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04/09/2012 - 7502I• � CITY COUNCIL MEETING OF APRIL 9, 2012 CfiY OF FRIDLEY The City of Fridley will not discriminate against or harass anyone in the admission or access to, or treatment, or employment in its services, programs, or activities because of race, color, creed, religion, national origin, sex, disability, age, marital status, sexual orientation or status with regard to public assistance. Upon request, accommodation will be provided to allow individuals with disabilities to participate in any of Fridley's services, programs, and activities. Hearing impaired persons who need an interpreter or other persons with disabilities who require auxiliary aids should contact Roberta Collins at 572-3500. (TTD/572-3534) PLEDGE OF ALLEGIANCE. LOCAL BOARD OF APPEAL AND EQUALIZATION MEETING CITY COUNCIL MEETING APPROVAL OF PROPOSED CONSENT AGENDA: APPROVAL OF MINUTES: City Council Meeting of March 26, 2012 NEW BUSINESS: 1. Receive the Minutes from the Planning Commission Meeting of March 21, 2012 ............................................................ 1- 4 2. Special Use Permit Request, SP #12-01, by Signcrafters, for St. Philip's Lutheran Church, to Allow an Electronic Changeable Message sign as Part of a New Free-Standing Sign, Generaily Located at 6180 Highway 65 (Ward 2); and Resolution Approving Special Use Permit, SP #12-01, for Signcrafters, on Behalf of St. Philip's Lutheran Church, the Property Owner of 6180 Highway 65 ............................................................................... 5- 11 FRIDLEY CITY COUNCIL MEETING OF APRIL 9. 2012 PAGE 2 APPROVAL OF PROPOSED CONSENT AGENDA: NEW BUSINESS (CONTINUED): 3. Resolution Approving and Authorizing Signing an Agreement with Police Officers of the City of Fridley Police Department for the Years 2012 and2013 ........................................................................................................ 12 - 41 4. Approve 2012-2013 Liquor License Renewals ................................................... 42 - 44 5. Appointment — Police Officer .............................................................................. 45 6. Claims (154527 — 15480) .................................................................................. 46 - 58 7. Licenses ........................................................................................................ 59 - 63 ADOPTION OF AGENDA: OPEN FORUM, VISITORS: Consideration of items not on Agenda — 15 minutes. PUBLIC HEARING: 8. Consideration of the Creation of TIF District #20 and Hazardous Substance Subdistrict (HSS) #20A ........................................... 64 - 69 FRIDLEY CITY COUNCIL MEETING OF APRIL 9. 2012 PAGE 3 NEW BUSINESS: 9. Resolution Modifying the Redevelopment Plan for Redevelopment Project No. 1 and the Tax Increment Financing Plans for Tax lncrement Financing Districts Nos. 6-7, 9, 11-13 and 16-19, to Reflect Increased Project Costs and increased Bonding Authority Within Redevelopment Project No. 1, Creating Tax Increment Financing District No. 20 and Adopting a Tax Increment Financing Plan Relating Thereto and Creating Hazardous Substance Subdistrict No. 20A and the Adoption of a Tax Increment Financin Plan Thereto g.................................................................... 10. Resolution Approving and Authorizing Execution of the Amended and Restated Liquor Store Lease Between the 70 - 112 City of Fridley and ZCOF TL Fridley, LLC .......................................................... 113 - 119 11. Informal Status Report ....................................................................................... 120 ADJOURN. (Legal Notice) City of Fridley Notice of Board of Appeal and Equalization Notice is hereby given, that the Board of Appeai and Equalization of the City of Fxidley, County of Anoka, Minnesota, will meet at the Fridley Municipal Center located at 6431 University Avenue NE, Fridley, Minnesota in the City Council Chambers at 7:00 p.m., on Monday, April 9, 2012. The purpose of this meeting is to determine whether tasable property in the jurisdiction has been properly valued and classified by the assessor, and to determine whether corrections need to be made. If you believe the value ox classification of your property is incorrect, please contact the Assessor s Office to discuss your concerns. If you are still not satisfied with the valuation or classification after discussing it with the Assessor, you may appear before the Local Board of Appeal and Equalization. The Board shall review the valuation, classification, or both if necessazy, and shall correct as needed. Generally, an appeazance before your local Board is required by law before an appeal can be taken to the County Board of Appeal and Equalization. Given under by hand this 24th day of January, 2�12. !s/ Debra A. Skogen, City Clerk (Published in the Fridley SunFocus March 29 and April 2, 2012) CITY COUNCIL MEETING CITY OF FRIDLEY MARCH 26, 2012 The City Council meeting for the City of Fridley was called to order by Mayor Lund at 730 p.m. ROLL CALL: MEMBERS PRESENT: Mayor Lund Councilmember-at-Large Barnette Councilmember Saeflce Councilmember Varichak Councilmember Bolkcom OTHERS PRESENT: William Burns, City Manager Darcy Erickson, City Attorney Jim Kosluchar, Public Works Director Scott Hickok, Community Development Director Paul Slesar, 44 Lock Lake Road Larry and Cathleen Korzenowski, 529 Janesville St NE Pam Reynolds, 1241 Norton Avenue PRESENTATION: 2011 City Engineers Association of Minnesota (CEAM), Project of the Year Award for the North Innsbruck, Water Main Rehabilitation Project Layne Otteson, Assistant Public Works Director, said this was a Cooperative Project to install Class N Structural CIPP Water Main between Fridley, Golden Valley and Hutchinson. The design was by SEH and the contractor was Fer-Pal from Taylor, Michigan. The City Engineer's Association of Minnesota Professional Association promoted Yhe interchange of helpful ideas and information (technical, environmental, legal, and ethical). Everyone worked constructively toward the advancement and improvement of the engineering profession to seek ways and means by which we may be more useful and efficient to those whom we serve. Mr. Otteson said the problem in Golden Valley were five breaks each in 10 years for two streets. Fridley had five breaks in 15 years on one street. Hutchinson had seven breaks in seven years and four in 2009. All showed significant failure in certain locations. Fridley and Hutchinson had concrete roadways (increased restoration cost for open cut) and Yhere were congested private utility corridors in all cities. The fiber optic corridor, which houses data between two General Mills facilities, makes excavation very tough. There was high traffic on all streets, and it was important to maintain safe travel through these areas. Mr. Otteson said the cities researched other trenchless methods (cement lining, pipe bursting, etc.) and ultimately chose to implement a product that uses a standalone Class IV structural CIPP FRIDLEY CITY COUNCIL MEETING OF MARCH 26. 2012 PAGE 2 liner. We felt it was the least intrusive and provided the best long-term solution to our infrastructure needs. Mr. Otteson said once they knew which product to use, they had to ]ook at qualified contractors. This type of rehabilitation required highly skilled contractors for its installation. Currently, only a handful of contractors throughout the world are able to install this type of product. Because of this, high project mobilization costs were imminent. All three cities were working under tightened budget constraints and there was a real push to do more with less. The cities decided to complete the project under a cooperative project agreement and bid all projects under one bid tab. All cities had experience with CPAs in the past and all felt comfortable working with each other due to networking opportunities with CEAM, APWA, and AWWA. Using the CPA tool helped to incxease the total quantity of lining to be performed in the area, bringing down the respective mobilization costs for each City. The CPA tool also gave the contractor an insight that there may be a future market for new business in this area. This forced them to keep their prices low in hopes of opening up a new hub for future water main rehabilitation work in central Minnesota. Mr. Otteson said the cities worked on writing the bid documents to establish projects that fit for each city. They had to have a consensus on design, construction practices, and Cesting methods. They also had to meet each individual city's requirements for traffic control, turf establishment, general restoration, and temporary water services. Each city wanted the ability to opt out of the project for any reason before the contract was issued. An upfront payment from each city to the Contracting Authority for 95% of the engineer's estimated construction amount needed to be received before construction started. There were no issues presented by any cities. Mr. Otteson said it was a challenge getting each city's management, council, and attorneys to agree on one CPA document. It was also a challenge getting approvals from each city in a timely manner prior to the `Contracting Authority" taking the overall project to Council for bid. The cities had to work together to remain organized and plan well to avoid project delays. To accomplish this SHE, provided project-related material for City Council packets for all three Cities and were ready for each city. SEH tried to use the same bid-unit pay items across all of the cities to balance the cost among the three cities. For example; 12-inch CIPP water main lining was one line item that combined the pipe length for all three Cities. However, mobilization costs were difficult to standardize because the project locations were miles apart. Items like mobilization, traffie control, and temporary water required contractors to bid on separate lump sum pay items for each City involved. Mr. Otteson said there is a line item breakdown for work that occurred in each City. The work on Boone Avenue was completed in 2010. All other portions dropped out for the Spring 201 I bid. Prices were higher because the project was pushed in late season with high LD's if not completed on time. Brunswick Avenue had a change order diiven work. We had three breaks over this section while Fer-Pal was in town. The change order allowed us to rehabilitate pipe under a country road that kept breaking, as well as install valves that maintained service to a local Dialysis Clinic that kept being shut off. The total approximate savings was 10% less than the cost of rehabilitation using the open-cut method of pipe rehabilitation. FRIDLEY CTTY COU1�iCIL MEETING OF MARCH 26 2012 PAGE 3 Mr. Otteson reviewed the water main wark that was done: • Install a temporary water to disrupted homes • Dig pits • Video and clean the pipe • Install the liner inside the existing host pipe • Expand the liner and cure with hot water • Flush the new liner and test • Perform all reconnections and backfill pits • Remove temporazy water and perform restoration Mr. Otteson said CIPP technology offers significant sustainable environmental benefits compared to the open-cut rehabilitation method. CIPP reduces greenhouse gas emissions needed to rehabilitate trunk water main pipe using open-cut method by 84%. An 84% reduction amounts to 378 tons of carbon dioxide for each mile of trunk water main pipe rehabilitated using CIPP. In other words, this is a reduction of carbon dioxide equal to that produced by 24,600 gallons of gasoline or 196,570 pounds of coal for each mile of trunk water main pipe. Mr. Otteson said these savings will be realized in the reduced boulevard impacts as there will be no curb stop repairs or service pipe replacement required (reduces boulevard restoration). There will be less pavement damage, as a11 of the Cities had to considez the political fallout (namely property-owner complaints) from damaging good pavement. There will also be less water service disturbances, and this particular CIPP application used robotically controlled cutting devices to restore flow to water service laterals. The project had minimal material waste by creating small excavaYion footprints and experienced reduced trucking costs as less materials were necessary for construction and it was easy to transport without many trucks. Mr. Otteson said on Boone Avenue, in a commercial business area where companies relied both on daily access and water usage to conduct their business, the city did not receive any complaints ducing construction. Safety was maintained working on two-way traffic along TH15(Main Street in Hutchinson and secured excavations with flashers prevented accidental fall in. The restoration left very litUe evidence that there was ever work being done in the area. Mr. Otteson said they learned they should bid early to get better bid prices. Also if you manage a cooperative project, use LD's to ensure that work is finished in one City prior to commencing in another. This helps to reduce construction durations and promote clean/efficient projects. It is also important to plan ahead to make sure there is ample time to complete the wark in all cities involved. The contractor will want to limit risk of LD's so give them plenty of time in the construction season to get this work done. APPROVAL OF PROPOSED CONSENT AGENDA: APPROVAL OF MINUTES: City Council Meeting of March 12, 2012. FRIDLEY CITY COUNCIL MEETING OF MARCH 26. 2012 PAGE 4 Councilmember Bolkcom asked for the following correcCions: Page 8, third paragraph Kevin BohPs address should be "7399" Page 8, fourth paragraph Darcy Erickson stated you may prorate in the year of closing paying those special assessments and anything going forward may sometimes be picked up by the purchaser. It is an item for negotiation between buyer and seller. Page 8, last paragraph Mr. Kosluchar replied, basically there are dischazges that violate the City ordinance (which only permits discharge outside of the City right-of-way). If someone whished not to connect, they basically would have to cut their discharge pipe at least 10 feet back from the back of the curb. The pipe would be in their yard hopefully infiltrating. In addition, the City does have a nuisance ordinance. If there is some discharge creating icing conditions on the roadway, it is considered a nuisance and the property owner has to deal with it. These are the requirements the property owners would have to deal with. Page 9, last pazagraph APPROVED AS AMENDED. OLD BUSINESS: Wendy Hanson said she has an irrigation system and was wondering what would happen . . .. 1. Second Reading of an Ordinance Amending the Fridley City Code, Chapter 1, Legislative Body, Pertaining to ward and Precinct Boundaries. William Burns, City Manager, said that since the population changes for Fridley's three wards did not change substantially, tbe wazd boundazies remain the same. The changes in state legislative district boundaries; however, dictate that we consolidate precincts four and five in Wazd 2. Staff recommends Council's approval of the second and final reading of this ordinance. WAIVED THE READING OF THE ORDINANCE AND ADOPTED ORDINANCE NO. 1294 ON SECOND READING AND ORDERED PUBLICATION. NEW BUSINESS: 2. Resolution Entering into an Agreement with the Minnesota Department of Transportation for Preliminary Engineering for Safe Routes to School Project No. ST2011-21 and MnDOT Agency Agreement No. 00516. FRIDLEY CITY COUNCIL MEETING OF MARCH 26, 2012 PAGE 5 William Burns, City Manager, said this resolution is in support of an agreement w�th MnDOT regarding our Safe Routes to School Grant. Last year, the City and School District #14 applied for and received $108,840 in federal funding for pedestrian safety improvements in the vicinity of Hayes and Stevenson Elementary Schools and the Fridley Middle School. This resolution allows the City to conduct the preliminary engineering for this work under a"Delegated Contract Process" as required for projects receiving federal aid. Under this process, Fridley will work directly with MnDOT rather than the Federal Highway Administration. The agreement also provides that the City will be reimbursed for up to $14,800 in preliminary engineering cosYs. Staffrecommends CounciPs approval. THIS ITEM WAS REMOVED FROM THE CONSENT AGENDA AND PLACED ON THE REGULAR AGENDA. 3. Resolution Authorizing application for DNR Local Trail Connection grant Funds for Uaity Hospital Health Walk to rice Creek Regional Trail. William Burns, City Manager, said that last year, through the use of SHIP grant money for grant writing, we applied for two DNR local trail grants. Although we scored well, we were not funded. The grants, along with local matching money, would have been used to build bike/walkways in the vicinity of Fridley High School and between Unity Hospital's wellness walkway and the Rice Creek Regional Trail. Dr. Burns said that due to other potential commitments for local matches on Main Street, we are recommending that tlus year's DNR grant application be targeted at bikeway/walkway improvements between Unity Hospital and the Rice Creek Regional TraiL The $101,128 project would enable someone to walk or bike from Unity Hospital's "Wellness Walk" south on Ballet Boulevard to Madsen Pazk. From there they would, with the aid of a push-button pedestrian cross walk, cross 73rd Avenue to an existing City trail on the Target Distribution site. They would joumey from there to the Rice Creek Regional Trail in Locke Park. Staff has hired the consultant we used last year to tweak the grant applications. The local match on the Unity-Rice Creek Trail application is esfimated at $25,000. Staff would use MSAS money to fund the City share. Staff recommends Council's approval of the resolution. THIS ITEM WAS REMOVED FROM THE CQNSENT AGENDA AND PLACED ON THE REGULAR AGENDA. 4. Approve Master Services Agreement behveen the City of Fridley and Nehvork Medics, Inc. William Burns, City Manager, said the Police Department has had a service agreement with Network Medics of Minneapolis for repair and maintenance of its sixteen laptop computers since 2008. The sixteen computers serve as mobile data terminals in squads and are used primarily by police patrol. They are, however, also used by detectives, administrators, community service officers and reserve officers for a wide variety of law enfoicement purposes. These computers are used 24 hours per day, 7 days per week. The annual fee for this 24/7 service has been and will continue to be $21,875 per year. Staff recommends Council's approval. FRIDLEY CITY COUNCIL MEETING OF MARCH 26. 2012 PAGE 6 APPROVED. 5. Approve 2012 Reappointments to CiTy Commissions. William Burns, City Manager, said that the following people have asked to be reappointed to commission terms that expire on April 1, 2012: Dave Kondrick Chair of Planning Commission Brad Sielaff Appeals Commission Richard Svanda EQEC Dave Kondrick Parks and Recreation Commission Marcy Sibell Parks and Recreation Commission William Holm HRA (Term Expires: June 9, 2017) Dr. Burns said that all terms are three year terms with the exception of the HRA term, which is Por five years. Staff recommends Council's approval. APPROVED. 5a. Appointment — Appraiser. Dr. Burns said following an evaluation of fourteen candidates for the appraiser position vacated by Shawn Halligan in January, staff recommends the appointment of Patrick Maghrak. Patrick has a BS Degree from the University of Minnesota's Carlson School of Management. He also holds licenses as a Certified Minnesota Assessor, Real Property Appraiser and Residential Real Estate Sales. He has been employed by the City of Coon Rapids since 2004 where he served as Appraiser II. He also works as a staff appraiser for Equity Appraisal Services and has been working for the City of Fridley as an independent contractor for the past two months. Staff has been very pleased with his work and recommends Council's approval of his appointment. I�� � • �PI�TI]� 6. Claims (154389 —154526) APPROVED. 7. Licenses APPROVED THE I.ICENSES AS SUBMITTED AND AS ON FILE. APPROVAL OF CONSENT AGENDA: Councilmember Bolkcom asked for Item Nos. 2 and 3 to be removed from the Consent Agenda. FRIDLEY CITY COUNCIL MEETING OF MARCH 26, 2012 PAGE 7 MOT10N by Councilmember Bolkcom to approve the Consent Agenda with the removal of Item Nos. 2 and 3. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. ADOPTION OF THE AGENDA: MOTION by Councilmember Barnette to adopt the Agenda with the addition of Item Nos. 2 and 3. Seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. OPEN FORUM VISITORS: Pam Reynolds, 1241 Norton Avenue, discussed recent happenings with Springbrook Nature Center. Her information was found from documents acchived on the City's website. In November, 1972, a resolution was passed to purchase the Springbrook Nature Center. The City went to the voters to decide what the use of the land should be; a golf course or nature center. There was a 78% voter participation and a nature center was born. A group was formed known as the Springbrook Nature Center Foundation. In 1975 the Foundation entered into a lease agreement for the nature center and also developed plans to include walkways and tours. They ensured that the Springbrook Nature Center would not be a burden on taxpayers. This lease was for five yeazs. Ms. Reynolds said in 1975, Council was asked to approve a sign for the area but they did not decide on what name should be on the sign. After this was referred to Parks and Recreation, Council decided on Springbrook Nature Center at North Park. Only the faciliry was being named and this was not an effort to change the name of the park. In 1978, sewer and water came in from the City of Coon Rapids and the Foundation paid for those services. In 1979, a resolution was passed to build a visitors center. It was brought to the City to use the land as golf course again and was put back on the ballot to ask voters what to use land for. The Foundation said tax payers would not foot the bill but many additional requests have been granted throughout the years. Ms. Reynolds said recent developments for the Natuce Center include building a theater and a bookstore. The last attempt to build a recreation center was denied by 94% of voters. A 2010 Council meeting asked the question of when Council would take official action to require all money upfront rather than a phased plan. A MOU was discussed but never produced. Council proceeded with the issue without the official action necessary. The Foundation has control of the nature center but Council says the Foundation should run decisions througb the Council. Ms. Reynolds said in 1974 and 2004, Fridley chose to have North Park remain a green space. She could not find where the name was ever changed to Springbrook Nature Center. This is not the desire of the majority of Fridley residents. There are many questions as to why Fridley is FRIDLEY CITY COUNCIL MEETING OF MARCH 26, 2012 PAGE 8 responsible to provide special use for surrounding communities. Springbrook Nature Center should be maintained in the same fashion as other parks owned by the City, for the use of residents and protected from the developmentthatis being proposed. Ms. Reynolds said the Nature Center is open for biking, walking, running, and other activities. The use of the Nature Centec needs to be accomplished tluough a ballot with two questions; do residents wish to see North Park continue under the special tax levy and if they wish the facility to be used as it was deemed when it was built. If a petition is needed to put these questions on the ballot, she will take on that task. Time is of the essence to secure a spot on the 2012 ballot. She also asked for an answer to her question as to what the official name of the park is. Mayor Lund said he had a lot of things to say about her comments and noted that it would have been moce appropriate to submit her comments by email. He felt that she was using Open Forum as a campaign for the petition she plans to take to voters. This has been done in the past when the Foundatio� asked for a time period where they could bring questions to the voters, like in 2004. There has never been a complete census from voters for or against a golf course. Vaters clearly spoke in 1974 and 2004. Mayor Lund noted Foundation members are volunteers trying to do something good. They raise a significant amount of money every yeaz for those less fortunate and give quite a few grants themselves to schools to benefit the progxams at Springbrook Nature Center. It is unfortunate this issue comes up. He will look up the official designated name change and get back to Ms. Reynolds. Bert Martinez, 7786 Beach Street NE, said he has had a situation over the last 20 years and thought the s�lution was fixed but it keeps coming back. He wants to stop his shop from floating in water. There is damage to equipment, carpet, furniture just to name a few. This year he barely got done putting things back from water damage only to have another flood. There is no rhyme or reason to this water pxoblem and he has talked to Jim Kosluchaz to try to learn what is wrong. Mayor Lund agreed Mr. Martinez has a valid concem. Mr. Kosluchaz will look at the issue and see if something can be engineered differently. The problem can be solved today but it is not a failsafe solution; there is no guarantee our system can handle all weather situations. The current system was overwhelmed but the rain. All storm sewers end up in rivers and creeks and they get overwhelmed until the water level goes down. Mayor Lund responded to the letter Mr. Martinez submitted It stated in the letter that this is'sue was brought to the Mayor and he never heard anything back. Mayor noted that staff has responded to his concerns. A gate was lowered and worked effectively for three years. He thought the issue was taken care of. When the City bad flooding issues last year he did not hear from Mr. Martinez so he thought it was resolved. Staff will look at the problem to see if they can help. Staff will mitigate and check with engineering to figure out what is wrong. Councilmember Bolkcom said this area is not part of the new water shed district but part of Coon Creek so this may be a new project opportunity. FRIDLEY CITY COUNCIL MEETING OF MARCH 26, 2012 PAGE 9 Jim Kosluc6ar said a survey has been done and he would get back to Mr. Martinez in about six weeks. MOTION by Councilmember Bolkcom to move into record a letter from Mr. Martinez. Seconded by Councilmember Saeflce. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Don Anderson asked what the rules were for mopeds on city streets. Councilmember Saetke thought it was okay to operate the moped under a regular license if the moped was under 49 cc's. He knew the moped could not be operated on a bike ]ane and that he should drive in the regular traffic lane on city streets, where speed limit is 30 miles per hour. Mayor Lund said he should check with the Police Department for the proper rules for operating mopeds on city streets. NEW BUSINESS: 8. Resolution Approving Adoption of the East River Road Corridor Study as Prepared by Kimley-Horn and Associated, Inc. Jim Kordiak, Anoka County Commissioner, introduced the East River Corridor Study and the representatives from Kimley-Horn. Councilmember Bolkcom asked what the next step would be if the resolution was approved. She asked if Council did not approve of everything or had concerns, who should be contacted. She also asked who the people should respond to if they had questions ar concerns. Commissioner Kordiak said he has not had a chance to read the resolution. Any changes and desires of the Council and the residents of Fridiey are important. Councilmember Bolkcom noted that many people do not think about moving traffic like the County does which is a concem. We have to plan ahead, but she thinks the County Engineers want to move traffic quicker than Fcidley. It is clear in the studies that have taken place that people are concemed about some of those things. She is not sure she agrees with everything in the resolution_ Scott Hickok, Community Development DirectoT, said both agencies have interests related to East River Road and how it comes together. There will be discussion to make both interests match to cxeate a plan to guide the future of East River Road. Datt Coylel, Kimley-Horn Traffic Engineer, said there were goals developed with the key idea of not widening East River Road. They found out in the study that they could avoid having to widen the road to six lanes. He reviewed the following Implementatian Costs: FRIDLEY CITY COUNCIL MEETING OF MARCH 26, 2012 PAGE 10 Kate Garwood, Anoka County Highway Department Multi Modal Transportation Planner, said the next steps will be for the cities to approve the resolution, as well as the County Public Works Committee and the County Board. Future steps include to monitor changes in corridor conditions, capitalize on opportunities as they azise, apply for funding as it is available and work on short-term goals in support of ]ong-term recommendations. Ms. Garwood said the main message that was taken away from the meetings was Fcidley did not want East River Road widened. That message was received and it comes with some compromises. The easiest route in this project is to widen the road, but we plan to keep the road like a residential-type neighborhood The freight traffic on this road is significant. Trucks are loud and it was reported by some residents that the trucks shake their homes. Truck freight also takes up space and causes congestion. They plan to try to establish a freight corridor on University Avenue, Highway 252 or Highway 65. They are trying to figure out how to move truck freight traffic in a different way. Funding is not something that comes very quickly; it takes time to get funding. From the time we have a plan to the time we have a shovel in the ground takes a minimum of seven years. Things will be completed as they make sense. 5maller projects may be completed to take advantage of funds as they become available. We need to agree on a plan and a concept but not all the details. Coon Rapids adopted a plan as of Tuesday last week. The County will take this to Public Works on April 2 and it would go to the County Board on April 10 to adopt the resolution. Matthew Parent, Anoka County Highway Department Planner, said they reviewed the map and specifications that were distributed to Council. Councilmember Barnette asked about the Safe Route to School project regarding Stevenson Elementary School and how this project would work with that effort. Mr. Hickok said there has been discussion eazly on about a path around Stevenson Elementary. Through these discussions, staff learned a lot and did not know students at Stevenson could not cross East River Road. If they lived across this road they are bused to school. Safe Routes to School aze to enter school through the neighborhood to the north. They looked at a connection to the south as well so there would be a more direct route. Councilmember Bolkcom asked who would do the monitoring. FRIDLEY CITY COUNCIL MEETING OF MARCH 26. 2012 PAGE 11 Ms. Garwood said those issues were spoken to and County roads would be the County's responsibility. Currently this is done on an annual basis and reported back to the cities. Councilmember Bolkcom asked if the area of East River Road and Mississippi Street at the traffic ligl�t has been looked at. There could be a cleanup of signs in that area as she counted 20 signs in a three-block area. Also on February 26, she asked if any of this area would be included in the new watershed area. Jim Kosluchar, Public Works Director, answered no; that would be the Coon Creek Watershed Area. Councilmember Bolkcom said where it talks about the turning phases undex 85`h Avenue, she did not understand it. At some point, she would like an explanation. Ms. Garwood said that they could create a diagram so it is easier to understand. Councilmember Bolkcom was concerned about making u-turns and realizes that afier a while people will get used to it. She noted this project is different than Coon Rapids because this is a residential corridor. This is drastic change. On section 6.4 regarding the right of way and the easement, she noted it talked about noise wall costs. She had not heazd of a noise wall being installed. Ms. Garwood said she would look at that section. A noise wall is needed if federal funds are used and if the capacity of the road is expanded. She will research and get back to the Council. Councilmember Bolkcom questioned why the traffic numbers were higher on East River Road than University. Ms. Garwood answered thaC the gowth communities in Anoka County are tQ Yhe north and west and Fridley is south. A driver will take the quickest path away fram Highway ] 0 and the quickest path into Minneapolis is East River Road. Councilmember Bolkcom noted most of the studies and census are information from 2000 and this information will need to be updated as time goes on. Ms. Garwood answered yes; each time a new segment is started that information will need to be reviewed. Mayor Lund asked about a freight study and if there was funding available or a time line established for a freight study. Ms. Garwood said that the budget for this yeaz has something in it regarding &•eight bottlenecks and to find funding for a freight corridor study. Conversations have been held with MnDOT. Mayor Lund asked what type of green space or decorative fea[ure would be in the median strips. FRIDLEY CITY COUNCIL MEETING OF MARCH 26. 2012 PAGE 12 Ms. Garwood said to eliminate number of signs, there would be a longer median allowing a better opportuniry for landscaping. OpUons include decorative shrubs or pavement something attractive. Mayor Lund noted that the elimination of crossings would increase the speed and move traffic along faster. Ms. Garwood said they hope to not increase the speed. They are recommending leaving the speed limit as it is today. MnDOT controls the speed limit on all roads in the state. Mayor Lund was also concerned with u-tums; it will be an education process and could be a safety issue. The site line is not the best so the engineers need to look at this closely. Ms. Garwood said the engineers aze efficient with site lines and aware of busses' and trucks' turning radius. All of these things will be looked at very closely. Councilmember Bolkcom asked on item 2.5 if a breakdown of land uses could be provided; also to divide Coon Rapids from Fridley_ She also asked how they came up with how long it takes someone to get to work. Ms. Garwood said the traffic people were not here tonight but they take averages; they watch traffic and estimate how long it takes to get from one point to another. Councilmember Bolkcom noted that this is based on the 2000 census. Ms. Garwood said a new traffic questionnaire is happening right no���. The analysis also looks at where you live and where you work. Larry KorLenowski, 529 Janesville St NE, said this cul-de-sac business is unnecessary. If he has to come down another street and come up a hill it will be a problem. This is an unnecessary expense and just creates more revenue for the city or county. Cathleen Korzenowski, 524 Janesville St NE, said that this neighborhood is difficult to drive through because of the steep hills. This will create a hardship on people in the area with no access to East River Road. Right now she is unable to get up the hill on slippery days and she will not be able to get to her home. She should not be denied access to roads she has spent her life paying for, Putting in islands and u-turns does not service the people at all, it only further inconveniences people. The current road flows well the way it is and will continue to do so. Mayor Lund asked how they feel the county or city would make money on this project. Money will be spent on this project, not made. Mr. Korzenowski said that the funding is nat a necessary expenditure. Mayor Lund asked if the Korzinowskis attended any of the meetings. FRIDLEY CITY COUNCIL MEETING OF MARCH 26. 2012 PAGE 13 Ms. Korzenowski answered yes they did. After taking to all the neigbbors at the meetings, they felt like no one was listening to them. Mayor Lund said doing nothing is not a good option. This project is forward thinking; some parts could happen in a few years . The entire project will not happen at once. Councilmember Bolkcom said she is not totally against this project. Just because we approve this resolution tonight there will still be future discussion. She would be against a cul-de-sac in their area and would like to make sure they can get around in inclement weather. Mr. Hickok said this street pattem goes back to the turn of the century. The road worked well then but not now when you look at traffic numbers that exist today. It is difficult to come up with anything short of a system that would separate the connections to East River Road. Sepazating the housing from the heavy trafflc by creating cul-de-sacs has purpose to create a visual separation and take away traffic. A]ot of time has been spent detercnining that there aze certain streets that make sense to be blocked ofF. Councilmember Saetke said the County is moving forward and had a choice of widening East River Road to handle fizture traffic or make these modifications and close off some side streets. If the road were made wider, sound walls would have to be installed. Residents objected to widening East River Road and this is the alternative. It will not be easy, but we need to compromise. This is a county road and not a city road. The county is trying not to have to take out homes and widen the road. Mayor Lund agreed the majority of the people did not want to widen the road. People in the area do not want more traffic, but in the future, there will be more traffic. This is a better compromise than widening the road. Mr. Korzenowski asked how closing off streets would improve it that much. Mr. Hickok said it is hazd to visualize what conditions will be because right now the flow appears just fine. The predictability factor about it is that cazs are slowing down to turn; there ara short blocks that are not consistent and median breaks. Double the traffic in this area and see how that works; problems start to azise. The traffic is eventually going to come and this street cannot continue to operate as we are today. Ms. Korzenowski asked if they did an accident analysis as she does not notice any accidents; she does not see it as problem. Paul 5lesar, 44 Lock Lake Road, said everyone is upset with what is going to be happening in their corner of the world. This is a county project and we are all residents of the county and the city. Bypassing tcaffic seems logical but people aze not cheering that this is a good idea. He asked Council to vote no to this project. Mayor Lund asked what Mr. Sleezer did not like about the project. FRIDLEY CITY COUNCIL MEETING OF MARCH 26. 2012 PAGE 14 Mr. Slesar said this is a residential neighborhood. He likes cops sitting in the median in his area and pulling over speeders. He is not looking forward to more traffic. He also does not want to see an increase in the speed limit but he sees this happening in the future. He likes to bike to work and has concerns about all the traffic and making it dangerous to bike on East River Raad. Couucilmember Bolkcom said this project looks at improvements to get bike traffic off East River Road so bikers are not at the mercy of cars. Some improvements make sense. We will have to change how we do things. Mayor Lund noted he is aware people are resigned to this project but others realize doing nothing is not the greatest altemative either. The County listened to the people and agreed not to widen the road. The County has tried its best to listen to the City and ask f'or staff and Council involvement. This project will never be what everyone wants it to be. Dr. Burns noted that the county has made changes in response to the meetings. Mr. Hickok said the traffic will be here with or withoui the change. This project presents difficult problems with not a lot of solutions to pick from. The end product loQks diffexent today had we not involved the publia This project will end up with the best solution considering al] the elements that had to be considered. Ms. Garwood said there will be no additional taxing done by the County for this road and they are not asking the city to do that either. The county does nat add tax or access anything for this project. Councilmember Bolkcom asked about maintenance and who would maintain and plo�v the roadway, bikeways and walkways. Ms. Garwood said it is a county road so the county would maintain the road. Commissioner Kordiak said this road will 1QOk great when it is finished. He appreciated the consideration for this project There has been serious discussion on this project, and he asked Council to support this resolution. Every point of location will have vast modifications in the future. This is a work in prc�gress. The County does not bring traffic to Fridley, the traffic finds Fridley and will continue as populations grow. A cul-de-sac is great far kids, bike, strollers etc. and pravides a safe environment. All comments are important to consider and we will find satisfaction together. MOTION by Councilmember Bolkcom to move into record the final drafr of the East River Road Project. Seconded by Councilmember Saeflce. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. MOTION by Councilmember Bolkcom to adopt Resolution 2012-25. Seconded by Councilmember Barnette. FRIDLEY CITY COUNCIL MEETING OF MARCH 26, 2012 PAGE 15 UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY 2. Resolution Entering into an Agreement with the Minnesota Department of Transportation for Preliminary Engineering for Safe Routes to School Project No. ST20ll-21 and MnDOT Agency Agreement No. 00516 Councilmember Bolkcom asked on page 11 where it talks about the duties of the City, what the risk was for Fridley. The estimated cost is $14,800; she asked if the City paid any part of the cost or expense of the wark. Jim Kosluchar, Public Works Director, said under that cost, the City would be using staff time and would be reimbursed for staff time. Councilmember Bolkcom asked on page 12 where it talks about staffing, if someone else would be employed, Mr. Kosluchar said we would employ our own staff. Councilmember Bolkcom asked on page 13, number 2 where it talks about MnDOT and paying them, she asked if we had to wait to be reimbursed. Mr. Kosluchar answered the document relates to more contract payments and to testing, and they aze reasonahle as far as costs. This is a standard clause. The soil analysis or testing would be something we would pay and then get reimbursed. Councilmember Balkcom askad on page 14, letter F, regarding the costs paid with federal funds if there were any concerns federal funds will not be available. Mr. Kosluchar answered that the federal funds would be allocated ahead of time. Councilmember Bolkcom noted that pages 16/17 repeat themselves. Mr. Kosluchar confirmed that is correct; page six of the resolution is missing from CounciPs packet. MOTION by Councilmember Bolkcom to move into record page 6 of the contract. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY MOTION by Councilmember Bolkcom to adopt Resolution No. 2012-23. � Seconded by Councilmember Saefke. FRIDLEY CITY COUNCIL MEETING OF MARCH 26. 2012 PAGE 16 UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 3. Resolution Authorizing application for DNR Local Trail Connection Grant Funds for Unity Hospital Health Walk to Rice Creek Regional Trail. Councilmember Bolkcom asked iP this is being done because it is cheaper and what funds were for Moore Lake. William Burns, City Manager, said there is a local match over $100,000. Councilmember Bolkcom said that the project is $101,000 Dr. Burns confirmed it is a large local match. Councilmember Bolkcom wanted to confirm the project cost. She was concerned the bids would come ln higher because of the oil prices. She asked if staff was comfortable the project could be done for the estimaYed price. Jim Kosluchar, Public Works Director, said the price was adjusted from last year because of the price of oil. Councilmember Bolkcom asked if the City was committed to do this project no matter what the cost was. Mr. Kosluchar answered no, the funds could be returned. Councilmember Varichak asked who would maintain the connections. Mr. Kosluchar answered Public Works would maintain this area. MOTION by Councilmember Bolkcom to adopt Resolution No. 2012-24. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 9. Informal Status Report. Scott Hickok, Communiry Development Director, said April 21 is the first recycling drop-off date for 2o12. The saine articles will be accepted as before and no scrap metal or tires can be dropped of£ Check the website or call 763-572-3�99 to see what is okay to bring and not to bring. FRIDLEY CITY COUNCIL MEETING OF MARCH 26. 2012 PAGE 17 Mayor Lund said the SECA Empty Bowls will be held on Thursday from 4:30 p.m.-7:30 p.m. at Murzyn Hall in Columbia Heights. A free-will donation for soup and salad will be accepted at the door. Councilmember Saefke added any contributions during the month of Marcb qualify for matched funds by corporations in Minnesota. Councilmember Bolkcom said the trailway by Locke Park on Locke Lake is being repaired in the near future. She anticipates it happening in the next few months. ADJOURN: MOTION by Councilmember Barnette to adjourn. Seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOU5LY AND THE MEETING ADJOURNEA AT 10:36 P.M. Respectfully Submitted, Knsta Monsrud Scott Lund Recording Secretary Mayor AGENDA ITEM CITY COUNCIL MEETING OF APRIL 9, 2012 G7Y OF FRIDLEY Date: March 27, 2012 To: William Burns, City Managerd�� �� From: Scott Hickok, Community Development Director lulie Jones, Planning Manager Stacy Stromberg, Planner Subject: Resolution Approving Special Use Permit Request, SP #12-01, by Signcrafters, for St. Philip's Lutheran Church INTRODUCTION The petitioner, Mike Lawrance, of Signcrafters, who is representing St. Philip's Lutheran Church, is requesting a special use permit to allow an electronic message center sign to be part of a new free-standing sign on the church property, which is located at 6180 Hwy 65. The church would like to construct a new 80 sq. ft. free- standing sign, of which 40 sq. ft. of the sign will be the electronic message center. It should be noted that though the overall size of the new sign is 80 sq. ft., the total square footage of the text is 55 sq. ft. PLANNING COMMISSION RECOMMENDATION At the March 21, 2012, Planning Commission meeting, a public hearing was held for SP #12-01. After a 6rief discussion, the Planning Commission recommended approval of SP #12-01, with the stipulations as presented. THE MOTION CARRIED UNANIMOUSLY. PLANNING STAFF RECOMMENDATION City Staff recommends concurrence with the Planning Commission and approval of the attached resolution, including the stipulations listed below. 5 STIPULATIONS 1. The petitioner shall obtain a sign permit and current sign erector license prior to installing any signage on site. 2. Message on electronic message center sign sha(1 noY change more often than authorized under Section 214.07 of the Fridley City Code. 3. Message on electronic message center sign sholl never flash or have motion that may distract vehicular traffic in the orea. 4. Prior to sign instaJlation, the petitioner shall have the noriheast property stake marked to verify sign location meeYS setback requirements. 5. The signage on the existing retaining wall shall be removed within 30 days of comp/etion of the new free-sYandrng sign. � RESOLUTION NO. 2012 - A RESOLUTION APPROVING SPECIAL USE PERMIT SP# 12-01 FOR SIGNCRAFTERS, ON BEHALF OF ST. PHILIPS LUTHERAN CHURCH, THE PROPERTY OWNER OF 6180 HWY 65 NE WHEREAS, Section 214.07.01 of the Fridley City Code allows electronic changeable signs in residential districts, provided the requirements for Institutional Signs can be met, and then by a special use permit; and WHEREAS, on March 21, 2Q12, the Fridley Planning Commission held a public hearing to consider a request by Signcrafters, on behalf of St. Philips Lutheran Church, the property owner of 6180 Hwy 65 in Fridley, on Outlot 1 and 2, Block 2, Moore Lake Highlands 4�' Addition, for a Special Use Permit SP# 12-Q1 for an electronic changeable sign; and WHEREAS, on April 9, 2012, the Pridley City Council approved the stipulations represented in E�ibit A to this resolurion as the conditions approved by the City Council on S�ecial Use Permit SP# 12-01; and WHEREAS, the petitioner, Signcrafters, on behalf of the property owner, St. Philips Lutheran Church, was presented with Exhibit A, the stipulations for SP# 12-01, at the April 9, 2012 City Council meeting; NOW, THEREFORE, BE IT RESOLVED, by the City Council of the Ciry of Fridley that Special Use Permit SP# 12-01 and stipulations represented in Exhibit A are hereby adopted by City Council of the City of Fridley. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS 9�' DAY OF APRIL, 2012. ATTEST: DEBRA A. SKOGEN - CITY CLERK % SCOTT LUND — MAYOR EXHIBIT A SP# 12-01 Special Use Permit for an Electronic Changeable Sign St. Philips Lutheran Church, 6180 Hwy 65 NE, Fridley, MN Stipulations l. The petitioner shall obtain a sign permit and current sign erector license prior to installing any signage on site. 2. Message on elecuonic message center sign shall not change more often than authorized under Section 214.07 of the Fridley City Code. 3. Message on electronic message center sign shall never flash or have mofion that may distract vehicular traffic in the area. 4. Prior to sign installation, the petitioner shall have the northeast property stake marked to verify sign location meets setback requirements. 5. The signage on the existing retaining wall shall be removed within 30 days of completion of the new free-standing sign. � of Fridley Land Use Application SP #12-01 GENERAL INFORMATION Applicant: Signcrafter's Mike Lawrance 2405 Annapolis Lane N #200 Plymouth MN 55441 Requested Action: Special Use Permit for an automatic changeable Purpose: To install a new free-standing sign with an electronic message center sign Existing Zoning: R-3 (Multi-Family) Location: 6180 Hwy 65 Size: 330,620 sq. ft. 7.59 acres Existing Land Use: St. Philips Lutheran Church Surrounding Land Use & Zoning: N: Miller Funeral Home & C-3 E: Hwy 65 & ROW 5: Moore Lake & Water W: Sin�le FamilV Home & R-1 Comprehensive Plan Conformance: Consistent with Plan Zoning Ordinance Conformance: Section 214.07 of the City of Fridley sign code requires a special use permit for an automatic changeable sign. Zoning History: 1955 — Lot is platted 1958 —Church is constructed. 1959 — Education building constructed. 1965 — Sanctuary constructed. 1978 — Garage constructed. 1978 — Pylon sign permit. 1991— Building addition 1994 — Pylon sign permit. 1994 — Deck permit. Legal Description of Property: OutLot 1 and 2, Block 2, Moore Lake Highlands 4`" Addition � March 21, 2012 SPECIAL INFORMATION Public Utilities: The building is connected. Transportation: The property is accessed off of West Moore Lake Drive. Physical Characteristics: The property is encompassed with 2 lots that contain the church building, a few detached buildings, and parking area. It is bordered hy Moore Lake on the south and also contains several landscaped areas. SUMMARY OF PROIECT The petitioner, Mike Lawrance, of Signcrafter's, who is representing St. Philip's Church, is requesting a special use permit to allow an electronic message center sign to be part of a new free-standing sign that will be constructed on the church property, which is located at 6180 Hwy 65. SUMMARY OF ANALYSIS City Staff recommends approval of this speciol use permrt, with stipulations. Electronic changeable signs are an approved special use in a residentially zoned district with an institution on it, provided the sign complies with Aerial of the Site CITY COUNCIL ACTION/60 DAY ACTION DATE City Council — April 9, 2012 60 Day Date — April 16, 2012 Staff Report Prepared by: Stacy Stromberg LAND USE APPLICATION SPECIAL USE PERMIT #12-01 REQUEST The petitio�er, Mike Lawrence, of Signcrafters, who is representing St. Philip's Lutheran Church, is requesting a special use permit to allow an electronic message center sign to be part of a new free-standing sign on the church property, which is located at 6180 Hwy 65. The church would like to construct a new 80 sq. ft. free- standing sign, of which 40 sq. ft. of the sign will be the electronic message center. It should be noted that though the overall size of the new sign is 80 sq. ft., the total square footage of the text is 55 sq. ft. HiSTORY AND ANALYSIS The subject property is located on the southwest corner of Hwy 65 and West Moore Lake Drive. The property is zoned R-3, Multi-Family. The properties to the west are zoned R-1, Single-Family. The properties to the north and east are zoned C-3, General Shopping. The original church building was constructed in 1958 and there have been several additions to the building since then. This property has had two free-standing sign permits in � the past, one was issued in 1978 and the other was issued � _ °-y� •° � in 1994. The permit issued in 1978 was for the existing M� � ] � .. � �;:` �``. .r , .,.,�,�:�., ,,E �". ._ _ corner monument sign, which bears the name of the church. The other 1994 sign permit was for a temporary sign permit, which was for a two year time period. After the expiretion of that temporary permit, staff noticed that the sign had not been removed and informed the church of the violation. The church ended up requesting and obtaining a one-year extension from the City Council on the temporary sign permit. �.�.,..., j! The Planning Commission and City Council may recall, _`�� that in 2006 a sign code text amendment was approved �'�` "% — to allow institutions (churches, schools, hospitals, medical t:'� clinics) that are located on residentially zoned property to .,... .. ri r' have similar standards for signage as commercially zoned property, provided certain code requirements can be met. The new language for free-standing signs states that institutions are allowed to have one free-standing sign per development, with a maximum size of 80 sq. ft. provided that the sign is placed a minimum of 50 ft. from any neighboring residentially zoned property (not including a residential site an institution is located on), the illuminated sign face is 10 perpendicular to an adjacent roadway and the sign does not create glare that wiflim pact adjacent residential properties. The proposed sign will be located approximately 450 ft. from the closest residential property, which is located at 6209 Baker Avenue. It will be approximately 620 ft. from the property located at 916 West Moore Lake Drive. The illuminated sign faces will ae facing north and south, which is perpendicular to Hwy 65 and parallel to West Moore Lake Drive, therefore reducing the likelihood of creating glare to adjacent residential properties. The proposed sign also complies with the maximum size requirements of 80 sq. ft., height requirement of 25 ft., and is proposed to be approximately 10 ft. from the east property line and 50 ft. from the north property line, therefore complying with the 10 ft. setback from a property line requirement. The petitioner is requesting a special use permit to allow the electronic message center as part of the new free-standing sign. Electronic changeable signs are an approved special use in any zoning district, except residential, unless meeting the requirements for Institutional Signs; provided the electronic message center sign doesn't change more often than once every 45 seconds. The sign also needs to be in conformance wiih all other sign requirements, which as stated above, it does. City staff hasn't heard from any neighboring property owners. City Staff recommends approval o/ the speciol use permit as electronic changeable signs are an approved specio! use in a residential disirict provided all requirements for Insiitutional5ignoge can be met subject to stipulations. STIPULATIONS City Staff recommends that if the special use permit is grented, the following stipulations be attached. 1. The petitioner shall obtarn a sign permrt and current sign erector license prior to installing any signage on site. 2. Message on electronic message center sign shall not change more often than authorized under Section 214.07 of the Fridley City Code. 3. Message on electronic message center sign sha/l never flash or have motion that may distract vehicular traffic i� the area. 4. Prior to srgn installatron, the petitioner sholl have the northeast property stake marked to verify sign location meets setbock requirements. 5. The signage on the existing retoining wall shall be removed within 30 days of completion of the new free-sianding sign. 11 AGENDA ITEM CITY COUNCIL MEETING OF APRIL 9, 2012 CfTY OF FRIDLEY 1'0: ��G`illiam W. Aums, Cit� blanager ��� From: Deboxah Dahl, Human Resousces Directot� Donovan Abbott, Public Safety Duectoi Date: April 5, 2012 Re: CON'TRAC'I' WITH POLICE PATROL UNION We aze pleased and proud [o announce a two-year tentadve agxeement has been xeached between the Ciry of Fridley and the Police Patrol bargauung unit (I,.H.L.S. Local #179) for the 30L and 2013 calendax yeaxs. As }>ou may recall, the Ciry xecentlp entered into negotiauons and xeached what we believe is a very posinve and xe�3sonable agreement. The patcol unit has taken a vote and have approved thc ter�tanve a�eement, which is attached for poux xeview and final Council appcQVal at the t�pn19, 2012 Council Meeting. We think it is also important to point out that this was a vexy productive and positive pxocess and fell within the directic�es and guidance that Council established in Novembes of 2011. The rerms �f the agxeement are suci�snarized below: SUMMARY OF CHANGES: 1. Article 33 - Duration (Two j�ears - 2012 and 2013) 2. Ardcle 17 - Insurance Emplopees in this bazgaii��g unit cvill receive the sune insuxance benefit package as all Qthex Citp employees, which includes the 6ealth, dental and life insucance and altemarives (cash opuon or benefit leave). Having the same benefit package aeross the board has been a long-stanclingpattern and valued pxacnce at Fridley, which is unique to our City and difficult to defend, given the xeducrions in budgets and uncertaintu of the economy. 3. Article 22 - Wages In comparing wages of Pridlcy's patrol officers to the City's established peer list, our research found that oux �oup continues to ttail behind thc maxket b� 5-7% on a�rerage. As in most negotiarions, wages aze the typically the biggest sucking point W'ith the economy and the City's budget show-ing • Page 1 ,' .1 slight signs of unprovement, the unions �vere very xeasonable and undexstanding through negotiauons, particulaxly �c7th Gcagc s. The tentarive agteement is callu�g fox a genexal increase of 1;/o on Jan. 1, 2012 and anothex 1;% on Julj� 1, 2012, as well as a 2% on Jan. 1, 2013. 5. Article 22.3 - Shift DiffecenUal (New) Both paxties a�eed ta pxo�2de for an e��cning shift diffeTential fox thosc employees �cho wosk between 71 p.m. and 7 a.m. according to the follo�ving schedule: a. An addiuonal $0.50 per houc �vill be paid for xegulat houts worked. b. t1n addirional one and one-half (1 1/2) tunes the shift differendal ($0.75 pex ho�) will be paid in addidon to oveTdme compensarion for hoars woxked in addidon to a xegularly scheduled shift, and fox call back ox eaxly xeport to a shifc, far extta dut� houcs, or voluntary ovemme shiFts. c. An addiuonal two (2) rimes the shift differential ($1.00 pex hour) will be paid in addirion to ovectnrie pa}- for overtime houxs worked on a holiday. d. Shift diffexential does not apply to nn}� leave t�•pe taken fox ho�s dunng those hours. 6. Article 25.4 - Annual Leave Sell-back Program The union a�eed to eliminate the �lnnual I,eave Se11-back pxogxam fxom rhe contxact in considexation of addi»g 40 hours ro the annual leave cap of 240 houTS and including in the conteact the y�eai-end payout of xemaining holiday houxs (see Acdcle 26.4 bclo�v). This is a significant decision and one that the Ciq� woxked very hard to negodate out of the contracts at the c�ecdon of Councd. In eschange fox the eliminadon of the annualleave sell-back program, the Cit�� agreed to incxease the annual leave cap.'I'he curxent cap is 240 houxs foT non-union, the patrol utuon and sexgeant's union. This agteement raises the cap to 280 hours (35 days). Employees would not earn addirional annual leave, just that they would be allowed to carcy over 40 mote hoars into the follo�ving year. The City's annual leave psogram was established in 1983 to xemove sick leave and replace it �vith annual leave (the Ciry's vexsion oE Pessonal Time Off - P1'O). The cap 6as not been adjusted since its inception. Oux tesearch sho�vs that Fxidley's cap is well below what other cities offer in terms of a cap. Fridley has been at 30 days where oar comparables are at 44. This recommendauon will put Fndley moxe in line uith what oTher ciries aze offering. 7. P,rticle 2G.4 - Holiday Pay Both pazdes agxeed to specify in the conuact that any ��unused" holiday time �vould be paid out at the end of the year. This has been a long-standing pxacuce in the Police Depattment (patrol officexs and patxol sesgeants have been paid out for 24 to 88 hours of holiday time), however, there has nevex been a wxirten procnsion ui the conrtact fox this. The current contxact pxo�ndes for eleven • Page 2 13 RESOLUTION NO. - 2012 A RESOLUTION APPROVING AND AUTHORIZING SIGNING AN AGREEMENT WITH POLICE OFFICERS OF THE CITY OF FRIDLEY POLICE DEPARTMENT FOR THE YEARS 2012 & 2013 WHEREAS, the Law Enforcement Labor Services, Inc. as bargaining representative of the Police Officers of the Ciry of Fridley, has presented to the Ciry of Fridley various requests relating to the wages and working conditions of Police Officers of the Police Department of the Ciry of Fridley; and WHEREAS, the City of Fridley has presented various requests to the Union and to the Employees relating to �vages and working conditions of Police Officers of the Police Department of the Ciry of Fridley; and WHEREAS, representatives of the Union and the City have met and negotiated regarding the requests of the Union and the City; and WI-IEREAS, representatives of the Union and the City have reached an agreement (E�chibit "A") and , WHEREAS, Union members voted in favor of adopting the agreement, NOW, 7'HEREFORE, BE IT RESOLVED that the City Council hereby approves said Agreement and that the Mayor and the City Manager are hereby authorized to execute the attached Agteement (Exhibit "A") relating to wages and wocking conditions of Police Officers of the City of Fridley. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS DAY OF . 2012. ATTEST: D�BRA SKOGEN - CITY CLERK SCOTT J. LiJND - MAYOR 15 EXHIBIT "A" LABOR AGREEMENT BETWEEN THE CITY OF FRIDLEY AND LAW ENFORCEMENT LABOR SERVICES, INC. LOCAL NO. 119 2012 & 2013 7is LABOR AGREEMENT BETWEEN THE CITY OF FRIDLEY AND LAW ENFORCEMENT LABOR SERVICES, INC. LOCAL NO. 119 2012 & 2013 TABLE OF CONTENTS ARTICLE PAGE 1. Purpose of Agreement 1 2. Recognition 1 3. Definitions 1 4. Employer Security 3 5. Employer Authority 3 6. Union Security 3 7. Employee Rights - Grievance Procedure 4 8. Savings Clause 7 9. Seniority 7 10. Discipline 8 11. Constitutional Protection 9 12. Work Schedules 9 13. Ovex�time 9 14. Court Time 10 �i7 15. Call Back Time 16. Working Out of Classi�cation 17. Insurance 18. Standby Pay 19. Uniforms 20. P.O.S.T. Training 21. Longevity and Educational Incentive 22. Wage Rates 23. Legal Defense 24. Probationary Periods 25. Annual Leave 26. Holidays 27. Short-term Disability 28. Bereavement Leave Pay 29. Jury Pay 30. Compensatory 1�me 31. Employee Education Program 32. Pay for Investigators or School Resource Officer 33. BMC Case No. 85-PN-486-A. Issue 8 34. Waiver 35. Duration i.iJ 10 11 11 13 13 13 13 15 15 16 16 18 18 19 20 20 20 21 21 22 22 LABOR AGREEMENT BE7�'VEEN THE CITY OF FRIDLEY AND LAW ENFORCEMENT LABOR SERVICES, INC. LOCAL NO. 119 Article 1. Purpose of Agreement This Agreement is entered into between the City of Fridley, hereinafter called the Employer, and Law Enforcement Labor Services, Inc., hereinafter called t.he Union. It is the intent and purpose of this Agreement to: 1.1 Establish procedures for the resolution of disputes concerning this Agreement's interpretation and/or application; and 12 Place in written form the parties' agreement upon terms and conditions of employment for the duration of this Agreement. Article 2. Recognition 2.1 The Employer recognizes the Union as the exclusive representative, under Minnesota Statutes, Section 179A.03, subdivision 8, for all police personnel in the following job classifications: 1. Police Officer 22 In the event the Employer and the Union are unable to agree as to the inclusion or exclusion of a new or modified job class, the issue shall be submitted to the Bureau of Mediation Services for determination. Article 3. Definitions 3.1 Union Law Enforcement Labor Services, Inc. '�9 3.2 Union Member A member of the Law Enforcement Labor Services, Inc. 3.3 Emnlovee A member of the exclusively recognized bargaining unit. 3.4 Department The Fridley Police Department. 3,5 Emnlover The City of Fridley. 3.6 Chief The Public Safety Director of the Fridley Police Department. 3.7 Union Officer Officer elected or appointed by the Law Enforcement Labor Services, Inc. 3.8 Inve sti eator/Dete ctive An Employee specifically assigned or classified by the Employer to the job classification and/or job position of Investigator/Detective. 3.9 Overtime Work performed at the express authorization of the Employer in excess of the Employee's scheduled shift. 3.10 Scheduled Shift A consecutive work period, including rest breaks and a lunch break. 3.11 Rest Breaks Periods during the scheduled shift during which the Employee remains on continual duty and is responsible for assigned duties. � 3.12 Lunch Break A period during the scheduled shift during which the Employee remains on continual duty and is responsible for assigned duties. 3.13 Strike Concerted action in £ailing to report for duty, the willful absence from one's position, the stoppage of work, slow-down, or abstinence in whole or in part fiom the full, faithful; and proper performance of the duties of employment for the purposes of inducing, influencing or coercing a change in the conditions or compensation or the rights, privileges or obligations of employment. Article 4. Employer Security The Union agrees that during the life of this Agreement the Union will not cause, encourage, participate in or support any strike, slow-down or other interruption of or int.erference with the normal functions of the Employer. Article 5. Employer Authority 5.1 The Employer retains the full and unrestricted right to operate and manage all manpower, facilities, and equipment; to establish functions and programs; to set and amend budgets; to determine the utilization of technology; to establish and modify the organizational structure; to select, direct, and determine the number of personnel; to establish work schedules, and to perform any inherent managerial function not specifically limited by this Agreement. 5.2 Any term and condition of employment not specifically established or modified by this Agreement shall remain solely withiii the discretion of the Employer to modify, establish, or eliminate. Article 6. Union Security 6.1 The Employer shall deduct from the wages of Employees who authorize such a deduction in writing an amount necessary to cover monthly Union dues. Such monies shall be remitted as directed by the Union. 6.2 The Union may designate Employees from the bargaining unit to act as a steward and an alternate and shall inform the Employer in writing of such choice and changes in the position of steward and/or alternate. 6.3 The Employer shall make space available on the Employee bulletin board for posting Union notice(s) and announcement(s). �1 6.4 The Union agrees to indemnify and hold the Employer harmless against any and all claims, suits, orders, or judgments brought or issued against the Employer as a result of any action taken or not taken by the Employer under the provisions of this Article. Article 7. Employee Rights — Grievance Procedure 7.1 Definition of a Grievance A grievance is defined as a dispute or disagreement as to the interpretation or application of the specific terms and conditions of this Agreement. 7.2 Union Representatives The Employer will recognize Representatives designated by the Union as the grievance representatives of the bargaining unit having the duties and responsibilities established by this Article. The Union shall notify the Employer in writing of the names of such Union Representatives and of their successors when so designated as provided by Section 6.2 of this Agxreement. 7.3 Processing of Grievance It is recognized and accepted by the Union and the Employer that the processing of grievances as hereinafter provided is limited by the job duties and responsibilities of the Employees and shall therefore be accomplished during normal working hours only when consistent with such Employee duties and responsibilities. The aggrieved Employee and a Union Representative shall be allowed a reasonable amount of time without loss in pay when a grievance is investigated and presented to the Employer during normal working hours provided that the Employee and the Union Representative have notified and received the approval of the designated supervisor who has determined that such absence is reasonable and would not be detrimental to the work programs of the Employer. 7.4 Procedure Grievances, as defined by Section 7.1, shall be resolved in conformance with the following procedure: St2D 1 An Employee claiming a violation concerning the interpretation or application of this Agreement shall, within twenty-one (21) calendar days after such alleged violation has occurred, present such grievance to the Employee's supervisor as designated by the Employer. The Employer-designated � representative will discuss and give an answer to such Step 1 grievance within ten (10) calendar days after receipt. A grievance not resolved in Step 1 and appealed to Step 2, shall be placed in writing setting forth the nature of the grievance, the facts on which it is based; the provision or provisions of the Agreement allegedly violated; the remedy requested; and shall be, appealed to Step 2 within ten (10) calendar days after the Employer-designated representative's final answer to Step 1. Any grievance not appealed in writing to Step 2 by the Union within ten (10) calendar days shall be considered waived. Step 2 If appealed, the written grievance shall be presented by the Union and discussed with the Employer-designated Step 2 representative. The Employer- designated representative shall give the Union the Employer's answer in writing within ten (10) calendar days after receipt of such Step 2 grievance. A grievance not resolved in Step 2 may be appealed to Step 3 within ten (10) calendar days following the Employer-designated representative's final answer in Step 2. Any grievance not appealed in writing to Step 3 by the Union within ten (10) calendar days shall be considered waived. Step 2a If the grievance is not resolved at Step 2 of the grievance procedure, the parties, by mutual agreement, may submit the matter to mediation with the Bureau of Mediation Services. Submitting the grievance to mediation preserves timeliness for Step 3 of the grievance procedure. Any grievance not appealed in writing to Step 3 by the Union within ten (10) calendar days of mediation shall be considered waived. Step 3 A grievance unresolved in Step 2 or Step 2a and appealed to Step 3 by the Union shall be submitted to arbitration subject to the provisions of the Public Employment Labor Relations Act of 1971, as amended. The selection of an arbitrator shall be made in accordance with the "Rules Governing the Arbitration of Grievances" as established by the Bureau of Mediation Services. 7.5 Arbitrator's Authoritv a. The arbitrator shall have no right to amend, modify, nullify, ignore, add to, or subtract from the terms and conditions of this Agreement. The arbitrator shall consider and decide only the specific issue(s) submitted in writing by the Employer and the Union, and shall have no authority to make a decision on any other issue not so submitted. �3 b. The arbitrator shall be without power to make decisions contrary to, or inconsistent with, or modifying or varying in any way to application of laws, rules, or regulations having the force and effect of law. The arbitrator's decision shall be submitted in writing within thirty (30) days following close of the hearing or the submission of briefs by the parties, whichever be later, unless the parties agree to an extension. The decision shall be binding on both the Employer and the Union and shall be based solely on the arbitrator's interpretation or application of the express terms of this Agreement and to the facts of the grievance presented. a The fees and expenses for the arbitrator's services and proceedings shall be borne equally by the Employer and the Union provided that each party shall be responsible for compensating its own representatives and witnesses. If either party desires a verbatim record of the proceedings, it may cause such a record to be made, providing it pays for the record. If both parties desire a verbatim record of the proceedings the cost shall be shared equally. 7.6 Waiver If a grievance is not presented within the time limits set forth above, it shall be wnsidered "waived." If a grievance is not appealed to the next step within the specified time limit or any agreed extension thereof, it shall be considered settled on the basis of the Employer's last answer. If the Employer does not answer a grievance or an appeal thereof within the specified time limits, the Union may elect to treat the grievance as denied at that step and immediately appeal the grievance to the next step. The time limit in each step may be extended by mutual written agreement of the Employer and the Union in each step. 7.7 Choice of Remedv If, as a result of the written Employer response in St.ep 2 or 2a, the grievance remains unresolved, and if the grievance involves the suspension, demotion or discharee of an Employee who has completed the required probationary period, the grievance may be appealed either to Step 3 of Article 7 or to another procedure such as � eteran's Preference or Fair Emplovment. If appealed to anYprocedure other than Sten 3 of this Article, the grievance is not subject to the arbitration proceduie as provided in Step 3 of Article 7. The aggrieved Employee shall indicate in writing which procedure is to be utilized - Step 3 of Article 7 or an alternate procedure - and shall sign a statement to the effect �4 that the choice of the alternate procedure precludes the aggrieved Employee from making a subsequent appeal through Step 3 of E�ticle 7. Except with respect to statutes under jurisdiction of the United States Equal Opportunity Commission, an employee pursuing a statutory remedy is not precluded from also pursuing an appeal under this grievance procedure. If a court of competent iurisdiction rules contrar�to the rulin� in EEOC u. Board of Goaernors of State Colleges and Uniuersities. 957 F2d 424 (7�h Cir.), cert. denied, 506 U.S. 906. 113 S.Ct. 299(1992), or if Board of Gouernors is judiciallv or legislativelv overruled, this naraeraph of this Section shall be null and void. Article 8. Savings Clause This Agreement is subject to the laws of the United States, the State of Minnesota and the City of Fridley. In the event any provision of this Agreement shall be held to be contraiy to law by a court of competent jurisdiction from whose final judgment or decree no appeal has been taken within the time provided, such provisions shall be voided. All other provisions of this Agreement shall continue in full force and effect. The voided provision may be renegotiated at the written request of either party. Article 9. Seniority 9.1 Seniority shall be determined by the Employee's length of continuous employment with the Police Department and posted in an appropriate location. Seniority rosters may be maintained by the Chief on the basis of time in grade and time within specific classiiications. 92 During the probationary period, a newly hired or rehired Employee may be discharged at the sole direction of the Employer. During the probationary period a promoted or reassigned Employee may be replaced in his/her previous position at the sole discretion of the Employer. 9.3 A reduction of work force will be accomplished on the basis of seniority. Employees shall be recalled from layoff on the basis of seniority. An Employee on layoff shall have an opportunity to return to work within two years (2) of the time of his/her layoff before any new Employee is hired. 9.4 Senior Employees will be given preference with regard to transfer, job classification assignments and promotions when the job-relevant qualifications of Employees are equal. �5 9.5 Senior qualified Employees shall be given shift assignments preference after eighteen (18) months of continuous full-time employment. 9.6 One continuous scheduled annual leave period shall be selected on the basis of seniority until March ls� of each calendar year. After March lst, scheduled annual leave shall be on a first-come, first-served basis. 9.7 Employees shall lose their seniority for the following reasons: a. Discharge, if not reversed; b. Resignation; c. Unexcused failure to return to work after expiration of a vacation or formal leave of absence. Events beyond the control of the Employee, which prevent the Employee from returning to work will not cause loss of seniority; d. Retirement. Article 10. Discipline 10.1 The Employer will discipline Employees for just cause only. Discipline will be in one or more of the following forms: a. oral reprimand; b. written reprimand; c. suspension; d. demotion; or e, discharge. 10.2 Suspensions, demotions and discharges will be in written form. 10.3 Written reprimands, notices of suspension, and notices of discharge which are to become part of an Employee's personnel file, shall be read and acknowledged by signature of the Employee. Employees and the Union will receive a copy of such reprimands and/or notices. 10.4 Employees may examine their own individual personnel files at reasonable times under the direct supervision of the Employer. 10.5 Discharges will be preceded by suspension without pay for forty (40) regularly scheduled working hours unless otherwise required by law. �l:l 10.6 Employees will not be questioned concerning an investigation of disciplinary action unless the Employee has been given an opportunity to have a Union representative present at such questioning. 10.7 Grievances relating to this Article shall be initiated by the Union in Step 2 of the grievance procedure under Article 7. Article 11. Constitutional Protection Employees shall have the rights granted to all citizens by the United States and Minnesota State Constitutions. Article 12. Work Schedules 12.1 The normal work year is an average forty (40) hour work week for full-time Employees to be accounted for by each Employee through: a. hours worked on assigned shifts; b. holidays; c. assigned training; e. authorized leave time. 12.2 Nothing contained in this or any other Article shall be interpreted to be a guarantee of a minimum or maximum number of hours the Employer may assign Employees. Article 13. Overtime 13.1 Employees will be compensated at one and one-half (1-1/2) times the Employee's regular base pay rate for hours worked in excess of the Employee's regularly scheduled shift. Changes of shifts do not qualify an Employee for overtime under this r�,rticle. 132 Overtime will be distributed as equally as practicable. 13.3 Overtime refused by Employees will for record purposes under �ticle 132 be considered as unpaid overtime worked. 13.4 For the puipose of computing overtime compensation, overtime hours worked shall not be pyramided, compounded or paid twice for the same hours worked. 13.5 Overtime will be calculated to the nearest fifteen (15) minutes. �7 13.6 Employees have the obligation to work overtime or call backs if requested by the Employer unless unusual circumstances prevent the Employee fiom so working. Article 14. Court Time 14.1 An Employee who is required to appear in court during his/her scheduled off- duty time shall receive a minimum of three (3) hours pay at one and one-half (1.5) times the Employee's base pay rate. The City may assign the Employee to stand by pending the notification of their appearance being required. Unless otherwise specified by the City or the prosecutor, this period of standby shall commence three (3) hours prior to the time scheduled for the Employee's appearance in court. The Employee will be compensated for three (3) hours at their base rate as provided in Article 18 for each day on standby. 14.2 If the court appearance is scheduled during the Employee's off time, and if the court appearance is cancelled, the Employee will be noti£ied by the end of the business day (5:Q0 p.m.) preceding the court appearance. If notification of cancellation is not made by the end of the business day (5:00 p.m.) preceding the court appearance, the Employee will receive standby pay for t.hree (3) hours at their base rate of pay. 14.3 The business day notice applies to all court cases for which the Employee receives notice resulting from their employment with the City. 14.4 Employees who are assigned to standby for a court appearance during their off- duty time, and who are then notified by the prosecuting attorney that they need to appear and who do appear in court shall receive a minimum of three (3) hours pay at one and one-half (1.5) times the Employee base rate of pay. Employees will not be paid both standby pay and for three (3) hours at one and one-half their base rate of pay. 14.5 Employees will be required to appear for the Court Trials/Traffic Coux-t, for Contested Omnibus Hearings, for Implied Consent Hearings, and for any other court appearance where the City or the prosecuting attorney directs that Standby is not feasible. Article 15. Call Back Time 15.1 An Employee who is called to duty during the Employee's scheduled off-duty time shall receive a minimum of three (3) hours pay at one and one-half (1-1/2) times the Employee's base pay rate. An extension or early report to a regularly scheduled shift for duty does not qualify the Employee for the three (3) hour minimum. � 15.2 An Employee who works extra-duty work (outside employment) during the Employee's scheduled off-duty time shall receive a minimum of two (2) hours pay at one and one-half (1 '/s) times the Employee's base pay rate. Extra-duty hours worked on a holiday, as defined in Article 26, shall be compensated at two (2) times the Employee's base pay rate. Article 16. Working Out of Classification Employees assigned by the Employer to assume the full responsibilities and authority of a higher job classification shall receive the salary schedule of the higher classification for the duration of the assignment. Article 17. Insurance 17.1 For the calendar year 2012, for Employees who choose single coverage in the Base Plan, the Employer will contribute up to $620.87 per month per employee toward the single health insurance premium and $1,318.37 per month toward the dependent health insurance premium, or an amount equal to that provided to non-union employees, whichever is greater, in accordance with the Employer's Flexible Benefit Plan. For the calendar year of 2013, for those Employees who choose wverage in the Base Plan, the Employer will contribute the same amount provided to non- union employees. If the 2013 rate for the non-union employees is less, the 2012 contribution will remain in effect. 17.2 For the calendar year 2012, for Employees who choose the high deductible health plan and health reimbursement arrangement (HRA), the Employer will contribute $520.87 per month toward the single health insurance premium and $1218.37 toward dependent health insurance premium, or an equal amount to that provided to non-union employees, whichever is greater, in accordance with the Employer's Flexible Benefit Plan. For the calendar year of 2013, for those Employees who choose coverage in the HRA Plan, the Employer will contribute the same amount provided to non- union employees. If the 2013 rate for the non-union employees is less, the 2012 contribution will remain in effect. 17.3 For the calendar gear 2012, for Employees who choose the high deductible health plan and health reimbursement arrangement (HR�A), the Employer will contribute $100 per month toward the VEBA Trust Account, or an equal amount to that provided to non-union employees, whichever is greater, in accordance with the Employer's Flexible Benefit Plan � For the calendar year of 2013, for those Employees who choose coverage in the HRA Plan, the Employer will contribute the same amount provided to non- union employees in their HRA VEBA. If the 2013 rate for the non-union employees is less, the 2012 contribution will remain in effect. 17.4 For the calendar year 2012, for Employees who choose the high deductible health plan and healthcare savings account (HSA), the Employer will contribute $520.87 per month toward single health insurance premium and $1,218.37 toward the dependent health insurance premium, or an equal amount to that provided to non-union employees, whichever is greater, in accordance with the Employer's Flexible Benefit Plan. For the calendar year of 2013, for those Employees who choose coverage in the HSA Plan, the Employer will contribute the same amount provided to non- union employees in their HSA account. If the 2013 rate for the non-union employees is less, the 2012 contribution will remain in effect. 17.5 For the calendar year 2012, for Employees who choose the high deductible health plan and healthcare savings account (H.S.A.), the Employer will wntribute $100 per month toward the H.S.�. Account, or an equal amount to that provided to non-union employees, whichever is greater, in accordance with the Employer's Flexible Benefit Plan. For the calendar year 2013, for Employees who choose the high deductible health plan and healthcare savings account (H.S.A.), the Employer will contribute an equal amount toward the HSA as is provided to non-union employees, whichever is greater, in accordance with the Employer's Flexible Benefit Plan. 17.6 For the calendar years of 2012 and 2013, for Employees who choose dental coverage, the Employer will contribute up to $22 per month toward the dental insurance premium, or an amount equal to that provided to non-union employees, whichever is greater, in accordance with the Employer's Flexible Benefit Plan. 17.7 The Employer will provide group term life insurance with a maximum of $25,000 per Employee and additional accidental death and disability insurance with a maximum of $25,000 per Employee (current cost is $4.25 per month), or an amount equal to that provided to non-union employees, whichever is greater, in accordance with the Employer's Flexible Senefit Plan. 17.8 For the calendar year 2012, in accordance with the Employer's Flexible Benefit Plan, Employees have the option during an open enrollment period or during approved qualified events to decline health or dental insurance coverage, provided they provide proof of coverage elsewhere. In lieu of electing health and dental benefits, Employees may elect the option of having ten (10) additional Benefit Leave Days or a monthly cash benefit of $448.92, or the amount equal to or greater than the amount provided to non-union employees. � For the calendar year 2013, for Employees who choose to waive the health and dental programs and elect Benefit Leave Days or the monthl5� cash option, the Employer will contribute the same amount provided to non-union employees, whichever is greater, in accordance with the Employer's Flexible Benefit Plan. If the 2013 amount for the non-union employees is less, the 2012 amount will remain in effect. Benefit Leave days are required to be used within in the calendar y�ear and may not 6e carried into the following year. Article 18. Standby Pay Employees required by the Employer to standby shall be paid for such standby time at the rate of one hour's pay for each hour on standby. Employees placed on standby shall remain able to respond within a reasonable time. Such reasonable time, if not otherwise specified at the time of assignment to standby, shall be one (1) hour to the police department, assigned court location, or other location designated by the City. Employees placed on standby shall remain available to be contacted by the Employer by normal means to include phone or wireless communication devices. Employees assigned to standby for wurt appearances shall be compensated for three (3) hours of pay for each day or portion of a day on standby. Article 19. Uniforms The Employer shall provide required uniform and equipment items. Article 20. P.O.S.T. Training 20.1 Employer shall assign training at Employer's expense for Police Officers to complete 48 hours of P.O.S.T. Board approved education during each three- year licensing period. 202 Employer shall pay the cost of maintaining P.O.S.T. licensure for all Employees required to maintain the license. Article 21. Longevity and Educational Incentive Effective July 1, 1978, the following terms and conditions are effective, except that Employees hired after January 1, 1987, shall not be eligible for educational incentive. 21.1 After four (4) years of continuous employment each Employee shall choose to be paid three percent (3%) of the Employee's base rate or supplementary pay, based on educational credits as outlined in 21.6 of this Article. � 212 After eight (8) years of continuous employment, each Employee shall choose to be paid supplementary pay of five percent (5%) of the Employee's base rate, or supplementary pay based on educational credits, as outlined 21.6 of this Article. 21.3 After twelve (12) years of continuous employment, each Employee shall choose to be paid supplementary pay of seven percent (7%) of the Employee's base rate, or supplementary pay based on educational credits, as outlined in 21.6 of this Article. 21.4 After sixteen (16) years of continuous employment, each Employee shall choose to be paid supplementary pay of nine percent (9%) of the Employee's base rate, or supplementary pay based on educational credits, as outlined in 21.6 of this Article. 21.5 Employees may choose supplementary pay either for length of service or for educational credits no more often than once every twelve (12) months. 21.6 Supplementary pay based on educational credits will be paid to Employees after twelve (12) months of continuous employment at the rate of: Educational credits stated in terms of colle�e quarter credits 45-89 90 - 134 135 - 179 180 or more Percentage Pay increment 3% 5% 7% 9% Not all courses are to be eligible for credit. Courses receiving quali ing credits must be job-related. (Thus, a four-year degree is not automatically 180 credits - or two year certificate is not automatically 90 credits.) Job-related courses plus those formally required to enter such courses shall be counted. For example: If Principles of Psychology (8 credits) is required before taking Psychology of Police Work (3 credits), completion of those courses would yield a total of eleven qualifying credits. C.E.U.'s (Continuing Education Units) in job- related seminars, short courses, institutes, etc. shall also be counted. The Employer shall determine which courses are job-related. Disputes are grievable based on the criteria outlined in the award of Minnesota Bureau of Mediation Services Case No. 78-PN-370-A. �T+ Article 22. Wage Rates 22.1 The following hourly wage rates will apply fox� 2012 & 2013 (amounts may be rounded to two decimal points): Start Af'ter six months After one y�ear After two years Af'ter three years Jan. 1 2012 20.66 22.26 25.51 28.56 31.75 July 1 2012 20.87 22.48 25.77 28.85 32.07 Jan. 1 2013 21.29 22.93 26.29 29.43 32.71 22.2 Employees classified or assigned by the Employer to the following job classifications or positions will receive five percent (5%) in addition to their regular wage rate: Investigative (detective); School Resource Officer; Rental Housing Ofizcer and Drug Task Force Investigator 222 An Employee certified for and assigned to Field Training Officer (FTO) duties shall receive overtime pay equal to the overtime rate or compensatory time at time and one-half up to the limit in Article 30, in addition to any other regular overtime worked, for any single shift worked as Field Training Officer as indicated: Shift of 12 or more hours two (2) hours Shift of 8 to 11.9 hours one and one half (1-1/2) hours Shift of 4 to 7.9 hours one (1) hour 22.3 Employees who work between 11 p.m. and 7 a.m. shall be paid a shift differential for hours worked between those times, according to the following schedule: a. An additional $0.50 per hour will be paid for regular houx�s worked. b. An additional one and one-half (1 1/2) times the shift differential ($0.75 per hour) will be paid in addition to overtime compensation for hours worked in addition to a regularly scheduled shift, and for call back or early report to a shift, for extra duty hours, or voluntary overtime shifts. c. An additional two (2) times the shift differential ($1.00 per hour) will be paid in addition to overtime pay for overtime hours worked on a holiday. � d. Shift differential does not apply to any leave type taken for hours during those hours. Article 23. Legal Defense 23.1 Employees involved in litigation because of proven negligence, or non- observance of laws, or of a personal nature, may not receive legal defense by the municipality. 23.2 Any Employee who is charged with a traffic violation, ordinance violation or criminal offense arising from acts performed within the scope of his/her employment, when such act is performed in good faith and under the direct order of his/her supervisor, shall be reimbursed for attorney's fees and court costs actually incurred by such Employee in defending against such charge. 23.3 Employer will provide protection for all Employees against false arrest charges. Article 24. Probationary Periods All newly hired or rehired Employees will serve a twelve (12) month probationary period. Article 25. Annual Leave 25.1 Each Employee shall be entitled to annual leave away from employment with pay. Employees shall accrue annual leave based on an average eight (8) hour work day. Annual leave may be used for scheduled or emergency absences from employment. Annual leave pay shall be computed at the regular rate of pay to which such an Employee is entitled; provided, however, that the amount of any compensation shall be reduced by the payment received by the Employee from workers' compensation insurance, Public Employees Retirement Association disability insurance, or Social Security disability insurance. r1n Employee's accumulation of annual leave will be reduced only by the amount of annual leave for which the Employee received compensation. 252 Seniority shall apply on scheduled annual leave up to March l9t of each year. After March lst, scheduled annual leave shall be on a first-come, first-served basis. 25.3 A beginning Employee shall accrue annual leave at the rate of eighteen (18) days (144 hours) per year for the iirst seven (7) years (84 successive months). C:iy An Employee who has worked seven (7) years (84 consecutive months) shall accrue annual leave at the rate of twenty-four (24) days (192 hours) per year, beginning with the eighty-fifth (85�h) month of successive employment. An Employee who has worked fifteen (15) years (180 successive months) shall accrue annual leave at the rate of twenty-six (26) days (208 hours) per year, beginning with the one hundred eighty-first (181Gt) month of successive emplo5�ment. These rates are based on a forty-hour (40) regular workweek. The actual amount credited to an Employee in any given pay period shall be prorated according to the actual number of regular hours worked during that pay period. Hours worked on overtime, callback, or standby shall not enter into the calculation of the accrual of annual leave. 25.4 For an Employee hired on or after January 1, 1984: The maximum total accumulation of annual leave at the end of any given year shall be thirty (35) days (280hours). 25.5 For an Employee hired before January 1, 1984: Vacation accrued but unused as of December 31, 1983, shall be converted by annual leave at the rate of one (1) day of annual leave for one (1) day of vacation. Accrued but unused sick leave as of December 31, 1983, shall be converted to annual leave according to the following schedule: a. lst 45 days @ 1 day of annual leave for 1 day of sick leave b. 2�d 45 days @ 1 day of annual leave for 2 days of sick leave c. Remainder @ 1 day of annual leave for 3 days of sick leave In lieu of severance pay, one hour of annual leave shall be credited for each full month of employment up to a maximum of two hundred forty (240) hours. The total amount of annual leave credited to the Employ�ee's balance as of January 1, 1984, shall be equal to accrued but unused vacation plus accrued but unused sick leave converted according to the formula above plus the amount in lieu of severance pay. If upon conversion to the annual leave plan an Employee's accumulation of annual leave exceeds thirty (35) da5�s (280 hours), that amount shall be the maximum total accumulation (cap) for that Employee at the end of any subsequent year. �� 25.6 An Employee who wishes to take advantage of the catch-up provision for the City's 457 Deferred Compensation Plan may exchange as many days as desired for cash under the following conditions: a. The Employee's cap is reduced by the number of days exchanged. b. In no case may the cap be reduced below thirty (35) days (280 hours). c. An Employee taking advantage of this provision must file the appropriate forms with the payroll division of the Employer. 25.7 Upon separation from employment with the City, an Employee will be paid one (1) day's salary for each day of accrued annual leave remaining in the Employee's balance. Article 26. Holidays 26.1 Employees will accrue eight (8) hours of holiday leave for each of eleven (11) holidays in a calendar year. If the City granted a 12th holiday to non-union employees, it would apply to the patrol union as well. 262 In addition to the eleven holidays, Employees assigned to the Patrol Division shall be paid at one and one-half (1- 1/s) times their base rate of pay for all hours worked on the actual holiday between the hours of midnight and midnight. For an5� overtime hours worked on a holiday, Employees will be paid two (2) times their base rate of pay. 26.3 Employees, with approval, may use accumulated holiday leave time in any hourly increment the Employee chooses. 26.4 Once a year, Employees will be paid for any unused holiday hours remaining after Dea 31st of each year. Payment will be made at the Employee's hourly rate in effect on Dec. 31st of the year in which the holiday hours were accrued. Article 27. Short Term Disability 27.1 Calculation of the short-term disability benefit shall be based on an average eight (8) hour workday. Each Employee who has successfully completed the Employee's probationary period shall be eligible for the short-term disability benefit. Such an Employee shall be entitled to full pay commencing on the twenty-first (213t) consecutive working day on which the Employee is absent (after absence for 160 consecutive regularly scheduled working hours) due to a physician-certified illness or injury off the job, and continuing until the Employee returns to work able to carry out the full duties and responsibilities 4� of the Employee's position or through the one hundred tenth (110�h) working day (880th regularly scheduled working hoiu) of absence, whichever occurs first. Such an Employee shall also be entitled to full pay commencing on the eleventh (llth) consecutive working day on which the Employee is absent (after absence for eighty consecutive regularly scheduled working hours) due to a physician-certified illness or injury on the job and continuing until the Employee returns to work able to carry out the duties and responsibilities of the Employee's position or through the one hundredth (100�h) working day (800�h regularly scheduled working hour) of absence, whichever occurs first. The amount of any compensation for the short-term disability benefit shall be reduced by any payment received by the disabled Employee from workers' compensation insurance, Public Employees Retirement Association disability insurance, or Social Security disability insurance. Payment of short-term disability benefit by the City to an Employee shall not exceed ninety (90) working days (720 working hours) for any single illness or injury, regardless of the number and spacing of episodes. The annual leave balance of an Employee receiving short-term disability benefit shall not be reduced, nor shall such Employee accrue annual leave during that period. 272 Before any short-term disability payments are made by the Employer to an Employee, the Employer may request and is entitled to receive a certificate signed by a competent physician or other medical attendant certifying to the fact that the entire absence was, in fact, due to the illness or injury and not otherwise. The Employer also reserves the right to have an examination made at any time of any Employee claiming payment under the short-term disability benefit. Such examination may be made on behalf of the Employer 6y any competent person designated by the Employer when the Employer deems the same to be reasonably necessary to verify the illness or injury claimed. 27.3 If an Employee hired before January 1, 1984, has received payments under the injury-on-duty provisions of previous contracts, the number of days for which payment was received will be deducted from the number of days of eligibility for coverage under short-term disability for that same injury. Article 28. Bereavement Leave 28.1 Bereavement leave will be granted to full-time Employees up to a maximum of twenty-four (24) scheduled hours. Bereavement Leave is granted in case of deaths occurring in the immediate family. For this puipose, immediate family is considered to include: spouse, children, parents, brothers, sisters, grandparents, grandchildren, parents in-laws, brothers in-law, and sisters in- law. .. 282 The City will allow union employees to follow current practices for non-union employees, which gives Employees an option to appeal directly to the City Manager for additional time off if extenuating circumstances prevail. Article 29. Jury Pay It shall be understood and agreed that the Employer shall pay all regular full- time Employees serving on any jwy the difference in salary between jury pay and the Employee's regular salary or pay while in such service. Article 30. Compensatory Time Management reserves the right to approve compensatory time in lieu of overtime pay. Compensatory time shall not be accumulated in excess of thirty six (36) hours, and must be used within the calendar year in which it was accumulated as determined by the Employer. Article 31. Employee Education Program 31.1 The Employer will pay certain expenses for certain education courses based on the following criteria: a. The training course must have relevance to the Employee's present or anticipated career responsibilities; b. Attendance shall be at an institution approved by the Employer. The course must be approved by the Chief. c. Financial assistance will be extended only to courses offered by an accredited institution. This includes vocational schools, Minnesota School of Business, etc. 31.2 Programs Financial Policy Financial assistance not to exceed the amount of two thousand, nine hundred, twenty-five dollars ($2,925.00) per Employee per year will be extended to cover the cost of tuition, required books or educational materials, and required fees related to the course. Charges for student union membership, student health coverage, mileage, parking, and other charges for which the student receives some item or services other than actual instruction will not be paid. Upon successful completion of the course, an Employee will be required to present to the Chief a certification of satisfactory work. Satisfactory work is defined as follows: a. In courses issuing a letter grade, a C or above is required. /' b. In courses issuing a numerical grade, seventy percent (70%) or above is required. a In courses not issuing a grade, a certification from the instructor that the student satisfactorily participated in the activities of the course is required. 31.3 If the Employee satisfactorily wmpletes the course and provides the required documentation, the Employee will be reimbursed for 100% of the cost of the eligible costs (i.e. tuition, books, course fees, etc.) If the Employee fails to satisfactorily complete the course, the Employee will not be reimbursed for these costs. 31.4 The program will not reimburse the Employee for the hours the Employee spends in class, only for the tuition. 3L5 Expenses for which the Employee is compensated under some other educational or assistance program, scholarships, or programs such as the GI bill, will not be covered. 31.6 The City will not pay tuition or other costs for those courses, which are used to make the Employee eligible for additional salary. 31.7 The City will not reimburse the Employee for any course which is not completed and or any course which may be a duplicate or retaken. Article 32. Pay for Investigators, School Resource, Rental Housing Officers, and Drug Task Force Investigators In addition to receiving the five (5%) percent per month differential pay, Employees assigned as Investigators, School Resource, Rental Housing Officers, and Drug Task Force Investigators shall be eligible for the overtime provisions of the contract applicable to Police Officers. Article 33. BMC Case No. 85-PN-486-A, Issue 8 The Employer shall establish a minimum of two (2) months between each shift change in the rotation. Article 34. Waiver 34.1 Any and all prior agreements, resolutions, practices, policies, rules and regulations regarding terms and conditions of employment, to the extent inconsistent with the provisions of this Agreement, are hereby superseded. � 34.2 The parties mutually acknowledge that during the negotiations, which resulted in this Agreement, each had the unlimited right and opportunity to make demands and proposals with respect to any term or condition of employment not removed by law from bargaining. All agreements and understandings arrived at by the parties are set forth in writing in this Agreement for the stipulated duration of this Agreement. The Employee and the Union each voluntarily and unqualifiedly waives the right to meet and negotiate regarding any and all terms and conditions of employment referred to or covered in this Agreement or with respect to any term or condition of employment not specifically referred to or covered by the Agreement, even though such terms or conditions may not have been within the knowledge or contemplation of either or both of the parties at the time this contract was negotiated or executed. Article 35. Duration This Agreement shall be effective as of the first day of Jan.l, 2012, and shall remain in full force and effect through the thirty-first day of December, 2013. In witness whereof, the parties hereto have executed this Agreement on this day of . 2012. I hereby recommend approval of this agreement. FOR CITY OF FRIDLEY Scott J. Lund, Mayor (Date) William W. Burns, City Manager (Date) Deborah K. Dahl, Human Resources Director (Date) Donovan VV. Abbott, Public Safety Director (Date) 0 FOR LAW ENFORCEMENT LABOR SERVICES, INC. Nick Wetschka, LELS Business Agent (Date) Ginny Foxx, Steward Bob Stevens, Steward Nick Kaufer, Steward �� (Date) (Date) (Date) AGENDA ITEM CITY COUNCIL MEETING OF �� April 9, 2072 qiY OF FRIDLEY To: William W. Burns, City Manager � From: Darin Nelson, Finance Director �� Debra A. Skogen, City Clerk� Donovan Abbott, Public Safety Director Robert Rewitzer, Police Captain Date f� Apri15, 2012 2012-13 Liquor License Renewals The annual liquor license renewals have been reviewed by staff. All on-sale intoxicating liquor license establishments, 3.2% on-sale and wine, and club on-sale intoxicating liquor licenses up for renewal have all provided the necessary insurance, bond, and CPA statement with supporting documentation pertaining to food to liquor sales as required by City Code. After reviewing the supplied documentation, it was found these establishments have complied with the City Code requirement of 40% food sales and 60% liquor sales, or 30% food sales for restaurants within bowling alleys. The police review found no major issues that would prevent these establishments from receiving a renewal on-sale liquor license. They have provided information per establishment on the number of calls received, number of police calls per $lOK, calls per service ratio, and whether ar not they failed either of the two compliance checks made in 2011. Based on the information above, staff recommends approval of the following liquor license renewals at this time: On-Sale Intoxicating Liquor License • AMF Bowling Centers Inc dba AMF Maple Lanes • Applebees Minnesota LLC dba Applebees Neighborhood Grill & Bar • BAM Inc dba Shortstop - Fridley • Billiard Street Cafe Inc dba Two Stooges Bar & Grill • Fridley Grill LLC dba Pickle Park • GMME Dough Inc., dba Broadway Bar & Pizza • King's Restaurant • Shorewood Inc dba Shorewood Restaurantin Fridley On-Sale 3.2% Malt Liquor and Wine License • Rob Did it Again Inc dba Chris & Rob's Chicago Taste Authority On-Sale Club Intoxicating Liquor Licenses • Fridley American Legion • Fridley VFW 42 L O 0 C 'a M � N .., 0 N N 0 N � � � � O N �N � M �Fr � � � 0 A O �•T-I � p O a ,b � � " N N b � o O U y U =�n( .1 � y N �UV � � � � � � " a � � o ��jU .-. o " � U � � � � ... �� � o � 7�CJ Q1' Y-4 o = .� '� N � w p O � N � N'j y N C '' � �❑ p N V � O O �y'V G � � �.�° . vi vi vi �y �(n �3 p, i N �i vi ' vi � � � ,�, ��3 U X �� m aEi aEi a�i a�i °' o 0 0 `� �°' $�� `y° o 0 0 0 `� o 0 0 °��C��� o 0 0 0 C C G �«� U� '� C C C F > > > S (n C � � �' O > > > > t L .G O N C y R O� t .G .L' L .V. � V 'O �� d d W F U U � Y �. 0�, a° c�. 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'` CfiY OF FRIDLEY Name John Kotchen AGENDA ITEM CITY COUNCIL MEETING OF APRIL 9, 2012 Appointment Starting Position Salarv Police $20.46 Officer per hour (2011 contract) 45 Start Date Replaces Apri110, Michael 2012 Morrissey (retirement) '= AGENDA ITEM COUNCIL MEETING OF APRIL 9, 2012 affOF CLAIMS FRIDLEY CLAIMS 154527 - 154680 ., ti i H F�2 o i x 2 i p i c�a m � � m w m o 0 0 0 0 o m o r ti o o m m a o 0 0 o a m m m m m m o rv oiUDiO� nmti nm rvnm m� o0 0o no^m mm rvN o0 00o rrvm mw i� O r E i . . . . . . . . . . . . . . . . . . . . . . . . . . . . . � . . . . . . . i S�� Q� O N T T P O N N �� N� P C m m N N O O r H� m N N� � N � O b � � V Q� � T O M m W'� N N N N N N N O m o H N N M m ti� N O C� r �� ��� � I 2 i �� C N 0 N P N ti M M� ry N ti ry ry ry ry � C N b r M� O O O N R I � - R iF wMN n titi ti �� m� II �: F: O U C x a %y I i W i ry N N N N N N N (V N N N CI Cl N[V ^] N ry N N N /f i i N i N'1 �-1 �-1 N'i rl N fl N ry rl N N rY rl Pi O � O O C O O O O O O O O O O O O O O O �f 0.' � ry N N (V N N N N N 1V N N ry N CI N[V N N N N N I W \'� \ \ \ \ \ \ \ \ \ \ \ iG � � � � � � � o 0 0 0 0 ._ o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 u � O � w 0 � r �w a � � U � P r � p O G: N � O P N A� N I J N �-1 O rl W O �I i'G f� ri O %� N �' N � ul N r� n .i ti ❑ il Z O Q C � P o i U w C N p i .] Q C H i "� m a c� u y � o z � F a m°� '� r a � H x x w W 2 v� �n i x i m o c .n in 4 N 2 .� F o f+ c n W � o m W .�+ Y. 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(� O N n o ro no �,y m in m i m i m i w i p� O p O cN O [ry N p O� l(1 O Ifl O Ifl a I(1 C V1 N ti . � �n � in u� � in � r s m ar n c N ( N C N O ry p :V �D N O '-I O �-i O �-1 O ri 1C �-I O 00 00 00 0�0 00 N O N O N O 1\ O N O \ i \ i \ i \ i N rl Ifl rl N rl ul !1 O O O O � O 7 O O O �w �m �m �n �� 0 0 0 0 0 � N ri r� � � � � � AGENDA ITEM CITY COUNCIL MEETING OF APRIL 9, 2012 °TMOF LICENSE RENEWALS fRIDLEY TYPE OF LICENSE: APPLICANT: APPROVED BY: FOOD, TOBACCO & RETAIL University Holiday Market Community Development GAS Andrea Drake Fire Inspector Public SafeYy Kadi Borther's, Inc. dba Amor'e Community Development Food and Fuel Fire Inspector Rashad H. Badac Public Safet Holiday StationsCore #118 Community Development James R Hupp Fixe Inspector Public Safety Holiday Stationstore # 188 Community Development James R. Hupp Fire Inspector Public Safet Fridley BP Community Development Youssef Ramayti Fire Inspector Public Safet FOOD ESTABLISHMENT Burger King #13091Heartland Community Development Midwest, Joel Aaseby Fire Inspector Public Safety LTF Club Operations , dba Community Development Life Cafe Steve Kerzman Fire Inspector Public Safety Maricopa Management, Inc. dba Community Development Zantigo Donald Kaelble Fire Inspector Public Safety PKS, Inc. dba Subway Community Development Peggy Schmitz Fire Inspector Public Safety Wong's Gourmet Community Development Zhi hui Wu Fire Inspectot Public Safety Dolly Belle LLC dba Dunn Bros Community Development Coffee Steven Gudim Fire Inspectar Public Safety ZZA Factary Community Development Benjamin Bruchert Fire Inspector Public Safety Seoul Foods Kyung Min Ahn Community Development Fire Inspector Public Safety 59 TYPE OF LICENSE APPLICANT APPROVED SY FOOD ESTABLISHMENT Taste of Thailand Community Development Toun Thanane Fire Inspector Pu61ic Safetv Bon Appetit Management Community Development Company Medtronic World Fire Inspector Head Quarters Fedele Bauccio Public Safety Bon Appetit Management Community Development Company Old Central Office Pire Inspectar Fedele Bauccio Public Safet Quiznds Community Development Hiep Pho Fire Inspector Public Safety Taco Bell Community Development Lee Engler Fire Inspector Public Safet � Pa Pa Murphy's Take N Bake Community Development Pizza Drake Enterprises Fire Inspector Kathleen Jenni es Public Safet Dairy Queen Community Development Matthew D. Frauenshuh Fire Inspector Public Safetv Chanricleaz Pizza Community Development Mohammed Karim Fire Inspector Public Safety Fridley Alano Society Community Development John Zgainer Fire Inspector Public Safety Bosnian Supermarket Community Development Salko Hoso Fire Inspector Public Safety Bob's Produce Ranch Community Development Michael Schroer Fire Inspector Public Safet � FOOD/1'OBACCO Mr. Discount Tobacco & Community Development Grocery Bilal Haidari Fire Inspectar Public Safety Wal-Mart Stores, Inc. dba Community Development Walmart #1952 Andrea Fire Inspector Lazenb Public Safet Walgreen's #04697 Community Development Michael Felish Fire Inspectar Public Safety . 1 HOTEL/MOTEL Budget Host Inn Community Development Diwesh Bhakta Fire Inspector Public Safet Rixmann-Fridley, LLC dba Community Development LivInn Hotels LTI7 Fire Inspector Wa ne Rixmann Public Safety RECYCLING & SOLID Dick's Sanitation Service, Inc. Public Safety WASTE Brett Anderson Recycling Coordinator Cit Clerk JME of Monticello, Inc Public Safety Jay Charles Morrell Recycling Coordinator City Clerk WTI Waste Technology Public Safety David J. Hayes Recycling Coordinator City Clerk Tennis Roll Off, LLC Public Safety William Tennis Recycling Coordinator City Clerk STREET VENDING Nafie Ice Cream City Clerk Mohammed A. Na�ie Public Safety Parks Directer TREE REMOVAL & Arbor Aesign Tree 5ervice dba Public Safety TREATMENT Arbor Tree Service Donald Public Works Lawrence Central Minnesota Tree Service Public Safety James Savre Public Works Eagle Tree Service Public Safety Michael Jensen Public Works Upper Cut Tree Service Public Safety Andrea Messina Public Works MOTOR VEHICLE BODY 7570 Inc. , dba Sam's Auto Public Safety REPAIR World Samir Awaijane Community Development Fire De artment MASSAGE THERAPY SHARALYN L. HERMANN Public Safety Hospital / Allina Health Cit Clerk KAREN E SATHRE at Public 5afety Thera eutic Massa e b Karen City Clerk JULIE E STREETER at Public Safety Virginia Piper Cancer Institute City Clerk Unit Hos ital r� BRIDGET WICKSTROM at Public Safety Life Balance Therapeutic City Clerk Massa e TOBACCO SALES Fridley Liquor Store #2 Community Development Darin Nelson Fire Inspector Public Safety Fridley Liquor Store # 3 Community Development Darin Nelson Fire Inspector Public Safety U5ED MOTOR VECHILES Midwest Car Search Public Safety Scott S iczka Community Develo ment GASOLINE SALE/ PRIVATE Determan Brownie Community Development PUMP Krisfine Matsun Fire Inspector Public Safety JUNK YARD A-ABCO Fridley Auto Parts Community DevelopmenY Derek Haluptzok Fire lnspector Public Safety Buildin Inspector 62 CfiY OF FRIDLEY AGENDA ITEM CITY COUNCIL MEETING OF APRIL 9, 2012 LICENSES 63 i' � Cf1Y OF fRIDLEY AGENDA ITEM CITY COUNCIL MEETING APRIL 9, 2012 Date: April 6, 2012 To: William Burns, City Manager �� From: Paul Bolin, Asst. Executive HRA Director Subject: Public Hearing to Create TIF District #20 & 20A (RER) At the City Council's February 13, 2012 meeting, a resolution was passed that set April 9, 2012 as the date for the Council to hold the public hearing necessary for the creation of TIF District #20 and Hazardous Substance Subdistrict (HSS) #20A. TIF District #20 & HSS #20A are being created to fund portions of the redevelopment activities for the BAE site located at 4800 East River Road. The creation of this district will allow Real Estate Recycling (RER) to feasibly redevelop this heavily polluted site by paying for some of the extraordinary clean up and demolition costs. Staff has been working diligently with legal counsel to ensure all of the proper steps towards the creation of TIF District #20 & HSS #20A have been taken. A notice of intent to create the district was provided to Commissioner Kordiak; a draft TIF Plan was provided to Anoka County and to the School District; and Monday night's hearing has been advertised in the Fridley Focus. On April 5, the HRA, adopted a resolution that modified the redevelopment plan for Redevelopment Project #1 and the TIF Plans for Districts #6-7, 9, 11-13 and 16-19 to reflect increased project costs and increased bo�ding authority within Redevelopment Project #1. The resolution also gives their authorization for the creation of TIF District #20, HSS #20A and adopts the TIF Plan for District #20 and HSS #20A. Staff recommends that the Council hold the pubiic hearing for the creation of TIF District #20 and Hazardous Substance Subdistrict #20A. ,I:U'lanningACouncil Items By Mceting�2012 Council Items�Apr�12\TIFHEAR1NGDist#20Memo.docx Questions for use at 4-9-12 Council Meeting 1. The Councii is being asked to create TIF District #20/#20A. Are we creating two districts? If yes, why? 9nswer: The Council is being asked to create TIF District #20 which is a redevelopment tas increment financing district (`Redevelopment TIF Dishicf'). It is also Ueing asked to create Hazardous Substance Subdistrict #20A ("HSS"). Because of the extensive contamination and remediation issues, it is necessary to ereate the HSS. An HSS is a subdistrict and cannot be established unless there is a host or overlying district which, in this case, is the redevelopment TIF District. The HSS captures a portion of the exisring taaces and the Redevelopment TIF District caphues a portion of the new taxes. 2. The HRA will approve a resolution on Thursday authorizing the creation of a TIF district for the BAE site. The same action modifies "the redevelopment plan for the City and the tax increment financing plans for the existing TLF districts". Whose redevelopment plan are we talking about? Is it the City's or the HRA's plan? Answer: The Redevelopment Plan is the HRA's Redevelopment Plan which speaks to Yhe need to promote development, iedevelopment, and housing options within the Ciry. The Radevelopment Plan alsa describes the Project Area. This is the area in which the IIRA has the anthocity to act and the ability with City Council approval to adopt tax increment financing districts. The City of Fiidley has a unified ar integrated redevelopment plan wt�ich allows the IIRA maximum flexibility throughout its Project Area. All the City/HRA TIF Districts are in a single project area governed by a single redevelopment plan. When a new tax increment plan is approved, all the existing plans are amended to allow for the maximum flexibility in the use of funds and in the use of HRA authority. 3. Will this redevelopment plan modification also be part of the Council action on 4-9? Answer: Both the HRA and the Council will be asked to approve a redevelopment plan modification. This is the process that has been followed for over 30 years. 4. Will Couucil also be asked to create the HSS sub district on 4-9? I didn't see this in the HRA resolution for their 4-5 meeting. Answer_ The Council will be asked to establish both the HSS and the TIF Redevelopment Diskict at its April 9`h Couttcil meeting. The HRA wi11 Ue asked to do ihe same at its April 5`h meeting. 65 5. Does the creation of the TIF District and/or the HSS Sub-district creaYe auy financial obligation for the ITRA? Answer: No financial oUligation is created by the establishment of the HSS oi the T1F Redevelopment District. 6. What specific obligations does it create? Answer: No obligations are created. Any action by the HRA is solely pennissive. The establishment of the HSS and TIF Redevelopment District allow the HRA to exercise a number of options. None of the options are mandated; all are permissive and require additional approva] by tbe HRA. Speaking of financial matters, I`ve reviewed a very length "Term Sheet". I assume that it is very preliminary. Aas the HRA approved our initial position on these terms? Where do we stand in negotiating the terms of the Cerm sheet with the developer? Answer: The Term Sheet is still being negotiated. It has gone through several iterarions and will most likely be presented to the HRA for its approval at its May 3'� meeting. 8. R'hat have we heard from RER lately regarding the following topics: A. Their negotiations with BAE regarding the coustruction of a 200,000 square foot building for BAE Answer: BAE has had several intemal meetings and has developed some initial specifications. RER is looking forvvard ta receiving those in the coming weeks to begin looking at a potential new building for BAE. RER expects this pxocess could take several months or more. B. Closure on purchase of the property from BAE Answer: RER just completed a 90 day extension of the Purchase Agreement (the end of June 20 i2). C. The iVIPCA Approved Responses Action Plan Answer: RER had an initial meeting with MPCA last week and is wotking on a Phase I. RER will develop a Phase II investigation plan (implementarion to be funded with TIF) and then a RAP. This will take at ]east 3-5 months. . . D. Sources of state and federal funding for remediation of environmental issues Answer: REK had an initial meeting with Navy and is trying to schedule a follow up meeting with Navy on a Memorandum of Understanding to outline roles and responsibilities for cosfs eta This will take at ]east 90 days to complete. Grant funds will be applied for in NovemUer 2012 ideally. E. Potential asers of the site...any commitments from any C/I entities Answer: Other than BAfi no. There are multiple usexs out there, but until we get tax increment funding locked down to delivar the site, we ace not trying to maxket the site at this time. Once we get TIF deal done, we will liire a brokerage team to market the site. 9. I'm supposing that the HRA will be assisting RER through revenues derived from the TIF Redevelopment District as well as through the HSS Sub-district. also understand that you will be providing revenues up fronY to RER through the use of grants, notes and bonds. Please describe in general terms the use of grants, notes and bonds as follows: A. H55 Sub-district 1. Grants Answer: The HRA is Ueing asked to provide grants not to exceed a total of $4.OM. The grants would Ue pzovided as the phases develop. The initial grants are smaller because there is less need in the fixst two phases. B. TIF Redevelopment District 1. Notes Answer: Notes will be issued Uy the Authority for each phase. The redeveloper will advance the funds necessary for demolition, infrastmetuce, uriliries, relocation and site preparation. The notes to the Redeveloper will be paid only from tax increment generated Uy the new development. l•)J 2. Bonds Answer: At the HRA's discretion, it may allow the Redeveloper to convert its revenue notes by the sale of bonds. 10. Will the IIRA be extending any direct loans to RER? If yes, how so? Answer: At the present time neithex direct nor indirect loans are contemplated. 11. How will the RER project impaat the cash balances for the I�IRA's General Fund and its assorted TIF District Funds? Answer: In order for the HSS to provide grants, it will be necessary for the HSS to Uorrow funds intemally from the HRA general fund, the revolving loan fund or possibly other TIF Districts. This will be done through a mechanism that the HRA has used many times and is called an interfund loan. The HSS genecates approximately $320,000 a year in tax increment to repay any of the funds it borrows intemally. The first �ant to RER will probably occur late tlus year and the fixst repayments on the interfund loan, which pcovides the funds for the gxant, will be available from the HSS starting ln July of 2013. Preliminaiy analysis suggests that the HRA has adequate fiznds in �uhich to provide the grants. ]2. Will it leave us with any money to purchase the JLT site? Answer: The ability of the HRA to purchase the JLT site will be a function of the cost of this acquisition and its timing. The HRA has several options in which to rai5e funds if it so chooses. It may sell debt, for example, based on revenues from the HSS which are very secure because they result from valuation that is already in place. 13. My understanding is that the project will be completed in three to four phases. Has the project phasing changed at all since the last time Council discussed this? Answer: We are still opexating on the assumprion that there will Ue three or four phases with multiple buildings within each phase. 14. Have there been any changes in RER`s projected contributions to this project? Answer: The projected contribution is still the acquisition price of approximately $15.OM plus other matches for grants. 15. Have there been auy changes in our projection of project benefits? Answer: w'e are srill anticiparing that upon conclusion of the project we will have a site cleaned up to the specifications approved by the MPCA which will ultimately •: result in a site being valued between $70 M and $80 M containing approximately 1.5 million square feet of new development. 16. What else should we tell Council? Answer: This may be the most difficult site the HRA and the City have evei undertaken to xedeve]ap. It creates minimal risk to the City and the HRA Uut provides an enoxmous opportunity to improve and xedevelop an area that will benefit the City foi decades. [The answess to question #8 wexe piovided by Real Estate Recycling. The answers to all other questions were provided by Monroe Moxness Berg.] MMB: 4837-8296-5519, v. 1 � � J ' qiY OF FRIDLEY Date: To: From AGENDA ITEM CITY COUNCIL MEETING APRIL 9, 2012 April 5, 2012 �/ William Burns, City Manager� 1° Paul Bolin, Asst. Executive HRA Director Subject: Resolution to Create TIF District #20 &#20A (RER) In addition to holding a public hearing on the creation of TIF District #20 and #20A, the Council is required to adopt a resolution authorizing the creation of the District and Subdistrict. Adopting the resolution will allow the developer and HRA to move fonvard with the creation of a development agreement. The removal of the existing building, addition of 1,454,960 square feet of new office/showroom/industrial space and the accompanying jobs, will be a welcome addition to the City of Fridley. Staff recommends that the Council adopt the attached resolution allowing for the creation of TIF District #20 and Hazardous Substance Subdistrict #20A. 1:APlnnningVCouncil Items By Mee5ng�2012 Council Items�Ap��[012\Resolution Approval MemoDist�20Memo.docx City of Fridley Anoka County, Minnesota RESOLUTION NO. 2012 - A RESOLUTION MODIFYING THE REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJECT NO.1 AND THE TAX INCREMENT FINANCING PLANS FOR TAX INCREMENT FINANCING DISTRICTS NOS. 6-7, 9, 11-13 AND 16-19 TO REFLECT INCREASED PROJECT COSTS AND INCREASED BONAING AUTHORITY WITHIN REDEVELOPMENT PROJECT NO. 1, CREATING TAX INCREMENT FINANCING DISTRICT NO. 20 AND ADOPTING A TAX 1NCREMENT FINANCING PLAN RELATING THERETO AND CREATING fIA7.ARDOUS SUBSTANCE SUBDISTRICT NO. 20A AND THE ADOPTION OF A TAX INCREMENT FINANCING PLAN THERETO BE IT RESOLVED by the City Council (the "Council"} of the City af Fridley, Minnesota (the "Cicy"), as follows: Section l. Racitals. 1.01. It has been proposed by the Housing and Kedevelopment Authority (the "Authority") that the Council approve and adopt the proposed modifications to its Redevelopment Plan for Redevelopment Project No. 1(the "Project Area") reflecting increased project costs and increased bonding authority, pursuant to and in accordance with Minnesota Statutes, Sections 469.001 to 464.047, inclusive, as amended and supplemented from time to time. ].Q2. It has been further proposed by the Authority that the Counci] approve and adopt the proposed modiiications to the Tax Inerement Financing Plans (the "Existing Plans") for Tax lncrement Financing Districts Nos. 6-7, 9, 11-13 and 16-19 (the "Existing Districts") reflecting inereased project costs and increased bonding authoriry within the Project Area, pursuant to Minnesota Statutes, Section 469. ] 74 through 469.1799, inclusive, as amended and supplemented from time to time. 1.03. It has been further proposed by the Authority that the Council approve the creation of proposed Tatc Inerement Financing District No. 20 (tha "Redevelopment DistricP') and Hazaxdous Substance Subdistrict No. 20A (the "SuhdistricP') (collectively the "Pxoposed Districts") and adopt proposed Tax Increment Financing Plans (the "Proposed Plans") relating tl�ereto, pursuant to and in accordance with Minnesota Statutes. Section 469.174 to a69.1799, inclusive, as amended and supplemented frocn time to time. 1.04. The Authority has caused to be prepared, and this Council has investigated the facts with respect thereto, a modified Redevelopment Plan for the Proj ect Area and modified Existing Pl ans for the Existing Districts reflecting increased project costs and i�creased bonding authority within the Project Area and Proposed Plans for the Proposed Districts, defining more precisely the property to be included, the public costs to be incurred, and other matters relating thereto. 71 Resolution No. 2012 - Page 2 1.05. The Council has performed all actions required by law to be performed prior to the approval and adoption of the modifications to the Redevelopment Plan and Existing Plans and the appxoval and adoption of the Proposed Plans. 1.0G. The Council hereby determines that it is necessary and in the best interests ofthe City and the Authority at this time to approve and adopt the modifications to the Redevelopment Plan and Existing Plans reflecting increased project costs and increased bonding authority within the Project Area, to create the Proposed Districts and to approve and adopt the Proposed Plans relating thereto. Section 2. General Findings. 2.01. The Council hereby finds, determines and declazes that the assistance to be pxovided through the adoption and implementation of the modified Redevelopment Plan , modified Existing Plans and Proposed P1ans (collectively, the "Plans") are necessary to assure the development and redevelopment of the Project Area. 2.02. The Council hereby finds, determines and declares that the Plans confoim to the general plan fox the development and redevelopment of the City as a whole in that they are consistent with the City's comprehensive plan. 2.03. The Counci] hereby finds, determines and declares that the Plans afford maximum opportunity consistent with the sound needs of the City as a whole for the development and redevelopment of the Project Area by private enterprise and it is contemplated that the development and redevelopmeni thereof �vill be carried out pursuant to redevelopment contracts wiih private developers. 2.04. The Council hereby fmds, determines and declares that the niodification, approval and adoption of the Plans is intended and, in the judgment of this Council, its effect will be Co promote the purposes and objectives specified in this Section 2 and otherwise promote certain public purposes and accomplish certain objectives as specified in the Plans. 2.05. The Council hereby finds, determines and declares that the City made the above findings stated in this Section 2 and has set forth the reasons and supporting facts for each determination in the Plans and Exhibit A to this Resolution. Section 3. Specific Findings for the Redevelopment District. 3.01. The Council hereby finds, determines and declares that the Redevelopment Dish-ict constitutes a"tax increment financing district" as defined in Minnesota Statutes, Section 469.174, S ubd. 9, and further constitutes a"redevelopment districY' as defined in Minnesota Statutes, Section 4fi9.174, Subd. 10. 3.02. The Council hereby finds, determines and declares that the proposed deve]opment or redevelopment in the Redevelopment District, in the opinion of this Council, would not reasonably be expected to oocur solely through private investment within the reasonably foreseeable future and, �2 Resolution No. 2012 - therefore, the use of taac increment financing is deemed necessary. Page 3 3.03. The Council hereby finds, determines and declares that the increased market value of a project not receiving tax increment assistance would be less than the increased market value of a project receiving tax increment assistance after deducting the present value of projected tax increments for the maximum duration of the Redevelopment District. 3.04. The Council hereby finds, determines and declares that the expenditure of tas increment within the Redevelopment District serves primarily a�ublic purpose. 3.05. The Council hereby finds, determines and declares that the City made the above findings stated in this Section 2 and has set forih the reasons and supporting facts far each determination in the Plans and Exhibit S to this Resolution. Section 4. Specific Findings for the Subdistrict. 4.0 L The Council hereby finds, determines and declares that the Subdistrict constitutes ahazardous substance subdistrict as defined in Minnesota Sfatutes, SecCion 469.174, Subdivision 23. 4.02. The Council hereby finds, determines and declares that the proposed development or redevelopinent in the Subdistrict, in the opinion ofthe Council, would not occur solely through private inveshnent within the reasonably foreseeable future and, therefora, the use oftaY increment financing is deemed necessary. 4.03. The Council hereby finds, determines and declares that the Subdistrict is not larger than, and the period of time during which tas increments aze elected to be received is not longer than, that which is necessary, in the apinion of the Cauncil, to provide for the additional costs due to the designated bazacdous substance site. 4.04. The Council hereby finds, determines and declazes that the expenditure oftaac increment within tlie Subdistrict serves a primarily public purpose. 4.0_5. The C�uncil hereby finds, determines and declares that the City made the above findings stated in this Section 4 and has set forth the reasons and supporting facts for each determination in the Subdistrict Plan and Exhibit C of this Resolution. Section �. Approvals and Adoptions. 5.01. The modifications to the Redevelopment Plan reflecting increased project costs and increased bonding authority within the Project Area are hereby approved and adopted by the Council of the City. 5.02. The modifications to the Existing Plans reflecting increased project costs and inereased bonding autharity within the Project Area aze hereby approved and adopted by the Council of the City. 73 Resolution No. 20] 2-_ Page 4 5.03. The creation of the Proposed Districts within the Project Area and the adoption of the Proposed Plans relating thereto are hereby approved by the Council of the City. Section 6. Filing of Plans. 6.0] . Upon its approval and adoption of the modified Redevelopment Plan for the Project Area, the City shal l cause said Redevelopment Plan to be filed with the Minnesota Department of Revenue, tY�e Office of the State Auditor, and Anoka County. 6.02. Upon its approval and adoption ofthe Redevelopment Plan for the Redevelopment District, the City shall cause said Redevelopment District Plan to be filed with the Mimiesota Department of Revenue, the Office of the State Auditor, and Anoka County. 6.03. Upon its approval and adoption of the Subdistrict Plan for the Subdistnct and the approval of the Development Action Response Plan by the Pollution Control Agency, the City shall cause said Subdistrict Plan to be filed with the Minnesota Depamnent of Revenue, the Office of the State Auditor, and Anoka County. PASSED AND ADOPTED BY THE COUNCIL OF TAE CITY THIS DAY OF , 2012. ATTEST: DEBRA SKOGEN - CITY CLERK 74 SCOTT LT_JND - MAYOR Resolution No. 2012 - _ GENERAL FINDINGS Page 5 EXHIBIT A The reasons and facts supporting the findings for the modification ofthe Plans for the Project Area, Existing Districts and Proposed Districts pursuant to Minnesota Statutes, Section 469115, Subdivision 3, are as follows: ]. Finding that the assistance to be provided through the adoption and implementation of the Plans is necessary to assure the developmeut and redevelopment of the Project Area. Tl�e tax increment assistance resulting from the implementation of the Plans is necessary for the proposed project to proceed. Please refer to Exhibit XXI-D of the Redevelopment Plan and XXII-D of the Subdistrict Plan. 2. Finding that the Plans conform to the general plan for the development and redevelopment of the City as a whole in that they are consistent with the City's Comprehensive Plan. The Council has reviewed the Plans and has determined that they aze consistent with the Gity's comprehensive plan. 3. Finding that the Plans afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development and redevelopment of the Project Area by private enterprise, and it is contemplated YLat the development or redevelopment thereof will be carried out pursuant to development contracts with private developers. Please refer to the attached Exhibit B and C respectively for specific information relafing to the Proposed Districts. 4. Ft'nding that the approval and adoptiou of the Plans is intended and, in the judgment of this Council, its effect will be Yo promote the public purposes and accomplish the objectives specified in the Plans. Thc tax increment that will be generated due to the approval and adoption of the Plans will assist in financing the public improvements and eligible expenses as detailed in the Plans. 75 Resolution No. 2012 - _ SPECIFIC FINDINGS FOR THE REDEVELOPMENT DISTRICT Page 6 EXHIBIT B In addirion to the findings included in Exhibit A, the reasons and facts supporting the additional findings for the Redevelopinent Plan for the Redevelopment District pursuant Co Minnesota Statutes, Section 469175, Subdivision 3, are as follows: l. Finding that Che Redevelopment District is a"redevelopment district" as defined in Minnesota Statutes. The Redevelopment District consists of 3 parcels totaling approximaiely 13b acres. Of this acreage, it has been determined that parcels comprising ap�roximately 122 aeres aze occupied by buildings, streets, utilities, paved or �-avel parking lots or similaz structures. This 90% area coverage exceeds the 70% coverage test required by Minnesota Statutes, 5ection 469.174, Subdivision 10(1). Additionally, the building wbich is approximately 2,000,000 square feet and is located on t�mo parcels has been determined to be "structurally substandard" because it contains defeets in structural elements or a combination ofdeficiencies in essential urilities and facilities, light and ventilation, fireprotection including adequate egress, layouY and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantia] renovation ar clearance. This btrilding which by itself is 100% ofthe improvements satisfies the requirements ofMinnesota Statutes, Section 4f�9174, 5ubdivision 10(1) which requires that over 50% of buildings, not including outbuildings, must be found "structurally substandard °' lt has further been determined that these conditions are reasonably distributed through the Redevelopment District These findinas and the conclusion that the Redevelopment District qualifies under the statutory criteria and formulas for a redevelopment tax uicrement finaneing district are further described in a report prepared by LHB dated January 31, 2012 (the "LHB ReporP'). 2. Findiug that the proposed development or redevelopment, in the opinion of the Council, would not reasonabiy be expected to occur solely through private investment within the reasonably foreseeabte future and, therefore, the use of tax increment Yinancing is deemed necessary. Development activities proposed to occur in tha Redevelopment District includes land acquisition, demolition of the building, remediation of the Site and construction of approximately 1,SQ0,000 square feet of office, showroom, warehouse uid bulk warehouse Yacilities in approximately 12 buildings. Upon completion of the development, it is anticipated that the City's tax base will iucrease by approximately $60,000,000. City staffhas reviewed the estimated development costs and the available methods of financing and has determined that tax increment assistance is necessary to make the redevelopment project economically feasible and to allow the Redeveloper to pxoceed at this time. 76 Resolution No. 2012 -_ Page 7 3. Finding that the increased market value of a project not receiving tax increment f'inancing assistance would be less than the increased market value of a project receiving tax increment financing assistance after deducting the preseat value of the projected tax increments for the maximum duration of the Redevelopment District. The original market value of the Redevelopment District is approximately $15,000,000. Ciry staff has determined that without tax increment assistance these parcels would not be developed witlun the foreseeable future and that only minimal remodeling would probably occur. Therefore, ifthere was an increase in market value it would be minimal. City staff has further determined thaY with tax increment assistance it is possible to construct almost 1,500,000 square foot office showroom, officelwarehouse and bulk warehouse development wifli an estimated market value of approximately $75,OQ0,000 After deducting the original mazket value of $15,000,000 from the estimated market value of $75,000,000, Ciry staf�has further determined that the increased market value that could reasonably be expected to occur from a project receiving taY increment assistance would be approximately $60,000,000. City staffhas furtl�er determined that the total amount of tax increment generated over the 25 year tertn oP flie Redevelopment District approximates $48,500,000. Assuming the same term and a present value rate of 6.0%, thepresent value of $48,SOO,Q00 approximates $17,000,000. After deducting the pcesent value of the tax inerement ($17,000,000) from the increasein estimatedmarketvalue occurring as a result of utilizing taY increment assistance ($60,000,000), the net increase in estimated market values approximates $43,OOQ000. Ciry staff has further deYermined that the inereased mazket value of the site that could reasonabiy be ehpected to occur without the use of taY increment financing ($0) is less than the increased macket value of the siYe occurring with the use oftax increment financing after subtracring the present value of the projected tax increments for the maximum duration ofthe Redevelopment District ($60,000,000). Further information supporting this Finding is attached as Schedule 1. 4. Finding that expenditure of tax iucrement serves a primarily public purpose. The expenditure of tax increment is not intended as a private benefit and any such benefit is incidental. Public benef ts resulting from the proposed project inelude (i) an inerease in the State and Ciry tax bases, (ii) tl�e acquisition and redevelopment ofproperty which is not now in its highest ar best use, (iii) demolition and removal of an existing substandard and blighted structure, and (iv) remediation of contaminated property. %% Resolution No. 2012 - SPECIFIC FINDINGS FOR THE SUBDISTRICT Page 8 EXHIBIT C In addition to the findings included in Exhibit A, tha reasans and facts supporting the additional findings for the Subdistrict P1an for the Subdistrict pursuant to Minnesota Statutes, Section 469.175, Subdivisions 3 and 7, are as follows: 1. Finding that the Subdistrict is a"hazardous substance subdistrict" as defined in Minnesota Statutes. The Subdistriet consists of 3 parcels which the Council reasonably expects will be designated as a I�azardous substance site as defined in Minnesota Statutes, Section 469174, Subdivision 16 and will be included in a Development Action Response Plan. The Council will certify to the County Auditor that it will enter into an agreement(s) providing for the removal or remedial actions as specified in its Development Action Response Plan. The Council acknowledges that the parcels to be included in the Subdistrict will not be certified until the Development Action Response Plan has been approved. 2. Finding that the proposed development within the Subdistrict, in the opinion of the Council, would not occur solely through private investment within the reasonably foreseeable future and, therefore, the use of tas increment financing is deemed necessary. The activities expected to occur within the Subdisri-ict include the removal and/or remedial actions necessary to be undertaken and completed in order to facilitate the construction ofthe housing units, office space, retail and restaurant space as described in Item 2 of Exhibit B and in the Proposed P]ans. City staffhas received apreliminary overview of the estimated costs for the necessary removal a�1d/or remedial actions and the available methods offinancing these activities. Although some ofthe tax increment generated from the Redevelopment District may assist with tha remediation and removal efforts, addiCional assistance is required far these extensive costs. Without the addiTional tax increment generated by the Subdistriet, unfeasible and cannot proceed. D of the Subdistrict Plan. the redevelopment of the Redevelopment District is eeonomically Addifional background supporting this Finding are included in Exhibit 3. Finding that other parcels not designated as hazardous substance sites are expected to be developed together with the designated hazardous substance site. All parcels are to be included in the Subdistrict and it is anticipated that they will all be designated as a hazardous substance site. In the event a parcel(s) is not designated a hazardous substanca site, it will be developed with the adjacent pazcels within the Subdistrict as allowed by Minnesota Statutes, Section 469175, Subdivision 7. 4. Finding that the Subdistrict is not larger than, and the period of time during which tax increments are elected to be received is not longer than, that which is necessary, in the �i•: Resolution No. 2012 - _ Page 9 opinion of the Council, to provide for the additional costs due to the designated hazardous substance site. The Council has determined that the pazcels ]ocated within the Subdistrict require remediation and removal acrions in order for the redevelopment of the District to pmceed as proposed. The Council has also determined that the duration of the Subdistrict will extend only as long as is required to finance thE remediation, removal and related activities. 5. Finding that the expenditure of tax increment serves a primarily public purpose. The expenditure of tax increment is not intended as a private benefit, and any such benefit is incidentaL The principal intent for the tax increment expenditures includes the removal and remediation actions needed, and associated costs, for the pamels included in the Subdistrict. See also Exhibit B, Item 4. 79 Resolution No. 2012 - _ NUMERICAL `BUT FOR" Page 10 SCHEDULE 1 TO EXHIBIT B ESTIMATED MARI�ET VALUE INCREASE FOR A DEVELOPMENT PROJECT WITHOUT TIF ASSISTANCE Witl�oui tvc increment assistance the parcels would not be developed within the foreseeable future and only minimal reinodeling may occur EstiniatedMarket Value ........................................................................... $ -�- Original Market Value .............................................................................. $ 15,OOQ000 Increased Market Value ............................................................................ $ -�- ESTIMATED MARKET VALUE INCREASE FOR A DEVELOPMENT PR03ECT WITH T1F ASSISTANCE With tax increment assistance it is proposed that approximately 1,500,000 square feet office sho���room, office/warehouse and bulk �i-arehouse development in 12 buildings be constructed in at least four phases over 10 years. Estimated Market Value ........................................... Original Market Value .............................................. Increased Market Value ............................................ Less: Present Value of the Tax Increment generated at 6.0°/o for the duration of the Proposed Kedevelopment District ..... .._ ......................... � 75,000,000 ............................. $ 15,000,000 ............................. $ 60,000,000 ............................. $ 17,000,000 Net Increased Market Value ...................................................................... $ 43,000,000 MMB: 4823-2570-7023, v. 1 �• 1 SECTION XXI TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DiSTRiCT NO. 20 (RER PROJECT) Subsection 21.1. Statement of �bjectives. See Section l, Subsection 1.5, Statement of Qbjectives. Subsection 21.2. Modified Redevelopment Plan. See Section I, Subsections 1.2 through 1.15. Subsection 21.3. Parcefs to be Included. The boundaries of Tax Increment Financing District No. 20 (the "T1F DistricY'} are described on the attached Exhibit XXI-A and illustrated on Exhibit XXI-B. Subsection 21.4. Parcels in Acauisition. 7he Authority may write down or acquire and reconvey real property, or interests therein, within this TiF District or elsewhere within the Project Area, at the time or times as the Authoriry may determine to be necessary or desirable to assist or implement development or redevelopment within 1he Project Area or the TIF District. The Authority may acquire any of the parcels described on Exhibit I-A and ifiustrated on Exhibit I-B by gift, dedication, condemnafion or direct purchase from willing sellers in order to achieve the objectives of the Redevelopment Plan or the TIF Plan. 5ubsection 21,5. Development Activitv for which Contracts have been Siqned. As of the dafe of adoption of the TIF Plan, the Authority intends to enter into a Redevelopment Contracl with Real Estate Recycling LLC, a limited liability company for the activities discussed below. Subsection 21.6. Specific Development Expected to Occur. At this time it is anticipated that the current parcels will be redeveloped including demolition and removal of blighted and substandard structures and contamination remediation and the construction of: Phase l: Approximately 65,090 square feet of o�ce showroom, 100,000 of office/warehouse and 2oD,Q00 of bulk warehouse space to be constructed in 2012-2013; Phase II: Approximately 65,000 square feet of office showroom, 100,000 of office/warehouse and 200,000 of bulk warehouse space to be constructed in 2013-2015; and Phase III: Approximately 125,Q00 square feet of office showroom, 200,000 of officelwarehouse and 400,000 of bulk warehouse space to be constructed in subsequent years. 21-1 � Upon completion of fhe redevelopment, an aggregate of 1,454,960 square feet of o�ce showroom, o�ce/warehouse and bulk warehouse will be constructed with an estimated market value of approximately $72.7 M. Subsection 21.7. Prior Planned Improvements. After due and diiigent search, the Authority has determined that no building permits have been issued during the eighteen (18) months immediately preceding approval of the TIF Plan by ihe Authority. Subsection 21.8. Fiscal Disgarities. The Council hereby elects the method of tax increment computation set forth in Minnesota Statutes, Section 469.177, Subdivision 3, clause (a) if and when commerciaUindustrial development occurs within the TI F aistrict. Subsection 21.9. Estimated Public Improvement Costs, The estimated public improvement costs, including interest thereon to be incurred for the benefit of and within the TIF District and the Project Area are set forth on Exhibit I-C. Subsection 21.10. Estimated Amount of Bonded Indebtedness. It is anticipated that approximately $20,1 M of bonded indebtedness may be incurred with respect to this portion of the Project Area. Subsection 21.11. 5ources of Revenue. Anticipated revenue sources to assist in the financing of the pubfic improvement cosis, pursuant to Subsection 21.9, above, include (1) general obligation and/or re�enue tax increment obligations with interest; {2) the direct use of tax increments; (3) the borrowing of available funds, including without limitation interest-bearing City short-term or long-term loans; (4) interfund loans or advances; (5) interfund transters, both in and out; (6) land sale or lease proceeds; (7) levies; (8) grants from any pubiic or private source; (9) developer payments; (14) loan repayments or other advances originally made with tax increments as permitted by Minnesota Statutes; and (11) any other revenue source derived from the City's or Authority's activities within the Project Area as required to finance the costs as set foRh in Exhibit I-C. All revenues are available for tax increment eligible expenses within the Project Are as allowed by Minnesota Statutes. Subsection 21.12. Estimated Oripinal and Ca�tured Tax Capacities. The tax capacity of all #axable property in the TIF district, as most recenily certified by the Commissioner of Revenue of the State of Minnesota on January 2, 2012, is estimated to be $361,468. The captured tax capaoity of the TIF District upon comptetion of the proposed improvements on Ja�uary 2, 2014 is estimated to be $1,153,212. The Authority intends to utilize 100% of the captured tax capacity for the duration of the TIF District for purposes of determining tax increment revenues. Subsection 21.13. Tax tncrement. Annual tax increment generated from the TfF District has been caiculated at approximately $1,300,420 upon the initial completian of 21-2 � the improvements. This estimate is provided on the attached Exhibit XXI-C. Revenue has also been projected for the duration of the T1F District and is shown on Exhibit I-C- 15. Subsection 21.14, Local Tax Rate. The estimated pay 2012 lacal tax rate is 1.12765. Subsection 21.15. ype of TIF District. The TIF District is a redevelopment district pursuant to Minnesota Statutes, Section 469.174, Subdivision 10. Subsection 21,16. Duration of TIF District. The duration of Yhe TIF District is expected to be twenty five (25) years from receipt of the first tax increment, The date af receipt of the first tax increment is estimated to be July, 2015. Thus, it is estimated that the TIF District, including any modifications for subsequent phases or other changes, would terminate in the year 2040. Subsection 21.17. Estimated Imaact an Other Taxing. Jurisdictions. The estimated impact on other taxing jurisdictions assumes construction would have occurred without the creation of the TIF Qistrict. If the construction is a resuit of tax increment financing, the impact is $0 to other entities. Notwithstanding the fact thaf the fiscal impact on the other taxing jurisd+ctions is $0 due to the fact that the financing would not have occurred without the assistance of the Authority, the attached Exhibit XXI-E reflects (I) the estimated impact of the TIF Qistrict if the "but for" test was not met; {ii) the estimated amount of tax increment generated annually and over the duration of the TIF District�, and, (iii) the estimated amount of tax increment attributable to the County, School District and other taxing districts. At this time the Authority anticipates there will be no impact on City services due to the creation of the TIF District. Additionally, since the Ci1y has no current plan to issue general obligation debt for project costs, it further anticipates that there will be no impact on its borrowing costs due to the creation of the TIF Dislrict. Please refer to Exhibit XXI-D for the narrative "but for" analysis. Subsection 21.1 B. Modification of the TIF District and/or the TIF Plan. As of April 9, 2012, no modifications tv the TIF District or the TIF Pfan have been made, said date being the date of initial approval and adoption thereof by the City Council. 21-3 �� EXHIBIT XXI—A PARCELS 70 BE INCLUDED 27-30-24-13-OOD2, 27-30-24-42-0002, 27-30-24-a3-0002 and all easements, rights-of-way and adjacent roads and streets XXI-A-1 :� ,; � ,� �, �;., i �,` � jil �1 <<„ i h�..a, �ti6in� Pi„r, 1��; �1�, . � EXHIBIT XXI-B _ -.».n..n...,.�w.._,�7f"'-_,.X.,Yw _..v- �.____� �. _._. t_. `��.J ��.. �.--- � -� __ � � 9 E�, ., �a � �F 1��.7 Y� � �. 1 .P.C°e6.*:mr:.'. ,�i � '.--�..--�' � - � �--�� j- 1 1 qN01_. _ M�NNS�BH�B Cear�miumuuo����°W _ _.__._�- =-��— �- �T - � � -'�� s„ �q�,l �� i - i �� : ��� t F. t ���j =� �� � � ��� r� ��� � � :� _ - ��� �FM������M��������� ��misw�no ��a�� r. ��— , � �� ' �oy R� �m � ��.: hWpIM9Ma.�a��� 4 � ,� ��e wiw f Y+4f �: 1 .fr _ � �-�_._ . _._____'�_,..r_..�__"_._� ��A 3 XXI-@_2 :. �' -� ��► � �s � � �� .� � �� �� p ,.� �7 � I� � N ("� �% � �� � 8AE 6ite 2012C - 71F Plan.xlsz XXI - C-1 �� 6AE Slte 2012c - TIF Plan.xlsx XXI - C- 2 - i : EXNIBIT XXI—D "BUT FOR" ANALYSIS The Site is approximately 136 acres and contains a building that is 2,000,000 square feet. The Site is best known as the FMC Corp. Site. From 1941-1964, a naval ordinance manufacturing complex operated the Site, from 1945-1969, a southern portion of the Site was used for burning and disposing of waste; in 1981, an investigation revealed contaminaiion and a history of waste disposal; in 1983, a cleanup of the Site began, The southern portion was listed on the National Priorities List. Attached is the cover page and the Executive Summary of the Fourth Five-Year Review Report dated September 30, 2009. The building is substandard as shown by the Code/Condition Deficiency Report prepared by LHB, Inc. dated January 31, 2012. In addition, the building has limited uses and is obsolete by current warehouse standards. Real Estate Recycling is proposing to demolish the building, remediate the Site and construct approximately 1,500,009 square feet of office, showroom, warehouse and bulk warehouse facilities in approximately 12 buiidings. Because of the very substantial demolition and remediation costs, it is not possible to redevelop the Site without the use of tax increment. MMB: 4836-3509-1982, v. 1 XXl-D-1 � TION DEFICIENCY REPOI2T Januairy 31,2012 Property Address; Q850 East River Road, Fridley, MN PIN: 27-30-24-13-0002 & 27-30-24-42-0002 Inspection Date(s) & Time(s): December 2, 20] I- 8:00 e.m, Inspection Type: interior & Exterior Summary of Deficiencies: It is our professional opinion that this building is Su6sfandard because: - Building Code deFciencies total more than 15% of replacement cost. - Substantial rcnovation is required to con'ect Conditions found. �stimated Reptacement Cast: $ 179,468,500 Estimated Cost to Correct Building Code Deficiencies: $ 40,475,000 Percentage of Replacement Cosi: 23% Descrivtion of CandiUon Deficiencies Minnesota Stawtes, Section 469.174, Subdivision ]0, states thai a building is Structurally Substandazd if it contai�s "defects in structural elements or a combination of deftciencies in essential utilities and facilities, light and venUlation, fire protecfion including adequata egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies aze of sufficient total significance to justify substantial renovation or clearance." A. De%cts 3n Structural Elements 1. Roof shvcture inadequate to support reroofing with correct amount of slope and insulation. 2. Roof structure under-sized to support snow drift loads. 3. Columns and roof structure are not fire-rated. B. Combination aY'DeYiciencies 1. Essetrtial Utilitles and Facilities a. The HVAC system is piece-ineal and of different ages, some elements dating from die 40s. Many uf the older units appeaz to 6e aged and in need of replacement or repair. 2. Light arid Ventilation a. Many light fixtures use 1'121amps, scheduled to ba phased ont by DOE mandate. 3. Fire ProtectionlAdeauate Earess a. Two stairs are too steep and have inadequate handrails. b. Three stairs have inadequate handrails. c. Unlawful mechanicaVelectrical penehation a[ one stair enclosure, d. At least three stair enclosnres exit into the factory space, instead of into an acceptable exit passage, e. Mechanical rooms appear ta be i�adequatety separated from rest of construction. G. Lavout and Condition of Interior Partitions/Materials a, Interior finishes have been damaged by water leaking from roof in some locations. b. Office building win� 6adly damaged from mold infesYation. c. Office wing Finishes completely gutted, lighting removed and HVAC distribution system partialty removed. XXI-D-2 90 5. Exterior Conshuction a. Roofing appeais cracked and worn. b. Roof slope inadequate, resulting in ponding and leaking. c. Office bttilding wing badly damaged from mold infestation. Description of Code De6ciencies 1. Steel suucture is exposed and unprotected. In order [o meet allowaUla azea requirements in tha code, exposed steel columns and roof structure must be have at least 1-hour fire resistancc. 2. Approximately 4Q% of tlie building is without required sprinklet system. 3. Stair guaidrails at five locations do not meet code. Guardrail picket spacing is greater than 4". 4. Stair handrails are too low in five ]ocations and lack extensions. 5. Stair risers ii� two locations exceed the maximum allowable 7" and trends are less than the minimum allowable 1)" 6. There are unprotected penetrations in reqaired fire-rated walls pnd ceilings (stair enclosure and mechanicat room). 7. Roof slopes do not meet code for adequate drainage. 8. According to a roof survey conducted in the mid-80s, most of the roof ts overstressed, meaning it woidd be unable to support the tapered insulation necessary to correct roof slopes. Although changes in the code have lessened roof design loads since the survey was conducted, a requirement to accommodate snow di�ft loads has been added. The result, in a building such as this with many clerestory areas that would cause drifting on lower roofs, is a greater design load in affected areas. It is estimated that 7S% of the roof is stivcturally inadequate due to snow drift loading, 9. One ofthe elevators is without accessibie controls. ]0. T�avel distance &om buiIding interior to public way exceeds allo�+�able maximum. Enerev Code In addition to the building code deficiencias ]isted above, the existing buildivg dces not comply with the current energy code.'I'hase deficieacies are not included in the esUmated costs to correct code deficiencies and are not considered in determining whether ornot tha building is substandard; - Building's wall insulation does not meet current code requirements. - Building's heating and cooling is not as efficient as ciurent energy code would require. - Building's lighting in majority of office areas not energy efficient. M;11 I Pro�1110621 W00 DesignW06 Reports\'flFlSu6standazd 6uilding Repon BAE i I 1228.dacx XXI-D-3 91 ,4,pproved by: � _.--�-'�~R�h�C�Karl Director Supe.rftu�d Division EPAII YRfeI�g�i�oNn p6��Ryacryvrds Clr. I IINI IIA ml l IW �II�I O�� � N2T66 Five-Year Review Report Fourth Five-Year Review Report For FMC Corporation (Fridley Plant) Fridley Anoka County, Minnesota September, 20Q9 PREPARED BY: Minnesoia Pollution Control Ageacy St. Pau2, Minnesota As Modified by The United States Environtnental Protection Agency Region 5 Chicago, Illinois Date: XXl-D-4 92 3� 0 Executive Summary On behalf of the United States Environmenial Protection Agency {US EPA), the Minnasota Pollution Control Agency (MPCA) hns campleted a five-year review of the remedial action (RA) implemented at the FMC Site (Site) lacated in Fridley, Minnesota. This 'ss the fourth Five-year review for the Site which evaluates the effactiveness of the RA to date. Historically, industrial and hazardous waste generated from naval ordnance manufactwing including plating wastes, paint, paini sludges, oils, bottom ash and chlorinated and non- chlorinated solvents was disposed of'at the Site. Initial remedia] actions included construction of an on-site conlaiiunent and ireatment faci)ity (CTF) to treat and contain soils contaminated with volatile organic compounds (VOCs) in 1983, Groundwates contamination was addressed through a groundwater ezlraction system, installed in 1987, and a monitoring well network, The gmandwater extracuon system condnues to operate and VQCs remain in the groundwater at and down gradient of the Site. Protectiveness Sta[ement(s): The protectiveness of the cunent remedy as concluded by this five-year review is as Follows: Groundwater The remedy selected ro address groundwater contarnination is currently protective of human healih and the environment in the short temi . In order for tha remedy to be protective in the long-term the following actions need to be completed: • The monitoring well network must be expanded and the groundwater plume must be fully defined; • MCLs or health based cleanup values are to be achicved at the Site boundary; • Updates to ihe Site monitoring plan naed to ba completed; • The capture of the groundwater extraction system must be further evaluated; • A co.mplete risk assessment is to be conducted with regard to the seep; • EfFective institutional controls are in place at and neaz the site that are protective in the short term and apply to a(1 activizies that may lead to potential exposure; In order to nssure iong term protectiveness, additional instituNonal controls on BAE property and nearby property will be evaivated. • Remediai ac6on addressing exposure at che seep must be comp{eted (if " See AQpendix A for MPCA's position on the shoR term protectiveness. t0 XXI-D-5 93 determined to be necessary by the risk assessment); • Further evaluation needs to be conducted for additional remedia] action utilizing data coltected from additional investigations; • Improvements to data evaluation and presentation within Annual Monitoring Report to be made, 5oi1 Soil removal actions were conducted prioz to implementation of the RQD and decision dor,uments fbr the Site. The US EPA and MPCA have found soil removat actions to be ptt�tective of human health and the environment. Continued monitoring of CTF monitoring wells and data evaluation is required to assure contioued long term protectiveness. In addition institutional controls may need to be implemented to assure the CTF remains protective in the long-term, A review of TCs wil] be conducted in an IC plan to determine what additional ICs are ne�;ded. Site Wide The selected remedy to address groundwater contamination at the site is protective of human heFilth and the environment in the short term. In order for the groundwacer remedy to be protective in the long-term, actions identified in the protectiveness statement in the groundwater and racammendations section of this five-year review must be implemented. The soil rernoval actiuns and CTF have been identified by the MPCA and US BPA as protective, although institutional controls are may be needed to assure long-tecm proteetiveness. 31 XXI�� EXHIBIT XXI - E �S7IMATED IMPACT OF TAX INCREMENT FINANCING DISTRICT NO. 20 ENTITY County of Anoka ISD #13 ENTITY County of Anoka ISD #13 Oiher IMPACT ON TAX BASE ORIGINAL TAX TAX 3ASE CAPACITY 315,214,077 301,488 2Q,892,516 301,468 ESTIMATED CAPTURED TAX TAX CAPACi7Y CAPACITY 1,454, 680 1,153,212 1,454,68D 1,153,212 1,454,680 1,153,212 111APACT ON TAX RATE " TAX % OF RATE TOTAI 0.39478 35.01 % O.A1056 36.41% 0.24355 21.60% 0.07876 6.98% 1.12765 100.00°Jo TAX TAX RATE INCREMENT INCREASE 455,265 1.486% 473,463 0.151 % 280,865 9.423% 90, 827 7,300,420 DISTRICT AS % OF TOTAL 0.366% 5.520% "Assumes construction would have occurred without the creation of a 7ax Increment Fir�ancing District, If construction is a result of Tax Increment Financing, the impact is �0. XXI-E-1 95 ESTIMATED TAl( INCREMENT REVENUES (from tax Incxemenl genarated by the dlstrict) Tax increment revenues dlstributed from the county Interest and Investment earnings Sales/lease proGe6ds Market vafue homestead credil Total Estlmatad Tax Increment Revenues EXHIBIT I - C BUDGET TIF 1i20 TIF #20A HSS Cumulative Cumulauve Modified NbdiHed TIF Plan TIF Plan Budgel Budget TOTAL $ 48,500,OQQ $ 8,350,0�0 56,850,000 485,OD0 83,500 568,500 $ 48,885,OOD $ 8,433,500 $ 57,418,5D0 ESTIMATED PROJECTIFINANCING COSTS (ro be paid or financed with tax increment) Pro}ect Costs Lend/6ullding acquisilion Site Improvements/preparation costs Utiltties Diher quailiying improvements Constmctfon ot affordabVe hoosfng Small city authorized casts, If not already included above Administrative cosis Estlmated Tax increment Project Costs $ 56D,000 $ - 4,898,500 15,275,OOD 4,650,OOD 835,D00 $ 20,625,Q00 $ 5,833,500 5p0,D0� 4,996,500 15,275,000 5,885,OD0 $ 26,458,500 Eatimated Financing Costs Interest e�ense � 28,360,000 2,600,000 30,960,000 Total Estfmated ProjecVFinancFng Costs to be Paid From TI $ A8,98b,00D $ 8,433,500 $ 57,418,500 0 D 0 ESTIMATED FINANCING Total amount oi bonds to be issued TIF 8udget - 20 & 20A.xlsx I-C-15 i � 20,M100,000 5,800,p09 25,900,000 SECTION XXII TAX IfVCREMENT FINANCING PLAN FOR HAZARDOUS SUBSTANCE SUBDISTRICT NO. 20A (RER PROJECI� Subsection 22.1. Statement of Obiectives. See Section I, Subsection 1.5, Statement of Objectives. Subsection 22.2, Modified Redevelopment P{an. See Section I, Subsections 1.2 through 1.15. Subsection 22.3. Parcels to be Included. The boundaries of Hazardous Substance Subdistrict No. 20A (the "SubdistricY') are described on the attached Exhibit XXII-A and illustrated on Exhibit XXII-B. Subsection 22.4. Parcels in Acquisition. The Authority may write down or acquire and reconvey real property, or interests therein, within this Subdistrict or elsewhere within the Project Area, at the time or #imes as the Authority may determine to be necessary or desirable to assist or implement development or redevelopment within the Project Area or the Subdistrict, The Authority may acquire any of the parcels described on Exhibit I-A and illustrated on Exhibit I-B by gift, dedication, condemnation or direct purchase from wiliing sellers in order to achieve the objectives of the Redevelopment Plan or the TIF Plan. Subsection 22.5. Develo�ment Activitv for which Contracts have been Sianed. As of the date of adopYion of the Tax Increment Financing Plan (the "TIF Plan"}, the Authority intends to enter into a Redevelopment Contract with Real Estate Recycling LLC, a limited liability company for the activit+es discussed below. Subsection 22,8. Specific Development Expected to Occur. At this time it is anticipated that the current parcels will be redeveloped including demolition and removal of blighted and substandard structures and contamination remedialion and the construction of: Phase I: ApproximaYely 65,000 square feet of office showroom, 100,000 of office/warehouse and 200,000 of bulk warehouse space to be constructed in 2012-2013; Phase Il: Approximately 65,000 square feet of office showroom, 100,000 of office/warehouse and 200,000 of bulk warehouse space to be constructed in 2013-2015; and Phase III: Approximately 125,000 square feet of offce showroom, 200,000 of office/warehouse and 400,000 of bulk warehouse space to be constructed in subsequent years. 22-1 � Upon complefion of the redevelopment, an aggregate of 1,454,96� square feet of office showroom, officehvarehouse and bulk warehouse will be constructed with an estimated market value of approximately $72.7 M. Subsection 22.7. Prior Planned Improvements. After due and diligent search, the Authority has determined that no building permits have been issued during the eighteen (18) months immediately preceding approval of the TIF Plan by the Authority. Subsection 22.8. Fiscal Disparities. The Council hereby elects the method of tax increme�t computation set forth in Minnesota Statutes, Section 469.177, Subdivision 3, clause {a). Subsection 22.9. Estimated Public Improvement Costs. The estimated public improvement costs, including interest thereon to be incurred for the benef�t of and within the Subdistrict and the Project Area are set forth on Exhibit I-C. 5ubsection 22.10. Estimaied Amount of Bonded Indebtedness. It is anticipated that approximately $4.4 M of bonded indebtedness may be incurred with respect to this portion of the Project Area. Subsection 22.11. Sources of Revenue. Anficipated revenue sources fo assist in the financing of the public improvement costs, pursuant to Subsection 21.9. above, include (1) general obligation and/or revenue tax increment obligations with interest; (Z} the direct use of tax incremen#s; (3} the bvrrowing of available funds, including without limitation interest-bearing City short-term or long-term loans; (4) interfund loans or advances; (5) interfund transfers, both in and out; (6) land sale or lease proceeds; (7) levies; (8) grants from any pubfic or private source; (9) developer payments; (10) loan repayments or other advances originally made with tax increments as permitted by Minnesota Statutes; and (11) any ofher revenue source derived from the City's or Authority's activities within the Project Area as required to finance the costs as set forth in Exhibit I-C. All revenues are available for tax increment eligible expenses within the Project Are as allowed by Minnesota Statutes. Subsection 22.12. Estimated Or�inaV and Ca�tured Tax Ca�acities. The tax capacity of all taxable property in the Subdistrict, as most recently certified by the Commissioner of Revenue of the State of Minnesota on January 2, 2012, is estimated to be $301,468. The captured tax capacity of the Subdistrict is estimaied to be $301,468. The Authority intends to utilize 100°/0 of fhe captured tax capacity for the duration of the Subdistrict for purposes of determining tax increment revenues. Subsection 22,13. Tax Increment. Annual tax increment generated from the Subdistrict has been calculated at approximately $339,950. This esiimate is provided on the attached Exhibit XXII-C. Revenue has also been projected for the duration of the Subdistrict and is shown on Exhibit i-C-15, 22-2 98 Subsection 22.14, Local Tax Rate. The estimated pay 2012 local tax rate is 1,12765. Subsection 22.15. Subdistrict. The Subdistrict is, pursuant to Minnesota Statutes, Section 469.174, 5ubdivision 23, a hazardous substance subdistrict. Subsection 22.18. Duration of TIF District. The duration of the Subdistrict is expected to be twenty five (25) years from receipt of the first tax increment or the period necessary to recover the costs of removal actions or remedial actions as specified in the development respond action plan. The date of receipt of the first tax increment is estimated to be July, 2013. Thus, it is estimated that the 5ubdistrict, including any modifications for subsequent phases or other changes, would terminate in the year 2038. Subsection 22.17. Estimated Impact on Other Taxinq Jurisdictions. The estimated impact on other taxing jurisdictions is reflected on Exhibit XXII-E. At this time the Authority anticipates there will be no impact on City services due to the creation of the Subdistrict. Additionally, since the City has no current ptan to issue general obligation debt for project costs, it further anticipates that there will be no impact on its borrowing costs due to the creation of the 71F pistrict. Please refer to Exhibit XXII-D for the narrative "but for" analysis. Subsection 22.18. Modification of the Hazardous Substance 5ubdistrict andlor Tax increment Financing Plan. As of Aprii 9, 2012, no modifications to the Subdistrict or the TIF Plan have been made, said date being the date of initial approval and adoption thereof by the City Council, 22-3 .. EXHI6IT XXiI—A PARCELS TO BE INCLUDED 27-30-24-13-0092, 27-3Q-24-42-�002, 27-30-24-43-0002 and all easements, rights-of-way and adjacent roads and streets XXil-A-1 r � �� � n� �,�i iri�i y: �@ �� 1 � ^ •�"er ; , , ry7Q.: . ti��, �'��i=, aaa �y,_ 'Ti�[eIDs'� `. x� Gi� i��r� �i7 Yii xix.<v��tt(i�5� ffj° , t`� ::�3 ��3�p:��y{�g fg�si��r .:i::W .��i��� i2!:rfeen`�i��:�■�12�E1{���._ � _ ." a,- r���, !� �� ._ �,�_�_ 1�� EXHIBIT XXII—B . .,�.,..�.�.,�.,...�..o....,.....»,�., �... � y,. 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XXI(-g,2 102 1� � J3 .d�- ,p. � �1 � � � � w� � BAE Site 2012c � TIF Plan.xlsx XXII - G� 1 103 BAE Sne 2ei2c - 71F Plan.zisx XXII - C- 2 104 EXHIBIT XXII—D "BUT FOR" ANALYSIS The Site is approximately 136 acres and contains a building that is 2,000,000 square feet. 7he Site is best lcnown as the FMC Corp. 5ite. From 1941-1964, a naval ordinance manufacturing comptex operated the Site, from 1945-1969, a southern portion of the Site was used for burning and disposing of waste; in 1981, an mvestigation revealed contamination and a history of waste disposat; in 1983, a cleanup of the Site began. The southern portion was listed on the National Priorities List. Attached is the cover page and the Executive Summary of the F'ourth Five-Year Review Reporl dated September 30, 2009. The building is substandard as shown by the Code/Condition Deficiency Report prepared by LHB, Inc. dated January 31, 2012. In addition, the building has limited uses and is obso{ete by current warehouse standards. Real Estate Recycling is proposing to demolish the building, remediate the Site and construct approximately 1,�00,000 square feet of office, showroom, warehouse and bulk warehouse facilities in approximately 12 buildings. Because of the very substantial demolition and remediation costs, it is not possible to redevslop the Site without the use of tax increment. MMB: 4840-4818-5648, v. 1 XXI I-D-1 �os Property Address: PTN: Inspection Dnte(s) & Time(s}: Inspecdon Tyhe: CODE/CONDITION DEFICIENCY REPORT dannary 31,2012 4850 East River Road, Frfdley, MN 27-30-24-13-0002 & 27-30-24-42-0002 December 2, 2011 - 8:00 a.m. Interior & Exferior Summary of Uefrciencies: It is our professional opinion that Uris building is Substandard because: - Building CoJe deficiencies total more than I 5% of replacement cost. - Substantial renovation is required to conect Conditions found. EstimatedReplacementCost: $ 179,468,500 Fstimated Cost to Correct Building Code Deficiencies: $ 40,A75,000 Percentage of Replacement Cost: 23% Aescription of Condi6on Deficiencies Minnesota Statutes, Section 469.174, Subdivision 10, states that a building is Structarally Substandard if it contains "defects in structural elements or a combination of deficiencies in essential utilitias and facilities, light and venlilation, fire protection including adaquate egress, layout and condition of interior pu[itions, ar similar faciors, whicli defects or deficiencies are of sufficient total s+gnificance to justify substantial renovation or clearance." A. Defects in Structara] Elements I. Roof strachu•e inadeyuata to supgon reroofing with correct amount of slope and insuletion. 2. Roof structure under-sized to support snow drift loads. 3, Columns and roof structure are not fire-rated. B. Combination of IIeficiencies 1. Essential Utilities and Facilities a. The HVAC system is piec�meal and of different ages, some elements dating from the 49s. Many of the older units appear to be aged and in need of replacement or repair. 2. Li�ht and Ventilatian a. Many light fixtures use T121amps, scheduled to be phased out by DOE mandate. 3. Fire ProtectionlAde�uate Eg�•ess a. Two stairs are too steep and have inadequate handrails. h. Tlu•ee stairs have inadequate handrails. c. Onlawful mechanical/elecuical penetralion at one stair enclosure, d. At least tluee sYair anclosures exit into the factory space, instead of into an acceptable exit passage. e. Mechanical rooms appear to be inadequately separated fmm rest of construction. 4. Layout and Condition of Lrterior PartitionsJivlaterials a. Interior finishes have been damaged by water leaking from roof in some ]ocations. b. Office building wing badly damaged from mold infestation. c. O�ce wing finishes completely gutted, lighting removed and HVAC distribution system parfially removed. X1�06� 5. E�cterior ConsG•uc6on a. Roofing appears cracked and worn, b, Roof slope inadeqnate, resulting in ponding and leaking. c, O�ce building wing badty damaged flom mold infestation. Descrietion of Code Deficfencics 1. Steel sLucture is expased and unprotected. In order to meet allowable area requirements in the code, exposed steel columns and roof structure must be have at least 1-hour fire resistance. 2. Approximately 40% of the building is without required sprinkter system. 3. Stair guardrails at five locations do not meet code. Girazdrail picket spacing is greater than 4". 4. Stair handrails are too low in five locations and lack extensions. 5. Stair risers in two locations exceed the maximum allowable 7" and peads are less than tlie minimum allowabla 11" 6. There are unprotected penetrarions in required fire-rated wal(s and ceilings (stair enclosure and mechanical room). 7. Roof slopes do not meet code for adequate drainage. 8. According to a roof survey conducted in the mid-SOs, most of the roof is overstressed, meaning it would ba unable to support ffie tapered insula(ion necessary to correct roof slopes, Although changes in the code have lessened roof design loads since the survey was conducted, a requiremant to acwmmodate snow dri$ loads has been added. The result, in a building such as this with many clerestory Areas that would cause drifling on lower roofs, is a greater dasign load in affected aseas. It is estimated Ihat 75°ro of the roof is structwally inadequate due to snow drift foading. 9, One of the elevators is without accessible controls. 10. Travel distance from buildiug interior to public way exceeds albwable maximum. Enerev Code In addition to the building code deficiencies listed aUove, the existing building dces not comply with the current energy oode. These deficiencies are not included in the estimated wsts [o correc[ coda deficiencies and are not considered in detennining wUetl�er or noi the bailding is substandard: - Building's wal( insulation dces not meet current code requirements. - Building's heating and coo]ing is not as efficient as current energy code would require, - Building's ]ighting in majority of office azeas not energy efficient. M:1; IPro�111062l1400➢esign}40G Reportsl'fIYlSubstuMeN Duilding Reporl BAE I1 I228.docx XXN-D-3 107 EPA� qRepgp�b�pn 6 �Rry=cords Ctr. I�WHQIIe�NHI�I�� 342766 Five-Ycar Review Report Fourth Five-Year Review Report For FMC Corporation (Fridley Plant) Fridley Anoka �ounty, Minnesota September, 2009 PKEPARED SY; Minnesota Ppllulion Conlrol Agency St. Paul, Minnesota As Modified by The United States Environmental Protection Agency Region 5 Chicago, Illinois Approved by: _. ' � _�--�'"' R�ard C. Karl lairevtar f'suX�crfund Division Date: XXII-D-4 108 3� 4 Executive Summary On behalf of the United States 6nvironmental Protection Agency (US EPA), the Minnesota Pollution Control Agency (MPCA) has co[npleted a five-yeur review of the remedial action (RA) imptemented at the FMC S'tte (Site) located in Fridtey, Minnesota. This is the fourth five-year review for the Site which evaluates the efFectiveness of the ttA to date. Historically, industrial and hazardous waste generated from naval ordnance manufacturing including plating wasYes, paint, paint sludges, oils, botiom ash and chlorinatad and non- chlorinated solvents was disposed of at the Site. Initial remedial actions included construction of an on-site cantainment artd treaimenl facility (CTF) to treat and contain soils contaminated wiTh voiatile organic compounds (VOCs) in 1983. Groundwaler contamination was addressad through a groundwater extraction systam, installad in 1987, and a monitoring well network. The groundwatet eactracfion system continues fo operate and VOCs mmain in the groundwater at and down gradient of the Site. Protectiveness Statement(s): The pratectiveness of the current remedy as concluded by ihis five-year review is as follows: Grou�dwater TE�e remedy setected to address groundwater contarreination is currently protective of human health and the environment in the shart terma. In order for the remedy to be protective in the long-term the follow'sng actions need to be completed: • The monitoring well network must be expanded and iha groundwater plume must be fiaily defined; • MCLs or healih based cleanup vaiues are to be achieved at the Site boundary; • Updates to the Site monitoring plan need to be completed; • The capture of lBa gxoundwater extraction system must be further evaluated; • A complete risk assessment is to be conducted with regard to the seep; • Effectiva institutional controis are in place at and near the site that are pratective in the short term and apply to a11 activities thac may lead to potentiat exposure; In order to assure long term protectiveness, additional institutional controls on BAE property and naazby propeny wi0 be evAluated. • Remedial action addressing exposure at the seep must be comp[eted (if ' See Appendi% A For MPCA's position on the short term protectiveness, !D XXI I-Q-5 109 determined to be necessary by the risk assessment); • Further evaluation needs to be conducted for add'rtional remedial action utilizing data collected from additional investigations; � • Improvements [o data evaluation and presentation within Annual Monitoring Report to be made. 3oi1 Soil removai actions were conducted prior to implementauon of tha ROD and decision documents for the Site. The US EPA and MPCA have found soil removal actions ta be protective of hurnan health and the environment. Continued monitonng of CTF monitoring wet)s and data evaluation is required to assure continued long term protectiveness, In addition institutional controls may need to be implemente� to assure the CTF remains protective in the long-term. A review of ICs will be conducted in an iC plan to determine what additionaJ ICs are needed. Site Wida The selected remedy to address groundwater contamination at the site is protective of human he��lth and the em�ironment in tha shorl term. Tn order f'or the groundwater remedy to be protective in the long-term, nctions identifie$ in the protectiveaess statement in the groundwater and recommendations section of this fiv�year review must be implemented. The soil removal actions and CTF fiave been identified by the MPCA and US EPA as protective, alihough institutional controls aze may be needed to assure long-tetm protectiveness. 11 1� � . 1 EXHIBIT XXII - E ESTIMATED IMPACT OF HAZARDQUS SUSSTANCE SUBDISTRfCT NO. 20A IMPACT QN TAX BASE ORIGfNAL ESTIMATED CAPTURED TAX 7AX TAX TAX DIS7RICT AS % ENTITY BASE CAPACITY CAPACITY CAPACITY OF TOTAL City of Fridley 31,795,494 D 301,468 301,468 D.948% CountyofAnoka 315,214,077 0 301,468 3Q1,A68 0.096% ISD #13 20,892,516 6 301,468 301,468 1.443% IMPACT ON TAX RATE * TAX °lo OF TAX TAX RATE ENTITY RATE TOTAL INCREMENT INCREASE City of Fridley 0.39478 35.01% 119,014 0.378°/v County of Anoka 0.41056 36.�+1 °fo 123,771 0.039% ISD #13 0.24355 21.80% 73,423 0.357°/u pther 0.07876 6.9&% 23,744 1.12765 100.00% 339,950 * Assumes market value will not decfine. XXII-E-1 111 ESTIMATED TAX INCREMEN'f REVENUES (from tax fncrament genarated by �he district) Tax incremeni revanues distrfbuted from tho county Interest and investment eamings Salesllease proceetls MeAcet value homestead credlt Total Estlmated Tax Incremeni Revenues EXHIBIT I - C BUDGET TIF #20 71F #20A N55 Cumulative Cumulative Modfffed Nlotlifled TIF Plan TIF Plan 6udget Budget TOTAL $ 48,500,000 $ 8,356,000 56,850,000 485,000 83,500 588,500 $ 48,985,000 $ 8,433,500 $ 57,h18.500 ESTIMA7ED PROJECTlfINANCING COSTS {to be pafd or financed with tax Increment) Projuct Costs LandJbuilding acquisition SNe improvemerKslpreparation costs Utlllties � Ottier qual'dying Improvements Construotian of affordeble housing Small city authorized costs, If nof already inGuded abova Administrative costs Estimated Tax Increment Project Costs $ 500,Q00 $ - 4,998,500 15,275,D00 4,850,000 835,Q00 $ 20,H25,000 $ 5,833,500 500,000 4,996,500 15,275,000 5,685,000 $ 26,458,500 Estimated Fi�ancing Costs Interesi axpense 28,36p,000 2,6D0,000 30,960,000 Total Estimatetl ProjecUFinanGng Costs to be Paid From TI $ 46,985,000 $ 8.433,500 $ 57,418,500 0 0 0 ESTIMATED FINANCMG Total amount ot bonds to be Issued 20,1D0,000 5,800,000 26,900,OQ0 TIF Budget - 20 & ZDA.xlsx I- C-15 112 f: AGENDA ITEM CITY COUNCiL MEETiNG OF F o� April 9, 2012 To: William W. Burns, City Manager qi��� From: Dazin R. Nelson, Finance Director jy`I Kyle Birkholz, Liquor Store Manager Date: Apri15, 2012 Re: Amended & Restated Liquor 5tore Lease Background Back on February 13`h, the Council approved a new liquor store lease agreement with ZCOF TL Fridley, LLC also known as Tri-Land Developments, Inc. of Westchester, Illinois. Tri-Land's financing company is currently reviewing both the SuperValu and Fridley Liquor Store lease before approving final financing for the redevelopment and allowing both leases to be fully executed. The financing company has requested two changes to the City's contract that will help expedite the construction timeline. The first change is in Section 23, which defines the commencement date. The commencement date is the date the liquor store first opens for business to the public fully fixture, stocked and staffed in the new premises. In the lease approved in February, the City has up to sixty days between the delivery date (the date the keys aze handed to the Ciry) and the commencement date (the first day of operations). The concern of the financing company is that during this sixty day window, the demolition of the existing premises cannot occur, causing a potential delay in construction. This delay could result in outside work potentially not being completed before the onset of winter. We aze sensitive to this timeline and would also prefer to have construction wrapped up before winter so that the liquor store operations can return to normalcy. We have since negotiated with Tri-Land to allow us to set up our beer cooler twenty-one days prior to the delivery date. The installation of the beer cooler is our largest project in regazds to moving and setting up. In return, we have agreed to reduce the number of days between the delivery date and the commencement date from sixty to twenty-one. Staff is confident that with the beer cooler set up and running prior to the delivery date, we will be able to finish our detail work and move into the existing space within this timeframe. 113 The second change is in Section 2.4, which defines the timeline for surrendering the existing leased space. In the lease approved in February, the City has fourteen days to surrender the existing space after the commencement date. In essence, this allows the City to utilize the existing space for up to fourteen days, even though we would be fully operational in our new space. Again, this additional two weeks of potential idle time puts pressure on the timely complerion of the construction schedule. We do not anticipate needing the existing space after operations aze up and running. We were concerned that we may have miscellaneous items such as shelving or even inventory left in the existing space immediately following the commencement date. In order to not slow the demolition of the existing space, we negotiated with Tri-Land to allow for temporazy storage space for up to fourteen days after the commencement date. This space will be located in an area of the building that is not under construction at that point in time. We will have to vacate the existing liquor store space, but having another space available to stage items is acceptable. The only other change noted is to Section 11 of Exhibit D, which is a directly related to the language changes in Section 2.3. This change allows the ciTy to relocate and install the beer cooler prior to the delivery date, with the stipulation that we have necessary liability insurance, building permits, etc., which is what is spelled out in Section 3.2A of Exhibit D. The City Attorney has reviewed the revisions to the lease and is comfortable with the language amendments. Attached are the sections of the originallease with the appropriate revisions noted. Recommendation Staff recommends Council pass the attached resolution approving the Amended and Restated Liquor Store Lease between the City of Fridley and ZCOF TL Fridley, LLC, with the stipulation that the signed lease not be delivered to the landlord until evidence of a fully executed SuperValu lease is received. 114 An�endrt7e;nts .c� Leasc:_fi:�reeri�nt �i�rt i�t ?-,�- _ _ Section 2.3. Commencement of the Term. The Lease Term, and the obligations of the Tenant to pay Rent hareunder and to commence retail operations in the Leased Premises, shall commence and accrue on the earlier of (a) the date that Tenant first opens for business to the public fully fixtured, stocked and staffed in the Leased Premises, or (b) the �ixti��t�(�}��(t��)"'t7Y� - firsLfZL) day following the date on which Landlord delivers possession ofthe Leased Premises to Tenant with those portions of Landlord's Work more particularly described in Sections 1 through �4 of Exhibit C substantiaUy complete (the "Delivery Date"). Such date of commencement of the Lease Term as hereinabove provided, is referred to as the "Commencement Date." Tenant shalV perform diligently such of its obligations contained in Exhibit D as are to be performed by it prior to the Lease Term, and shall complete its work not later than the Commancement Date. Section 2.4. Existin� Lease. Landlord and Tenant are eurrently parties to that certain Shopping Center Sublease dated as of June 14, 1999, as amended by that certain First Amendment to Lease dated as of September 21, 2006 (collectively referred to herein as the "Existing Lease"), for certain premises consisting of approximately ]3,331 square feet, including :i r�ortion of the Leased Premises and.s�CGtiu additional premises referred to herein as the °Surrender Premises", as depicted on Exhibit B attached hereto (the F-�.�Surrendcr Premises and said o�rYicin of the �;a,=ra�k��Le.SSSSI Premises are colleeYively referred to herein as the "Existing Premises"). Prior to the Commencement Date, Tenant shall continue to occupy the Esisting Premises subject to the terms, covenants and conditions of the Existing Lease, except as otherwise expressly provided in this Lease. Tenant shall relocate Tenant's operations from the Existing Premises to the Leased Premises, as more particularly described in Exhibit C and Exhibit D, removc atl of Tenant's :: , ��� � s,.s�� ! =s=s•-�.�� and open for business to the public in the Leased Premises on the Commencement Date: orovided 6owever. that Tenant shall be nermiftetL t4 st9r_e_ tr� fixturee etiuinment and ofher p�� �� oronertv (includine inve�torvl in a oortiou (as mav be deciunated by I andlord from time to time�StLSll��nac� desi�ated_as_ "Availa6le Anchor" ou Gxhibit D-1 � ��.� =�� � �� the Comme��cement Date. Effective as of the Commencement Date, the Existing Lease shall terminate and shall be of no fuMher force or effect, and thereafrer Tenant shall be deemed to have surrendered possession of the Surrender Premises to Landlord, shall have no right to possession of the Surrender Premises, and shall have no right to conduct operations ;�+r+�Er�-;fij+�+t+tnti# -I�+,+ektt: {�i��-+�4��4k�r�=t ���t� to store v�:� trade fixtures, equipment �++�i� personal property 1<x,iiett rt3--t#3. �trr�et3.1�f-�'r�t�r�t�; ifjii33�tltatelu t�++r;+-t���ltr�rt}��r,, '.--,�,T�° �+�-�ft� Sta�ri'�iteae� -}?+'e�ix�i-,es :, � � - thcrein. Follo�tiing the Commencement Date,-k�I4�>�-��4;+�4i Landlord shall have right to remove and dispose of s��t+e�y ofTenant'c trade Tixtures,_gquioment or persanal �roperh� not removed from the Surrender Premises without liability to Tenant therefor, �-+i+il-jcr� �+��ati.-�.;-TT�+�t--I�; �4d-t*+-it,, _;. _ ,. . , , , ;-e`;�ittit-tii�i�-c`r!1-Fi-I+tc+r-N+-H-ritrt�i,}�++ r�+-i--trti>t,z-Fi-4._.y"+•.ti#'i1+�z-i -c=1+Ye'+rrF�`-cY�+ r,�.:i-t�+tEi+H'i-j�t"+�,f-*tiz+i f,_.`:�F�.�irlcrttc�;-++Hl�re.*-�+i++l'IrciicP��icirttsc>�-citii� (iN ifct�'Hft6 +C3yiit�tixtd <OV�tiiN1�� (dfi4=ttiHe :+flti-)�E�l� .�'ttJ4't'CIi{�y'{' F�tiCY145t.h-��>� i+:H;2i?l�itib� etiti.eic a Sc.i�c?�tN'_�.'7 ��iiiiil�, '.i�tiitfdifl���?4?�Ha�4 -���titEvi !i) �i*iiF,if}{ S d•.'k'i?i.. it�iii!'il�I���ti di��-i'illl�i=4CC4 d•i�� Iiii�,tbi �,ia�E{ft�IL�. i�?t:t}Iv�fi�i �5t4?C•aai.ii+lti.?+i8 : , t++++i=cv�:-�+t�{*k�+e�-= -,#�+�+I�e+,--t{++t�}i-lr-�;-±t �� +;t w�r_-:+�,-trt�ti 05392\00707�9100.>4_10 3 115 k+r;s �ttx���+3s-4�tt+rtl�e!-ttttit+�+r r! :c�t-k� �-it�tc�+�-: }�-w,-ckt+t»4+a-v',,,.,:;�-,.�Ees�+�rc+�-��3r,�'sctly� �+���c ��t3 ttt� �Ererc+t�#�r--t'reixtnc-. t��caLt�ok�cJ 13y tt�}-,+stfxrt»�r't�,+<at� <a{'-{�yt�tr�t: c;+_«4`at}�.�t}��+aj;+r; F��. [i}r+rtr•�kr+�-�i�ck+�+�;{+++.-;+r}fl�+;}t ii�:it+t} Ng 4�tF3'fl!'e? Ir* iNH �tiCfS.bft eif jl?81riC'Ci{ ���e_!f4'4R4'_ iH O}4<�i ci�h�t1S �:iti L�ti4'i'e�ie�it }�i'ti-4Yt�§4l4 eii' dC+���-!"si5� ��Ycfc'���. Section 2.5. Term of Lease. The Lease Term shall be for the period specified in Section 1.1 supra, unless otherwise terminated or extended as provided herein. Section 2.6. Definition of Lease Year. The term "Lease Year" means a period of twelve (12) consecutive calendar months, provided, however, that prior to the first Lease Year there shall be a"Partial Lease Year" which shall commence on the Commencement Date and shall end on October 31, 2012. The first Lease Year shall commence on November l, 2012 and shall end on October 31, 2013, a�d each succeeding Lease Year shall commence upon the anniversary date of the first full Lease Year. Section 2.7. Extension Options. Provided Tenant is not otherwise in default hereunder beyond any applicable notice and cure period and is continuously operating in the Leased Premises for the Permitted Uses at the time of Tenant's delivary of the First Extension Notice (de6ned herein), Tenant shall have the option ("First Extension Option") to extend the Lease Cerm for one (1) period of five (5) additional Lease Years (the "First Option Term"), subject to the terms, conditions, covenants and provisions of this Lease. Tenant shall exercise the First Extension Option by giving Landlord written notice thereof ("First Extension Notice") at least three hundred thirty-five (335) days prior to the expiration of the initial Lease Term. If Tenant shall fail to timely deliver the First Extension Notice to Landlord, or if Tenant shall be in default beyond any applicable notice and cure period at the time of Tenant's delivery of Ihe First Extension Notice, the First Extension Option shall immediately become null and void. In addition, provided Tenant has properly exereised the First Extension Option and further provided Tenant is not otherwise in default hereunder and is continuously operating in the Leased Premises for the Permitted Uses beyond any applicable notice and cure period at the time of Tenant's delivery of the Second ExCension Notice (defined herein), Tenant shall have the option ("Second Extension Option") to extend the Lease Term for one (1) period of five (5) additional Lease Years (the "Second Option Term"), subject to the terms, conditions, covenants and provisions of this Lease. Tenant shall exercise the Second Extension Option by giving Landlord written notice thereof ("Second Estension Notice") at least at ]east three hundred thirty- five (335) days prior to the expiration of the First Option Term. If Tenant shall fail to timely deliver the Second Extension Notice to Landlord, or if Tenant shall be in default beyond any applicable notice and cure period at the time of Tenant's delivery of the Second Extensio� Notice, the Second Extension Option shall immediately become null and void. Section 2.8. Fridlev 1998 L.L,C. Lease. It shall be an express condition precedent for both Landlord and Tenant that C,andlord and Fridley 1998 L.L.C.("Cub") enter into a new lease to reconfigure Cub's current premises in the Shopping Center (the "New Cub Lease"). Landlord shall notify Tenant in writing upon the execution of the New Cub Lease and verify the New Cub Lease by showing Tenant the face page and the signature page of the New Cub Lease. 05392\007071910454.10 4 116 Section 2 9 Amendmeut and Restatement This Lease l�erebv amends and restatec in it� eutiretv that certain leace bv a�td b��aLa�ullocd and Tenant ���hich �cac nreviouslv anuroved bc Tenant ott Februarr 13 2012 but was ut erecuCed h� Lan lord The uarties desire tn here Y�men�sQrt2in_�rat�isions of such orior lease, as nrovided in this Leasc. ARTICLE III. CONSTRUCTION. Section 3.1. Construction bv Landlord. Landlord will perform work in the Existing Premises and the Leased Premises substantially in accordance with the outline specifications described in the schedule entitled Description of Landlord's Work and attached hereto as Exhibit C. Not later than the Commencement Date, Landlord's architect will calculate the actual Floor Area of the Leased Premises. If, pursuant to said calculation, the actual Floor Area of the Leased Premises is less than or greater than that stated herein, then all applicable references to the Floor Area of the Leased Premises shall be amended in accordance with said calculation; provided, however, that if the square footage for the Leased Premises is equal to or greater than 10,300 square Yeet, then the Fixed Minimum Rent payable by Tenant under this Lease shall not be affected. ]f the square footage for the Leased Premises less than 1Q300 then the Fixed Minimum Rent shall be amended to be $] 0.43 multiplied by the actual number of square feet for the Leased Premises. In determining the Floor Area of the Leased Premises, measurement shall be taken from the outside surface of exterior walls and the center of interior dividing or demising walls. Section 3.2. Construction by Tenant. All work to be performed by Tenant prior to the Commencement Date shall be governed by Exhibit D attached hereto and made a part hereof. Any work to be performed by Tenant following the Commencement Date shall be governed by Section 8.1.i ofthis Lease. Section 3.3. Renovation Allowance. Provided Tenant is not otherwise in default beyond any applicable notice and cure period, Landlord will reimburse Tenant for a portion of the costs incurred by Tenant in relocating or replacing or adding fixtures, equipment and merchandise to the Leased Premises in the amount of up to Fifty Thousand and No/]00 Dollars ($50,000.00) (the "Renovation Allowance"), which amount shall be payable within forty-five (45) days following the later to occur of (i) the Commencement Date and (ii) the date Tenant submits to Landlord a written statement requesting such payment accompanied by paid invoices covering all costs incurred by Tenant in connection with such work, certifies that the Shopping Center is free and clear of all mechanics' liens and other encumbrances relating to such work by submitting a commercially reasonable form reasonably acceptable to Landford and Tenant, and provides to Landlord �vaivers, affidavits and releases of Iien from all of Tenant's contractors and material suppliers relating to such work in form and substance reasonably satisfactory to Land lord. ARTICLE IV. METHOD OF RENT PAYMENT. Section 4.1. Fixed Minimum Rent. Tenant agrees to pay to Landlord, or to such other persons as Landlord may direct, without demand, at the Address of Landlord or such place as Landlord may by notice in writing to Tenant from time to time direct, Fixed Minimum Rent in the amount specified in Section l.l, payable in United SEates Dollars in advance in equal successive monthly installments commencing on the first day of the Lease Term for the first os39z�oo�m�9 i oasa. i a 5 117 EXHIBIT D DESCRIPTION OF TENANT'S WORK All work required to complete and place the Leased Premises in finished condition for opening for business, except work to be done by the Landlord described in Exhibit C, is to be done by the Tenant, at the TenanYs expense, and in accordance with this Exhibit, Exhibit E, and the Lease to which this Exhibit is attached. TENANT'S WORK includes, but is not limited to, the following: I.l Relocate .�ih� portion of Tenant's x�;r,<< beer cooler ki�+�itthat is located iu the 4;�kr<tm�-�-F+e+�rf,e4 +t�—t�+��}�ta+��a;��-�=h}�,��+eEl cased Premieev to a oortion (as may be .l _. _ l L . i _J� ..l f _ _ a.W_ �_ �.:�_l ..0 �L_ ......�__ J.�.. ,�L..�1 .�.. 1� A�..�:I..l.l.. A....1.....�1 on Eshibit D-1 (where Landlord shall store same at Landlord's cost) :�s� -.1}e��i e�� ��l���l�i� -l�--l- �al; ��a,t:er. Landlord shall give Tenant not less than thirty (30) days prior notice of the date on which Tenant shall relocate Tenant's cooler and products, whereupon Tenant shall partition TenanYs cooler to prepare for the partial relocation and �hall relocate same Landlord sh�ll �ive Tenant nnt less than thirfv (301 davs' nrior notice of t6e date on H�hich Laudlor estimates that the Delive_�ate�°ill_ucc�. Cmnmencin� on the date tl�at is riventv-one (211 dav� orior t� the nr000sed Delirer�� Date set forth iu Landlord's notice. Tenani shal h;s�� the �iQht trz cntcr ontc� thc Leased Premi,es f�r the nuroose of relocatinQ and insfalline'LennnYs beer �ooler�om tlt� �vailf�Vlc AochQr snace and the F'xivtin Premicec to the I eaced Premicec and installiue same S�cli entry �nt� the I,eased Premisc� and oerformance of such work bv Tcnant orior to the Deli��erv llate shall be ou all of the terms and con�itions of the I.ease other than TenanYa obl�gation to nay Fired Minimum RenL Tenant'c Pro-Rnta Share of QneraHnp Cocts rea! estate taYec xnd insuranee and tttiliri� eharees for the Leased Premises Tenant stt�ll noLtzr uertnitte to enter onto the Leased Premises nrior to ttie detiverv to Landlord �f all items reauired in Section 3.2A o1' this �xhibit D. Tenant and TenanYs contractnrs shall worlc in harmon�with Landlord and L•indlord's contracYorti duri� sucl� entn- by Tcnant orior to the ('ommencement llaYe and shall uot delav or disruot the nerformancc of L2ndlcird'c 4Vc�rk. 1.2 Purehasing and installing new equipment and fixtures or reinstalling the shelving in the Existing Premises and other interior fixtures and equipment, including all refrigerated coolers and cases and remote compressors. 1.3 Reloeating or disposing of all trade fixtures and furnishings in the Existing Premises. 1.4 Relocating all of Tenant's merchandise &om the Existing Premises to the Leased Premises. 1.5 Install storefront display platforms or backgrounds. 1.6 Purchasing and installing new signage consistent with TenanPs sign plans as illustrated in Exhibit G4-1 and as approved by Landlord. D-1 os3vz�oo�a�vioasa io 118 RESOLUTION N0.2012- A RESOLUTION APPROVING AND AUTHORIZING EXECUTION OF THE AMENDED AND RESTATED LIQUOR STORE LEASE BETWEEN CITY OF FRIDLEY AND ZCOF TL FRIDI,EY, LLC WHEREAS, the City of Fridley has an existing lease for its warehouse liquor store with ZCOF TL Fridley, LLC, a.k.a. Tri-Land Developments, Inc. of Westchester, Illinois located at 248 57th Avenue NE, Fridley, Minnesota; and WHEREAS, Tri-Land Developments is in the process of finalizing redevelopment plans for the shopping center which currently houses the City's liquor store and Cub Foods; and WHEREAS, the redevelopment plans will cha�ge the location, layout and size of the liquor store. The new footprint will resemble a more traditional strip mall size and shape by praviding a narrower storeFront width and a deeper store depth. The new liquor store will be approximately 2,760 feet smaller allowing for more efficient operations and a more controlled flow of customers through one entrance rather than the curcent two entrances;and WHEREAS, the terms of the lease are similar to the existing fease and provides for the currant annual Iaase rate of $109,980.75 through October 31, 2013, and an additional five-year lease beginning November ], 2013 through October 31, 2018 at an annua] rate of S 136,777.81, with the option of two additional five-year terms that include fixed rent adjustments; and W HEREAS, [he liquor store experienced a decrease in sales since Gander Mountain vacated the space next to the liquor store, the redevelopment plan provides for additional tenants which should help the liquor store regain lost sales; and WHEREAS, the City was able to negotiate a monthly $I,00� rent rebate into the lease to help insulate the City against the rent increase if the shopping center does not achieve its anticipated 75°/a occupancy for the first five-year term from 2013 to 2018; and WHEREAS, the new lease provides for a$50,000 renovation allowance for relocating the woler and associated condensers,signage and decorating expenses;and WHEREAS, the common area maintenance services will be provided by Tri-Land Deoelopments and the liquor store shall only be responsible for its prorated share of the shopping center; and WHEREAS, the lease is contingent upo� Cub Foods signing a new lease; and WHEREAS, subsequent to the liquor store lease approved by Council on February l3, 2012, Tri-Land Developments has requested changes to the lease to accommodate fina] financing approval: and WHEREAS, Sections 2.3, 2.4, and Exhibit D- Section 1.1 have been amended to terms agreeable to both the City and Tri-Land Developments; and NOW, THEREFORE, BE IT RESOLVED, that the Ciry Council of the City of Fridley hereby approves the amended and restated liquor store lease between the City of Fridley and ZCOF TL Fridley, LLC, located at the new address of 264 57th Avenue NE, Fridley, Minnesota, authorizes the execution of the lease by the Mayor with the stip�lation that the lease not be delivered to the landlord until evidence of a new Cub Foods lease is received. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE C1TY OF FRIDLEY THIS _ DAY OF 2012. ATTEST: Debra A. Skogen, City Clerk 119 Scott J. Lund, Mayor ��� � ���� AMENDED AND RESTATED LEASE FOR FRIDLEY MARKET FRIDLEY. MINNESOTA ARTICLE I. BASIC LEASE PROVISIONS AND ENUMERATION OF EXHBITS. Section 1.1. Basic Lease Provisions. EFFECTNE DATE: LANDLORD: ZCOF TL Fridley LLC, a Delaware limited liability company. ADDRESS OF LANDLOKD: c/o Tri-Land Developments, Inc., One Westbrook Corporate Center, Suite 520, Westchester, Illinois 60154-5764. With a copy of all notices to c/o EGI Properties, L.L.C., Two North Riverside Plaza, Suite 600, Chicago, Illinois 60606 Attn: Leasing Coordinator. TENANT: City of Fridley, a Minnesota municipal corporation. NOTICE ADDRESS OF TENANT: 6431 University Ave. NE., Fridley, Minnesota 55432-4384 Attention: Director of Finance. TENANT'S TRADE NAME: Fridley Liquors. LEASED PREMISES: The space designated and cross-hatched on Exhibit A, commonly known as 260 57�' Avenue N.E., Fridley, Minnesota 55421. FLOOR AREA: 10,540 square feet, being the deemed rentable area of the Leased Premises, as outlined in Exhibit A, subject to re-measurement as provided in Section 31 below. LEASE TERM: Approximately six (6) Lease Years (plus a Partial Lease Year, prior to the first Lease Year). FiXED MINIMUM RENT: Lease Year/Period Annual Fixed Minimum Rent 1, including Partial Lease Year preceding $109,980.75 first Lease Year (Commencement Date — 10/31I2013) 2 through 6 (ll/1/2013 — 10/31/2018) $126,777.81 oss9z�oo�o»� oasa. io Lease YearlPeriod Annual Fixed Minimum Rent (Option Terms) 7 through 11(ll(1(2018— 10(3ll2023) $145,841.14 12 through 16 (ll/1/2023-10/31/2028) $167,703.98 PERMITTED USES: A municipal liquor store and no other uses, subject to all of the terms, covenants and conditions set forth in this Lease including, without limitation, the covenants set forth in Article VIII. SECURITY DEPOSIT: None. Section 1.2. Enumeration of Exhibits. The exhibits enumerated in this Section 1.2 and attached to this Lease are incorporated in this Lease by this reference. Exhibit A. Site Plan of Fridley Market. Exhibit B. Depiction of Existing Premises. Exhibit C. Description of Landlord's W ork. Exhibit D. Description of TenanYs Work. Exhibit E. Sig� Criteria. Exhibit F. Rules and Regulations. Exhibit G. Depiction of Designated Spaces. Exhibit H. Depiction of Loading Area. ARTICLE Ii. LEASED PREMISES AND `1"ERM Section 2.1. Shonpine Center. Landlord is the owner of the tract of land located in the City of Fridley, Minnesota, commonly known as "Fridley Market" ("Landlord's Tract"). Landlord's Tract is depicted on Exhibit A. Landlord's Tract and any improvements and appurtenances constructed thereon from time to time are sometimes hereinafter referred to as the "Shopping Center." Landlord reserves the right from time to time during the Lease Term to make changes to the Shopping Center including the size and location of the buildings and Common Areas, to construct kiosks, enclosed malYs or courts, and to redesign or redecorate any or all of the Shopping Center. Section 2.2. Leased Premises. Landlord hereby leases and demises to Tenant, and Tenant hereby leases from Landlord, subject to and with the benefit of the provisions of this Lease, the Leased Premises. oss9z�oa�o»�oasa.io z Section 23. Commencement of the Term. The Lease Term, and the obligations of the Tenant to pay Rent hereunder and to commence retail operations in the Leased Premises, shall commence and accrue on the earlier of (a) the date that Tenant first opens for business to the public fully fixtured, stocked and staffed in the Leased Premises, or (b) the twenty-first (21 s�) day following the date on which Landlord delivers possession of the Leased Premises to Tenant with those portions of Landlord's Work more particularly described in Sections 1 through 4 of Exhibit C substantially complete (the "Delivery Date"). Such date of commencement of the Lease Term as hereinabove provided, is referred to as the "Commencement Date." Tenant shall perform diligently such of its obligations contained in Exhibit D as are to be performed by it prior to the Lease Term, and shall complete its work not later than the Commencement Date, Section 2.4. Existing Lease. Landlord and Tenant are currently parties to that certain Shopping Center Sublease dated as of June 14, 1999, as amended by that certain First Amendment to Lease dated as of September 21, 2006 (collectively referred to herein as the "Existing Lease"), for certain premises consisting of approximately 13,331 square feet, including a portion of the Leased Premises and certain additional premises referred to herein as the "Sunender Premises", as depicted on Exhibit B attached hereto (the Surrender Premises and said portion of the Leased Premises are collectively referred to herein as the "Existing Premises"). Prior to the Commencement Date, Tenant shall continue to occupy the Existing Premises subject to the terms, covenants and conditions of the Existing Lease, except as otherwise expressly provided in this L,ease. Tenant shall relocate Tenant's operations from the Existing Premises to the Leased Premises, as more particularly described in Exhibit C and Exhibit D, remove all of TenanYs trade fixtures, equipment and personal property from the Surrender Premises and open for business to the public in the Leased Premises on the Commencement Date; provided, however, that Tenant shall be permitted to store trade fixtures, equipment and other personal property (including inventory) in a portion (as may be designated by Landlord from time to time) of the space designated as "Available Anchor" on Exhibit D-1 for a period of fouReen (14) days following the Commencement Date. Effective as of the Commencement Date, the Existing Lease shall terminate and shall be of no further force or effect, and thereafter Tenant shall be deemed to have surrendered possession of the Surrender Premises to Landlord, shall have no right to possession of the Surrender Premises, and shall have no right to conduct operations or to store any trade fixtures, equipment or personal property therein. Following the Commencement Date, Landlord shall have right to remove and dispose of any of TenanYs trade fixtures, equipment or personal property not removed from the Surrender Premises without liability to Tenant therefor. Section 2.5 Term of Lease. The Lease Term shall be fox the period specified in Section 1.1 supra, unless otherwise terminated or extended as provided herein. Section 2.6. Definition of Lease Year. The term "I,ease Year" means a period of twelve (12) consecutive calendar months, provided, however, that prior to the first Lease Year there shall be a"Partial Lease Year" which shall commence on the Commencement Date and shall end on October 31, 2012. The first L,ease Year shall commence on November 1, 2012 and shall end on October 31, 2013, and each succeeding Lease Year shall commence upon the anniversary date of the first full L,ease Year. 05392�007071910454-10 3 Section 2.7. Extension Options. Provided Tenant is not othenvise in default hereunder beyond any applicable notice and cure period and is continuously operating in the Leased Premises for the Permitted Uses at the time of Tenant's delivery of the First Extension Notice (defined herein), Tenant shall have the option ("First Extension Option") to extend the Lease Term for one (1) period of five (5) additional Lease Years (the "First Option Term"), subject to the terms, conditions, covenants and provisions of this Lease. Tenant shall exercise the First Extension Option by giving Landlord written notice thereof ("First Extension Notice") at least three hundred thirty-five (335) days prior to tbe expiration of the initial I,ease Term. If Tenant shall fail to timely deliver the First Extension Notice to Landlord, or if Tenant shall be in default beyond any applicable notice and cure period at the time of Tenant's delivery of the First Extension Notice, the First Extension Option shal] immediately become null and void. In addition, provided Tenant has properly exercised the First Extension Option and further provided Tenant is not otherwise in default hereunder and is continuously operating in the Leased Premises for the Permitted Uses beyond any applicable notice and cure period at the time of Tenant's delivery of the Second Extension Notice (defined herein), Tenant shall have the option ("Second Extension Option") to extend the Lease Term for one (1) period of five (5) additional Lease Years (the "Second Option Term"), subject to the terms, conditions, covenants and provisions of this Lease. Tenant shall exeroise the Second Extension Option by giving Landlord written notice thereof ("Second Extension Notice") at least at least three hundred thirty- five (335) days prior to the expiration of the First Option Term. If Tenant shall fail to timely delivec the Second Extension Notice to Landiord, or if Tenant shall be in default beyond any applicable notice and cure period at the time of Tenant's delivery of the Second Extension Notice, the Second Extension Option shall immediately become null and void. Section 2.8. Fridlev 1998 L.L.C. Lease. It shall be an express condition precedent for both Landlord and Tenant that Landlord and Fridley 1998 L.L.C. ("Cub") enter into a new lease to reconfigure Cub's cunent premises in the Shopping Center (the "New Cub Lease"). Landlord shall notify Tenant in writing upon the execution of the New Cub Lease and verify the New Cub Lease by showing Tenant the face page and the signature page of the New Cub I,ease. Section 2.9. Amendment and Restatement. This Lease hereby amends and restates in its entirety that certain lease by and between Landlord and Tenant which was previously approved by Tenant on Febivazy 13, 2012 but was not executed by Landlord. The pafties desire tQ here6y amend certain provisions of such prior lease, as provided in this Lease. ARTICLE III. CONSTRUCTION. Section 31. Construction bv Landlord. Landlord will perform work in the Existing Premises and the Leased Premises substantially in accordance with the outline specifications described in the schedule entitled Description of Landlord's Work and attached hereto as Exhibit C. Not later than the Commencement Date, Lndlord's architect will calculate the actual Floor Area of the Leased Premises. If, pursuant to said calculation, the actual Floor Area of the Leased Premises is less than or greater than that stated herein, then all applicable references to the Floor Area of the Leased Premises shall be amended in accordance with said calculation; provided, however, that if the square footage for the Leased Premises is equal to or greater than 10,300 square feet, then the Fixed Minimum Rent payable by Tenant under this Lease shall not be oss9z�oo�o��9ioasa.io q affected. If the square footage for the Leased Premises less than 10,300 then the Fixed Minimum Rent shall be amended to be $10.43 multiplied by the actual number of square feet for the Leased Premises. In determining the Floor Area of the Leased Premises, measurement shall be taken from the outside surface of exterior walls and the center of interior dividing or demising walls. Section 3.2. Construction bv Tenant. All work to be performed by Te�ant prior to the Commencement Date shall be governed by Exhibit D attached hereto and made a part hereof. Any work to be performed by Tenant following the Commencement Date shall be govemed by Section B.LI of this I,ease. Section 33. Renovation Allowance. Provided Tenant is not otherwise in default beyond any applicable notice and cure period, Landlord will reimburse Tenant for a portion of the costs incurred by Tenant in relocating or replacing or adding fixtures, equipment and merchandise to the Leased Premises in the amount of up to Fifry Thousand and No/100 Dollars ($50,000.00) (the "Renovation Allowance"), which amount shall be payable within forty-five (45) days following the later to occur of (i) the Commencement Date and (ii) the date Tenant submits to Landlord a written statement requesting such payment accompanied by paid invoices covering all costs incurred by Tenant in connection with such work, certifies that the Shopping Center is free and clear of all mechanics' liens and other encumbrances relating to such work by submitting a commercially reasonable forrn reasonably acceptable to Landlord and Tenant, and provides to Landlord waivers, affidavits and releases of lien from all of Tenant's contractors and material suppliers relating to such work in form and substance reasonably satisfactory to Landlord. ART[CLE IV. METHOD OF RENT PAYMENT. Section 4.1. Fixed Minimum Rent. Tenant agrees to pay to Landlord, or to such other persons as Landlord may direct, without demand, at the Address of Landlord or such place as Landlord may by notice in writing to Tenant from time to time direct, Fixed Minimum Rent in the amount specified in Section 1.1, payable in United States Dollars in advance in equal successive monthly installments commencing on the first day of the Lease Term for the first month of the Lease Term and thereafter on the first day of each calendar month of the Lease Term. If the Lease Term commences on a day other than the first day of the month, the monthly rent payment for the first month shall be pmrated on the basis of one-thirtieth (1(3�th) of said monthly payrttent for each day of said month that is included in the Lease Term. Until notified to the contrary by Landlord, Tenant shall pay all amounts payable under this Lease to Tri-Land Developments, Inc., One Westbrook Corporate Center, Suite 520, Westchester, Illinois 60154- 5764. Section 4.2. Delinquencv Charge For Late Rent Payment -- Retumed Check Charee. To the extent permitted by law, to each and every payment of Rent which is not received by Landlord when due, there shall be added a delinquency charge equal to ten percent (10%) of said installment, payable immediately without the necessity of notice ox demand by Landlord as additional Rent hereunder. In addition, Tenant shall pay Landlord as additional Rent the sum of Twenty Five Dollars ($25.00) for each check given to Landlord by or on behalf of Tenant that is returned unpaid due to insufficient funds or otherwise. 05392\00 70 719 104 5 4.10 5 Section 43. Definition of Rent. The term "RenY' means all amounts due Landlord from Tenant under or pursuant to this Lease, including, without limitation, Fixed Minimum Rent, amounts due on account of real estate taxes, Operating Costs and insuxance premiums. Section 4.4. Fixed Minimum Rent Rebate. Provided that Tenant is not otherwise in default under any provision of this Lease beyond any applicable notice and cure period, Tenant shall be entitled to a partial rzbate of Fixed Minimum Rent (the "Rent Rebate"), calculated on a daily basis, during the period commencing on November l, 2013 through October 31, 2018 ("Rent Rebate Period"). During the Rent Rebate Period, the Rent Rebate shall be equal to One Thousand and Nol100 Dollars ($1,000.00) per month for each calendar month (pro-rated for any paRial month) following November 1, 2013 during which less than seventy-five percent (75%) of the total floor area of the remaining existing building of the Shopping Center is leased and occupied. The total Rent Rebate for each calendar year shall be calculated and paid to Tenant within sixty (60) days follawing the end of such cafendar year. Landlord shall give Tenant written notice of the first date on which seventy-five peroent (75%) or more of the total floor area of the Shopping Center is leased and occupied (the "Minimum Occupancy Date"), following which Minimum Occupancy Date Tenant shall have no further right to the Rent Rebate; provided, however, if at any time following the Minimum Occupancy Date and prior to October 31, 2018 the total floor area of the Shopping Center which is leased and occupied is again less than sevanty-five percent (75%), Landlord shall give Tenant prompt written notice thereof, whereupon Tenant shall again be entitled to the Rent Rebate effective as of the date on which less than seventy-five percent (75%) of the Shopping Center is leased and occupied until the earlier to occur of: (a) the date on which Landlord gives Tenant written notice of the first date on which seventy-five percent (75°fo) or more of the total floor area of the Shopping Center is again leased and occupied, and (b) October 31, 2018. Notwithstanding anything set forth herein to the contrary, the Rent Rebate shall terminate and be of no further force or effect following October 31, 2018. ARTICLE V. OPERATION OF THE SHOPPING CENTER. Section 51. Common Areas and Facilities. Landlord shall make available from time to time such areas and facilities of the Shopping Center for the common benefit of the tenants and occupants of the Landlord's Tract as Landlord shall deem appropriate. Landlord shall, subject to the other provisions of this Lease, operate, manage, equip, heat, ventilate, cool, light, insure, secure, repair and maintain such common areas and facilities of the Shopping Center for their i�tended purposes in such manner as Landlord shall in its sole discretion determine, and may from time to time change the size, location, use and nature of any common area and facility, sell or lease any portion thereof, or assign the exclusive use thereof to one or more tenants; and may make installations therein and move and remove such installations, including the installation of kiosks, enclosed malls ar courts. Landlord shall designate a Landlord representative with whom Tenant may communicate regarding Tenant's maintenance needs with respect to the Common Areas. Tenant shall not be required to look to Cub or any other tenant of the Shopping Center for performance of any required maintenance or repairs in the Common Areas which are Landlord's obligations under this I.ease. Section 5.2. Use of Common Areas. Tenant and its permitted concessionaires, officers, employees, agents, customers and invitees shall have the non-exclusive right, in common with oss9z�ao�o� i oasa. i o 6 Landlord and all others to whom Landlord has or may hereafter grant rights, to use such portions of the common areas as designated from time to time by Landlord, subject to such reasonable regulations as Landlord may from time to time impose including the designation of specific areas in which cars owned by Tenant, its permitted concessionaires, officers, employees and agents must be parked. Tenant agrees to abide by such regulations and to use its best efforts to cause its permitted concessionaires, officers, employees, agents, customers and invitees to conform thereto. Landlord may at any time close temporarily any common area to make repairs or changes to prevent the acquisition of public rights in such area or to discourage noncustomer parking; and may do such other acts in and to the common areas as in its judgment may be desirable to improve the convenience thereof. Tenant shall upon request furnish to Landlord the license numbers and description of the cars operated by Tenant and its permitted concessionaires, officers, employees, and agents. Tenant shall not at any time interfere with tbe rights of Landlord and other tenants, and their permitted concessionaires, officers, employees, agents, customers and invitees, to use any part of the parking areas and other common areas. Landlord reserves the right to grant to other tenants and third persons such exclusive and non-exclusive rights in the common areas as from time to time the Landlord deems appropriate. Section 53. Operatine Cost Payment. During each Landlord Fiscal Year (or portion thereo� during the Lease Term following the Commencement Date, Tenant shall pay to Landlord on account of Tenant's obligation under Seetion 5.4, the Operating Cost Payment which shall be payable in equal monthly installments on the first day of every calendar month during the Lease Term and a pro-rata sum for the partial month, if any, at the beginning of the Lease Term, payabla on the Commencement Date. The Operating Cost Payment shall be equal to one-twelfrh (1/12th) of the total annual Operating Costs, as estimated by Landlord, plus an Administrative Charge equal to twelve and one-half percent (12.5%) of the foregoing. Following each Landlord Fiscal Year, the Operating Cost Payment shall be adjusted upwards or downwards based on Landlord's estimate of what the actual costs for the current Landlord Fiscal Year will be, as defined in Section 5.4 hereof, including the appropriate Administrative Charges as herein provided, which shall be payable retroactively to the first day of such Landlord Fiscal Year. "Landlord Fiscal Year" shall mean the fiscal year established by Landlord in its sole discretion. Section 5.4. Landlord's O�ratinE Costs. Tenant shall pay as additional Rent "Tenant's Pro-Rata Share° (as such term is defined in Section I 1.1 of this Lease) of all reasonable costs and expenses paid or incuned by Landlord during the Lease Term in operating, equipping, policing (if and to the extent provided by Landlord), protecting, insuring, heating, cooling, lighting, painting, cleaning, ventilating, repairing, replacing and maintaining the Shopping Center. Operating Costs shall include, but not be limited to: (i) maintaining the enclosed Common Areas including the sexvice corcidors and utility rooms that serve multiple tenants, (ii) traffic cantrol including signage repairs and replacements, line painting, and temporary staffed traffic control personnel; (iii) cleaning; repairing and maintaining foundations, walls, roofs, guriers, downspouts, fascias, soffits, canopies; (iv) securiry, including security service personnel, security camera and fire alarm systems, fire hydrants, sprinkler systems and other fire protection devices and equipment (v) repair of water and sewer lines outside tenant spaces, including periodic video line inspections and jetting; (vi) removal of rubbish and other refuse, not including the removal of individual tenant trash pickup; (vti) pedestrian traffic direction and control; (vui) exterior illumination of buildings and Common Areas, (viii) illumination and maintenance of os39z�oo�a�v � oasa. i o � Shopping Center signs; (ix) dirt, debris, snow and ice clearance; (x) planting, maintaining, replanting and replacing flowers and other landscaping; (xi) water and sewage charges; (xii) the costs associated with the operation of a maintenance shop including electricity, gas, telephone, water and sewer charges, (xiii) premiums for mischief, vandalism, workers compensation, employees' liability, property damage, casualty, liability and other insurance; (xiv) wages, salaries and other personnel costs including costs of uniforms; wage, unemployment and social security taxes for persons directly engaged in performing on-site maintenance and repair of the Common Areas; (xv) required licenses and permits; supplies and hand tools; (xvi) all charges for utility services, including maintaining lighting fixtures (including the cost of light bulbs and electric current); (xvii) all costs, expenses, chargas, or other impositions or assessments incurred by Landlord in connection with environmental protection legislation or regulation or imposed on the Shopping Centex or any part thereof with regard thereta; and (xviii) reasonable depreciation of or rents paid for the leasing of equipment used in the operation of the Shopping Center. The following costs shall be excluded: (a) costs of equipment properly chargeable to Landlord's capital awount and depreciation of the original cost of construcTing the Shopping Center as well as the depreciation of all costs assoeiated with the remodeling of the Shopping Center scheduled to begin in 2012; and (b) costs incurred in maintaining the roof and structure of the premises leased by CLib. [n the event that any Operating Costs are incurred or increased as a result of the particular needs of Tenant, Landlord reserves the right to charge Tenant for the full amount of any Operating Costs incurred or increased as a result of Tenant's particular needs. Any Operating Cost which is incurred or increased as a result of the requirements of more than one tenant may be allocated among such tenants in a manner deemed equitable by Landlord. Landlord may, in its sole and absolute discretion but subject to the provisions of Section 5.5 below, defer billing to Tenant, all or any portion of any Operating Cost incurred in one Landlord Fiscal Year to future Landlord Fiscal Years. In the event that any Operating Costs are incurred or increased as a result of the particulaz needs of Tenant, Landlord reserves the right to charge Tenant for the full amount of any Operating Costs incuned or increased as a result of Tenant's paRicular needs. Any Operating Cost which is incurred or increased as a result of the requirements of more than one tenant may be allocated among such tenants in a manner deemed equitable by Landlord. In the event Operating Costs relating to outdoor areas and facilities are not separately incurred for the Shopping Center but are incutted together with other areas within the vicinity of the Shopping Center, then the cost allocable to the Shopping Center shall be an amount equal to the product of such total cost multiplied by a fraction, the numerator of which shall be the square footage of the outdoor area within the Shopping Center and the denominator of which shall be the sum of the square footage of the outdoor area within the Shopping Center plus the square footage of other outdoor areas outside the Shopping Center for which expenses have been incurred and included within such total cost. Section 5.5. Annual Operating Cost Budeet, Landlord's Statement. Prior to the Commencement Date and not later than December 1 of each Landlord Fiscal Year thereafrer, Landlord shall prepare and deliver to Tenant Landlord's budget for Operating Costs for the immediately following calendar year (the "Annual Operating Cost Budget") which Annual Operating Cost Budget shall represent Landlord's good faith estimate of Operating Costs by category line item, based upon (except for the first full Landlord Fiscal Year and the Partial oss9z�oo�o��stoasa.io g Lease Year) the actual Operating Costs for the Shopping Center for the prior Landlord Fiscal Year. In the event any Annual Opexating Cost Budget ineludes a budgeted expenditure for a single line item repair or replacement estimated to cost in excess of (a) $25,000.00 during the initial Lease Term, (b) $30,000.00 in the First Option Term, or (c) $35,OOQ.00 during the Second Option Term, Landlord shall provide Tenant with evidence of the need for such repair or replacement. In the event that Tenant, in good faith, shall reasonably dispute Landlord's conclusion of the need for such repair or replacement, Tenant shail notify the Landlord of such objection in writing within fifteen (15) business days following Tenant's receipt of the Annual Operating Cost Budget ("TenanYs Objection Notice"). Upo� Landlord's reaeipt of Tenant's notice, Landlord shall have the option to: (i) delete such line item form the Annual Operating Cost Budget; (ii) amend the Annual Operating Cost Budget to accommodate the rationale set forth in Tenant's Objection Notice; or (iii) provide the Tenant with a professional evaluation of the condition and the recommendation for the repair or replacement accompanied by an estimated cost to perform same, which evaluation and recommendation shall be conclusive. In the event that Landlord fails to provide Tenant with the aforementioned professional evaluation and recommendation within fifteen (15) days after Landlord's receipt of Tenant's Objection Notice, the repair or replacement, as the case may be, shall not be included in Operating Costs. Notwithstanding an�4hing set forth in Section 5.4 to the contrary, in the event any item of repair or maintenance is to be performed over a period of Landford Fiscal Years, the Annual Operating Cost Budget for the first Landlord Fiscal Year in which such repair or maintenance is to be performed shall separately identify the anticipated cost, timing and area of such work for each Landlord Fiscal Year separately and the total for all Landlord Fiscal Years in such period. In each Lease Year after the end of Landlord's Fiscal Year, and after the end of Landlord's Fiscal Year following expiration or termination of the Lease Term, Landlord shall fumish Tenant a statement, in reasonable detail, of (i) Landlord's actual �Jperating Costs paid or incurred by Landlord, and thereupon there shall be an adjustment between Landlord and Tenant with payment to or repayment by Landlord, as the case may be, to the end that Landlord shall receive the entire amount of Tenant's Pro-Rata Share of Operating Costs plus twebe and one-half percent (12S%) of the foregoing as the Administrative Charge. Any amount due from Tenant shall be payable within ten (10) days following the rendition of Landlord's statement therefor. Any amount due from Landlord shall be credited toward TenanYs next due Operating Cost Payment, or at the termination of the Lease Term, payable to Tenant within ten (10) days following the rendition of Landlord's statement described in this paragraph. The obligation of Landlord or Tenant hereunder shall survive the expiration or earlier termination of the Lease Term. ARTICLE VI. UTILITY SERVICE. Section 61. Utilities. Tenant agrees that throughout the Lease Term it wil] pay for and provide its own water meter, water meter pit, and other meters, heat, air conditioning, water, gas, electriciry and all other utilities, and Tenant further agrees that it will pay all water and sewage charges imposed by government authority or otherwise. Tenant will not install or use any os39z�oo�o7�9ioasa.io 9 equipment on the Leased Premises which may exceed the capacity of any utiliry facilities serving the Leased Premises. ARTICLE VII. LANDLORD'S ADDIT[ONAL COVENANTS. Section 7.1. Repairs by Landlord. Landlord covenants to keep the foundations of the Leased Premises and the structural soundness of the roof, concrete floors and exterior walls thereof, in good order, repair and condition, unless any necessary work is required because of damage caused by any act, omission or negligence of Tenant, any permitted concessionaire or their respective employees, agents, invitees, licensees or contractors. Landlord shall not be required to commence any such repair until a reasonable time after written notice from Tenant that the same is necessary. The provisions of this Section 7.1 shall not apply in the case of damage or destntction by fire or other casualty or a taking under the power of eminent domain, in which events the obligations of Landlord shall be controlled by Article IX. Except as provided in this Section 7.1, Landlord shall not be obligated to make repairs, replacements or improvements of any kind upon the Leased Premises, or any equipment, facilities or fixtures contained therein, which shall be the responsibility of Tenant as provided in Article VI[I, Subsections 8.1 F and G. Section 7.2. Ouiet Enjovment. Landlord covenants that Tenant on paying the Rent and performing Tenant's obligations in this Lease shal{ peacefully and quietly have, hold and enjoy the Leased Premises throughout the Lease Term or until it is terminated as in this Lease provided. ARTICLE VIII. TENANT'S ADDITIONAL COVENANTS. Section 8.1. Covenants. Tenant covenants at its expense at all times during the L,ease Term and during any other time that Tenant enters upon the Leased Premises, including any period prior to the Commencement Date: A. To perform promptly all of the obligations of Tenant set forth in this Lease, and to pay when due the Rent without notice and without any set-offs whatsoever. B. To operate in the Leased Premises only under Tenant's Trade Name for the Permitted Uses; to refrain from conducting any "going out of business", or bankruptcy or similar distress sales. C. To record and report all Gross Sales as provided herein: (i) Within 5freen (IS) days afrer the end of each fiscal quarter, or portion thereof, in the Lease Term, Tenant shall fumish Landlord a statement, certified by Tenant's Director of Finance, of Tenant's Gross Sales during such quarter or portion thereo£ As used herein, "Gross Sales" shall mean the total amount in dollars of the actual sales price of all sales or rentals of inerchandise (including gift certificates sold in or from the Leased Premises) and services, and all other receipts of business conducted in ar from the L,eased Premises, including sales by any sublessee, concessionaire; licensee and any other person or persons doing business in or from the Leased Premises. 05392\00707\910455.10 ] Q (ii) In the event any sublessee, concessionaire, licensee or other person or persons shall do business in or from the Leased Premises, Tenant is responsible for ensuring that such parties' records and statements conform to the requirements in this Article N. The failure of any such party to maintain records and statements as required hereunder, or to correctly repoR gross sales, shall be deemed a failure on the part of Tenant to conform to the requirements of this Article and shall subject Tenant to the remedies set forth in the Lease. D. To fully perforrn Tenant's Work in accordance with the terms set forth in this Lease and E�ibit D and open for business to the public in the Leased Premises fully fixtured, stocked and staffed on the Commencement Date for one (1) day; unless Tenant has propedy exercised its option to Go Dark as provided herein, to use and continuously operate for a minimum of at least eight (8) hours per day for six days per week (excluding therefrom (i) legal holidays, (ii) other days where the sale is prohibited by Minnesota Law and (iii) days on which Tenant is prevented from operating the Leased Premises due to Force Majeure (defined herein)) for retail sales purposes all of the Leased Premises other than such minor portions thereof as aze reasonably required for storage and office purposes, except when and to the extent that the Leased Premises are untenantable by reason of damage by fire or other casualty, to identify the Leased Premises with signage in accordance with the terms o£ this Lease; to open for business and remain opan during the entire Lease Term; and to light its signs and its display windows, if any, during the hours the Leased Premises are open for business. As used herein, "Force Majeure" shall mean casualty or delays caused by any governmental or quasi-governmental entity; shortages of materials, natural resources or labor; fire; catastrophe; labor strikes; civil commotion; riots, war, acts of God; govemmental prohibitions or regulations; or any and all other extraordinary causes (but not including financial inability.) Tenant shall have the option to cease operations and/or vacate the Leased Premises ("Go Dark") by giving Landlord not less than sixty (60) days prior wcitCen notice of the date on which Tenant shall Go Dark (the "Go Dark Notice"). In the event that Tenant delivexs a Go Dark Notice, following the ninetieth (90�h) consecutive day that the Leased Premises are closed for business (except for periods during which the Leased Premises are untenantable by reason of damage by fire or other casualty, or periods of xemodeling not to exceed thirty (30) consecutive days), Landlord shall have the right to terminate the Lease and recapture the Leased Premises by giving Tena�t written notice thereof ("Landlord's Termination Notice"), whereupon the Lease shall terminate effective as of the date specified in Landlord's Termination Notice. In the event Tenant elects to Go Dark as provided in this Section 8.1.D, Tenant shall remain fully liable to perform all of its obligations under this Lease, including but not limited to Tenant's obligation to pay Rent and all other charges due hereunder until the earlier of (a) the expiration of the then current Lease Term or (b) the date set forth in Landlord's Termination Notice, in the event Landlord elects to terminate the Lease as provided herein. In the event that Landlard terminates the Lease as provided herein, Tenant shall sunender the Leased Premises in the condition xequired pursuant to Section S.LM of this I,ease not later than the date specified in Landlord's Termination Notice. oss9z�omor�ioasa_�o 11 E. To store all trash and refuse in adequate containers within the Leased Premises which Tenant shall maintain in a neat and clean condition and so as not to be visible to members of the public shopping at the Shopping Center and so as not to create any health or fire hazard, and to attend to the dai(y disposal thereof in the manner designated by Landlord; to comply with any recycling program; to keep all drains inside the Leased Premises clean; to receive and deliver goods and merchandise only in the manner and at such times and in such areas as may be designated by Landlord; and to conform to all rules and regulations as set forth in Exhibit F hereto and to all reasonable and nondiscriminatory rules and regulations which Landlord may make. F. (i) To maintain in good order, condition and repair, the Leased Premises, including the store front or store fronts, plate glass, window cases; or window frames, doors or door frames, and the pipes, plumbing, glass, store-fronts, electric wiring, air conditioning and heating equipment, boilers, motors, engines, ta�ks, machinery, fixtures, appliances and appurtenances belonging thereto installed for use in connection with the Leased Premises, including the repair, maintenance and periodic cleaning of TenanYs fascia and undercanopy or soffit signs, and tbe maintenance and repair of any sewer ejection system serving the Leased Premises whether located within or outside of the Leased Premises, and to refrain from overloading the floors; to take reasonable measures to prevent mold conditions from occurring and to take reasonable actions to remediate any mold conditions that occur as a result of Tenant's acts or omissions; to refrain from bringing, or disposing of, any Hazardous Substances (the term "Hazardous Substances' shall include any hazardous or toxic substance, material or waste which is declared to be "toxid' ox "hazardous [or words of similac import], or is otherwise regulated as such under any law, ordinance or regulation now or hereafter enacted or promulgated by any lawful authority) into or at the Leased Premises or the Shopping Center (a�d to prohibit their agents, employees and contractors from doing so), other than de minimis amounts, and to remediate any Hazardous Substances introduced into the Leased Premises or the Shopping Center by Tenant (or its agents, employees or contractors); to make as and when needed by contractors or mechanics approved by Landlord, all repairs in or about the Leased Premises a�d in and to all such equipment, fixtures, appliances and appurtenances necessary to keep the same in good order and operating condition. Tenant shall give Landlord prior written notification of any repair work to be performed on the Leased Premises. All repairs made by Tenant shall be equal in quality and class to the original work, and shall be performed and completed in accordance with all applicable statutes, ordinances, regulations and codes, including those governing the handling, care and removal of any materials involved in or affected by such repairs. When used in this Lease the term 'Yepairs" shall include all replacements, renewals, alterations, additions and betterments. (ii} To keep in effect, at its sole oost and expense, a maintenance agreement with a reputable and qualified contractor approved by Landlord providing for periodic (at least semi-annual) servicing and xepair of the heating, ventilating and air oss9zwmo�� i oasa. i o 12 conditioning ("HVAC") system serving the Leased Premises. Tenant shall provide Landlord with semi-annual reports not later than October 15 and April 15 of each Lease Year on the condition and maintenance report form provided by Landlord to Tenant, summarizing the condition of the HVAC, the maintenance performed on the HVAC during the period since the last report and the recommendations for the maintenance to be performed for the succeeding six month period. G. To promptly comply with all present and future laws, ordinances, orders, rules, regulations, and requirements (collectively hereinaier referred to as "Orders") of all federal, state, municipal and local govemments, departments, commissions, boards and officers, and all Orders of Landlord's and Tenant's insurance carriers whether foreseen or unforeseen, ordinary as well as extraordinary, which may be applicable to the Leased Premises or Tenant's use thereof. H. To exterminate all insects or vermin, if the same infest the Leased Premises and to employ such exterminators and such exterminating company or companies as shall be approved by Landlord. 1. To refrain from making any alterations to the Leased Premises, or any penetrations to the roof or floor slab of the Leased Premises, without the Landlord's prior consent and compliance with the following requirements of the Lease and subject to any of Landlord's conditions to granting such consent; to pay promptly when due the entire cost of any work in the Leased Premises undertaken by Tenant so that the Leased Premises, including Tenant's leasehold estate shall at all times be free of liens for labor and materials; to procure and provide copies to Landlord of all necessary permits before undertaking such work; to do all of such work in a good and workmanlike manner, employing only new materials and new fixtures of good quality; to procure Builder's Risk insurance whenever appropriate in amounts and with companies satisfactory to Landlord; to perform such work only with contractors, plans and specifications previously approved in writing by Landlord and to comply with the requirements of Exhibits D and E; to perform and complete such work in accordance with all applicable statutes, ordinances, regulations and codes, including those governing the handling, care and remova] of any materials involved in or affected by such work; and to defend and save Landlord and Landlord's beneficiaries and agents harmless and indemnified from all injury, loss, claims or damage to any person or property occasioned by or growing out of such work. J. Except fox injury, loss, elaims or damage resulting from the negligence or intentional misconduct of Landlord, to defend and save Landlord, Landlord's beneficiaries and agents, their respective officers, employees, shareholders, directors, partners, managers and members and their respective successors and assigns, harmless and indemnified from all injury, loss, claims or damage to any person or properey while on the Leased Premises or any other part of the Shopping Center occasioned by an act or omission of Tenant, or of anyone claiming by, through or under Tenant, and any injury or damage to any person or propeRy occurring in, on or about the Leased Premises or any part thereof and any injury, loss, claims or damage arising from TenanYs breach of this Lease; to obseroe and comply with the requirements of all policies of public liability, fire 05392�00707\910494.10 � 3 and all other policies of insurance at any time in force with respect to the Shopping Center or any part thereof; to maintain the following insurance: (i) Commercial general liability ("CGL") insurance cvritten on an occurrence basis, including such endorsements as Landlord may require, covering the Leased Premises and all operations of Tenant in or about the Leased Premises and anywhere upon Landlord's Tract, against claims for bodily injury, property damage and product liability and to include contractual liability coverage insuring Tenant's indemnification obligations under this Lease, to be in combined single limits of not less than $1,000,000 each occurrence for bodily injury and property damage, $1,000,000 for products/completed operations aggregate, $1,000,000 for personal injury, and to have general aggregate limits of not less than $2,000,000 (per Iocation) and Umbrella Lia6i(ity Insurance in an amount not less than $1,000,000 for each policy year. The general aggregate limits under the CGL insurance policy or policies shall apply separately to the Leased Premises and to Tenant's use thereof (and not to any other location or use of Tenant) and such policy shall contain an endorsement to that effect. Landlord shall have the right to direct Tenant to increase said amounts whenever it considers them inadequate; (ii) Property insurance with "Special Form Causes of Loss" covecage adequate to cover the replacement cost of all of Tenant's stock in trade, fixtures, furniture, furnishings, floor coverings and equipment in the Leased Premises, with a deductible not exceeding $5,000.00 per occurrence and with the insurer's waiver of any coinsurance provisions, and plate glass insurance covering all exterior plate glass in the Leased Premises. (iii) Workers' compensation insurance coverage covering all persons directly employed by Tenant and with respect to which death or injury claims could be asserted against Tenant, Landlord or the Shopping Center or any interest therein, with limits not less than as required by applicable law and regulations, together with an employers liability limit of not less than $500,000 per accidenUdisease/policy. All of said insurance shall be in form and in responsible companies satisfactory to Landlord with an A.M. Best Rating or its equivalent of A-VIll or better and shall provide that it will not be subject to cancellation, termination or change except afrer at least thiRy (30) days prior written notice to Landlord. The policies or duly executed certificates for the same (which certificates shall evidence the insurer's waiver of subrogation) together with a copy of an additional insured endorsement (except with respect to the workers' compensation coverage) naming Landlord, Landlord's mortgagees, beneficiaries and agents, as theix interests may appear, and satisfactory evidence of the payment of premiums thereon, shall be deposited with Landlord no later than the day Tenant begins TenanYs GVork, and upon renewals of such policies, not less than thirty (30) days prior to the expiration of the term of such coverage. If Tenant fails to comply with such requirements, Landlord may obtain such insurance and keep the same in effect and Tenant shall pay Landlord the premium cost thereof upon demand. Each such payment shall constitute additional rent payable by Tenant under this Lease. Oi392\0090T910454_I O 14 In the event Tenant's occupancy or operation causes any increase of premium for the fire and extended coverage and/or casualty rates on the Leased Premises or Shopping Center or any part thereof above the rate for the least hazardous type of occupancy legally permitted in the Leased Premises, or premium for the rent insurance policy that may be carried by Landlord, Tenant shall pay the additional premium on the fire, boiler and/o� casualty insuraace policies 6y reason thereof within ten (10) days following the billing thereof as additional rent. K. To waive all claims for damage to Tenant's business or person or property sustained by Tenant or any person claiming through Tenant resulting from any accident or occurrence in or upon the Leased Premises or the building of which they shall be a part, or any other paR of the Shopping Center, to waive all claims for damage attributable to any act, omission or negligence by other tenants of the Shopping Center. L. To permit Landlord, Landlord's mortgagee and their agents to enter the Leased Premises at reasonable times after providing notice to Tenant for the purpose of inspecting same, making repairs, additions or alterations thereto or to the building in which the same are located and showing the Leased Premises to prospective purchasers, lenders and tenants. Upon the failure of Tenant to operate in the Leased Premises for a period of forty-eight consecutive hours, and provided Tenant has vacated the Leased Premises, in whole or in part, during such period, Tenant hereby authorizes Landlord to enter the Leased Premises and to take such action as Landlord deems necessary or prudent to secure the Leased Premises. The parties hereby acknowledge that Landlord's entry hereunder shall not affect Landlord's other rights and remedies in this Lease nor are the rights herein granted to Landlord intended to abridge any requirements of applicable law for Landlord to gain possession of the Leased Premises by process of law; it being the intention of the parties that Landlord have this limited right of access to assist Tenant with xespect to Tenant's obligation to secure, protect and preserve the Leased Premises. M. (i) To surcender, at the termination of this Lease, the L,eased Pxemises in a broom-clean condition, free of debris and in the same condition (subject to the removals hereinafter required) as the Leased Premises were on the date Tenant opened the Leased Premises for business to the public, reasonable wear and tear excepted, with all holes in walls patched, taped and sanded ready £or paint, and to surrender al] keys for the Leased Premises to Landlord at the place then fixed for the payment of cent, and to inform Landlord of all combinations on locks, safes and vau{ts, if any, in the Leased Premises; to remove, during the Iast thirty (30) days of the Lease Term, all of Tenant's trade fixtures, and to the extent required by Landlord by written notice, any other installations, alterations, improvements, wall coverings or floor coverings (and any adhesives relating thereto) before surrendering the Leased Premises as aforesaid and to repair any damage to the Leased Premises or the Shopping Center caused thereby. Any alterations; changes, additions and improvements (specifically including, by way of example, light fixtures and heating and air conditio�ing equipment) shall immediately upon the termination of this Lease, at Landlord's option, become Landlord's property, be considered part of the Leased Premises, and shall not be 05392\00707\910454.10 � 5 removed at or prior to the end of the Lease Term without Landlord's written consent unless Landlord requests Tenant to remove same. If Tenant fails to remove any shelving, decorations, equipment, trade fixtures or personal property from the Leased Premises upon the end of the Lease Term, at Landlord's option they shall become Landlord's property and Tenant shall pay for the repair of any damage done to the Leased Premises or Shopping Center and the costs incurred resulting from the removal of the same. (ii) To remove, at the termination of this Lease, Tenant's sign from the fascia above the storefront of the Leased Premises, and any other signs Landlord may have permitted Tenant to affix to any wall surface in the Shopping Center, and to reimburse Landlord for the cost incurred by Landlord to repair, restore, repaint and/or re-stain the fascia necessitated by the removal of such signs. The under canopy soffit sign (other than Tenant's removable name panels) shall cemain and upon termination of the Lease shall become the propeRy of Landlord. N. Recognizing that this L,ease and the rights and interests of Tenant under this Lease are and shall be subject and subordinate to any mortgages or trust deeds which Landlord has placed or may place upon the Landlord's Tract and the Leased Premises, and to any advances made thereunder, and to the interest thereon, and all extensions thereof, to execute and deliver whatever instruments may be required to evidence same. In the avent Tenant fails to execute and deliver such instruments evidencing that this Lease is subordinate within ten (10) days after demand in writing, Tenant does hereby make, consCitute and irrevocably appoint Landlord as its attorney in fact and in its nama, place and stead so to do without prejudice to Landlord's remedies underthis Lease which are cumulative. Tenant acknowledges and agrees that this Lease is subject and subordinate to any such future or existing mortgages or trust deeds, and to any advances made thereunder, and to the interest thereon, and all extensions thereof, without the need for a separate instrument evidencing same. If any foreclosure or power of sale proceedings are initiated by the holder of any such mortgage or the trustee under any such trust deed, or a deed in lieu is granted, Tenant agrees, upon written request of any such holder or trustee, or purchaser at such sale, to attorn and pay Rent to such party and to execute and deliver any instruments necessary or appropriate to evidence or effectuate such attornment. In the eveni of attornment, no holder of any such mortgage or beneficiary under any such trust deed, or purchaser at such sale shall be: (i) liable for any act or omission of Landlord, or subject to any offsets or defenses which TenanY might have against Landlord (prior to such holder, beneFciary or purchaser becoming Landlord under such attornme�t), (ii) liable for any security deposit or bound by any prepaid Rent not actually received by such holder, beneficiary or purchaser, or (iii) bound by any modification or amendment of this Lease not consented to by such holder, beneficiary or purchaser. Tenant agrees to give the holder oY any such mortgage or the trustee under any such trust deed by certified mail, return receipt requested, a copy of any notice of default served by Tenant upon Landlord, provided that prior to such notice Tenant has been notified in writing (by way of service on Tenant of a copy of an assig�ment of leases, or otherwise) of the name and address of such holder or trustee. Tenant further agrees that if Landlord shall have failed to cure such default within the time permitted Landlord for 0539?\007G71910454.10 1( cure under this Lease, any such holder or trustee whose address has been so provided to Tenant shall have an additional period of thirty (30) days in which to cure (or such additional time as may be required due to causes beyond the control of such holder or trustee, including time to obtain possession of Landlord's Tract by power of sale or judicial action). To the extent not expressly prohibited by law, Tenant waives the provisions of any law now or hereafter adopted which may give or purport to give Tenant any right or election to terminate or otherwise adversely affect this Lease or TenanYs obligations hereunder if foreclosure or power of sale proceedings are initiated, prosecuted or completed. Any mortgagee or trustee may elect also to give the rights and interest of Tenant under this Lease priority over the lien of its mortgage or trust deed. Such election shall be effective upon written notice to Tenant. O. To pay to Landlord Tenant's Pro-Rata Share of the real estate taxes (to the extent not paid pursuant to Article V, suara.), during the Lease Term, and any renewal or extension thereof, including any period during which Tenant shall transact business in the Leased Premises prior to the Commencement Date. The term "real estate taxes" shall include all real estate taxes, assessments, levies and other governmental impositions and charges which shall or may, during the Lease Term, be levied, assessed, imposed, become due and payable, or liens upon, or arise in connection with, the use, occupancy or possession of the Shopping Center, including all costs incuned by Landlord in contesting or negotiating the same before ar after assessments with governmental authorities. Tenant agrees to pay to the Landlord one-twelfth (1/12) of the "Initial Real Estate Tas Payment" as such term is herein defined) on the first day of each calendar month commencing upon the Commencement Date as its estimated payment for real estate taxes for the first calendar year or portion thereof included in the I,ease Term. The term "Initial Real Estate Tax Payment" shall mean and be equal to an amount estimated by Landlord to be Tenant's real estate tax liability for the first calendar year or portion thereof included in the Lease Term. For each calendar year thereafter, Tenant shall pay Landlord monthly one-twelfth (Ul2th) of the amount estimated by Landlord to be Tenant's real estate tax liability in respect of each such calendar year. Any amount paid by Tenant which exceeds tbe true amount due shall be credited on the next succeeding payment due pursuant to this Section. If Tenant has paid (ess tha� the amount due, Tenant shall pay the difference within ten (10) days of receipt of notice from Landlord. This covenant shall survive the expiration or earlier termination of the Lease Term. If the Lease Term shall begin or end other than on the first or last day of a calendar year, such charges shall be billed and adjusted on the basis of such fraction of a calendar year. Should the taxing authority include in such real estate taxes, machinery, equipment, fxtures, inventory or other personal property or assets of Tenant, then Tenant shall pay the entire real estate taxes for such items. P. To remain fully obligated under this Lease norivithstanding any assignment or sublease or any indulgence granted by Landlord to Tenant or to any assignee or sublessee, but nothing contained in this subparagraph shall be construed to permit any assignment or sublease by Tenant. osa9z�oo�o��9�oasa �o � � Q. Intentionally Omitted. R. To refrain from assigning, selling, mortgaging, pledging, or in any manner transferring this Lease or any interest therein, by operation of law or otherwise; to refrain from subletting the Leased Premises or any portion or portions thereof; to refrain from permitting occupancy by anyone with, through or under it� S. Not to suffer any mechanic's lien to be filed against the Leased Premises or the Shopping Center by reason of any work, labor, services or materials performed at or fumished to the Leased Premises, to Tenant, or to anyone holding the Leased Premises through or under the Tenant. If any such mechanids lien shall at any time be filed, Tenant shall forthwith cause the same to be discharged of record by payment or order of a court of competent jurisdiction or otherwise, but Tenant shall have the right to contest any and all such liens, provided security satisfactory to Landlord is deposited with Landlord within fifteen (15) days after the filing of such ]ien. If Tenant shall fail to cause such a lien to be discharged within thirty (30) days after the filing thereof and before judgment or sale thereunder, then, in addition to any other right or remedy of Landlord, Landlord may, but shall not be obligated to, discharge the same by paying the amount claimed to be due or by bonding or other proceeding deemed appropriate by Landlord in Landlord's absolute discretion, and the amount so paid by Landlord and all costs and expenses incurred by Landlord in procuring the discharge or bonding of such lien, shall be deemed to be additional rent and together with interest thereon at the Lease [nterest Rate from date of payment shall be due and payable by Tenant to Landlord within ten (10) days of the rendition of Landlord's statement therefoc "Lease Interest Rate" shall mean interest at the lesser of (i) the rate per annum equal to two (2) percentage points above the rate of interest then most recently publicly announced by JPMorgan Chase Bank, N.A. (or its successor) as its "prinie rate" or "base rate" (the "Prime Rate"), as the case may be, and (ii) the maximum legal rate. Nothing herein shall be construed as a consent on the part of Landlord to subject Landlord's estate in the Leased Premises to any lien or liability under the mechanic's lien law of Minnesota. T. To pay on demand Landlord's costs, charges and expenses, including reasonable attorneys' fees, expenses and administrative charges (which shall also include, without limitation, time charges of attorneys and paralegal administrators who may be employees of Landlord or its managing agent), which may be imposed on, incurred by, or assefted hearing and court costs incuned either directly or indirectly in any negotiations or transactions in which Landlord, without its fault, becomes involved or concerned by reason of this Lease, in enforcing any obligation of Tenant under this Lease, in curing any default by Tenant, in connection with appearing, defending or otherwise participating in any action or proceeding arising from the filing, imposition, contesting, discharging or satisfaction of any lien or claim for lien, in defending or otherwise participating in any legal proceedings initiated by or on behalf of Tenant wherein Landlord is not adjudicated to be in default under this Lease, or otherwise arising from or incurred because of TenanYs failure to comply with any provisions of this Lease or in connection with any investigation or review of any conditions or documents in the event Tenant requests 05392100707\910454.10 I 8 Landlord's approval or consent to any action of Tenant which may be desired by Tenant or required of Tenant hereunder. U. To refrain from recording this Lease. ARTICLE IX. DAMAGE OR TAKING AND RESTORATION. Section 91. Fire, Explosion or Other Casualtv. In the event the I,eased Premises are damaged by fire, explosion or any other casualty to an extent which is less than twenty five percent (25%) of the insurable value of the Leased Premises, the damage shall be promptly repaired by Landlord at Landlord's expense upon receipt by Landlord ofinsurance proceeds for such damage; provided that Landlord shall not be obligated to expend for such repair an amount in excess of the insurance proceeds recovered as a result of such damage and that in no event shall Landlord be required to repair or replace TenanYs stock in trade, fixtures, furniture, fumishings, floor coverings and equipment. In the event of any such damage and (a) Landlord is not required to repair as hereinabove provided or (b) the Leased Premises shall be damaged to the extent of twenty-five percent (25%) or more of the insurable value, or (c) the building which the Leased Premises are a part is damaged to the extent of twenty-five percent (25%) or more of the insurable value, or (d) the buildings (taken in the aggregate) in the Shopping Center shall be damaged to the extent of twenry-five percent (25%) or more of the aggregate insurable value, Landlord may elect either to repair or rebuild the Leased Premises or the building or buildings, or to terminate this Lease upon giving notice of such electian in writing to Tenant within ninety (90) days afrer the occunence of the event causing the damage. In the event Landlord terminates this Lease as provided in the preceding sentence, TenanYs obligation to pay Fixed Minimum Rent or Tenant's Pro-Rata Share of Operating Costs shall cease as of the date when the damage occuned. ffthe casualty, repairing or rebuilding shall render the L,eased Premises untenantable, in whole or in part, and the damage shall not have been due to the default or neglect of Tenant, a pro- portionate abatement of the Fixed Minimum Rent and Tenant's Pro-Rata Share of Operating Costs shall be allowed from the date when the damage occuned until the date Landlord completes its work, said proration to be computed on the basis of the relation which the gross square foot area of the space rendered untenantable bears to the Floor Area. No abatement of rent, proportionate or otherwise, pursuant to this Section 9.1 shall have any effect upon or be viewed as a waiver by either party of any rental value insurance maintained by such party relative to this Lease. If Landlord is required or elects to repair the Leased Premises as herein provided, Tenant shall repair or replace its stock in trade, fixtures, furniture, fumishings, floor coverings and equipment, and if Tenant has closed, Tenant shall promptly reopen for business. Section 9.2. Eminent Domain. If the whole of the Leased Premises shall be taken by any public authority under the power of eminent domain, the Lease Term shall cease as of the day possession shall be taken by such public authority, and Tenant shall pay rent up to that date with an appropriate refund by Landlord of such rent as may have been paid in advance for any period subsequent to the date possession is taken. ARTICLE X. DEFAULTS BY TENANT AND REMEDIES. Section 10.1. Defaults bv Tenant. If (i) Tenant vacates or abandons the Leased Premises or permits the same to remain vacant or unoccupied or fails to be continuously open for business 05392�007Q7'3104id.la 19 for a period of five (5) days, or (ii) Rent or any part thereof shall be unpaid for five (5) days after written notice thereof to Tenant, or (iii) default shall be made in the prompt and full performance of any covenant, condition or agreement of this Lease to be kept or performed by Tenant and such default or breach of perforrrtance shall wntinue twenty (20) days (unless the default involves a hazardous condition, which shall be cured immediately) after written notice to Tenant, specifying such default or breach of performance, or (iv) any proceedings shall be commenced to declare Tenant or any Guarantor bankrupt or insolvent or to obtain relief under any chapter or provision of any bankruptcy or debtor relief law or act or to reduce or modify the debts or obligations of Tenant or any Guarantor or to delay or extend the payment thereof, or if any assignment of the property of Tenant or any Guarantor be made for the benefit of creditors, or if a receiver or trustee be appointed for Tenant or a Guarantor or the property or business of Tenant or a Guarantor, or (v) any Guarantor shall die, then Landlord may treat the occurrence of any one or more of the foregoing events as a breach of this Lease and thereupon at its option, without further notice or demand of any kind to Tenant or any other person, may have, in addition to all other legal or equitable remedies, the following described remedies: A. La�dlord may elect to terminate this Lease and the Lease Tetm created hereby in which event Landlord forthwith may repossess the Leased Premises and Tenant shall pay at once to Landlord as liquidated and final damages, a lump sum of money equal to the discounted present rental value of the Rent for the balance of the stated term of this Lease less the fair rental value of the Leased Premises for said period. B. Landlord may elect to termioate Tenant's right of possession without terminating this Lease or releasing Tenant in whole or in part from Tenant's obligations under this Lease, in which event Tenant agrees to surrender possession and vacate the I,eased Premises immediately and deliver possession thereof to Landlord, and Tenant hereby grants to Landlord full and free license to enter into and upon the Leased Premises, in whole or in part, with or without process of law and to repossess Landford of the Leased Premises. In any such case, Landlord shall, to the extent required by applicable law, if any, attempt to relet the Leased Premises and Tenant shall pay to Landlord each month, any deficiency between (a) the Fixed Minimum Rent and additions thereto calculated based on the then current Operating Costs, insurance and real estate tax payments, for the residue of the Lease Term plus any other sums then due hereunder, without prejudice to Landlord's rights to collect additional sums which may hereafter become due including without limitation Tenant's Pro Rata Share of Operating Costs and insurance eapenses and real estate taxes for the balance of the Lease Term and (b) the payments, if any, received by Landlord from any reletting of the Leased Premises. Tenant hereby expressly waives the service of any notice of any election made by Landlord under this Section 10.1, demand for payment of Rent or for possession, except the particular demands and notices as may in this Lease be specified. Upon and after entry into possession without terminating the Lease, Landlord shall, to the extent required by applicable law, if any, attempt to relet all or any part of the Leased Premises for the account of Tenant for such rent and upon such terms and to such person, firm or corporation and for such period or periods as Landlord in Landlord's sole discretion shall determine. If the consideration collected by Landlord upon any such os39awo�ons�oasa.io Zp reletting for TenanEs account is not sufficient to pay the Rent reserved in this Lease plus the cost of repairs, alterations, additions, redecorating and Landlord's other expenses, Tenant agrees to pay to Landlord the deficiency upon demand. The Landlord may collect and receive any Rent due from Tenant and the payment hereof shall not constitute a waiver of any existing default by Tenant or affect any notice ot demand given, suit instituted or judgment obtained by Landlord, or be held to waive, affect, change, modify or alter the rights or remedies which Landlord has in equity or at law or by virtue of this Lease. Payment by Tenant or receipt by Landlord of a lesser amount than any installment or payment due shall be deemed on account of, but not satisfaction of, the amount due, and no endorsement or statement on any check or any transmittal document accompanying any check or payment of any amount due shall be deemed an accord and satisfaction. Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of any amount due or pursue any other remedies available to Landlord. Section 10.2. Holdover bv Tenant. [n the event Tenant remains in possession of the Leased Premises after the expiration of the tenancy created hereunder, and without the execution of a new lease, Tenant, at the option of Landlord, shall be deemed to be occupying the Leased Premises as a tenant from month-to-month, at twice the monthly Rent (i.e. Fixed Minimum Rent and charges for real estate taxes, Operating Costs and insurance charges), subject to all the other conditions, provisions and obligations of this Lease insofar as the same are applicable to a month-to-month tenancy. Additionally, and regardless of whether Landlord exercises the option set forth in the immediately preceding sentence, Tenant shall be tiable for any consequential damages, including attorneys' fees, incurred by Landlord as a result of TenanPs failure to surrender possession of the Leased Premises upon expiration of the Lease Term. Section 103. Landlord's Rieht to Cure. Landlord may, but shall not be obligated to, cure, at any time, without notice, any faifure by Tenant to perform any obligation under this Lease; and whenever Landlord so elects, all costs and expenses incurred by Landlord, including, without limitation reasonable attorneys' fees together with interest on the amount of costs and ex- penses so incurred at the Lease Interest Rate shall be paid by Tenant to Landlord on demand. Section ] 0.4. Effect of Waivers of Default. No consent or waiver, express or implied, by Landlord to or of any breach of any covenant, condition or duty of Tenant shall be construed as a consent or waiver to oc of any other breach of the same or any other covenant, condition or duty. Section 10.5. Intentionally Omitted. ARTICLE XI. MISCELLANEOUS PROVISIONS. Section 11.1. Calculation of Pro-Rata Shares. A. "Tenant's Pro-Rata Share" of Operating Costs shall be equal to the product of (a) the amount of said Operating Costs, and (b) a fraction, the numerator of which is the Floor Area of the Leased Premises and the denominator of which is the total floor area in the Shopping Center contributing to such Operating Costs. Notwithstanding the 05392�00707\910454.10 21 foregoing to the contrary, to the extent that Landlord performs any maintenance, repair or replacement that serves Tenant and fewer than all of the tenants at the Shopping Center, TenanYs Pro-Rata Share with respect to said maintenance, repair or replacement shall be shall be based on a fraction, the numerator of which is the Floor Area of the Leased Premises and the denominator of which is the total floor area of the premises served by such maintenance, repair or replacement. B. "Tenant's Pro-Rata Share" of real estate taxes shall be equal to the product of (a) the amount of said real estate taxes, and (b) a fraction, the numerator of which is the Floor Area of the Leased Premises and the denominator of which is the total floor area of the buildings comprising the tax parcel of which the Leased Premises are a part. Section 11.2. Mutual Waiver of Subroeation. Whenever (a) any loss, cost, damage or expense resulting from fire, explosion or any other casualty or occurrence is incurred by either of the parties to this Lease or any party daiming by through or under Landlord or Tenant, as the case may be, their respective property, their respective businesses, the Shopping Center or the Leased Premises or any addition or improvements thereto, or any contents therein, and (b) such party is then required under the terms of this Lease to maintain insurance with respect to such loss, cost, damage or expense, then the party required to be so insured hereby releases the other party from any liability it may have on account of such loss, cost, damage, or expense to the extent of any amount that is, or, if such required insurance was not in effect, that would have been recoverable, by reason of such insurance and waives any right of subrogation which might otherwise exist in or accrue to any person on account thereof; provided that such release of liability and waiver of the right of subrogation shall not be operative in any case where the effect thereof is to invalidate such insurance coverage or increase the cost thereo£ Each party shall also be responsible for the payment of any deductible amounts required to be paid under the insurance referred to in this Section 11.2. Section 11.3. Adiacent Excavation-Shorine. If an excavation shall be made upon land adjacent to the Leased Premises, or shall be authorized to be made, Tenant shall permit Landlord to enter upon the Leased Premises to perform proper shoring. Section 11.4. Tenant's Authoritv. Tenant hereby covenants, warrants and represents that it has authority to enter into ihis Lease. Section I 1.5. Notices. Any notice or demand from Landlord to Tenant or from Tenant to Landlord shall be in writing and mailed, postage prepaid, by certified mail or by commercial overnight delivery service for next business day delivery, freight prepaid, or delivered by personal delivery, addressed, if to Tenant, at the Notice Address of Tenant or such other address as Tenant shall have last designated by notice in writing to Landlord, and, if to Landlord, to Tri-Land Developments, Inc., One Westbrook Corporate Center, Suite 520, Westchester, Illinois 60154-5764, or such other address as Landlord shall have last designated by notice in writing to Tenant. The customary receipt signed or refused by the parry to whom notice is directed shall be conclusive evidence of such service. Notice shall be deemed given when delivered, if given by personal delivery, otherwise on the second business day afrer being mailed by certified mail or on the next business day after being posted with the commercial overnight delivery service, as applicable. 05392�007071910454.10 22 Section 11.6. Brokera�e. Tenant warrants that it has had no dealings with any broker or agent in connection with this Lease other than Landlord's broker, and covenants to pay, hold harmless and indemnify Landlord from and against any and all cost, expense or liability for any compensation, commissions and charges claimed by any other broker or other agent with respect to this Lease or the negotiation thereof. Section ll.7. Votine Control of Tenant. In the event that Tenant is a corporation or entity other than an individual, any transfer of a majority or controlling interest in Tenant (whether by stock transfer, merger, operation of law or otherwise) shall be considered an assignment of this Lease subject to the provisions of Section 8.1.R. hereof. Section 11.8. Estappel Certificates. Tenant shall, within ten (10) days following request in writing from Landlord or any existing or prospective modgagee or purchaser of Landlord, execute, acknowledge and deliver to Landlord a statement in writing certifying: (i) that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as modified and stating the modifications); (ii) the date of commencement of the Lease Term; (iii) that Rent is paid currently without any offset or deductio� thereto; (iv) the dates to which the Fixed Minimum Rent and other charges have been paid, and the amount of Fixed Minimum Rent and other charges, if any, paid in advance; (v) the amount of any security deposit, (vi) that Tenant has accepted the Leased Premises and all of Landlord's Work has been completed, (vii) whether or not there is then existing any claim of Landlord's default hereunder and, if so, specifying the nature theceof; and (viii) any other matters reasonably requested by Landlord, or any existing or prospective mortgagee or purchaser of Landlord. Any such statement may be relied upon by Landlord or any existing or prospective mortgagee or purchaser of Landlord. If Tenant shall fail to execute and return such statement within the time required herein, Tenant shall be deemed to have agreed with the matters set forth therein, and Landlord acting in good faith shall be authorized as TenanYs attorney-in-fact to execute such statement on behalf of Tenant (which shall not be in limitation of Landlord's other remedies therefor). Section 11.9. Applicable Law and Construction. The laws of the State of Minnesota shalf govern the validity, performance and enforcement of this Lease. The invalidity or unenforceability of any provision of this Lease shall not affect or impair any other provision. The headings of the several articles contained herein are for convenience only and do not define, limit or construe the contents of such articles. Section 11.10. Binding Effect of Lease. The covenants, agreements and obligations herein contained except as herein otherwise specifically provided, shall extend to, bind and inure to the benefit of the parties hereto and their respective personal representatives, heirs, successors and assigns. Landlord, at any time and from time to time, may make an assignment of its interest in this Lease, and, in the event of such assignment and the assumption by the assignee of the covenants and agreement to be performed by Landlord herein, Landlord and its successors and assigns (other than the assignee of this Lease) shal( be released from any and all liability hereunder. All negotiations, considerations, representations and understandings between Landlord and Tenant are incorporated herein and this Lease represents the entire agreement between the parties. ass9z�ao�o�9 �ocsa. � 0 23 Section 11.11. Landlord and Landlord's Aeents. Wherever in this Lease Landlord is granted any right, including but not limited to the right to enforce any provision of this Lease or to exercise any remedies of Landlord, either specifically provided for herein or at law or equity, such right shall also be exercisable by Landlord's manager, its members or any agent of Landlord or Landlord's manager or members, in their own name, along or in conjunction with Landlord or any of the foregoing parties. Section 11.12. lntentionallv Omitted. Section ] 1.13. Obiection to Statements. Tenant's failure to object to any statement, invoice or billing rendered by Landlord within a period of thirty (30) days after receipt thereof shall constitute Tenant`s acquiescence with respect thereto and shall render such statement, invoice or billing an account stated between Landlord and Tenant. Section 1 1.14. Executive Order 13224. Tenant represents and warrants to Landlord that neithex Tenant, nor any of the entities or individuals owning or controlling Tenant, haue been designated as a blocked person pursuant to Executive Order 13224. Tenant shall update the foregoing representation by written notice to Landlord if the foregoing representation should ever become false during the Term. Any failure to update the foregoing representation shall constitute a default by Tenant under this Lease and Landlord may immediately (without delivering any prior notice to Tenant or affording Tenant any opportunity to cure) exercise any and all rights and remedies permitted in this Lease. Furthermore, if Tenant or any of the entities or individuals owning or controlling Tenant either now or in the future is designated as a blocked person pursuant to Executive Order 13224, such circumstance shal( constitute a default by Tenant under this Lease and Landlord may immediately (without delivering any prior notice to Tenant or affording Tenant any opportunity to cure) exercise any and all rights and remedies permitted in this Lease. Tenant shall, within ten (10) days after receipt of written request from Landlord, certify to Landlard in writing the identiry of all entities and individuals owning or controlling Tenant. Section 11.15. Jurt� Waiver. THE PARTIES HERETO SHALL, AND THEY HEREBY DO, WANE TRIAL BY JURY IN ANY ACTION, PROCEED[NG OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY OF THE LEASED PREMISES AND/OR ANY CLAIM FOR INJURY OR DAMAGE. Section 11.16. Exculpation. It is specifically understood and agreed that there shall be no personal liability of the Landlord, or any member, manager or beneficial owner thereof, in respect of any of the covenants, conditions and provisions of the Lease; in the event of a breach or a default by Landlord of any of its obligations under this Lease, as such Lease may be amended from time to time, Tenant shall look solely to the equity of Landlord in the Shopping Center for satisfaction of Tenant's remedies. 05392\00707\9Id154.10 24 Section ll.17. Survival. Unless otherwise expressly stated, all of Tenant's obligations under this Lease shall survive the expiration or earlier termination of the Lease Term, as the same may be extended from time to time. Section 11.18. Entitlements. If at any time any part of the Shopping Center is subjaot to any tax allocation subsidy or any other govemmental subsidy or entitlement ("Entitlement"), Tenant will provide to Landlord and at such intervals as may be required, all information relating to sales taxes and other taxes attributable to Tenant's activities at the Shopping Center required to be provided by or on behalf of Landlord or the Shopping Center in connection with such Entitlament. Tenant shall deliver such information in such form and substance as Landlord, the City of Fridley or other governmental authorities shall request. Tenant shall, upon Landlord's request, provide such infQrmation, or an additional copy thereof, dicectly to such govemmental authorities as Landlord may request in connection with Landlord's compliance with the terms of any such Entitlement. ARTTCLE XII. PARKING SIGNS. Section 12.1. Tenant's Customer Parkin� Si¢ns. Landlord hereby grants Tenant the right to install, at Tenant's sole cost and expense, professionally-made signs xeading "Fridley Liquors Customer Parking Only" ("Tenant's Customer Parking Signs") in front of the parking spaces designated on Exhibit G(the "Designated Spaces"). Tenant shall be obligated, at Tenant's sole cost and expense, to clean, maintain in good condition and repair, and replace or remove as necessary, TenanPs Customer Parking Signs. Landlord and Tenant hereby acknowledge that the Designated Spaces are in the common areas, are and shall remain under Landlord's exclusive controL and are not reserved or leased by Tenant. Landlord shall have no responsibility or obligation to Tenant to police or enforce parking in the Designated Spaces, nor shall Tenant be permitted to take any action to do so. ARTiCLE XIII. EXCLUSNITY OF USE. Section 13.1. Tanant's Exclusive Use. As a material inducement to Tenant to enter into this Lease, without which inducement Tenant would not have entered into this L,ease, Landlord agrees that during the L,ease Term, provided that Tenant is continuously operating for the Permitted Uses in the Leased Premises and has not exercised its option to Go Dark, Landlord shall not lease any space in the 5hopping Center (or approve any assignment of a lease or sublease) to another tenant or occupant whose use incVudes the sale of liquor, beer, wine or other spirits or alcoholic beverages for off=premises co�sumption ("TenanYs Exclusive Use"). Section 13.2. Excentions to Tenant's Exclusive Use. Notwithstanding anything set forth in this Article XIII to the contrary, Landlord and Tenant acknowledge and agree that: A. Cub shall have the right to sell, for off-premises consumption, beer that contains 3.2% (or less) alcohol by weight. B. The sale of beer or wine for off-premises consumption by tenants or occupants operating restaurants at the Shopping Center shall not be a violation of TenanYs Exclusive 05392100707U10454.10 25 Use, provided such use is ancillary (comprising 5% or less of the gross revenues of each such tenant or occupant) to any such tenanYs or occupanYs primary use. C. The sale for on-premises consumption of liquor, beer, wine or other spirits or alcoholic beverages for on-premises consumption by other tenants or occupants of the Shopping Center shall not be a violation of TenanPs Exclusive Use. Section 13.3. Notice to Other Tenants. During the term of this Lease, Landlord shall notify all current and future tenants of TenanYs Exclusive Use. Provided that Tenant is continuously operating for the Permitted Uses in the Leased Premises and has not exercised its option to Go Dark, Landlord agrees to use commercially reasonable efforts to enforce Tenant's Exclusive Use against other tenants and occupants of the Shopping Center. In the event a tenant in the Shopping Center violates Tenant's Exclusive Use, Landlord shall, within five (5) business days after Landlord receives written notice from Tenant of a violation of TenanYs Exclusive Use, demand in writing that the offending tenant immediately cease engaging in the Tenant's Exclusive Use. Landlord shall diligently pursue the prevention of the Exclusive Use violation by an offending tenant, which diligent pursuit shall include, but not be limited to, filing for injunctive relief against the offending tenant if the violation of TenanYs Exclusive Usa continues for a period of thirty (30) days after Landlord delivers written notice to the offending tenant. ARTICLE XN. LOADING AREA. Section 141. Loading Area. The loading area for the Leased Premises shall be the area depicted on Exhibit H, attached hereto and incorporated herein by reference. [SIGNATURE PAGE FOLLOWS] os39z�oo-ro��9�oasa.�o 26 IN WiTNES5 WHEREOF, Landlord and Tenant have executed this Lease the day and year first above written. TENANT: LANDLORD: CITY OF FRIDLEY, a Minnesota municipal ZCOF TL FRIDLEY LLC, a Delaware limited corporation liability company, By: _ Name: Its: S-1 05392\00707\91045A.10 By: ZCOF TRI-LAND, L.L.C., a Delaware limited liability company, managing member E � i- p1�ILL �s ? d°g � �Y �� � 0 Z < � � � � �� �� � � �� � �� � .i� � � W � � � ff Exhibit'A' Leeal Description of Shoppine Genter Real Pronertv in the City of Fridlev, Counri' of Anoka, Siate of Minnesota, described as fullows: Parcel 1: Lot 2, Block 1, Holiday North 2°a Addition, according to the plat on file in the office of the Registrar of Titles, Anoka County, Minnesota. Parcel2: Access easement for the benefit of Parcel 1 as created by and described in Easement and Restriction Agreement dated October 18, 2QQ6, filed October 23, 2006, as Document No. 489456.005. Parcel 3: [ngress and egress easement for the benefit of Parcel 1 as created by and described in Easement and Maintenance Agreement dated April 29, 1983, filed May 12, 1983, as Document No. 126502. A-2 OS?92100707\910454.10 EXHIBIT C DESCRIPTION OF LANDLORD'S WORK The following work shall be done by the Landlord prior to the Delivery Date, except as otherwise specified, in accordance with the schedule set forth below. Construct a temporary enclosare wall separating the Existing Premises from the Leased Premises and protect the east customer entry area, as shown on Exhibit G2 attached hereto. 2. Construct new demising partition as shown on Exhibit C-3 attached hereto. 3. Construct new north storefront including masonry and glass as shown on Exhibit G4 attached hereto and substantially as shown on the elevation attached hereto as Exhibit C-4- l. 4. Build out Leased Premises to vanilla box finish, as depicted on the plans attached hereto as Exhibit GS and made a pad hereof ("Landlo�d's Plans") and/or as provided herein: a. Gypsum wallboard partitions in sales area of Leased Premises, taped, sanded and painted. b. 2'x4' acoustical tile ceiling with lay-in fluorescent light fixtures (1 fixture per 80 square feet of sales floor area) in the sales area and office area at approximately 10' above the finished floor IeveL Stock area will have exposed fluorescent tube fixtures mounted to structure. c. 1/8' nominal vinyl floor tile and baseboards in sales area. d. HVAC — 350 square feet per ton. e. 7 watts per square foot to a circuit breaker panel — electrical outlets shall be installed per Landlord's Plans. f. Drain lines for refrigerated cases in locations per Landlord's Plans. g. Male and female restrooms with handicap hardware. h. Single customer entry vestibule with automatic entry doors going east and north. i. Overhead delivery door in location shown on Exhibits GS and H. j. Roof hatch for access to HVAC and other roof-mounted equipment in location to be determined by Landlord. k. Curtain wall from ceiling to top of cooler at location of cooler as approximately sho�cm on Exhibit G5. 1. Office in a size and location to be mutually agreed upon by the parties and consisting of four (4) walls, one (1) window into the sales area and one (1) door. lt is the intent of the Landlord and Tenant that, to the extent the description contained herein conflicts with the depiction of the Leased Premises set forth on E�ibit G5, the descriptions provided herein in Exhibit C# 4(a) through (l) shall control. Landlord shall perform Landlord's Work as described in this Exhibit C at its expense and none of the improvements contained herein shall be subject to or deducted from TenanYs Renovation Allowance as set G1 05392V00707V`10454.10 forth in Section 3.3 ofthe Lease. The following work shall be done by the Landlord following the Delivery Date, except as otherwise specified, in accordance with the schedule set forth below. 5. Renovate east exterior wall of the Leased Premises as shown on Exhibit C-4-1 attached hereto. 6. Renovate east parking area as generally shown on Exhibit C-9 attached hereto. 7. Decommission and demolish poRion of Existing Premises not included in the L,eased Premises as shown on Exhibit G10 attached hereto. 8. Renovate north parking lot as shown on Exhibit C-11 attached hereto. Landlord shall have the right to run drainage lines, utility lines, pipes, duct work or any other component parts of all mechanical and electrical systems; where necessary or desirable, as determined by the Landlord, through attic spaces, column spaces or other pads of the Leased Premises, and to repair, alter, replace or remove the same, and to require the Tenant to install and maintain proper access panels thereto. 05392\00707\910454.10 C_Z w � a � X O � a a ¢ w z 0 � z w � 0 J J Q � Y c� � m x x w i— - --- - -- -I --- -- ---- . �_ -- � --- - � — - — - — - — - — � — I - � � � ewnwmm_/� �' � ~ I � e��o�s [vNwrn � — ra�aiert / wua�• I �...� I .-_.–..� I oeti�r �ocmm ' �b+cau.x•,rr. ' v1O�ILLb ` !MM I I –l__—__ i i 1 1 _ — , _ _ � .I . _ ._.. . . i -�------ ,I ., _ . - . i � — – — – — I I . j ____ _ _ — � � I I � I rwi _ _ GS10 N — _ I � pMMSIW WLLL � I - - --r- -� - - � i i µ,µ, � ° �i — T— — — _' .__. y � — _ , _ _ I � Q Z W 4 � J O mr^ � V � � F J W Z � Q E � pb Z Y F � Q � �:�. w � J' � � a °-� `. p u. W� ],O . , w 0 w c � . _ i[ i V J J iy �i �� �° �� EXHIBIT C-5 i � � � � � � � rn � � � 275.8 � � � � � EXISTING PREMfSES r--- ``` iso.a• ( 1. � � � � � � : � � � Lo DECOMMISSION AND FRIDLEY DEMOLISH OLD LIQUORS STORE. 10,540 S.F.� � �i � � AVAILABLE ANCHOR ±43,877 SQ. FT. 230.0' . .� � EXISTING cvs o� z� � �� 'I � I, I� I �\ � �� i 2� e� I I I \ 17 \ 13I I � li � � � �� � � I I � /, � EXHIBIT C-10 // EXHIBIT D DESCRIPTION OF TENANT'S WORK Al( work required m complete and place the Leased Premises in finished condition for opening for business, except work to be done by the Landlord described in Exhibit C, is to be done by the Tenant, at tha Tenant's expense, and in accordanae with this Exhibit, Exhibit E, and the Lease to which this Exhibit is attached. I. TENANT'S WORK includes, but is not limited to, the following: l.l Relocate the portion of TenanYs beer cooler that is located in the Leased Premises to a portion (as may be designated by Landlord from time to time) of the space designated as "Available Anchor" on Exhibit D-1 (where Landlord shall store same at Landlord's cost). Landlord shall give Tenant not less than thirry (30) days prior notice of the date on which Tenant shall relocate Tenant's cooler and products, whereupon Tenant shall partition Tenant's cooler to prepare for the partial relocation and shall relocate same. Landlord shall give Tenant not less than thir[y (30� days' prior notice of the date on which Landlord estimates that the Delivery Date will occur. Commencing on the date that is twenty-one (21) days prior to the proposed Delivery Date set forth in Landlord's nQtice, Tenant shall have the right to enter onto the Leased Premises for the purpose of relocating and instal(ing Tenant's beer cooler from the Available Anchor space and the Existing Premises to the Leased Premises and installing same. Such entry onto the I.eased Premises and performance of such work by Tenant prior to the Delivery Date shall be on all of the terms and conditions of the Lease other than Tenant's obiigation to pay Fixed Minimum Rent, TenanPs Pro-Rata Share of Operating Costs, real estate taxes and insurance, and utility charges for the Leased Premises. Tenant shall not be permitted to enter onto the Leased Premises prior to the delivery to Landlord of all items required in Section 3.2A of this Exhibit D. Tenant and Tenant's contractors shall work in harmony with Landlord and Landlord's contractors during such entry by Tenant priar to the Commencement Date, and shall not delay or disrupt the performance of Landlord's Work. 1.2 Purchasing and installing new equipment and Ptxtures or reinstalling the shelving in the Existing Premises and other interior fixtures and equipment, including all refrigerated coolers and cases and remote compressors. 1.3 Relocating or disposing of all trade fixtures and furnishings in the Existing Premises. 1.4 Relocating all of Tenant's merchandise from the Existing Premises to the Leased Premises. 1.5 Install storefront display platforms or backgrounds. 1.6 Purchasing and installing new signage consisYent with Tenant's sign plans as illustrated in Exhibit C-4-1 and as approved by Landlord. D-1 053921007DT910454.10 1.7 Purchasing and installing any new or relocated interior d8cor package. 1.8 Obtaining all permits and inspections associated with Tenant's Work. IL CIIANGES & ALTERATIONS Landlord reserves the right to require changes in Tenant's Work when necessary by reason of code requirements, or building facility necessity, or directives of governmental authorities having jurisdiction over the Leased Premises, or directives of Landlord's insurance underwriters. III. GENERAL PROVISIONS All work done by Tenant shall be governed in all respect by, and be subject to, the following: 3.1 Plans. All work other than that to be performed by Landlord, if any, is to be done by Tenant, by reputable contractors approved by Landlord, at TenanYs expense and in strict accordance with the outline description set forth in this Exhibit D, the Sign Criteria set forth in Exhibit E and the fixture layout to be provided by Tenant which shall be subject to Landlord's approval. Tenant agrees to submit to Landlord, within fifteen (15) days following receipt of notice from Landlord that Tenant's Plans are due ("Plan Notice"), plans cQVering Tenant's Woxk ("Tenant's Plans"). Within a reasonable time following Landlord's receipt of TenanY's Plans, Landlord shall either approve Tenant's Plans as submitted or conditionally approve Tenant's Plans by noting required revisions thereon ("Landlord's Notes"). Landlord's Notes shall be incorporated by reference into and be deemed to modify TenanYs Plans as though originally set forth therein. Tenant's Plans, as revised by Landlord's Notes, shall collectively constitute the "Approved Tenant Plans." The technical review of Tenant's Plans for the purpose of securing Landlord's approval shall be performed by Landlord's project azchitect at Landlord's cost. In the event that Tenant fails to make timely submission of Tenant's Plans or Tenant's Additional Plans as pcovided in this Lease, then Landlord shall have the right, but not the obligation, to proceed with Landlord's Work pursuant to plans prepared by or otherwise approved by Landlord. 3.2 Prosecution of Tenant Work. A. In addition to the requirements set forth in 3.1 above, not less than five (5) days prior to the date on which Tenant is obligated to commence performance of TenanPs Work; and before delivery of any materials into the Leased Premises or the Shopping Center, Tenant shall furnish to Landlord for approval evidence satisfactory to Landlord that the insurance coverage described in Section 8.IJ of the Lease is in effect the names and addresses of al] contractors; copies of all contracts, necessary permits and licenses; certificates of insurance and instrwnents of indemnificafion; and waivers of lien against any and all costs, claims, expenses, damages and liabilities wbich may arise in connection with such work, all in such form and amount as is satisfactory to Landlord. B. Tenant shall, following the Delivery Date, commence Tenant's Work and thereaier diligently prosecute such work to completio� not later than the Commencement D5392\D6707�910454_]0 D_Z Date. Tenant shall not commence any work upon or within the Leased Premises or be entitled to possession thereof until (a) Landlord has approved Tenant's Plans and (b) Landlord has received and approved all items described in Section 3.2.A above. TenanYs failuee to provide all items described in Section 32.A within the time required shall not excuse Tenant's delay in commencing TenanYs Work. Upon completion of Tenant's Work, Tenant shall fumish Landlord with contractor s affidavits accompanied by fufl and final waivers of lien, receipted bills covering all labor and materials expended and used in connection with such work and copies of all permits which are required to evidence the proper completion of such work, including a certificate of occupancy evidencing that Tenant has satisfied all local governmental requirements necessary to conduct Tenant's business in the Leased Premises. All of Tenant's Work shall be performed in strict compliance with the Approved Tenant Plans and comply with all insurance requirements and with all laws, ordinances, rules and regulations of all governmental authorities and all occupancy permits applicable to the Leased Premises. 33 Landlord agrees to notify Tenant within a reasonable time in advance of the day when Tenant must commence TenanYs Work and Tenant agrees that Landlord may require Tenant to commence work, subject to such notice to commence Tenant's Work before Landlord's Work has been fully completed, provided that the Leased Premises and the building of which the Leased Premises are a part are completed to the extent that it is practicable for Tenant to commence TenanYs Wark. TenanYs Work shall be coordinated with the work being done by the Landlord andlor other tenants of Landlord to such a degree that such �vork �vill not interfere with or delay the completion of work by Landlord and/or other tenants of Landlord. 3.4 Tenant's Work shall be performed in a first-class workmanlike manner using good grades of new materials and without interfering with other tenants' operations and shall be in good and usable condition at the date of completion thereof. The materials to be used by Tenant for floox and wall coverings, countertops, lighting fixtures and other fixtures and decor items installed by Tenant shall be new and of good quality. Tenant shall require any party performing any such work to guarantee the same to be free from any and all defects in workmanship and materials for one (1) year from the date of completion thereof. Tenant shall also require any such party to be responsible for the replacement or repair without additional charge of any and all work done or furnished by or through such party which shall become defective within one (1) year after substantial completion of the work. The correction of such work shall include, without charge, all expenses and damages in connection with such removal, replacement, or repair of any part of the work which may be damaged or disturbed thereby. All warranties or guarantees as to materials or workmanship on or with respect to Tenant's Work shall be contained in the conVact or subcontract which shall be so written that such guarantees or warranties shall inure to the benefit of both Landlord and Tenant, as their respective interests appear, and can be directly enforced by either. Tenant covenants and agrees to give Landlord any assignment or other assurances necessary to effect the same. 3.5 Landlord shall have the right (but shall not be obligated) to perform by its own contractor or subcontractor, on behalf of and for the account of Tenant, any of Tenant's Work which Landlord determines should be so performed. Generally, such work shall be work which affects any structural ar roofing components, or work of other tenants of, or the general utility OS?92�0070T910454.10 D-3 systems for, the building in which the Leased Premises are located. If Landlord so detercnines, it shall sa notify Tenant prior to the commencement of such work. Tenant shall promptly, on demand, reimburse Landlord for all costs of planning and performing such work when and as incurred by Landlord, and for all permits in connection therewith. 3.6 Compliance with Laws: All TenanPs Work shall conform to applicable statutes, ordinances, regulations, codes and the requirements of Landlord's fire undera�iter. Tenant shall obtain and convey to Landlord copies of all permits, certifications and appxovals indicating compliance. 3.7 Approvals: iv�o approvals by Landlord shall be deemed valid unless the same shall be in writing signed by the Landlord. 05392\0070T910454.10 D-4 EXHIBIT E SIGN CRITERIA I. GENERAL 1.1 This exhibit shall govem the design, construction and installation of all signs to be installed by the Tenant at any time in conjunction with the provisions of the TenanYs Lease. The Landlord shall make all final and controlling determinations concerning any questions of interpretation ofthis sign policy. l.2 It is intended that the signing of stores in Fridley Market shall be designed and executed in a manner to result in an attractive and coordinated total effect. Lettering shall be well proportioned, and its design, spacing and legibility shall be a major criterion for approval. 13 Tenant shall be required to identify its premises by erecting signs which shall be attached respectively directly to the building fascia as described hereinafter. Where the Leased Premises is a corner store, Tenant may install a fascia sign on each fascia when the parallel fease frontage exceeds fifreen (15) feet, and Che criteria shall govern each frontage �espectively. In nQ event shall the preceding sentence be construed to permit the installation of fascia signage on sides of a building lacking fascia. Landlord hereby approves Tenant's sign rendering attached hereto as E�ibit C-4-1. The parties agree that TenanPs building signs shall be prepared and installed in the size and locations shown on E�ibit C-4-1. 1.4 Landlord shall supply and install a uniform identification sign on the Tenant's service door at the TenanYs expense. Tenant shall not post any additional signs in the service area. 1 S The content of Tenant identification signs shall be limited m the store name and shall not include crests, shields, logos or names of items for sale. 1.6 All lines of lettering shall run horizontally. 1.7 All lettering shall be upper case or lower case block type letters or combinations thereof. Script shall not be allowed, except as the Landlord shall otherwise determine. 1.8 Moving, rotating flashing, noise-making or odor-producing signs shall not be allowed. 1.9 The names, stamps or decals of manufacturers or installers shall not be visible except fox technical data (if any) required by goveming authorities. 110 Tenant shall not be permitted to open for business without approved required signs in place. Failure to open for this reason shall not excuse Tenant from the performance of its obligations under the Lease. 05392V0070T9t0454.10 E-1 II. CRITERIA FOR BUILDING FASCIA S[GNS 2.1 Letters shall be individual and individually mounted to the fascia material with minimum practical sized, noncorrosive, concealed fastenings, weathersealed at point of fascia penetration. 2.2 Length of signs shall be limited to 70% of the leased frontage. The assigned position for each Tenant sign is as illustrated on Exhibit C-4-1, or as otherwise approved by Landlord. 2.3 The principal base of all sign letters shall be aligned on a base line located as determined by the Landlord for each Tenant sign. 2.4 The maximum height of upper case letters, lower case letters and ascenders and descenders of lower case letters shall be limited as shown in the following chart. LEASE FRONTAGE UPPER CASE Less than 20' 24" 20' to less than 30' 30" 30' to ]es than 50' 36" 50' to less thao 80' 42" 80' and over 48" LOWER CASE 16" 20" 24" 28" 32" ASCENDER/ $�� ]0" 12" 14" 16" 2.5 Letters shall be of minimum practical depth. Maximum depth shall be 5". 2.6 Letters shall be formed of steel or aluminum back and sides with white porcelain or baked enamel or anodized aluminum exterior finish. Sides and trim caps (if any) shall be white in color. Open end of the channel shall be glazed with acrylic plastic facing of color selected by the Tenant. 2.7 Sign letters shall be self-illuminated. Intemal illumination shall be provided by neon-t}=pe tubing witb wiring and transforrners concealed behind the fascia construction. Electrical penetrations of the fascia shall be of minimum practical si2e and number, non-corrosive, concealed and weathersealed at point of fascia penetration. 2.8 Tenant shall install any blocking behind the canopy fascia that may be necessary to properly support the individual letters. Minimum blocking shall be installed in a manner that will not damage the canopy structure of the fascia. IIL CRITERIA FOR CANOPY SOFFTf SIGNS 3.1 Landlord may establish a design for a standard canopy soffit or "blade" sign with space for Tenant identification of standard size and color. Letter style shall match TenanYs fascia sign. E-2 05392\00707\910454_10 3.2 All canopy soffit or "blade" signs shall be fabricated and installed by a sign company selected by Landlord. Tenant shall order said signs(s) from and make payment directly to the Landlord. 33 Signs shall be mounted and located as determined by the Landlocd. IV. CR[TERIA FOR STOREFRONT SIGNS 4.1 Tenant may install not more than a total of two identification signs on tha daars, windows or sidewall returns of the storefront. Signs shall be non-illuminated, shall not exceed 2" in height and letters shall be either painted, or cut from self-adhering vinyl fabric of 1i4" thick wood, metal or plastic. 4.2 Tenant shall not apply any other signs to the interior or exterior face of the storefront glass or other material. V. APPROVAL OF LOCAL GOVERNMENT AUTHORITIES 51 Tenant shall be responsible for complying with the regulations and ordinances goveming the installation and maintenance of signs with the City of Fridley, Minnesota. Application for necessary permits and the payment of fees shall be directed to the appropriate City Department. VI. PROCEDURE AND SCHEDULE FOK COMPLETION OF SIGN DRAWINGS 6.1 Prior to awarding a contract for fabrication and installation, Tenant shall submit drawings and specification, in quadruplicate, including samples of materials and colors for all its proposed building fascia, canopy soffit and storefront sign work. The drawings shall cleaxly show location of sign and indicate graphics, color, materials, construction and attachment details. Landlord shall return one (1) set to Tenant with its required modifications andlor approval. E-3 05392\00707V10454.10 EXHIBIT F RULES AND REGULATIONS Tenant covenants and agrees to abide with the following Rules and Regulations for the Shopping Center: 1. No sign, advedisement, display, notice, or other lettering shall be exhibited, inscribed, painted or affixed on any part of the outside of the Leased Premises or inside, if visible from the outside, or outside the building of which they form a part, and no symbol, design, mark, or insignia adopted by Landlord for the Shopping Center or the tenants therein shall be used in connection with the conduct of TenanYs business in the Leased Premises or elsewhare without, in each instance, the prior written consent of Landlord. All such signs, displays, advertisements, and notices of Tenant so approved by Landlord shall be maintained by Tenant in good and attractive condition at Tenant's expense and risk_ The distribution of handbills, leaflets or other printed materials including but not limited to the use of handbills for advertising, shall be prohibited at the Shopping Center. 2. No awning or other projections shall be attached to the outside walls of the Leased Premises or the building of which they form a part without, in each instance, the prior written consent of Landlord. 3. All loading and unloading of goods shall be done only at such times, in the areas and through the entrances desigttated for such purpose by Landlord. 4. All garbage and refuse shall be kept in the kind of container specified by Landlord, and prepared for collection in the man�er and at the times and places specified by Landlord. If Landlord shall provide or designate a service for picking up refuse and garbage, Tenant shall use same at Tenant's cost, provided such cost shall be competitive to any similar service available to Tenant. Tenant will not install or cause to be installed any automatic garbage disposal equipment without the prior written consent of Landlord. 5. No cadio oc television ox other similar device shall be installed. and no aeria] shall be erected on the roof or exterior walls of the Leased Premises, or on the grounds without, in each instance, the prior written consent of La�dlord. Any aerial so installed without such written consent shall be subject to removal without notice at Tenant's expense at any time. 6. No loud speakers, television sets, phonographs, radios or other devices shall be used in a manner so as to be heard or seen outside of the Leased Premises without the prior written consent of Landlord. 7. No auction, fire, bankruptcy or selling-out sales shall be conducted on or about the Leased Premises without the prior written consent of Landlord, which may be withheld in Landlord's sole and absolute discretion. 8. Tenant shall keep Tenant's display windows i]luminated and the signs and exterior lights lighted each and every day of the term hereof during the hours designated by Landlord. F-1 05341\00707\910454.10 9. Tenant shall keep tha Leased Premises at a temperatuxe sufficiently high to prevent freezing of water in pipes and fixtures. 10. The outside areas immediately adjoining the Leased Premises shall be kept clean by the Tenant and Tenant shall not place or permit any obstructions or merchandise in such areas or in the service corridors. 11. Tenant and Tenant's employees shall park their cars only in those portions of the parking azea designated for employee parking by Landlord, and Tenant shall pay Landlord a charge of $10 per day for each car of Tenant and TenanYs employees which park on Landlord's Tract outside the designated area. Tenant shall furnish Landlord the automobile license numbers assigned to Tenant's cars and the cars of Tenant's employees within five days after taking possession of ihe Leased Premises and shall thereafter notify the Landlord of any changes within five days after such changes occur. 12. Tenant shall not make or permit any noise or odor which Landlord deems objectionable to emanate from the Leased Premises and no person shall use the Leased Premises as sleeping quarters, sleeping apartments or lodging rooms. 13. Tenant shall obtain all permits and licenses necessary to conduct its business. 14. Tenant shall not operate any coin or token operated vending machine or similar device for the sale of any goods, wares, merchandise, food, beverages, or services, including but ❑ot limited tq pay telephones, pay lockers, pay toilets, scales, amusement devices and machines for the sale of beverages, foods, chewing gum, candy, cigarettes or other commodities or any moving sign or fixture of any kind without the prior written consent of Landlord. The foregoing covenants and agreements of this Exhibit F shall be referred to as "Rules and Regulations." F-2 05392�007071910454.10 -- -----�i i 30'-0" � ±60'-0" � I ___"__--�-�_�_�_ t 140.0' -I--� � -�j X I �' -�J X X X FRIDLEY X � LIQUORS X I � x � 10,540 S.F. � X I � X I +� x I I f I I I I �so.o' I I I I �' I � � I � I � I � � X= DESIGNATED SPACES I E� Ill�l�i �� „G„ E� SEC�ION 12.1 �� FRIDLEY AGENDA ITEM CITY COUNCIL MEETING OF APRIL 9, 2012 INFORMAL STATUS REPORTS 120 �