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HRA 05/20/1999 - 6310
a, HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, MAY 20, 1999 7:30 P.M. PUBLIC COPY (Please return to Community Development Department) 14 4-1 CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, MAY 20, 1999, 7:30 P.M. POSTPONED FROM MAY 6, 1999, MEETING AGENDA LOCATION: City Council Chambers CALL TO ORDER ROLL CALL: APPROVAL OF MINUTES: April 1, 1999 CONSENT AGENDA: Consider Extension of Participation Agreement for Affordable Suburban Housing ............... ............................... 1 Claims and Expenses ............. ............................... 2 ACTION ITEMS: Conduct Public Hearing to sell portion of Lake Pointe site to Medtronic Inc..... 3 Consider Resolution Authorizing Execution of Redevelopment Contract, MedtronicInc ..................... ............................... 4 INFORMATION ITEMS: Gateway East Update ............... ............................... 5 OTHER BUSINESS ADJOURNMENT e� CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING APRIL 1, 1999 CALL TO ORDER: Chairperson Commers called the April 1, 1999, Housing and Redevelopment Authority meeting to order at 7:30 p.m. ROLL CALL: Members Present: Lary Commers, Virginia Schnabel, Pat Gabel and John Meyer Members Absent: Jim McFarland Others Present: Barb Dacy, Community Development Director Grant Femelius, Housing Coordinator Bill Bums, City Manager Jim Casserly, Financial Consultant Rick Pribyl, Finance Director Julie Vogel, Accountant APPROVAL OF THE MARCH 4. 1999 HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES: MOTION by Ms. Schnabel, seconded by Mr. Meyer, to approve the March 4, 1999, Housing and Redevelopment Authority minutes as presented in writing. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. CONSENT AGENDA: 1. CONSIDER SUBORDINATION AGREEMENT FOR SHOREWOOD: 2. CLAIMS AND EXPENSES: Ms. Vogel, Accountant, distributed a list of additional expenses for consideration. MOTION by Ms. Gabel, seconded by Ms. Schnabel, to approve the Consent Agenda as presented. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 1, 1999 PAGE 2 ACTION ITEMS: 3. RECONSIDER MAXIMUM LOAN AMOUNT FOR REVOLVING LOAN PROGRAM: Mr. Femelius, Housing Coordinator, explained that at the March 4, 1999, meeting, staff made a recommendation to increase the maximum revolving loan amount from $25,000 to $35,000. At that time, the item was tabled and the HRA requested additional information regarding the repayment history of borrowers receiving larger loans and the types of improvements which were made with these funds. Mr. Femelius explained that the HRA currently has 201 outstanding loans. Forty -three of these loans have a balance greater than $20,000. Staff reviewed the payment history of loans with balances over $20,000 and with balances under $20,000. Of the 43 loans with balances over $20,000, only three delinquencies have occurred. Of the 158 loans with balances under $20,000, there are approximately 25 delinquencies. Mr. Femelius noted that many of the loans are less than 30 days delinquent. Based upon this information, the larger loans do not seem to have a high delinquency rate in comparison to the smaller loans. Mr. Femelius provided the HRA with a breakdown of types of improvements completed with HRA loans. Fifty -six percent of the improvements were made to the exterior including windows, doors, roofing, siding, etc. The remaining improvements have basically been used to upgrade the health, safety, and livability of the housing. Mr. Meyer asked if the type of improvements were based on the actual percentage of dollars spent or by the percentage of loans made. Mr. Femelius responded that the numbers were based on the loans made. Mr. Meyer stated this would not provide him with the information he desired. He stated he still believes that exterior improvements, room expansions, and interior improvements are not as important as improving the housing stock of the community, which is the main goal of the program. Mr. Fernelius stated that these improvements do improve the housing stock in the community. Furthermore, allowing homeowners to make changes such as additions often allows them to remain in the community rather than moving to larger homes in outlying suburbs. Mr. Meyer stated he does not feel this is an important element of the program. Raising the loan limit would not add money into the targeted areas of the community such as Hyde Park. Ms. Gabel stated she disagreed with Mr. Meyer. Part of the goal of the program is to maintain the housing stock and this provides the means for residents to do so. She stated she feels the entire community benefits by these improvements. Anoka County HOUSING & REDEVELOPMENT AUTHORITY MEETING. APRIL 1, 1999 PAGE 3 has adjusted the income guidelines for the CDBG Home Improvement Grant Program and she feels this increase in loan limits falls in line with those increases. She would be in favor of the increase in loan amounts. MOTION by Ms. Gabel, seconded by Ms. Schnabel, to approve Resolution No. 2 -1999, A Resolution Modifying the Fridley Revolving Loan Program. Mr. Meyer asked what the income limits were for the loan program. Mr. Femelius responded that the maximum income per household is $58,650 per year. Mr. Meyer stated he did not feel that a household with an income of $58,000 was in need of this type of a loan and that it was not going to those who were financially in need of the assistance. UPON A VOICE VOTE, COMMERS, SCHNABEL, AND GABEL VOTING AYE, MEYER VOTING NAY, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED. 4. PROJECT PLAN APPROVAL FOR MEDTRONIC PROJECT: Ms. Dacy, Community Development Director, presented the master plan and project plan approval for the Medtronic world international headquarters to be located at the Lake Pointe site at 1 -694 and Highway 65. She stated she believes the proposed site plan for the corporate office facility captures the original intent and vision that the City and HRA has had since the site was identified in the mid- 1980's for a redevelopment site. The HRA's action on this item will be the first step in the master plan review process. It will be presented to the Planning Commission on Wednesday, April 7. The City Council will take action on the plans at the April 26 Council meeting. The AUAR will be reviewed and action will be taken at the April 12 meeting. Ms. Dacy noted that the S -2 district requires that the HRA review the plans to determine if it is consistent with the redevelopment objectives. She presented an overhead of the master plan. She noted that the site is approximately 44 acres with the increase due to the realignment of the roadway along the north side of the site. The key concept of the plan is a creation of a parkway, which will extend from the 7th Street intersection to Highway 65 which will create a very stately and formal appearance. Ms. Dacy stated that Phase I will encompass approximately the east half of the site and will include five buildings and a parking structure. The centerpiece of Phase I will be the corporate office with a large atrium in the middle of the building. This building will be the tallest structure in Phase I with a total height proposed at 85 feet. It will have four stories of offices. The neuro office building will be 70 feet high and the research center and education center will be 55 feet in height. Ponds will flank an access drive with both the research center and education center on either side at the entrance. There will be an underground access to the parking ramp, which will consist of six parking levels, two of which, as proposed, will be installed below grade with a maximum above -grade elevation HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 1, 1999 PAGE 4 of 40 feet. A central power plant facility will be located just west of the parking structure which will provide the heating and cooling systems for the entire development. Ms. Dacy stated a mail area will connect the office buildings. The mall area will provide a garden -type approach, providing the campus with a pedestrian walkway. A 20 -foot high light standard is proposed for the center of the parkway, which is appropriate for the area and will create a parkway feel rather than a typical city street. She stated that the landscaping plan is rather extensive with 618 trees being proposed for Phase I. She noted that the grading and utility plans will need to be approved by the City engineers and the Rice Creek Watershed District to see that they are in compliance with all required standards. Ms. Dacy briefly discussed the purpose of each of the plan documents which had been distributed to the HRA. The plan documents include the site survey, the master site plan, the site plan for Phase I, the site demolition plan, the site layout plan, the preliminary grading plan, the preliminary utility plan, the drainage and erosion control plan, and the planting plan. Mr. Meyer stated that Red Oak trees in Fridley have been especially susceptible to oak wilt. He felt this should be noted. Ms. Schnabel asked if Bridgewater Drive will be privately maintained or if Medtronic will maintain it. Ms. Dacy stated that it is currently proposed as a city street; however, staff is suggesting that the vegetation and maintenance of the area around the trees on the median and boulevard areas be the responsibility of Medtronic, due to the City's limited access to necessary equipment. Ms. Schnabel stated her concern in that this drive may become a speedway providing direct access from 7th Street to Highway 65. Ms. Dacy stated this could occur; however, with the nature of the design, it is hoped that it will be a below -speed roadway. Ms. Schnabel asked if stop signs could be installed to alleviate the problem. Ms. Schnabel asked the proposed parking stall width. Ms. Dacy stated that the stalls in the parking ramp are proposed at 8.5 feet wide with 9 feet wide proposed for the surface parking. The 9 -foot wide surface parking will require a special use permit, which Medtronic is seeking. Staff is supporting a zoning text amendment to create an 8.5 -foot wide space only in parking ramp structures. Mr. Haggmann of Medtronic presented a rendering of the proposed Phase I development. He stated they are very excited about this development and that it will make a dramatic HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 1, 1999 PAGE 5 statement for the North Metro area. He also presented a three - dimensional model of the development. MOTION by Ms. Schnabel, seconded by Mr. Meyer, to recommend approval of the master project plan to the Planning Commission and the City Council, subject to the execution of the development agreement and approval by necessary entities. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. INFORMATION ITEMS: 5. HRA BUDGET: Mr. Pribyl, Finance Director, stated staff is in the process of developing the HRA budget. Ms. Dacy stated that staff is proposing a workshop meeting at 6:30 p.m. preceding the May HRA meeting to further discuss the budget. The HRA members were in agreement with this meeting time. 6. MEDTRONIC UPDATE: Ms. Dacy stated that staff has been working actively on two pieces of legislation. She explained that a bill has been introduced to both the Senate and House which would extend the TIF district to the year 2025, with the understanding that 200,000 square feet of Phase I development will become taxable in the year 2011. Additionally, staff has been working with members of the Senate and House for a bill that would identify funds to assist the city in constructing additional lanes on Highway 65. Mr. Bums, City Manager, stated two hearings have been held in regard to the TIF extension which he believes were well received. This will now be presented to the Tax Committees. The bill for the public improvements was introduced to the Senate, which would provide $500,000 through a MIF grant (appropriated in year 2000). A similar grant has been requested for the current fiscal year. Both of these bills are uncertain at this time. He stated staff is also exploring other alternatives for funding the highway improvements. Ms. Dacy has hired Mr. Jim Benshoof to conduct a traffic analysis and a consultant is also conducting soil borings. It appears, from preliminary information, that the cost of the project will likely increase from $5 million to $7.5 million. Ms. Dacy stated staff has been meeting with various entities, including the County Commissioner, the President of the School Board, and the Chamber of Commerce. A meeting has been scheduled with the entire School Board to discuss the development. Mr. Casserly stated that the School board and the County would need to approve the TlF extension and file it with the Secretary of State. HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 1, 1999 PAGE 6 Ms. Dacy stated she has received a very positive response at the various meetings and people have been extremely supportive of the development. 7. CONSIDER TIF REQUEST, WAYMORE TRUCKING: Ms. Dacy explained that she met with Waymore Trucking representatives on Monday, March 29, in regard to TIF assistance. They have indicated that they would like to pursue development on the vacant parcel immediately east of their present facility. She stated that the HRA could provide up to $112,000 in tax increment assistance, assuming they sign a minimum valuation agreement at certificate of completion. Staff has reviewed the soil reports and talked with Braun Intertec. The cost of soil correction is significant. Mr. Commers asked if the request would meet the HRA requirements. Ms. Dacy stated that it is higher than usual. The proposed assistance would be approximately 9% of the project costs of approximately $1.2 million. Mr. Commers asked what the justification would be for exceeding the HRA guidelines. Ms. Dacy stated that this is a similar approach to the Onan /Murphy project in that if the soil is not corrected, no development will occur on the property. Mr. Bums noted that it is estimated that the new development will create 25 additional jobs. MOTION by Ms. Schnabel, seconded by Ms. Gabel, to authorize staff to pursue negotiations with the owner of Waymore Trucking, with a tax increment package not to exceed $112,239. Mr. Commers stated he would not support this request, as the assistance would exceed the HRA guidelines. Furthermore, he is not convinced that 25 additional jobs would be available. Ms. Dacy stated that the job requirement would be made part of the development contract. Ms. Schnabel stated the guidelines are generally adequate for a typical project. However if this assistance is not available, no development will occur on that property. She feels the HRA needs to consider more assistance in this kind of circumstance. UPON A VOICE VOTE, SCHNABEL, GABEL, AND MEYER VOTING AYE, COMMERS VOTING NAY, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED. 8. UPDATE ON HOME IMPROVEMENT GRANT PROGRAM: Mr. Femelius explained that Anoka County notified staff that HUD has released new income limits for the CDBG and HOME programs. These funds are used to provide assistance under the HRA's Home Improvement Grant program. He stated that in recent HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 1, 1999 PAGE 7 years, the demand for the program has decreased, which is partly due to the income guidelines. It is felt that the increase in income limits will allow more residents to qualify. No action is required by the HRA on this item. OTHER BUSINESS: Staff noted that the Housing Program Summary Report was included in the packet for HRA's information. Mr. Femelius explained that Mr. Dave Mayer, the City's Remodeling Advisor, has submitted his resignation notice. Staff will miss his expertise as he has done an excellent job for Fridley. The position will be advertised and staff will begin the process of finding a replacement immediately. ADJOURNMENT: MOTION by Mr. Meyer, seconded by Ms. Schnabel, to adjourn the meeting at 9:25 p.m. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE APRIL 1, 1999, MEETING OF THE HRA ADJOURNED AT 9:25 P.M. Respectfully submitted, Tamara D. Saefke ` Recording Secretary CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING APRIL 28, 1999 CALL TO ORDER: Vice - Chairperson Schnabel called the April 28, 1999, Housing and Redevelopment Authority special meeting to order at 7:35 p.m. ROLL CALL: Members Present: Virginia Schnabel, Pat Gabel and John Meyer Members Absent: Larry Commers and Jim McFarland Others Present: Barb Dacy, Community Development Director Grant Femelius, Housing Coordinator Jim Casseriy, Financial Consultant Ms. Dacy stated that there is a pending bill at the legislature, which would affect two of the districts in the City's redevelopment program. The bill will also require decertification of the districts after this year unless the HRA has existing obligations that need to be paid both inside and outside the district. Lastly, the bill will define what a pre- existing obligation is. In essence, if a city has approved bonds or pledged increments by April 1, 1999, it is deemed acceptable; or if a binding agreement has been entered into by May 1, 1999, it would also be an acceptable expenditure. Ms. Dacy stated that the HRA could still use the increment from the two districts to pay the debt of the Lake Pointe Bond and some of the other bond issues, which have been approved in the past. After December 31, 1999, cities must abide by the current law. ACTION ITEMS: 1. CONSIDERATION OF A RESOLUTION NO. HRA 3 -1999. AUTHORIZING EXECUTION OF A PURCHASE AGREEMENT WITH HOLIDAY PROPERTIES: Mr. Femelius stated that he had distributed a copy of this resolution, which would authorize the HRA to enter into a purchase agreement for the property at 5807 University Avenue. Holiday Companies owns this property. Mr. Femelius stated that this property is one of five parcels which the HRA has been looking at and which comprised the Gateway East Redevelopment Project. This would be the second site that the HRA would be acquiring. Mr. Femelius gave a brief history of the building /property. The property was built in the1960s. It is approximately 4,300 square feet on a 200 -foot by 129 -foot site. This n HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 28, 1999 PAGE 2 property would be a key piece to the Gateway East project. Without it, the viability of the project would be greatly reduced. Mr. Femelius discussed some of the issues that had been .identified by staff. The lease for the current tenant will expire on May 31, 1999. Holiday Companies has assured the HRA that this tenant will be out of the building by that time. He stated there are also some environmental issues which staff became aware of during their negotiations with Holiday Companies. Some soil tests were completed in March 1998 at which time polluted soil was found in the area where the underground storage tanks once existed. He noted that the tanks were actually removed in 1987; however, some polluted soil exists in an area approximately 18 to 20 feet below grade. Mr. Femelius stated that staff has been working closely with Holiday Companies, its environmental consultant, and a consultant retained by the HRA. At this time, the reports are being reviewed and further analyses made as to potential issues. Based upon what has been relayed to the HRA, it appears that Holiday Companies are responsible should any clean -up need to take place. Determination is currently being made as to whether or not the contaminated soil actually needs to be removed. Preliminary discussions with the MPCA indicate that there may not be a problem if the soil is left in place, as long as no contact is made during the redevelopment project. Staff will continue to evaluate this situation and make sure that if corrective action is necessary, Holiday Companies will be responsible for the costs. Mr. Femelius stated the property will be sold in an "as is" condition. Staff has not had an opportunity to go in and test for asbestos, etc. This cost has typically been absorbed in the past as part of other redevelopment properties, and it is a cost that the HRA would be responsible for in this case as well. The price of the property is $225,000. Closing on the property would take place after the tenant has moved out. If the HRA were agreeable to this purchase, proceeds would be placed in an escrow account and held with a third party until the closing is conducted. Mr. Femelius stated that the HRA did have the property appraised and it was determined that the value was between $215,000 and $225,000. Ms. Schnabel asked what type of development is proposed for the site. Mr. Femelius stated a townhome development is proposed. Ms. Schnabel asked if the homes would have basements. Mr. Femelius stated this has not been determined yet. At this point, staff only has a footprint plan showing how many units could be placed on the site. Mr. Casserly stated he believes the HRA should be able to develop the site as desired. Ms. Schnabel asked what the costs would be for demolition of the building. t� HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 28, 1999 PAGE 3 Mr. Femelius stated that these costs have not been obtained; however, typically the cost is $3.00 to $4.00 per square foot. Any asbestos removal, etc., would be additional. Ms. Schnabel stated that the assessed value of the property is approximately $60,000 less than the proposed purchase price. Mr. Femelius stated there always seems to be a discrepancy between the assessors value and the market value of properties. Ms. Dacy stated that the site, though located on a service road, has a lot of visibility. Mr. Meyer stated he is not surprised by the difference in the assessed value and the market value. Furthermore, in calculating the price per square foot, he feels the purchase price is fair. MOTION by Ms. Gabel, seconded by Mr. Meyer, to approve Resolution No. HRA 3- 1999, Authorizing the Execution and Delivery of a Purchase Agreement By and Between the Housing and Redevelopment Authority in and for the City of Fridley and Holiday Stationstores, Inc. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 2. CONSIDERATION OF RESOLUTION NO. HRA 4 -1999, DETERMINING THAT CERTAIN PARCELS ARE OCCUPIED BY STRUCTURALLY SUBSTANDARD BUILDINGS AND ARE TO BE INCLUDED IN THE TAX INCREMENT DISTRICT: Ms. Dacy stated that this resolution is the same resolution that was used for the structure on the north side of 57th Avenue. This resolution would essentially declare the Holiday Stationstore property and the J R Automotive property as substandard. It would give the HRA the flexibility to demolish the buildings if the HRA should so choose and then would give a period of three years to include the properties in the TIF district. MOTION by Mr. Meyer, seconded by Ms. Gabel, to approve Resolution No. HRA 4- 1999, A Resolution Determining that Certain Parcels are Occupied by Structurally Substandard Buildings and are to be Included in a Tax Increment Financing District. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 3. CONSIDERATION OF RESOLUTION NO. HRA 5 -1999 AUTHORIZING EXECUTION OF A DEVELOPMENT CONTRACT WITH SENIOR HOUSING CONSTRUCTION, INC. Ms. Dacy distributed copies of Resolution No. 5 -1999. In essence, Senior Housing Construction, Inc. has purchased the property and the plans and is completing the construction of 108 senior housing rental units. The City Council did approve the revenue bond issuance to provide project financing. The tax increment financing HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 28, 1999 PAGE 4 assistance would be provided on a "pay as you go" note. The value of the note is approximately $683,000. This resolution would authorize the Chairperson and the Executive Director to execute the agreement, which is now in the name of Senior Housing Construction, Inc. MOTION by Ms. Gabel. Seconded by Mr. Meyer, to Approve the Adoption of Resolution No. HRA 5 -1999, A Resolution Authorizing Execution and Delivery of a Contract for Private Redevelopment by and between the Housing and Redevelopment Authority in and for the City of Fridley and Senior Housing Construction, Inc. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 4. CONSIDERATION OF RESOLUTION NO. HRA 6 -1999, A RESOLUTION AUTHORIZING EXECUTION OF A DEVELOPMENT CONTRACT WITH WAYMORE TRANSPORTATION: Ms. Dacy explained that this item was discussed at the last HRA meeting in April. At that time, there was a question as to the amount of assistance that was being requested for the Cintas Uniform Company project. At that time, this information was not readily available. Since that time, information has been obtained and the amount of assistance is 5% of the total project cost of nearly $5 million. Ms. Dacy stated that this contract would provide a grant at the certificate of completion in the amount of $112,000. The company is set to proceed and would be adding a 13,000 square foot refrigerated warehouse. They have agreed to the job goals that are required by state law. Ms. Dacy stated that in her telephone conversation with Mr. Commers, he noted a concern about the amount of the assistance and the fact that it is over the HRA's guidelines. Ms. Schnabel asked if anyone has reviewed the contract Waymore Trucking has with Cub Foods. She wondered how a cancellation of a contract such as Cub Foods would affect the company's ability to carry out the job goals that have been established. Furthermore, she was concerned that there was less demand for refrigerated warehouse space than for other warehouse space. Ms. Dacy stated she believes the contract is in place but has not reviewed it. However, the consequences for not meeting the state job goals would require them to repay the assistance. Mr. Casserly stated that Waymore Trucking would be required to sign an assessment agreement in which the valuation of the property will not be less than $42.50 per square foot for the next ten years. HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 28, 1999 PAGE 5 Mr. Meyer stated he does not see a problem with exceeding the current assistance guidelines. Some land will require more assistance than others will. If the assistance is not obtained, the property will likely remain dormant for many more years. Ms. Gabel stated this property has been a problem for a long time. Soil correction costs will only continue to increase and she feels the assistance is necessary. MOTION by Mr. Meyer, seconded by Ms. Gabel, to approve the Adoption of Resolution No. HRA 6 -1999, A Resolution Authorizing Execution and Delivery of a Contract for Private Redevelopment by and between the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota and Waymore Transportation, Inc. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. OTHER BUSINESS: Ms. Dacy stated that Bill Bums, HRA Executive Director, will be out of town and some of the Contracts will need to be executed prior to Saturday, May 1, 1999. She would like the HRA to make a motion that would empower her to sign the contracts /agreements on behalf of the Executive Director in his absence. MOTION by Ms. Gabel, seconded by Mr. Meyer, to appoint Barbara Dacy as Assistant Executive Director and to authorize her to act on behalf of the Executive Director in his absence. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. Ms. Dacy stated that staff is still awaiting comments from Medtronic in regard to the redevelopment agreement. They are hopeful that the last version of the agreement will be delivered on Thursday, April 29. It is unlikely that staff will be able to review the document, meet with Medtronic, and resolve any issues prior to the regularly scheduled HRA meeting on May 6, 1999. Therefore, she would like to postpone the regular HRA meeting until May 13, 1999 or May 20, 1999. This was agreeable to the HRA members, and they concurred that the meeting be postponed to either May 13 or May 20, 1999. ADJOURNMENT: MOTION by Mr. Meyer, seconded by Ms. Gabel, to adjourn the meeting. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIM�3USL AND THE SPECIAL HRA MEETING OF APRIL 28, 1999 WAS ADJOVRED 8:35 P.M. HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 28, 1999 PAGE 6 gespectfully submitted, O.C4_11 oil Tamara D. Saefke Recording Secretary DATE: May 14, 1999 MEMORANDUM HOUSING AND REDEVELOPMENT AUTHORITY TO: William W. Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director Grant Fernelius, Housing Coordinator SUBJECT: Extension to Participation Agreement for Vacant Lot In January of this year, the HRA entered into a Participation Agreement with Affordable Suburban Housing (ASH) for the development of a vacant lot at 5800 2nd St. The Participation Agreement allows the developer to reserve the site for 120 days in order to develop house plans, find a buyer and coordinate other details of the project. At the end of 120 days, the HRA would then review the project, and if acceptable enter into a Development Agreement with ASH. Bill Schatzlein, Executive Director of ASH has had problems securing estimates from the general contractor he originally selected to do the construction. This has made it difficult to market the site to potential buyers. According to Schatzlein these issues have been worked out, however the Participation Agreement terminated on May 8, 1999. Unfortunately, the house plans will not be finalized by the May 20d' HRA meeting. Schatzlein is requesting an extension to the Participation Agreement to June 3, 1999, the date of the next regular HRA meeting. At that time he should have everything ready for HRA consideration. Recommendation Staff recommends that the HRA approve an extension to the Participation Agreement with Affordable Suburban Housing to June 3, 1999. M -99 -123 1 w O C w A V U l z r, X4 iL a Q a U a r .+ z N Q a a o H W IL a r a w L•7 fd t C1 U \ W C 2 J tL O 1` x •T L• 1 ei G >i "ti i>i i ri W .. it . 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LeZ O wCCe - QZI •I>O J i i i-W WJ >~ WW WJO 4 Ct O r.6F -a wI- FL.4AU" r I z x NZ QfL ZF- - _j W r H H W H O r N H Q Q Q} I room JELuuwwwU At - Q I Wic0OHQWOO cew3" H H I zwmol -ow NU W CCOX ZUrO i i- +zwxNHHr -N WzcLxx Q zN + J-Wc Hzl- •'1•- QI•-Wx H4jE aw W I w Qii:xwz � WQ OL3iLz El ixxaxwuwm4wx xwxwwxz Q+ O Z x W O t- O W S> Z O H O H Z I - LL I- ULZIL - HOx >UE i a )-z a OH <C>l-E iL i WWWOO • O CLC[wQ ZN O I E WftJNZEQSZWOJ >NHA0 0 A I f-WAZW YN�t- ilAONYZ •PL z i UZJi+xUuOz<zw - zcwmNx W I •wxiGOW • W iL WOCCZIx Q 3 i riU W L7JH 13iC000L" -ixZz 1 a a a aOPa col aaaaaaaa0.aaa i a 0- a0. 0- aa0- 0. 0. a0.0Paa0- 0- 0. YW I a a 0P 0. Ol0- 0. a01 0. aa0P0. 0 -01 a06 0. U I- I .i .i H ei v4 a �i .I .-r .i .I .I .i .r1 .i .i .i .i .I iii $ I \ \ \ \ \ \ \ \ \ \ "N \ \ \ \ \ \ \ xA I C- 4NCdNNNNMMMMMMMMMMMM U Y NNNNNCdNO1NNNClNNNNNNfJ i V'PCPQ'PPPPPPPPPPPPPP 0 W z x A f_� 4 MEMORANDUM HOUSING AND REDEVELOPMENT AUTHORITY DATE: May 14, 1999 TO: William W. Bums, Executive Director HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Conduct Public Hearing Regarding Sale of Land and Consider a Resolution Authorizing Execution of Redevelopment Contract with Medtronic Inc. Requested Action by the HRA State law requires that the Authority conduct a public hearing prior to conveyance of property. The public hearing was properly advertised for the May 6, 1999, meeting, but because the meeting had to be postponed the public hearing needs to be conducted on May 20, 1999. The second purpose of the Authority's action is to pass the Resolution Authorizing Execution of the Redevelopment Contract with Medtronic Inc. By Thursday evening the conclusion of the legislature's work on the TIF extension request will have concluded. The enclosed agreement does not address the outcome of the legislation. Depending on the outcome of legislative action an amendment to the agreement will be necessary. Summary of Key Issues 1. The Authority will receive 20 percent of the tax increment until it has recovered the present value of $3,300,000, and after that point it will receive 2.5 percent of the tax increment until the end of the existing district. It is contemplated that the Authority would receive 20 percent of the tax increment if the district is extended to the year 2025. 2. The uses permitted on the property are defined as "office and related uses" (page 6 of agreement) and must be permitted and approved by the master plan. 3. Depending on the level and the square footage of development, Medtronic will retain an option right for the remaining part of the property. Given the proposed 4. size of phase one development of approximately 460,000 square feet, Medtronic will retain the right to have an option on the remaining property until June 1, 2006. 5. Representations by the Authority: 3 &4 Public Hearing Sale of Land Page 2 May 14, 1999 • The site is suitable for construction of up to 1.6 million gross square feet of building area, subject to the completion of the appropriate environmental permits (AUAR and Indirect Source Permit). • The Authority represents that there will be no use made of the remaining property in which it retains ownership that would unduly interfere with Medtronic's Phase I Development. • The building site coverage shall not exceed 40 percent. • The building height may extend to 10 stories. 6. Representations by the redeveloper (Medtronic): • Redeveloper will comply with all Local, State, and Federal Environmental Laws and Regulations. • Redeveloper agrees to require its contractors to comply with the city's prevailing wage requirements. • The redeveloper has agreed to comply with the state requirements regarding job and wage goals, and has agreed to provide an aggregate net increase of 100 jobs within 2 years at a minimum of $10 per hour. • The redeveloper will construct a new public street (currently know as Bridgewater Drive) from 70' Street to Highway 65. • The redeveloper shall pay customary city fees for utility connections, building permits, and park dedication, but shall not be obligated to pay any special assessments with respect to the site improvements or the public permits defined in the agreement. • The redeveloper agrees to construct the structured parking. 7. Article 3 of the Agreement (page 18) defines the terms of conveyance of the property. The date of closing for the Phase I development shall not be later than June 1, 1999, unless on a date as mutually agreed to by both parties in writing. For the initial phase of development there is no land payment required. Future acquisitions must be in accordance "Land Holding Payment" which is defined on page 5 of the agreement. 8. Article 4 on page 28 of the agreement outlines the time frames for Authority approvals on the master plan and construction plans. As is typical, the Authority will have 40 days to review a master plan amendment from the date of receipt of the application. Medtronic agrees to commence construction of the Phase I improvements on or before 9. July 1, 1999, and agrees to commence construction of additional phases within 60 days of the date of closing for the relevant parcel. The article, specifically section 4.3(a) requires that 75 percent of the parking requirements shall be in structured parking (Medtronic is exceeding this requirement), and that at least 85 percent of the parking requirements in future phases should in structured parking. Structured parking is defined as ramps or decks of two or more parking levels. The parking structure as part of the Phase I improvements shall not have more than 3 parking levels above grade. Subsequent structured parking may be all on or above grade (page 9). s' Public Hearing Sale of Land Page 3 May 14, 1999 Medtronic has until December 31, 2000, to complete construction of the Phase I improvements or maybe liable for a payment in lieu of taxes. The agreement states that the redeveloper shall have substantially completed each phase in future development within 2 years of a commencement in construction. 10. The original draft of the agreement refereed to "expansion parcels" these were the 7 single family homes which were to be acquired by Medtronic. Medtronic is in the process of closing on 6 out of 7 and the seventh property is under negotiation. Because the city may ultimately be carrying out a condemnation 11. proceeding it was determined that this article was no longer necessary in the Authority's agreement and language is included in an agreement with the city. Articles 5, 6, & 7 are typical articles regarding insurance and condemnation, prohibitions against assignment and transfer, and events of default. Article 8 pertains to the payment of real estate property taxes and defines that the real estate value for a potential Pilot payment would be $13,500,000. 12. Article 9 states that the agreement shall expire on the defined termination date which means determination of the tax increment district or the date of which the agreement is terminated in accordance with other sections of the agreement. 13. Section 10.11 on page 45 states that Medtronic does not acquire all of the redevelopment property. The Authority agrees to impose design controls on future development which would insure capability with Medtronic's development. It also 14. commits the Authority to consulting with Medtronic and imposing design controls as part of agreements with future owner or in deeds transferring to redevelopment property. Aside from the tax increment financing extension legislation it appears that the remaining issues have been resolved satisfactorily with Medtronic. Additional updates may be provided to the Authority prior to Thursday evening; however, staff is hopeful that all issues can be resolved and the Authority can approve this very important agreement on Thursday night. Recommendation Pending further discussions regarding the of extension legislation early next week, staff recommends the Authority approve the Resolution to Authorize the Chairperson and the Executive Director to Execute the Redevelopment Contract. Jim Casserly advised that the resolution will be distributed at the meeting. BD \jt Attachment M -99 -125 DRAFT: - Iarel -. 29Ma y 13, 1999(Blacklined to Apri129, 1999 Medtronic Draft) CONTRACT FOR PRIVATE REDEVELOPMENT By and Between HOUSING AND REDEVELOPMENT AUTHORITY In and For THE CITY OF FRIDLEY, MINNESOTA And MEDTRONIC, INC. This document was drafted by: Krass Monroe, P.A. Suite 1100 Southpoint Office Center 1650 West 82nd Street Minneapolis, MN 55431 (612) 885 -1296 DRAFT: 13 1999 (Bl� to Anri129 1999 Medtronic Draft) CONTRACT FOR PRIVATE REDEVELOPMENT By and Between HOUSING AND REDEVELOPMENT AUTHORITY In and For THE CITY OF FRIDLEY, MINNESOTA And MEDTRONIC, INC. This document was drafted by: Krass Monroe, P.A. Suite 1100 Southpoint Office Center 1650 West 82nd Street Minneapolis, MN 55431 (612) 885 -1296 I *' CONTRACT FOR PRIVATE REDEVELOPMENT TABLE OF CONTENTS Page ARTICLE Definitions Section 1.1 Definitions ....................................... ARTICLE H Section 2.1 Representations, Warranties and Agreements by the Authority.............. * • • 1214 Section 2.2 Representations, Warranties and Agreements by the RedeveloPer ...... -- ARTICLE III INSPECTIONS, CONVEYANCE OF PROPERTY. AND REIMBURSEMENT PAYMENTS OPTION RIGHTS Section3.1 inspection ........................................................................................................... Section 3.2 Conveyance of the Redevelopment Property ..................................................... Section 3.3 Conditions Precedent to Conveyance ................................................................. 2 -22 Section 3.4 No Special Assessments .................................................................................... 22-2 Section 3.5 Site improvements .............................................................................. 2 Section 3.6 Documents at Closing ..................................................... ................................... Claims 2 Section 3.7 Real Estate Brokerage Commission, Other ........................................... Section 3.8 Option Rights .......................................... . ......... ....... ... ................................... ................ 2 Section 3.9 Reimbursement PaYments .................................................................. ARTICLE IV MASTER PLAN APPROVAL, GOVERNMENTAL APPR OVALS, CONSTRUCTION OF MPa—MUN EMPROVEMI—ENISS CONSTRUCTION OF PUBLIC IMPROVEMENTS Section 4.1 Section 4.2 Section 4.3 Section 4.4 Section 4.5 Section 4.6 ,)4= Governmental Approvals ................................................................................... Construction of Minimum improvements ............................ ..............................2 ......................................................... 2 ConstructionPlans ............................................................................................. 2 Completion of Construction ............................................................................... 21 Certificate of Completion .................................................................................. 2 Bridgewater Drive Improvements ...................................................................... 3 - —W kequisitien. . .......................... . .......................... "W-Antiala .................. ................... ARTICLE V1 INSURANCE AND CONDEMNATION Section 56.1 Insurance ........................................................................................................ 12' — 33, Section 56.2 Condemnation ................................................................................................ — — ....... 31 Section 56.3 Subordination .................................................................................................. — ARTICLE VII I PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER; INDEMNIFICATION Section 6-7.1 Representation as to Redevelopment ............................................................. 2334-3t Section 67.2 Prohibition Against Transfer of property and Assignment of Agreement...... —44 3 Section 67.3 Release and Indemnification Covenants ............................................ ARTICLE VIII EVENTS OF DEFAULT Section 78.1 Events of Default Defined .............................................. ............................... 37 Section 78.2 Remedies on Default ................................ ............................... . ...... 3 Section 78.3 Revesting Title in Authority Upon Happening of Event Subsequent to Conveyance to Redeveloper ............................................ ............................... 3 Section 78.4 Resale of Reacquired Property; Disposition or Proceeds ............................... 4 Section 78.5 No Remedy Exclusive ..................................................... ............................... 4 Section 78.6 No Additional Waiver Implied by One Waiver ........... ............................... .. 4 SECTION VIIIIX I REAL PROPERTY TAXES PLEDGE AND PILOT I Section 89.1 Real Property Taxes ........................................................ ............................... 41 Section89.2 Pledge ............................................................................. ............................... 41 Section89.3 PILOT ............................................................................... .............................41 ARTICLE IX I TERMINATION .OF Section 919.1 Termination — General .................................................... ............................... 424 Section 910.2 Termination — Specific .................................................... ............................... 42 ARTICLE XI ADDITIONAL PROVISIONS Section 101. 1 Conflict of Interest; Authority Representatives Not Individually Liable........ : Section 101.2 Equal Employment Opportunity ..................................... ............................... Section 10 1.3 Provisions Not Merged With Deed ............ ............................... .......... Section 101.4 Titles of Articles and Sections ....................... ............................... Section 1015 Notices and Demands ..................................................... ............................... Section 101.6 Counterparts .................................................................... ............................... Section 1013 Time is of the Essence ................................ ............................... .................... Section 104-.8 Unavoidable Delay .......................................................... ............................... Section 101.9 Expiration ....................................................................... ............................... Section 101.10 No Thirty-Party Beneficiaries ......................................... ............................... Section 101.11 Adjacent Development Design Controls ......... ............................... SIGNATUREPAGES .................... ............................... ............................ ............................... 464 SCHEDULE A Legal Description of Redevelopment Property .................. ............................... 4 SCHEDULE B Redevelopment Property Deed ......................................... ............................... 4 SCHEDULE C Medtronic Campus ........................................................... ............................... 5 SCHEDULED Certificate of Completion ..................................................... ............................... 55 SCHEDULE E EkparAen Pw eel Area of Initial Nfinimum Improvements ... ............................... 5� SCHEDULE F Public Improvements ............................................................ ............................... 59 SCHEDULE G Site Improvements ............................................................... ............................... 60 SCHEDULE H Storm Sewer Pond Agreement ............................................. ............................... 62 SCHEDULE I Nfiai� Building addn9 Requirements .......................... 6 SCHEDULE � Master Plan..... ............................ ............................... ........ .......... ..................... 6 CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, made on or as of the day of , 1999, by and between the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a political subdivision of the State of Minnesota organized under the Constitution and laws of the State of Minnesota, and Medtronic, Inc. ("Medtronic"), a corporation organized under the laws of the State of Minnesota. WITNESSETH: WHEREAS, the Board of Commissioners (the "Board ") of the Authority has determined that there is a need for development and redevelopment within the corporate limits of the City to provide employment opportunities, to improve the tax base and to improve the general economy of the City and the State of Minnesota; WHEREAS, in furtherance of these objectives, the Authority has established, pursuant to Minnesota Statutes, Sections 469.001 et seg. (the "Act "), the redevelopment plan known as the Modified Redevelopment Plan for its Redevelopment Project No. 1 (the "Project Area "), which plan, as amended, and as it may be amended, is hereinafter referred to as the "Redevelopment Plan," in the City to encourage and provide maximum opportunity for private development and redevelopment of certain property in the City which is not now in its highest and best use; WHEREAS, major objectives in establishing the Redevelopment Plan are to: 1. Promote and secure the prompt redevelopment of certain property in the Project Area, which property is not now in its highest and best use, in a manner consistent with the City's Comprehensive Plan and with a minimum adverse impact on the environment, and thereby promote and secure the redevelopment of other land in the City. 2. Secure additional employment opportunities within the Project Area and the City for residents of the City and the surrounding area, thereby improving living standards, reducing unemployment and the loss of skilled and unskilled labor and other human resources in the City. 3. Prevent the deterioration of, and secure the increase of, commercial/industrial property subject to taxation by the City, Independent School Districts, Anoka County, and the other taxing jurisdictions in order to better enable such entities to pay for governmental services and programs required to be provided by them. 4. Provide for the financing and construction for public improvements in and adjacent to the Project Area necessary for the orderly and beneficial redevelopment of the Project Area and adjacent areas of the City. 5. Promote the concentration of new desirable industrial, office, and other appropriate redevelopment in the Project Area so as to maintain the area in a manner compatible with its accessibility and prominence in the City. 6. Encourage local business expansion, improvement, and redevelopment, whenever possible. 7. Create a desirable and unique character within the Project Area through quality land use and design of new buildings. 8. Encourage and provide maximum opportunity for private redevelopment of existing areas and structures which are compatible with the Project Area; WHEREAS, in order to achieve the objectives of the Authority and the City in creating the Project Area and adopting the Redevelopment Plan, the Authority .is prepared to provide assistance in accordance with this Agreement; WHEREAS, the Redeveloper has proposed redevelopment of certain property in the Project Area; WHEREAS, as an integral part of its decision to undertake the proposed redevelopment, the Redeveloper is relying on the representation of the Authority that the Authority will convey the Redevelopment Property or Parcels thereof and provide the assistance for the Site Improvements to the Redeveloper subject to the terms and conditions of this Agreement; and WHEREAS, as an integral part of its decision to undertake the proposed redevelopment on the Redevelopment Property, the Redeveloper is relying on the representations and obligations created under and agreed upon in a separate agreement executed by the Redeveloper and City of Fridley contemporaneously with this Agreement; and WHEREAS, the Authority believes that the development and redevelopment of the Project Area pursuant to this Agreement, and the fulfillment generally of the terms of this Agreement, are in the vital and best interests of the Authority and the health, safety, morals and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state and local laws under which the development and redevelopment are being undertaken and assisted; 2 NOW, THEREFORE, in consideration of the premises and the mutual obligations of the Parties hereto, each of them does hereby covenant and agree with the other as follows: ARTICLE I Definitions Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means Minnesota Statutes, Sections 469.01 et se . "Agreement" means this Agreement, as the same may be from time to time modified, amended, or supplemented. "Available Tax Increment" means the Tax Increment and any Gemingent IneFement- remaining after the following deductions: (i) Twenty percent (20 %) of the Tax Increment shall be retained by the Authority until it has recovered the present value of $3,300,000 ( which shall be reduced by any PILOT paid by the Redeveloper and retained by the Authority) calculated at a present value discount rate of 6.75% per annum compounded annually from April 1, 1999, and (ii) Two and one -half percent (2.5 %) of the Tax Increment shall be retained by the Authority after it has recovered the present value of $3,300,000 as described in (i) abov ° Fm "Authority" means the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, or its successors or assigns. "Certificate of Completion" means the certification, in the form of the certificate contained in Schedule D attached to and made a part of this Agreement, provided to the Redeveloper, pursuant to Section 4.4 of this Agreement. "City" means the City of Fridley, Minnesota, or its successors or assigns. "Commencement of Construction" or "Commenced Construction" means the commencement of the pouring of concrete in connection with the installation of the footings or foundation for the portion of the Minimum Improvements described in the applicable building permit issued by the City. 91 "Commercial Uses" means (i) hotel facilities, (ii) convention facilities, (iii) daycare facilities, (iv) financial institutions and (v) sit -down restaurants or cafeterias and (vi) other related and similar uses as allowed by the Master Plan and this Agreement. "Construction Plans" means the plans, specifications, drawings and related documents on the construction work to be performed by the Redeveloper on the Redevelopment Property which (a) shall be as detailed as the plans, specifications, drawings and related documents which are submitted to the building official of the City, and (b) shall include at least the following for each building: (1) site plan; (2) building plan for the shell signed by a construction engineer and an architect; (3) grading and utility plan ; (4) elevations (all sides); (5) facade and landscape plan; (6) roof plan; and (7) such other plans or supplements to the foregoing plans as the City may reasonably request. "Construction Threshold Requirements" means the aggregate amount of the gross buildable Minimum Improvements for which the Redeveloper has Commenced Construction by a specific date. The number of gross buildable square feet the construction of which shall have commenced by the specific date is shown below: a. 150,000 square feet by July 1, 1999; b. 240,000 square feet by June 1, 2003; c. 400,000 square feet by June 1, 2006; d. 500,000 square feet by June 1, 2008. "Consumer Price Index" means the Consumer Price Index published monthly for All Urban Consumers, U.S. City Average, Base Year 1982 -84 = 100, issued by the Bureau of Labor Statistics of the United States Department of Labor, or in the event such index is no longer published, then such other index as shall be generally acceptable as being comparable thereto. -- --"Ce i gea Tax - IriereemenV-means fii Viable du g- ay-ex#ensiet "County" means the County of Anoka, Minnesota "Date of Closing" means the date or dates set forth in Section 3.2(b). "Event of Default" means an action by the Redeveloper or the Authority described in Section 78.1 of this Agreement. i "Expansion Parcels" means those parcels described on Schedule E of this Agreement. 4 b*e�ejeet �-en 5.2 hefee "Hazardous Substances" shall have the meaning given to this term in the regulations promulgated under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, and/or in any other federal laws, statutes, rules or regulations or in the Minnesota Environmental Response and Liability Act and/or in any other State laws, statutes, rules or regulations, and specifically including petroleum and related hydrocarbons and their by- products, asbestos, and polychlorinated biphenyls. "Initial Minimum Improvements" means the initial building of not less than 150,000 gross square feet which is constructed by the Redeveloper and which (i) shall conform to the Minimum Building Quality Standards, (ii) be designed for Office and Related Uses, and (iii) provide Structured Parking to the extent required by this Agreement. "Initial Project" means that Initial Redevelopment Property and the Initial Minimum Improvements. "Initial Redevelopment Property" means the Parcel of the Redevelopment Property acquired for the Initial Minimum Improvements. "Land Holding Payment" means payments made by the Redeveloper for Optional Redevelopment Property. The Land Holding Payment is calculated by multiplying the Usable Square Feet being transferred or purchased as shown on the Survey times the number of full months that have elapsed since the Date of Closing for the Initial Redevelopment Property times $0.02083 - Bents. "Master Plan" means the plans prepared by the Redeveloper showing the proposed general nature, density and location of the Minimum Improvements on the Redevelopment Property, which Master Plan has been approved by the Authority and City and is attached hereto as Schedule J, as amended and approved from time to time. "Medtronic Campus" means the area shown on Schedule C attached to this Agreement which the Authority has platted as the Fridley Executive Center. "Minimum Building Quality Standards" means a standard of building quality and finish reasonably comparable to those utilized in the construction of Medtronic's existing facilities at Rice Creek, Shoreview and the Neuro in Columbia Heights. 5 4 . I "Minimum Improvements" means the improvements to be constructed by the Redeveloper on the Redevelopment Property. The Minimum Improvements include the "Initial Minimum Improvements" and "Optional Minimum Improvements." "Minnesota Environmental Policy Act" means the statutes located at Minnesota Statutes. Sections 116D.01 et sea., as amended. "Minnesota Environmental Rights Act" means the statutes located at Minnesota Statutes. Sections 116B.01 et se ., as amended. "MnDot" means the Minnesota Department of Transportation. "National Environmental Policy Act" means the federal law located at 42 U.S.C. Sub. Sect. 4331 et sea., as amended. "Notice of Closing" means the written notice from the Redeveloper to the Authority specifying the Date of Closing for any part of the Redevelopment Property. "Office and Related Uses" means those uses Medtronic currently has in place at its Rice Creek Campus, together with other uses necessary to the operation of the Redeveloper's business or typical office business uses, and includes, witheut limitafieng, the following: a. Light manufacturing or assembly of any products the Redeveloper sells from time to time, including clean room manufacturing; b. Research and development activities; c. Warehousing activities; d. Conference and training facilities; e. Office activities and reasonably related uses; f. Uses reasonably incident to a primary or secondary headquarters facility for a United States manufacturing company, including day care, food service and other sundry retail uses. g. Ancillary commercial uses as allowed by the Master Plan and this Agreement. "Optional Minimum Improvements" shall mean all Minimum Improvements built by the Redeveloper after the Initial Minimum Improvements which shall (i) conform to the Minimum Building Quality Standards; (ii) be designed for Office and Related Uses or Commercial Uses as allowed for in this Agreement; and (iii) provide Structured Parking to the extent required by this Agreement. "Optional Redevelopment Property" means the Redevelopment Property remaining after the acquisition by the Redeveloper of the Initial Redevelopment Property. "Option Rights" means the right of the Redeveloper to acquire part or all of the Optional Redevelopment Property in accordance with the terms of this Agreement, and specifically Article III. When an Option Rights deadline or period has expired, then those terms and provisions of this Agreement relating to the Option Rights shall lapse and shall be of no further force or effect. Unless previously terminated in accordance with Article III, the Option Rights shall expire June 1, 2008. "Parcel" means a part of the Redevelopment Property, including the Initial Redevelopment Property and the separate Parcels of the Optional Redevelopment Property, as acquired by the Redeveloper from time to time. A Parcel shall consist of the Useable Square Feet and any appropriate part of the roads or storm water outlet ponds, as agreed by the Parties. "Parking Requirements" means the parking spaces currently required by City ordinances (as reduced by any applicable shared parking approvals or variances) as set forth in Schedule-K I. I "Party" means a party to the Agreement. "Parties" means all parties to the Agreement, collectively. "Payment in Lieu of Taxes" or "PILOT" means the amount, if any, to be paid by the Redeveloper to the Authority in the event that the Redeveloper has not substantially completed the Initial Minimum Improvements on or before December 31, 2000 and the amount to be paid by the Redeveloper to the Authority in the event that the Redeveloper has not substantially completed the Initial Minimum Improvements on or before December 31 of any succeeding year. The first PILOT, if any, shall be payable in the year 2002. The Authority shall provide the Redeveloper with a notice of the PILOT 30 days prior to the time that real estate taxes are payable. The Authority need only provide a single notice, but the Redeveloper may pay the PILOT in equal installments at the times provided by law for the payment of real estate taxes. Failure of the Authority to provide notice shall not relieve the Redeveloper of this obligation. The PILOT for the year 2002 or any succeeding calendar year (if applicable) shall be calculated as follows: if the market value for the Initial Project assigned by the City assessor for the real estate taxes payable in such calendar year is less than $13,500,000, the PILOT shall equal the product of the difference times the class rates in effect in such calendar year times the tax rates of all of the tax jurisdictions in which the Initial 7 Project is located in effect for such calendar year times twenty percent (20.0 %). The PILOT obligation shall remain in effect only until the year Redeveloper has paid real estate taxes based on the assessor's market valuation of $13,500,000. "Plat" means a recordable plat in conformance with Minnesota Statutes, Ch. 505 of the Redevelopment Property, currently designated as the Fridley Executive Center Plat. "Preliminary Plans" means the schematic design plans for each part of the Minimum Improvements and shall include, at a minimum, a site plan, a typical floor plan and representative elevations depicting the proposed Minimum Improvements. "Project" means the Redevelopment Property and the Minimum Improvements. "Public Improvements" means the public improvements to be constructed or caused to be constructed by the Authority, the City under it's agreement with the Redeveloper, or others on or adjacent to the Redevelopment Property as shown on Schedule F. "Purchase Price" means the purchase price paid for the Initial Redevelopment Property and each Parcel of the Optional Redevelopment Property specified in Section 3.2(d). "Redeveloper" means Medtronic, Inc., a corporation organized under the laws of the State of Minnesota, its successors or assigns. "Redevelopment Plan" means the Modified Redevelopment Plan adopted by the Authority in connection with its Redevelopment Project No. 1. "Redevelopment Property" means the real property upon which the Minimum Improvements are to be constructed, which real property is described on Schedule A of this Agreement. The Redevelopment Property is approximately 41.63 acres, inclusive of roads and outlots for storm water ponding, and is being platted as the Medtronic Campus. The Redevelopment Property includes the "Initial Redevelopment Property" and the "Optional Redevelopment Property." The Initial Minimum Improvements shall be constructed on the Initial Redevelopment Property and the Optional Minimum Improvements, if any, shall be constructed on the Optional Redevelopment Property. In the event the Expansion Parcels are acquired, then the term Redevelopment Property shall also include the Expansion Parcels. "Redevelopment Property Deed" means a recordable quit claim deed or deeds, substantially in the form of the deed in Schedule B of this Agreement, used to convey the Redevelopment Property, or Parcels thereof, from the Authority to the Redeveloper. "Reimbursement Payment(s)" means the payments by the Authority from the Available Tax Increment to reimburse the Redeveloper for the Site Improvement Costs. ' a "Site Improvements" means the improvements to be constructed by the Redeveloper on the Redevelopment Property as shown on Schedule G. "Site Improvement Costs" means the sum of all costs and expenses incurred by the Redeveloper in connection with the design, financing during construction and construction of the Site Improvements, including without limitation the cost of permits, labor and materials, professional and consulting fees, and interest eests not to e*eeed at 6.75% from the date the Site Improvements Costs are actually paid. In the °-• °�� Recleveleper- a ned-- €naneing eesk- duFing 0 "State" means the State of Minnesota. "Storm Sewer Pond Agreement" means that agreement substantially in the form of Schedule H of this Agreement to be executed by the Redeveloper and the City. "Street Lighting" means the street lights to be installed by the Redeveloper on the public right of ways, in the Medtronic Campus. "Structured Parking" or "Parking Structures" means ramps or decks of two or more parking levels. Grade level parking spaces within, beneath or on top of Parking Structures shall be considered a parking level and part of the Structured Parking. The Parking Structure constructed as part of the Initial Minimum improvements shall not have more than three (3) parking levels above grade. Subsequent Structured Parking may all be on or above grade -with no�egthr- err�e�tc�- be�belew -grime. "Survey" means a boundary and, as regards the Survey provided by the Authority only, topographic survey of the Redevelopment Property provided by the Authority or Redeveloper and acceptable to the Redeveloper and the Title Company. The Survey shall contain a certificate in form and substance satisfactory to the Redeveloper and the Title Company and addressed to them, specifically verifying that (i) the Survey was made on the ground of the Redevelopment Property, (ii) the Survey is correct, (iii) there are no improvements, visible or recorded easements -or uses, encroachments, conflicts, gaps, overlaps or protrusions, except as shown on the Survey, and (iv) no portion of the Redevelopment Property falls within any area designated as having special flood hazards as determined by any official of any federal, state or local government or any instrumentality thereof, except if and as shown on the Survey. "Tax Increment" means only (i) that portion of the real estate taxes paid with respect to and representing increases in the original net tax capacity ofland iffl—lae of the Redevelopment Property, and with respect to all improvements thereon, conveyed to the Redeveloper, which is remitted to the Authority as tax increment pursuant to the Tax Increment Act, plus (ii) any PILOT paid by the Redeveloper to the Authority. Tax Increment does not include any payments (other than the PILOT) of any kind made by the Redeveloper to the Authority. 9 "Tax Increment Act" means the Tax Increment Financing Act, Minnesota Statutes. Sections 469.174 to 469.179, as amended and as it may be amended. "Tax Increment District" means Tax Increment District No. 6 approved and adopted by the Authority and the City pursuant to the Tax Increment Act. "Tax Official" means any City or County assessor, County auditor, City, 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, the State Court of Appeals or the State Supreme Court. "Termination Date" means the termination date of this Agreement which shall be the earlier of. (i) the date of termination of the Tax Increment District, as the same may be extended from time to time or (ii) the date on which this Agreement is terminated in accordance with the provisions contained in Articles VIR and IX. I "Title Insurance Company" means a title insurance company mutually acceptable to the Authority and the Redeveloper. "Unavoidable Delays" means delays which are the direct result of strikes or shortages of material; delays which are the direct result of casualties to the Minimum Improvements, the Redevelopment Property or the equipment used to construct the Minimum Improvements; delays which are the direct result of governmental actions; delays which are the direct result of judicial action commenced by third parties; delays which are the direct result of citizen opposition or action affecting this Agreement, acts of God or any event beyond the control of the party adversely affected thereby. Where there is any date for performance or any other obligation hjerein, it shall always be subject to extension for Unavoidable Delays equivalent to the delay occassioned thereby. "Usable Square Feet" means the square footage of the Redevelopment Property necessary and required for the construction of any part of the Minimum Improvements. The Usable Square Feet- for any Parcel shall be calculated by multiplying the square feet of the gross building area of the Minimum Improvements to be built on the Parcel by 1.9033. As required by the terms of this Agreement, the Redeveloper is paying only for Usable Square Feet which is 1,427,461 square feet less the Usable Square. Feet for the Initial Minimum Improvements. The Redeveloper shall provide a Survey showing the boundaries, location and Usable Square Feet of a Parcel, plus any non Useable Square Feet allocated to the Parcel, at the time of the request for conveyance of such Parcel. "VIC" means the Voluntary Investigation and Cleanup program of the Minnesota Pollution Control Agency. 10 "VPIC" means the Voluntary Petroleum Investigation and Cleanup program of the Minnesota Pollution Control Agency. 11 Y ARTICLE H Representations. Warranties and Agreements Section 2.1. Representations. Warranties and Agreements by the Authority. The Authority represents, warrants and agrees that: (a) The Authority is a public body duly organized and existing under the laws of the State. Under the provisions of the Act, the Authority has the power to enter into this Agreement and carry out its obligations hereunder. (b) The Authority has created, adopted and approved the Redevelopment Plan in accordance with the terms of the Act. (c) The Authority has created, adopted and approved the Tax Increment District pursuant to the Tax Increment Act. (d) The Authority will convey the Redevelopment Property to the Redeveloper pursuant to Article III hereof for uses in accordance with the Redevelopment Program and this Agreement. (e) The Authority will cooperate with the Redeveloper with respect to any litigation commenced by third parties in connection with this Agreement. (f) Except as stated in this subsection (f), the Authority makes no representation, guarantee, or warranty, either express or implied, as to the Redevelopment Property or its condition (regarding soils, pollutants, hazardous wastes or otherwise), and hereby assumes no responsibility or liability therefor except to the extent that the Authority is a responsible party as to Hazardous Substances. Notwithstanding the foregoing, the Authority represents that, to the best of its knowledge, the Authority is not aware of the presence of Hazardous Substances in, on or under the Redevelopment Property. (g) The Authority is the owner of the Redevelopment Property and represents that it has good and marketable title thereto, and will have good and marketable title to each of the Initial Redevelopment Property and the Parcels of the Optional Redevelopment Property as of the date of conveyance thereof. Such good and marketable title shall as of the Date of Closi at all times- be free and clear of all encumbrances. (h) Public Improvements sufficient to serve the Minimum Improvements are available at the perimeter or on the Redevelopment Property as described in Schedule F. 12 (i) The site is suitable for construction of up to 1.6 million gross square feet of building area (plus the gross square footage required for surface parking or the Structured Parking) subject to the completion and certification(s) of the Alternative Urban Areawide Review Fridley Lake Pointe Center and the issuance of indirect source permit(s) by the Minnesota Pollution Control Agency. 6) The Authority shall maintain, at its expense, the Redevelopment Property that it retains, including regular mowing and watering, litter cleanup and regular policing. The Authority sly - ise- represents that there is -shall be no use made of the Redevelopment Property during the period it retains titlethat it Fetains that would be inconsistent with or would unduly interfere with the operation by Redeveloper of the Minimum Improvements, and specifically shall ifisum—EwL4ksents that there is —shall be no dumping of waste or Hazardous Substances, parking or storage of vehicles, storage of construction materials or other similar use of the Redevelopment Property during the period it retains title. (k) The Authority has received approval of the currently existing storm water drainage plans from any and all watershed districts having jurisdiction; however, such storm water improvements are not represented as currently sized to accommodate the Minimum Improvements. (1) The Authority shall cooperate to allow the redesign, removal or relocation of any existing road improvements, storm water improvements and utilities, on the Redevelopment Property, consistent with the Master Plan, as same shall be amended from time to time. (m) The Initial Minimum Improvements may be located anywhere in the Medtronic Campus in accordance with the Master Plan and this Agreement and the Authority shall provide the necessary easements on the Redevelopment Property that it retains to facilitate the construction of the Initial Minimum Improvements. (n) The Authority will use its best efforts and cooperate fully in the approval of the Master Plan and in obtaining all necessary approvals for the construction of the Minimum Improvements hereunder. (o) The building site coverage area (i.e. the footprint of the Minimum Improvements, excluding all Parking Structures and other parking areas, divided by the total square footage of the Redevelopment Property) shall not exceed forty percent (40.00/6), unless otherwise approved pursuant to the Master Plan and shall conform to the Master Plan and this Agreement. (p) The Authority will use its best efforts to secure all necessary environmental approvals required of the Authority, including expeditious completion of the Alternative Urban Areawide Review (the "AUAR") under the Minnesota Environmental Policy Act. As of the date of execution of this Agreement, the Authority represents that there are no federal 13 funds, no federally designated wetlands and no other federal involvement on or applicable to the Redevelopment Property which requires environmental compliance under the National Environmental Policy Act. (q) The Authority shall approve Construction Plans that are in accordance with the terms of this Agreement and the Master Plan, as same shall be amended from time to time. It is further specifically agreed that plans which provide for building heights of up to 10 stories and which provide for an overall height required to permit a 15 foot clear height on the entry level and any other level with conference, dining or other similar facilities (finished to the bottom of a completed ceiling) and a 10 foot clear height for all other levels (finished to the bottom of a completed ceiling) shall not be disapproved based on the proposed building heights. In addition, the Redeveloper shall be able to place mechanical equipment (HVAC for example) and elevator housings on the roof of the building. in accordance with the City's building code and appropriately screened so as to be architecturally compatible with the Minimum Building Quality Standards. Section 2.2. Representations. Warranties and Agreements by the Redeveloper. The Redeveloper represents, warrants and agrees that: (a) The Redeveloper is a corporation organized under the laws of the State of Minnesota; is authorized to transact business and is in good standing in the State; has duly authorized the execution of this Agreement and the performance of its obligations hereunder; and 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, conflicts with, results in a breach of, or constitutes a default under, the terms of any indebtedness, agreement or instrument of whatever nature to which the Redeveloper is now a party or by which it is bound. (b) The Redeveloper has or will have all necessary corporate authority and approvals to purchase the Redevelopment Property from the Authority pursuant to Article III hereof and, in the event the Redevelopment Property is conveyed to the Redeveloper, then the Redeveloper will construct the Minimum Improvements in accordance with the terms of this Agreement, the PUD, the Master Plan, and all applicable local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations). (c) The Redeveloper will comply with, or will cooperate with the Authority to comply with, all applicable local, state and federal environmental laws and regulations, including the completion by the Authority of the AUAR under the Minnesota Environmental Policy Act. As of the date of execution of this Agreement, the Redeveloper is aware of no facts the existence of which would cause it to be in violation of any local, state or federal environmental law, regulation or review procedure or which would give any person a valid claim under the Minnesota Environmental Rights Act. 14 (d) The Redeveloper agrees that it will cooperate with the Authority and/or the City with respect to any litigation commenced by third parties in connection with this Agreement. (e) The Redeveloper has and will have financial resources, or will obtain financing, sufficient to enable the Redeveloper to successfully complete the Initial Minimum Improvements and any Optional Minimum Improvements, as applicable, as contemplated in this Agreement. (g)(ft_For the construction of the Minimum Improvements, the Redeveloper will require its contractors retained to construct the minimum Improvements to pay wages in accordance with the "prevailing wage rate" as that term is defined in Ordinance No. 1095 of the City's Code. " (i�The Redeveloper shall not allow any use or occupancy of the Project by a sexually orientated business" as defined in Ordinance No. 965 of the City's Code. (Wh -The Redeveloper shall provide storm water ponding in accordance with (i) the storm water drainage plans described in subsection 2.1(k) above, as amended to accommodate the Minimum Improvements, (ii) the Master Plan, and; (iii) this Agreement. If the Redeveloper wishes to utilize storm water ponds not included in the Parcel(s) of the Redevelopment Property conveyed to the Redeveloper, but existing or designed for use on the Parcel(s) of the Redevelopment Property retained by the Authority, then the Redeveloper agrees that it will execute the Storm Sewer Pond Agreement with the City. Upon execution of the Storm Sewer Pond Agreement, the Redeveloper shall be permitted to utilize the Parcel(s) of the Redevelopment Property retained by the Authority for storm water, and in that regard may reshape, enlarge, or deepen the existing storm ponds or basins at any time to enhance their efficiency for water quality and water quantity management, based on standard engineering and construction methods. If the Redeveloper does not acquire and develop all of the Medtronic Campus, then ownership of the storm water pond(s) may be allocated by the Authority to the owner of the developed lot or lots in closest proximity to the particular storm water pond(s). The respective owner of such storm water pond(s) shall perform all required maintenance and shall execute the Storm Sewer Pond Agreement with the City. In such circumstances where shared storm water benefits are created among the respective owners, warranting the apportionment of maintenance costs, then such costs shall be apportioned on the basis of the relationship of gross square feet of each owner's buildings to the total gross square feet of buildings located on lots which drain storm water to the particular storm water pond(s). (m) i -The Authority has provided to the Redeveloper, and the Redeveloper acknowledges receipt of, a copy of Laws of Minnesota for 1995, Chapter 224, Section 58, codified as Minnesota Statutes Section 116J.9 11, and entitled "Public Assistance to Business; Wage and Job Requirements," requiring that within 2 years of receiving the assistance provided pursuant to this Agreement, which for this purpose shall be deemed to be the 2 year 15 period beginning on the date the parties execute this Agreement and the agreement between the Redeveloper and City the Redeveloper shall comply with certain job and other obligations stated in the above - mentioned statute. The Redeveloper hereby covenants to comply with said obligations, and the Parties agree that said goal level shall be an aggregate net increase of 100 jobs within the applicable 2 year period. The Redeveloper acknowledges and agrees that, as required by this statutory provision, failure to meet said goals will result in an Event of Default hereunder and in an obligation of the Redeveloper to repay all of the assistance provided pursuant to this Agreement. The Redeveloper further agrees that said jobs shall have an average hourly wage of at least Ten Dollars ($10.00) per hour. This subsection 6) shall not be construed as imposing on the Redeveloper any obligation beyond the scope and purpose of the above- mentioned statute to maintain or provide minimum employment and wage levels. The Redeveloper further agrees to provide to the Authority in a timely manner, or to the State, as may be applicable, any information that is reasonably necessary to comply with the above - mentioned statute and, in particular, the information necessary to complete the Minnesota Business Assistance Form; provided, however, that the Redeveloper's obligation to provide the information referred to in this sentence shall terminate once the Redeveloper has achieved the requirements contained in this subsection (i). (e)W The Redeveloper may locate the Initial Minimum Improvements anywhere in the Medtronic Campus in accordance with the Master Plan as shall be amended from time to time, and this Agreement. However, for the Parcel(s) of the Redevelopment Property retained by the Authority, the Redeveloper must allow for the construction of a total of 750,000 square feet of improvements for Office and Related Uses, less the square feet of the Minimum Improvements, and shall further provide public access via the road currently known as Bridgewater drive to facilitate development of the retained Parcel(s) of the Redevelopment Property. (q)The Redeveloper intends to use the Redevelopment Property primarily for a combination of Office and Related Uses. (s) l_The Redeveloper, at its sole expense, may remove or relocate, at any time, any existing road improvements, storm water improvements and utilities located on the Redevelopment Property but shall construct the Bridgewater Drive Improvements as provided for in Section 4.6 of this Agreement. Any removal or relocation shall comply with the City's engineering standards. Any costs of any kind associated with a removal or relocation, such as engineering, planning, surveying, platting and conveyancing, shall be the expense of the Redeveloper. Any streets retained by the Redeveloper shall be maintained by the Redeveloper. Redeveloper shall have the right to slangethe name any street platted as a public street in the renlat of Medtronic Campus of any street located within the Redevelopment Project. In the event that the Redeveloper does not exercise its Option Rights, the street currently known as Bridgewater Drive shall provide a means for ingress and egress as necessary to access the Parcel(s) of the Redevelopment Property retained by the Authority in accordance with the Master Plan. 16 fui(m) The Redeveloper shall pay the customary City fees for utility connections, building permits and park dedication, but shall not be obligated to pay any special assessments with respect to the Site Improvements or the Public Improvements. ( w)(n)_The construction of the Minimum Improvements would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future without the use of tax increment financing provided by the Authority pursuant to this Agreement. The Redeveloper shall construct the Structured Parking as required by the terms of this Agreement. 17 ARTICLE III Inspections. Conveyance of Property Option Rights and Reimbursement Payments Section 3.1. Inspection. (a) Documents From Authority. The Authority shall provide, forthwith, the following information to the Redeveloper to the extent in the possession of the Authority, or reasonably available to the Authority, relating to the Redevelopment Property, (i) any and all environmental reports, (ii) any and all soil tests or other geotechnical evaluations related to the Redevelopment Property in the possession of or reasonably available to the Authority; (iii) plans for all existing public improvements on or adjacent to the Redevelopment Property; and (iv) plans for the existing storm water drainage system and any reports or studies related to the storm water drainage system and the Storm Sewer Pond Agreement. (b) On -Site Environmental or Soil Testing. At Redeveloper's expense, the Redeveloper, its agents and designees, are hereby granted the right at any time or times after the date hereof to inspect, analyze and test the Redevelopment Property and to conduct any soil testing, geological testing, environmental analysis or other studies it deems appropriate. The Redeveloper shall hold the City and Authority harmless from any liability resulting from the entering upon the Redevelopment Property or the providing of any testing, inspection or analysis by the Redeveloper, its agents or designees. Furthermore, the Redeveloper covenants and agrees to indemnify, protect, defend and hold harmless the City and Authority from and against all loss, liability, damages, expenses of every kind and nature, and attorney's fees by reason of any lien or claim of lien for labor, services or materials (including allowances for interest or profit) of any general contractor, subcontractor, sub - subcontractor, materialmen or any persons whatsoever, or by reason of any equitable or statutory lien against the Redevelopment Property, arising by reason of or in the course of any testing, inspection or analysis or work of any nature, whether heretofore completed, now in progress or hereafter to be done. (c) Environmental Contingency. The Parties agree that the Redeveloper, in its sole discretion, may determine, following environmental investigation, not to proceed with the obligations under this Agreement. Section 3.2. Conveyance of the Redevelopment Property. (a) Title. The Authority shall convey marketable title to and possession of the Redevelopment Property to the Redeveloper under quit claim deed(s) in the form of the 18 Redevelopment Property Deed contained in Schedule B of this Agreement. The conveyance of title to the Redevelopment Property pursuant to the Redevelopment Property Deed and the Redeveloper's use of the Redevelopment Property shall be subject to all of the conditions, covenants, restrictions and limitations imposed by this Agreement, the Master Plan and the Redevelopment Property Deed. The Authority agrees to obtain and shall deliver to the Redeveloper within thirty (30) days of the date of receipt of a Notice of Closing for the Initial Redevelopment Property, a commitment for an owner's title insurance policy (ALTA Form B -1970) issued by a title insurance company acceptable to the Authority and Redeveloper, describing all of the Redevelopment Property and naming Redeveloper as the proposed owner - insured of all of the Redevelopment Property in an amount acceptable to the Authority and the Redeveloper (the "Commitment "). The Commitment shall only be provided once by the Authority for purposes of conveying the Initial Redevelopment Property. The Authority shall pay for the initial Commitment; the Redeveloper shall pay for all subsequent commitments, including any commitment which is limited to the Initial Redevelopment Property. The Commitment shall have a current date as its effective date and shall commit to insure marketable title in the Redeveloper, free and clear of all mechanics' lien claims, questions of survey, unrecorded interests, rights of parties in possession or other standard exceptions. The Commitment shall set forth all levied real estate and special assessments. Said Commitment shall have attached copies of all instruments of record which create any easements or restrictions which are referred to in Schedule B of the Commitment. The Redeveloper will be allowed 20 days after receipt of the initial Commitment to make an examination thereof and to make any objections to the marketability of the title to the Redevelopment Property, said objections to be made by written notice or to be deemed waived. If the title to the Redevelopment Properly, as evidenced by the Commitment and a Survey, as provided in accordance with this Agreement, together with any appropriate endorsements, is not good and marketable of record in the Authority and is not made so by the Date of Closing, Redeveloper may either: (i) Terminate this Agreement by giving written notice to the Authority, in which event this Agreement shall become null and void and neither party shall have any further rights or obligations hereunder except as specified in this Agreement; or, (ii) Elect to accept the title in its unmarketable condition by giving written notice to the Authority, in which event the Redeveloper shall hold back adequate funds from the portion of the Purchase Price or band Holding Payment, as the case may be, payable at the 19 closing to cure the defects and shall apply said holdback funds to the cost of curing such defects, including attorneys' fees, and shall pay the unexpended balance to the Authority. If the amount of said holdback cannot be mutually agreed to by the Authority and the Redeveloper, the issuer of the Commitment shall determine the amount of said holdback. (b) Time of Convey. The Authority shall execute and deliver to the Redeveloper the Redevelopment Property Deed for each Parcel of the Redevelopment Property as determined by the Redeveloper on the date noted in the Notice of Closing or on such other date as the Authority and the Redeveloper shall mutually agree in writing (the "Date of Closing "). The Date of Closing for the Initial Redevelopment Property shall not be later than June 1, 1999. The Redeveloper shall take possession of each Parcel of Redevelopment Property on the Date of Closing for that Parcel. (c) Notice of Closing- Identification of Parcel. With respect to each Parcel, the Redeveloper shall deliver a Survey identifying the Redevelopment Property Parcel to be acquired and specifying the proposed Date of Closing. For the Initial Redevelopment Property, the Notice of Closing must be received by the Authority on or before the later of (i) May 1, 1999 or (ii) 10 days following the date this Agreement and the agreement between the City and Redeveloper have been fully executed and delivered by the parties and shall be at least twenty (20) days prior to the Date of Closing. For each Parcel of the Optional Redevelopment Property, the Notice of Closing must be received by the Authority not less than thirty (30) days prior to the Date of Closing. (d) Price and Payment. The Authority agrees to sell the Redevelopment Property and the Redeveloper agrees to purchase the Initial Redevelopment Property, and at the Redeveloper's discretion, all or part of the Optional Redevelopment Property, for the Purchase Price or the Land Holding Payment, whichever applies, on the Date of Closing. (i) For the Initial Redevelopment Property, the Redeveloper shall pay a Purchase Price of $1.00. (ii) For any Parcel of the Optional Redevelopment Property acquired by the Redeveloper in accordance with Article III, which is to be used for Office and Related Uses, the Redeveloper shall pay either the Land Holding Payment in lieu of the Purchase Price for the Optional Redevelopment Property so long as the Redeveloper satisfies the Construction Threshold Requirements or shall pay the Purchase Price of $3.00 as adjusted by the CPI per Usable Square Foot as shown on the Survey. The CPI shall be prorated for each full month and shall commence the later of the Date of Closing for the Initial Redevelopment Property or May 1, 1999, and continue 20 until the Date of Closing for the applicable Optional Redevelopment Property Parcel. (iii) For any Parcel of the Optional Redevelopment Property acquired by the Redeveloper in accordance with Article III, which is to be used for Commercial Uses, the Redeveloper shall pay either the Land Holding Payment in lieu of the Purchase Price for any such Parcel of the Optional Redevelopment Property so long as the Redeveloper satisfies the Construction Threshold Requirements, or the Purchase Price of $6.00, as adjusted by the CPI in accordance with subsection 3.2(d)(ii) above, per Usable Square Foot as shown on the Survey. Unless otherwise mutually agreed by the Authority and the Redeveloper, the execution and delivery of all deeds and the payment of the Purchase Price or Land Holding Payment shall be made at the offices of the Title Insurance Company. The Redevelopment Property Deeds shall be in recordable form and shall be promptly recorded. The Redeveloper shall pay all costs for such recording and closing, except for any state deed tax due as a result of the conveyance which shall be paid by the Authority. (e) Taxes. Real estate taxes due and payable prior to the year of closing shall be paid by the Authority. Real estate taxes due and payable in the year of closing shall be prorated as of the Date of Closing based upon the Parties' respective period of ownership in the year of closing. Real estate taxes due and payable in the years subsequent to the year of closing shall be paid by the Redeveloper. On or prior to the Date of Closing the Authority shall pay all pending or levied special assessments. (f) Area to be Conveyed. The area for the Initial Minimum Improvements is described in Schedule Eb. The square footage of each subsequent Parcel of the Redevelopment Property to be conveyed by the Authority to the Redeveloper shall be a minimum of the Usable Square Feet times 1.903 and shall be consistent with the Master Plan and this Agreement. The square footage of each Parcel of the Optional Redevelopment Property may be smaller because additional square footage was provided for the Initial Minimum Improvements, but it shall be consistent with the Master Plan and this Agreement. The specific square footage of each Parcel shall be identified in the Notice of Closing and the Survey for such Parcel. (g) Survey. At its expense, the Authority shall deliver a Survey of the Redevelopment Property to the Redeveloper on or before May 1, 1999. The Redeveloper shall pay for all other Surveys of the Redevelopment Property including a Survey of the Initial Redevelopment Property and each subsequent Parcel of the Optional Redevelopment Property. 21 (h) Plat Preparation. At its expense, the Authority has platted the Redevelopment Property as the Fridley Executive Center. The Redeveloper shall pay for all modifications to the Plat including a modification to describe the Initial Redevelopment Property and each subsequent Parcel and to change the name of the Plat. The Redeveloper shall plat each Parcel not more than 120 days after conveyance. Section 3.3. Conditions Precedent to Conveyance. The obligations of the Authority to convey and the obligations of the Redeveloper to purchase any Parcel of the Redevelopment Property shall be subject to the following conditions precedent: (a) On the Date of Closing, the Redeveloper shall be in material compliance with all of the terms and provisions of this Agreement; (b) The Authority acknowledges that the Redeveloper is capable of financing, or has obtained financing or a commitment for financing sufficient to finance the construction of the Minimum Improvements for the applicable Parcel of the Redevelopment Property. (c) The City shall have approved the Construction Plans or, if applicable, the relevant incremental Construction Plans, for the Minimum Improvements for the applicable Parcel which is to be conveyed to the Redeveloper on the relevant Date of Closing. (d) The Redeveloper shall have received the appropriate City permits for the construction of the Minimum Improvements or, if applicable, for part of the construction if the Redeveloper is using the incremental approach; (e) The Redeveloper shall have tendered payment of the Purchase Price or the Land Holding Payment, as applicable. (f) The Redeveloper shall have satisfied itself that the soil conditions are suitable for the construction of the Minimum Improvements. (g) The Redeveloper shall have satisfied itself that there are no Hazardous Substances on the applicable Parcel, as defined in this Agreement, which would prohibit the construction and financing of the Minimum Improvements on such Parcel; or, in the Redeveloper's sole discretion, an approval, satisfactory to Redeveloper, from the Minnesota Pollution Control Agency under its VIC or VPIC program, shall have been obtained by Redeveloper. The Parties agree to cooperate to obtain any needed VIC or VPIC approval. (h) The City and Authority shall have approved the Master Plan in a form reasonably satisfactory to Redeveloper. 22 Section 3.4. No Special Assessments. The City shall not assess the Redevelopment Property for efFt-the Minimum Improvements ineluding but not fiff9ted r the Public I Improvements. Section 3.5. Site Improvements. The Redeveloper shall construct and pay for all Site Improvements, subject to reimbursement of the Site Improvement Costs from the Available Tax Increment as provided in this Agreement. The Site Improvements, unless conveyed to the City as public roads, shall be the property of the Redeveloper except as otherwise provided for in this Agreement. Section 3.6. Documents at Closing. (a) At each closing, the Authority shall deliver to the Redeveloper: (i) The Redevelopment Property Deed. (ii) All certificates, instruments and other documents necessary to permit the recording of the Redevelopment Property Deed. (iii) A standard Seller's Affidavit with respect to judgments, bankruptcies, tax liens, mechanics liens, parties in possession, unrecorded interests, encroachment or boundary line questions, and related matters, properly executed on behalf of the Authority and acceptable to the Title Insurance Company to allow issuance of the title policy free of all standard exceptions. (iv) If applicable, the owner's duplicate certificate of title to the Parcel. The Authority shall not provide an abstract of title if the property is classified as abstract property, but the Authority shall provide, at its expense, the Commitment as described in Section 3.2 of this Agreement. (v) An affidavit of the Authority in form and content satisfactory to the Redeveloper stating that the Authority is not a "foreign person" within the meaning of Section 1445 of the Internal Revenue Code. (vi) Such other documents as may be reasonably required to close the Parcel sale as contemplated herein. (b) At each closing, the Redeveloper shall deliver to the Authority: 23 (i) The Purchase Price or Land Holding Payment described in Section 3.2(d). (ii) Such other documents as may be reasonably required to close the Parcel sale as contemplated herein. Section 3.7. Real Estate Brokerage Commission_ Other Claims. (a) Each Party represents to the other that it has not authorized any broker or finder to act on its behalf in connection with the sale and purchase of the Redevelopment Property and that it has not dealt with any broker or finder purporting to act on behalf of the other Party. Each Party agrees to indemnify and hold harmless the other Party from and against any and all claims, losses, damages, costs or expenses of any kind or character arising out of or resulting from any agreement, arrangement or understanding alleged to have been made by such Party or on its behalf with any broker or finder in connection with this Agreement. (b) Any amounts owed to any other person or entity with a claim to the Redevelopment Property shall be the obligation of and paid by the Authority, and the Authority shall indemnify and hold harmless the Redeveloper from any claims, losses, costs or damages arising out of or resulting from any such claims. Section 3.8. Option Rights. (a) Grant of Option Rights. Subsequent to the closing of the Initial Redevelopment Property, the Authority grants to the Redeveloper the option of acquiring all or part of the Optional Redevelopment Property. The Redeveloper shall exercise its Option Rights for a specific Parcel by delivering to the Authority the Notice of Closing along with a Survey and description of the Parcel to be acquired as provided in this Article III. The Redeveloper shall purchase and the Authority shall convey the requested Parcel of the Optional Redevelopment Property in accordance with the procedures described in this Article III, and the Authority shall receive as consideration the Land Holding Payment or the Purchase Price, as applicable. (b) Compliance with Construction Threshold Requirements (i) Unless the 240,000 square foot Construction Threshold Requirement is met on or before June 1, 2003, the Redeveloper shall have no further Option Rights and the provisions of this Agreement relating to Option Rights shall lapse and shall be of no further force or effect. (ii) If the 240,000 square foot Construction Threshold Requirement is met, then the Redeveloper shall have the Option Right to acquire all or part of the remaining Optional Redevelopment Property for the Land Holding Payment. The Redeveloper's Option Rights under this subsection (ii) expire June 1, 20036. 24 S 25 (iii) If the 400,000 square foot Construction Threshold Requirement is met, then the Redeveloper shall have the Option Right to acquire all or part of the remaining Optional Redevelopment Property for the Land Holding Payment. The Redeveloper's Option Rights under this subsection (iii) expire June 1, 20068. (iv) If the Redeveloper has met the 500,000 Construction Threshold Requirement, then the Redeveloper shall have the Option Rights to acquire all or part of the remaining Optional Redevelopment Property for the Land Holding Payment. The Redeveloper's Option Rights under this subsection (iv) expire June 1, 2008. (c) Option for Commercial Uses. (i) Upon compliance with the 240,000 square foot Construction Threshold Requirement, the Redeveloper may exercise its Option Rights to acquire part of the Optional Redevelopment Property for Commercial Uses by delivering to the Authority the Notice of Closing and the Survey and description of the Parcel to be acquired in accordance with the procedures described in this Article III. (ii) The Redeveloper shall be limited to the acquisition of not more than 356,866 square feet of the Optional Redevelopment Property for Commercial Uses inclusive of the area needed to satisfy the Parking Requirements for such use. (iii) If the Redeveloper is in compliance with the 500,000 square foot Construction Threshold Requirement or has commenced construction for 500,000 gross buildable square feet, then the consideration to be paid by the Redeveloper to the Authority shall be the Land Holding Payment. (iv) If the Redeveloper has not met the 400,000 or 500,000 square foot Construction Threshold Requirement, but still has Option Rights, then the Authority shall receive as consideration for the Parcel of the Optional Redevelopment Property to be developed for commercial uses, the following: A. The Land Holding Payment; and B. A Note in the amount of the Purchase Price less the Land Holding Payment, made by the Redeveloper and payable to the order of the Authority. Interest shall accrue from the Date of Closing at a rate of 6.75% compounded annually. The Note will mature and be payable in full, including principal and accrued interest, on the date that the Option Rights terminate due to Redeveloper's failure to comply with either the 400,000 or 500,000 square foot Construction Threshold Requirements, which is either June 1, 2006, or June 1, 2008. If the Redeveloper timely meets the 500,000 square foot Construction Threshold Requirement, then the Note shall be deemed paid in full. Section 3.9. Reimbursement Payments. (a) Consideration. As consideration for the execution of this Agreement and the construction of the Minimum Improvements by the Redeveloper, subject to the further provisions of this Agreement, including but not limited to the limitations on source of reimbursement and amounts set forth in subsection 3.9(c) below, the Authority shall deliver to the Redeveloper appropriate documents acceptable to the Authority and Redeveloper, evidencing the Authority's obligation to pay to the Redeveloper the Reimbursement Payments. The Authority shall provide additional evidence of its obligation upon issuance of each Certificate of Completion for a part of the Minimum Improvements. The Reimbursement Payments shall be made by wire transfer in accordance with instructions to be furnished by the Redeveloper, or by such other method as may be mutually acceptable to the Authority and the Redeveloper. (b) Limitations on Undertaking of the Authority. (i) The Authority shall have no obligation to the Redeveloper under this Agreement to pay the Reimbursement Payments if, at the time or times such payment is to be made, the Authority has given the Redeveloper notice of an Event of Default by the Redeveloper and such Event of Default has not been cured. If the Authority has given notice of an Event of Default under Section 78.2 and if a payment is withheld due to an Event of Default which is later cured, such payment shall be made within ten (10) days after such Event of Default has been cured. (ii) The Authority shall have no obligation under this Agreement to pay the Reimbursement Payment, unless the Redeveloper has submitted to the Authority invoices for the Site Improvement Costs along with certifications signed by the Redeveloper's project 26 architect or engineer that (aa) the work has been completed and (bb) the Site Improvements Costs have been actually paid. The Authority shall indicate its acceptance of the amounts for reimbursement, assuming the conditions of this section have been complied with and there is no Event of Default, when it issues a Certificate of Completion in accordance with Section 4.4 for each part of the Minimum Improvements. (c) Limitation of Costs: Methods of Payment. W The sole source of funds from which the Authority is obligated to pay the Reimbursement Payments to the Redeveloper under this Agreement shall be the Available Tax Increment, and nothing herein shall be construed to obligate the Authority or the City to use any of their general funds or other Authority or City funds to pay the Reimbursement Payments. The Authority shall reimburse the Redeveloper in an amount not to exceed the costs as certified in subsection 3.9(b)(ii) for the Site Improvements plus interest on the unpaid balance as set forth in subsection 3.9(c)(iii) below. (iii) The Authority shall pay interest on the Site Improvement Costs at the rate of 6.75% per annum compounded annually from the date such costs set forth in subsection .3.9(c)(ii) above are paid. Any interest amount not paid shall be accrued. Payments shall first be applied to accrued interest. Installment payments to the Redeveloper shall be made on August 1 st and February is' of each Year from the Available Tax Increment. The February 19 installment payment will be made from the Available Tax Increment resulting from the Tax Increment received in the last five months of the preceding year; the August 1 st installment will be made from the Available Tax Increment resulting from Tax Increment received in the first seven months of the same year. The Authority shall provide the Redeveloper with the February I' Payment with an accounting of the total of all payments made to date, the amounts paid on principal and for interest and the amount remaining unpaid under this Agreement. 27 ARTICLE IV Master Plan A royal Governmental A royals Construction of Minimum Im rovements Construction of Public Improvements Section 4.1. Governmental Approvals. (a) Master Plan Amendment. The Parties agree that the Master Plan, as agreed to between the Redeveloper, City and Authority, is a general description of the nature, density and likely location of the Minimum Improvements on the Redevelopment Property. As development occurs, it is likely that the Master Plan will require amendment from time to time. The Authority agrees to promptly review any proposed amendment to the Master Plan. The Authority shall approve or reject (in whole or in part) any amendment to the Master Plan, in writing, within forty (40) days after the date of receipt thereof. Any rejection shall set forth in detail the reasons therefor. If the Authority rejects the amended Master Plan, in whole or in part, the Redeveloper may submit a modified Master Plan amendment at any time after receipt by the Redeveloper of the notice of rejection. The Authority's rejection of a Master Plan amendment shall not be arbitrary or capricious ,._ a a (b) Cooperation of Authority. Whenever any approval is required of the City, the Authority agrees to use its best efforts to cooperate and assist the Redeveloper in obtaining such approval, consistent with the requirements of this Agreement. Section 4.2. Construction of Minimum Improvements. The Redeveloper agrees that it will construct the Minimum Improvements on the Redevelopment Property in accordance with this Agreement, the Master Plan and the approved Construction Plans. The Redeveloper shall Commence Construction of the Initial Minimum Improvements on or before July 1, 1999 and the Redeveloper shall Commence Construction of the Optional Minimum Improvements within sixty (60) days of the Date of Closing for the relevant Parcel of the Optional Redevelopment Property or, in either case, the date on which the Redeveloper, after using its reasonable best efforts, has obtained all required permits, licenses and approvals, whichever is later. Section 4.3. Construction Plan s. (a) The Redeveloper shall construct the Minimum Improvements in accordance with the Construction Plans approved by the City which Construction Plans shall demonstrate that the following requirements are met: 28 (i) For the Initial Minimum Improvements (75 %) of the Parking Requirements shall Structured percent and For the Optional Minimum Improvements; ei Ive (85 %) of the Parking Requirements shall be Structured Parpking cen t The Construction Plans conform to the terms and conditions of the Preliminary Plans and this Agreement, (iv) The Construction Plans conform to all applicable federal, State and local laws, ordinances, rules and regulations; (v) The Construction Plans are adequate to provide for the construction of the Minimum Improvements, or the pertinent Part thereof if a incremental approach is being utilized; and (b) No notice of an Event of Default has been given as to which the Event of Default is continuing. Section 4.4. Completion of Construction. (a) The Redeveloper shall have substantially completed the construction of the Initial Minimum Improvements by December 31, 2000 or may be liable for the PILOT as Provided herein. The Redeveloper shall have substantially completed each phase under the Op ti n Minimum Improvements within twenty -four (24) months of the Commencement on Construction of such Optional Minimum Improvements. All work with respect to of Minimum Improvements to be constructed or provided by the Redevelo er on the the Redevelopment Property shall be in substantial conformity with the Construction Plan submitted by the Redeveloper and approved by the Authority. s as (b) The Redeveloper agrees for itself, its successors and assigns, in interest to the Redevelopment Property, or an and every successor Property Deed shall reference the covenants contained Amin this Section 4.4 and Section Redevelopment this Agreement, that the Redeveloper, and its successors and assi 3 of diligently prosecute to completion the redevelopment of the RedeevlelopmentrPropn �thr and the construction of the Minimum Improvements thereon, and that such construction opProperty shall rough any event be completed within the period specified in this Section t in Section 4.5. Certificate of Com letion . (a) accordance Promptly with the after completion of each the Minimum Improvements in provisions of this Agreement greement relatin g to the obligations of the 29 i Redeveloper to construct such improvements (including the date for completion thereof), the Authority will furnish the Redeveloper with a Certificate of Completion for that part of the Minimum Improvements. The Certificate of Completion shall be a conclusive determination and conclusive evidence of the satisfaction and termination of the agreements and covenants in this Agreement and in the Redevelopment Property Deed with respect to the obligations of the Redeveloper and its successors and assigns to construct the Minimum Improvements, including the date for the completion thereof. (b) If the Authority shall refuse or fail to provide the Certificate of Completion in accordance with the provisions of this Section 4.5, the Authority shall, within twenty (20) days after written request by the Redeveloper, provide the Redeveloper with a written statement, indicating in adequate detail in what respects the Redeveloper has failed to complete the Minimum Improvements in accordance with the provisions of this Agreement, or is otherwise in default, and what measures or acts will be necessary, in the opinion of the Authority, for the Redeveloper to take or perform in order to obtain a Certificate of Completion. (c) The construction of each part of the Minimum Improvements shall be deemed to be completed when the City has issued a Certificate of Occupancy for the part of the Minimum Improvements and the Structured Parking related thereto. (eYd,- Contemporaneously with the delivery of the Certificate of Completion, the Authority shall deliver the documentation provided for in Section 3.9 evidencing the Authority's obligation to reimburse the Redeveloper for the Site Improvement Costs for those Site Improvements constructed in connection with that part of the Minimum Improvements under this Agreement. Section 4.6 Bridgewater Drive Improvements. The Redeveloper shall construct to City engineering standards new roadway improvements which shall be dedicated as a public street along the Northerly border of the Redevelopment Property connecting 7�' Street N.E. (at the N.W. corner of the Redevelopment Property) with West Moore Lake Drive as shown on the master Plan (currently known as Bridgewater Drive). The Bridgewater Drive Improvements shall be completed contemporaneously with the completion of the Initial Minimum Improvements. The Redeveloper shall timely provide the Minnesota Pollution Control Agency with the documentation it requires, including any documentation relating to timing and funding, in order that the MPCA may issue the necessary indirect source permit for the Initial Minimum Improvements. Medtronic shall retain the right to rename any street located within th e Redevelo ment Pro'ect in accordance with Section 2.2 e dgewater tefflm of this Agreement 30 iiii-i�8�he Redeye}9peF- AiAheii - }tom- e:..�.., '...� +>+'e A isr'r'i-zs�oE3i#1ei}� 1•s �iantin1flt A +i+ 4■,_? a8•Mlews } .e4lRi-avdJevelepeL__"� --be —1 -ii eftai -0A> 1 16e- fi l -al r�rnvir:,••,� ,.f this A + -- ---- -- fib)— The edevel©pe�1- liar► e- depested- v�i#�i- �o�i- $- sflepFeseflg oke- aebieeleeaior 3;- releeexa- �eflstig, -jai -} -fees,- legal peaket - eense� - t3y;— as-- r�caried;�er - -#1ie - �epes}� • -- fly-- deoiefleile . Seetien 5.2. As is Aeguils-itHelm. The D ede.,el e t th - D 1 15- �1��-be -r -- -o - -- -- take - -- Expansion ........� 0Li"'(Ll� GG.. ..» L.. - FeS�OflSi�@- f9f— E�6fl�@� }t E "aMiOR �ec4s; bed -sb �Fe de it3e a deflae a i six e fl eteb�e #ale - gree t---- fie - �z#�ia i - sbe}l- ice -s aeti wed to anew aa� A�iflflese -- M-1; -e� -see.. 31 ARTICLE VI Insurance and Condemnation Section 56.1. Insuran ce. (a) The Redeveloper will provide and maintain (or the Redeveloper may require its contractor'to provide and maintain) insurance coverage at all times during the process of constructing the Minimum Improvements according to the requirements outlined below: (i) builder's risk insurance, written on the so-called "Builder's Risk -- Completed Value Basis," in an amount equal to one hundred percent (100 %) of the insurable value of the Minimum Improvements at the date of completion, and with coverage available in nonreporting form on the so- called "all risk" form of policy; comprehensive general liability insurance with limits against bodily injury and property damage of not less than $1,000,000 for each occurrence and $5,000,000 in the aggregate (to accomplish the above- required limits, an umbrella excess liability policy may be used); and (iii) workers' compensation insurance, with statutory coverage. (b) All insurance required in this Article VI shall be taken out and maintained in responsible insurance companies selected by the Redeveloper which are authorized under the laws of the State to assume the risks covered thereby. The Redeveloper will deposit with the Authority a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article VI, each policy shall contain a provision that the insurer shall not cancel nor modify it without giving written notice to the Redeveloper and the Authority at least thirty (30) days before the cancellation or modification becomes effective. Not less than fifteen (15) days prior to the expiration of any policy, the Redeveloper shall furnish to the Authority evidence satisfactory to the Authority that the policy has been renewed or replaced by another policy conforming to the provisions of this Article VI, or that there is no necessity therefor under the terms hereof. In lieu of separate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Redeveloper shall deposit with the Authority a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. The interest of the Authority shall be protected in accordance with a clause in form and content reasonably satisfactory to the Authority. 32 (c) The Redeveloper shall have the right to negotiate the settlement of any insurance claims and to use any and all insurance proceeds as the Redeveloper, in its sole judgment, may deem necessary or desirable, but agrees to keep the Authority reasonably apprised of its decisions in such regard. (d) The Redeveloper may propose self insurance for any risk if it can demonstrate adequate financial resources. The Authority agrees to accept self insurance if it determines in its reasonable judgment that the Redeveloper possesses adequate financial resources. Section 56.2. Condemnation. (a) If any condemnation proceedings ,affecting the Redevelopment Properly, or any part thereof, shall be commenced or threatened prior to the Date of Closing for the Initial Redevelopment Property, the Authority shall provide immediate written notice thereof to the Redeveloper. The Redeveloper may, at its option, (i) terminate this Agreement by notice in writing to the Authority, or (ii) proceed-to close this transaction and receive at the Date of Closing for the Initial Redevelopment Property an assignment from the Authority of all condemnation proceeds or awards, or payment in lieu of condemnation, payable to the Authority. The Redeveloper shall also have the right to contest the condemnation in the place of the Authority as the real party in interest. (b) If any condemnation proceedings affecting the Optional Redevelopment Property, or any part thereof, shall be commenced after entry into this Agreement, the Authority shall provide immediate written notice thereof to the Redeveloper. The Redeveloper may, at its option, (i) terminate this Agreement by notice in writing to the Authority or (ii) elect to have the Authority escrow, in an interest bearing account, any condemnation proceeds or awards, or payment in lieu of condemnation, payable to the Authority, and make same available to the Redeveloper upon purchase of the Parcel of the Redevelopment Property which would have included the property had it not been condemned. The Redeveloper shall also have the right to contest the condemnation in the place of the Authority as the real party in interest. Section 56.3. Subordination. Notwithstanding anything to the contrary contained herein, the rights of the Authority with respect to the receipt and application of the proceeds of insurance shall be subject to and subordinate to the rights of any holder of any mortgage with respect to the Redevelopment Property as of the date hereof, or any mortgage which is permitted by this Agreement. 33 ARTICLE VII Prohibitions Against Assignment and Transfer Indemnification Section 6-7.1. Representation as to Redevelopment. Pro (a) The Redeveloper represents and agrees that its purchase of the Redevelopment perry, and its other undertakings pursuant to this Agreement, are and will be used for the purpose of redevelopment of the Redevelopment Property and not for speculation in land holding. Notwithstanding this representation, it is square foot Construction Threshold Requirement, nothing herein shall preclude sale ofp art or all of the Redevelopment Property by the Redeveloper able to obtain. such Pn� as the Redeveloper is (b) The Redeveloper further recognizes that, in view of (i) the importance of the redevelopment of the Redevelopment Property to the general welfare of the Authority and (ii) the substantial financing and other public costs that have been incurred by the Authority for the purpose of making such redevelopment possible, the qualifications and identity of the Redeveloper are of particular concern to the Authority. The Redeveloper further recognizes that it is because of such qualifications and identity that the Authority is entering into this Agreement with the Redeveloper, and, in so doing, is further willing to accept and rely on the obligations of the Redeveloper for the faithful performance of all undertakings and covenants hereby by it to be performed. Section 6-7.2. Prohibition A ainst Transfer of Property and Assignment of Agreement. For the reasons set forth in subsection 7.1(b), the Redeveloper represents and agrees that prior to the meeting of the 240,000 square foot Construction Threshold Requirement, the Redeveloper shall not sell or convey all or part of the Redevelopment Property. (a) Except for the purpose of obtaining financing necessary to enable the Redeveloper or any successor in interest to the Redevelopment Property, or any part thereof, to perform its obligations with respect to constructing the Minimum Improvements under this Agreement, and any other purpose authorized by this Agreement, the Redeveloper has not made or created, and will not make or create or suffer to be made or created, any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Redevelopment Property, or any part thereof or any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the Authority, provided, however, that so long as the Redeveloper remains liable and bound by this Redevelopment Agreement, the Authority's approval is not required. Any such transfer shall be subject to the provisions of this Agreement. No the foregoing, the Redeveloper may transfer the Redevelopment Property to any corporation, 34 Partnership, or limited liability company con with the Redeveloper. trolling, controlled by, or under common control (b) In the event the Redeveloper, upon transfer or assignment of the Redevelopment Property or any portion thereof, seeks to be released from its obligations under this Agreement, the Authority shall be entitled to require, except as otherwise provided in this Agreement, as conditions to any such release that: (1) Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Redeveloper. Any proposed transferee, by instrument in writing satisfactory to the Authority and in form recordable among the land records, shall, for itself and its successors and assigns, and expressly for the benefit of the Authority, have expressly assumed all of the obligations of the Redeveloper under this Agreement and agreed to be subject to all of the conditions and restrictions to which the Redeveloper is subject; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Redevelopment Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically Provided in this Agreement or agreed to in writing by the Authority) deprive the Authority of any rights or remedies or controls with respect to the Redevelopment Property, or any part thereof, or the construction of the Minimum Improvements; it being the intent of the Parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Redevelopment Property or an thereof, or any interest therein, however consummate part or occurring, and whether voluntary legally or practically, to depriv limit theuAuthority of orrewith respect to any rights or remedies or controls provided in or resulting from this Agreement with respect to the Minimum Improvements that the Authority would have had, had there been no such transfer or change. In the absence of specific written agreement by the Authority to the contrary, no such transfer or approval by the Authority thereof shall be deemed to relieve the Redeveloper, or any other party bound in any way by this 35 Agreement or otherwise with respect to the construction of the Minimum Improvements, from any of its obligations with respect thereto. Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Redevelopment Property governed by this Article VIA shall be in a form reasonably satisfactory to the Authority. In the event the foregoing conditions are satisfied, then the Redeveloper shall be released from its obligation under this Agreement as to the portion of the Redevelopment Property that is transferred, assigned or otherwise conveyed. Section 6-7.3. Release and Indemnification Covenants. (a) The Redeveloper covenants and agrees to indemnify and hold harmless the City and the Authority, and the governing body members, officers, agents, servants and employees thereof, against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Minimum Improvements, or the acquisition, construction, installation, ownership and operation of the Minimum Improvements, except for any loss resulting from negligent, willful or wanton misconduct of any such Parties, and provided that the claim therefore is based upon the acts of Redeveloper or of others acting on the behalf or under the direction or control of Redeveloper. (e)01 The City and the Authority, and the governing body members, officers, agents, servants and employees thereof, shall not be liable. for any damage or injury to the persons or property of the Redeveloper or its officers, agents, servants or employees or any other person who may be about the Redevelopment Property or Minimum Improvements due to any act of negligence of any person, other than the negligence and misconduct of City or Authority employees or those employed or engaged by the City or Authority. (e)c)_ All covenants, stipulations, promises, agreements and obligations of the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and not of any governing body member, officer, agent, servant or employee of the Authority in the individual capacity thereof. (g)L�k Nothing in this section or this Agreement is intended to waive any municipal liability limitations contained in Minnesota Statutes particularly Chapter 466. 36 ARTICLE VIII Events of Default Section 79.1. Events of Default Defined. Subject to Unavoidable Delays, 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 (unless the context otherwise provides), any one or more of the following events: (a) Failure by the Redeveloper to pay when due all real property taxes assessed against the Redevelopment Property. (b) Failure of the Redeveloper to submit satisfactory Preliminary Plans or Construction Plans in accordance with Section 4.3 of this Agreement. (c) Failure by the Redeveloper to commence or complete construction of the Minimum Improvements pursuant to the terms, conditions and limitations of Article IV of this Agreement. (d) Failure by the Redeveloper or Authority to substantially observe or perform any covenant, condition, obligation or agreement on its part to be observed or performed hereunder. (e) If the Redeveloper or Authority shall: (i) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the United States Bankruptcy Code, or under any similar federal or state law, or (ii) snake an assignment for the benefit of its creditors; or (iii) admit in writing its inability to pay its debts generally as they become due; or (iv) be adjudicated as bankrupt or insolvent; or if a petition or answer proposing the adjudication of the Redeveloper or Authority as a bankrupt, or proposing the adjudication of its reorganization, under any present or future federal bankruptcy act or any similar federal or State law shall be filed in any court and such petition or answer shall not be discharged or denied within ninety (90) days after the filing thereof; or a receiver, trustee or liquidator of the 37 Redeveloper or Authority or of the Redevelopment pro P� thereof, shall be appointed in an Ply, or the Redeveloper or Authority Proceeding brought against ninety (90 days ty and shall not be discharged within ay after such appointment, or if the Redeveloper or Authority shall consent to or acquiesce in such appointment. Section 78.2. Remedies on Default. Section 79• 1 • of this A Whenever any Event of Default referred to in the following actions af}ee Agreement providing sixty the non- defaultin p xty (6p g' may take any one or more of I the Event of Default, but only if the Event of Default has not b notice to the defaulting P or such longer period of time as m been cured within said ays is by its nature incurable within s�vdbs provided in this A Agreement or if the Event of Default Party fails to provide the non- defaultin p d�' or other specified period, and the defaulting the reasonable discretion of the non-defaulting pa written assurances, deemed satisfactory in as soon as reasonably possible: g t'' that the Event of Default will be cured (a) Suspend its performance under this Agreement in default, suspend Reimbursement including, is the Redeveloper ent Payments until it race' continue its eiformanEe under this A eeme g' Ives assurances from the ant nt. (a) Terminate this A eement.Redeveloper, deemed ad Redeveloper will cure its default equate by the Authority. that the (b) te- (4)(clTake whatever action, including legal, equitable or administrative may apps necessary or desirable, including action, which this Agreement, or to enforce performance g any actions to collect an covenant of the defaulting Party P ce and observance can y Payments due under give the under this A Y obligation, agreement, or Notice of Closing cement. Provided, if the Redeveloper does not Redevelopment property g Pursuant to Article IU� Section 3.2 or fails to close on the ) Redevelopment ) for the Initial Authority's sole remedy shall be to terminate this Agnitial Particular have the right to specific performance it being Property, the t The Redeveloper shall in is unique for its purposes. ng weed the Redevelopment Property Section 78.3. Revestin Title in Authori Conv ance to Redeveloper. II on Ha enin of Event Subs uent to Redevelopment Property )n the event that subsequent to conveyance of p rty : the Redeveloper and prior to the receipt by a Redeveloper of the Certificate of Completion: P e (a) the Redeveloper fails to carry out its obligations with respect t the Minimum Improvements (including the nature and the date P to the construction of completion thereof), or abandons or substantially suspends construr the commencement and chop work, and any such 38 failure, abandonment, or suspension • shall not be cured, ended, or remedied, or assurances reasonably satisfactory to the Authority made, within ninety (90) days after written demand from the Authority to the Redeveloper to do so; or (b) the Redeveloper fails to pay the PILOT provided for hereunder,_ real estate taxes or assessments on the Redevelopment Property or any part thereof when due; or creates, suffers, assumes, or agrees to any encumbrance or lien on the Redevelopment Property which is unauthorized by this Agreement; or shall suffer any levy or attachment to be made, or any materialmen's or mechanics' lien, or any other unauthorized encumbrance or lien to attach; and such taxes or assessments shall not have been paid, or the encumbrance or lien removed or discharged, or provision reasonably satisfactory to the Authority made for such payment, removal, or discharge, within ninety (90) days after written demand by the Authority to do so; provided, that if the Redeveloper shall first notify the Authority of its intention to do so, it may in good faith contest any mechanics' or other lien filed or established and in such event the Authority shall permit such mechanics' or other lien to remain undischarged and unsatisfied during the period of such contest and any appeal. During the course of such contest the Redeveloper shall keep the Authority informed respecting the status of such defense; or (c) there is, in violation of this Agreement, any transfer of the Redevelopment Property or any part thereof, and such violation shall not be cured within ninety (90) days after written demand by the Authority to the Redeveloper; then the Authority shall have the right to re -enter and take possession of the Redevelopment Property and to terminate (and revest in the Authority) the estate conveyed by the Redevelopment Property Deed to the Redeveloper; it being the intent of this provision, together with other provisions of the Agreement that the conveyance of the Redevelopment Property to the Redeveloper shall be made upon, that the Redevelopment Property Deed shall contain a condition subsequent to the effect that in the event of any default on the part of the Redeveloper and failure on the part of the Redeveloper to remedy, end, or abrogate such default within the period and in the manner stated in such subdivisions, the Authority at its option may declare a termination, in favor of the Authority, of the title and of all the rights and interests in and to the Redevelopment Property conveyed to the Redeveloper, and that such title and all rights and interests of the Redeveloper, and any assigns or successors in interest to and in the Redevelopment Property, shall revert to the Authority, but only if the defaults by the Redeveloper stated in subsections 8.3(a) -(c) have not been cured within the time periods provided above. Notwithstanding anything to the contrary contained in this Section 78.3 of this Agreement, the Authority shall have no right to re -enter or retake title to and possession of any part of the Redevelopment Property for which a Certificate of Completion has been issued, if the Termination Date has occurred or, with respect to the Initial Minimum Improvements, if the PILOT is being timely paid. Section 78.4. Resale of Reacquired Property- Disposition of Proceeds. Upon the revesting in the Authority of title to any Parcel of the Redevelopment Property as provided in 39 Section 78.3, the Authority shall have no further responsibility to the Redeveloper hereunder with respect to that or any subsequent Parcel and may sell or otherwise devote said Parcels to such other uses as the Authority shall, in its sole discretion determine, without reimbursement of any sums paid by the Redeveloper to the Authority under this Agreement except as provided below. From the proceeds of sale of the reacquired property, the Authority shall pay all costs of reacquiring, holding, marketing and disposing of such property and shall also retain the lost tax increment that would have been received had the Minimum Improvements been timely constructed. The remainder of any sums shall be paid to the Redeveloper, but not to exceed the amounts actually paid by the Redeveloper for the conveyance of the applicable Parcel. Section 78.5. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority or Redeveloper is intended to be exclusive of any other available remedy or remedies, unless otherwise provided herein, 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. In order to entitle the Authority or the Redeveloper to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article VIII. Section 78.6. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. Mien 8.7. A_:APi1lP_Tit t Le -A 12 II. Dealt eEears- andie- Atheriityd/ Revedele uses -�� 7L .. etheF -&APeffses; -sueh fees and expenses shall be paid to die 40 ARTICLE UM Real Property Taxes Pledse and LO--T Section 8.9.1. Real Property Taxes The Redeveloper shall pay when due, prior to the attachment of penalty, all real property taxes payable with respect to the Redevelopment Property subsequent to execution and delivery of the Redevelopment Property Deed. Section 89. -2. pledge. The Authority hereby pledges the Available Tax Increment to payment of the Reimbursement Payments provided herein. Section 83• -3. PILOT. In the event that the Redeveloper has not substantially completed the Initial Minimum Improvements on or before December 31, 2000, then the Redeveloper shall be liable for and shall pay to the Authority the PILOT, to the extent required hereun. The PILOT obligation shall remain in effect only until the year Redeveloper has paid real estate taxes based on the assessor's market valuation of $13,500,000. 41 ARTICLE IX Termination of Agreement Section 949.1. Termination - General. terminate Termination Date and the discharge of all of the Authority's and l Redeveloper's upon its respective obligations hereunder, but no such termination shall terminate any indemnification or other rights or remedies arising hereunder due to any Event of Default which occurred an was continuing prior to such termination. d Section _949.2. Termination - Specific. If the Notice of Closing on the Initial Redevelopment Property has not been received by the Authority within ten (10 s o execution and delivery by the parties of this Agreement and the Agreement between City of Fridley and Medtronic or May 7, 1999 whichever is later, then this A eement ty terminate and neither Party shall have any liability to the other hereunder. U n such l termination, the Authority and the Redeveloper, shall enter into an form evidencing the cancellation of this Agreement. agreement in recordable 42 ARTICLE XI Additional Provisions Section 1Q4..1. Conflict of Interest Authori R resentatives Not Individuall Liable. No member, official, or employee of the Authority shall have any personal interest, indirect, in this Agreement, nor shall any such member, official, or employee artiai � or any decision relating to the Agreement which affects his Participate m any corporation, partnership, or association in which he is d ecti or or the interests interested. of No member, official, or employee of the Authority shall be personally liable to the Redeveloper, or any successor in interest, in the event of any default or breach b the Authority, for any amount which may become due to the Redeveloper Y obligations under the terms of this Agreement, except in the case of willful misconduct. on any Section 104.2. EQUaI EmDlovmpnr The Redeveloper, for itself and its successors and assigns, DDOrtunity. mss agrees that during the construction of the Minimum Improvements Provided for in this Agreement, opportunity and non it will comply with all applicable equal employment - discrimination laws, ordinances and regulations. Section 141.3. Provisions Not Mer ed With Deed. None of the provisions of this Agreement are intended to or shall be merged by reason of any deed transferring any interest I in the Redevelopment Property, or any parcel thereof, and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 141..4. Titles of Articles and Sections. Any titles of the several parts, articles, and sections of this Agreement are inserted for convenience of reference onl and I disregarded in construing or interpreting any of its provisions. Y shall be Section 1¢1•.5. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under this Agreement b either I the other shall be sufficient) Y party to mail o Y given or delivered if it is dispatched by registered or certified postage prepaid, return receipt requested, delivered by a recognized overnight courier or delivered personally, and (a) in the case of the Redeveloper, is addressed to or delivered personally to the Redeveloper at: tl s f 43 Medtronic, Inc. 7000 Central Avenue Northeast Minneapolis, MN 55432 Attention: with a copy to the same address, Attention: Corporate Counsel Director of Corporate Real Estate (b) in the case of the Authority, is addressed to or delivered personally to the Housing and Redevelopment Authority in and for the City of Fridley at: Housing and Redevelopment Authority City of Fridley 6431 University Avenue Northeast Fridley, Minnesota 55432 Attention: City Manager (c) or at such other address with respect to either party as that party may, from time to time, designate in writing and forward to the other as provided in this Section. Section 104-.6. Counterparts. This agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 1(4.7. Time of the Essence. Time is of the essence of this Agreement. Section 10-x.8. Unavoidable Delay. Whenever any time is established for performance of any act hereunder, regardless of whether specifically indicated herein, the obligation and date of performance shall be automatically extended by the occurrence of an Unavoidable Delay. Section 10.9. Expiration. This Agreement shall expire on the Termination Date. Section 10-x.10. No Third -Party Beneficiaries. There shall be no third -party beneficiaries to this Agreement. More specifically, the Authority enters into this Agreement, and intends that the consummation of the Authority obligations contemplated hereby shall be, for the sole and exclusive benefit of the Redeveloper, and notwithstanding the fact that any other "person" may ultimately participate in or have an interest in the Pro thereof, the Authority does not intend that an jest or any portion Y PAY other than the Redeveloper shall have, as alleged third party beneficiary or otherwise, any rights or interests hereunder as Authority, and no such other party shall have standing to complain of the Authority's exercise 44 of, or alleged failure to exercise, its rights and obligations, or of the Authority's performance or alleged lack thereof, under this Agreement. Section 141.11. Ad ,ent Develo ment D sign Controls. a Redeveloper does not acquire all of the Redevelopment Prop In the event tha t the erty, Authority agrees to design control on any future development of the afore- referenced property to ensure it will be developed in a fashion reasonably compatible with the portions of the Redevelopment Property developed by the Redeveloper. The Authority with respect to all such restrictions and to impose the as redevelopment �c�onttrRedeveloper l agreement for redevelopment entered into by the Authority or in any deed transferring the Redevelopment Property. 45 Dated: MEDTRONIC, INC. By Its STATE OF COUNTY OF ) ss. On this . day of 199 before me, a no me County, Personally appeared Public within and for personally known who by me duly o of Medtronic, did say that s/he is the acknowledged the foregoing instrument on behalf of said corporation Minnesota corporation, and Notary public Redeveloper Signature page - Contract for Private Redevelopment tea,;•« SCHEDULE A 47 DESCRIPTION OF REDEVELOPMENT PROPERTY Outlot A and Outlot B, Fridley Executive Center, Anoka County, Minnesota 48 SCHEDULE B REDEVELOPMENT pROPERTY DEED THIS INDENTURE, made this day of 199-7 bween Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a political subdivision of the State of Minnesota (the "Grantor "), and Medtronic, Inc., a corporation organized under the laws of the State of Minnesota. (the "Grantee "). WITNESSETH, that Grantor, in consideration of the sum of One Dollar ($1.00) and Other good and valuable consideration the receipt whereof is hereby acknowledged, does hereby convey and quit claim to the Grantee, its successors and assigns forever, all the tract or follows: parcel of land lying and being in the County of Anoka, and State of Minnesota described as See Exhibit 1 Attached together with all hereditament and appurtenances belonging thereto, Grantor covenants and represents that: Grantee has committed to construct certain improvements and Grantor has a right of re -entry in accordance with Sections 4.5 and 8.3 respectively of the Contract for Private Redevelopment By and Between the Housing and Redevelopment Authority in and for the City of Fridley and Medtronic, Inc. dated completion of,the improvements and the release of the right of re-entry s The hall be evidenced by the recording of the Certificate of Completion and Release of Forfeiture attached as Exhibit 2 to this deed. The Grantor certifies that the Grantor does not know of any wells on described real property. 49 IN WITNESS WHEREOF, the Grantor has caused this deed to be dul ex behalf by its Chairman and its Executive Director the Y executed in its day an year written above. And by STATE OF MINNESOTA ) COUN'T'Y OF ANOKA � � HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA Its Chairman Its Executive Di cer or On this - day of for Anoka County, personally appeared 9 before me, a notary public within and to me they are the Chairman and Exe utive Director of the H who by me duly sworn, did say that in and for the City of Frill Housing and Redevelopment Authority and acknowledged �'° Minnesota, a political subdivision of the State of Minnesota, gel the foregoing instrument on behalf of said Authority. This instrument was drafted by. No Public Krass Monroe, P.A. (J.R.C.) Suite 1100 Southpoint Office Center 1650 West 82nd Street Minneapolis, MN 55431 (612) 885-1296 50 � 11: LEGAL DESCRIPTION 51 � 11: CERTIFICATE OF COMpLETION AND RELEASE OF FORFEITURE WHEREAS, the Housing and Redevelopment Authority in and for the City Minnesota, a political subdivision of the State of "Grantor"), of Fridley, recorded in the Office of the County Recorder in and fo the County o ka d a Did Minnesota, as Deed Document Number and State of of Titles in and for the County of Anoka and State of Minnesota, a d in the office of the Registrar respectively, has conveyed to Medtronic Inc, a corporation D� Document Number the laws of the State of Indiana (the Grantee organised under Anoka and State of " Minnesota, to -wit: "), the following described land in County of See Exhibit 1 attached WHEREAS, said Deed contained certain covenants and restrictions the b which by Grantee, its successors and assigns, reach of by Grantor, its successors and assigns, gns would result in a forfeiture and right of re -entry Deed; and gns, said covenants and restrictions being set forth in said WHEREAS, said Grantee has performed said covenants and conditions insofar as able in a manner deemed sufficient by the Grantor to permit the execution it is this certification; and recording of 52 NOW, THEREFORE, this is to certify that all building construction and other physical improvements specified to be done and made by the Grantee have been completed p y above covenants and conditions in said Deed have been performed by the Grantee therein and the that the provisions for forfeiture of title and right to re-en nd and subsequent by the Grantor therein is hereby released absolutely and forever insofar ditio t applies to the land described herein, and the County Recorder and the Registrar of Titles n and for the County of Anoka and State of Minnesota is hereby authorized to accept in recording and to record this instrument, and the filing of this instrument shall be a conclusive pt for determination of the satisfactory termination of the covenants and conditions referred said Deed, the breach of which would result in a forfeiture and right of re-entry. to in try Dated: 20 And by STATE OF MINNESOTA ) COUNTY OF ANOKA ss HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA Its Chairman Its Executive Director On this day of for Anoka 20 before me a notary public within and County, personally appeared they are the Ch ' and to me personally known who by me duly sworn, did say that airman and Executive Director of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a political subdivision of the State of and acknowledged the foregoing instrument on behalf of said Authority. Minnesota, Notary public 53 SCHEDULE C MEDTRONIC CAMPUS (platted as Fridley Executive Center as of April 1, 1999) See Attached 54 SCHEDULE D CERTIFICATE OF COMPLETION AND RELEASE OF FORFETI'[IRg WHEREAS, the Housing and Redevelopment Authority Minnesota, a political subdivision of the State of �' m and for the City of Fridley, recorrecorded in the Office of the Coon Minnesota the " - d Minnesota, Grantor as Deed Document Number order in and for the County ),' a Deed Titles in and for the County ty °f Anoka and State of ty of Anoka and State of and in the office of the Registrar of respectively, has cony Minnesota, as Deed Document Number laws of the State of eyed to Medtronic, Inc., a co Anoka and State of Minnesota, (the "Grantee" corporation Organized under the ta, to -wit: ), the following described land in County of See Exhibit 1 Attached which WHEREAS, said Deed contained certain Y Grantee, its successors and assigns covenants and restrictions, the breach of by Grantor, its successors and assi s gns' would result in a forfeiture and right of re -en Deed; and � ,said covenants and restrictions being set forth in d W 'MREAS, said Grantee has performed able in a manner deemed sufficient b said covenants and conditions insofar as it is this certification; y the Grantor to permit the execution and recording of 55 NOW, THEREFORE, this is to certify that all building construction and other physical improvements specified to be done and made by the Grantee have been completed above covenants and conditions in said Deed have been and the that the provisions for forfeiture of title and right to by for breach the Grantee therein and subsequent by the for therein is hereby released absolutely and fo g f condition applies to the land described herein, and the County Recorder and the Registrar of far is it and for the County of Anoka and State of Minnesota is hereby authorized to accept in recording and to record this instrument, and the filing of this instrument shall be a �� ut for determination of the satisfactory termination of the covenants and conditions of rive referred to in said Deed, the breach of which would result in a forfeiture and right of r contract Dated: � re-entry. 20 And by STATE OF MINNESOTA ) COUNTY OF ANOKA ) ss HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MIlVNESOTA Liz Its Chairman Its Executive Director On this day of for Anoka Coun 20 before me, a notary public within and tY, personally appeared to me personally known who by me duly sworn, did say that they are the Chairman and Executive Director of the Housing and Redevelopment A in and for the City of Fridley, uthority eY Mmnesota, a political subdivision of the State of Minnesota, and acknowledged the foregoing instrument on behalf of said Authority. Notary public 56 � 11: LEGAL DESCRIPTION OF REDEVELOPMENT PROPERTY 57 SCHEDULE E See attached map 58 a SCHEDULE F PUBLIC Il PROVEMENTS Public Improvements to the Redevelo me P nt Property shall include the following: 1 water, available in Bridgewater Drive by Date of Closing Sanitary Sewer, available in Bridgewater water Dnveby Date of Closing Universi w ����` tY Avenue and 57th Avenue improvements 59 f a P SCHEDULE G SITE IMPROVEMENTS . Stakeout for excavation of ri electric, gas, telephone, curb and 8ht -of- -way, on -site gradin gutter. & ref, water, storm drainage, Clearing site before grading and removal of bituminous streets, curbs and gutters. Grade establishment for right Rough grading ght-of- -way and Minimum Improvements. Cost of dewatering Removal of poor soils. Compacting of existing soils Import of soils from off -site to meet shall use its best efforts to minimize costs to imort or to use fill from on -site sow- grading equirements, if necessary. P export fill. Redevelop hall attlempt pond. sources including fill m g ade available from excavation of stormwater Aeration Equipment Cost of acquisition and in including pondin installation of stormwatel. site in accordance vv�it� system reinforced concrete piping to assist in draining system, Section 2.2 m' (h) of the Agreement g stormwater off - Installation of erosion and sediment controls. Installation of streets, driveways Agreement apron, bridges and blacktop accordance walking sand firelands including curb, Sections 2.2(e) and 4.6 of the Street signs and streetlights as approved by the City. Installation of sewer and water mains from the Minimum Improvements, including the replacement of Redevelopment Properly to facilities, and installation of pressure reducing valves ent, reali gnment or removal of existing and/or water pressure booster pumps. 60 On -site land including b landscaping and landscape berms, and p�j`acY fencing if required lighting whether or not r aired y either the Authori by the City, Stormvater management area f tY or the city. fencing. All professional and Of the Site Irn rov consulting fees related to P ements includin the acquisitio engineering' le g but not limited , deli gal, financial and environmental. mated to acquisition, Planning and construction architectural, Acquisition of adlacent associated therewith, Parcels, includ' I the Minimum Im necessary to provide a site o femolition and relocation provements. sufficient size to and other costs Permit development of Removal, abatement or containment of f hazardous substances Redevelopment abatement or remediation Propel, neces �Y for the development Of the All Structured Parking and _-- ---- Su &ee -Parldfl, �` "roosts- relate�{e-fle'�e.emeat 61 1' f P i SCHEDULE H STORM SEWER POND AGREEMENT THIS AGREEMENT STORM and between entered into this hereinafter referred to �3' of � "Owner" of the below described a - by and Minnesota, a political subdivision of the State el Minn Corporation, hereinafter and the City of Fridley, (PROPERTY DESCRIPTION) ewe' referred to as "City ". WBEREAS, the accommodate storm City has required the Owner to water and the rate of flow of area ruProvide detention pong to WAS, the Owner agrees to construct a detention CIO all relating grading, slope work and restoration. including on the above described property City. ve and installation of pipe as approved by NOW 'BEREFORE IT IS AGREED AS FOLLOWS: 1 The Owner assumes the full and sole responsibility maintenance and management, at no for the condition, Pond Storm Sewer S cost to the City, for an on -site Detention/Retention repair' Purpose of receivin System which meets generally accepted engineering detention collected retaining and transporting worm hic standards for the within the system. may be 2• The City shall not under an Performance of an Y circumstances be responsible for the on repairs, changes or alterations whatsoever to the On -site g physical appurtenances and the City shall not be liable for the cost thereof pond and 3 • The Owner agrees, at no cost to the City, (2) maintain and trim all other s et regularly: (1) maintain repair or replace an shrubs and vegetatio and cut � Vass, Y Bass or other vegetation, remove all liter and debris, (4) maintain any Pipe system, getation, (5) maintain the outlet reasonably , and (7) take all Other and structure, (6) y necessary for the purpose of maintainin further steps which would be consistent with a first class business park. g a quality level of landscape care 4. The Owner agrees to rode any damages which the ��' and hold harmless the City from an of the Pond Storm Sewer may sustain a result of the co Y action and against System located on the construction and maintenance Owner's property. 62 CORPORATION LIM Its: CITY OF FRIDLEY LO Its: STATE OF MINNESOTA ) ss. COUNTY OF ANOKA ) The foregoing instrument was acknowledged before me this day of , by the of a Corporation under the Laws of , on behalf of the Corporation. (Signature of Person Taking Acknowledgment) STATE OF MINNESOTA ) ss. COUNTY OF ANOKA ) The foregoing instnunent was acknowledged before me this day of , , by , of the City of Fridley, a political subdivision of the State of Minnesota, on behalf of the City of Fridley. (Signature of Person Taking Acknowledgment) M 63 5. G1 The Owner's obligati on to indemnify also includes an obli and hold the City harmless in which ma gOII on the part of the Owner to defend the City 4 above y be brought against the City in an and hold harmless the City y and as to which Owner agreed y actions ty as set forth above. to indemnify In the event that the Lty Pond improvement in a hion lievistthat the ref is not m� written notice to the Owner detailing this agreement, g the Detention wr the deficiency then the City shall maintaining the Pond. If ten (10) days the manner in which the give b rapt of this notice the deficiency Owner is in the notice has not been corrected notice take any steps which it deems reasonably Owner, then the City �' described deficiency. The Owner easonably necessary may without further Of invoice for agrees to then reimburse the City � order to ��� the correcting the deficiency. s �cutred, to include Administrative tY (30) days of receipt If this invoice is not paid ° 30h by the City in Owner agrees that the City may assess the cost tom' ( ) days of recei against the Owner's property. P� then In the event that it becomes necessary deficiency as provided herein, �' for the City to assess the certify then the City is authorized assess ss cost for correcting the '' this assessment against the direct the County waives any right to a public against th i Owner's real property described above and the Owner for. g which may be statutorily or COnstitutionallY Provided 7. That any notices requires under this receipt requested, or by Personal service agreement shall d sent by certified ce at the following add -ess: �" return (OWNER'S ADDRESS) FURTBER, IT IS AGREED that the enforceable agar the provisions of this the roe Parties hereto, their successors greement shall be binding Property rty here described. An ex ccessors and assigns and all g upon and County Recorder's Ogi meted coPY of this subsequent owners of ce and made a part of and be this agreement shall be filed with the Anoka. binding upon the above described property. IN WITNESS WBEREOF, the Parties hereto have hereunto set their hands this _� day of SCHEDULE I 250 s uare f `i one 1 of feet of office s For retail uses 1 ace use. 150 s uare f east il s one 1 oiq eet of reta ace For manufa „r4-- - -- , . use. rovided for _ "� "�• a uses � 1 ` each 2 000 east one 1 ofd s uare feet of warehouse s ace 65 SCHEDULE J MASTER PLAN See attached Resolution No. 34 -1999 for 114edtroni 66 �6. DATE: May 14, 1999 101DIUMM, WINN HOUSING REDEVELOPMENT AUTHORITY TO: William W. Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director Grant Fernelius, Housing Coordinator SUBJECT: Update on Gateway East Redevelopment Project This is an update on several issues related to the Gateway East Redevelopment Project. Holiday Properly On April 30, 1999, funds were placed in escrow for the purchase of the property at 5807 University Avenue. A tentative closing date has been scheduled for early June, subject to expiration of the tenant's lease and relocation to another site. Earlier this week staff was contacted by Holiday's legal counsel about the urgency of closing in June. Holiday is primarily concerned that the tenant may make the transition difficult if they are forced to move by the end of May. As such, Holiday would like to delay the closing until mid - summer to give the tenant time to find a new location. Staff believes that there are no pressing needs for the building, however we do not want to prolong the process and delay the entire redevelopment project. Additional, information will be provided after the May 20th meeting on the status of our discussions with Holiday. Duplex Replacement As you are aware, one of the key issues facing the Council and HRA is how to replace the two rental units scheduled to be torn down. It has been extremely difficult finding sites and sources of funding for this small of a project. However, 5 Gateway East Memo May 14, 1999 Page 2 we have identified a tax forfeit parcel on Starlite Circle and ACCAP has indicated that they would be willing to act as the developer. ACCAP believes a project of this scale would probably cost in the range of $200,000 to $250,000 and take up to a year to build. In general, the units would be rented to families earning up to 50% of median income (e.g. $31,800 for a family of four) and ACCAP would own and manage the project. There are a couple of options for funding the project. Option 1 Access funding under the Metropolitan'Housing Opportunities Program (MHOP). This is a special program created as a result of a lawsuit against the Minneapolis Public Housing Authority and HUD. The program provides both construction funding and on -going subsidies to keep the properties affordable for a period of 40 years. Residents of Minneapolis would have preference to the units for the 1st ten years. The advantage of this program is that the City would have to contribute very little money to the project (possibly land), however ACCAP believes Anoka County might be willing to donate the tax forfeit parcel to the project. Given the uncertainty of the TIF laws and the impact on the HRA's resources this program is very attractive. Obviously, there are some political issues that need to be discussed with the Council. Option 2 Incorporate this project into a federal tax credit project. ACCAP is currently wrapping up a scattered project and doesn't know if they will administer this program again. Generally, there a minimum number of units required (usually 15 -20) and it would probably take several years for ACCAP to identify enough sites to pursue a tax credit project. This project would involve a local contribution as well, probably in the form of a land write down and possibly gap funding. Option 3 The last option would involve a significant financial contribution from the City (land, plus $100,000 to $150,000). The remaining funds could probably be secured with MHFA or another source. We would probably have to compete for Gateway East Memo May 14, 1999 Page 3 the remaining funds. If the project were not funded, delays could result in the Gateway East project. Our goal is to continue to work out the details with ACCAP on a project, probably using the MHOP program and come back to the Council and HRA in June with more information. No action is needed by the HRA at this time. M -99 -124 I V Fridley HRA Monthly Housing Program Summary May 20, 1999 1. Loan Origination Report Covers the loans and grants issued through 5- 14 -99. This report shows activity both city -wide and in the Hyde Park neighborhood. 2. Loan Servicing Report Covers HRA funded loans only. Report summarizes all of the loans being serviced (including prior years) by the Community Reinvestment Fund (CRF) for the most recent reporting period, 4- 30 -99. 3. Delinquent Loan Report (see attached memo) Report shows the number of loans that are considered delinquent. There are four categories (1 month, 1 -2 months, 2 -3 months, over 3 months). The report also shows the total amount of delinquent payments along with the total loan principal outstanding. Report covers activity through 4- 30 -99. 4. Other Information None Monthly Housing Report cover (5.1 -99 HRA) v 1989 (APR MAY) LOAN ACTMTY REPORT - 8/14M LOAN ORIGINATION REPORT Month Ending May -99 City Wide Learns and Grants 6 $ 10,000.00 1 $ 31,460.00 2 $ 118,218.58 9 Units Hyde Park Loans and Grants T HRA MNFA Fed. Date Type of lProgran I Name Address Loans Unt Loans Unt Grants UM Total Unt Closad Proe Hicks 6700 Monroe SL $ 6,000.00 1 S $ $ 6,000.00 1 1/12199 Single Family HRA 5% Loan Jacob 6251 Rainbow Dr. $ 7,401.58 1 $ $ $ 7,401.58 1 223/99 Single Family HRA 5% Loan Wenzel 130 - Logan Pkwy. $ 10,660.00 1 $ $ $ 10,660.00 1 32/99 Single Family HRA 5% Loan Schreiner 7372 Symphony St. $ 25,000.00 1 $ $ $ 25,000.00 1 323/99 Single Family HRA 5% Loan Steinberg 6533 Lucia Lane $ 24,750.00 1 $ $ $ 24,750.00 1 4/7/99 Single Family HRA 5% Loan Warner 4543 Main SL NE $ 2,947.00 1 $ $ $ 2.947.00 1 420/99 Single Family HRA 5% Loan Bernier 1544 Osborne Rd. $ $ 10,000.00 1 $ $ 10,000.00 1 420/99 Single Family MHFA Loan Kuusisto 595 - Kimball St. NE $ $ $ 15,635.00 1 $ 15,635.00 1 429/99 Single Family CDBG Grant Semke 518 - Kinball SL NE $ $ $ 15.825.00 1 $ 15,825.00 1 429199 Single Family CDBG Grand Sub -Total $ 76,758.58 6 $ 10,000.00 1 $ 31,460.00 2 $ 118,218.58 9 Units Hyde Park Loans and Grants T HRA MNFA CDBG /HOME Dab Type of Name Address Loans Loans Grant Total Closed Property Program Butterfield 5924 - 2 -12 SL $ 9,390.66 7 $ 9,390.66 $ - $ 18,781.32 7 3110/99 Multiple Family Hyde Park Deferred Woods 5830 - 2nd SL $ 25,000.00 4 $ - $ $ 25,000.00 4 3111/99 Multiple Family Hyde Park Deferred Sub -Total $ 34,390.88 11 S 9,390.66 $ $ 43,781.32 11 Units Total $ 111,14924 17 S 19,390.69 1 $ 31,490.00 2 S 161,999.90 20 Unit a < A LOAN SERVICING REPORT Month Ending April -99 Installment Loans Pool 1 Pool 2 Total Number of Loans in Portfolio 78 104 182 Principal Payments $ 6,546.19 $ 9,904.92 $ 16,451.11 Interest P iyments $ 3,662.03 $ 4,871.78 $ 8,533.81 Ending Principal Balance $ 950,973.13 $1,188,785.86 $ 2,139,758.99 Deferred Loans Number of Loans in Portfolio 20 2 22 Principal Payments $ 36.98 $ - $ 36.98 interest Payments $ 1.22 $ - $ 1.22 Ending Principal Balance Totals $ 108,079.68 $ 17,390.66 $ 125,470.34 Total Loans in Portfolio 98 106 204 Principal Paid $ 6,583.17 $ 9,904.92 $ 16,488.09 Interest Paid $ 3,663.25 $ 4,871.78 $ 8,535.03 $ 25,023.12 CRF Monthly Servicing Fee $ 853.50 NET FUNDS RECEIVED $ 24,169.62 TOTAL OUTSTANDING LOAN PRINCIPAL $1,059,052.81 $1,206,176.52 $ 2,265,229.33 Notes: Pool 1 loans were issued prior to February 1, 1997. Pool 2 loans were issued after February 1, 1997; loans made from the City's $1.5 million loan. 1999 (APR -MAY) LOAN ACTIVITY REPORT LSR - APR 1999 5/14/99 Fridley Loan Program Loan Delinquencies April 1999 Number of Installment Loans in Portfolio (201) Total of Payments Due % of Portfolio Delinquent by Category 14 1 to 2 2 to 3 Over 3 1 Month Months Months Months 14 2 2 3 $ 2,371.42 $ 798.28 $ 524.60 $ 2,015.19 5.6% 1.7% 1.2% 1.3% File: DELINQUENCIES Worksheet LOAN DELIQUENCIES Date: 5114/99