be provided to the City by the Developer during the City's review process of the PUD application or the Project. k. Nofinrithstanding any provision of this Agreement to the contrary, to the full extent permitted by State laws, any further development or construction of new improvements and any additions or alterations to existing improvements not expressly approved under this Agreement will require additional approvals from the City, as required by City ordinances, and in full compliance with any amendments to the City's Comprehensive Plan or Zoning Ordinance requirements enacted after the date of this Agreement. 17. Notices. Required notices to the Developer shall be in writing, and shall be either hand delivered to the Developer or mailed to the Developer by registered mail at the following address: G-14 Liberty Crossing Investment Partners, LLC Attn: Chief Manager 5402 Parkdale Drive #200 Minneapolis, MN 55416 Notices to the City shall be in writing and shall be either hand delivered to the City Manager, or mailed to the City by registered mail in care of the City Manager at the following address: City Manager City of Golden Valley 7800 Golden Valley Road Golden Valley, MN 55427 G-15 IN WITNESS WHEREOF, the parties have hereunto set their hands the day and year first above written. CITY OF GOLDEN VALLEY By: Shepard M. Harris, Mayor By: Timothy J. Cruikshank, City Manager DEVELOPER LIBERTY CROSSING INVESTMENT PARTNERS, LLC By: Todd Schachtman, Chief Manager G-16 STATE OF MINNESOTA ) )ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of , 2016, by Shepard M. Harris, Mayor, and Timothy J. Cruikshank, City Manager, of the City of Golden Valley, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its City Council. Notary Public STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of , 2016, 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 THIS INSTRUMENT WAS DRAFTED BY: BEST & FLANAGAN LLP (TGG) 60 South Sixth Street, Suite 2700 Minneapolis, Minnesota 55402 TEL 612.339.7121 G-17 ATTACHMENT 1 [Copy of the Ordinance attached.] G-18 ATTACHMENT 2 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, McTac 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. G-19