2020-09 Holly Center TIF District
HRA RESOLUTION NO. 2020 - 09
A RESOLUTION MODIFYING THE REDEVELOPMENT PLAN FOR
REDEVELOPMENT PROJECT NO. 1 AND THE TAX INCREMENT
FINANCING PLANS FOR TAX INCREMENT FINANCING DISTRICTS
NOS. 6, 11-13 AND 17-24 TO REFLECT INCREASED PROJECT COSTS
AND INCREASED BONDING AUTHORITY WITHIN REDEVELOPMENT
PROJECT NO. 1, CREATING TAX INCREMENT FINANCING DISTRICT
NO. 25 AND ADOPTING A TAX INCREMENT FINANCING PLAN
RELATING THERETO.
BE IT RESOLVED by the Board of Commissioners (the "Commissioners") of the
Housing and Redevelopment Authority in and for the City of Fridley, Minnesota (the
"Authority"), as follows:
Section 1. Recitals.
1.01. It has been proposed that the Authority approve and adopt the proposed
modifications to its Redevelopment Plan for Redevelopment
ect costs and increased bonding authority, pursuant to and
in accordance with Minnesota Statutes, Sections 469.001 to 469.047, inclusive, as
amended and supplemented from time to time.
1.02. It has been further proposed that the Authority approve and adopt the
proposed modifications to the Tax Increment Financing Plans (the "Existing Plans") for Tax
Increment Financing Districts Nos. 6, 11-13 and 17-24 (the "Existing Districts") reflecting
increased project costs and increased bonding authority within the Project Area, pursuant
to Minnesota Statutes, Section 469.174 through 469.1799, inclusive, as amended and
supplemented from time to time.
1.03. It has been further proposed that the Authority approve the creation of
proposed Tax Increment Financing District No
Project Area and approve and adopt the proposed Tax Increment Financing Plan (the
pursuant to and in accordance with Minnesota Statutes,
Sections 469.174 to 469.1799, inclusive, as amended and supplemented from time to
time.
1.04. The Authority has investigated the facts and has caused to be prepared with
respect thereto, a modified Redevelopment Plan for the Project Area and modified Existing
Plans for the Existing Districts reflecting increased project costs and increased 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.
1.05. The Authority 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
HRA Resolution No. 2020 - 09
Plans and the approval and adoption of the Proposed Plan.
1.06. The Authority hereby determines that it is necessary and in the best interests
of the City and the Authority at this time to approve and adopt the modifications to the
Redevelopment Plan and Existing Plans, to create the Proposed District and to approve
and adopt the Proposed Plan relating thereto.
ection 2. Findings.
S
2.01. The Authority hereby finds, determines and declares that the assistance to
be provided through the adoption and implementation of the modified Redevelopment
Plan, modified Plans and Proposed Plan (collecPla) is necessary to assure
the development and redevelopment of the Project Area.
2.02. The Authority hereby finds, determines and declares 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.
2.03. The Authority 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 redevelopment thereof will be carried out pursuant to redevelopment
contracts with private developers.
Section 3. Approvals and Adoptions.
3.01. 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 Commissioners of the Authority and are forwarded to the Fridley City
Council for public hearing, review and approval.
3.02. The modifications to the Ex
isting Plans reflecting increased project costs and
increased bonding authority within the Project Area are hereby approved and adopted by
the Commissioners of the Authority and are forwarded to the Fridley City Council for public
hearing, review and approval.
3.03. The creation of the Proposed District within the Project Area and the adoption
of the Proposed Plan relating thereto are hereby approved and adopted by the
Commissioners of the Authority and are forwarded to the Fridley City Council for public
hearing, review and approval.
2
HRA Resolution No.
Section 4. Filing of Plan.
4.01. Upon approval and adoption of the Plan, the Authority shall cause said
Plan to be filed with the Minnesota Department of Revenue, the Office of the State
Auditor and Anoka County.
PASSED AND ADOPTED BY HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF FRIDLEY THIS DAY OF , 2020.
_____________________________________
WILLIAM HOLM- CHAIRPERSON
ATTEST:
______________________________________
WEXECUTIVE DIRECTOR
CERTIFICATION
I, Wally Wysopal, Executive Director of the Housing and Redevelopment Authority in and
for the City of Fridley, Minnesota, hereby certify that the foregoing is a true and correct
copy of Resolution No. adopted by the Authority on the day of
, 2020.
3
RESOLUTION NO.
A RESOLUTION MODIFYING THE REDEVELOPMENT PLAN
FOR REDEVELOPMENT PROJECT NO. 1 AND THE TAX
INCREMENT FINANCING PLANS FOR TAX INCREMENT
FINANCING DISTRICTS NOS. NOS. 6, 11-13 and 17-24 TO
REFLECT INCREASED PROJECT COSTS AND INCREASED
BONDING AUTHORITY WITHIN REDEVELOPMENT
PROJECT NO. 1, CREATING TAX INCREMENT FINANCING
DISTRICT NO. 25 AND ADOPTING A TAX INCREMENT
FINANCING PLAN RELATING THERETO
BE IT RESOLVED by the City Council (the "Council") of the City of Fridley, Minnesota (the
"City"), as follows:
Section 1. Recitals.
1.01. It has been proposed by the Housing and Redevelopment Authority (the "Authority")
that the Council approve and adopt the proposed modifications to its Redevelopment Plan for
Redevelopment Project No. 1 (the increased project costs and
increased bonding authority, pursuant to and in accordance with Minnesota Statutes, Sections
469.001 to 469.047, inclusive, as amended and supplemented from time to time.
1.02. It has been further proposed by the Authority that the Council approve and adopt the
proposed modifications to the Tax Increment Financing Plans (the "Existing Plans") for Tax
Increment Financing Districts Nos. 6, 11-13 and 17-24 (the "Existing Districts") reflecting
increased project costs and increased bonding authority within the Project Area, pursuant to
Minnesota Statutes, Section 469.174 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 Tax Increment
proposed Tax Increment
and in accordance with Minnesota Statutes. Section 469.174 to 469.1799, inclusive, as
amended and supplemented from 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 Project Area and modified
Existing Plans for the Existing Districts reflecting increased project costs and increased
bonding authority within the Project Area and the Proposed Plan for the Proposed District,
defining more precisely the property to be included, the public costs to be incurred, and
other matters relating thereto.
Page 2 - Resolution No. __________
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 approval and adoption of the Proposed Plan.
1.06. The Council hereby determines that it is necessary and in the best interests of the
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 District and to approve
and adopt the Proposed Plan relating thereto.
Section 2. General Findings.
2.01. The Council hereby finds, determines and declares that the assistance to be
provided through the adoption and implementation of the modified Redevelopment Plan ,
modified Existing Plans and the Proposed Plan (co
assure the development and redevelopment of the Project Area.
2.02. The Council hereby finds, determines and declares 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.
2.03. The Council 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 redevelopment thereof will be carried out pursuant to redevelopment
contracts with private developers.
2.04. The Council hereby finds, determines and declares that the modification, approval
and adoption of the Plans is intended and, in the judgment of this Council, its effect will be
to 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 Proposed District.
3.01. The Council hereby finds, determines and declares that the Proposed District
Minnesota Statutes, Section
defined in Minnesota
Statutes, Section 469.174, Subd. 10.
2
Page 3 - Resolution No. __________
3.02. The Council hereby finds, determines and declares that the proposed development
or redevelopment in the Proposed District, in the opinion of this Council, would not
reasonably be expected to occur solely through private investment within the reasonably
foreseeable future and, therefore, the use of tax increment financing is deemed necessary.
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 Proposed District.
3.04. The Council hereby finds, determines and declares that the expenditure of tax
increment within the Proposed District serves primarily a public 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 forth the reasons and supporting facts for each
determination in the Plans and Exhibit B to this Resolution.
Section 4. Approvals and Adoptions.
4.01. 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.
4.02. The modifications to the Existing Plans reflecting increased project costs and
increased bonding authority within the Project Area are hereby approved and adopted by
the Council of the City.
4.03. The creation of the Proposed District within the Project Area and the adoption of the
Proposed Plan relating thereto is hereby approved by the Council of the City.
Section 5. Filing of Plans.
5.01. Upon its approval and adoption of the Plans, the City shall request the Authority to
cause said Plans to be filed with the Minnesota Department of Revenue, the Office of the
State Auditor, and Anoka County.
3
Page 4 - Resolution No. __________
PASSED AND ADOPTED BY THE COUNCIL OF THE CITY THIS ______ DAY OF
____________________, 2020.
___________________________________
SCOTT LUND - MAYOR
ATTEST:
___________________________
DANIEL TIENTER - CITY CLERK
CERTIFICATION
I, Daniel Tienter, the duly qualified Clerk of the City of Fridley, County of Anoka, Minnesota,
hereby certify that the foregoing is a true and correct copy of Resolution No. __________
passed by the City Council on the ______ day of _______________, 2020.
___________________________________
DANIEL TIENTER - CITY CLERK
4
Page 5 - Resolution No. __________
The reasons and facts supporting the findings for the modification of the Plans for the
Project Area, Existing Districts and Proposed District pursuant to Minnesota Statutes,
Section 469.175, Subdivision 3, are as follows:
1. Finding that the assistance to be provided through the adoption and
implementation of the Plans is necessary to assure the development and
redevelopment of the Project Area.
The tax increment assistance resulting from the implementation of the Plans is necessary
for the proposed project to proceed. Please refer to Exhibit XXVII-D of the Proposed 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
Comprehensive Plan.
The Council has reviewed the Plans and has determined that they are consistent with the
City'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 that the development or
redevelopment thereof will be carried out pursuant to development contracts with
private developers.
Please refer to the attached Exhibit B for specific information relating to the Proposed
District.
4. Finding that the approval and adoption of the Plans is intended and, in the
judgment of this Council, its effect will be to promote the public purposes and
accomplish the objectives specified in the Plans.
The 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.
5
Page 6 - Resolution No. __________
R THE REDEVELOPMENT DISTRICT
In addition to the findings included in Exhibit A, the reasons and facts supporting the additional
findings for the Proposed District pursuant to Minnesota Statutes, Section 469.175,
Subdivision 3, are as follows:
1. Finding that the Proposed District is
Minnesota Statutes.
The Proposed District consists of three parcels totaling approximately 8.42 acres. Of
this acreage, it has been determined that parcels comprising 100% of the Proposed District
are occupied by buildings, streets, utilities, paved or gravel parking lots or similar structures.
This 100% area coverage exceeds the 70% coverage test required by Minnesota Statutes,
Section 469.174, Subdivision 10(1). Three of the three buildings located on one of the parcels
have been determined to cause they contain defects in
structural elements or a combination of deficiencies in essential utilities and facilities, light and
ventilation, fire protection including adequate egress, layout and condition of interior partitions,
or similar factors, which defects or deficiencies are of sufficient total significance to justify
substantial renovation or clearance. These three buildings satisfy the requirements of
Minnesota Statutes, Section 469.174, Subdivision 10(a) which requires that over 50% of
buildings, not including outbuildings, mustturally subsAdditionally,
these buildings would require expenditures of greater than 15% (of the cost of a new structure
of similar size and type) to bring them into compliance with current building codes. It has
further been determined that these conditions are reasonably distributed through the
Proposed District. Information supporting these findings are on file at City Hall and are
contained in a Report prepared for the City by LHB, Inc., dated June 25, 2020.
2. Finding that the proposed development or redevelopment, in the opinion of
the Council, would not reasonably be expected to occur solely through private
investment within the reasonably foreseeable future and, therefore, the use of tax
increment financing is deemed necessary.
Development activities proposed to occur in the Proposed District include land acquisition,
demolition of buildings, remediation of the Site and construction of approximately 10,000
square feet of commercial retail/office space and 261 market-rate workforce rental housing
units. Upon completion of the proposed redevelopment it is anticipat
base will increase by approximately $31.5 million.
City and HRA staff have reviewed the estimated development costs and the available
methods of financing and have determined that tax increment assistance is necessary to
6
Page 7 - Resolution No. __________
make the redevelopment project economically feasible and to allow redevelopment to
proceed at this time and in the foreseeable future.
3. Finding that the increased market value of a project not receiving tax
increment financing assistance would be less than the increased market value of a
project receiving tax increment financing assistance after deducting the present
value of the projected tax increments for the maximum duration of the Proposed
District.
The original market value of the Proposed District is approximately $5,000,000. City staff
has determined that without tax increment assistance these parcels would not be developed
within the foreseeable future and that only minimal remodeling would probably occur.
Therefore, if there was an increase in market value it would be minimal.
City staff has further determined that with tax increment assistance it is possible to construct
approximately 10,000 square feet of retail and 261 multi-family market rate workforce rental
units with an estimated market value of approximately $36.5 million. After deducting the
original market value of $5.0 million from the estimated market value of $36.5 million, City
staff has further determined that the increased market value that could reasonably be
expected to occur from a project receiving tax increment assistance would be approximately
$31.5 million.
City staff has further determined that the total amount of tax increment generated over the 26
year term of the Proposed District approximates $18.4 million. Assuming the same term and
a present value rate of 4.0%, the present value of $18.4 million approximates $9.75 million.
After deducting the present value of the tax increment ($9.75 million) from the increase in
estimated market value occurring as a result of utilizing tax increment assistance ($31.5
million), the net increase in estimated market values approximates $21.75 million.
City staff has further determined that the increased market value of the site that could
reasonably be expected to occur without the use of tax increment financing ($0.0 million) is
less than the increased market value of the site occurring with the use of tax increment
financing after subtracting the present value of the projected tax increments for the maximum
duration of the Proposed District ($21.75 million). Further information supporting this Finding
is attached as Schedule 1.
4. Finding that 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. Public benefits resulting from the proposed project include (i) an increase in
the State and City tax bases, (ii) the acquisition and redevelopment of property which is not
now in its highest or best use, (iii) demolition and removal of an existing substandard and
blighted structures, and (iv) remediation of contaminated property.
SCHEDULE 1 TO EXHIBIT B
7
Page 8 - Resolution No. __________
ESTIMATED MARKET VALUE INCREASE FOR A DEVELOPMENT PROJECT
WITHOUT TIF ASSISTANCE
Without tax increment assistance there would be minimal, if any, increase in market value.
Estimated Market Value ................................................................ $ 0.00 million
Original Market Value .................................................................... $ 5.00 million
Increased Market Value ................................................................ $ 0.00 million
ESTIMATED MARKET VALUE INCREASE FOR A DEVELOPMENT PROJECT
WITH TIF ASSISTANCE
With tax increment assistance it is proposed that approximately 10,000 square feet of retail
and 261 units of multi-family market rate workforce rental units will be constructed over
three years.
Estimated Market Value ................................................................ $ 36.50 million
Original Market Value .................................................................... $ 5.00 million
Increased Market Value ................................................................ $ 31.50 million
Less: Present Value of the Tax Increment
generated at 4.0% for the duration
of the Proposed Proposed District ..................................... $ 9.75 million
Net Increased Market Value .......................................................... $ 21.75 million
4849-8809-2873, v. 1
8
DRAFT: August 28, 2020
_________________________________________________________________
_________________________________________________________________
CONTRACT
FOR
PRIVATE REDEVELOPMENT
By and Between the
HOUSING AND REDEVELOPMENT AUTHORITY
In and For
THE CITY OF FRIDLEY, MINNESOTA
And
ROERS FRIDLEY APARTMENTS OWNER LLC
_________________________________________________________________
_________________________________________________________________
This document was drafted by:
James R. Casserly, Esq.
Vickie Loher-Johnson, Esq.
Monroe Moxness Berg PA
7760 France Avenue South
Suite 700
Minneapolis, MN 55435
952-885-5999
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
Section 1.1 Definitions 3
ARTICLE II
Representations and Warranties
Section 2.1 Representations and Covenants by the Authority 7
Section 2.2 Representations and Warranties
and Covenants by the Redeveloper 8
ARTICLE III
Conveyance of the HRA Redevelopment Property;
Undertakings of Authority and Redeveloper
Section 3.1 Conveyance of the Redevelopment Property 11
Section 3.2 Intentionally Omitted 13
Section 3.3 Conditions Precedent to Conveyance 14
Section 3.4 Documents at Closing 15
Section 3.5 Undertakings 16
Section 3.6 Environmental Undertakings 16
Section 3.7 Issuance of Note 17
Section 3.8 Business Subsidy Provisions 18
Section 3.9 Repayment of Assistance 18
ARTICLE IV
Construction of Minimum Improvements
Section 4.1 Construction of Minimum Improvements 20
Section 4.2 Completion of Construction 20
Section 4.3 Preliminary Plans and Construction Plans 20
Section 4.4 Certificate of Completion 21
ARTICLE V
Insurance
Section 5.1 Redeveloper Insurance 23
i
ARTICLE VI
Prohibitions Against Assignment and Transfer, Release or Indemnification
Section 6.1 Representation as to Redevelopment 24
Section 6.2 Prohibition Against Transfer of Property and Assignment 24
of Agreement
Section 6.3 Assignment of Note 24
Section 6.4 Release and Indemnification Covenants 25
ARTICLE VII
Events of Default
Section 7.1 Events of Default Defined 27
Section 7.2 Remedies on Default 28
Section 7.3 No Remedy Exclusive 28
Section 7.4 No Implied Waiver 28
Section 7.5 Agreement to Pay Attorney's Fees and Expenses 28
ARTICLE VIII
Tax Increment; Taxes
Section 8.1 Pledge of Tax Increment 29
Section 8.2 Right to Collect Delinquent Taxes 29
Section 8.3 Review of Taxes 29
Section 8.4 Petition to Reduce Tax 29
ARTICLE IX
Additional Provisions
Section 9.1 Conflict of Interest 30
Section 9.2 Restrictions on Use 30
Section 9.3 Provisions Not Merged With Deed 30
Section 9.4 Notices and Demands 30
Section 9.5 Counterparts 30
Section 9.6 Law Governing 30
Section 9.7 Expiration 31
Section 9.8 Termination 31
Section 9.9 Provisions Surviving Termination 31
SIGNATURES 32
ii
SCHEDULE A Description of Redevelopment Property 34
SCHEDULE B Site Plan 35
SCHEDULE C Site Improvements 36
SCHEDULE D Public Improvements 37
SCHEDULE E Form of Note 38
SCHEDULE F Form of Certificate of Completion 42
SCHEDULE G Declaration of Restricted Covenants and Prohibition
Against Tax Exemption 44
SCHEDULE H Form of Redevelopment Property Deed 46
SCHEDULE I Existing Environmental Reports 48
SCHEDULE J HRA Redevelopment Property 49
iii
CONTRACT FOR PRIVATE REDEVELOPMENT
THIS AGREEMENT, made on or as of the ___ day of _________, 2020 by and
between the Housing and Redevelopment Authority in and for the City of Fridley,
Minnesota, a political subdivision of the State of Minnesota organized under the
Constitution and laws of the State of Minnesota (the "Authority"), and Roers Fridley
Apartments Owner LLC, a Delaware limited liability company organized under the laws
of the State of Delaware (the "Redeveloper"),
WITNESSETH:
WHEREAS, the Board of Commissioners (the "Board") of the Authority has
determined that there is a need for development and redevelopment within the
corporate limits of the City to provide employment opportunities; to provide adequate
housing in the City, including low and moderate income housing, housing for the elderly
and workforce housing; to improve the tax base; and to improve the general economy of
the City and the State of Minnesota;
WHEREAS, in furtherance of these objectives, the Authority has adopted,
pursuant to Minnesota Statutes, Sections 469.001 et seq. (the "Act"), a development
program known as the Modified Redevelopment Plan (the "Redevelopment Plan") and
established Redevelopment Project No. 1 (the "Project Area") in the City to encourage
and provide maximum opportunity for private development and redevelopment of
certain property in the City which is not now in its highest and best use;
WHEREAS, in connection with the Project Area, Tax Increment Financing District
been approved by the Authority and forwarded
to the City along with the Tax Increment Financing Plan, which Tax Increment Financing
Plan is to be certified by Anoka County and filed with the State, pursuant to the
Minnesota Tax Increment Financing Act contained in Minnesota Statutes, Sections
469.174 to 469.1799;
WHEREAS, major objectives in establishing the Project Area are to:
1. Promote and secure the prompt redevelopment of certain property in the
Project Area, which property is not now in its highest and best use in a manner
consistent with the City's Comprehensive Plan and with a minimum adverse impact on
the environment, and thereby promote and secure the redevelopment of other land in
the City.
2. Provide additional employment opportunities within the Project Area and
the City for residents of the City and the surrounding area, thereby improving living
standards, reducing unemployment and the loss of skilled and unskilled labor and other
human resources in the City.
1
3. Prevent the deterioration and secure the increase of commercial/industrial
property subject to taxation by the City, the Independent School Districts, Anoka
County, and the other taxing jurisdictions in order to better enable such entities to pay
for governmental services and programs required to be provided by them.
4. Provide for the financing and construction for public improvements in and
adjacent to the Project Area necessary for the orderly and beneficial redevelopment of
the Project Area and adjacent areas of the City.
5. Promote the concentration of new desirable industrial, office, housing and
other appropriate redevelopment in the Project Area so as to maintain the area in a
manner compatible with its accessibility and prominence in the City.
6. Encourage local business expansion, improvement, and redevelopment,
whenever possible.
7. Create a desirable and unique character within the Project Area through
quality land use alternatives and design quality in new or remodeled buildings.
8. Encourage and provide maximum opportunity for private redevelopment of
existing areas and structures which are compatible with the Project Area; and
WHEREAS, in order to achieve the objectives of the Authority and City in
creating the Project Area and adopting the Redevelopment Plan, the Authority is
prepared to provide financial and other assistance to the Redeveloper in accordance
with this Agreement; and
WHEREAS, the Authority believes that the development and redevelopment of
the Redevelopment Property pursuant to this Agreement, and fulfillment generally of the
terms of this Agreement, are in the vital and best interests of the Authority and the
health, safety, morals and welfare of its residents, and in accord with the public
purposes and provisions of applicable federal, state and local laws under which the
development and redevelopment are being undertaken and assisted;
NOW, THEREFORE, in consideration of the promises and the mutual obligations
of the parties hereto, each of them does hereby covenant and agree with the other as
follows:
2
ARTICLE I
Definitions
Section 1.1 Definitions. In this Agreement, unless a different meaning clearly
appears from the context:
"Act" means Minnesota Statutes, Section 469.001 et seq.
"Agreement" means this Agreement, as the same may be from time to time
modified, amended, or supplemented.
"Authority" means the Housing and Redevelopment Authority in and for the City
of Fridley, Minnesota.
of the Tax Increment from the Tax
Increment District.
"Certificate of Completion" means the certification, in the form of the certificate
contained in Schedule F attached to and made a part of this Agreement, provided to the
Redeveloper, pursuant to Section 4.4 of this Agreement.
"City" means the City of Fridley, Minnesota.
Property is conveyed by the Authority to the Redeveloper pursuant to Article III.
"Construction Plans" means the plans, specifications, drawings and related
documents on the construction work to be performed by the Redeveloper on the
Redevelopment Property which (a) shall be as detailed as the plans, specifications,
drawings and related documents which are submitted to the building inspector or the
City, and (b) shall include at least the following for each building: (1) site plan; (2)
foundation plan; (3) floor plan for each floor; (4) cross sections of each (length and
width); (5) elevations (all sides, except as to a side of existing structure where no
construction is to take place); (6) facade and landscape plan; and (7) such other plans
of supplements to the foregoing plans as the City may reasonably request.
"Council" means the Council of the City.
"County" means the County of Anoka, Minnesota.
means those restrictive covenants substantially in the form of Schedule G attached to
this Agreement.
3
the plan approved by
the MPCA to protect the public health, welfare and environment in accordance with
Minnesota Statutes, Section 469.179, Subdivision 17 and the applicable statutes for the
MPCA.
ublic Improvements, Site Improvements,
Relocation Costs and any other cost eligible for payment under the Tax Increment Act.
Interest paid to banks that financed Eligible Costs is an Eligible Cost.
the Redeveloper described in Section 7.1.
of this Agreement.
those environmental reports related to
the Redevelopment Property, which reports are listed on Schedule I attached hereto.
he real property described on Schedule
J attached to this Agreement.
"Minimum Improvements" means the commercial and housing improvements to
be constructed by the Redeveloper on the Redevelopment Property as shown on the
Site Plan and include approximately 261 workforce income rental housing units (the
approximately 10,000 square feet of
Minimum Improvements may be constructed subsequent to the Housing Minimum
Improvements. The product mix and square feet are estimates and subject to change
as necessary to comply with Council and Planning Commission requirements, or an
approved DRAP.
"Minnesota Environmental Policy Act" means the statutes located at Minnesota
Statutes, Sections 116D.01 et seq., as amended.
Pollution Control Agency.
"National Environmental Policy Act" means the federal law located at 42 U.S.C.
Sub. Sect. 4331 et seq., as amended.
to this Agreement.
"Note" means the Limited Revenue Tax Increment Note substantially in the form
of Schedule E attached to this Agreement, and to be made by the Authority payable to
the order of the Redeveloper or its permitted assigns in accordance with the terms of
this Agreement.
, the Public Improvements and the
Minimum Improvements.
4
"Project Area" means Redevelopment Project No. 1, as amended, as established
in accordance with the Act.
eans the public improvements to be performed or
constructed by the Redeveloper on or adjacent to the Redevelopment Property and
described on Schedule D to attached to this Agreement.
able by the Redeveloper for the HRA
Redevelopment Property, as set forth in Section 3.1(d) of this Agreement.
st
of the second year following full valuation
of the Housing Minimum Improvements.
"Redeveloper" means Roers Fridley Apartments Owner LLC, a limited liability
company organized under the laws of the State of Delaware and its permitted
successors and assigns.
"Redevelopment Plan" means the modified redevelopment plan adopted by the
Authority for its Redevelopment Project No. 1, as amended.
"Redevelopment Project" means the Redevelopment Property and the Minimum
Improvements.
"Redevelopment Property" means the real property described in Schedule A of
this Agreement.
a quit claim deed of the HRA
Redevelopment Property, substantially in the form of Schedule H attached hereto.
relocation services, benefits, and other
costs to which owners, tenants, or others have claimed and are legally entitled to in
accordance with State and Federal laws arising from the acquisition and redevelopment
of the Redevelopment Property.
"Site Improvements" means those improvements described on Schedule C
attached to this Agreement as qualified improvements of the Redevelopment Property.
ched hereto in Schedule B showing the
proposed nature and location of the Minimum Improvements.
"State" means the State of Minnesota.
the real estate taxes paid with respect
to the Redevelopment Property which is remitted to the Authority by the County as tax
increment from the Tax Increment District pursuant to the Tax Increment Act.
5
x Increment Financing Act, Minnesota
Statutes, Sections 469.174 to 469.1799, as amended and as it may be amended.
ement Financing District No. 25 which is
located within the Project Area and has been approved by the Authority and forwarded
to the City along with the Tax Increment Plan which is to be certified by the County and
filed with the State.
increment financing plan adopted by the
Authority for its Tax Increment Financing District No. 25.
"Termination Date" means the date defined in Section IX of this Agreement.
"Unavoidable Delays" means delays which are the direct result of strikes or other
labor troubles, delays which are the direct result of unforeseeable and unavoidable
casualties to the Redevelopment Property, the Project, or the equipment used to
construct the Redevelopment Project, delays which are the direct result of governmental
actions, delays which are the direct result of judicial action commenced by third parties,
delays which are the direct result of citizen opposition or action affecting this
Agreement, environmental delays which are the direct result of the implementation of an
environmental agency-approved work plan for remediation, delays which are the direct
result of severe weather which prevents or delays construction of Minimum
Improvements, acts of God, fire or other casualty to the Project, site conditions
materially different from those revealed in any report or test provided to or obtained by
the Redeveloper, or any other delays beyond the reasonable control of a Party,
including, but not limited to, delays caused directly or indirectly by pandemic.
Action Response Plan above.
6
ARTICLE II
Representations and Warranties
Section 2.1. Representations and Covenants by the Authority. The Authority
makes the following representations as the basis for the undertaking on its part herein
contained:
(a) The Authority is a public body duly organized and existing under the laws
of the State. Under the provisions of the Act, the Authority has the power to enter into
this Agreement and carry out its obligations hereunder. This Agreement has been or
will be duly authorized by all necessary action on the part of the Authority and has been
duly executed and delivered by the Authority. The Authorit
performance of this Agreement will not conflict with or result in a violation of any
judgment, order, or decree of any court or government agency. This Agreement is a
valid and binding obligation of the Authority and is enforceable against the Authority in
accordance with its terms. There is no action, litigation, condemnation or proceeding of
any kind pending or, to the best of the Authreatened which would
have a material and adverse effect on the ability of the Authority to perform its
obligations under this Agreement or against the Redevelopment Property, or any portion
thereof.
(b) The Authority has approved the Redevelopment Plan in accordance with
the terms of the Act.
(c) The Authority has approved the Tax Increment District pursuant to the Tax
Increment Act.
(d) The Authority, subject to Unavoidable Delays, and subject to the
conditions precedent set forth herein, shall at Closing convey title to the HRA
Redevelopment Property pursuant to Article III to the Redeveloper for the
he Redevelopment Plan and this Agreement.
(e) To assist the Redeveloper with the Eligible Costs in accordance with the
Tax Increment Plan, Redevelopment Plan and this Agreement. The Authority proposes
to make the Note payable to the Redeveloper in accordance with the provisions of this
Agreement and to pledge Tax Increment generated by the Tax Increment District to the
payment of the Note according to its terms.
(f) The Authority will cooperate with the Redeveloper with respect to any
litigation commenced by third parties in connection with this Agreement.
(g) The Authority makes no representation, guarantee, or warranty, either
express or implied, and hereby assumes no responsibility or liability as to the
Redevelopment Property or its condition (regarding soils, pollutants, hazardous wastes
or otherwise), except as described in Section 2.1(h).
7
(h) The Authority has no knowledge as to the presence of hazardous
substances (as the same are described in the regulations promulgated under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986, an/or in the
environmental laws of the State of Minnesota, and specifically including petroleum and
related hydrocarbons and their byproducts, asbestos, and polychlorinated biphenyls) in,
on or under the Redevelopment Property, except (i) as may be expressly set forth in the
reports described in Schedule I, copies of which shall have been or will be delivered by
the Authority or its agents and consultants to the Redeveloper or (ii) as may be
expressed in reports received subsequent to the date of this Agreement.
(i) Within five (5) days after the execution of this Agreement, the Authority
shall deliver, or shall cause its agents or consultants to deliver, to Redeveloper all
information available to the Authority regarding the ownership and potential
development of the Redevelopment Property, including, but not limited to,
correspondence from the City or County, flood zones, deed restrictions, utility
commitments, engineering plans, studies, soils reports, engineering reports,
construction plans, subdivision plans and/or environmental reports.
(j) No third party has an option to purchase, right of first refusal, right of first
offer or other similar right with respect to all or a portion of the HRA Redevelopment
Property and the Authority has not entered into any other contracts for the sale of all or
any portion of the HRA Redevelopment Property with any third party.
(k) The Authority is not aware of any methamphetamine production occurring
on the HRA Redevelopment Property. This representation is intended to satisfy the
requirements of Minn. Stat. § 152.0275, Subd. 2(m).
s knowledge, information and belief:
i. There are \[zero (0)\]"Wells," as defined in Minn. Stat. §
103I.005, Subd. 21, on the HRA Redevelopment Property. This
representation is intended to satisfy the requirements of Minn. Stat. §
115.55, Subd. 6.
ii. There are no individual sewage treatment systems
at. § 115.55, Subd. 1, on the HRA
Redevelopment Property. This representation is intended to satisfy the
requirements of Minn. Stat. § 115.55, Subd. 6
Section 2.2. Representations, Warranties and Covenants by the Redeveloper.
The Redeveloper represents and warrants that:
(a) The Redeveloper is a limited liability company organized and existing
under the laws of the State of Delaware, is authorized to transact business in the State,
8
and has duly authorized the execution of this Agreement and the performance of its
obligations under this Agreement. None of the execution and delivery of this
Agreement, the consummation of the transactions contemplated by this Agreement, or
the fulfillment of or compliance with the terms and conditions of this Agreement is
prevented, limited by or conflicts with the terms of any indebtedness, agreement or
instrument of whatever nature to which the Redeveloper is now a party or by which it is
bound.
(b) Subject to the conditions contained in Article III below, the Redeveloper
will purchase the HRA Redevelopment Property from the Authority pursuant to Article III
and, in the event the HRA Redevelopment Property is conveyed to the Redeveloper,
the Redeveloper will construct and maintain the Public Improvements and the Minimum
Improvements in accordance with the terms of this Agreement and all applicable local,
State and Federal laws and regulations (including, but not limited to, environmental,
zoning, building code and public health laws and regulations).
(c) As of the date of execution of this Agreement, the Redeveloper has
received no notice or communication from any local, state or federal official that the
anticipated activities of the Redeveloper with respect to the Redevelopment Property
may be or will be in violation of any environmental law or regulation.
(d) The Redeveloper will use commercially reasonable efforts to obtain, in a
timely manner, all required permits, licenses and approvals, and will meet, in a timely
manner, all requirements of all applicable local, state and federal laws and regulations
which must be obtained or met before the Public Improvements and the Minimum
Improvements may be lawfully constructed.
(e) The Redeveloper shall pay the normal and customary City fees and
expenses for the approval and construction of the Project including, but not limited to,
bonding requirements, building permit fees, sewer accessibility charges (SAC), water
accessibility charges (WAC) and park dedication fees.
(f) Except as specifically set forth herein, the Redeveloper is purchasing the
of the HRA Redevelopment Property and with the understanding that there is no
warranty by the City that the HRA Redevelopment Property is fit for any particular
purpose.
(g) The Redeveloper agrees that it will reasonably cooperate with the
Authority with respect to any litigation commenced by third parties in connection with
this Agreement, including, but not limited to claims: (i) made against the Authority and
associated with the formation and validity of the Tax Increment District; and (ii) made
against the Authority for Relocation Costs.
(h) The financing arrangements which the Redeveloper has obtained or will
obtain to finance the acquisition of the Redevelopment Property and the construction of
9
the Public Improvements and the Minimum Improvements, will be sufficient to enable
the Redeveloper to successfully complete the Public Improvements and the Minimum
Improvements as contemplated in this Agreement.
(i) Once acquired by the Redeveloper, the Redevelopment Property will not
become exempt from the levy of ad valorem property taxes, or any statutorily authorized
alternative, and any improvements of any kind constructed on the Redevelopment
Property will similarly not become exempt before December 31, 2048.
(j) The construction of the Minimum Improvements, in the opinion of the
Redeveloper, would not reasonably be expected to occur solely through private
investment within the reasonably foreseeable future without the use of tax increment
financing provided by the City pursuant to this Agreement.
(k) The Housing Minimum Improvements will not have income limits but are
being marketed to those households at 80% of the area medium in
the Reconciliation Date, the Redeveloper, at its expense, shall provide an analysis of
unit rents, unit household income and percentages of AMI for the preceding calendar
year. (Assuming full valuation of the Housing Minimum Improvements occurs on
January 1, 2023, this analysis would be due March 1, 2025 for calendar year 2024.)
(l) The Redeveloper shall not allow any use or occupancy of the
Redevelopment Property or Minimum Improvements by a "Sexually Orientated
Business" as defined in Ordinance No. 965 of the City's Code.
(m) The Redeveloper agrees, notwithstanding the provisions of Article VI, that
it will not assign, convey or lease (except as set forth in the next sentence) any interest
of the Redevelopment Property or any portion thereof, or this Agreement or any portion
thereof, to any tax-exempt entity under the U.S. Internal Revenue Code of 1986, as the
same may be amended from time to time, without the prior written approval of the
Authority. A lease of an interest or portion of the Redevelopment Property shall not be
prohibited by this subparagraph unless it results in an exemption of the Redevelopment
Property from ad valorem property taxes pursuant to subparagraph (i) above.
(n) If valid claims for Relocation Costs arise as a result of the Redevelopment
Project, the Redeveloper will pay, or obtain written relocation waivers in a form
satisfactory to the Authority, regarding all Relocation Costs. Any Relocation Costs paid
by the Redeveloper are reimbursable Eligible Costs. Without limit
obligations under Section 6, the Redeveloper will indemnify, defend and hold harmless
the Authority, the City, and their governing body members, employees, agents, and
contractors from any and all claims for benefits or payments arising out of the relocation
or displacement of any person from the Redevelopment Property as a result of the
implementation of this Agreement. The costs associated with such indemnification shall
at all times be excluded from the definition of Eligible Costs. The indemnification
requirement set forth herein shall survive the Closing and the termination of this
Agreement. Nothing in this Agreement is an acknowledgment by the Redeveloper or
10
the Authority that any Relocation Costs may be rightly claimed or due under applicable
law.
11
ARTICLE III
Conveyance of the HRA Redevelopment Property;
Undertakings of Authority and Redeveloper
Section 3.1. Conveyance of the Redevelopment Property.
(a) Title. The Authority shall convey marketable title to and possession of the
HRA Redevelopment Property to the Redeveloper under a quit claim deed in the form of
the Redevelopment Property Deed contained in Schedule B. At its sole cost and
expense, the Redeveloper shall obtain any title insurance and endorsements it deems
necessary.
At its expense, the Authority shall order and shall obtain within fifteen (15) days of the
date of this Agreement a co
B) issued by Commercial Partners Titl
Redeveloper as the proposed owner-insured of the HRA Redevelopment Property in the
removal of or endorsement over general exceptions by means of an extended coverage
endorsement. The Commitment shall have a current date as its effective date and shall
commit to insure marketable title to the HRA Redevelopment Property in the
Redeveloper. Such insurance shall be fr
unrecorded interests, rights of parties in possession or other exceptions customarily
excluded from such insurance. The Commitment shall set forth all levied real estate
and special assessments related to the HRA Redevelopment Property. The
Commitment shall include such title policy endorsements as may be reasonably
requested by the Redeveloper. The Commitment shall have attached copies of all
instruments of record which create any easements or restrictions which are referred to
in Schedule B of the Commitment. Within five (5) business days of receipt of the
Commitment, Redeveloper shall order a Survey of the HRA Redevelopment Property.
Should Redeveloper fail to order an updated Survey in a timely manner (a) Redeveloper
shall have waived all survey objections, and the Authority shall not be required to
execute a survey affidavit or similar affidavit in relation to the HRA Redevelopment
Property for purposes of the waiver of any survey exception by Title; and (b) the fifteen
(15) day time period for the issuance of title objections by the Redeveloper shall
commence to run thirty-five (35) days from the date of this Agreement.
The Redeveloper will be allowed fifteen business (15) days after receipt of the
Commitment and Survey to make an examination thereof and to make any objections to
the marketability of the title to the HRA Redevelopment Property, objections to be made
by written notice or to be deemed waived.
written objections, the Authority shall proceed in good faith and with all due diligence to
attempt to cause the objections made by the Redeveloper to be cured, but Authority
shall have no obligation to cure such objections. In the event that an objection is not
resolved to the satisfaction of the Redeveloper, the Redeveloper shall have the options
set forth in Section 3.1 (c) (i) or (ii), below. In no event shall Redeveloper object to the
12
terms and conditions of the Declaration of Restrictive Covenants and Prohibition
Against Tax Exemption attached hereto as Schedule G, the form of which shall be
recorded against the Redevelopment Property at or prior to Closing and the form of
which shall be recorded prior to the recording of any financing documents associated
with the Redevelopment Property, it being the understanding of the parties that the
Redeveloper is at all times taking ownership of the HRA Redevelopment Property
subject to the Declaration of Restrictive Covenants and Prohibition Against Tax
Exemption, and that the Redevelopment Property as a whole will be subject to the
Declaration of Restrictive Covenants and Prohibition against Tax Exemption.
(b) Survey. The Redeveloper shall obt
expense, any survey(s) or updated survey(s) necessary for the issuance of title
insurance or as necessary to replat or reconvey the HRA Redevelopment Property
(c) Title Not Marketable. If the title to the HRA Redevelopment Property is
not marketable as evidenced by the Commitment and the Survey, together with any
appropriate endorsements, and is not made so by the Closing Date, the Redeveloper
may either:
(i) Terminate this Agreement by giving written notice to the Authority,
in which event this Agreement shall become null and void and neither party shall
have any further rights or obligations hereunder, except those indemnification
obligations which expressly survive such termination; or
(ii) Elect to accept the title in its unmarketable or existing condition by
giving written notice to the Authority of the waiver of such objections, and
proceed to Closing.
In the event that Redeveloper has not terminated this Agreement and thereafter
proceeds to Closing, Redeveloper shall be deemed to have selected option (c)(ii)
above.
(d) Conveyance, Purchase Price and Closing. Subject to the terms of this
Agreement, the Authority agrees to sell and the Redeveloper agrees to purchase the
HRA Redevelopment Property for the Purchase Price. The Authority shall execute and
deliver to the Redeveloper a Redevelopment Property Deed at Closing, which
Redevelopment Property Deed shall be subject to the Declaration of Restrictive
Covenants and Prohibition Against Tax Exemption in form set forth on Schedule G. The
form of said Declaration of Restrictive Covenants and Prohibition Against Tax
Exemption may be executed by the Authority and recorded at Closing prior to the
delivery and recordation of the Redevelopment Property Deed. The conveyance of title
the HRA Redevelopment Property pursuant to the Redevelopment Property Deed shall
be subject to all of the conditions, covenants, restrictions and limitations imposed by this
Agreement and the Redevelopment Property Deed. The Redeveloper shall promptly
record the Redevelopment Property Deed.
13
Closing shall take place at the principal offices of the Title Company unless the parties
mutually agree in writing that the Closing shall take place at another location. The
Purchase Price shall be paid at Closing and shall be calculated to be equal to
$7.64/square foot for property not subject to public easements.
The Closing shall occur simultaneously with t
of the Housing Minimum Improvements but no later than December 31, 2020. The
Closing is at all times contingent upon the conditions precedent described in Section 3.3
being satisfied for the Authority and the Redeveloper.
(e) Inspection. At the Redeveloper
agents are hereby granted the right following execution of this Agreement until October
and test the HRA Redevelopment Property.
Any investigations, testing and/or inspections initiated by the Redeveloper shall be
st and expense. After completing its
investigation of the HRA Redevelopment Property, if Redeveloper elects to terminate
this Agreement, Redeveloper shall return the HRA Redevelopment Property to
substantially the same condition as existing prior to the investigations, testing and/or
inspections; provided that Redeveloper shall not be responsible for any existing
conditions on the Property that are discovered as a result of such investigations, testing
and/or inspections. The Redeveloper shall hold the Indemnified Parties (as defined in
Section 6.4) harmless from and shall indemnify the Indemnified Parties for any liability
s agents entrance upon the Redevelopment
Property or any liability resulting from the performance of any of the tests or inspections
referred to in this Section; provided that Redeveloper shall not be responsible for any
existing conditions on the Property that are discovered as a result of such
investigations, testing and/or inspections. The indemnification requirements set forth
herein shall survive the Closing and the termination of this Agreement.
(f) Taxes; Special Assessments; Other Pro Rations. Real estate taxes due
and payable prior to the year of Closing shall be paid by the Authority. Real estate
taxes due and payable in the year of Closing shall be allocated between the parties
based on their respective period of ownership in the year of Closing. Real estate taxes
due and payable in the years subsequent to the Closing shall be paid by the
Redeveloper. The Redeveloper shall pay all special assessments pending or levied as
of the Closing Date. The Redeveloper shall pay all special assessments after the
Closing Date. The Redeveloper shall bear all costs of recording the Redevelopment
Property Deed except as set forth below. The Redeveloper shall pay the State tax due
in connection with conveyance of the Redevelopment Property and shall pay the cost of
recording any document necessary to place title in the condition described in this
Agreement. The Redeveloper shall pay all other recording costs incurred in connection
with this Agreement. The parties shall equally share other closing costs. Each party
shall pay all sums in cleared funds on the Closing Date.
14
(g) Plat; Covenants; Easements. The Redeveloper at its expense shall replat
the Redevelopment Property. The Redeveloper shall pay all costs for plats, replats, lot
splits, preparation of restrictive covenants, easements and any other documentation
necessary for the construction and financing of the Minimum Improvements and all
costs of recording any such documents.
Section 3.2. Intentionally Omitted.
Section 3.3. Conditions Precedent to Conveyance.
(a) The obligation of the Authority to convey the HRA Redevelopment
Property to the Redeveloper at Closing shall be subject to the following conditions
precedent:
(i) The Redeveloper shall be in material compliance with all of the
terms and provisions of this Agreement;
(ii) The Authority shall have approved the Preliminary Plans for the
Project;
(iii) The Redeveloper shall have paid the Purchase Price as described
in Section 3.1;
(iv) Intentionally Omitted.
epresentations and warranties set forth
in Section 2.2 shall be true as of the Closing Date and the Redeveloper shall so
certify in writing at Closing.
(vi) Redeveloper shall have executed the Declaration of Restrictive
Covenants and Prohibition Against Tax Exemption in the form attached as
Schedule G with regard to the Redevelopment Property for recordation in priority
to any financing documents recorded against the Redevelopment Property.
(vii) Redeveloper shall, concurrent with the Closing, close on the
financing for the construction of the Minimum Improvements.
(b) The obligation of the Redeveloper to purchase the HRA Redevelopment
Property at Closing shall be subject to the following conditions precedent:
(i) The environmental condition of the Redevelopment Property, not
including any required soil corrections, shall be suitable for the construction of
the Minimum Improvements and Redeveloper shall have received a No
Association Determination from the Minnesota Pollution Control Agency, if
applicable, based on the approved Response Action Plan if such a plan is
necessary;
15
(ii) The Authority shall be in material compliance with all other terms
and provisions of this Agreement;
(iii) Title to the Redevelopment Property shall be acceptable to the
Redeveloper;
entations and warranties set forth in
Section 2.1 shall be true as of the Date of Closing and the Authority shall so
certify in writing at Closing;
(v) No moratorium has been imposed upon the Redevelopment
Property;
(vi) The required permits, including, but not limited to building permits,
have been issued for the Public Improvements and the Minimum Improvements;
plat of the Redevelopment Property
has been approved by the appropriate governmental authorities;
(viii) Redeveloper has received executed easements for off-site utility,
drainage, construction or other easements if required for the development of the
Redevelopment Property;
Plans have been approved by the City
and any other appropriate governmental authorities, and significant architectural
upgrades are not required to such Construction Plans;
ans shall have been approved by the
Authority.
(c) In the event the aforementioned conditions precedent of the Authority or of
the Redeveloper are not satisfied by the Closing Date (except as otherwise set forth
hereinabove with respect to corporate approval deadline), the parties may, by mutual
agreement, extend the Closing until the conditions precedent are satisfied. In the event
the parties cannot reach such mutual agreement for such extension, this Agreement
shall automatically terminate, and neither party shall have any further rights or
obligations hereunder, except those indemnification obligations which expressly survive
such termination.
Section 3.4. Documents at Closing.
(a) At Closing, the Authority shall deliver to the Redeveloper:
(i) The Redevelopment Property Deed,
16
(ii) All certificates, instruments and other documents necessary to
permit the recording of the Redevelopment Property Deed,
properly executed on behalf of the
Authority with respect to judgments, bankruptcies, tax liens, mechanics liens,
parties in possession, unrecorded interests, encroachment or boundary line
questions and related matters, subject at all times to the Survey,
licate certificate of title to the
Redevelopment Property. The Authority need not provide an abstract of title if
the property is classified as abstract property,
(v) An affidavit of the Authority in form and content satisfactory to the
Redeveloper stating that
meaning of Section 1445 of the Internal Revenue Code, and
(vi) The certification as to representations and warranties described in
Section 3.3(b)(iv).
(vii) The executed Declaration of Restrictive Covenants and Prohibition
Against Tax Exemption.
(b) At Closing, the Redeveloper shall deliver to the Authority:
(i) The Purchase Price in cleared funds,
(ii) A Certificate of Real Estate Value,
(iii) The certification as to representations and warranties described in
Section 3.3(a)(v), and
(iv) The executed Declaration of Restrictive Covenants and Prohibition
Against Tax Exemption in the form attached as Schedule G with regard to the
Redevelopment Property for recordation in priority to any financing documents
recorded against the Redevelopment Property.
Section 3.5. Undertakings.
(a) The Redeveloper shall purchase the HRA Redevelopment Property and
shall construct or cause to be constructed the Minimum Improvements and the Public
Improvements in accordance with the terms of this Agreement.
(b) The Authority shall convey the HRA Redevelopment Property and issue
the Note in accordance with the terms of this Agreement.
Section 3.6. Environmental Undertakings.
17
(a) The parties acknowledge that the Redeveloper will request for a VRAP
providing for remediation of hazardous wastes and contaminants on the Redevelopment
Property. Redeveloper shall promptly undertake remediation and any other actions
required under a VRAP.
(b) The Redeveloper acknowledges that the Authority makes no
representations or warranties as to soil and environmental condition on the
Redevelopment Property or the fitness of the Redevelopment Property for construction
of the Minimum Improvements or any other purpose for which the Redeveloper may
make use of such property, and that the assistance provided to the Redeveloper under
this Agreement neither implies any responsibility by the Authority or the City for any
contamination of the Redevelopment Property or poor soil conditions nor imposes any
obligation on such parties to participate in any cleanup of the Redevelopment Property
and or correction of any soil problems (other than the financing described in this
agreement).
(c) Without limiting its obligations under Section 9.9 of this Agreement the
Redeveloper further agrees that it will indemnify, defend, and hold harmless the
Authority, the City, and their governing body members, officers, and employees, from
any claims or actions arising out of the presence, if any, of hazardous wastes or
pollutants existing on or in the Redevelopment Property unless and to the extent that
such hazardous wastes or pollutants are present as a result of the actions or omissions
of the indemnities. Further, Redeveloper expressly agrees that the provisions of any
VRAP are incorporated herein by reference. Nothing in this section will be construed to
limit or affect any limitations on liability of the City or Authority under State or federal
law, including without limitation Minnesota Statutes Sections 466.04 and 604.02.
Section 3.7. Issuance of Note.
(a) In order to reimburse the Redeveloper for Eligible Costs, the Authority
shall issue and the Redeveloper shall purchase the Note. The terms of the Note,
including maturity and payment dates, will be substantially those set forth in the form of
the Note shown in Schedule E and as further described in this Section. The Note will be
dated as of the date of delivery, and simple, non-compounded interest will accrue from
such date.
(b) Before issuance and delivery of the Note, Redeveloper must submit to the
Authority a certificate signed by the Redeveloper's duly authorized representative,
containing the following: (i) a statement that each cost identified in the certificate is an
Eligible Cost, incurred after the date of this Agreement; (ii) evidence that each identified
cost has been paid or incurred by or on behalf of the Redeveloper; (iii) a statement that
no uncured Event of Default by the Redeveloper has occurred and is continuing under
the Agreement. The Authority may, if not satisfied that the conditions described herein
have been met, return the certificate with a statement of the reasons why it is not
acceptable and requesting such further documentation or clarification as the Authority
18
may reasonably require. The Authority will deliver the Note upon receipt and approval of
the certificate evidencing the relevant Eligible Costs in at least the principal amount of
the Note less the adjustment described in this Section.
(c) The Redeveloper understands and acknowledges that the Authority
makes no representations or warranties regarding the amount of Available Tax
Increment, or that revenues pledged to the Note will be sufficient to pay the principal
and interest on any Note. Any estimates of Tax Increment prepared by the Authority or
its financial advisors in connection with the TIF District or this Agreement are for the
benefit of the Authority, and are not intended as representations on which the
Redeveloper may rely. If the Eligible Costs exceed the principal amount of the Note,
such excess costs are the sole responsibility of Redeveloper.
(d) In addition to the limitations above, the following limitations shall apply to
the issuance of the Note:
(i) Only Available Tax Increment shall be pledged.
(ii) The term of any Note may not extend more than 32 days beyond
the duration of the Tax Increment District.
(iii) Any amounts unpaid at the maturity date shall be deemed paid in
full.
(iv) Eligible costs paid by grants from any source are not to be
included in the Note.
(v) The Note will bear simple interest and the rate will be the
lesser of (1) the rate for the long term or permanent financing of the Minimum
Improvements, or (2) 4.0%.
(vi) The principal amount of the Note shall be the certified
Eligible Costs less the estimated market value of the land only (not existing
building) of the Redevelopment Property (excluding the HRA Redevelopment
Property) as determined by the County Assessor on January 1, 2020, but the
principal amount shall not exceed $8,100,000.00.
(vii) The Authority will not issue bonds to prepay the Note.
(viii) The Housing Certificate of Completion shall have been
issued.
Section 3.8. Business Subsidy Provisions. (a) The Parties agree and understand
that the assistance provided to Redeveloper in this Agreement (including any grant
proceeds and issuance of the Note) does not constitute a "business subsidy" under the
19
Business Subsidy Act, because any grant and Note represent assistance that is exempt
from the Business Subsidy Act under Sections 116J.993, Subdivision 3, clause (17).
(b) Redeveloper acknowledges that under Section 116J.994, subdivision 7(c)
of the Business Subsidy Act, the Redeveloper is nevertheless required to file annual
reports containing the information described therein. If the Redeveloper fails to timely
file any required report, the Authority will mail the Redeveloper a warning within one
week after the required filing date. If, after 14 days of the postmarked date of the
warning, the Redeveloper fails to provide a report, the Redeveloper must pay to the
Authority a penalty of $100 for each subsequent day until the report is filed. The
maximum aggregate penalty payable under this Section is $1,000.
Section 3.9. Repayment of Assistance.
(a) On the Reconciliation Date the Redeveloper shall deliver to the Authority
evidence of its annualized cumulative internal rate of return from the Redevelopment
Property and the Minimum Improvements relat calculated as of
the Reconciliation Date. The IRR shall be calculated in accordance with generally
accepted accounting principles, provided that
excess of 7.0 percent (7%) of total development costs.
The IRR calculation shall include the Eligible Costs paid by the Redeveloper and not
reimbursed by grants or the Note.
(b) The amount by which the IRR exceeds 12.0 percent (12%) is a
Percentage shall be credited to the reduction of the principal plus accrued interest of the
Note as of the Reconciliation Date.
(c) For purposes of calculating revenues for the IRR from sales of property
the following adjustments shall be made:
(i) If property (improved or unimproved) is sold to an unrelated party in
l be determinative of the sales price.
The Redeveloper will certify to the City that such party would be considered
unrelated under applicable Internal Revenue Code regulations.
(ii) If property is sold to a related party (as defined in Internal Revenue
Code regulations), the property sale price will be determined by agreement
between the Authority and Redeveloper or, if agreement cannot be reached, the
sale price will be the higher of an appraisal conducted by an appraiser mutually
agreeable to the parties or the actual sale price.
(iii) For property still owned by the Redeveloper on the Reconciliation
ed on an appraisal, or other method
acceptable to both parties for valuing the property or its rate of return, will be
used.
20
ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Minimum Improvements. Subject to the limitations
set forth herein, the Redeveloper agrees that it will construct the Minimum
Improvements on the Redevelopment Property in accordance with the Construction
Plans approved by the City and the Site Plan.
Section 4.2. Completion of Construction. Subject to Unavoidable Delays, the
Parties anticipate the start of construction by December 31, 2020, and the substantial
completion of the construction of the Housing Minimum Improvements by December 31,
2022. All work with respect to the Housing Minimum Improvements to be constructed or
provided by the Redeveloper on the Redevelopment Property shall be in conformity with
the Construction Plans and the Site Plan.
The Redeveloper agrees for itself, its successors and assigns, and every
successor in interest to the Redevelopment Property, or any part thereof, that the
Redeveloper, and such successors and assigns, shall, subject to the limitations set forth
in Section 4.1, diligently prosecute to completion the development of the
Redevelopment Property through the construction of the Minimum Improvements
thereon, and that such construction is anticipated to be completed within the period
specified in this Section 4.2 of this Agreement.
Section 4.3. Preliminary Plans and Construction Plans.
(a) Preliminary Plans. Thirty (30) days prior to commencement of construction
of the Minimum Improvements, the Redeveloper shall submit the Preliminary Plans to
the Authority for approval. The Preliminary Plans shall not be inconsistent with this
Agreement or any applicable state and local laws and regulations, insofar as said
consistency may be determined at said preliminary stage. If approval of the Preliminary
Plans is requested in writing by the Redeveloper at the time of submission thereof to the
Authority, the Authority shall approve or reject (in whole or in part) such Preliminary
Plans in writing within twenty (20) days after the date of receipt thereof. If no written
rejection is made within said twenty (20) days, the Preliminary Plans shall be deemed
approved by the Authority. Any rejection shall set forth in detail the reasons therefor.
If the Authority rejects the Preliminary Plans, in whole or in part, the Redeveloper shall
submit new or revised Preliminary Plans within a reasonable time after receipt by the
Redeveloper of the notice of rejection. The provisions of this Section relating to
approval, rejection and resubmission of new or revised Preliminary Plans shall continue
to apply until the Preliminary Plans have been approved by the Authority. The
e Preliminary Plans shall not be unreasonably withheld,
conditioned or delayed, however if an Event of Default has occurred or is continuing, the
Authority may withhold approval of the Preliminary Plans.
21
(b) Construction Plans. Prior to
construction of the Minimum Improvements, the Redeveloper shall submit Construction
Plans to the City. The Construction Plans shall provide for the construction of the
Minimum Improvements and shall be in conformity in all material respects with this
Agreement, the Preliminary Plans, and all applicable state and local laws and
regulations.
No approval by the Authority shall be deemed to relieve the Redeveloper of the
obligation to comply with the terms of this Agreement and applicable federal, State and
local laws, ordinances, rules and regulations, or to construct the Minimum
Improvements in accordance therewith. No approval by the Authority shall constitute a
waiver of any Event of Default.
(c) Changes. If the Redeveloper desires to make any material change in the
Preliminary Plans after their approval by the Authority, then the Redeveloper shall
submit the proposed change to the Authority for its approval. If the Preliminary Plans,
as modified by the proposed change, conform to the requirements of this Section with
respect to such previously approved Plans, the Authority shall approve the proposed
change and notify the Redeveloper in writing of its approval. Such change in the
Preliminary Plans shall, in any event, be deemed approved by the Authority unless
rejected in writing by the Authority, in whole or in part, within twenty (20) days after
receipt of the notice of such change, setting forth in detail the reasons therefor.
Section 4.4. Certificate of Completion. (a) Promptly after substantial completion
of the Housing Minimum Improvements and Public Improvements in accordance with
those provisions of the Agreement relating to the obligations of the Redeveloper to
construct those Housing Minimum Improvements and Public Improvements, the
Authority will furnish the Redeveloper with a Certificate of Completion associated with
those improvements. Such certification by the Authority shall be (and it shall be so
provided in the certification itself) a conclusive determination of satisfaction and
termination of the agreements and covenants in the Agreement with respect to the
obligations of the Redeveloper, and its successors and assigns, to construct the
Housing Minimum Improvements and Public Improvements.
(b) If the Authority shall refuse or fail to provide any certification in accordance
with the provisions of this Section 4.4 of this Agreement, the Authority shall, within ten
(10) days after written request by the Redeveloper, provide the Redeveloper with a
written statement, indicating in adequate detail in what respects the Redeveloper has
failed to complete the Minimum Improvements or Public Improvements in accordance
with the provisions of the Agreement, or is otherwise in default, and what measures or
acts it will be necessary, in the opinion of the Authority, for the Redeveloper to take or
perform in order to obtain such certification.
(c) The construction of the Housing or Commercial Minimum Improvements
shall be deemed to be substantially completed when the Redeveloper has received the
22
appropriate occupancy permit from the City's building inspector, which permit shall not
be unreasonably withheld.
(d) The construction of the Public Improvements shall be deemed to be
completed in accordance with the Redevel
has accepted the Public Improvements in writing.
23
ARTICLE V
Insurance
Section 5.1. Redeveloper Insurance.
(a) The Redeveloper will provide and maintain at all times during the process
of constructing the Minimum Improvements and, from time to time at the request of the
Authority, furnish the Authority with proof of payment of premiums on:
equal to one hundred percent (100%) of
the insurable value of the Minimum Improvements at the date of completion, and
with coverage available in non-reporting form
policy. The interest of the Authority shall be protected in accordance with a
clause in form and content reasonably satisfacto
risk policy shall be obtained for each of the single-family, owner-occupied homes
constituting the Minimum Improvements at the time the Redeveloper receives a
certificate of occupancy for each home;
(ii) Comprehensive general liabili
bodily injury and property damage of not
less than $2,000,000 for each occurrence (to accomplish the above-required
limits, an umbrella excess liability policy may be used); and
rance, with statutory coverage.
(b) All insurance required by this Article V shall be taken out and maintained
in responsible insurance companies selected by the Redeveloper which are authorized
under the laws of the State to assume the risks covered thereby. The Redeveloper will
deposit annually with the Authority policies evidencing all such insurance, or a
certificate(s) or binder(s) of the respective insurers stating that such insurance is in
force and effect. Unless otherwise provided in this Article V, each policy shall contain a
provision that the insurer shall not cancel or modify it without giving written notice to the
Redeveloper and the Authority at least thirty (30) days before the cancellation or
modification becomes effective. Not less than fifteen (15) days prior to the expiration of
any policy, the Redeveloper shall furnish the Authority with evidence satisfactory to the
Authority that the policy has been renewed or replaced by another policy conforming to
the provisions of this Article V, or that there is no necessity therefor under the terms
hereof. In lieu of separate policies, the Redeveloper may maintain a single policy,
blanket or umbrella policies, or a combination thereof, having the coverage required
herein, in which event the Redeveloper shall deposit with the Authority a certificate or
certificates of the respective insurers as to the amount of coverage in force upon the
Minimum Improvements.
24
ARTICLE VI
Prohibitions Against Assignment and Transfer, Release or Indemnification
Section 6.1. Representation as to Redevelopment. The Redeveloper represents
and agrees that its purchase of the Redevelopment Property, and its other undertakings
pursuant to this Agreement, are, and will be used, for the purpose of redevelopment of
the Redevelopment Property and not for speculation in land holding. The Redeveloper
further recognizes that, in view of (a) the importance of the redevelopment of the
Redevelopment Property to the general welfare of the Authority, and (b) the substantial
financing that has been made available by the Authority for the purpose of making such
redevelopment possible, the qualifications and identity of the Redeveloper are of
particular concern to the Authority. The Redeveloper further recognizes that it is
because of such qualifications and identity that the Authority is entering into this
Agreement with the Redeveloper, and, in so doing, is further willing to accept and rely
on the obligations of the Redeveloper for the faithful performance of all undertakings
and covenants hereby by it to be performed.
Section 6.2. Prohibition Against Transfer of Property and Assignment of
Agreement. Also, for the foregoing reasons the Redeveloper represents and agrees that
prior to the date of the issuance of the Certificate of Completion, except for the purpose
of obtaining financing necessary to enable the Redeveloper or any successor in interest
to purchase the Redevelopment Property, or any part thereof, to perform its obligations
with respect to making the Minimum Improvements under this Agreement, and any
other purpose authorized by this Agreement, the Redeveloper has not made or created
and will not make or create or suffer to be made or created any total or partial sale,
assignment, conveyance, or lease, or any trust or power, or transfer in any other mode
or form of or with respect to this Agreement or the Redevelopment Property or any part
thereof or any interest therein, or any contract or agreement to do any of the same,
without the prior written approval of the Authority which shall not be unreasonably
withheld, unless the Redeveloper remains liable and bound by this Agreement in which
event the Authority's approval is not required. Any such transfer shall be subject to the
provisions of this Agreement. Notwithstanding the foregoing, the Redeveloper may
transfer the Redevelopment Property to any corporation, partnership or entity
controlling, controlled by, or under common control with the Redeveloper.
Section 6.3. Assignment of Note. The Redeveloper may assign and pledge a
Note to secure any loan secured by a portion of the Redevelopment Property, and may
transfer a Note to any entity controlling, controlled by or under common control with the
Redeveloper. Otherwise, the Note shall not be assignable nor transferable without the
prior written consent of the Authority; provided, however, that such consent shall not be
unreasonably withheld or delayed if: (a) the assignee or transferee delivers to the
Authority a written instrument acknowledging the limited
payment obligations under the Note, and (b) the assignee or transferee executes and
delivers to the Authority a certificate, in form and substance satisfactory to the Authority,
pursuant to which, among other things, such assignee or transferee represents that (i)
25
the Note is being acquired for investment
account, not as a nominee or agent, and not with a view to the resale or distribution of
any part thereof, (ii) the assignee or transferee has no present intention of selling,
granting any participation in, or otherwise distributing the same, (iii) the assignee or
Rule 501 of Regulation D
under the Securities Act of 2033, as amended, (iv) the assignee or transferee, either
atives, has knowledge and
experience in financial and business matters and is capable of evaluating the merits and
risks of the prospective investment in the Note and the assignee or transferee is able to
bear the economic consequences thereof, (v) in making its decision to acquire the Note,
the assignee or transferee has relied upon independent investigations and, to the extent
believed by such assignee or transfere
n professional, tax and other advisors, and
has not relied upon any representation or warranty from the Authority or the City, or any
of their officers, employees, agents, affiliates or representatives with respect to the
value of the Note, (vi) neither the Authority nor the City has made any warranty,
acknowledgment or covenant, in writing or otherwise, to the assignee or transferee
regarding the tax consequences, if any, of the acquisition and investment in the Note,
(vii) the assignee or transferee or its representatives have been given a full opportunity
to examine all documents and to ask questions of, and to receive answers from, the
Authority and its representatives concerning the terms of the Note and such other
information as the assignee or transferee desires in order to evaluate the acquisition of
and investment in the Note, and all such questions have been answered to the full
satisfaction of the assignee or transferee, (viii) the assignee or transferee has evaluated
the merits and risks of investment in the Note and has determined that the Note is a
suitable investment for the assignee or transferee in light of su
condition and prospects, (ix) the Note will be
under the federal securities laws because the Note is being acquired in a transaction
not involving a public offering and that under such laws and applicable regulations such
security may not be resold without registration under the Securities Act of 1933, as
amended, except in certain limited circumstances, and (x) no market for the Note exists
or is intended to be developed.
Section 6.4. Release and Indemnification Covenants.
(a) The Redeveloper covenants and agrees that the City, the Authority and
the governing body members, officers, agents, servants and employees of either of
be liable for, and agrees to
indemnify and hold harmless the Indemnified Parties against, any loss or damage to
property or any injury to or death of any person occurring at or resulting from any defect
in the Minimum Improvements, due to any act, including negligence, of the Redeveloper
or of others acting on its behalf or under its direction or control; provided, however, that
on obligations in this subparagraph (a) shall not apply to
any loss resulting from negligent, willful or wanton misconduct of any of the Indemnified
Parties. The costs associated with such indemnification shall at all times be excluded
26
from the definition of Eligible Costs. The indemnification requirement set forth herein
shall survive the Closing and the termination of this Agreement.
(b) The Redeveloper agrees to protect and defend the Indemnified Parties,
now or forever, and further agrees to hold the Indemnified Parties harmless, from any
claim, demand, suit, action or other proceeding by any person or entity arising or
purportedly arising from this Agreement or the transactions contemplated hereby or the
construction and ownership of the Minimum Improvements, due to any act, including
negligence, of the Redeveloper or of others acting on the behalf or under the direction
or control of the Redeveloper; provi
indemnification obligations in this subparagraph (b) shall not apply to any loss resulting
from any negligent or willful misrepresentation or any negligent, willful or wanton
misconduct of any of the Indemnified Parties. The costs associated with such
indemnification shall at all times be excluded from the definition of Eligible Costs. The
indemnification requirement set forth herein shall survive the Closing and the
termination of this Agreement.
(c) None of the Indemnified Parties shall be liable for any damage or injury to
the person or property of the Redeveloper or its officers, agents, servants or employees
or any other person who may be on or about the Redevelopment Property or Minimum
Improvements due to any act or negligence of any person, other than the negligence or
misconduct of an Indemnified Party.
(d) None of the Indemnified Parties shall be liable to the Redeveloper or to
any third party for any consequential or other damages that may arise out of delays of
any kind relating to activities undertaken pursuant to this Agreement, including but not
limited to delays due to environmental conditions, court challenges or elements outside
the control of the Authority.
(e) All covenants, stipulations, promises, agreements and obligations of the
Authority contained herein shall be deemed to be the covenants, stipulations, promises,
agreements and obligations of the Authority and not of any governing body member,
officer, agent, servant or employee of the Authority in the individual capacity thereof.
(f) Nothing in this Section is intended to waive any municipal liability
limitations contained in Minnesota Statutes, particularly Chapter 466.
27
ARTICLE VII
Events of Default
Section 7.1. Events of Default Defined. The following shall be "Events of Default"
under this Agreement and the term "Event of Default" shall mean whenever it is used in
this Agreement any one or more of the following events:
(a) Failure by the Redeveloper to timely pay all ad valorem real property taxes
assessed with respect to the Redevelopment Property.
(b) Failure by the Redeveloper to complete the Site Improvements, Public
Improvements or the Minimum Improvements pursuant to the terms, conditions and
limitations of this Agreement.
(c) Failure by the Redeveloper to submit to the Authority the documents
required by Articles III and VI.
(d) Failure by the Redeveloper to substantially observe or perform any other
covenant, condition, obligation or agreement on its part to be observed or performed
under this Agreement.
(e) If, before the issuance of Certificate of Completion for the Minimum
Improvements, the Redeveloper shall:
(i) file any petition in bankruptcy or for any reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or similar relief
under the United States Bankruptcy Act of 2078, as amended or under any
similar federal or state law; or
(ii) make an assignment for the benefit of its creditors; or
(iii) admit in writing its inability to pay its debts generally as they
become due; or
(iv) be adjudicated as bankrupt or insolvent; or if a petition or answer
proposing the adjudication of the Redeveloper, as bankrupt or its reorganization
under any present or future federal bankruptcy act or any similar federal or state
law shall be filed in any court and such petition or answer shall not be discharged
or denied within ninety (90) days after the filing thereof; or a receiver, trustee or
liquidator of the Redeveloper, or of the Minimum Improvements, or part thereof,
shall be appointed in any proceeding brought against the Redeveloper, and shall
not be discharged within ninety (90) days after such appointment, or if the
Redeveloper shall consent to or acquiesce in such appointment.
28
Section 7.2. Remedies on Default. Whenever any Event of Default referred to in
Section 7.1 occurs and is continuing, the Authority, as specified below, may take any
one or more of the following actions after providing sixty (60) days' written notice to the
Redeveloper, but only if the Event of Default has not been cured within said sixty (60)
days, or such longer period as is necessitated by Unavoidable Delay.
(a) The Authority may suspend its performance under this Agreement
including payment of the Note until it receives assurances from the Redeveloper,
deemed adequate by the Authority, that the Redeveloper has cured its default and will
continue its performance under this Agreement.
(b) The Authority may cancel and rescind the Agreement.
(c) The Authority may withhold a Certificate of Completion.
Section 7.3. No Remedy Exclusive. No remedy herein conferred upon or
reserved to the Authority is intended to be exclusive of any other available remedy or
remedies, but each and every such remedy shall be cumulative and shall be in addition
to every other remedy given under this Agreement or now or hereafter existing at law or
in equity or by statute. No delay or omission to exercise any right or power accruing
upon any default shall impair any such right or power or shall be construed to be a
waiver thereof, but any such right and power may be exercised from time to time and as
often as may be deemed expedient.
Section 7.4. No Implied Waiver. In the event any agreement contained in this
Agreement should be breached by any party and thereafter waived by any other party,
such waiver shall be limited to the particular breach so waived and shall not be deemed
to waive any other concurrent, previous or subsequent breach hereunder.
Section 7.5. Agreement to Pay Attorney's Fees and Expenses. Whenever any
Event of Default occurs and the Authority shall employ attorneys or incur other
expenses for the collection of payments due or to become due or for the enforcement or
performance or observance of any obligation or agreement on the part of the
Redeveloper herein contained, the Redeveloper agrees that it shall, on demand
therefor, pay to the Authority the reasonable fees of such attorneys and such other
expenses so incurred by the Authority.
29
Article VIII
Tax Increment; Taxes
Section 8.1. Pledge of Tax Increment. The Authority shall pledge the Tax
Increments to the payment of the Note in accordance with the terms of this Agreement.
Section 8.2. Right to Collect Delinquent Taxes. The Redeveloper acknowledges
that the Authority is providing substantial aid and assistance in furtherance of the
development through the issuance of the Note. The Redeveloper understands that the
Tax Increment pledged to payment on the Note is derived from real estate taxes on the
Redevelopment Property, which taxes must be promptly and timely paid. To that end,
the Redeveloper agrees for itself, its successors and assigns, in addition to the
obligation pursuant to statute to pay real estate taxes, it is also obligated by reason of
this Agreement to pay before delinquency all real estate taxes assessed against the
Redevelopment Property and the Minimum Improvements. The Redeveloper
acknowledges that this obligation creates a contractual right on behalf of the Authority to
sue the Redeveloper or its successors and assigns to collect delinquent real estate
taxes and any penalty or interest thereon and to pay over the same as a tax payment to
the county auditor. In any such suit, the Authority shall also be entitled to recover its
costs, expenses and reasonable attorney fees.
Section 8.3. Review of Taxes. The Redeveloper agrees that prior to the
Termination Date it will not cause a reduction in the real property taxes paid in respect
of the Redevelopment Property through willful destruction of the Redevelopment
Property or any part thereof; provided that the foregoing restriction shall not apply to
the existing improvements in the normal course of
redeveloping the Redevelopment Property.
Section 8.4 Petition to Reduce Tax. The Redeveloper may seek through petition
or other means to have the County Asse
Redevelopment Property reduced. Until the Note is fully paid, such activity must be
preceded by written notice from the Redeveloper to the Authority indicating its intention
to do so. Upon receiving such notice, or
intentions, the Authority may suspend payments due under the Note until the actual
amount of the reduction is determined, whereupon the Authority will make the
suspended payments less any amount that the Authority is required to repay the County
as a result, any reduction in the market value of the Redevelopment Property. During
the period that the payments are subject to suspension, the Authority may make partial
payments on the Note if it determines, in its sole and absolution discretion, that the
amount retained will be sufficient to cover any repayment which the County may
of payments on the
Note pursuant to this Section shall not be considered a default under Article VII.
30
Article IX
Additional Provisions
Section 9.1. Conflict of Interest. No member, official, or employee of the
Authority shall have any personal interest, direct or indirect, in the Agreement, nor shall
any such member, official or employee participate in any decision relating to the
Agreement which affects his personal interests or the interests of any corporation,
partnership, or association in which he is, directly or indirectly, interested.
Section 9.2. Restrictions on Use. The Redeveloper shall not, in marketing or
sale of the Redevelopment Property, the Minimum Improvements, or any portion of the
such real property or improvements, discriminate upon the basis of race, color, creed,
sex or national origin or any other basis prohibited by applicable local, State or federal
laws or regulations.
Section 9.3. Provisions Not Merged With Deed. None of the provisions of this
Agreement are intended to or shall be merged by reason of any deed transferring any
interest in the Redevelopment Property and any such deed shall not be deemed to
affect or impair the provisions and covenants of this Agreement.
Section 9.4. Notices and Demands. Any notice, demand, or other
communication permitted or required to be given hereunder by either party to the other
shall be deemed given or delivered if it is dispatched by registered or certified mail,
postage prepaid, return receipt requested, transmitted by facsimile, delivered by a
recognized overnight carrier, or delivered personally to the following addresses:
(a) If to the Redeveloper: Roers Fridley Apartments Owner LLC, 110
Cheshire Lane, Suite 120, Minnetonka, MN 55305, Attention: Shane LaFave and Brian
Roers.
With a copy to: Winthrop & Weinstine, P.A., 225 South Sixth Street, Suite
3500, Minneapolis, Minnesota 55402 Attention: Kevin McLain.
(b) If to the Authority: Housing and Redevelopment Authority in and for the
City of Fridley, Minnesota, 7071 University Avenue NE, Fridley, MN 55432, Attention:
City Manager. Fax: (763) 571-1287.
With a copy to: Monroe Moxness Berg PA, 7760 France Avenue South,
Suite 700, Minneapolis, MN 55435-5844, Attention: James R. Casserly, Esq. Fax:
(952) 885-5969.
Section 9.5. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
31
Section 9.6. Law Governing. This Agreement will be governed and construed in
accordance with the laws of the State.
Section 9.7. Expiration. This Agreement shall expire when the Note is paid in
full.
Section 9.8. Termination. This Agreement shall terminate on its expiration if it
has not been terminated before such date pursuant to any provision hereof.
Section 9.9. Provisions Surviving Termination. Termination of this Agreement
shall not terminate any indemnification or other rights or remedies under this Agreement
due to (i) any Event of Default which occurred and was continuing prior to such
termination, or (ii) any cause of action which arose before the termination. In addition,
termination of this Agreement shall not terminate any Declaration of Restrictive
Covenants and Prohibition Against Tax Exemption which shall have been recorded
against the Redevelopment Property at or prior to Closing.
IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly
executed in its name and behalf and the Redeveloper has caused this Agreement to be
duly executed on or as of the date first above written.
(Signature pages follow)
32
Dated: _________________
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF FRIDLEY, MINNESOTA
By: _____________________________________
Its: Chairperson
By: _____________________________________
Its: Executive Director
STATE OF MINNESOTA )
)ss
COUNTY OF ANOKA )
On this _____ day of _______________, 20___ before me, a Notary Public, personally
appeared _________________ and ___________ , to me personally known who by me
duly sworn, did say that they are the Chairperson and Executive Director, respectively,
of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a
political subdivision of the State of Minnesota, and acknowledged the foregoing
instrument on behalf of said Authority.
___________________________________
Notary Public
Authority Signature Page - Contract for Private Redevelopment
33
Dated: _______________
ROERS FRIDLEY APARTMENTS OWNER LLC, a
Delaware limited liability company
By: Roers Fridley Apartments Manager LLC, a
Minnesota limited liability company
Its: Manager
By: Roers Companies LLC, a Minnesota limited
liability company
Its: Manager
By _______________________________
Brian J. Roers, Manager
STATE OF MINNESOTA )
)ss
COUNTY OF __________ )
On this _____ day of __________________, 2020, before me, a Notary Public,
personally appeared Brian J. Roers, the Manager of Roers Companies LLC, a
Minnesota limited liability company, the Manager of Roers Fridley Apartments Manager
LLC, a Minnesota limited liability company, the Manager of Roers Fridley Apartments
Owner LLC, a Delaware limited liability company, and acknowledged the foregoing
instrument on behalf of said limited liability company.
___________________________________
Notary Public
Redeveloper Signature Page - Contract for Private Redevelopment
34
SCHEDULE A
DESCRIPTION OF REDEVELOPMENT PROPERTY
PINS: 14-30-24-23-0092; 14-30-24-23-0094; and 14-30-24-23-0098
To be platted as Lots 1 and 2, Block 1 and ________ of the plat of ______________.
35
SCHEDULE B
SITE PLAN
36
SCHEDULE C
SITE IMPROVEMENTS
Subject to reimbursement as Eligible Costs within the limitations set forth herein, the
Redeveloper will construct and pay for all Site Improvements, including:
Costs of Acquisition (excluding assessors market value of land as of 1/1/2020)
Environmental remediation
Site clearance
Tenant relocation costs
Landscaping and screening
Trails and pedestrian improvements, including sidewalks
Grading and import/export soil
Retaining walls and fences
Private streets
Park improvements
Storm sewers and storm water system elements
Interest on financed eligible costs not to exceed 4.0%
37
SCHEDULE D
PUBLIC IMPROVEMENTS
Subject to reimbursement as Eligible Costs within the limitations set forth herein, the
redeveloper will construct and pay for the following Public Improvements in accordance
with City specifications and subject to approval by the City engineer. The parties will
coordinate the installation of the Public Improvements in order to accommodate the
timetable for construction of the Minimum Improvements. Upon completion of the Public
Improvements in compliance with City specifications and acceptance by the City, the
Public Improvements will become public property.
City streets, curbs and gutters
Public trails, sidewalks, pedestrian improvements
38
SCHEDULE E
Form of Note
US $ Fridley, Minnesota
___________, 20_
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF ANOKA
HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE
CITY OF FRIDLEY, MINNESOTA
LIMITED REVENUE TAX INCREMENT NOTE
The Housing and Redevelopment Authority in and for the City of Fridley,
Minnesota (the "Authority"), hereby acknowledges itself to be indebted and, for value
received, promises to pay to the order of
(the "Owner"), solely from the Available Tax Increment, to the extent and in the manner
hereinafter defined, the principal amount of this Note, being
Dollars and __/100 ($ ) (the "Principal Amount"), together with
simple interest of percent (_____%) per annum commencing from the date of
issuance of the Note and payable on the dates described below (the "Scheduled
Payment Dates") and in the amounts as hereinafter defined (the "Scheduled
Payments").
The Scheduled Payment Dates are August 1, 20__, and on the 1st day of
February and August thereafter until and including February 1, 20__, unless earlier
paid, in accordance with the terms of this Note.
Upon 30 days' prior written notice from the Authority to the Owner, the Principal
Amount is subject to prepayment at the option of the Authority in whole or in part at any
time.
Any payments on this Note shall be applied first to accrued interest and the
balance to the reduction of principal.
Each payment on this Note is payable in any coin or currency of the United
States of America which on the date of such payment is legal tender for public and
private debts and shall be made by check or draft made payable to the Owner and
mailed to the Owner at its postal address within the United States which shall be
designated from time to time by the Owner.
The Note is a special and limited obligation and not a general obligation of the
Authority, which has been issued by the Authority pursuant to and in full conformity with
39
the Constitution and laws of the State of Minnesota, including Minnesota Statutes,
Section 469.178, subdivision 4, to aid in financing a project, as therein defined, of the
Authority consisting generally of defraying certain public redevelopment costs incurred
and to be incurred by the Authority within and for the benefit of its Redevelopment
Project No. 1.
THE NOTE IS NOT A GENERAL OBLIGATION OF THE AUTHORITY, THE
E STATE OF MINNESOTA (THE "STATE"),
AND NEITHER THE AUTHORITY, THE CITY, THE STATE NOR ANY POLITICAL
SUBDIVISION THEREOF SHALL BE LIABLE ON THE NOTE, NOR SHALL THE NOTE
BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN AVAILABLE
TAX INCREMENT, AS DEFINED BELOW.
The Scheduled Payment of this Note due on any Scheduled Payment Date is
payable solely from and only to the extent that the Authority shall have received as of
such Scheduled Payment Date the Available Tax Increment which is defined in the
Contract for Private Redevelopment By and Between the Authority and the Owner dated
the Note, shall have the meaning assigned to them in the Agreement.
The Authority shall pay on each Scheduled Payment Date to the Owner the
Available Tax Increment. On February 1, 20__, the maturity date of this Note, any
unpaid portion shall be deemed to have been paid in full.
This Note shall not be payable from or constitute a charge upon any funds of the
Authority, and the Authority shall not be subject to any liability hereon or be deemed to
have obligated itself to pay hereon from any funds except the Available Tax Increments,
and then only to the extent and in the manner herein specified.
The Owner shall never have or be deemed to have the right to compel any
exercise of any taxing power of the Authority or of any other public body, and neither the
Authority nor any director, commissioner, council member, board member, officer,
employee or agent of the Authority, nor any person executing or registering this Note
shall be liable personally hereon by reason of the issuance or registration hereof or
otherwise.
The Authority makes no representation or covenant, express or implied, that the
revenues described herein will be sufficient to pay, in whole or in part, the amounts
which are or may otherwise become due and payable hereunder.
The Authority's payment obligations hereunder shall be further conditioned on the
fact that there shall not at the time have occurred and be continuing an Event of Default
under the Agreement, and, further, if pursuant to the occurrence of an Event of Default
under the Agreement the Authority elects to terminate the Agreement, the Authority
shall have no further debt or obligation under this Note whatsoever. Reference is
hereby made to the provisions of the Agreement for a fuller statement of the obligations
40
of the Redeveloper and of the rights of the Authority thereunder, and said provisions are
hereby incorporated by reference into this Note to the same extent as though set out in
full herein. The execution and delivery of this Note by the Authority, and the acceptance
thereof by the Redeveloper, as the initial Registered Owner hereof, shall conclusively
establish this Note as the "Note" (and shall conclusively constitute discharge of the
Authority's obligation to issue and deliver the same to the Redeveloper) under the
Agreement.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things
required by the Constitution and laws of the State of Minnesota to be done, to have
happened, and to be performed precedent to and in the issuance of this Note have
been done, have happened, and have been performed in regular and due form, time,
and manner as required by law; and that this Note, together with all other indebtedness
of the Authority outstanding on the date hereof and on the date of its actual issuance
and delivery, does not cause the indebtedness of the Authority to exceed any
constitutional or statutory limitation thereon.
IN WITNESS WHEREOF, the Board of Commissioners of the Housing and
Redevelopment Authority in and for the City of Fridley, Minnesota, by its Commission
Members, has caused this Note to be executed by the manual signatures of the Chair
and the Executive Director of the Authority and has caused this Note to be dated
_________________________, 20__.
By _________________________ By ____________________________
Its Chair Its Executive Director
41
CERTIFICATE OF REGISTRATION
It is hereby certified that the foregoing Note, as originally issued as of the ____
day of ______________, 20__, was on said date registered in the name of the Housing
and Redevelopment Authority in and for the City of Fridley, Minnesota, a public body
corporate and politic and that, at the request of said Registered Owner of this Note, the
undersigned has this day registered this Note as to principal and interest on the Note in
the name of such Registered Owner, as indicated in the registration blank below, on the
books kept by the undersigned for such purposes.
Name of Date of Signature of
Registered Owner Registration Executive Director
, ________, 20__ ________________
a
42
SCHEDULE F
Form of Certificate of Completion
WHEREAS, the Housing and Redevelopment Authority in and for the City
of Fridley, Minnesota, a political subdivision of the State of Minnesota (the "Authority")
and Roers Fridley Apartments Owner LLC, a Delaware limited liability company (the
"Redeveloper") have entered into a Contract for Private Redevelopment (the
"Agreement") dated as of _________________, regarding certain real property located
in Tax Increment Financing District No. 25 in the City (hereinafter referred to and
referred to in the Agreement as
WHEREAS, the Agreement contains certain conditions and provisions
requiring the Redeveloper to construct improvements upon the Redevelopment
Property (hereinafter referred to and referred to in the Agreement as the "Minimum
Improvements" which include Housing Minimum Improvements and Commercial
Minimum Improvements), as well as
WHEREAS, Section 4.4 of the Agreement requires the Authority to
provide an appropriate instrument promptly after the substantial completion (as defined
in the Agreement) of the Housing Minimum Improvements and the Public Improvements
so certifying said substantial completion;
NOW, THEREFORE, in compliance with said Section 4.4 of the
Agreement, this is to certify that the Redeveloper has substantially completed the
Housing Minimum Improvements and the Public Improvements in accordance with the
conditions and provisions of the Agreement relating solely to the obligations of the
Redeveloper to construct the Housing Minimum Improvements and the Public
Improvements (including the dates for beginning and completion thereof), and this
certification shall be a conclusive determination of satisfaction and termination of the
agreements and covenants in the Agreement with respect to the obligations of the
Redeveloper, and its successors and assigns, to construct the Housing Minimum
Improvements and the Public Improvements, and the dates for the beginning and
completion thereof.
Dated: _______________, 20___.
43
Dated: _______________________
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF FRIDLEY, MINNESOTA
By __________________________
Its Chairperson
And by
___________________________
Its Executive Director
STATE OF MINNESOTA )
) ss
COUNTY OF ANOKA )
On this _____ day of _______________, 20__ before me, a notary public
within and for Anoka County, personally appeared _________________________ and
_________________________ to me personally known who by me duly sworn, did say
that they are the Chairperson and Executive Director of the Housing and
Redevelopment Authority in and for the City of Fridley, Minnesota, a political subdivision
of the State of Minnesota, and acknowledged the foregoing instrument on behalf of said
Authority.
Notary Public
Authority Signature Page Certificate of Completion
44
SCHEDULE G
Declaration of Restrictive Covenants and Prohibition Against Tax Exemption
This Declaration is made and executed as of the _____ day of _______,
20__ by Roers Fridley Apartments Owner LLC, a Delaware limited liability company
RECITALS
A. Declarant is fee owner of the premises located in the County of
Anoka, State of Minnesota described on Exhibit A attached
B. The Housing and Redevelopment Authority in and for the City of
Fridley, Minnesota, a political subdivision of the State of Minnesota
entered into a Contract for Private Redevelopment dated as of _________________
he Redevelopment Agreement
provides for certain assistance, financial and otherwise, to be provided by the Authority
in connection with the construction of housing and commercial improvements by the
Declarant on the Property.
NOW, THEREFORE, in consideration of the foregoing, Declarant, for itself
and its successors and assigns, does hereby declare that the Property shall be owned,
used, occupied, sold and conveyed subject to the following covenants and restrictions:
1. No part of the Property shall become tax exempt from the levy of ad
valorem property taxes, or any statutorily authorized alternative, until December 31,
2048.
2. The covenants and restrictions herein contained shall run with the title to
the Property and shall be binding upon all present and future owners and occupants of
the Property; provided, however, that the covenants and restrictions herein contained
shall inure only to the benefit of the Authority and may be released or waived in whole
or in part at any time, and from time to time, by the sole act of the Authority, and
variances may be granted to the covenants and restrictions herein contained by the sole
act of the Authority. These covenants and restrictions shall be enforceable only by the
Authority, and only the Authority shall have the right to sue for and obtain an injunction,
prohibitive or mandatory, to prevent the breach of the covenants and restrictions herein
contained, or to enforce the performance or observance thereof.
3. The covenants and restrictions herein contained shall remain in effect until
December 31, 2048 and thereafter shall be null and void.
4. If any one or more of the covenants or restrictions contained in this
Declaration are held to be invalid or enforceable, the same shall in no way affect any of
the other provisions of this Declaration, which shall remain in full force and effect.
45
ROERS FRIDLEY APARTMENTS OWNER
LLC,
a Delaware limited liability company
By: Roers Fridley Apartments Manager LLC, a
Minnesota limited liability company
Its: Manager
By: Roers Companies LLC, a Minnesota
limited liability company
Its: Manager
By _______________________________
Brian J. Roers, Manager
STATE OF MINNESOTA )
) ss
COUNTY OF __________ )
On this ______ day of __________________, 20____, before me, a
notary public within and for ___________ County, personally appeared Brian J. Roers,
to me personally known and who by me duly sworn, did say that he/she is the Manager
of Roers Companies LLC, a Minnesota limited liability company, the Manager of Roers
Fridley Apartments Manager LLC, a Minnesota limited liability company, the Manager of
Roers Fridley Apartments Owner LLC, a Delaware limited liability company, and
acknowledged the foregoing instrument on behalf of said limited liability company.
___________________________________
Notary Public
46
SCHEDULE H
FORM OF REDEVELOPMENT PROPERTY DEED
THIS INDENTURE, made this ___ day of ___________, 20__, between the
Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a
political subdivision of the State of Mi
Apartments Owner LLC, a Delaware limit
WITNESSETH, that the Grantor, in consideration of the sum of One Dollar
($1.00) and other good and valuable consideration, the receipt of which is hereby
acknowledged, does hereby convey and quit claim to the Grantee, its successors and
assigns, forever, all the tract or parcel of land lying and being in the County of Anoka
and State of Minnesota described as follows:
See Exhibit 1 hereto
TOGETHER with all hereditaments and appurtenances belonging thereto, subject to all
conditions, covenants, restrictions and limitations imposed by matters of record.
Check box if applicable:
Grantor certifies that Grantor does not know of any wells on the described
real property.
A well disclosure certificate accompanies this document.
Grantor is familiar with the property described in this instrument and
certifies that the status and number of wells on the described real property
have not changed since the last previously filed well disclosure certificate.
47
IN WITNESS WHEREOF, the Grantor has caused this Deed to be duly executed
in its behalf by its Chairperson and Executive Director as of the first date above written.
HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF FRIDLEY, MINNESOTA
By: _____________________________________
Its: Chairperson
By: _____________________________________
Its: Executive Director
STATE OF MINNESOTA )
)ss
COUNTY OF ANOKA )
On this _____ day of _______________, 20___ before me, a Notary Public,
personally appeared _______________ and _______________ to me personally
known who by me duly sworn, did say that they are the Chairperson and Executive
Director, respectively, of the Housing and Redevelopment Authority in and for the City
of Fridley, Minnesota, a political subdivision of the State of Minnesota, and
acknowledged the foregoing instrument on behalf of said Authority.
__________________________
Notary Public
This instrument was drafted by: Tax statements for the real property
described in this instrument should be sent
MONROE MOXNESS BERG PA (JRC) to:
7760 France Avenue South, Suite 700
Minneapolis, MN 55435-5844 Roers Fridley Apartments Owner LLC
(952) 885-5999 110 Cheshire Lane, Suite 120
Minnetonka, MN 55305
48
SCHEDULE I
EXISTING ENVIRONMENTAL REPORTS
Phase I Environmental Site Assessment dated June, 2020, completed by Wenck
Associates, Inc.
Draft Phase II Environmental Site Assessment dated July, 2020, completed by Wenck
Associates, Inc.
\[Note to Drafter: To be revised to add HRA report information\]
49
SCHEDULE J
HRA REDEVELOPMENT PROPERTY
PINS: 14-30-24-23-0092; 14-30-24-23-0094
To be included as part of the Redevelopment Property to be platted as
_______________________.
20248605v2
4834-5224-7239, v. 7
50