IP #897IIIVIIv�IVIIII�IRInhRB
Doc No A10092637
Certified, filed and/or recorded on
Jul 1, 2014 2:00 PM
Office of the County Recorder
Hennepin County, Minnesota
Martin McMormick, County Recorder
Mark Chapin, County Auditor and Treasurer
Deputy 84 Pkg ID 1125719C
Doc Name: Development Agreement
Document Recording Fee $46.00
Dow~ Total $46.00
This cover sheet is now a permanent part of the recorded document
PURCHASE AND DEVELOPMENT AGREEMENT
By and Between
NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY
and
COMPASS POINTE LIMITED PARTNERSHIP
Dated as of: 2014
This document was drafted by:
BRADLEY & DEIKE, P. A.
4018 West 65" Street, Suite 100
Edina., MN 55435
Telephone: (952) 926-5337
#',,, �z
rcial par{ners Title, LLC
Ca0myne200 South Sixth Street
Suite 3300 MN55442
Minneapolis,
371VL 3 -f� $ �T�
Section 1.1. Definitions
TABLE OF CONTENTS
Page
ARTICLE I
Definwgz
3
ARTICLE H
Representations
Section 2.1. Representations by the Authority
Section 2.2. Representations by the Developer
r:��Wei"I
Authority Assistance. Issuance of Note
Section 3.1.
Basis for Assistance
8
Section 3.2.
Issuance of Note
8
Section 3.3.
Conditions Precedent to Issuance of Note
8
Section 3.4.
Payment of Administrative Costs
9
Section 3.5.
Authority Review of Developer's Costs
9
Section 3.6.
Title
9
Section 3.7.
Closing; Purchase Price
10
Section 3.8.
Conditions Precedent to Conveyance of Authority Property
10
Section 3.9.
Advance of Land; Tax Increment Interfund Loan
10
Section 3.11.
Status of Developer Property
1 I
(i)
ARTICLE IV
Construction of Improvements
Section 4.1. Construction of Improvements 12
Section 4.2. Construction Plans 12
Section 4.3. Commencement and Completion of Construction 12
Section 4.4. Certificate of Completion 13
Section 4.5. Management of Improvements 13
Section 4.6. Playground 14
Section 5.1. Insurance
Section 5.2. Condemnation
"ftw-RALIA
Insurance and Condemnation
ARTICLE VI
Taxes: Tax Increment
15
16
Section 6.1. Real Property Taxes 18
Section 6.2. Tax Increment 19
Section 6.3. Developer's Representations Concerning Note 19
Section 6.4. Income and Rent Restrictions 20
Section 6.5. Assessment Agreement 21
ARTICLE VII
Morrtgne Financing
Section 7.1. Mortgage Financing 22
ARTICLE VIII
Prohibitions Against Assipment and Transfer,• Indemnification
Section 8.1. Prohibition Against Transfer of Property and
Assignment of Agreement 23
Section 8.2. Release and Indemnification 23
Section 8.3. Environmental Conditions 24
ARTICLE IX
Events of Default
Section 9.1.
Events of Default Defined
25
Section 9.2.
Authority's Remedies on Default
25
Section 9.3.
No Remedy Exclusive
26
Section 9.4.
No Additional Waiver Implied by One Waiver
26
Section 9.5.
Costs of Enforcement
26
Section 6.6.
The Developer's Option to Terminate
26
Section 6.7.
Action to Terminate
26
Section 6.8.
Effect of Termination
26
ARTICLE X
Additional Provisions
Section 10.1. Representatives Not Individually Liable
28
Section 10.2. Restrictions on Use
28
Section 10.3. Titles of Articles and Sections
28
Section 10.4. Notices and Demands
28
Section 10.5. Disclaimer of Relationships
29
Section 10.6. Modifications
29
Section 10.7. Counterparts
29
Section 10.8. Judicial Interpretation
29
Section 10.9, Business Subsidy Act
29
Section 10.10. Termination
29
SCHEDULE A
SCHEDULE B
SCHEDULE C
SCHEDULE D
SCHEDULE E
SCHEDULE F
Description of Property
Note
Developer Pro forma
Assessment Agreement
Deed
Interfund Loan Resolution
PURCHASE AND DEVELOPMENT AGREEMENT
THIS AGREEMENT, made on or as of the A&day of 2014, by and
between the New Hope Economic Development Authority, a publa bo& politic and corporate
under the laws of the State of Minnesota (hereinafter referred to as the "Authority"), and having
its principal office at City Hall, 4401 Xylon Avenue North, New Hope, Minnesota 55428, and
Compass Pointe Limited Partnership, a Minnesota limited partnership (hereinafter refereed to as
the "Developer"), having its principal office at 7500 West 78" Street, Edina, Minnesota 55439.
WHEREAS, The Authority is a municipal economic development authority organized and
existing pursuant to the Constitution and laws of the State of Minnesota and is governed by its
Board of Commissioners (the "Board"); and
WHEREAS, the Authority and the City of New Hope, Minnesota (the "City'l have
established within the City Redevelopment Project No. 1 pursuant to Minnesota Statutes.
Sections 469.001 - 469.047, providing for the development and redevelopment of certain areas
located within the City (which development district is hereinafter referred to as the "Project");
and
WHEREAS, the Authority and the City have further established the Compass Pointe Tax
Increment Financing District within the Project pursuant to Minnesota Statutes. Sections
469.174-469.179 (which tax increment financing district is hereinafter referred to as the "Tax
Increment District"); and
WHEREAS, the Tax Increment District is a housing tax increment financing district
intended to provide affordable rental housing for low and moderate income persons and families;
and
WHEREAS, pursuant to Minnesota Statutes, Section 469.176, subdivision 4, tax
increment derived from the Tax Increment District may be used in accordance with the tax
increment financing plan created in connection with the establishment of the Tax Increment
District to pay the public redevelopment costs of the Project; and
WHEREAS, the Developer has presented to the Authority a proposal pursuant to which
the Developer will acquire certain real property within the Project (which property is hereinafter
referred to as the "Property" and is more particularly described in Schedule A annexed hereto
and made a part hereof) and construct thereon a 68 -unit residential rental facility; and
WHEREAS, a portion of the Property is owned by the City (the "Authority Property") and
a portion of the Property is owned by the Developer (the "Developer Property'); and
WHEREAS, the City and the Developer have entered into an option agreement (the
"Option Agreement") pursuant to which the City has agreed to convey the Authority Property to
the Developer; and
WHEREAS, the Developer has as a part of its proposal requested that the Authority
provide certain financial assistance to aid in its development, without which such development
would not be possible; and
WHEREAS, Authority believes that the provision of the affordable housing as proposed
by the Developer is in the best interest of the City and its residents and in accord with the public
purposes and provisions of applicable federal, state and local laws under which the Project is
being undertaken and assisted;
NOW THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the other as follows:
Definitions
Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears
from the context:
"Act" means Minnesota Statutes, Sections 469.001-469.047, as amended.
"Agreement" means this Agreement, as the same may be from time to time modified,
amended, or supplemented.
"Assessment Agreement" means the agreement in the form attached to this Agreement as
Schedule D.
"Authority" means the New Hope Economic Development Authority, a public body
Politic and corporate, its successors and assigns.
"Authority Property" means the property described as such on the attached Schedule A.
"Available Tax Increment" means, with respect to a Scheduled Payment Date, as defined
in the Note, ninety percent (90%) of the Tax Increment received by the Authority in the six (6)
month period preceding such Scheduled Payment Date.
"Board" means the Authority's Board of Commissioners.
"City" means the City of New Hope, Minnesota.
"Construction Plans" means the site plan, utility plan, grading and drainage plan,
landscape plan, elevations drawings and related documents on the construction work to be
performed by the Developer on the Property which have been or will be submitted for approval
by the Board, together with the resolution of the Board approving such pians and the plans,
specifications, drawings and related documents on the construction work to be performed by the
Developer on the Property which are to be submitted to the building inspector of the City.
"County" means Hennepin County, Minnesota.
"Deed" means the deed in the form of Schedule E attached hereto.
"Developer" means Compass Pointe Limited Partnership, a Minnesota limited
partnership, its successors and assigns and any future owner of any right, title or interest in the
Property.
"Developer Property" means the property described as such on the attached Schedule A.
"Event of Default" means an action by the Developer listed in Article IX of this
Agreement.
"Improvements" means the improvements to be constructed by the Developer on the
Property, consisting of the construction of a 68 -unit rental housing development together with
parking and other incidental and relaxed improvements in accordance with the approved
Construction Plans.
"Minimum Market Value" means the market value for tax purposes of the Property and
Improvements established by the Assessment Agreement.
"Net Proceeds" means any proceeds paid by an insurer to the Developer or the Authority
under a policy or policies of insurance required to be provided and maintained by the Developer
pursuant to Article V of this Agreement and remaining after deducting all expenses (including
fees and disbursements of counsel) incurred in the collection of such proceeds.
"Note" means the Taxable Limited Revenue Tax Increment Note to be issued by the
Authority pursuant to Section 3.2 of this Agreement, which Note shall be substantially in the
form of the Note attached to this Agreement as Schedule B.
"Option Agreement' means that certain Option Agreement by and between the City and
the Developer dated as of June 4, 2012, as amended as of the date hereof.
"Permitted Encumbrances" means the provisions of the Deed and this Agreement:
reservations of minerals or mineral rights to the State of Minnesota; public utility, roadway and
other easements which will not adversely affect the development and use of the Authority
Property pursuant to the Developer's Construction Plans; building laws, regulations and
ordinances consistent with the Improvements; restrictions, covenants and easements of record
that do not materially adversely affect the development and use of the Improvements and are
reasonably acceptable to the Developer; and exceptions to title to the Authority Property which
are not objected to by Developer upon examination of the title evidence delivered to the
Developer pursuant to the terms of the Option Agreement.
"Project" means the Authority's Redevelopment Project No. 1.
"Project Area" means the real property located within the boundaries of the Project.
"Project Plan" means the redevelopment plan adopted in connection with creation of the
Project.
"Property" means the real property described as such on the attached Schedule A,
consisting of the Authority Property and the Developer Property.
"Reimbursable Costs" means the costs to be reimbursed by the Authority to the
Developer as described in Article III of this Agreement, which costs consist of the cost of
constructing the Improvements.
"State" means the State of Minnesota.
"Tax Increment" means that portion of the real property taxes paid with respect to the
Property and Improvements that is remitted to the Authority as tax increment pursuant to the Tax
Increment Act, minus deductions required by law.
"Tax Increment Act" means the Tax Increment Financing Act, Minnesota Statutes.
Sections 469.174-469.1794, as amended and as it may be further amended from time to time.
"Tax Increment District" means the Compass Pointe Tax Increment Financing District
created by the Authority within the Pmject'Area.
"Tax Increment Plan" means the tax increment financing plan adopted by the Authority
in connection with its creation of the Tax Increment District, which plan together with the
information and findings contained therein is hereby incorporated herein and made a part hereof
by reference.
"Termination Date" means the latest of the following dates: (i) the date that the Note is
paid in full or terminated; (ii) the date that this Agreement is terminated-, or (iii) the date that the
Interfund Loan described in Section 3.9(b) has been paid in full.
"Unavoidable Delays" means delays which are the direct result of acts of God,
unforeseen adverse weather conditions, strikes, other labor troubles, fire or other casualty to the
Irnprovemeats, litigation commenced by third parties which, by injunction or other similar
judicial action, directly results in delays, or acts of any federal, state or local governmental unit,
and which directly results in delays.
5
ARTICLE H
Representations
Section 2.1. Rg sentations by the Auffiority., The Authority nukes the following
representations as the basis for the undertaking on its part herein contained:
(a) The Authority is a municipal economic development authority organized and
existing under the laws of the State. Under the laws of the State, the Authority has the power to
enter into this Agreement and to perform its obligations hereunder.
(b) The Authority will cooperate with the Developer with respect to any litigation
commenced with respect to the Project Plan, Project, or Improvements and in the Developer's
acquisition of any permits or other approvals required in connection with the construction of the
Improvements.
(c) The Authority has received no notice or communication from any local, state or
federal official that the activities of the Developer or the Authority in the Project Area may be or
will be in violation of any environmental law or regulation The Authority is aware of no facts
the existence of which would cause it or any portion of the Authority Property to be in violation
of any local, state or federal environmental law, regulation or review procedure.
(d) Neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, nor the fiA llment of or compliance with the terms and
conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of,
the terms, conditions or provisions of any restriction or any evidences of indebtedness,
agreement or instrument of whatever nature to which the Authority is now a party or by which it
is bound, or constitutes a default under any of the foregoing
(e) To the best of the Authority's knowledge, there is no litigation, pending or
threatened, regarding the Authority Property or challenging the validity of this Agreement.
(fl The Authority will not issue any further obligations that are payable from or
secured by the Available Tax Increment prior to the date that the Note has been paid in full, or
terminated in accordance with its terms, without the prior written consent of the Developer.
Section 2.2. Kgtations by the Develop, The Developer represents that:
(a) The Developer is a limited partnership duly organized and authorized to transact
business in the State, is not in violation of any provisions of its articles of partnership agreement
or the laws of the State, has power to enter into this Agreement and has duly authorized the
execution, delivery and performance of this Agreement by proper action of its board of general
partners.
(b) The Developer will construct the Improvements in accordance with the terms of
this Agreement and all local, state and federal laws and regulations (including, but not limited to,
6
environmental, zoning, building code and public health laws and regulations), except for
variances necessary to construct the improvements contemplated in the Construction Plans
approved by the Authority.
(c) The Developer has received no notice or communication from any local, state or
federal official that the activities of the Developer or the Authority in the Project Area may be or
will be in violation of any environmental law or regulation. The Developer is aware of no facts
the existence of which would cause it to be in violation of any local, state or federal
environmental law, regulation or review procedure. In the event that it is necessary to take any
action to obtain any necessary permits or approvals with respect to the Property under any local,
state or federal environmental law or regulation, the Developer will be responsible for taking
such action.
(d) The Developer will 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 Improvements may be
lawfully constructed.
(e) Neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of,
the terms, conditions or provisions of any restriction or any evidences of indebtedness,
agreement or instrument of whatever nature to which the Developer is now a party or by which it
is bound, or constitutes a default under any of the foregoing.
(f) The Developer will cooperate with the Authority with respect to any litigation
commenced with respect to the Project Plan, Project, or Improvements.
(g) The Developer could not and would not proceed with the construction of the
Improvements absent the financial assistance being provided by the Authority pursuant to this
Agreement.
ARTICLE III
Authori Assistance; Issuance of Note
Section 3.1. Basis for Assistance. The Authority believes that there is currently a shortage
of affordable rental housing for low and moderate income persons within the City. Therefore,
the Authority has determined that it is in the vital interests of the City and its residents that
additional affordable housing be provided and that such housing will not be provided without the
financial participation of the Authority as proposed by the Developer. In consideration of the
Developer's agreement to undertake the development of the Improvements, its agreement to
construct as a part of the Improvements certain amenities that the Authority deems necessary and
desirable, and its covenants concerning tenant incomes, the Authority is willing to cause the City
to convey the Authority Property to the Developer and to defray a portion of the Developer's
costs of construction of the Improvements through the issuance and the payment of the Note.
Section 3.2. Issuance of Note. The Authority agrees to defray a portion of the Developer's
cost of constructing the Improvements through the issuance of the Note. The costs to be
reimbursed by the Authority through the issuance of the Note are referred to herein as the
"Reimbursable Costs". The Reimbursable Costs consist of a portion of the cost of constructing
the Improvements. The issuance of the Note shall occur when the conditions set forth in Section
3.3 have been satisfied. The principal amount of the Note will be equal to the Developer's actual
Reimbursable Costs incurred and paid by the Developer, but in no event to exceed $684,250. If
the Developer's documented Reimbursable Costs for such items are less than $684,250 then the
amount of the Note shall be such lesser amount. The Note shall be in the form of the Note
attached to this Agreement as Schedule B, with all blanks properly completed. Interest at the
rate of five and one half percent (5.5%) shall accrue on the principal amount of the Note from the
date of its issuance up to February 1, 2016, and shall be added to the principal amount of the
Note on the first day of each February and August after its issuance up to and including February
1, 2016. From and ager February 1, 2016, until the Note is terminated or paid in full, simple
non -compounding interest at the rate of five and one half percent (5.5%) shall accrue with
respect to the principal amount of the Note.
Section 3.3. Conditions Precedent to Issuance of Note. Notwithstanding anything to the
contrary contained herein, the Authority's obligation to issue the Note shall be subject to
satisfaction, or waiver in writing by the Authority, of all of the following conditions precedent:
(a) the Developer shall not be in default under the terms of this Agreement;
(b) the Developer shall have closed on financing sufficient to pay all costs to be
incurred in connection with the acquisition and construction of the Improvements;
(c) the Developer shall have paid the Reimbursable Costs as described in Section 3.2 of
this Agreement and shall have provided to the Authority such documentation of
such costs as the Authority shall reasonably request; and
(d) the Developer shall have completed construction of the Improvements and the
Authority shall have completed the financial analysis provided for in Section 3.5 of
this Agreement.
Section 3.4. Payment of Administrative Costs. Except for any costs required to be paid
by the City pursuant to the Option Agreement, the Developer will reimburse the Authority for all
out-of-pocket costs incurred by the Authority in connection with review and analysis of the
development proposed under this Agreement, development of the Tax Increment Plan for the
Tax Increment District; and negotiation of this Agreement and any related agreements and
documents (collectively, the "Administrative Costs"). The Administrative Costs include fees
paid to attorneys, the Authority's financial advisor, and any planning and engineering consultants
retained by the Authority or City in connection with the construction of the Improvements. As
security for the Administrative Costs, the Developer deposited with the Authority the amount of
$10,000, and the Authority shall pay the Administrative Costs from such funds. If the total
Administrative Costs exceed $10,000, the Developer rernains responsible for such excess costs,
and must pay such costs to the Authority within 10 days after receipt of a written invoice from
the Authority describing the amount and nature of the costs to be reimbursed. After the Note has
been issued and the certificate of completion referenced in Section 4.4 has been executed and
delivered, and all the Administrative Costs related to such actions have been paid, the Authority
will refund to the Developer any portion of the balance from the $10,000 deposit (if any) that is
not needed to cover the Administrative Costs through such reimbursement date.
Notwithstauduag anything to the contrary herein, the Developer remains obligated to pay the
Administrative Costs after issuance of such certificate of completion, including the costs of any
amendments to this Agreement or to the Note.
Section 3.5. Authorijy Review of Develo Costs. The Authority's determination
to issue the Note to the Developer is based on the Developer's representations regarding its costs
of constructing the Improvements. Based on those representations the Authority has determined
that reimbursement of the Developer through the issuance of the Note for the Reimbursable
Costs is necessary to assist in making the construction and ownership of the Improvements
financially feasible. Attached to this Agreement as Schedule C is a financial pro forma provided
to the Authority by the Developer setting forth the Developer's anticipated costs associated with
the acquisition of the Property and construction of the Improvements. Within thirty (30) days
after the Developer's completion of construction of the Improvements and payment of all costs
associated with such construction, the Developer shall furnish to the Authority an updated pro
forma showing the Developer's actual costs incurred in connection with the construction of the
Improvements, together with such supporting documentation as the Authority may require. If
such updated pro forma shows that the Developer's total costs of acquiring the Property and
constructing the Improvements is less than the amount shown on the pro forma attached hereto
as Schedule C, the principal amount of the Note to be issued pursuant to Section 3.2 shall be
reduced by $.50 for each $1.00 that the Developer's actual costs are less than the amount
estimated as shown on Schedule C.
Section 3.6. Title. Submission of evidence of title to the Authority Property and
Developer's review of title shall occur in accordance with the terms of the Option Agreement..
Section 3.7. C o ' . Purchase Price. (a) Closing on the conveyance of the Authority
Property to the Developer shall occur on such date the# the conditions precedent contained in
Section 3.8 have been satisfied or waived.
(b) At the closing on the conveyance of the Authority Property the Authority shall
cause the City to deliver to the Developer: (i) a Deed duly executed and acknowledged
conveying to the Developer marketable title to the Authority Property subject only to Permitted
Encumbrances; and (ii) such other documents as are required to be delivered pursuant to the
terms of the Option Agreement.
(c) Closing costs associated with the conveyance of the Authority Property will be
allocated as provided in the Option Agreement.
(d) The purchase price to be paid by the Developer to acquire the Authority Property
shall be $304,000 and shall be payable at closing.
Section 3.8. Conditions Precedent to Conveyance of the AuthorityProperty. The
Authority's obligation to cause the City to sell and the Developer's obligation to purchase the
Authority Property shall be subject to satisfaction of the following conditions precedent:
(a) The Developer having secured financing or provided to the Authority evidence
reasonably satisfactory to the Authority of its ability to secure financing sufficient for the
acquisition of the Property and the construction of the lmprovements.
(b) The Developer having reviewed and approved, or waived any objections to, title to
the Authority Property pursuant to Section 3.6 of this Agreement.
(c) The Developer having secured the Authority's approval of the Construction Plans
and all other governmental approvals necessary to permit the construction and operation of the
Improvements.
(d) The Developer shall have acquired the Developer Property.
(e) The Developer and the City shall be in compliance with the terms of the Option
Agreement.
If all of the conditions precedent to the conveyance of the Authority Property have not
been satisfied by July 1, 2014, the Authority shall have the right to terminate this Agreement by
giving written notice of termination to the Developer, upon which this Agreement shall terminate
and the Authority and Developer shall execute an instrument in recordable form evidencing such
termination.
Section 3.9. Advance of Land,• Tax Increment Interfand Loan. (a) The City has
acquired the Authority Property and the City and the Authority have incurred certain costs to
prepare such property for redevelopment, including payment of relocation costs, environmental
remediation, demolition of buildings and site clearance. After Developer's payment of the
10
purchase price for the Authority Property there will remain unreimbursed costs incurred by the
City and the Authority in the approximate amount of $149,300 (the "City Costs"). Subject to all
the terms and conditions of this Agreement, upon the conveyance of the Authority Property to
the Developer, the City and the Authority will forego receipt of the City Costs and the City Costs
will remain outstanding. The City and the Authority shall reserve the right to collect such City
Costs through the Interfund Loan, as described in Section 3.9(b) below.
(b) The Authority will treat the amount of the City Costs as an interfund loan (the
"Interfimd Loan") within the m miing of Section 469.178, Subdivision 7 of the Tax Increment
Act. The terms of the Inwxfund Loan are described in the resolution attached as Schedule F (the
"Loan Resolution"). Until the Note has been paid in full, or terminated in accordance with its
terms, the Interfund Loan will be payable only from Tax Increment received by the Authority
that is in excess of Available Tax Increment.
Section 3.10. Status of Pg3MIoM Pro a The Developer Property consists of the real
property described as such on Schedule A attached hereto. As of the date of this Agreement, the
Developer has entered into a purchase agreement to acquire the Developer Property for
$240,000.
II
ARTICLE IV
Construction of Improvements
Section 4.1. Construction _of Improvements. The Developer agrees that it will construct
the Improvements on the Property in material accordance with the approved Construction Plans
and at all times prior to the Termination Date will operate and maintain, preseive and keep the
Improvements or cause the Improvements to be maintained, preserved and kept with the
appurtenances and every part and parcel thereof, in good repair and condition. "Material
accordance" with the Construction Plans, for purposes of this Agreement, shall mean without a
"material change" from the Construction Plans, as defined in Section 4.2(b).
Section 4.2. Construction Plans. (a) The Developer has submitted and the City and
the Authority have approved a site plan for the construction of the Improvements (the "Site
Plan"). All Construction Plans for the Improvements shall be consistent with the approved Site
Plan, The Construction Plans shall provide for the construction of the Improvements and shall
be in conformity with this Agreement, the Site Plan approved by the Authority, and all
applicable state and local laws and regulations. The Authority shall approve the Construction
Plans in writing if; in the reasonable discretion of the Authority: (i) the Construction Plans
conform to the terms and conditions of this Agreement; (ii) the Construction Plans are consistent
with the Site Plans previously submitted to the Authority; (iii) the Construction Plans conform to
all applicable federal, State and local law, ordinances, rules and regulations; (iv) the Construction
Plans are adequate to provide for the construction of the Improvements; (v) the Construction
Plans do not provide for expenditures in excess of the funds which will be available to the
Developer for the construction of the Improvements; and (vi) no Event of Default has occurred.
No approval by the Authority under this Section 4.2 shall relieve the Developer of the obligation
to comply with the terms of this Agreement or applicable federal, state and local laws,
ordinances, rules and regulations, or to construct the Improvements. No approval by the
Authority shall constitute a waiver of an Event of Default. Such Construction Plans shall, in any
event, be deemed approved unless rejected in writing by the Authority, in whole or in part. Such
rejection shall set forth in detail the reasons therefor, and shall be made within thirty (30) days
after the date of their receipt by the Authority. The provisions of this Section relating to
approval, rejection and resubmission of corrected Construction Plans shall continue to apply
until the Construction Plans have been approved by the Authority or until this Agreement is
terminated. The Authority's approval shall not be unreasonably withheld. Notwithstanding any
other provisions of this Agreement, the issuance by the City of a building permit for the Project
shall constitute the approval of the Construction Plans by the City and the Authority as provided
herein.
(b) If the Developer desires to make any material change in any Construction Plans
after their approval by the Authority, the Developer shall submit the proposed change to the
Authority for its approval. For purposes of this Agreement, a "material change" means a change
that changes the size, nature or exterior appearance of the Improvements or that reduces the
value of the Improvements. If the Construction Plans, as modified by the proposed change,
conform to the requirements of this Section 4.2 of this Agreement with respect to such
previously approved Construction Pians, the Authority shall approve the proposed change and
12
notify the Developer in writing of its approval. Any requested change in the Construction Plans
shall, in any event, be deemed approved by the Authority unless rejected, in whole or in part, by
written notice by the Authority to the Developer, setting forth in detail the reasons therefor. Such
rejection shall be made within ten (10) days after receipt of the notice of such change.
Section 4.3. Commencement and Completion of Construction. (a) Subject to
Unavoidable Delays, the Developer shall commence construction of the Improvements by
September 1, 2014, or on such other date as the parties shall mutually agree. Subject to
Unavoidable Delays, the Developer shall complete the construction of the Improvements by
December 31, 2015. All work with respect to the Improvements to be constructed or provided
by the Developer on the Property shall be in conformity with the Construction Plans as submitted
by the Developer and approved by the Authority.
(b) Until construction of the Improvements has been completed, the Developer shall
make construction progress reports, at such times as may reasonably be requested by the
Authority, but not more than once a month, as to the actual progress of the Developer with
respect to such construction.
Section 4.4. C Wfieate of Coompletim, (a) Promptly after completion of the
Improvements in accordance with those provisions of this Agreement relating solely to the
obligations of the Developer to construct the Improvements, and upon request by the Developer,
the Authority will furnish the Developer with a Certificate of Completion for the Improvements
in a form acceptable for recording in the County Recorder's Office or the Office of the Registrar
of Titles. The Certificate of Completion shall be famished to the Developer within, ten (10)
business day after request by the Developer, and shall conclusively satisfy and terminate the
agreements and covenants in this Agreement and in the Deed of the Developer, and its
successors and assigns, to construct the Improvements. Such certification and such
determination shall not constitute evidence of compliance with or satisfaction of any obligation
of the Developer to any Holder of a Mortgage, or any insurer of a Mortgage, securing money
loaned for construction of the Minimum Improvements, or any part thereof.
(b) If the Authority shall refuse or fail to provide a Certificate of Completion in
accordance with the provisions of this Section 4.4 of this Agreement, the Authority shall, within
ten (10) business day after written request by the Developer for the Certificate of Completion,
provide the Developer with a written statement, indicating in adequate detail in what respects the
Developer has failed to complete the Improvements in accordance with the provisions of this
Agreement and what measures or acts will be necessary, in the opinion of the Authority, for the
Developer to take or perform in order to obtain the Certificate of Completion.
(c) The construction of the Improvements shall be deemed to be completed when the
City has issued a final certificate of occupancy for the Improvements (or when the Developer
would be entitled to a certificate of occupancy if it requested one), and when all conditions
imposed in connection with the City's approval of the Developer's development, including the
establishment of any completion escrow, if necessary, have been satisfied.
13
Section 4.5. Management of Improvements. The Developer shall at all times either
self -manage (upon submission of evidence of experience in operating multifamily residential
developments) or engage Steven Scott Management or another property management company
with substantial experience in operating multifamily residential developments, subject to approval
by the Authority, which approval will not be unreasonably withheld. The Developer will submit
evidence of such management by February 1, 2016.
Section 4.6. Plavaround. The Developer shall construct the playground portion of the
Improvements (the "Playground") in conformity with the planned unit development approved by
the City for the Property and Improvements and the approved Site Plan for the use and
enjoyment of residents and invitees of the Improvements. The Playground shall incorporate
amenities described in Developer's site plan approved by the City. The parties agree and
understand that the Developer shall be responsible for the cost of the maintenance and operation
of the Playground.
14
ARTICLE V
Insurance and Condemnation
Section 5.1. Insurance.
(a) The Developer will provide and maintain at all times during the process of
constructing the improvements and, from time to time at the request of the Authority, furnish the
Authority with proof of payment of premiums on:
(i) Builder's risk insurance, written on the so-called "Builder's Risk --
Completed Value Basis," in an amount equal to one hundred percent (10011/o) of the
insurable value of the Improvements at the date of completion, and with coverage available
in nonreporting form on the so called "all risk" form of policy;
(ii) Comprehensive general liability insurance (including operations, contingent
liability, operations of subcontractors, completed operations, Broadening Endorsement
including contractual liability insurance) together with an Owner's Contractor's Policy with
limits against bodily injury and property damage of not less than $2,000,000 for each
occurrence (to accomplish the above -required limits, an umbrella excess liability policy
may be used); and
(iii) Worker's compensation insurance, with statutory coverage and employer's
liability protection.
The policies of insurance required pursuant to clauses (i) and (ii) above shall be in form and
content satisfactory to the Authority and shall be placed with financially sound and reputable
insurers licensed to transact business in the State, the liability insurer to be rated A or better in
Best's Insurance Guide. The policy of insurance delivered pursuant to clause (i) above shall
contain an agreement of the insurer to give not less than thirty (30) days' advance written notice
to the Authority ' in the event of cancellation of such policy or change affecting the coverage
thereunder.
(b) Upon completion of construction of the Improvements and prior to the Termination
Date, the Developer shall maintain, or cause to be maintained, at its cost and expense, and from
time to time at the request of the Authority shall furnish proof of the payment of premiums on,
insurance as follows:
(i) Insurance against loss and/or damage to the Improvements under a policy or
policies covering such risks as are ordinarily insured against by similar businesses,
including (without limiting the generality of the foregoing) fire, extended coverage, all risk
vandalism and malicious mischief, boiler explosion, water damage, demolition cost, debris
removal, and collapse in an amount not less than the full insurable replacement value of the
Improvements, but any such policy may have a deductible amount of not more than
$10,000. No policy of insurance shall be so written that the proceeds thereof will produce
less than the minimum coverage required by the preceding sentence, by reason of co -
15
insurance provisions or otherwise, without the prior consent thereto in writing by the
Authority. The term "full insurable replacement value" shall mean the actual replacement
cost of the Improvements (excluding foundation and excavation costs and costs of
underground flues, pipes, drains and other uninsurable items) and equipment, and shall be
determined from time to time at the request of the Authority, but not more frequently than
once every three years, by an insurance consultant or insurer, selected and paid for by the
Developer and approved by the Authority.
(ii) Comprehensive general public liability insurance, including personal injury
liability (with employee exclusion deleted), and automobile insurance, including owned,
non -owned and hired automobiles, against liability for injuries to persons and/or property,
in the minimum amount for each occurrence and for each year of $2,000,000.00.
(iii) Such other insurance, including worker's compensation insurance respecting
all employees of the Developer, if any, in such amount as is • customarily carried by like
organizations engaged in like activities of comparable size and liability exposure; provided
that the Developer may be self-insured with respect to all or any part of its liability for
worker's compensation.
(c) All insurance required in Article V of this Agreement shall be taken out and
maintained in responsible insurance companies selected by the Developer which are authorized
under the laws of the State to assume the risks covered thereby.
(d) The Developer agrees to notify the Authority imamedudely in the case of damage
exceeding $100,000 in amount to, or destruction of, the Improvements or any portion thereof
resulting from fire or other casualty. In the event of any such damage, the Developer will
forthwith repair, reconstruct and restore the Improvements to substantially the same or an
improved condition or value as existed prior to the event causing such damage and, to the extent
necessary to accomplish such repair, reconstruction and restoration, but subject to the rights of
Developer's lenders, the Developer will apply the proceeds of any insurance relating to such
damage received by the Developer to the payment or reimbursement of the costs thereof.
The Developer shall complete the repair, reconstruction and restoration of the Improvements,
whether or not the Net Proceeds of insurance received by the Developer for such purposes are
sufficient to pay for the same. Any proceeds remaining after completion of such repairs,
construction and restoration shall be retained by the Developer.
If the Developer fails to fulfill its obligations to repair, reconstruct and restore the Improvements
within a reasonable time after the occurrence of the damage, the Authority shall be entitled, as its
only remedy on account thereof, to terminate the Note.
Section 5.2. Condemnation. In the event that title to and possession of the Improvements or
any material part thereof shall be taken in condemnation or by the exercise of the power of
eminent domain by any governmental body or other person prior to the Termination Date, the
Developer shall, with reasonable promptness after such taking, notify the Authority as to the
nature and extent of such taking. Upon receipt of any condemnation award, but subject to the
I6
rights of Developer's lenders, the Developer shall elect to either: (a) use the entire condemnation
award to reconstruct the Improvements (or, in the event only a part of Improvements have been
taken, then to reconstruct such part) within the Project Area; or (b) retain the condemnation
award whereupon in the event that a substantial portion of the Property and Improvements have
been taken, the Authority's obligations under the Note shall terminate as of the date of the taking.
17
ARTICLE VI
Taxes; Tax Increment; Assessment Acreement
Section 6.1.. Real Propefiy Taxes. The Developer sball pay or cause to be paid when due
and prior to the imposition of penalty all real property taxes and installments of special
assessments payable with respect to the Property after the Developer aoquires the Property. In
addition, the Developer agrees that prior to the Termination Date: (1) it will not seek
administrative or judicial review of the applicability of any tax statute determined by any Tax
Official to be applicable to the Improvements or the Property or raise the inapplicability of any
such tax statute as a defense in any proceedings, including delinquent tax proceedings; (2) it will
not seek administrative or judicial review of the constitutionality of any tax statute determined by
any tax official to be applicable to the Improvements or the Property or raise the
unconstitutionality of any such tax statute as a defense in any proceedings, including delinquent
tax proceedings; and (3) it will not cause a reduction in the Minimum Market Value of the
Improvements through--
(a)
hrough:
(a) willful destruction of the Improvements or any part thereof;
(b) willful refusal to reconstruct damaged or destroyed property pursuant to
Section 5.1(d) of this Agreement;
(c) a request to the County assessor to reduce the assessed value of the Property
below the Minimum Market Value of all or any portion of the Property or Improvements;
(d) a petition to the board of equalization of the County to reduce the assessed value
of the Property below the Minimum Market Value;
(e) a petition to the board of equalization of the State or the commissioner of revenue
of the State to reduce the assessed value of the Property below the Minimum Market Value;
(fl an action in a. district court of the State or the tax court of the State seeking a
reduction in the assessed value of the Property below the Minimum Market Value;
(g) an application to the commissioner of revenue of the State or to any local taxing
jurisdiction requesting an abatement of real property taxes regarding the Property or
Improvements;
(h) any other proceedings, whether administrative, legal or equitable, with any
administrative body within the County or the State or with any court of the State or the federal
government regarding a reduction in the assessed value of the Property below the Minimum
Market Value; or
(i) a transfer of the Property or Improvements, or any part thereof, to an entity
exempt from the payment of real property taxes under State law.
19
Notwithstanding anything contained in this Section 6.1 or elsewhere in taus Agreement to the
contrary, the Developer may contest real property taxes assessed in excess of the Minimum
Market Value of the Improvements. The Developer shall notify the City and Authority of any
administrative or judicial review affecting the Improvements or the Property. In such event, the
Authority will continue to make payments under the Note to the Developer based upon the value
stated in the Assessment Agreement, with any additional Tax Increment available for payment
being withheld from Developer until such time that the administrative or judicial review
affecting the Improvements or the Property is finally determined. The Developer shall not, prior
to the Termination Date, apply to any taxing jurisdiction for a deferral or abatement of property
tax on the Property or improvements.
The parties hereto acknowledge that Developer intends to apply to have the Property
certified as low-income rental housing property as described in Minnesota Statutes, Section
273.13, Subdivision 25(e). Nothing set forth in this Agreement shall restrict Developer from
applying to have the Property certified as low-income rental housing property as described in
Minnesota Statutes, Section 273.13, Subdivision 25(e).
Section 6.2. Tax Increment. Subject to the limitations contained in the Note, the Authority
hereby pledges to the payment of the Note the Available Tax Increment. Tax Increment received
by the Authority in excess of Available Tax increment shall be the Authority's property and, the
Authority shall be free to use such excess Tax Increment for any purpose for which such Tax
Increment may be used under the Tax Increment Act.
Section 6.3. Developer's R resentatxons Concernin Note. The Developer makes the
following representations to the Authority with respect to the issuance of the Note:
(a) The Developer has not relied on, any representations of the Authority, or any of its
officers, agents, or employees, and has not relied on any opinion of any attorney of the
Authority, as to the federal or State income tax consequences relating to the ownership of the
Note by the Developer.
(b) The Developer is sufficiently knowledgeable and experienced in financial and
business matters, including the purchase and ownership of obligations of a nature similar to the
Note, to be able to evaluate the risks and merits of the purchase and ownership of the Note. The
Developer has been made aware of the security for the Note and the proposed uses of the
proceeds of the Note, and has received the cooperation of the Authority in undertaking any due
diligence that the Developer has deemed necessary or appropriate.
(c) The Developer understands that the portion of the Tax Increment pledged to the
payment of the Note pursuant to this Agreement is the sole source of money that is pledged and
will be available for the payments due under the Note; that the Authority is not under any
obligation to repurchase the Note from the Developer under any circumstances; that the Note is
not a general obligation of the Authority; and that, if the Tax Increment pledged to the payment
of the Note pursuant to this Agreement is not sufficient to make the payments due under the Note
in full, no right will exist to have taxes levied by the Authority or the City for the payment of the
unpaid amounts due under the Note.
19
(d) The Developer understands that the Tax Increment necessary to pay the Note has
been estimated assuming that the Improvements will have certain market values on certain dates.
All estimates of Tax Increment that have been prepared by or on behalf of the Authority have
been done for the Authority's use only and neither the Authority nor its consultants shall have
liability to the Developer if the actual Tax Inurement is less than the amounts estimated. In the
event, among other things, the Developer fails to complete the Improvements in a timely manner
or the market value of the improvements does not reach certain levels, the Tax Increment
pledged to the payment of the Note may be inadequate to pay the total principal of and interest
on the Note.
(e) The Developer understands that the Note is not registered or otherwise qualified
for sale or transfer under the securities laws and regulations of the State or under federal
securities laws or regulations, the Note is not listed on any stock or other securities exchange,
and the Note will carry no rating from any gating service.
Except as provided herein, the Note may not be transferred to any third party without the
prior written approval of the Authority. The Authority hereby approves the transfer of the Note
by the Developer to the Minnesota Housing Finance Agency CWHFA") as part of the permanent
financing for the Project. Any transferee of a Note shall be required to execute an instrument
making the representations to the Authority contained in this Section; provided, that such
requirement shall not apply to a transfer or assignment of the Note to the N1HFA.
Section 6.4. Income Restrictions. (a) The Authority and the Developer understand
and agree that the Tax Increment District is a "housing district" under Section 469.174, Subd. 11
of the Tax Increment Act. Accordingly, in compliance with Section 469.1761, Subd. 3 of the
Tax Increment Act, the Developer agrees that the Improvements must satisfy, or be treated as
satisfying, the income requirements for a qualified residential rental project as defined in Section
142(d) of the Internal Revenue Code. The parties further agree that no more than 20% of the
square footage of the Improvements (which is the only building receiving assistance from Tax
Increments) may consist of commercial, retail, or other nonresidential uses. The Developer must
meet the above requirements as follows:
(i) At least 40% of the residential units in the Improvements must be
occupied or available for occupancy by persons whose incomes do not exceed
60% of the County area median income; and
(ii) The limits described in clause (A) must be satisfied through the
Termination Date. Income for occupants of units described in clause (A) shall be
adjusted for family size in accordance with Section 142(d) of the Internal
Revenue Code and related regulations.
(b) On or before each January 1, commencing on January 1, 2016, the Developer or
an agent of the Developer must deliver or cause to be delivered to the Authority a Compliance
Certificate executed by the Developer covering the preceding six months together with written
evidence satisfactory to the Authority of compliance with the covenants in this Section. This
evidence must include a statement of the household income of each of qualifying renter, a.
20
written determination that each qualifying renter's household income talcs within the qualifying
limits of this Section (and Section 142(d) of the Internal Revenue Code), and certification that
the income documentation is correct and accurate (and that the determination of qualification
was made in compliance with Section 142(d) of the Internal Revenue Code). The Authority may
review, upon request, all documentation supporting the Developer submissions and statements.
In detaining compliance with this Section, the Developer must use the County median
incomes for the year in which the payment is due on the Note, as promulgated by the Minnesota
Housing Finance Agency based on the area median incomes established by the United States
Department of Housing and Urban Development.
(c) In the event that there occurs a failure on the part of the Developer to comply with
the restrictions contained in the Tax Increment Act or this Section 6.4 that results in liability on
the part of the Authority or City for repayment of Tax Increment or penalties, the Developer
shall be liable to the Authority and on demand shall pay to the Authority the amount of any
liability. Without limiting any other remedy available to the Authority, the Authority shall be
entitled to specifically enforce the Developer's covenants under this Section.
(d) The income restrictions contained in this Section 6.4 shall apply to the
Improvements until the Termination Date, notwithstanding the earlier termination of this
Agreement or the Note.
Section 6.5. Assessment Agreement
(a) Upon commencement of construction of the improvements, the Developer shall,
with the Authority, execute an Assessment Agreement pursuant to Minnesota Statutes, Section
469.177, subd. 8, specifying an assessor's Minimum Market Value for the Improvements. The
amount of the minimum Market Value of the Improvements shall be $5,916,000 as of January 2,
2016 and each January 2 thereafter, notwithstanding the status of construction by such dates.
(b) The Assessment Agreement shall be substantially in the form attached as Schedule
D. Nothing m the Assessment Agreements shall limit the discretion of the assessor to assign a
market value to the property in excess of such Minimum Market Value. The Assessment
Agreement shall remain in force for the period specified in the Assessment Agreement
21
ARTICLE VII
Mortgage Financing
Section 7.1. Morge Financingy. On or before June 1, 2014, the Developer shall provide
to the Authority evidence of a commitment for mortgage financing sufficient for construction of
the Improvements. If the Authority finds that the mortgage financing is sufficiently committed,
adequate in amount to provide for the construction of the Improvements, and subject only to such
conditions as the Authority approves, then the Authority shall notify the Developer in writing of
its approval. Such approval shall not be unreasonably withheld and either approval or rejection
shall be given within fourteen (14) days from the date when the Authority is provided the
evidence of mortgage financing. The issuance of a building permit for the Improvements by the
City shall be deemed to evidence the Authority's approval under this Section. If the Authority
rejects the evidence of mortgage financing as inadequate, it shall do so in writing specifying the
basis for the rejection. In any event, the Developer shall submit adequate evidence of mortgage
financing within thirty (30) days after such rejection.
Notwithstanding the foregoing, the Authority acknowledges receipt from the Developer of
the commitment for mortgage financing as described above and acknowledges that such
commitment has been approved by the Authority.
22
ARTICLE VIII
Prohibitions Azainst Asskument and Transfer Indemnification
Section 8.1. Prohibition Against Transfer of Prop_ . and Assignment of Agreement. The
Developer represents and agrees that the Developer has not made or created and, prior to the
Termination Date, 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 Property or any part thereof or any interest
herein or therein, or any contract or agreement to do any of the same, other than to residential
tenants in the ordinary course of business, without the prior written approval of the Authority,
which approval shall not be unreasonably withheld or delayed. Notwithstanding the foregoing,
the Developer may transfer the Property and assign its interest in this Agreement to an entity
affiliated with the Developer or the Developer's owners provided that such new entity executes
an instrument in a form acceptable to the Authority by which it assumes and agrees to perform
the Developer's obligations under this Agreement. No such assignment or transfer shall relieve
the Developer of any liability under this Agreement unless the Authority in writing specifically
releases the Developer. A transfer of partnership interests in the Developer shall not be
considered a transfer of the Property hereunder.
Section 8.2. el and Indenmificafi n Cov
(a) The Developer releases from and covenants and agrees that the Authority, the City
and the governing body members, officers, agents, servants and employees thereof shall not be
liable for and agrees to indemnify and hold harmless the Authority, the City, and the governing
body members, officers, agents, servants and employees thereof against any loss or damage to
property or any injury to or death of any person occurring at or about or resulting from any
defect in the Improvements, provided that the foregoing indemnification obligation shall not
apply to damages resulting from any actions or inactions of any of the foregoing parties that are
not contemplated by this Agreement.
(b) Except for any willful misrepresentation, any willful or wanton misconduct or
gross negligence of the following named parties, the Developer agrees to protect and defend the
Authority, the City, and the governing body members, officers, agents, servants and employees
thereof, now or forever, and further agrees to hold the aforesaid harmless from any claim,
demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising
or purportedly arising from this Agreement, or the transactions contemplated hereby or the
acquisition, construction, installation, ownership, and operation of the Improvements.
(c) The Authority, the City, and the - governing body members, officers, agents,
servants and employees thereof shall not be liable for any damage or injury to the persons or
property of the company or its officers, agents, servants or employees or any other person who
may be about the Property or Improvements due to any act of negligence of any person.
(d) All covenants, stipulations, promises, agreements and obligations of the Authority
contained herein shall be deemed to be the covenants, stipulations, promises, agreements and
23
obligations of the Authority and not of any governing' body member, officer, agent, servant or
employee of the Authority in the individual capacity thereof.
(e) Nothing in this Section or Section 8.3 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 Stwdes Sections 466.04 and 604.02.
Section 8.3. Environmental Conditions. (a) The Developer acknowledges that the
Authority makes no representations or warranties as to the condition of the soils of the Property
or the fitness of the Property for construction of the Minimum Improvements or any other
purpose for which the Developer may make use of such property, and that the assistance
provided to the Developer under this Agreement neither implies any responsibility by the
Authority for any contamination of the Property nor imposes any obligation on the Authority to
participate in any cleanup of the Property. The City has made certain representations and has
agreed to certain obligations in the Option Agreement.
(b) Without limiting its obligations under Section 8.2 of this Agreement, the
Developer further agrees that, except for any misrepresentation or any misconduct or affirmative
act by the Authority or the City and except for any breach by the Authority of its obligations
under this Agreement and except for the City's obligations with respect to the environmental
condition of the Property as provided in the Option Agreement, the Developer 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 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;
provided, however, that such indemnification obligations do not apply to costs for which the City
is responsible under the teras of the Option Agreement. 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.
24
ARTICLE IX
Events of Default
Section 9.1. Events of Default Defined. The term "Event of Default" shall mean, whenever
it is used in this Agreement (unless the context otherwise provides):
(a) any failure by Developer to observe or perform any covenant, condition, obligation
or agreement on its part to be observed or performed hereunder; or
(b) if, before issuance of the certificate of completion for the improvements, the
Developer 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 or under any similar federal or State law, which action is not
dismissed within sixty (60) days alter filing; or
[11
(ii) make an assignment for benefit of its creditors; or
(iii) admit in writing its inability to pay its debts generally as they become due;
(iv) be adjudicated a bankrupt or insolvent.
Section 9.2. Authority's Remedies an Default: Whenever any Event of Default by
Developer referred to in Section 9.1 of this Agreement occurs, the Authority may immediately
suspend its performance under this Agreement and/or the Note until it receives assurances from
the Developer, deemed adequate by the Authority, that the Developer will cure its default and
continue its performance under this Agreement and may take any one or more of the following
actions after providing thirty (30) days written notice to the Developer of the Event of Default,
but only if the Event of Default has not been cured within said thirty (30) days, or such longer
period of time as the Authority may reasonably determine if the Event of Default is of a nature
that it cannot be cured in thirty (30) days:
(a) Terminate this Agreement and/or the Note.
(b) Take whatever action, including legal, equitable or administrative action, which
may appear necessary or desirable to the Authority to collect any payments due under this
Agreement, or to enforce performance and observance of any obligation, agreement, or covenant
of the Developer under this Agreement.
Developer's investor limited partner ("Investor Limited Partner") shall have the right, but not the
obligation, to cure any Event of Default by Developer under this Agreement or any default under
any other document to be executed in connection herewith, and Authority shall accept
performance by Investor Limited Partner of any obligation of Developer thereunder as though
25
tendered by Developer itself, provided such performance by Investor Limited Partner has
occurred during the applicable cure period, if any, provided to Developer thereunder with respect
to such default or Event Of Default.
Section 9.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the
Authority or Developer 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. In order to entitle
the Authority or the Developer to exercise any remedy reserved to it, it shall not be necessary to
give notice, other than such notice as may be required in this Article IX.
Section 9.4. No Additional Waiver Implied by One Waiver. In the event any agreement
contained in this Agreement should be breached by either party and thereafter waived by the
other party, such waiver shall be limited to the particular breach so waived and shall not be
deemed to waive any other concurrent, previous or subsequent breach hereunder.
Section 9.5. Costs of Enforcement. 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 of performance or observance of any obligation or agreement
on the part of the Developer under this Agreement, the Developer agrees that it shall be liable for
the reasonable fees of such attorneys and such other expenses so reasonably incurred by the
Authority.
Section 9.6 The Deveio er's Option to Terminate. This Agreement may be terminated
by Developer, if (i) the Developer is in compliance with all material terms of this Agreement and
no Event of Default has occurred; and (ii) the Authority fails to comply with any material term of
this Agreement, and, after written notice by the Developer of such failure, the Authority has
failed to cure such noncompliance within ninety (90) days of receipt of such notice, or, if such
noncompliance cannot reasonably be cured by the Authority within ninety (90) days, of receipt
of such notice, the Authority has not provided assurances, treasonably satisfactory to the
Developer, that such noncompliance will be cured as soon as reasonably possible.
Section 9.7 Action to Terminate. Termination of this Agreement pursuant to Section
9.6 must be accomplished by written notification by the Developer to the Authority within thirty
(30) days after the date when such option to terminate may first be exercised. A failure by the
Developer to terminate this Agreement within such period constitutes a waiver by the Developer
of its rights to terminate this Agreement due to such occurrence or event.
Section 9.8 Effect of Termination. If this Agreement is terminated pursuant to
Sections 9.6 and 9.7, this Agreement shall be from such date forward null and void and of no
further effect; provided, however, the termination of this Agreement shall not affect the rights of
either party to institute any action, claim or demand for damages suffered as a result of breach or
default of the terms of this Agreement by the other party, or to recover amounts which had
26
accrued and become due and payable as of the date of such termination. Upon termination of this
Agreement pursuant to Sections 9.6 and 9.7, the Developer shall be free to proceed with the
Project at its own expense and without regard to the provisions of this Agreement; provided.,
however, that the Authority shall not be required to make any further payments on the Note.
27
ARTICLE X
Additional Provisions
Section 10.1. Representatives Not Individnally Liable. No member, official, or employee
of the Authority shall be personally liable to the Developer, or any successor in interest, in the
event of any default or breach or for any amount which may become due to Developer or
successor or on any obligations under the terms of the Agreement.
Section 10.2. Restrictions on Use. The Developer agrees for itself, and its successors and
assigns, and every successor in interest to the Property, or any part thereof, that the Developer,
and such successors and assigns, shall until the Termination Date devote the Property to, and
only to and in accordance with, the uses specified in this Agreement.
Section 10.3. Titles of Articles and Sections. Any titles of the several parts, Articles, and
Sections of the Agreement are inserted for convenience of reference only and shall be
disregarded in construing or interpreting any of its provisions.
Section 10.4. Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand, or other communication under the Agreement by either party to
the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail,
postage prepaid, return receipt requested, or delivered personally; and
(a) in the case of the Developer, is addressed to or delivered personally to the
Developer at 7500 West 78* Street, Edina, Minnesota 55439, with copies to:
Winthrop & Weinstine, P.A.
Capella Tower, Suite 3500
225 South Sixth Street
Minneapolis, MN 55402
Attn: Jeffrey Koerselman
And so long as any affiliates of Wells Fargo Bank, N.A. owns a partnership interest in
Developer, to:
Wells Fargo Affordable Housing
Community Development Corporation
MAC D1053-170
301 South College Street, 17th Floor
Charlotte, NC 28202.6000
Attention: Director of Asset Management; and
(b) in tue case of the Authority, is addressed to or delivered personally to the Authority
at City Hall, 4401 Xylon Avenue North, New Hope, Minnesota 55428.
Or at such other address with respect to either such party as that party may, from time to time,
designate in writing and forward to the other as provided in this Section.
28
Section 10.5. Disclaimer of Relationships. Nothing contained in this Agreement nor any
act by the Authority or the Developer shall be deemed or construed by any person to create any
relationship of third -party beneficiary, principal and agent, limited or general partner, or joint
venture among the Authority, the Developer, and/or any third party.
Section 10.6. Modifications. This Agreement may be modified solely through written
amendments hereto executed by the Developer and the Authority.
Section 10.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section 10.8. Judicial laIg retation. Should any provision of this Agreement require
judicial interpretation, the count interpreting or construing the same shall not apply a presumption
that the terms hereof shall be more strictly construed against one party by reason of the rule of
construction that a document is to be construed more strictly against the party who itself or
through its agent or attorney prepared the same, it being agreed that the agents and attorneys of
both parties have participated in the preparation hereof.
Section 10.9. Business Subsid Act Because the Authority's assistance to the
Developer's development is being made available for the purpose of encouraging the
development of housing, the assistance does not constitute a business subsidy within the meaning
of Minnesota Statutes, sections 116J.993 to 116J.995.
Section 10.10 Termination. This Agreement shall be null and void on the Termination
Date, provided, that Sections 8.2 and 8.3 shall survive any rescission, termination or expiration
of this Agreement with respect to or arising out of any event, occurrence or circumstance
existing prior to the date thereof.
29
IN WITNESS WHEREOF, the Authority has caused this Agreement to be duty executed
in its name and behalf and the Developer has caused this Agreement to be duly executed in its
name and behalf on or as of the date fust above written.
1' 1) W1.6 1
i 1 1 1'
•
COMPASS POINTE LEWMD
PARTNERSHIP
By Compass Pointe, LLC, its General Partner
By Ronald Clark, its Chief Manager
STATE OF MINNESOTA )
) SS.
COUNTY OF
TheVeffoling ' ent was aced Fore ejthisjday of2014, by1 = and ,1�IL, �pl the President and Executive
Director of the New Hope Economic Development Authority, a public body politic and
corporate, on behalf of the authority.
Notary Public
STEVEN A. SONDRALL
STATE OF ll9QNNESOTA) ''' ! Notary €'uN:c-Minnesota
SS. '
�.... �; td'v CMnmiss,on E B.aa 31 dU5
COUNTY OF
The foregoing instrument was acknowledged before me this day
of , 2014, by Ronald Clark, the Chief Manager of Compass Pointe, LLC, a
Minnesota limited liability company, the general partner of of Compass Pointe Limited
Partnership, a Minnesota limited partnership, on behalf of the limited partnership.
Notary Public
30
IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed
in its name and behalf and the Developer has caused this Agreement to be duly executed in its
name and behalf on or as of the date first above written.
NEW HOPE ECONOMIC
DEVELOPMENT AUTHORITY
COMPASS POINTE LIMITED
PARTNERSHIP
By Co pass Pointe, LLC, its Genegil Partner
&Z4�:4 e N'*- A0
By Ronald Clark, its Chief Manager
STATE OF MINNESOTA )
) SS.
COUNTY OF ]
The foregoing instrument was acknowledged before me this day of
2014, by and 'the President and Executive
Director of the New Hope Economic Development Authority, a public body politic and
corporate, on behalf of the authority.
STATE OF MINNESOTA )
) SS.
COUNTY OF 4! v"
Notary Public
SARAN MARY D"LO"
Notary PWft-M1nnmW
* Oon mn E00Jas 37, 2M7
The foregoing instrument was acknowledged before me this P-� day
of ajA , 2014, by Ronald Clark, the Chief Manager of Compass Pointe, LLC, a
Minnesota limited liability company, the general partner of of Compass Pointe Limited
Partnership, a Minnesota limited partnership, on behalf of the limited partnership_
Notar` Public
30
SCHEDULE A
Description of Property
Authority Property:
Outlot 1, Mork -Campion Heights, Hennepin County, Minnesota (Torrens Property
Torrens Certificate No.1330260)
The East 75 Feet of Oudot 2, Mork -Campion Heights as measured at a right angle from the East
lime thereof, Hennepin County, Minnesota
The West 75 Feet of the East 150 feet of Oudot 2, Mork -Campion Heights as measured at a right
angle from the East line thereof, Hennepin County, Minnesota
The West 75 Feet of the East 225 feet of Outlot 2, Mork -Campion Heights as measured at a right
angle from the East line thereof, Hennepin County, Minnesota
Developer Property:
The West 75 feet of the East 300 feet of Outlot 2, Mork -Campion Heights, Hennepin County
Minnesota, according to the recorded plat thereof as measured at a right angle from the East litre
thereof
The Developer Property and the Authority Property will be platted as Lot 1, Block 1,
Compass Pointe, Hennepin County, Minnesota.
SCHEDULE B
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY
TAXABLE LIMITED REVENUE TAX INCREMENT NOTE
(COMPASS POINTE LIMITED PARTNERSHIP)
The New Hope Economic Development Authority (the "Authority"), hereby acknowledges
itself to be indebted and, for value received, promises to pay to the order of Compass Pointe
Limited Partnership, a Minnesota limited partnership, or its permitted assigns (the "Owner"),
solely from the source, to the extent and in the manner hereinafter provided, the principal amount
of this Note, being Six Hundred Eighty Four Thousand Two Hundred Fifty Five Dollars
($684,255.00) (the "Principal Amount"), commencing on August 1, 2016, and continuing on
each February 1 and August 1 thereafter up to and including February 1, 2042 (the "Scheduled
Payment Dates"). Interest at the rate of five and one half percent (5.5%) per annum shall accrue
from the date of this Note on the Principal Amount and shall be added to the Principal Amount
on each February 1 and August 1 up to and including February 1, 2016. From and after February
1, 2016, simple non -compounding interest at the rate of five and one half percent (5.5%) shall
accrue on the outstanding Principal Amount until this Note has been paid in full or terminated in
accordance with its terms. This Note is the Note defined in that certain Purchase and
Development Agreement dated as of , 2014, between the Authority and the Owner (the
"Contract").
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 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 capital and administrative costs incurred and to be incurred by the Authority
within and for the benefit of its Redevelopment Project No. 1 (the "Project").
THIS NOTE IS A SPECIAL AND LIMITED AND NOT A GENERAL
OBLIGATION OF THE AUTHORITY PAYABLE SOLELY OUT OF AVAILABLE TAX
INCREMENT, AS DEFINED BELOW, AND NEITHER THE STATE, THE CITY OF
NEW HOPE, NOR ANY POLITICAL SUBDIVISION OF THE STATE, SHALL BE
LIABLE ON THIS NOTE, NOR SHALL THIS NOTE BE PAYABLE OUT OF ANY
FUNDS OR PROPERTIES OTHER THAN AVAILABLE TAX INCREMENT.
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 in the six (6) month
period preceding such Scheduled Payment Date "Available Talc Increment" _ For purposes of this
Note, Available Tax Increment with respect to any Scheduled Payment Date shall mean ninety
percent (90%) of the Tax Increment, as defined in the Contract, that has been received by the
Authority in the six (b) month period preceding a Scheduled Payment Date. Available Tax
Increment constitutes a portion of the real property taxes paid with respect to that certain real
property described on the attached Exhibit A (hereinafter referred to as the "Property'').
The Authority shall pay on each Scheduled Payment Date to the Owner the lesser of (i)
the Available Tax Increment; or (ii) the amount remaining ining to be paid under this Note. On the
earlier of (i) the date that this Note has been paid in full; or (ii) February 1, 2042, which is the
last Scheduled Payment Date, after making the payment due -on such date, the Authority's
payment obligations under this Note shall terminate and this Note shall no longer be an
obligation of the Authority. All payments made by the Authority shall be applied first to accrued
interest and then to the Principal Amount of this Note. The Authority may, at its option, prepay
this Note in whole or in part at any time at a price of the outstanding Principal Amount plus
accrued and unpaid interest.
The Authority's obligations herein are subject to the terms and conditions of the Contract.
Upon the occurrence of an Event of Default as provided in Section 9.1 of the Contract, which
Contract is incorporated herein and made a part hereof by reference, the Authority's payment
obligations hereunder shall be suspended and, upon expiration of all applicable cure periods
provided for in Section 9.2 of the Contract, this Note may be terminated by the Authority. Upon
such termination, the Authority's obligations to make further payments hereunder shall be
discharged. Such termination may be accomplished by the Authority's giving of written notice
to the then registered owner of this Note, as shown on the books of the Authority.
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 Available Tax Increment, 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.
This Note shall not be transferable or assignable, in whole or in part, by the Owner
without the prior written consent of the Authority, which consent shall not be unreasonably
withheld. This Note is issued pursuant to Resolution of the Authority and is entitled to the
benefits thereof, which resolution is incorporated herein by reference.
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 WTTNESS WHEREOF, the New Hope Economic Development Authority, by its
Board of Commissioners, has caused this Note to be executed by the manual signatures of the
_ and the ^y of the Authority and has caused this Note to be dated
24
EXHIBIT A TO NOTE
Description of Property
Lot 1, Block 1, Compass Pointe, acccordmg to the recorded plat thereof, Hennepin County,
Minnesota.
Hennepin County, Minnesota
Abstract Property
Torrens Certificate No.
SCHEDULE C
Developer Pro forina
6150=14
J EHLERS
4 •4eeer41e7 leo
CRY of mm Hops.
Ron Clark DeWopment
BB Und Tax Cmft Apa7Dwnr
..
%OF TOTAL
SOFMARLE --
TWA1!'
D VUWER FIMMCM-1stmor"ge
15.70%154M
1,073,060
RFW JX N6-TIFLM
040%
33M
054.000
AX CFEW ED65TY
761/%
70.17%
10,106,/04
7216%
4,777206
000%
AAI%IWF FWAN6m
ON"%
D 00%
14,TM,S®
DdwnidbwmbpwFm
000%
161p10
000%
125%
000%
TOTAL 8Ot111fb
180AM
060%
1
00
Lok
Amussrnn07
Reberon
Leen Buy Out
ONSTRIM" COSTS
Buiigd.�rq hr400�ra
Pr.1reN
BACJ WACJIIIt C SACA7AC
Prk DKNelm
emidwe Pmm
comnemay
Fae4n
Cir EsOsys
SOFT COWS
PROFESSICKAL BEAMRRS:B
ArshdodumL Ta 91 Q S PF kIW el Fees
SM A Perls Deaeekn6
Eads
EA1'6A1011616111
G—W
FF/B
R%dM R.r..dr
NnkWW
Appnse6Y
Oastc rbik m
Lapd-Derdi-
FROtMOn COSTS
twuaroe Fie
Tse knufRtae
1. = d, L"d
/oed COW"
TR04ee
mg"elispsh.I Tes
DON Sonde Reewue
kdfleel Dum pCwmbudOna
F4v"Fee
Eumm
WHO Cm
Tommmmm
MWANWLOM
ACCRM lXlWSSS
REAL ESTATE TA700
COR7810940Y-4%
PROASCr YANAe Dfr
Denlopw Fee
CA/RACCOLMS
Ree14nA Enl F11111
Dpendup Rnwwe
61om8emse Stwtrq
Teu1 SSS Com
$"a
421%
544AN
a D0%
6
0
0
a
6167,134
7216%
4,777206
000%
0
D 00%
0
rA
000%
0
000%
0
000%
0
060%
o
000%
o
a 00%
a
0
D 00%
0
660%
78aa75
a 00%
0
DAM
0
000%
0
000%
0
Sao%
o
.OW
a
aa0s
a
Sae%
a
060%
0
0
503%
040,070
0 12%
15.000
0
0
a
coos
0
0
1
0
0
0
a m%
1
0
0
0
0
0
0
071%
1153.00
a
a
285%
900.010
0
:1
fAWAM
400.00
3Aapra I
Page 1 of 1
Anpned ey W 1 OR Anmbpm 470-14- FINM for PA
SCHEDULE D
Assessment Agreement
ASSESSMENT AGREEMENT
and
ASSESSOR'S CERTIFICATION
By and among
NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY,
COMPASS POINTE LIMITED PARTNERSHIP,
and
COUNTY ASSESSOR OF THE COUNTY OF HENNEPIN
This document was drafted by:
BRADLEY &. DEUCE, P.A.
40] 8 West 65h Street, Suite 100
Edina, Minnesota 55435
THIS AGREEMENT, dated as of this day of , 2014, by and between the
New Hope Economic Development Authority, a body politic and corporate (the "Authority") and
Compass Pointe Limited Partnership, a Minnesota limited partnership (the "Developer").
WYMSSETH: that:
WHEREAS, on or before the date hereof the Authority and the Developer entered into
that certain Purchase and Development Agreement (the "Development Agreement") regarding
certain real property located in the City of New Hope, hereinafter referred to as the Property and
legally described in Exhibit A hereto; and
WHEREAS, it is contemplated that pursuant to said Development Agreement the
Developer will construct an affordable rental housing development on the Property; and
WHEREAS, the Authority and Developer desire to establish a minimum market value
for said land and the improvements to be constructed thereon, pursuant to Minnesota Statutes,
Section 469.177, Subdivision 8; and
WHEREAS, the Authority and the County Assessor for the County of Hennepin have
reviewed the preliminary plans and specifications for the improvements which it is contemplated-
will
ontemplatedwill be erected.
NOW, THEREFORE, the parties to this Agreement, in consideration of the promises,
covenants and agreements made by each to the other, do hereby agree as follows:
1. Commencing on January 1, 2016, and continuing on each assessment date
thereafter until the termination date stated in paragraph 2 below, the minimum market value
which shall be assessed for the land described in Exhibit A and the above described
improvements shall be not less than Five Million Nine Hundred and Sixteen Thousand Dollars
($5,916,040), notwithstanding incomplete construction of the above described improvements.
2. This Agreement shall terminate in its entirety on the earlier of December 31,
2040; or when the Note, as defined in the Development Agreement, has been paid.
3. This Agreement shall be promptly recorded at the expense of the Developer.
4. Neither the preambles nor provisions of this Agreement are intended to, nor shall
they be construed as, modifying the terms of the Development Agreement between the Authority
and the Developer.
S. This Agreement shall inure to the benefit of and be binding upon the successors
and assigns of the parties.
NEW HOPE ECONOMIC
DEVELOPMENT AUTHORITY
By:
Its President
By:
Its Executive Director
COMPASS POINTE LIIVIITED
PARTNERSHIP
By Compass Pointe, LLC, its General Partner
By Ronald Clark, its Chief Manager
STATE OF MDMSOTA )
) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
2014, by and 'the President and Executive
Director of the New Hope Economic Development Authority, a public body politic and
corporate, on behalf of the authority.
Notary Public
STATE OF MINNESOTA )
) Ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this day
of, 2014, by Ronald Clark, the Chief Manager of Compass Pointe, LLC, a
Minnesota limited liability company, the general partner of of Compass Pointe Limited
Partnership, a Minnesota limited partnership, on behalf of the limited partnership.
Notary Public
CERTIFICATION BY COUNTY ASSESSOR
The undersigned, having reviewed the plans and specifications for the improvements to
be constructed and the market value assigned to the land upon which the improvements are to be
constructed, and being of the opinion that the minimum market value contained in the foregoing
Agreement appears reasonable, hereby certif es as follows: The undersigned assessor, being
legally responsible for the assessment of the above described property, certifies that the market
values assigned to such land and improvements are reasonable.
County Assessor for the County
of Hennepin
STATE OF MINNESOTA)
)ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
2014, by the County Assessor for the County of Hennepin.
Notary Public
I *Ml Ml_.
Legal Description of Land
Lot 1, Block 1, Compass Pointe, according to the recorded plat thereof, Hennepin County,
Minnesota.
Hennepin County, Minnesota
Abstract Property
Torrens Certificate No.
SCHEDULE E
QUIT CLAIM DEED
THIS INDENTURE, between the City of New Hope, Minnesota, a municipal corporation
under the laws of the State of Minnesota (the "Grantor"), and Compass Pointe Limited
Partnership, a Minnesota limited partnership (the "Grantee").
WITNESSETH, that Grantor, in consideration of the sum of Three Hundred and Four
Thousand Dollars ($304,000.00) and other good and valuable consideration the receipt whereof
is hereby acknowledged, does hereby grant, bargain, quitclaim and convey to the Grantee, its
successors and assigns forever, all the tract or parcel of land lying and being in the County of
Hennepin and State of Minnesota described as follows, to -wit (such tract or parcel of land is
hereinafter referred to as the "Property"):
See Exhibit A Attached Hereto
To have and to hold the same, together with all the hereditaments and appurtenances
thereunto belonging in any wise appertaining, to the said Grantee, its successors and assigns,
forever,
Provided:
SECTION 1.
It is understood and agreed that this Deed is subject to the covenants, conditions,
restrictions and provisions of an agreement entered into between the New Hope Economic
Development Authority (the "Authority') and Grantee on the _ day of , 2014, identified
as "Purchase and Development Agreement" (hereafter referred to as the "Agreement") which
Agreement is incorporated herein and made a part hereof by reference.
This provision, however, shall in no way prevent the Grantee fi-am mortgaging this
Property in order to obtain funds for the purchase of Property hereby conveyed and for erecting
improvements thereon in conformity with the Agreement, any applicable redevelopment plan
and applicable provisions of the Zoning Ordinance of the City of New Hope, Minnesota.
It is specifically agreed that the Grantee shall promptly begin and diligently prosecute to
completion the redevelopment of the Property through the construction of the improvements
thereon, as provided in the Agreement.
Promptly after completion of the improvements in accordance with the provisions of the
Agreement, the Grantor will cause the Authority to furnish the Grantee with an appropriate
instrument so certifying (the "Certificate of Completion'). The Certificate of Completion 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 of the Agreement
and of this Deed with respect to the obligation of the Grantee, and its successors and assigns, to
construct the improvements and the dates for the beginning and completion thereof The
Certificate of Completion and such determination shall not constitute evidence of compliance
with or satisfaction of any obligation of the Grantee to any holder of a mortgage, or any insurer
of a mortgage, securing money loaned to finance the purchase of the Property hereby conveyed
or the improvements, or any part thereof.
The Certificate of Completion and any other certifications provided for herein shall be in
such form as will enable them to be recorded with the County Recorder, or Registrar of Titles,
Hennepin County, Minnesota. If the Authority shall refuse or fail to provide any such
certification in accordance with the provisions of the Agreement and this Deed, the Grantor shall,
within thirty (30) days after written request by the Grantee, provide the Grantee with a written
statement indicating in adequate detail in what respects the Grantee has failed to complete the
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 Grantor, for the Grantee to take
or perform in order to obtain such certification.
SECTION 2.
In the event the Grantee herein shall, prior to the completion of constriction of the
improvements under the Agreement as evidenced by the recording of the Certificate of
Completion for such unit, hereinabove referred to:
(a) Fail to begin construction of the improvements provided for in this Deed
and the Agreement in conformity with the Agreement and such failure is not due to
unavoidable delays (as defined in the Agreement) and such failure is not cured within one
hundred and twenty (120) days after written notice to do so; or
(b) Subject to extensions due to Unavoidable Delays, as defined in the
Agreement, default in or violate its obligations with respect to the construction of the
improvements provided for in this Deed and the Agreement, or shall abandon or
substantially suspend construction work, and such default, violation or failure is not due
to unavoidable delays (as defined in the Agreement), and any such default or violation,
abandonment or suspension shall not be cured, ended or remedied within one hundred
twenty (120) days after written demand by the Grantor so to do; or
(c) Fail to pay real estate taxes or assessments on the Property or any part
thereof when due, or shall place thereon any encumbrance or lien unauthorized by the
Agreement with the Grantor, or shall suffer any levy or attachment to be made, or any
materialmen's or mechanic's liens, or any other unauthorized encumbrances or liens to
attach, and such taxes or assessments shall not have been paid or the encumbrance or lien
removed or discharged, or provisions satisfactory to the Grantor made for such payments,
removal or discharge, within one hundred twenty (120) days after written demand by the Grantor
so to do provided, that if the Grantee shall first notify the Grantor of its intention to do so, it may
in good faith contest any mechanics' or other lien filed or established and in such event the
Grantor shall permit such mechanics' or other lien to remain undischarged and unsatisfied during
the period of such contest and any appeal, but only if the Grantee provides the Grantor with
evidence acceptable to the Grantor that the Grantee's title insurance company will insure over
the lien or provides a bank letter of credit in the amount of the lien, in a form satisfactory to the
Grantor pursuant to which the bank will pay to the Grantor the amount of any lien in the event
that the lien is finally determined to be valid and during the course of such contest the Grantee
shall keep the Grantor informed respecting the status of such defense; or
(d) Cause in violation of the Agreement or of this Deed, any transfer of the
Property or any part thereof that is not approved by the Grantor in accordance with the
terms of the Agreement, and such violation shall not be cured within sixty (60) days after
written demand by the Grantor to the Grantee; or
(e) Fail to comply with any of its covenants under the Agreement and fail to
cure any such noncompliance within one hundred twenty (120) days after written demand
to do so; or
(f) Default under the terms of a mortgage loan authorized by Article VII of
the Agreement and the holder of the mortgage exercises any remedy provided by the
mortgage documents or exercises any remedy provided by law or equity in the event of a
default in any of the terms or conditions of the mortgage and such default is not cured by
the later of the applicable notice and cure period of such mortgage or one hundred twenty
(120) days after written demand by the Grantor;
then the Grantor shall have the right to re -ewer and retake title to and possession of the Property,
subject to the liens and encumbrances then of record, and to terminate and revert in the Grantor
the estate conveyed by this Deed to the Grantee, its assigns or successors in interest, subject to
the terms and conditions of the Agreement, but only if the events stated in Section 2(a) -(f) have
not been cured within the time periods provided above, or if the events cannot be cured within
such time periods, the Redeveloper does not provide assurances to the Authority, reasonably
satisfactory to the Authority, that the events will be cured and will be cured as soon as
reasonably possible. The remedies contained in this Section 2 shall not be available to Grantor
upon the completion of construction of the Project in accordance with the terms of the
Agreement.
The investor limited partner of the Grantee (the "Investor Limited Partner") shall have the right,
but not the obligation, to cure any of the events stated in Section 2(a) — (f) and the Grantee shall
accept performance by the Investor Limited Partner of any obligation of the Grantee hereunder
as though tendered by Grantee itself, provided such performance by the Investor Limited Partner
has occurred during the applicable cure period, if any, provided to Grantee hereunder with
respect to such event or breach or default.
SECTION 3.
The Grantee agrees for itseit and its successors and assigns to or of the Property or any
part thereof, hereinbefore described, that the Grantee and such successors and assigns shall at all
times prior to the Termination Date, as defined in the Agreement:
(a) Devote the Property to, and only to and in accordance with the uses
specified in any applicable redevelopment plan adopted by the Authority as amended and
extended, provided that no amendment shall prohibit a pre-existing permitted use;
(b) Comply with all of the terms and conditions of the Agreement.
It is intended and agreed that the above and foregoing agreements and covenants shall be
covenants running with the land, and that they shall, in any event, and without regard to technical
classification or designation, legal or otherwise, and except only as otherwise specifically
provided in this Deed and the Agreement, be binding, to the fullest extent permitted by law and
equity for the benefit and in favor of, and enforceable by, the Grantor and the Authority, their
respective successors and assigns, and any successor in interest to the Property, or any part
thereof AOS the Grantee, its successors and assigns, and every successor in interest to the
Property, or any part thereof or any interest therein, and any party in possession or occupancy of
the Property or, any part thereof.
In amplification, and not in restriction o% the provisions of the preceding section, it is
intended and agreed that the Grantor and its successors and assigns shall be deemed beneficiaries
of the agreements and covenants provided herein. - Such agreements and covenants shall run in
favor of the Grantor without regard to whether the Grantor has at any time been, remains, or is an
owner of any land or interest therein to, or in favor of, which such agreements and covenants
relate. The Grantor shall have the right, in the event of any breach of any such agreement or
covenant to exercise all the rights and remedies, and to maintain any actions or suits at law or in
equity or other proper proceedings to enforce the curing of such breach of agreement or
covenant, to which it or any other beneficiaries of such agreement or covenant may be entitled.
The covenants and agreements of this Deed and the Agreement shall be enforceable only by
Grantor, the Authority, and any public body which is a successor of Grantor or the Authority.
SECTION 4.
This Deed is also given subject to:
(a) Provision of the ordinances, building and zoning laws of the City of New Hope,
state and federal laws and regulations in so far as they affect this real estate.
(b) Taxes payable subsequent to the date of this conveyance.
SECTION 5.
The Grantor certifies that the Grantor does not know of any wells on the subject property.
IN WITNESS WHEREOF, the Grantor has caused this Deed to be duly executed in its
behalf by its President and Executive Director this day of , 2014.
CITY OF NEW HOPE
By:
Its: Mayor
By:
Its: Manager
STATE OF MINNESOTA)
)ss.
COUNTY OF HENNEPE4)
The foregoing instriment was acknowledge before me this day of �� 2014, by
and , the Mayor and Manager of the
City of New Hope, a statutory city organized and existing under the laws of the state of
Minnesota, on behalf of the City.
Notary Public
This inst Went was drafted by:
BRADLEY & DEIKE, P.A.
4018 west 651° Street, Suite 100
Edina., Minnesota 55435.
Exhibit A to Quit Claim Deed
Description of Property
Outlot 1, Mork -Campion Heights, Hennepin County, Minnesota (Totten Property
Torrens Cer ficateNo. 1381801)
The East 75 Feet of Outlot 2, Mork -Campion Heights as measured at a right angle from the East
line thereof, Hennepin County, Minnesota (Abstract Property)
The West 75 Feet of the East 150 feet of Outlot 2, Mork -Campion Heights as measured at a right
angle from the East line thereof, Hennepin County, Minnesota (Abstract Property)
The West 75 Feet of the East 225 feet of Outlot 2, Mork -Campion Heights as measured at a right
angle from the East line thereof, Hennepin County, Minnesota (Abstract Property)
9149054v5
SCHEDULE F
Interfund Loan Resolution
NEW HOPE ECONOMIC DEVELOPNitENT AUTHORITY
CITY OF NEW HOPE
OWIN COUNTY
STATE OF Ml1OMSOTA
RESOLUTION NO. „2giA-w
RESOLUTION AUTHORIZING AN INTERFUND LOAN FOR ADVANCE OF
CERTAIN COSTS IN CONNECTION WITH THE COMPASS POINTE
HOUSING TAX INCREMENT FINANCING DISTRICT.
BE iT RESOLVED by the Board of Commissioners (the "Board") of the New Hope Economic
Development Authority (the "EDA") of the City of New Hope,11Smnesota, as follows:
WHEREAS, the City Council for the City of New Hope. N!mawta (the "City', intends to
establish the Compass Pointe Housing Tax Increment Financing District (the "TTP District") within
Redevelopment Project No. I (the "ProjeW), and will adopt a Tax bucrement Financing Plan (the "11F
Plan") for the purpose of financing certain improvements within the Project
WHEREAS, the EDA has determined to pay for certain costs identified in the TIF Plan consisting
of land/buildiag acquisition, site improvements/preparation, public utilities, streets and sidewalks, interest
and administrative costs (collectively, the "Qualified Costs"), which costs may be financed on a
temporary basis from EDA funds available for such purposes.
WHEREAS, tinder Minnesota Statutes, Section 469.17$, Subd. 7, the EDA is authorized to
advance or loan money from the EDA's general fund or any other fund from which such advances may be
legally authorized, in order to finance the Qualified Costs.
WHEREAS, the EDA owns certain property (tire "EDA Parcels") and has incurred certain costs
to prepare such property for redevelopment, including demolition, relocation and site clearance. The
EDA has determined that the estimated market value ofthe EDA Parcels is at least $453,281.
WHEREAS, the EDA proposes to enter into a Purchase and Development Agreement (the
"Development Agreement") with Compass Pointe Limited Partnership (the "Developeel, under which
the EDA will (among other things) convey the EDA Parcels to the Developer fbr $304,000.
WHEREAS, the EDA also proposes to enter into a Purchase and Development Agreement with
the Developer (the 11U Apmemeat"), specifying certain financial assist►ee to Developer in connection
with the Development Property.
WHEREAS, by conveying the EDA Parcels under the Purchase and Development Agreement, at
closing the EDA will forgo receipt of the full market value of the EDA Parcels. Such forbearance
represents an advance of EDA funds in the amount of $149,300.
WHEREAS, the EDA intends to designate such land advance as an interhmd loan in accordance
with the terms of this resolution and the TIF Act (which ternns are referred to collectively as the
"Interfund Loan'l.
NOW ARE BE IT RESOLVED by the Board as follows:
1. The Authority will reimburse #V in the principal amount of $149,300 toge dw with interest at
the rate of 4% per annum (the "latarfimd Loan"). interest accrues on the principal amount from
the date of closing on conveyance oftfre EDA Parcels to the Developer unfit the Development
Affeement (ham, the "Closing Date"). The maximum rate of interest permitted to be
charged is limited to the greater of the rates speer under Minnesota Statutes, Section 2700.40
or Section 549.09 As of the date the lean or advm m is authorized, unleas the written agreement
states that the maximum interest rate will fluctuate as the interest rates specified under Mhmesda
Statutes, Section 2700.40 or Sedan 549.09 arc firm time to time adjusted. The interest rate
shall be 4% and will not fluctuate.
2. Principal and int rest ("Payments") on the hw firnd Loan shall be paid semi-annually on each
August I and February i (each a "Payment Date"X cmqmeucing on the first Payment Date on
which the HWRA has Available Tax lacreniag (defined below), or on any other dates
determined by the Execudvc Director of the EDA, through the dere of last reoeipt of tax
increment fmrn the TEF District.
3. Payment on this hdwfund Loan are payable solely Rom °Available Tax hacw=en%" which shall
mean, on each Payment Date, tax increment available after other obligations have been paid, or as
determined by the City Manager, gencratcd m the preceding six (6) months with respect to the
properly within the TEF District and nearitted to the City by Hennepin County, all in aocoftm
witb Minnesota Statutes, Sections 469.174 to 469.1799, all innlusim as mated. Payments on
this h terfimd Loser may be subordinated to a w outstanding or future bond:, notes or oontracts
secured in whole or in part with Available Tax Increnwt, and are on parity with arty other
outstanding or f tin a interfund loans secured in whole or in part with Available Tax Incevrnent
4. The principal sum and all accrued iatar,est payable under this hawfimd Loan are pre -payable is
whole or in part at any time by the BDA without p+omhtm or penalty. No partial prepayment
shall affect the amount or timing of say other regular payment otherwise required to be made
under this Interfamd Lose.
5. This lnterf rad Loan is evidence of an internal borrowing by the EDA in accordance with
Minneaata Statutes, Section 469.178, Subd. 7, and is a limited obligation payable solely from
Available Tax bevement pledged to flue payment hereof under this resolution. This Interfnnd
Loan and the interest her+aarr shall not be deemed to constitute, a general obligation of the State of
Minnesota or any political subdivision thereof; including. without limitation. tie EDA. Neither
the State of Minnesota, nor any political subdivision thereof shall. be obligated to pay the
principal of or interest air this lnbmftW Loan or other costs incident hereto except out of
Available Tax Increment, and neither the frill faith and credit nor the taxing power of the State of
Minnesota or any political subdivision thereof is pledged to the payment of the principal of or
interest on this intetfimd Loan or ottani costs incident hereto. The SDA shall have no obligation
to pay say principal amount of the I awhind Lon or accrued interest thereon, which may remain
unpaid atter liar Sinal Payment Date.
6. The EDA may amend the terms of this Interfimd Loan at any time by resolution of the Baird,
including a determination to forgive the outstanding principal amount and accrued interest to the
extent permissible under law.
Approved by the Board on March . 24 .2014.
Daniel e�Presidant PionTem
Doc No T05181197
Certified, filed and/or recorded on
Jul 1, 2014 2:00 PM
Office of the Registrar of Titles
Hennepin County, Minnesota
Martin McCormick, Registrar of Titles
Mark Chapin, County Auditor and Treasurer
Deputy 84 Pkg ID 1125705C
Doc Name: Development Agreement
Document Recording Fee $46.00
Document Tota! $46.00
Existing Certs New Certs
1388516
This cover sheet is now a permanent part of the recorded document.
PURCHASE AND DEVELOPMENT AGREEMENT
By and Between
NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY
and
COMPASS POINTE LIMITED PARTNERSHIP
Dated as of l 2014
This document was drafted by:
BRADLEY & DEIKF, P. A.
4018 West 65" Strut, Suite 100
Edina, MN 55435
Telephone: (952) 926-5337
L��'O-fo
mercial Partners Title, LLC
200 South Sixth Street
Suite 1300
Minneapolis, MN 55402
3iftoa, '3'25j of
PREAMBLE
Section 1.1 _ Definitions
TABLE OF CONTENTS
ARTICLE I
Definitions
ARTICLE II
Representations
Section 2.1. Representations by the Authority
Section 2.2. Representations by the Developer
ARTICLE M
Authority Assistance: Issu_a_rce of Note
6
6
Section 3.1.
Basis for Assistance
8
Section 3.2.
Issuance of Note
8
Section 3.3.
Conditions Precedent to Issuance of Note
8
Section 3.4.
Payment of Administrative Costs
9
Section 3.5.
Authority Review of Developer's Costs
9
Section 3.6.
Title
9
Section 3.7.
Closing; Purchase Price
10
Section 3.8.
Conditions Precedent to Conveyance of Authority Property
10
Section 3.9.
Advance of Land; Tax Increment Interfimd Loan
10
Section 3.11. Status of Developer Property
11
(i)
ARTICLE IV
Construction of Im ron yements
Section 4.1. Construction of Improvements 12
Section 4.2. Construction Plans 12
Section 4.3. Commencement and Completion of Construction 12
Section 4.4. Certificate of Completion 13
Section 4.5. Management of Improvements 13
Section 4.6. Playground 14
Section 5.1. Insurance
Section 5.2. Condemnation
ARTICLE V
h u a= and Condemnation
ARTICLE VI
Taxes- Tax Increment
15
16
Section 6.1. Real Property Taxes 18
Section 6.2. Tax Increment 19
Section 6.3. Developer's Representations Concerning Note 19
Section 6.4. Income and Rent Restrictions 24
Section 6.5. Assessment Agreement 21
Section 7.1. Mortgage Financing 22
ARTICLE VIII
Prohibitions Against Assignment and Transfer: Indemnification
Section g.l . Prohibition Against Transfer of Property and
Assignment of Agreement 23
Section 8.2. Release and Indemnification 23
Section 8.3. Environmental Conditions 24
ARTICLE IX
Events of Default
Section 9.1.
Events of Default Defined
25
Section 9.2.
Authority's Remedies on Default
25
Section 9.3.
No Remedy Exclusive
26
Section 9.4.
No Additional Waiver Implied by One Waiver
26
Section 9.5.
Costs of Enforcement
26
Section 6.6.
The Developer's Option to Terminate
26
Section 6.7.
Action to Terminate
26
Section 6.8.
Effect of Termination
26
ARTICLE X
Additional Provisions
Section 10.1. Representatives Not Individually Liable
28
Section 10.2. Restrictions on Use
28
Section 10.3. Titles of Articles and Sections
28
Section 10.4. Notices and Demands
28
Section 10.5. Disclaimer of Relationships
29
Section 10.6. Modifications
29
Section 10.7. Counterparts
29
Section 10.8. Judicial Interpretation
29
Section 10.9. Business Subsidy Act
29
Section 10.10. Termination
29
SCHEDULE A
Description of Property
SCHEDULE B
Note
SCHEDULE C
Developer Pro forma
SCHEDULED
Assessment Agreement
SCHEDULE E
Deed
SCHEDULE F
Interfund Loan Resolution
PURCHASE AND DEVELOPMENT AGREEMENT
THIS AGREEMENT, made on or as of the /Qt day of 2014, by and
between the New Hope Economic Development Authority, a pub ' bod litic and corporate
under the laws of the State of Minnesota (hereinafter referred to as the " inty"), and having
its principal office at City Hall, 4401 Xylon Avenue North, New Hope, Minnesota 55428, and
Compass Pointe Limited Partnership, a Minnesota limited partnership (hereinafter referred to as
the "Developer"), having its principal office at 7500 West 7e Street, Edina, Minnesota 55439.
WITNESSETH:
WHEREAS, The Authority is a municipal economic development authority organized and
existing pursuant to the Constitution and laws of the State of Minnesota and is governed by its
Board of Commissioners (the "Board"); and
WHEREAS, the Authority and the City of New Hope, Minnesota (the "City") have
established within the City Redevelopment Project No. 1 pursuant to Minnesota Staff
Sections 469.001 - 469.047, providing for the development and redevelopment of certain areas
located within the City (which development district is hereinafter referred to as the "Project');
and
WHEREAS, the Authority and the City have further established the Compass Pointe Tax
Increment Financing District within the Project pursuant to Minnesota Statutes. Sections
469.174-469.179 (which tax increment financing district is hereinafter referred to as the "Tax
Increment District"); and
WHEREAS, the Tax Increment District is a housing tax increment financing district
intended to provide affordable rental housing for low and moderate income persons and families;
and
WHEREAS, pursuant to Minnesota Statutes. Section 469.176, subdivision 4, tax
increment derived from the Tax Increment District may be used in accordance with the tax
increment financing plan created in connection with the establishment of the Tax increment
District to pay the public redevelopment costs of the Project; and
WHEREAS, the Developer has presented to the Authority a proposal pursuant to which
the Developer will acquire certain real property within the Project (which property is hereinafter
referred to as the "Property" and is more particularly described in Schedule A annexed hereto
and made a part hereof) and construct thereon a 68 -unit residential rental facility; and
WHEREAS, a portion of the Property is owned by the City (the "Authority Property") and
a portion of the Property is owned by the Developer (the "Developer Property"); and
WHEREAS, the City and the Developer have entered into as option agreement (the
"Option Agreement") pursuant to which the City has agreed to convey the Authority Property to
the Developer; and
WHEREAS, the Developer has as a part of its proposal requested that the Authority
provide certain financial assistance to aid in its development, without which such development
would not be possible; and
WHEREAS, Authority believes that the provision of the affordable housing as proposed
by the Developer is in the best interest of the City and its residents and in accord with the public
purposes and provisions of applicable federal, state and local Iaws under which the Project is
being undertaken and assisted;
NOW THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the other as follows:
2
ARTICLE I
Definitions
Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears
from the context:
"Act" means Minnesota Statutes. Sections 469.001-469.047, as amended.
"Agreement" means this Agreement, as the same may be from time to time modified,
amended, or supplemented.
"Assessment Agreement" means the agreement in the form attached to this Agreement as
Schedule D.
"Authority" means the New Hope Economic Development Authority, a public body
politic and corporate, its successors and assigns.
"Authority Property" means the property described as such on the attached Schedule A.
"Available Tax Increment" means, with respect to a Scheduled Payment Date, as defined
in the Note, ninety percent (90%) of the Tax Increment received by the Authority in the six (6)
month period preceding such Scheduled Payment Date.
`Board" means the Authority's Board of Commissioners.
"City" means the City of New Hope, Minnesota
"Construction Plans" means the site plan, utility plan, grading and drainage plan,
landscape plan, elevations drawings and related documents on the constriction work to be
performed by the Developer on the Property which have been or will be submitted for approval
by the Board, together with the resolution of the Board approving such plans and the plans,
specifications, drawings and related documents on the construction work to be performed by the
Developer on the Property which are to be submitted to the building inspector of the City.
"County" means Hennepin County, Minnesota
"Deed" means the deed in the form of Schedule E attached hereto.
"Developer" means Compass Pointe Limited Partnership, a Minnesota limited
partnership, its successors and assigns and any future owner of any right, title or interest in the
Properly.
"Developer Property" means the property described as such on the attached Schedule A.
"Event of Default" means an action by the Developer listed in Article IX of this
Agreement.
"Improvements" means the improvements to be constructed by the Developer on the
Property, consisting of the construction of a 6$ unit rental housing development together with
parking and other incidental and related improvements in accordance with the approved
Construction Plans.
"Minimum Market Value" means the market value for tax purposes of the Property and
Improvements established by the Assessment Agreement.
"Net Proceeds" means any proceeds paid by an insurer to the Developer or the Authority
under a policy or policies of insurance required to be provided and maintained by the Developer
pursuant to Article V of this Agreement and remaining aft deducting all expenses (including
fees and disbursements of counsel) incurred in the collection of such proceeds.
"Note" means the Taxable Limited Revenue Tax Increment Note to be issued by the
Authority pursuant to Section 3.2 of this Agreement, which Note shall be substantially in the
form of the Note attached to this Agreement as Schedule B.
"Option Agreement" means that certain Option Agreement by and between the City and
the Developer dated as of June 4, 2012, as amended as of the date hereof.
"Permitted Encumbrances" means the provisions of the Deed and this Agreement:
reservations of minerals or mineral rights to the State of Minnesota; public utility, roadway and
other easements which will not adversely affect the development and use of the Authority
Property pursuant to the Developer's Construction Plans; building laws, regulations and
ordinances consistent with the Improvements; restrictions, covenants and easements of record
that do not materially adversely affect the development and use of the Improvements and are
reasonably acceptable to the Developer; and exceptions to title to the Authority Property which
are not objected to by Developer upon examination of the title evidence delivered to the
Developer pursuant to the terms of the Option Agreement.
"Project" means the Authority's Redevelopment Project No. 1.
"Project Area" means the real property located within the boundaries of the Project.
"Project Plan" means the redevelopment plan adopted in connection with creation of the
Project.
"Property" means the real property described as such on the attached Schedule A,
consisting of the Authority Property and the Developer Property.
"Reimbursable Costs" means the costs to be reimbursed by the Authority to the
Developer as described in Article III of this Agreement, which costs consist of the cost of
constructing the Improvements.
"State" means the State of Minnesota.
"Tax Increment" means that portion of the real property taxes paid with respect to the
Property and Improvements that is remitted to the Authority as tax increment pursuant to the Tax
Increment Act, minus deductions required by law.
"Tax Increment Act" means the Tax Increment Financing Act, Minnesota Statutes.
Sections 469.174469.1794, as amended and as it may be further amended from time to time.
"Tax Increment District" means the Compass Pointe Tax Increment Financing District
created by the Authority within the Project Area.
"Tax Increment Plan' means the tax increment financing plan adopted by the Authority
in connection with its creation of the Tax Increment District, which plan together with the
information and findings contained therein is hereby incorporated herein and made a part hereof
by reference.
"Termination Date" means the latest of the following dates: (i) the date that the Note is
paid in full or terminated; (ii) the date that this Agreement is terminated; or (iii) the date that the
Interfund Loan described in Section 3.9(b) has been paid in full.
"Unavoidable Delays" means delays which are the direct result of acts of God,
unforeseen adverse weather conditions, strikes, other labor troubles, fire or other casualty to the
Improvements, litigation commenced by third parties which, by injunction or other similar
judicial action, directly results in delays, or acts of any federal, state or local governmental unit,
and which directly results in delays.
ARTICLE II
Representations
Section 2.1. Representations 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 municipal economic development authority organized and
existing under the laws of the State. Under the laws of the State, the Authority has the power to
enter into this Agreement and to perform its obligations hereunder.
(b) The Authority will cooperate with the Developer with respect to any litigation
commenced with respect to the Project Plan, Project, or Improvements and in the Developer's
acquisition of any permits or other approvals required in connection with the construction of the
Improvements.
(c) The Authority has received no notice or communication from any local., state or
federal official that the activities of the Developer or the Authority in the Project Area may be or
will be in violation of any environmental law or regulation. The Authority is aware of no facts
the existence of which would cause it or any portion of the Authority Property to be in violation
of any local, state or federal environmental law, regulation or review procedure.
(d) Neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of,
the terms, conditions or provisions of any restriction or any evidences of indebtedness,
agreement or instrument of whatever nature to which the Authority is now a party or by which it
is bound, or constitutes a default under any of the foregoing
(e) To the best of the Authority's knowledge, there is no litigation, pending or
threatened, regarding the Authority Property or challenging the validity of this Agreement.
(fl The Authority will not issue any further obligations that are payable from or
secured by the Available Tax Increment prior to the date that the Note has been paid in full, or
terminated in accordance with its terms, without the prior written consent of the Developer.
Section 2.2. Re resentations by the Developff. The Developer represents that:
(a) The Developer is a limited partnership duly organized and authorized to transact
business in the State, is not in violation of any provisions of its articles of partnership agreement
or the laws of the State, has power to enter into this Agreement and has duly authorized the
execution, delivery and performance of this Agreement by proper action of its board of general
partners.
(b) The Developer will construct the Improvements in accordance with the terms of
this Agreement and all local, state and federal laws and regulations (including, but not limited to,
environmental, zoning, building code and public health laws and regulations), except for
variances necessary to construct the improvements contemplated in the Construction Plans
approved by the Authority.
(c) The Developer has received no notice or communication from any local, state or
federal official that the activities of the Developer or the Authority in the Project Area may be or
will be in violation of any environmental law or regulation. The Developer is aware of no facts
the existence of which would cause it to be in violation of any local, state or federal
environmental law, regulation or review procedure. In the event that it is necessary to take any
action to obtain any necessary permits or approvals with respect to the Property under any local,
state or federal environmental law or regulation, the Developer will be responsible for taking
such action.
(d) The Developer will 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 Improvements may be
lawfully constructed.
(e) Neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of,
the terms, conditions or provisions of any restriction or any evidences of indebtedness,
agreement or instrument of whatever nature to which the Developer is now a party or by which it
is bound, or constitutes a default under any of the foregoing.
(f) The Developer will cooperate with the Authority with respect to any litigation
commenced with respect to the Project Plata, Project, or Improvements.
(g) The Developer could not and would not proceed with the construction of the
Improvements absent the financial assistance being provided by the Authority pursuant to this
Agreement.
ARTICLE Ilii
Authop:jy Assistance; Issuance of Note
Section 3.1. Basis for Assistance. The Authority believes that there is currently a shortage
of affordable rental housing for low and moderate income persons within the City. Therefore,
the Authority has determined that it is in the vital interests of the City and its residents that
additional affordable housing be provided and that such housing will not be provided without the
financial participation of the Authority as proposed by the Developer. In consideration of the
Developer's agreement to undertake the development of the Improvements, its agreement to
construct as a part of the Improvements certain amenities that the Authority deems necessary and
desirable, and its covenants concerning tenant incomes, the Authority is willing to cause the City
to convey the Authority Property to the Developer and to defray a portion of the Developer's
costs of construction of the Improvements through the issuance and the payment of the Note.
Section 3.2. Issuance of Note. The Authority agrees to defray a portion of the Developer's
cost of constructing the Improvements through the issuance of the Note. The costs to be
reimbursed by the Authority through the issuance of the Note are referred to herein as the
"Reimbursable Costs". The Reimbursable Costs consist of a portion of the cost of constructing
the Improvements. The issuance of the Note shall occur when the conditions set forth in Section
3.3 have been satisfied. The principal amount of the Note will be equal to the Developer's actual
Reimbursable Costs incurred and paid by the Developer, but in no event to exceed $684,254. If
the Developer's documented Reimbursable Costs for such items are less than $684,250 then the
.amount of the Note shall be such lesser amount. The Note shall be in the form of the Note
attached to this Agreement as Schedule B, with all blanks properly completed. interest at the
rate of five and one half percent (5.5'/o) shall accrue on the principal amount of the Note from the
date of its issuance up to February 1, 2016, and shall be added to the principal amount of the
Note on the first day of each February and August after its issuance up to and including February
1, 2016. From and after February 1, 2016, until the Note is terminated or paid in fiull,supple
non -compounding interest at the rate of five and one half percent (5.5%) shall accrue with
respect to the principal amount of the Note.
Section 3.3. Conditions Precedent to Issuance of Note. Notwithstanding anything to the
contrary contained herein, the Authority's obligation to issue the Note shall be subject to
satisfaction, or waiver in writing by the Authority, of all of the following conditions precedent:
(a) the Developer shall not be in default under the terms of this Agreement;
(b) the Developer shall have closed on financing sufficient to pay all costs to be
incurred in connection with the acquisition and constriction of the Improvements;
(c) the Developer shall have paid the Reimbursable Costs as described in Section 3.2 of
this Agreement and shall have provided to the Authority such documentation of
such costs as the Authority shall reasonably request; and
(d) the Developer shall have completed construction of the Improvements and the
Authority shall have completed the financial analysis provided for in Section 3.5 of
this Agreement.
Section 3.4. Payment of Administrative Costs. Except for any costs required to be paid
by the City pursuant to the Option Agreement, the Developer will reimburse the Authority for all
out-of-pocket costs incurred by the Au4iorhy in connection with review and analysis of the
development proposed under this Agreement, development of the Tax Increment Plan for the
Tax hwrement District; and negotiation of this Agreement and any related agreements and
documents (collectively, the "Administrative Costs"). The Administrative Costs include fees
paid to attorneys, the Authority's financial advisor, and any planning and engineering consultants
retained by the Authority or City in connection with the construction of the Improvements. As
security for the Administrative Costs, the Developer deposited with the Authority the amount of
$10,000, and the Authority shall pay the Administrative Costs from such funds. If the total
Administrative Costs exceed $10,000, the Developer remains responsible for such excess costs,
and must pay such costs to the Authority within 10 days after receipt of a written invoice from
the Authority describing the amount and nature of the costs to be reimbursed. After the Note has
been issued and the certificate of completion referenced in Section 4.4 has been executed and
delivered, and all the Administrative Costs related to such actions have been paid, the Authority
will refund to the Developer any portion of the balance from the $10,000 deposit (if any) that is
not needed to cover the Administrative Costs through such reimbursement dato.
Notwithstanding anything to the contrary herein, the Developer remains obligated to pay the
Administrative Costs after issuance of such certificate of completion, including the costs of any
amendments to this Agreement or to the Note.
Section 3.5. Authority Review of Developer's Costs. The Authority's determination
to issue the Note to the Developer is based on the Developer's representations regarding its costs
of constructing the Improvements. Based on those representations the Authority has determined
that reimbursement of the Developer through the issuance of the Note for the Reimbursable
Costs is necessary to assist in making the construction and ownership of the Improvements
financially feasible. Attached to this Agreement as Schedule C is a financial pro forma provided
to the Authority by the Developer setting forth the Developer's anticipated costs associated with
the acquisition of the Property and construction of the Improvements. Within thirty (30) days
after the Developer's completion of construction of the Improvements and payment of all costs
associated with such construction, the Developer shall fimush to the Authority an updated pro
forma showing the Developer's actual costs incurred in connection with the construction of the
Improvements, together with such supporting documentation as the Authority may require. If
such updated pro forma shows that the Developer's total costs of acquiring the Property and
constructing the Improvements is less than the amount shown on the pro forma attached hereto
as Schedule C, the principal amount of the Note to be issued pursuant to Section 3.2 shall be
reduced by $.50 for each $1.00 that the Developer's actual costs are less than the amount
estimated as shown on Schedule C.
Section 3.6. Title. Submission of evidence of title to the Authority Property and
Developer's review of title shall occur in accordance with the terms of the Option Agreement..
Section 3.7. Closin—a: Purchase Price. (a) Closing on the conveyance of the Authority
Property to the Developer shall occur on such date that the conditions precedent contained in
Section 3.8 have been satisfied or waived.
(b) At the closing on the conveyance of the Authority Property the Authority shall
cause the City to deliver to the Developer: (i) a Deed duly executed and acknowledged
conveying to the Developer marketable title to the Authority Property subject only to Permitted
Encumbrances; and (ii) such other documents as are required to be delivered pursuant to the
terms of the Option Agreement.
(c) Closing costs associated with the conveyance of the Authority Property will be
allocated as provided in the Option Agreement.
(d) The purchase price to be paid by the Developer to acquire the Authority Property
shall be $304,000 and shall be payable at closing.
Section 3.8. Conditions Pywedent to Qggvevance of the Autho . Pro The
Authority's obligation to cause the City to sell and the Developer's obligation to purchase the
Authority Property shall be subject to satisfaction of the following conditions precedent:
(a) The Developer having secured financing or provided to the Authority evidence
reasonably satisfactory to the Authority of its ability to secure financing sufficient for the
acquisition of the Property and the construction of the Improvements.
(b) The Developer having reviewed and approved, or waived any objections to, title to
the Authority Property pursuant to Section 3.6 of this Agreement.
(c) The Developer having secured the Authority's approval of the Construction Plans
and all other governmental approvals necessary to permit the construction and operation of the
Improvements.
(d) The Developer shall have acquired the Developer Property.
(e) The Developer and the City shall be in compliance with the terms of the Option
Agreement"
If all of the conditions precedent to the conveyance of the Authority Property have not
been satisfied by July 1, 2014, the Authority shall have the right to terminate this Agreement by
giving written notice of termination to the Developer, upon which this Agreement shall terminate
and the Authority and Developer shall execute an instrument in recordable form evidencing such
termination.
Section 3.9. Advance of Land: Tax Increment Interfund Loan. (a) The City has
acquired the Authority Property and the City and the Authority have incurred certain costs to
prepare such property for redevelopment, including payment of relocation costs, environmental
remediation, demolition of buildings and site clearance. After Developer's payment of the
10
purchase price for the Authority Property there will remain unreimbursed costs incurred by the
City and the Authority in the approximate amount of $149,300 (the "City Costs"). Subject to all
the terms and conditions of this Agreement, upon the conveyance of the Authority Property to
the Developer, the City and the Authority will forego receipt of the City Costs and the City Costs
will remain outstanding. The City and the Authority shall reserve the right to collect such City
Costs through the Interfimd Loan, as described in Section 3.9(b) below.
(b) The Authority will treat the amount of the City Costs as an interfund loan (the
"Interfimd LoaW) within the meaning of Section 469.178, Subdivision 7 of the Tax Increment
Act. The terms of the Interfimd Loan are described in the resolution attached as Schedule F (the
"Loan Resolution" }. Until the Note has been paid in full, or terminated in accordance with its
terms, the InterRind Loan will be payable only from Tax Increment received by the Authority
that is in excess of Available Tax Increment
Section 3.10. Status of Developer Property. The Developer Property consists of the real
property described as such on Schedule A attached hereto. As of the date of this Agreement, the
Developer has entered into a purchase agreement to acquire the Developer Property for
$240,000.
I
ARTICLE IV
Construction of bu rovements
Section 4.1. Construction of improvements. The Developer agrees that it will construct
the improvements on the Property in material accordance with the approved Construction Plans
and at all times prior to the Termination Date will operate and maintain, preserve and keep the
improvements or cause the Improvements to be maintained, preserved and kept with the
appurtenances and every part and parcel thereof, in good repair and condition. "Material
accordance" with the Construction Plans, for purposes of this Agreement, shall mean without a
"material change" from the Constriction Plans, as defined in Section 4.2(b).
Section 4.2. Construction Plans. (a) The Developer has submitted and the City and
the Authority have approved a site plan for the construction of the Improvements (the "Site
Plan"). All Construction Plans for the Improvements shall be consistent with the approved Site
Plan. The Construction Plains shall provide for the construction of the Improvements and shall
be in conformity with this Agreement, the Site Plan approved by the Authority, and all
applicable state and local laws and regulations. The Authority shall approve the Construction
Plans in writing if, in the reasonable discretion of the Authority: (i) the Construction Plans
conform to the terms and conditions of this Agreement; (ii) the Construction Plans are consistent
with the Site Plans previously submitted to the Authority; (iii) the Construction Plans conform to
all applicable federal, State and local law, ordinances, rules and regulations; (iv) the Construction
Plans are adequate to provide for the construction of the Improvements; (v) the Construction
Plans do not provide for expenditures in excess of the fiends which will be available to the
Developer for the construction of the Improvements; and (vi) no Event of Default has occurred.
No approval by the Authority under this Section 4.2 shall relieve the Developer of the obligation
to comply with the terms of this Agreement or applicable federal, state and local laws,
ordinances, rules and regulations, or to construct the Improvements. No approval by the
Authority shall constitute a waiver of an Event of Default. Such Construction Plans shall, in any
event, be deemed approved unless rejected in writing by the Authority, in whole or in part. Such
rejection shall set forth in detail the reasons therefor, and shall be made within thirty (30) days
after the date of their receipt by the Authority. The provisions of this Section relating to
approval, rejection and resubmission of corrected Construction Plans shall continue to apply
until the Construction Plans have been approved by the Authority or until this Agreement is
terminated. The Authority's approval shall not be unreasonably withheld. Notwithstanding any
other provisions of this Agreement, the issuance by the City of a building permit fox the Project
shall constitute the approval of the Construction Plans by the City and the Authority as provided
herein.
(b) If the Developer desires to make any material change in any Construction Plans
after their approval by the Authority, the Developer shall submit the proposed change to the
Authority for its approval. For purposes of this Agreement, a "material change" means a change
that changes the size, nature or exterior appearance of the Improvements or that reduces the
value of the Improvements. If the Construction Plans, as modified by the proposed change,
conform to the requirements of this Section 4.2 of this Agreement with respect to such
previously approved Construction Pians, the Authority shall approve the proposed change and
12
notify the Developer in writing of its approval. Any requested change in the Construction Plans
shall, in any event, be deemed approved by the Authority unless rejected, in whole or in part, by
written notice by the Authority to the Developer, setting forth in detail the reasons therefor. Such
rejection shall be made within ten (10) days after receipt of the notice of such change.
Section 4.3. Commencement and Completion of Construction. {a} Subject to
Unavoidable Delays, the Developer shall commence construction of the Improvements by
September 1, 2014, or on such other date as the parties shall mutually agree. Subject to
Unavoidable Delays, the Developer shall complete the construction of the Improvements by
December 31, 2015. All work with respect to the Improvements to be constructed or provided
by the Developer on the Property shall be in conformity with the Construction Plans as submitted
by the Developer and approved by the Authority.
(b) Until construction, of the Improvements has been completed, the Developer shall
make construction progress reports, at such times as may reasonably be requested by the
Authority, but not more than once a month, as to the actual progress of the Developer with
respect to such construction.
Section 4.4. Certificate_ of CQaroletion. (a) Promptly after completion of the
Improvements in accordance with those provisions of this Agreement relating solely to the
obligations of the Developer to construct the Improvements, and upon request by the Developer,
the Authority will furnish the Developer with a Certificate of Completion for the improvements
in a forms acceptable for recording in the County Recorder's Office or the Office of the Registrar
of Titles. The Certificate of Completion shall be funnished to the Developer within ten (10)
business day atter request by the Developer, and shall conclusively satisfy and terminate the
agreements and covenants in this Agreement and in the Deed of the Developer, and its
successors and assigns, to construct the Improvements. Such certification and such
determination shall not constitute evidence of compliance with or satisfaction of any obligation
of the Developer to any Holder of a Mortgage, or any insurer of a Mortgage, securing money
loaned for construction of the Minimum Improvements, or any part thereof.
(b) If the Authority shall refuse or fail to provide a Certificate of Completion in
accordance with the provisions of this Section 4.4 of this Agreement, the Authority shall, within
ten (10) business day after written request by the Developer for the Certificate of Completion,
provide the Developer with a written statement, indicating in adequate detail in what respects the
Developer has failed to complete the Improvements in accordance with the provisions of this
Agreement and what measures or acts will be necessary, in the opinion of the Authority, for the
Developer to take or perform in order to obtain the Certificate of Completion
(c) The construction of the Improvements shall be deemed to be completed when the
City has issued a final certificate of occupancy for the Improvements (or when the Developer
would be entitled to a certificate of occupancy if it requested one), and when all conditions
imposed in connection with the City's approval of the Developer's development, including the
establishment of any completion escrow, if necessary, have been satisfied.
13
Section 4.5. Magement of Improvements. The Developer shalt at all times either
self-manage (upon submission of evidence of experience in operating multifamily residential
developments) or engage Steven Scott Management or another properly management company
with substantial experience in operating multifamily residential developments, subject to approval
by the Authority, which approval will not be unreasonably withheld. The Developer will submit
evidence of such management by February 1, 2016.
Section 4.6. Playground. The Developer shall construct the playground portion of the
Improvements (the "Playground") in conformity with the planned unit development approved by
the City for the Property and Improvements and the approved Site Plan for the use and
enjoyment of residents and invitees of the Improvements. The Playground shall incorporate
amenities described in Developer's site plan approved by the City. The parties agree and .
understand that the Developer shall be responsible for the cost of the maintenance and operation
of the Playground.
14
ARTICLE V
Insurance and Condemnation
Section 5.1. Insurance.
(a) The Developer will provide and maintain at all times during the process of
constructing the Improvements and, from time to time at the request of the Authority, furnish the
Authority with proof of payment of premiums on:
(i) Builder's risk insurance, written on the so-called "Builder's Risk --
Completed Value Basis," in an amount equal to one hundred percent (100%) of the
insurable value of the Improvements at the date of completion, and with coverage available
in nonteporting form on the so called "all risk" form of policy;
(ii) Comprehensive general liability insurance (including operations, contingent
liability, operations of subcontractors, completed operations, Broadening Endorsement
including contractual liability insurance) together with an Owner's Contractor's Policy with
limits against bodily injury and property damage of not less than $2,000,000 for each
ocaurence (to accomplish the above -required limits, an umbrella excess liability policy
may be used); and
(iii) Worker's compensation insurance, with statutory coverage and employer's
liability protection.
The policies of insurance required pursuant to clauses (i) and (ii) above shall be in form and
content satisfactory to the Authority and shall be placed with financially sound and reputable
insurers licensed to transact business in the State, the liability insurer to be rated A or better in
Best's Insurance Guide. The policy of insurance delivered pursuant to clause (i) above shall
contain an agreement of the insurer to give not less than thirty (3 0) days' advance written notice
to the Authority in the event of cancellation of such policy or change affecting the coverage
thereunder. .
(b) Upon completion of construction of the Improvements and prior to the Tmnination
Date, the Developer shall maintain, or cause to be maintained, at its cost and expense, and from
time to time at the request of the Authority shall furnish proof of the payment of premiums on,
insurance as follows:
(i) Insurance against loss and/or damage to the Improvements under a policy or
policies covering such risks as are ordinarily insured against by similar businesses,
including (without limiting the generality of the foregoing) fire, extended coverage, all risk
vandalism and malicious mischief, boiler explosion, water damage, demolition cost, debris
removal, and collapse in an amount not less than the full insurable replacement value of the
Improvements, but any such policy may have a deductible amount of not more than
$10,000. No policy of insurance shall be so written that the proceeds thereof will produce
less than the minimum coverage required by the preceding sentence, by reason of co -
15
insurance provisions or otherwise, without the prior consent thereto in writing by the
Authority. The term "full insurable replacement value" shall mean the actual replacement
cost of the Improvements (excluding foundation and excavation costs and costs of
underground flues, pipes, drains and other uninsurable items) and equipment, and shall be
determined from time to time at the request of the Authority, but not more frequently than
once every three years, by an insurance consultant or insurer, selected and paid for by the
Developer and approved by the Authority.
(ii) Comprehensive general public liability insurance, including personal injury
liability (with employee exclusion deleted), and automobile insurance, including owned,
non -owned and hired automobiles, against liability for injuries to persons and/or property,
in the minimum amount for each occurrence and for each year of $2,000,000.00.
(iii) Such other insurance, including worker's compensation insurance respecting
all employees of the Developer, if any, in such amount as is.customarily carried by like
organizations engaged in like activities of comparable size and liability exposure; provided
that the Developer may be self-insured with respect to all or any part of its liability for
worker's compensation.
(c) All insurance required in Article V of this Agreement shall be taken out and
maintained in responsible insurance companies selected by the Developer which are authorized
under the laws of the State to assume the risks covered thereby.
. (d) The Developer agrees to notify the Authority immediately in the case of damage
exceeding $100,000 in amount to, or destruction of, the Improvements or any portion thereof
resulting from fire or other casualty. In the event of any such damage, the Developer will
forthwith repair, reconstruct and restore the Improvements to substantially the same or an
improved condition or value as existed prior to the event causing such damage and, to the extent
necessary to accomplish such repair, reconstruction and restoration, but subject to the rights of
Developer's lenders, the Developer will apply the proceeds of any insurance relating to such
damage received by the Developer to the payment or reimbursement of the costs thereof
The Developer shall complete the repair, reconstruction and restoration of the Improvements,
whether or not the Net Proceeds of insurance received by the Developer for such purposes are
sufficient to pay for the same: Any proceeds remaining alter completion of such repairs,
construction and restoration shall be retained by the Developer.
If the Developer fails to fulfill its obligations to repair, reconstruct and restore the Improvements
within a reasonable time after the occurrence of the damage, the Authority shall be entitled, as its
only remedy on account thereof, to terminate the Note.
Section 5.2. Condemnation. In the event that title to and possession of the Improvements or
any material part thereof shall be taken in condemnation or by the exercise of the power of
eminent domain by any governmental body or other person prior to the Termination Date, the
Developer shall, with reasonable promptness after such taking, notify the Authority as to the
nature and extent of such taking. Upon receipt of any condemnation award, but subject to the
16
rights of Developer's tenders, the Developer shall elect to either: (a) use the entire condemnation
award to reconstruct the Improvernents (or, in the event only a part of Improvements have been
taken, then to reconstruct such part) within the Project Area; or (b) retain the condemnation
award whereupon in the event that a substantial portion of the Property and Improvements have
been taken, the Authoritys obligations under the Note shall terminate as of the date of the taking.
17
ARTICLE VI
Taxes; Tax Increment; Assessment Agreement
Section 6.1. Real PrT pg1y Taxes. The Developer shall pay or cause to be paid when due
and prior to the imposition of penalty all real property taxes and installments of special
assessments payable with respect to the Property atter the Developer acquires the Property. In
addition, the Developer agrees that prior to the Termination Date: (1) it will not seek
administrative or judicial review of the applicability of any tax statute determined by any Tax
Official to be applicable to the Improvements or the Property or raise the inapplicability of any
such tax statute as a defense in any proceedings, including delinquent tax proceedings; (2) it will
not seek administrative or judicial review of the constitutionality of any tax statute determined by
any tax official to be applicable to the Improvements or the Property or raise the
unconstitutionality of any such tax statute as a defense in any proceedings, including delinquent
tax proceedings; and (3) it will not cause a reduction in the Minimum Market Value of the
Improvements through:
(a) willful destruction of the Improvements or any part thereof;
(b) willful refusal to reconstruct damaged or destroyed property pursuant to
Section 5.1(d) of this Agreement;
(c) a request to the County assessor to reduce the assessed value of the Property
below the Minimum Market Value of all or any portion of the Property or Improvements;
(d) a petition to the board of equalization of the County to reduce the assessed value
of the Property below the Minimum Market Value;
(e) a petition to the board of equalization of the State or the commissioner of revenue
of the State to reduce the assessed value of the Property below the Minimum Market Value;
(f) an action in a district court of the State or the tax court of the State seeking a
reduction in the assessed value of the Property below the Minimum Market Value;
(g) an application to the commissioner of revenue of the State or to any local taxing
jurisdiction requesting an abatement of real property taxes regarding the Property or
Improvements;
(h) any other proceedings, whether administrative, legal or equitable, with any
administrative body within the County or the State or with any court of the State or the federal
government regarding a reduction in the assessed value of the Property below the Minimum
Market Value; or
(i) a transfer of the Property or Improvements, or any part thereof, to an entity
exempt from the payment of real property taxes under State law.
is
Notwithstanding anything contained in this Section 6.1 or elsewhere in this Agreement to the
contrary, the Developer may contest real property taxes assessed in excess of the Minimum
Market Value of the Improvements. The Developer shall notify the City and Authority of any
administrative or judicial review affecting the Improvements or the Property. In such event, the
Authority will continue to make payments under the Note to the Developer based upon the value
stated in the Assessment Agreement, with any additional Tax Increment available for payment
being withheld from Developer until such time that the administrative or judicial review
affecting the Improvements or the Property is finally determined. The Developer shall not, prior
to the Termination Date, apply to any taxing jurisdiction for a deferral or abatement of property
tax on the Property or Improvements.
The parties hereto acknowledge that Developer intends to apply to have the Property
certified as low-income rental housing property as described in Minnesota Stattrttes, Section
273.13, Subdivision 25(e). Nothing set forth in this Agreement shall restrict Developer from
applying to have the Property certified as low-income rental housing property as described in
Minnesota Statutes, Section 273.13, Subdivision 25(e).
Section 6.2. Tax Increment Subject to the limitations contained in the Note, the Authority
hereby pledges to the payment of the Note the Available Tax Increment. Tax Increment received
by the Authority in excess of Available Tax Increment shall be the Authority's property and, the
Authority shall be free to use such excess Tax Increment for any purpose for which such Tax
Increment may be used under the Tax Increment Act.
Section 6.3. Developer's,epectations Concern Note. The Developer makes the
following representations to the Authority with respect to the issuance of the Note:
(a) The Developer has not relied on any representations of the Authority, or any of its
officers, agents, or employees, and has not relied on any opinion of any attorney of the
Authority, as to the federal or State income tax consequences relating to the ownership of the
Note by the Developer.
(b) The Developer is sufficiently knowledgeable and experienced in financial and
business matters, including the purchase and ownership of obligations of a nature similar to the
Note, to be able to evaluate the risks and merits of the purchase and ownership of the Note. The
Developer has been made aware of the security for the Note and the proposed uses of the
proceeds of the Note, and has received the cooperation of the Authority in undertaking any due
diligence that the Developer has deemed necessary or appropriate.
(c) The Developer understands that the portion of the Tax Increment pledged to the
payment of the Note pursuant to this Agreement is the sole source of money that is pledged and
will be available for the payments due under the Note; that the Authority is not under any
obligation to repurchase the Note from the Developer under any circumstances; that the Note is
not a general obligation of the Authority; and that, if the Tax Increment pledged to the payment
of the Note pursuant to this Agreement is not sufficient to make the payments due tinder the Note
in full, no right will exist to have taxes levied by the Authority or the City for the payment of the
unpaid amounts due under the Note.
19
(d) The Developer understands that the Tax Increment necessary to pay the Note has
been estimated assuming that the Improvements will have certain market values on certain dates.
All estimates of Tax Increment that have been prepared by or on behalf of the Authority have
been done for the Authority's use only and neither the Authority nor its consultants shall have
liability to the Developer if the actual Tax Increment is less than the amounts estimated. In the
event, among other things, the Developer fails to complete the Improvements in a tamely manner
or the market value of the Improvements does not reach certain levels, the Tax Increment
pledged to the payment of the Note may be inadequate to pay the total principal of and interest
on the Note.
(e) The Developer understands that the Note is not registered or otherwise qualified
for sale or transfer under the securities lavas and regulations of the State or under federal
securities laws or regulations, the Note is not listed on any stock or other securities exchange,
and the Note will carry no rating from any rating service.
Except as provided herein, the Note may not be transferred to any third party without the
prior written approval of the Authority. The Authority hereby approves the transfer of the Note
by the Developer to the Minnesota Housing Finance Agency C MHFA'D as part of the permanent
financing for the Project. Any transferee of a Note shall be required to execute an instrument
malting the representations to the Authority contained in this Section; provided, that such
requirement shall not apply to a transfer or assignment of the Note to the NWA.
Section 6.4. income Restrictions. (a) The Authority and the Developer understand
and agree that the Tax Increment District is a "housing district" under Section 469.174, Subd. 11
of the Tax Increment Act. Accordingly, in compliance with Section 469.1761, Subd. 3 of the
Tax Increment Act, the Developer agrees that the Improvements must satisfy, or be treated as
satitsffing, the income requirements for a qualified residential rental project as defined in Section
142(d) of the Internal Revenue Code. The parties finther agree that no more than 20% of the
square footage of the Improvements (which is the only building receiving assistance from Tax
Increments) may consist of commercial, retail, or other nonresidential uses. The Developer must
meet the above requirements as follows:
(i) At least 40% of the residential units in the Improvements must be
occupied or available for occupancy by persons whose incomes do not exceed
60% of the County area median income; and
(ii) The limits described in clause (A) must be satisfied through the
Termination Date. Income for occupants of units described in clause (A) shall be
adjusted for family size in accordance with Section 142(d) of the Internal
Revenue Code and related regulations.
(b) On or before each January 1, commencing on January 1, 2016, the Developer or
an agent of the Developer must deliver or cause to be delivered to the Authority a Compliance
Certificate executed by the Developer covering the preceding six months together with written
evidence satisfactory to the Authority of compliance with the covenants in this Section. This
evidence must include a statement of the household income of each of qualifying renter, a
20
written determination that each qualifying renter's household income falls within the qualifying
limits of this Section (and Section 142(d) of the Internal Revenue Code), and certification that
the income documentation is correct and accurate (and that the determination of qualification
was made in compliance with Section 142(d) of the Internal Revenue Code). The Authority may
review, upon request, all documentation supporting the Developer submissions and statements.
In determining compliance with this Section., the Developer must use the County median
incomes for the year in which the payment is due on the Note, as promulgated by the Minnesota
Housing Finance Agency based on the area median incomes established by the United States
Department of Housing and Urban Development
(c) In the event that there occurs a failure on the part of the Developer to comply with
the restrictions contained in the Tax Increment Act or this Section 6.4 that results in liability on
the part of the Authority or City for repayment of Tax Increment or penalties, the Developer
shall be liable to the Authority and on demand shall pay to the Authority the amount of any
liability. Without limiting any other remedy available to the Authority, the Authority shall be
entitled to specifically enforce the Developer's covenants under this Section.
(d) The income restrictions contained in this Section 6.4 shall apply to the
Improvements until the Termination Date, notwithstanding the earlier termination of this
Agreement or the Note.
Section 6.5. Assessment Aareement.
(a) Upon commencement of construction of the Improvements, the Developer shall,
with the Authority, execute an Assessment Agreement pursuant to Minnesota Statutes, Section
469.177, subd. 8, specifying an assessor's Minimum Market Value for the Improvements. The
amount of the minimum Market Value of the Improvements shall be $5,916,000 as of January 2,
2016 and each January 2 thereafter, notwithstanding the status of construction by such dates.
(b) The Assessment Agreement shall be substantially in the form attached as Schedule
D. Nothing in the Assessment Agreements shall limit the discretion of the assessor to assign a
market value to the property in excess of such Minimum Market Value, The Assessment
Amt shall remain in force for the period specified in the Assessment Agreement..
21
ARTYCLE VII
MoEigage Financin
Section 7.1. Mortgage Financing. On or before June 1, 2014, the Developer shall provide
to the Authority evidence of a commitment for mortgage financing sufficient for construction of
the Improvements. If the Authority finds that the mortgage financing is sufficiently committed,
adequate in amount to provide for the construction of the Improvements, and subject only to such
conditions as the Authority approves, then the Authority shall notify the Developer in writing of
its approval. Such approval shall not be unreasonably withheld and either approval or rejection
shall be given within fourteen (14) days from the date when the Authority is provided the
evidence of mortgage financing. The issuance of a building permit for the Improvements by the
City shall be deemed to evidence the Authority's approval under this Section. If the Authority
rejects the evidence of mortgage financing as inadequate, it shall do so in writing specifying the
basis for the rejection. In any event, the Developer shall submit adequate evidence of mortgage
financing within thirty (30) days after such rejection.
Notwithstanding the foregoing, the Authority acknowledges receipt from the Developer of
the commitment for mortgage financing as described above and acknowledges that such
commitment has been approved by the Authority.
22
ARTICLE VIII
Prohibitions Against As ' ment and Transfer Indemnification
Section 8.1. Prohibition Against Transfer of EMRM and Asci eat of A ement. The
Developer represents and agrees that the Developer has not made or created and, prior to the
Termination Date, will. not make or create, or suffer to be made or created, any total or partial
Me, 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 Property or any part thereof or any interest
herein or therein, or any contract or agreement to do any of the same, other than to residential
tenants in the ordinary course of business, without the prior written approval of the Authority,
which approval shall not be unreasonably withheld or delayed. Notwithstanding the foregoing,
the Developer may transfer the Property and assign its interest in this Agreement to an entity
affiliated with the Developer or the Developer's owners provided that such new entity executes
an instrument in a form acceptable to the Authority by which it assumes and agrees to perform
the Developer's obligations under this Agreement. No such assignment or transfer shall relieve
the Developer of any liability under this Agreement unless the Authority in writing specifically
releases the Developer. A transfer of partnership interests in the Developer shall not be
considered a transfer of the Properly hereunder.
Section 8.2. Release and Indemnifica#ion Covenants.
(a) The Developer releases from and covenants aad agrees that the Authority, the City
and the governing body members, officers, agents, servants and employees thereof shall not be
liable for and agrees to indemnify and hold harmless the Authority, the City, and the governing
body members, officers, agents, servants and employees thereof against any loss or damage to
property or any injury to or death of any person occurring at or about or resulting from any
defect in the Improvements, provided that the foregoing indemnification obligation shall not
apply to damages resulting from any actions or inactions of any of the foregoing parties that are
not contemplated by this Agreement.
(b) Except for any willful misrepresentation, any willful or wanton misconduct or
gross negligence of the following named parties, the Developer agrees to protect and defend the
Authority, the City, and the governing body members, officers, agents, servants and employees
thereof, now or forever, and further agrees to hold the aforesaid harmless finm any claim,
demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising
or purportedly arising from this Agreement, or the transactions contemplated hereby or the
acquisition, construction, installation, ownership, and operation of the Improvements.
(c) The Authority, the City, and the governing body members, officers, agents,
servants and employees thereof shall not be liable for any damage or injury to the persons or
property of the company or its officers, agents, servants or employees or any other person who
may be about the Property or Improvements due to any act of negligence of any person.
(d) All covenants, stipulations, promises, agreements and obligations of the Authority
contained herein shall be deemed to be the covenants, stipulations, promises, agreements and
23
obligations of the Authority and not of any governing body member, officer, agent, servant or
employee of the Authority in the individual capacity thereof.
(e) Nothing in this Section or Section 8.3 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 8.3. Environmental Conditions. (a) The Developer acknowledges that the
Authority makes no representations or warranties as to the condition of the soils of the Property
or the fitness of the Property for construction of the Minimum Improvements or any other
purpose for which the Developer may make use of such property, and that the assistance
provided to the Developer under this Agreement neither implies any responsibility by the
Authority for any contamination of the Property nor imposes any obligation on the Authority to
participate in any cleanup of the Property. The City has made certain representations and has
agreed to certain obligations in the Option Agreement.
(b) Without limiting its obligations under Section 8.2 of this Agreement, the
Developer further agrees that, except for any misrepresentation or any misconduct or affirmative
act by the Authority or the City and except for any breach by the Authority of its obligations
under this Agreement and except for the City's obligations with respect to the environmental
condition of the Property as provided in the Option Agreement, the Developer 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 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;
provided, however, that such indemnification obligations do not apply to costs for which the City
is responsible under the terms of the Option Agreement. 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.
24
ARTICLE IX
Events of Default
Section 9.1. Events of Default Defined. The term "Event of Default" shall mean, whenever
it is used in this Agreement (unless the context otherwise provides):
(a) any failure by Developer to observe or perform any covenant, condition, obligation
or agreement on its part to be observed or performed hereunder; or
(b) if, before issuance of the certificate of completion for the Improvements, the
Developer 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 or under any similar federal or State law, which action is not
dismissed within sixty (60) days after filing; or
or
(ii) make an assignment for benefit of its creditors; or
(iii) admit in writing its inability to pay its debts generally as they become due;
(iv) be adjudicated a bankrupt or insolvent.
Section 9.2. Authori Ys s Remedies on Default. Whenever any Event of Default by
Developer referred to in Section 9.1 of this Agreement occurs, the Authority may immediately
suspend its performance ander this Agreement and/or the Note until it receives assurances from
the Developer, deemed adequate by the Authority, that the Developer will cure its default and
continue its performance under this Agreement and may take any one or more of the following
actions after providing thirty (30) days written notice to the Developer of the Event of Default,
but only if the Event of Default has not been cured within said thirty (30) days, or such longer
period of time as the Authority may reasonably determine if the Event of Default is of a nature
that it cannot be cured in thirty (30) days:
(a) Terminate this Agreement and/or the Note.
(b) Take whatever action, including legal, equitable or administrative action, which
may appear necessary or desirable to the Authority to collect any payments due under this
Agreement, or to enforce performance and observance of any obligation, agreement, or covenant
of the Developer under this Agreement.
Developer's investor limited partner ("Investor Limited Partner") shall have the right, but not the
obligation, to cure any Event of Default by Developer under this Agreement or any default under
any other document to, be executed in connection herewith, and Authority shall accept
performance by Investor Limited Partner of any obligation of Developer thereunder as though
25
tendered by Developer itself, provided such performance by Investor Limited Partner has
occurred during the applicable cure period, if any, provided to Developer thereunder with respect
to such default or Event Of Default
Section 9.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the
Authority or Developer 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 aceniing upon any default shall impair any
such right or power or shall be construed to be a waiver thereof, but any such right and power
may be exercised from time to time and as often as may be deemed expedient In order to entitle
the Authority or the Developer to exercise any remedy reserved to it, it shall not be necessary to
give notice, other than such notice as may be required in this Article DC
Section 9.4. No Additional Waiver Implied by One. Waiver. In the event any agreement
contained in this Agreement should be breached by either party and thereafter waived by the
other parry, 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 9.5. Costs of Enforcement 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 of performance or observance of any obligation or agreement
on the part of the Developer under this Agreement, the Developer agrees that it shall be liable for
the reasonable fees of such attorneys and such other expenses so reasonably incurred by the
Authority.
Section 9.6 The Developer's Option toa Miggkate. This Agreement may be terminated
by Developer, if (i) the Developer is in compliance with all material terns of this Agreement and
no Event of Default has occurred; and (ii) the Authority fails to comply with any material term of
this Agreement, and, after written notice by the Developer of such failure, the Authority has
failed to cure such noncompliance within ninety (90) days of receipt of such notice, or, if such
noncompliance cannot reasonably be cured by the Authority within ninety (90) days, of receipt
of such notice, the Authority has not provided assurances, reasonably satisfactory to the
Developer, that such noncompliance will be cured as soon as reasonably possible.
Section 9.7 Action to Terminate. Termination of this Agreement pursuant to Section
9.6 must be accomplished by written notification by the Developer to the Authority within thirty
(30) days after the date when such option to terminate may first be exercised. A failure by the
Developer to terminate this Agreement within such period constitutes a waiver by the Developer
of its rights to terminate this Agreement due to such occurrence or event.
Section 9.8 Effect of Termination. If this Agreement is terminated pursuant to
Sections 9.6 and 9.7, this Agreement shall be from such date forward null and void and of no
further effect; provided, however, the tmm3ination of this Agreement shall not affect the rights of
either party to institute any action, claim or demand for damages suffered as a result of breach or
default of the terms of this Agreement by the other party, or to recover amounts which had
26
accrued and become due and payable as of the date of such termination. Upon termination of this
Agreement pursuant to Sections 9.6 and 9.7, the Developer shall be free to proceed with the
Project at its own expense and without regard to the provisions of this Agreement; provided,
however, that the Authority shall not be required to make any further payments on the Note.
27
ARTICLE X
Additional Provisions
Section 10.1.ltenresentatives Not Individually Liable. No member, official, or employee
of the Authority shall be personally liable to the Developer, or any successor in interest, in the
event of any default or breach or for any amount which may become due to Developer or
successor or on any obligations under the terms of the Agreement.
Section 10.2. Restrictions on Use. The Developer agrees for itself, and its successors and
assigns, and every successor in interest to the Property, or any part thereof, that the Developer,
and such successors and assigns, shall until the Termination Date devote the Property to, and
only to and in accordance with, the uses specified in this Agreement.
Section 10.3. Titles of Articles and Sections. Any titles of the several parts, Articles, and
Sections of the Agreement are inserted for convenience of reference only and shall be
disregarded in construing or interpreting any of its provisions.
Section 10.4. Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand, or other communication under the Agreement by either party to
the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail,
postage prepaid, return receipt requested, or delivered personally; and
(a) in the case of the Developer, is addressed to or delivered personally to the
Developer at 7500 West 78a' Street, Edina, Minnesota 55439, with copies to:
Winthrop & Weinstine, P.A.
Capella Tower, Suite 3500
225 South Sixth Street
Minneapolis, MN 55402
Attn: Jeffrey Koerselman
And so long as any affiliates of Wells Fargo Bank, N.A. owns a partnership interest in
Developer, to:
Wells Fargo Affordable Housing
Community Development Corporation
MAC D1053-170
301 South College Street, 17th Floor
Charlotte, NC 28202-6000
Attention: Director of Asset Management; and
(b) in the case of the Authority, is addressed to or delivered personally to the Authority
at City Hall, 4401 Xylon Avenue North, New Hope, Minnesota 55428.
Or at such other address with respect to either such party as that party may, from time to time,
designate in writing and forward to the other as provided in this Section.
28
Section 10.5. Disclaimer of Relationships. Nothing contained in this Agreement nor any
act by the Authority or the Developer shall be deemed or construed by any person to create any
relationship of third -party beneficiary, principal and agent, limited or general partner, or joint
venture among the Authority, the Developer, and/or any third party.
Section 10.6. Modifications. This Agreement may be modified solely through written
amendments hereto executed by the Developer and the Authority.
Section 10.7. Counter arts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section 10.8. Judicial Interpret. Should any provision of this Agreement require
judicial interpretation, the court interpreting or construing the same shall not apply a presumption
that the terms hereof shall be more strictly construed against one party by reason of the. rule of
construction that a document is to be construed more strictly against the party who itself or
through its agent or attorney prepared the same, it being agreed that the agents and attorneys of
both parties have participated in the preparation hereof
Section 10.9. Business Subsidy Act. Because the Authority's assistance to the
Developer's development is being made available for the purpose of encouraging the
development of housing, the assistance does not constitute a business subsidy within the meaning
of Minnesota Stn—, sections 1161993 to 116J'.995.
Section 10.10 Termination. This Agreement shall be null and void on the Termination
Date, provided, that Sections 8.2 and 8.3 shall survive any rescission, termination or expiration
of this Agreement with respect to or arising out of any event, occurrence or circumstance
existing prior to the date thereof.
29
IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed
in its name and behalf and the Developer his caused this Agreement to be duly executed in its
name and behalf on or as of the date first above written.
NEW HOPE ECONOMIC
DEVELOP1ENT AUTHORITY
I
t
COMPASS POINTE LIMITED
PARTNERSHIP
By Compass Pointe, LLC, its General Partner
By Ronald Clark, its Chief Manager
STATE OF MINNESOTA )
SS.
COUNTY OF
IF
The01til
g fps nt was ackp1 wlpd fore N this da of ,
2014 by b(� and W "1 y pV �G�gt , the President and Executive
Director of the New Hope Economic Development Authority, a public body politic and
corporate, on behalf of the authority.
Notary
V91STEVEN A. SONORALLSTATE OF NIINNESOTA) ry Pum�Minrmsot& IMP WWWWW",
S fm wa E�nr u Jon 31 2015
COUNTY OF )
The foregoing instrument was acknowledged before me thus day
of , 2014, by Ronald Clark, the Chief Manager of Compass Pointe, LLC, a
Minnesota limited liability company, the general partner of of Compass Pointe Limited
Partnership, a Minnesota limited partnership, on behalf of the limited partnership.
Notary Public
30
IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed
in its name and behalf and the Developer has caused this Agreement to be duly executed in its
name and behalf on or as of the date first above written.
NEW HOPE ECONOMIC
DEVELOPMENT AUTHORITY
A
COMPASS POINTE LEVIITED
PARTNERSHIP
By Co ass Pointe, LLC, its General Partner
By Ronald Clark, its Chief Manager
STATE OF MINNESOTA )
) SS.
COUNTY OF _ )
The foregoing instrument was acknowledged before me this day of
2014, by and _ , the President and Executive
Director of the New Hope Economic Development Authority, a public body politic and
corporate, on behalf of the authority.
STATE OF MINNESOTA )
SS.
COUNTY OF
Notary Public
ja�SARAHMA�RY DDNI;
Notary M1nnwK a
Mr ��a,ae, st, xutT
The foregoing instrument was acknowledged before me this --27 - day
of ajj A --, 2014, by Ronald Clark, the Chief Manager of Compass Pointe, LLC, a
Minnesota limited liability company, the general partner of of Compass Pointe Limited
Partnership, a Minnesota limited partnership, on behalf of the limited partnership.
Notary Public
30
SCHEDULE A
Description of Property
Authority Property:
Outlot 1, Mork -Campion Heights, Hennepin County, Minnesota (Ton -ens Property
Torrens Certificate No. 1330260)
The Fast 75 Feet of Oudot 2, Mork -Campion Heights as measured at a right angle from the East
line thereof, Hennepin County, Minnesota
The West 75 Feet of the East 150 feet of Outlot 2, Mork -Campion Heights as measured at a right
angle from the East line thereof, Hennepin County, Minnesota
The West 75 Feet of the East 225 feet of Outlot 2, Mork -Campion Heights as measured at a right
angle from the East line thereof, Hennepin County, Minnesota
Developer Property:
The West 75 feet of the East 300 feet of Outlot 2, Mork -Campion Heights, Hennepin County
Minnesota, according to the recorded plat thereof as measured at a right angle from the East line
thereof
The Developer Property and the Authority Property will be platted as Lot 1, Block 1,
Compass Pointe, Hennepin County, Minnesota.
SCHEDULE B
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY
TAXABLE LIMITED REVENUE TAX INCREMENT NOTE
(COMPASS POINTE LIMITED PARTNERSHIP)
The New Hope Economic Development Authority (the "Authority"), hereby acknowledges
itself to be indebted and, for value received, promises to pay to the order of Compass Pointe
Limited Partnership, a Minnesota limited partnership, or its permitted assigns (the "Owner"),
solely firm the source, to the extent and in the manner hereinafter provided, the principal amount
of this Note, being Six Hundred Eighty Four Thousand Two Hundred Fifty Five Dollars
($684,255.00) (the "Principal Amount"), commencing on August 1, 2016, and continuing on
each February 1 and August 1 thereafter up to and including February 1, 2042 (the "Scheduled
Payment Dates"). interest at the rate of five and one half percent (5.5%) per annum shall accrue
from the date of this Note on the Principal Amount and shall be added to the Principal Amount
on each February 1 and August 1 up to and including February 1, 2016. From and after February
1, 2016, simple non -compounding interest at the rate of five and one half percent (5.5%) shall
accrue on the outstanding Principal Amount until this Note has been paid in full or terminated in
accordance with its terms. This Note is the Note defined in that certain Purchase and
Development Agreement dated as of , 2014, between the Authority and the Owner (the
"Contract").
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 firll conformity with 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 capital and administrative costs incurred and to be incurred by the Authority
within and for the benefit of its Redevelopment Project No. 1(the "Project").
THIS NOTE IS A SPECIAL AND LIMITED AND NOT A GENERAL
OBLIGATION OF THE AUTHORITY PAYABLE SOLELY OUT OF AVAILABLE TAX
INCREMENT, AS DEFINED BELOW, AND NEITHER THE STATE, THE CITY OF
NEW HOPE, NOR ANY POLITICAL SUBDIVISION OF THE STATE, SHALL BE
LIABLE ON THIS NOTE, NOR SHALL THIS NOTE BE PAYABLE OUT OF ANY
FUNDS OR PROPERTIES OTHER THAN AVAILABLE TAX INCREMENT.
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 in the six (6) month
period preceding such Scheduled Payment Date "Available Tax Increment". For purposes of this
Note, Available Tax Increment with respect to any Scheduled Payment Date shall mean ninety
percent (90%) of the Tax Increment, as defined in the Contract, that has been received by the
Authority in the six (6) month period preceding a Scheduled Payment Date. Available Tax
Increment constitutes a portion of the real property taxes paid with respect to that certain real
property described on the attached Exhibit A (hereinafter referred to as the "Property").
The Authority shall pay on each Scheduled Payment Date to the Owner the lesser of. (i)
the Available Tax Increment; or (ii) the amount remaining to be paid under this Note. On the
earlier of: (i) the date that this Note has been paid in full; or (ii) February 1, 2042, which is the
last Scheduled Payment Date, after making the payment due on such date, the Authority's
payment obligations under this Note shall terminate and this Note shall no longer be an
obligation of the Authority. All payments made by the Authority shall be applied first to accrued
interest and then to the Principal Amount of this Note. The Authority may, at its option, prepay
this Note in whole or in part at any time at a price of the outstanding Principal Amount plus
accrued and unpaid interest.
The Authority's obligations herein are subject to the terms and conditions of the Contract.
Upon the occurrence of an Event of Default as provided in Section 9.1 of the Contract, which
Contract is incorporated herein and made a part hereof by reference, the Authority's payment
obligations hereunder shall be suspended and, upon expiration of all applicable cure periods
provided for in Section 9.2 of the Contract, this Note may be terminated by the Authority. Upon
such termination, the Authority's obligations to make finther payments hereunder shall be
discharged. Such termination may be accomplished by the Authority's giving of written notice
to the then registered owner of this Note, as shown on the books of the Authority.
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 Available Tax Increment, 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.
This Note shall not be transferable or assignable, in whole or in part, by the Owner
without the prior written consent of the Authority, which consent shall not be unreasonably
withheld. This Note is issued pursuant to Resolution of the Authority and is entitled to the
benefits thereot which resolution is incorporated herein by reference.
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 New Hope Economic Development Authority, by its
Board of Commissioners, has caused this Note to be executed by the manual sigwures of the
and the of the Authority and has caused this Note to be dated
20
EX KBIT A TO NOTE
Description of Property
Lot 1, Block 1, Compass Pointe, according to the recorded plat thereof, Hennepin County,
Minnesota.
Hennepin County, Minnesota
Abstract Property
Torrens Certificate No.
SCHEDULE C
Developer Pro forma
C MKTIM
Lana
OamdAWaSe►AhaYnml
Anommep
Reboatwn
La Buy Oat
ONSTMIOTION OOaTS
sombo "hopm-f"W"
Puma
MCN AdWeI0 M=AC
Pa81Da61cullwl
BUWma PPn
C'
XFT COBTS
PROMWONAL SERMES
AwhledmA Erpaeng B PmlafuW.W Fee►
ah a Parc D40w00en
soft
Elariwunwial
�^'a7
FELE
Lao/ -Dash mwa
FOMMM COSTS
ConobL% im141wan
kavnm Fm
TAB knummmm
Lombne"
Bona Oedmal
T0wh0
MwIP4e ReyOWanen 7aa
Dole S6rAm Ra6rr.
ka■w4 Mw ONVIOUalmw
FMMdF* Fs
Eamaue
Mut COI
TeaDiarindwa
MAULNEN7 LOAN
A00BUED EXPENSES
REALSETATE TAXES
COMMO[ENCY-4x
PROJECT MANAGEMENT
Demo rFaa
CAM ACCOMITS
RMmdaatEnt Fina
L%=go-w4 Slag ap
Teml Sea Ceub
161.610
p—INR 1i
EHLERS
1 A►►►au+a► No
$9.000
City/ Df New Hope
WOOD
Ron Clark DeveMpment
o
Go Unit Tax Credit Apartment
9
4
m
EYELOFER FIWINCWG-Id Me11M 1628% 1647%
„1.076.000
EVEIAPER FDUWCINO-TIF Lam
620% 6.36%
604260
LXCREDITEOOITY
7616% 70.17%
10.106,904
EYELOPER EOUTY
060% 02M
1
ANOYRr FSMRCW
06.70%
12.1e1AN
Lana
OamdAWaSe►AhaYnml
Anommep
Reboatwn
La Buy Oat
ONSTMIOTION OOaTS
sombo "hopm-f"W"
Puma
MCN AdWeI0 M=AC
Pa81Da61cullwl
BUWma PPn
C'
XFT COBTS
PROMWONAL SERMES
AwhledmA Erpaeng B PmlafuW.W Fee►
ah a Parc D40w00en
soft
Elariwunwial
�^'a7
FELE
Lao/ -Dash mwa
FOMMM COSTS
ConobL% im141wan
kavnm Fm
TAB knummmm
Lombne"
Bona Oedmal
T0wh0
MwIP4e ReyOWanen 7aa
Dole S6rAm Ra6rr.
ka■w4 Mw ONVIOUalmw
FMMdF* Fs
Eamaue
Mut COI
TeaDiarindwa
MAULNEN7 LOAN
A00BUED EXPENSES
REALSETATE TAXES
COMMO[ENCY-4x
PROJECT MANAGEMENT
Demo rFaa
CAM ACCOMITS
RMmdaatEnt Fina
L%=go-w4 Slag ap
Teml Sea Ceub
161.610
p—INR 1i
W IRM
$9.000
421%
WOOD
*AM
o
9
4
0
$137.364
7220%
0,370,106
000%
0
000%
D
><0
DOOR
0
000%
0
000It
0
000%
0
OW%
0
000%
a
eon
0 a6%
700.776
0.40%
0
a DD%
0
400%
0
a DD%
0
000%
0
000%
D
400%
a
000%
0
000%
a
a
6.00%
610A70
01X!%
Ismo
4
0
a
000%
0
0
0
6
6
0
Doe%
0
0
0
0
O
0
D
0
0.71%
1266.000
D
0
166%
3p4.01!
0
AA33.103
A
e
1266ADD
7aeAM
3.640AM
Page i of 1
Pnpwad by Mhrma IRR Am"ft 6.36.14-M-1 is DA
SCHEDULE D
Assessment Agreement
ASSESSMENT AGREEMENT
and
ASSESSOR'S CERTIFICATION
By and among
NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY,
COMPASS POINTE LIMITED PARTNERSITYP,
and
COUNTY ASSESSOR OF THE COUNTY OF HENNEPIN
This document was drafted by:
BRADLEY & DEIKE, P.A.
4018 West 65" Street, Suite 100
Edina, Minnesota 55435
THIS AGREEMENT, dated as of this day of , 2014, by and between the
New Hope Economic Development Authority, a body politic and corporate (the "Authority") and
Compass Pointe Limited Partnership, a Minnesota limited partnership (the "Developer").
WITNESSETH: that:
WHEREAS, on or before the date hereof the Authority and the Developer entered into
that certain Purchase and Development Agreement (the "Development Agreement") regarding
certain real property located in the City of New Hope, hereinafter referred to as the Property and
legally described in Exhibit A hereto; and
WHEREAS, it is contemplated that pursuant to said Development Agreement the
Developer will construct an affordable rental housing development on the Property; and
WHEREAS, the Authority and Developer desire to establish a minimum market value
for said land and the improvements to be constructed thereon, pursuant to Minnesota Statutes
Section 469.177, Subdivision S; and
WHEREAS, the Authority and the County Assessor for the County of Hennepin have
reviewed the preliminary plans and specifications for the improvements which it is contemplated
will be erected.
NOW, THEREFORE, the parties to this Agreement, in consideration of the promises,
covenants and agreements made by each to the other, do hereby agree as follows:
1. Commencing on January 1, 2016, and continuing on each assessment date
thereafter until the termination date stated in paragraph 2 below, the minimum market value
which shall be assessed for the land described in Exhibit A and the above described
improvements shall be not less than Five Million Nine Hundred and Sixteen Thousand Dollars
($5,916,000), notwithstanding incomplete construction of the above described improvements.
2. This Agreement shall terminate in its entirety on the earlier of December 31,
2040; or when the Note, as defined in the Development Agreement, has been paid.
3. This Agreement shall be promptly recorded at the expense of the Peveloper.
4. Neither the preambles nor provisions of this Agreement are intended to, nor shall
they be construed as, modifying the terms of the Development Agreement between the Authority
and the Developer.
5. This Agreement shall inure to the benefit of and be binding upon the successors
and assigns of the parties.
NEW HOPE ECONOARC
DEVELOPMENT AUTHORITY
By:
Its President
Its Executive Director
COMPASS POINTE LBUMD
PARTNERSHIP
By Compass Pointe, LLC, its General Partner
By Ronald Clark, its Chief Manager
STATE OF MINNESOTA )
) SS.
COUNTY OF }
The foregoing instrument was acknowledged before me this day of
2014, by and , the President and Executive
Director of the New Hope Economic Development Authority, a public body politic and
corporate, on behalf of the authority.
Notary Public
STATE OF MESNESOTA )
) SS.
COUNTY OF }
The foregoing instrument was acknowledged before me this day
of _ _ , 2014, by Ronald Clark, the Chief Manager of Compass Pointe, LLC, a
Minnesota limited liability company, the general parhner of of Compass Pointe Limited
Partnership, a Minnesota limited partnership, on behalf of the limited partnership.
Notary Public
CERTMCATION BY COUNTY ASSESSOR
The undersigned, having reviewed the plans and specifications for the improvements to
be constructed and the market value assigned to the Iand upon which the improvements are to be
constructed, and being of the opinion that the minimum market value contained in the foregoing
Agreement appears reasonable, hereby certifies as follows: The undersigned assessor, being
legally responsible for the assessment of the above described property, certifies that the market
values assigned to such land and improvements are reasonable.
County Assessor for the County
of Hennepin
STATE OF ACU+ NESOTA)
)ss.
COUNTY OF 1
The foregoing instrument was acknowledged before me this day of
, 2014, by the County Assessor for the County of Hennepin.
Notary Public
�' 1 1` 1- W41
Legal Description of Land
Lot 1, Block 1, Compass Pointe, according to the recorded plat thereof;; Hennepin County,
hfim rota.
Hennepin County, Minnesota
Abstract Property
Torrens Certificate No.
SCHEDULE E
QUIT CLAIM DEED
THIS INDENTURE, between the City of New Hope, Minnesota, a municipal corporation
under the laws of the State of Minnesota (the "Grantor"), and Compass Pointe Limited
Partnership, a Minnesota limited partnership (the "Grantee").
WITNESSETH, that Grantor, in consideration of the sum of Three Hundred and Four
Thousand Dollars ($304,000.00) and other good and valuable consideration the receipt whereof
is hereby aclmowledged, does hereby grant, bargain, quitclaim and convey to the Grantee, its
successors and assigns forever, all the tract or parcel of land lying and being in the County of
Hennepin and State of Minnesota described as follows, to -wit (such tract or parcel of Iand is
hereinafter referred to as the "Property"):
See Exhibit A Attached Hereto
To have and to hold the same, together with all the hereditaments and appurtenances
thereunto belonging in any wise appertaining, to the said Grantee, its successors and assigns,
forever,
Provided:
SECTION 1.
It is understood and agreed that this Deed is subject to the covenants, conditions,
restrictions and provisions of an agreement entered into between the New Hope Economic
Development Authority (the "Authority") and Grantee on the — day of _ _ , 2014, identified
as "Purchase and Development Agreement" (hereafter referred to as the "Agreement") which
Agreement is incorporated herein and made a part hereof by reference.
This provision, however, shall in no way prevent the Grantee from mortgaging this
Property in order to obtain funds for the purchase of Property hereby conveyed and for erecting
improvements thereon in conformity with the Agreement, any applicable redevelopment plan
and applicable provisions of the Zoning Ordinance of the City of New Hope, Minnesota.
It is specifically agreed that the Grantee shall promptly begin and diligently prosecute to
completion the redevelopment of the Property through the construction of the improvements
thereon, as provided in the Agreement.
Promptly after completion of the improvements in accordance with the provisions of the
Agreement, the Grantor will cause the Authority to furnish the Grantee with an appropriate
instrument so certifying (the "Certificate of Completion'). The Certificate of Completion 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 of the Agreement
and of this Deed with respect to the obligation of the Grantee, and its successors and assigns, to
construct the improvements and the dates for the beginning and completion thereof. The
Certificate of Completion and such determination shall not constitute evidence of compliance
with or satisfaction of any obligation of the Grantee to any holder of a mortgage, or any insurer
of a mortgage, securing money loaned to finance the purchase of the Property hereby conveyed
or the improvements, or any part thereof.
The Certificate of Completion and any other certifications provided for herein shall be in
such form as will enable them to be recorded with the County Recorder, or Registrar of Titles,
Hennepin County, Minnesota. If the Authority shall refuse or fail to provide any such
certification in accordance with the provisions of the Agreement and this Deed, the Grantor shall,
within thirty (30) days after written request by the Grantee, provide the Grantee with a written
statement indicating in adequate detail in what respects the Grantee has failed to complete the
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 Grantor, for the Grantee to take
or perforin in order to obtain such certification.
ECTI 2
In the event the Grantee herein shall, prior to the completion of construction of the
improvements under the Agreement as evidenced by the recording of the Certificate of
Completion for such unit, hereinabove referred to:
(a) Fail to begin construction of the improvements provided for in this Deed
and the Agreement in conformity with the Agreement and such failure is not due to
unavoidable delays (as defined in the Agreement) and such failure is not cured within one
hundred and twenty 020) days after written notice to do so; or
(b) Subject to extensions due to Unavoidable Delays, as defined in the
Agreement, default in or violate its obligations with respect to the construction of the
improvements provided for in this Deed and the Agreement, or shall abandon or
substantially suspend constriction work, and such default, violation or failure is not due
to unavoidable delays (as defined in the Agreement), and any such default or violation,
abandonment or suspension shall not be cured, ended or remedied within one hundred
twenty (120) days after written demand by the Grantor so to do; or
(c) Fail to pay real estate taxes or assessments on the Property or any part
thereof when due, or shall place thereon any encumbrance or lien unauthorized by the
Agreement with the Grantor, or shall suffer any levy or attachment to be made, or any
materialmen's or mechanic's liens, or any other unauthorized encumbrances or liens to
attach, and such taxes or assessments shall not have been paid or the encumbrance or lien
removed or discharged, or provisions satisfactory to the Grantor made for such payments,
removal or discharge, within one hundred twenty (120) days after written demand by the Grantor
so to do provided, that if the Grantee shall first notify the Grantor of its intention to do so, it may
in good faith contest any mechanics' or other lien filed or established and in such event the
Grantor shall permit such mechanics' or other lien to remain undischarged and unsatisfied during
the period of such contest and any appeal, but only if the Grantee provides the Grantor with
evidence acceptable to the Grantor that the Grantee's title insurance company will insure over
the lien or provides a bank letter of credit in the amount of the lien, in a form satisfactory to the
Grantor pursuant to which the bank will pay to the Grantor the amount of any lien in the event
that the lien is finally determined to be valid and during the course of such contest the Grantee
shall keep the Grantor informed respecting the status of such defense; or
(d) Cause in violation of the Agreement or of this Deed, any transfer of the
Property or any part thereof that is not approved by the Grantor in accordance with the
terms of the Agreement, and such violation shall not be cured within sixty (60) days after
written demand by the Grantor to the Grantee; or
(e) Fail to comply with any of its covenants under the Agreement and fail to
cure any such noncompliance within one hundred twenty (120) days after written demand
to do so; or
(fl Default under the terms of a mortgage loan authorized by Article VII of
the Agreement and the holder of the mortgage exercises any remedy provided by the
mortgage documents or exercises any remedy provided by law or equity in the event of a
default in any of the terms or conditions of the mortgage and such default is not cured by
the later of the applicable notice and cure period of such mortgage or one hundred twenty
(120) days after written demand by the Grantor;
then the Grantor shall have the right to re-enter and retake title to and possession of the Property,
subject to the liens and encumbrances then of record, and to terminate and revest in the Grantor
the estate conveyed by this Deed to the Grantee, its assigns or successors in interest, subject to
the terms and conditions of the Agreement, but only if the events stated in Section 2(a) -(f) have
not been cured within the time periods provided above, or if the events cannot be cured within
such time periods, the Redeveloper does not provide assurances to the Authority, reasonably
satisfactory to the Authority, that the events will be cured and will be cured as soon as
reasonably possible. The remedies contained in this Section 2 shall not be available to Grantor
upon • the completion of construction of the Project in accordance with the terms of the
Agreement.
The investor limited partner of the Grantee (the "Investor Limited Partner") shall have the right,
but not the obligation, to cure any of the events stated in Section 2(a) — (f) and the Grantee shall
accept performance by the Investor Limited Partner of any obligation of the Grantee hereunder
as though tendered by Grantee itself, provided such performance by the Investor Limited Partner
has occurred during the applicable cure period, if any, provided to Grantee hereunder with
respect to such event or breach or default.
SECTION 3.
The Grantee agrees for itself and its successors and assigns to or of the Property or any
part thereof, hereinbefore described, that the Grantee and such successors and assigns shall at all
times prior to the Termination Date, as defined in the Agreement:
(a) Devote the Property to, and only to and in accordance with the uses
specified in any applicable redevelopment plan adopted by the Authority as amended and
extended, provided that no amendment shall prohibit a pre-existing permitted use;
(b) Comply with all of the terms and conditions of the Agreement.
It is intended and agreed that the above and foregoing agreements and covenants shall be
covenants running with the land, and that they shall, in any event, and without regard to technical
classification or designation, legal or otherwise, and except only as otherwise specifically
provided in this Deed and the Agreement, be binding, to the fullest extent permitted by law and
equity for the benefit and in favor of, and enforceable by, the Grantor and the Authority, their
respective successors and assigns, and any successor in interest to the Property, or any part
thereof against the Grantee, its successors and assigns, and every successor in interest to the
Property, or any part thereof or any interest therein, and any party in possession or occupancy of
the Property or any part thereof.
In amplification, and not in restriction of, the provisions of the preceding section, it is
intended and agreed that the Grantor and its successors and assigns shall be deemed beneficiaries
of the agreements and covenants provided herein. Such agreements and covenants shall run in
favor of the Grantor without regard to whether the Grantor has at any time been, remains, or is an
owner of any land or interest therein to, or in favor of, which such agreements and covenants
relate. The Grantor shall have the right, in the event of any breach of any such agreement or
covenant to exercise all the rights and remedies, and to maintain any actions or suits at law or in
equity or other proper proceedings to enforce the curing of such breach of agreement or
covenant, to which it or any other beneficiaries of such agreement or covenant may be entitled.
The covenants and agreements of this Deed and the Agreement shall be enforceable only by
Grantor, the Authority, and any public body which is a successor of Grantor or the Authority.
SECTION 4.
This Deed is also given subject to:
(a) Provision of the ordinances, building and zoning laws of the City of New Hope,
state and federal laws and regulations in so far as they affect this real estate.
(b) Taxes payable subsequent to the date of this conveyance.
SECTION 5.
The Grantor certifies that the Grantor does not know of any wells on the subject property.
IN WITNESS WHEREOF, the Grantor has caused this Deed to be duly executed in its
behalf by its President and Executive Director this day of , 2014.
CITY OF NEW HOPE
0
Its: Mayor
By:
Its: Manager
STATE OF MINNESOTA)
)ss.
COUNTY OF HENNEPIN)
The foregoing instrument was acknowledge before me this day of 2014, by
and, the Mayor and Manager of the
City of New Hope, a statutory city organized and existing under the laws of the state of
Minnesota, on behalf of the City.
Notary Public
This instrument was drafted by:
BRADLEY & DEIKE, P.A.
4018 West 65' Street, Suite 100
Edina, Minnesota 55435.
Exhibit A to Quit Claim Deed
Description of Property
Outlot 1, Mork -Campion Heights, Hennepin County, Minnesota (Torrens Property
Torrens Certificate No. 1391801)
The East 75 Feet of Outlot 2, Mork -Campion Heights as measured at a right angle from the East
line thereof, Hennepin County, Minnesota, (Abstract Property)
The West 75 Feet of the East 150 feet of Oudot 2, Mork -Campion Heights as measured at a right
angle from the East line &=of, Hennepin County, Minnesota (Abstract Property)
The West 75 Feet of the East 225 feet of Outlot 2, Mork -Campion Heights as measured at a right
angle from the East line thereof, Hennepin County, Minnesota (Abstract Property)
91480545
SCHEDULE F
In#eriund Loan Resolution
NEW HOPE ECONONaC DEVELOPN[ENT AUTHORITY
CITY OF NEW HOPE
HLNNEMN COUNTY
STATE OF MINNESOTA
RESOLUTION NO. -2om-o7
RESOLUTION AUTHORIZING AN ENTERFUND LOAN FOR ADVANCE OF
CERTAIN COSTS IN CONNECTION WITH THE COMPASS POINTE
HOUSING TAX INCREMENT FINANCING DISTRICT.
BE 1T RESOLVED by the Board of Commissioners (the "Board") of the Now Hope Economic
Development Authority (the "EDA") of the City of New Hope, Minnesota as follows:
WHEREAS, the City Council for the City of New Hope, Minnesota (dw "City"), intends to
establish the Compass Pointe Housing Tax Jitemment Financing District (the "TIF District") within
Redevelopment Project No. I (the "Project"), and will adopt a Tax Increment Financing Pian (the "TIF
Plan") for the purpose of financing certain improvements within the Project.
WHEREAS, the EDA has determined to pay for certain costs identified in the TIF Plan consisting
of land/building acquisition, site itnprove1 reparation, public utilities, street and sidewalks, interest
and administrative coats (collectively, the " flied Costs"), which costs may be furanced ion a
temporary basis from EDA funds available for such purposes.
WHEREAS, under Minnesota Statutes, Section 469.178, Subd. 7, the EDA is authorized to
advance or loan money from the EDA's general fund or any other fund from which such advances may be
legally authorized, in order to finance the Qualified Costs.
WHEREAS, the EDA owns carton property (the "EDA Parcels'j and has incurred certain costs
.to prepare such property for redevelopment; including demolition, relocation and site clearance. The
EDA has determined that the estimated market value of the EDA Parcels is at least $453,281.
WHEREAS, the EDA proposes to eater into a Purchase and Development Agreement (the
"Development Agreement") with Compass Pointe Limited Partnership (the "Developed, under which
the EDA will (among otherthfiW) convey the EDA Pamis to the Developer for 5304,000.
WHEREAS, the EDA also proposes to enter into a Purchase and Development Agrownent with
the Developer (the "TIF Agreement"), specifying certain financial assistance to Developer in connection
with the Development Property.
WHEREAS, by conveying the EDA Parcels under the Purchase and Development Agreement, at
closing the EDA will forgo receipt of the till market value of the EDA Parcels. Such forbearance
repro an advance of EDA fiords in the amount of $149,300.
WHEREAS, the EDA intends to designate such land advance as an interfimd loan in accordance
with the terms of this resolution and the TIF Act (which terms are referred to collectively as the
"Interfund Loan").
i
NOW TMWORE BE Tf RESOLVED by the Board as follows:
1. The Authority well reimburse Win the principal amount of $149,300 together with interest at
the rate of 49/9 per annum (the "interfund Loan"). iftrest accrues on the principal amount from
the data of closing on conveyance of the EDA Parcels to the Developer under the Development
Agreement (hermfier, the "Closing Date). The maximum rate of interest permitted to be
charged is limited to the greater of the rates specified under Minnesota Stag, Section 2700,40
or Section 549.09 as of the date the loan or advance is authorised, unless the vpitten agreement
states that the maximum interest rata will fluctuate as the interest rates speoifnod under Miaaesata
Statutes, Section 270C.40 or Section 549.09 ase from tine to time adjusted. The interest rate
shall be 4% and will not flmcivate.
2. Principal and interest ("Payments") on the Imtesfund Loan shall be paid semi-annually on ewh
August 1 and February 1 (each a; "Payment Dstc% commencing on the first Payment Date on
which the MORA has Available Tax Incremegt (defined below), or on any other dates
determined by the Executive Director of the FDA, through the date of last receipt of tax
increment h om the TIF District.
3. Payments on this Interfund Loan are payable solely from "Available Tax Increment," which shall
mean, on each Payment Date, tax increment available after outer obligations have been paid, or as
deermined by the City Manager, generated in the preceding six (6) months with respect to the
property within the TEF District and remitted to the City by Hemaepin County, all in accordance
with Minnesota Statutes, Sections 469.174 to 469.1799, all inclusive, as amended. Payments on
this hd rfund Loan may be subordinated to any outstanding or fun m bonds, notes or contracts
secured in whole or in part with Available Tax increir=4 and are on parity with any oth a
outstanding or future intorfund loans secured in whole or in part with Available Tax Inaw nwiL
4. The principal sum and all accrued interest payable under this Inteafkmd Loan are pre myeble in
whole or in part at any time by the EDA without premium or penalty. No partial primmient
shatI sabot the amonunt or timing of any other regular payment otherwise required to be made
under this Interfund Loan,
S. This Iaterfand Loan is evidence of an internal borrowing by the SDA in accordance with
Minnesota Statutes, Section 469.178, Subd. 7, and is a limited obligation payable solely from
Available Tax Inoranent pledged to the payment hereof under this rmlubon. This Imterfimd
Loan and the interest hereaan shall not be deemed to constitute a general obligation of the State of
Minnosata or any political subdivision t mw& including, without limitation, the EDA. Neither
the State of Minnesota, mor any political subdivision thereof shall be obligated to pay the
principal of or interest of this Interfind Loan or other oasts incideatt hereto amept out of
Available Tax Incremwi4 and neither the full faith and credit nor the taxing power of the State of
Minnesota or any political subdivision thereof is pledged to the payment of the principal of or
interest on this hmwfund Loan or other axft incident hereto. The EDA shall have no obligation
to pay any principal amount of the laterfumd Loan or accrued fina st tha=% which may rcmtain
unpaid alter the final Payment Date.
6. The EDA may amend the tams of this laterftinad Loan at any time by resolution of the Board,
including a determination to forgive the outstanding principal amount and accrued interest to the
extent permissible under law.
Approved by the Board on March. 24 , 2014.
- yr
Daniel 3 .President Pr�Tem
Doc No T0SIS1198
Certified, filed and/or recorded on
Jul 1, 2014 2:00 PM
Office of the Registrar of Titles
Hennepin County, Minnesota
Martin McCormick, Registrar of Titles
Mark Chapin, County Auditor and Treasurer
Deputy 84 Pkg ID 1125705C
Doc Name: Assessment Agreement
Document Recording Fee $46.00
Document Total $46.00
Existing Certs New Certs
1388616
This cover sheet is now a permanent part of the recorded document.
Assessment Agreement
ASSESSMENT AGREEMENT
and
ASSESSOR'S CERTIFICATION
By and among
NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY,
COMPASS POINTE LINIITED PARTNERSHIP,
and
COUNTY ASSESSOR OF THE COUNTY OF HENNEPIN
This document was drafted by:
BRADLEY & DEIKE, P.A.
4018 West 65'h Street, Suite 100
Edina, Minnesota 55435
`k.'Z� 0,4 —10
Commercial Partners Tale, LLC
200 South Sixth Street
Suite 1300
Minneapolis, MN 65402
-311 y z- 46- 3 (-t)
Ti 'e`c--
THIS AGREEMENT, dated as of this _4g? day of 2014, by and between the
New Hope Economic Development Authority, a body politico"dcorate (the "Authority") and
Compass Pointe Limited Partnership, a N innesota limited par(the "Developer").
WITNESSETH: that:
WHEREAS, on or before the date hereof the Authority and the Developer entered into
that certain Purchase and Development Agreement (the 'Vevelopment Agreement") regarding
certain real property located in the City of New Hope, hereinafter referred to as the Property and
legally described in Exhibit A hereto; and
WHEREAS, it is contemplated that pursuant to said Development Agreement the
Developer will construct an affordable rental housing development on the Property; and
WHEREAS, the Authority and Developer desire to establish a minimum market value
for said land and the improvements to be constructed thereon, pursuant to Minnesota Statutes,
Section 469.177, Subdivision $; and
WHEREAS, the Authority and the County Assessor for the County of Hennepin have
reviewed the preliminary plans and specifications for the improvements which it is contemplated
will be erected.
NOW, THEREFORE, the parties to this Agreement, in consideration of the promises,
covenants and agreements made by each to the other, do hereby agree as follows:
1. Commencing on January 1, 2016, and continuing on each assessment date
thereafter until the tenon date stated in paragraph 2 below, the minimum market value
which shall be assessed for the land described in Exhibit A and the above described
improvements shall be not less than Five Million Nine Hundred and Sixteen Thousand Dollars
($5,916,000), notwithstanding incomplete construction of the above described improvements.
2. This Agreement shall terminate in its entirety on the earlier of December 31,
2040; or when the Note, as defined in the Development Agreement, has been paid.
3. This Agreement shall be promptly recorded at the expense of the Developer.
4. Neither the preambles nor provisions of this Agreement are intended to, nor shall
they be construed as, modifying the terms of the Development Agreement between the Authority
and the Developer_
5. This Agreement shall inure to the benefit of and be binding upon the successors
and assigns of the parties.
STATE OF MINNESOTA )
) SS.
COUNTY OF V%)
NEW HOPE ECONONIIC
DEVELOPMENT AUTHORITY
By. -':� . "
I ent
By---
Its
y-Its Executive Director
COMPASS POINTE LII&TED
PARTNERSHIP
By Compass Pointe, LLC, its General Partner
By Ronald Clark, its Chief Manager
4 r
The re was ac wed fore a this of � day of �t�-r
,}
2014, by and 1 the President and Executive
Director of the New Hope Economic Development Authority, a public body politic and
corporate, on behalf of the authority.
STATE OF MINNESOTA )
) SS.
COUNTY OF
Notary Public
STEVEN A. SONDRALL
, *•� tr'otary Puhitc-Minnesota
on EC,06% 6% dz^ 3120015
.MWv�MnN+t
The foregoing instrument was acknowledged before me this day
of , 2014, by Ronald Clark, the Chief Manager of Compass Pointe, LLC, a
Minnesota limited liability company, the general partner of of Compass Pointe Limited
Partnership, a Minnesota limited partnership, on behalf of the limited partnership.
Notary Public --�
S. This Agreement shall inure to the benefit of and be binding upon the successors
and assigns of the parties.
NEW HOPE ECONOMIC
DEVELOPMENT AUTHORITY
By:
Its President
By:
Its Executive Director
COMPASS POINTE LIMITED
PARTNERSHIP
B=ass LC, its General Parhier
By Ronald Clark, its Chief Manager
STATE OF MINNESOTA )
) SS.
COUNTY OF —
The foregoing instrument was acknowledged before me this day of
2014, by and _ 'the President and Executive
Director of the New Hope Economic Development Authority, a public body politic and
corporate, on behalf of the authority.
STATE OF MINNESOTA )
) SS.
COUNTY OF
Notary Public
SARAH MARY DULONG
f�Otary PubNo-Minnesota
W Comm Anion E#Md JN 31. BD17
The foregoing instrument was acknowledged before me this T7 day
of 201.4, by Ronald Clark, the Chief Manager of Compass Pointe, LLC, a
Minnesota limited liability company, the general partner of of Compass Pointe Limited
Partnership, a Minnesota limited partnership, on behalf of the limited partnership_ _
Ngfary Public
CERTIFICATION BY COUNTY ASSESSOR
The undersigned, having reviewed the plans and specifications for the improvements to
be constructed and the market value assigned to the land upon which the improvements are to be
constructed, and being of the opinion that the minimum market value contained in the foregoing
Agreement appears reasonable, hereby certifies as follows: The undersigned assessor, being
legally responsible for the assessment of the above desc;ibpd property, certifies that the market
values assigned to such land and improvements are rele.
my Assessor fo'r
of Hennepin
STATE OF MINNESOTA)
)ss.
COUNTY OF �}
The foregoing instrument was acknowledged before me this J0 day of
2014, by the County Assessor for the County of Hennepin.
ELJ#JODEE
ta EOib
Legal Description of Land
Lot 1, Block 1, Compass Pointe, according to the recorded plat thereof, Hennepin County,
Minnesota.
Hennepin County, Minnesota
Abstract Property
Torrens Certificate No.
9209808vl
Pup
y,q vv9Doe No A10092639
I��I�I�I�UR116�III111�
Certified, filed and/or recorded on
Jul 1, 2014 2:00 PM
Office of the County Recorder
Hennepin County, Minnesota
Martin McMormick, County Recorder
Mark Chapin, County Auditor and Treasurer
Deputy 84 Pkg ID 11257190
Doc Name: Agreement
Document Recording Fee $46.00
Document Tota! $46.00
This cover sheet is now a permanent part of the recorded document.
CITY OF NEW HOPE
PLANNED UNIT DEVELOPMENT
SITE IMPROVEMENT AGREEMENT
(PUD Development District 12-04)
THIS AGREEMENT is entered into by Compass Pointe Limited Partnership, a Minnesota
limited partnership (hereafter "Developer"), and a City of New Hope, a Mimiesota municipal
corporation (hereafter "City"), this day of 2014.
WHEREAS, Developer is the fee owner C Vrea property located in the City of New Hope,
Hennepin County, Minnesota legally described as follows (hereafter "Property-):
Lot 1, BIock 1 Compass Pointe,
according to the duly recorded plat thereof, Hennepin County, Minnesota
Street Address P.I.D. Numbers
WHEREAS, the Property has been rezoned as PUD District 12-04 pursuant to Ordinance
No. 2012-06 adopted by the City Council at its regular meeting on May 29, 2012, and
WHEREAS, Developer has submitted development plans and specifications identified as
New Hope Planning Case 14-03 for the construction of a 68 unit, affordable apartment complex to
be known as "Compass Pointe" (hereafter the "Project") located at the Property in the City of
New Hope,
WHEREAS, Developer's development plans for development and final stage Planned Unit
Development approval and for preliminary and final plat approval for construction of the Project on the
Property were adopted by the City Council at its regular meeting on February 24, 2014 pursuant to
VCA,t"—Iz�
Commercial Partners Title, LLC
200 South Sixth Street
Stine 1300
Minneapolis, MN 55402
SIM yz -s" 0-6 r (T ) �W-
Resolution Nos. 2014-36 and 2014-37 respectively, and,
WHEREAS, this PUD Site Development Agreement was approved subject to the following
conditions:
1. Developer shall, at its cost, provide title evidence for the Property to the City
Attorney and enter into this written and recordable PUD Site Development
Agreement (hereafter "Agreement") incorporating the conditions of approval set out
in Resolution Nos. 2014-36 and 2014-37. Developer agrees it will construct and
maintain the Project and Property in accordance with the plans and specifications it
has submitted for approval in Planning case No. 14-03. Developer acknowledges
and agrees this Agreement shall run with the land and shall be binding on Developer
and all successors in title to the Property and Project.
2. Developer shall provide a financial guarantee as provided in Paragraphs 5 and 11 of
this Agreement in order to insure construction of the secured work and proposed
improvements described in paragraph 3. Said financial guarantee shall be in the
amount of $70,500.00 and shall also guarantee the payment of all administrative
staff costs and planning, engineering and legal costs incurred by the City in
connection with Developer's request for approval of this Agreement for
construction of the Project at the Property. Developer specifically agrees to pay
these costs as a condition of the herein approval.
3. The parties have entered into this Agreement which Developer agrees shall only be
effective upon its recording subsequent to the recording of the Plat of Compass
Pointe with the Hennepin County Recorder's Office and the Office of the Registrar
of Titles for Hennepin County Minnesota.
4. Developer agrees approval of this Agreement is also subject to Hennepin County's
approval of the Plat of Compass Pointe and that any alterations to the plat required
by Hennepin County shall be incorporated into Developer's site plan and this
agreement by this reference subject to compliance with the City's zoning code and
regulations.
5. The required public improvements for the Project shall include but not be limited to
the following as set forth in the plans and specifications submitted by Developer in
Planning Case 14-03:
a.) Burial of all overhead utilities for the Project;
b.) New curb cut installation and removal of existing unused curb cuts;
c.) Installation of new sidewalks along West Broadway
d.) Replacement of existing sidewalks along 62m4 Avenue;
e.) Installation of all utility connections required for the project
Q Developer shall provide an irrevocable letter of credit in an amount of
$70,500.00 per the City Engineer's April 10, 2014 letter attached hereto as
K
Exhibit A to financially guarantee construction and installation of the
public improvements for the Project.
b. Developer shall pay a park dedication fee of $8,400.00. This fee shall be paid to the
City of New Hope prior to the Final Plat being released for filing at the Hennepin
County Recorder's Office and at the Registrar of Titles for Hennepin County.
7. All adjusted building setbacks shall be approved by the City Council.
8. Developer hereby agrees, in the sole discretion of the City, to construct 22
additional parking stalls (the "Additional Parking") in the green space of the
Property shown on the Development Stage Plan as described in the January 28,
2014 Memorandum froze. the City Planner Northwest Associated Consultants, Inc.
attached hereto as Exhibit B. The City may require the Developer or its successor in
interest to build the Additional Parking if, in the City's reasonable discretion, it
determines the following conditions exist at the Property: i) parking occurs outside
the designated parking stalls, in driveways, fire lanes, or in green space due to
insufficient on-site parking or ii) off-site street parking occurs attributed to Compass
Pointe tenants or guests.
If the Developer is required by the City to construct the Additional Parking,
Developer shall also provide "No Parking and "Subject to Ticketing" signage in the
driveway and fire lane if violations occur.
9. The Applicant shall provide a snow removal plan to be included in the Agreement.
The snow removal plan should include provisions that allow the City to require
snow removal for the following items:
a) The Developer/property owner of the Project shall be responsible for snow
removal on the public sidewalks along West Broadway and 62nd Avenue.
This requirement is in consideration for reduced setbacks that limits snow
storage in these areas. The snow removal must be in conjunction with
parking lot plowing. Sidewalks must be cleared to allow safe pedestrian
passage year round. Snow shall be hauled off the site by
Developer/property owner of the Project if sidewalk snow storage becomes
a problem for the Project, survival of the landscaping is jeopardized or
traffic visibility is negatively affected by the snow storage at the 62
Avenue and West Broadway intersection or either of the site access points.
b) Snow must be removed from all internal sidewalks to allow safe pedestrian
passage year round.
c) Parking lot snow shall be stored in designated snow storage areas. Snow
must be hauled off-site if the following conditions occur: i) Snow storage
shall not be allowed in the constructed parking stalls, ii) Snow storage
shall not reduce the available required parking, iii) Snow storage shall not
result in damage of in-place landscaping, iv) Snow storage shall not
3
interfere with traffic visibility at the site access points, v) Snow storage
shall not extend more than two feet above the eight foot tall boundaryline
fence.
10. Bicycle parking shall be provided meeting the following conditions:
a) Developer shall provide design detail of bike racks for an evaluation of
parking capacity.
b) Developer shall remove bike rack from green space/snow storage area
and provide hard surface for bike parking.
c) Developer shall provide additional bike parking on west end of the
building.
11. A pedestrian sidewalk shall be provided through the activity area to the western
fence opening.
12. Developer shall execute and deliver to the City that certain Agreement to Maintain
Underground Stormwater Storage System attached to this Agreement as Exhibit C.
13. Drainage and utility plans provided by Developer shall be subject to the approval of
the City Engineer.
14. Developer shall provide a landscaping plata reasonably acceptable to the City and
subject to the following conditions:
a) any landscaping that dies or shows stress unacceptable to the City
shall be replaced by Developer or the property owner as provided by
the plan.
b) any planting or site improvements located in the public right of way
or easements may be removed by the City in conjunction with City
projects. Replacement of the landscaping and/or improvements shall
be the Developer's or properly owner's responsibility at their
cost.
15. Developer shall provide a detail of the eight foot boundary line fence which shall be
Subject to City approval.
16. If not previously approved, all building signs shall be subject to approval by the
City Council.
17. Light intensity regulations at the right of way lines and along- 62"d Avenue were
approved by the City Council at its February 24, 2014 meeting. The resolution of
the City Council dated February 24, 2014 approving various items related to the
Project shall be amended to reflect such approval.
18. Developer shall comply with all ministerial matters set forth in the New Hope City
Code and required by the City, including but not limited to, those of the City
Engineer and Public Works, Community Development, City Manager and Clerk and
the City Attorney, i.e. title examination, execution of the Agreement, Sling of letters
of credit and payment of all City fees for Planning Case 14-03.
19. The site plans and building plans submitted by Developer as part of Planning Case
14-03 shall be subject to the review and approval of the New Hope Fire Marshall.
20. Construction of and maintenance of the Project and Property shall comply with the
plans submitted by Developer as part of Planning Case 14-03, this Agreement,
subsequent approvals and local, state and federal laws, rules and regulations.
21. The Final Plat for Compass Pointe must be filed and recorded within a reasonable
time. If the Final Plat is not timely filed or recorded, upon thirty (30) days written
notice from the City to the Developer, this Agreement and all approvals herein shall
be void with no further action required by the City Council
NOW, THEREFORE, ff IS HEREBY AGREED as follows:
1. INCORPORATION OF RECITALS. The recitals above are incorporated herein by reference,
specifically including the conditions for this PUD Site improvement Agreement.
2. THE WORK. The Work shall consist of the site improvements described in the Plans,
including the Secured Work as described below, and including any amendments to the Plans
which are approved by the City Council. The Work shall be performed by the Developer to
the City's reasonable satisfaction and in compliance with all applicable codes, ordinances,
standards, and policies of the City.
3. THE SECURED WORK. The Secured Work includes all on-site exterior amenities shown on
the Site Plan as described by the City Engineer's April 10, 2014 Memorandum that is listed
below:
IMpmement -
Estimated cost
a. Demolition
$3,000.00
b. Utilities
$15,000.00
c. Private Driveway
$22,000.00
d. LaaclscapingResboration
$7.000.00
Subtotal
$47,000.00
+ 50% con ' en
S23,500.00
Letter of Credit/Bond amount required
$70,500.00
The Developer shall maintain all Secured Work for as long as the Property is zoned PUD
District 12-04.
4. COMPLETION. The Developer agrees that the Work shall be completed in its entirety on or
5
before the 31" day of December, 2015 (the Completion Date), except as this period of time is
extended by resolution of the City Council, or by the City taldng no action to require
completion hereunder on a timely basis. It is understood and agreed that failure of the City to
promptly take action to draw upon the bond or other searrity to enforce this Agreement atter
the expiration of the time in which the Work is to be completed hereunder will not waive,
estop or release any rights of the City and the City can take action at any time thereafter to
require completion of the Work, and payment for same. Fore, the term of this
Agreement shall be deemed to be automatically extended until such time as the City Council
declares the Developer in default hereunder, and the statote of limitations shall not be deemed
to commence running until the City Council has been notified in writing by the Developer that
the Developer has either complied with this Agreement, or that it refuses to for any reason.
These provisions shall be applicable to any person who shall give a financial guarantee to the
City as required below.
5. COST OF WQRK. The Developer shall pay for all costs of persons doing work or furnishing
skill, tools, machinery or materials, or insurance premiums or equipment or supplies and all
just claims for the same, and the City shall be under no obligation to pay the Developer or any
subcontractor any sum whatsoever on account thereof; whether or not the City shall have
approved the subcontract or subcontractor, and the Developer and its surety shall hold the City
harmless against any such claims, and provide the City with all necessary lien waivers.
6. DEFAULT. In the event of default by the Developer as to any of the Secured Work to be
performed hereunder, the City may, at its option, perform the Secured Work and the
Developer shall promptly reimburse the City for any expense incurred therein by the City,
provided the Developer is first given written notice by United States Mail ofthe Secured Work
in default and :required to be done by the Developer, not less than thirty (30) days being given
thereby to the Developer to remove the default status, said notice being addressed to the
Developer at the address set forth below Notice given in this manner being sufficient as
described, by agreement of the parties hereto. Notice to the Developer shall also constitute,
without further action, notice to any contractor or subcontractor, whether they are approved
and accepted by the City or not. In the event of emergency, as determined by the City
Engineer, the thirty (30) day notice requirement to the Developer shall be and hereby is
waived in its entirety by the Developer, and the Developer shall reimburse the City for any
expense so incurred by the City in the same manner as if mailed notice as described above had
been. given_ It is understood by the parties, however, that the responsibility of the Developer is
limited by strikes and force maj eure.
R
7. REVOCATION OF RENTAL PERMITS. The City Council approved this PUD Site
Improvement Agreement for the construction of a 68 emit apartment complex on the Property
subject to certain conditions including completion of the Work and compliance with the
provisions of New Hope Ordinance No. I2-06. As an additional remedy separate and
independent from any other remedy available to it, upon a breach of this Agreement by
Developer that materially and adversely affects the use of the Property, the City may revoke
the rental permits for the Property required by New Hope Code §3-31 et al. Developer
acknowledges and agrees that the City may also revoke the rental permits for the Property for
failure of the Developer to satisfy any of the other conditions of this PUD Site Improvement
Agreement when such failure materially and adversely affects the use of the Property. Upon
any breach or default by the Developer as described in this Section 7, the City shall provide
thirty (30) days' notice and right to cure any such breach or default prior to the revocation of
any rental permit to the Developer and its investor limited partner (the "Limited Pa taW')-
The Lwiited Partner shall have the right, but not the obligation, to cure any such breach or
default by the Developer and the City shall accept performance by the Limited Partner of any
obligation of the Developer as though tendered by Developer itself provided such
performance by the Limited Partner has occurred during the thirty (30) day cure period
provided in this Section 7.
S. ADUMI TRATION COSTS. Developer agrees to reimburse the City for the actual costs to
the City associated with Planning Case 14-03 and this Agreement, including but not limited to,
planning consultant, engineering and attorney's fees. Developer agrees that the financial
guarantee shall not be released until all such costs have been paid to the City.
9. MOLD HARML_E-8S. Except with respect to the gross negligence or willful misconduct of
the City, its agents, employees, or representatives, the Developer agrees to indemnify and hold
harmless the City and its agents, employees, and representatives against any and all claims,
demands, losses, damages and expenses (including attorney fees) arising out of or resulting
from the Developer's negligent or intentional acts, or any violation of any safety law,
wgulataion or code in the performance of this Agreement, without regard to any inspection or
review made or not made by the City, its agents, employees, or representatives, or failure by
the City, its agents, employees, or representatives to take any other prudent precaution. In the
event any City employee, agent or representative shall come under the direct or indirect
control of the Developer, or the City upon the failure of the Developer to comply with any
conditions of this Agreement, performs said conditions pursuant to the financial guarantee, the
Developer shall indemnify and hold harmless the City, its employees, agents and
representatives for its own negligent or intentional acts in the performance of the Developer's
required work under this Agreement
10. COST OF ENFORsrE ENT. The Developer agrees to reimburse the City for all costs
incurred by the City in the enforcement of this Agreement, or any portion thereot including
court costs and reasonable engineering and attorney's fees.
11. FINANCIAL GUARANTEE. The Developer shall furnish the City with a financial guarantee
acceptable to the City in one of the following forms: a) cash escrow; b) an irrevocable letter of
7
credit; c) an automatically renewing certificate of deposit in Developer's name but irrevocably
assigned to the Cita, d) other financial instruments which provide equivalent assurance to the
City_ Said financial guarantee shall be furnished to the City as security to assure completion of
the items of Secures Work as set forth above, and payment of the costs of mon as set
forth above. The financial guarantee shall be in an amount of $70,500.00. The financial
guarantee provided shall continue in full force and effect until the City Council approves and
accepts all of the Secured. Work undertaken and releases the surety and/or the Developer from
any further liability, and until all administrative costs are paid in full. The City Council may
reduce the amount of the financial guarantee upon partial completion of the Secured Work and
payment of all outstanding administrative costs:
12. CITY ACKNOWLEDGMENT. The Project was mistakenly referred to as a "market rate"
apartment development in City Council Resolution 2014-36. The City aclmowledges that the
Project is an affordable apartment development financed using Low Income Housing Tax
Credits and any references to "market rate" in City Council Resolution 2014-36 or other
similar documents or resolutions shall be corrected to "affordable."
13. NOTICE. The address of Property Owner and Tenant; for purposes of this Agreement is as
follows, and any notice mailed by the City to these addresses shall be deemed sufficient notice
to Property Owner and Tenant under this Agreement, until notice of a change of address is
given to the City in writing:
If to the Developer:
Compass Pointe Limited Partnership
7500 West 7e Street
Edina, MN 55439
Attention: Ronald E. Clark
With a copy to:
Winthrop & Weins me, P.A.
225 South Sixth Street
Suite 3500
Minneapolis, MN 55402
Attention: Jeffrey J. Koerselman
If to the Limited Partner:
Wells Fargo Affordable Housing
Community Development Corporation
MAC D1053-170
301 South College Street, l7d'Floor
Charlotte, NC 28202-6000
14. SEVERABILITY. If any portion, section, subsection, paragraph, sentence, clause or phrase of
this Agreement is for any reason held to be invalid, such decision shall not affect the validity
of the remaining portion of this Agreement.
15. SUCCESSION. This Agreement shall be binding upon the parties, their heirs, successors or
assigns, as the case may be.
IN WITNESS WHEREOF, we have hereunto set our bands and seals.
CITY OF NEW HOPE
By:
Its Mayor
1
By:
Its City Manager
COMPASS POINTE LE MTED
PARTNERSHIP
By: Compass Pointe LLC
Its General Partner
By:
Ronald E. Clark
Its Chief Manager
STATE OF MINNESOTA )
)Ss.
COUNTY OF HENNEPIN )
r(
jTheforegoing ent was acknowledged before me this �r day of
yj- , 201 Kathi Hernken and Kirk McDonald, the Mayor and Manager,
respectively, of the City of New Hope, a Minnesota municipal corporation, on behalf of said
municipal corporation.
Notary Public
E
of the remaining portion of this Agreement.
15. SUCCESSION. This Agreement shall be binding upon the parties, their heirs, successors or
assigns, as the case may be.
IN WITNESS WHEREOF, we have hereunto set our hands and seals.
CITY OF NEW HOPE
By.
Its Mayor
0
Its City Manager
COMPASS POINTE LD4n ED
PARTNERSHIP
By: Compass Pointe LLC
Its General Partner
By: ao�c'/
Ronald E. Clark
Its Chief Manager
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of
201. by Kathi Hemken and Kirk McDonald, the Mayor and Manager,
respectively, of the City of New Hope, a Minnesota municipal corporation, on behalf of said
municipal corporation.
Notary Public
D
STATE OF MINNESOTA ) SARAH MARY DULONG
ss. "� �s NGtWy Pub�nnesota
"xOwNdsown �,ay g1, 2017
COUNTY OF C,�h- )
The foregoing instrument was acknowledged before me this 97 day of Jd ,h1 _, 201 , by
Ronald E. Clark, the Chief Manager of Compass Pointe LLC, a Minnesota limited liability
company, the general partner of Compass Pointe Limited Partnership, a Minnesota limited
partnership, on behalf of said limited liability company and limited partnership.
_•l . t
1
161 M, rIT2 k1n 16
DRAFTED BY.•
JENSEN SONDRALL & PERSELLIN, P.A.
8525 Edinbrook Crossing, #201
Brooklyn Park, MN 55443
(763)424-8811
P SAo�yL4AS11 Cow Meda City dWV WB p289.2140) C'wu- Pante Wextbm&wX=q= PoOrte pd ffik 1n,prmtcmt.4w= d9 d=
9193107x3
10
IIIIIIII�III�RIR�IIAIDoe No TOSI 81199
Certified, filed and/or recorded on
Jul 1, 2014 2:00 PM
Office of the Registrar of Titles
Hennepin County, Minnesota
Martin McCormick, Registrar of Tides
Mark Chapin, County Auditor and Treasurer
Deputy 84 Pkg ID 1125705C
Doc Name: Agreement
Document Recording Fee $46.00
Document Total $46.00
Existing Certs New Certs
1388516
This cover sheet is now a permanent part of the recorded document.
E44 M MXe)_a 0 alaTCW10
PLANNED UNIT DEVELOPMENT
SITE IlUMOVEMENT AGREEMENT
(PUD Development District 12r04)
THIS AGREEMENT is entered into by Compass Pointe Limited Partnership, a Minnesota
limited partnership (hereafter "Developer"), and,*e City of New Hope, a Minnesota municipal
corporation (hereafter "City"), this qday of 2014.
WHEREAS, Developer is the fee ownerf property located in the City of New Hope,
Hennepin County, Minnesota legally descn`bed as follows (hereafter "Property"):
Lot 1, Block 1 Compass Pointe,
according to the duly recorded plat thereof, Hennepin County, Minnesota
Street Address P.I.D. Numbers
WI3EREAS, the Property has been rezoned as PUD District 12-04 pursuant to Ordinance
No. 2012-06 adopted by the City Council at its regular meeting on May 29, 2012, and
WBEREAS, Developer has submitted development plans and specifications identified as
New Hope Planning Case 14-03 for the construction of a 68 unit, affordable apartment complex to
be known as "Compass Pointe" (hereafter the "Project") located at the Property in the City of
New Hope,
WHEREAS, Developer's development plans for development and final stage Planned Unit
Development approval and for preliminary and final plat approval for construction of the Project on the
Property were adopted by the City Council at its regular meeting on February 24, 2014 pursuant to
►% L
Title, LLC
Cornmerciai Partners treet
200 South Sixth
Suite 1340
Minneapolis, MN 55402
3 7?W2- st S (A ) -Sve-
Resolution Nos. 2014-36 and 2014-37 respectively, and,
VVMREAS, this PUD Site Development Agreement was approved subject to the following
conditions:
Developer shall, at its cost, provide title evidence for the Property to the City
Attorney and enter into this written and recordable PUD Site Development
Agreement (hereafter "Agreement") incorporating the conditions of approval set out
in Resolution Nos. 2014-36 and 2014-37. Developer agrees it will construct and
maintain the Project and Properly in accordance with the plans and specifications it
has submitted for approval in Planning case No. 14-03. Developer acknowledges
and agrees this Agreement shall run with the land and shall be binding on Developer
and all successors in title to the Property and Project.
2. Developer shall provide a financial guarantee as provided in Paragraphs 5 and 11 of
this Agreement in order to insure construction of the secured work and proposed
improvements described in paragraph 3. Said financial guarantee shall be in the
amount of $70,500.00 and shall also guarantee the payment of all administrative
staff costs and planning, engineering and legal costs incurred by the City in
connection with Developer's request for approval of this Agreement for
construction of the Project at the Property. Developer specifically agrees to pay
these costs as a condition of the herein approval.
3. The parties have entered into this Agreement which Developer agrees shall only be
effective upon its recording subsequent to the recording of the Plat of Compass
Pointe with the Hennepin County Recorder's Office and the Office of the Registrar
of Titles for Hennepin County Minnesota.
4. Developer agrees approval of this Agreement is also subject to Hennepin County's
approval of the Plat of Compass Pointe and that any alterations to the plat required
by Hennepin County shall be incorporated into Developer's site plan and this
agreement by this reference subject to compliance with the City's zoning code and
regulations.
5. The required public improvements for the Project shall include but not be limited to
the following as set forth in the plans and specifications submitted by Developer in
Planning Case 14-03:
a.) Burial of all overhead utilities for the Project;
b.) New curb cut installation and removal of existing unused curb cuts;
c.) Installation of new sidewalks along West Broadway
d.) Replacement of existing sidewalks along 62nd Avenue;
e.) Installation of all utility connections required for the project
Q Developer shall provide an irrevocable letter of credit in an amount of
$70,500.00 per the City Engineer's April 10, 2014 letter attached hereto as
2
Exhibit A to financially guarantee construction and installation of the
public improvements for the Project.
6. Developer shall pay a park dedication fee of $8,400.00. This fee shall bepaid to the
City of New Hope prior to the Final Plat being released for filing at the Hennepin
County Recorder's Office and at the Registrar of Titles for Hennepin County.
7. All adjusted building setbacks shall be approved by the City Council.
8. Developer hereby agrees, in the sole discretion of the City, to construct 22
additional parking stalls (the "Additional Parking") in the green space of the
Property shown on the Development Stage Plan as described in the January 28,
2014 Memorandum from the City Planner Northwest Associated Consultants, Inc.
attached hereto as Exhibit B. The City may require the Developer or its successor in
interest to build the Additional Parking if, in the City's reasonable discretion, it
determines the following conditions exist at the Property: i) parking occurs outside
the designated parking stalls, in driveways, fire lanes, or in green space due to
insufficient on-site parking or ii) off-site street parking occurs attributed to Compass
Pointe tenants or guests.
If the Developer is required by the City to construct the Additional Parking,
Developer shall also provide "No Parking and "Subject to Ticketing" signage in the
driveway and fire lane if violations occur.
9. The Applicant shall provide a snow removal plan to be included in the Agreement.
The snow removal plan should include provisions that allow the City to require
snow removal for the following items:
a) The Developer/property owner of the Project shall be responsible for snow
removal on the public sidewalks along West Broadway and 62nd Avenue.
This requirement is in consideration for reduced setbacks that limits snow
storage in these areas. The snow removal must be in conjunction with
parking lot plowing. Sidewalks must be cleared to allow safe pedestrian
passage year round. Snow shall be hauled off the site by
Developer/property owner of the Project if sidewalk snow storage becomes
a problem for the Project, survival of the landscaping is jeopardized or
traffic visibility is negatively affected by the snow storage at the 62
Avenue and West Broadway intersection or either of the site access points.
b) Snow must be removed from all internal sidewalks to allow safe pedestrian
passage year round.
c) Parking lot snow shall be stored in designated snow storage areas. Snow
must be hauled offsite if the following conditions oc=: i) Snow storage
shall not be allowed in the constructed parking stalls, ii) Snow storage
shall not reduce the available required parking, iii) Snow storage shall not
result in damage of in-place landscaping, iv) Snow storage shall not
3
interfere with traffic visibility at the site access points, v) Snow storage
shall not extend more than two feet above the eight foot tall boundary line
fence.
10. Bicycle parking shall be provided meeting the following conditions:
a) Developer shall provide design detail of bike racks for an evaluation of
parking capacity.
b) Developer shall remove bike rack from green space/snow storage area
and provide hard surface for bike parking.
c) Developer shall provide additional bike parking on west end of the
building.
11. A pedestrian sidewalk shall be provided through the activity area to the western
fence opening.
12. Developer shall execute and deliver to the City that certain Agreement to Maintain
Underground Stormwater Storage System attached to this Agreement as Exhibit C.
13. Drainage and utility plans provided by Developer shall be subject to the approval of
the City Engineer.
14. Developer shall provide a landscaping plan reasonably acceptable to the City and
subject to the following conditions:
a) any landscaping that dies or shows stress unacceptable to the City
shall be replaced by Developer or the property owner as provided by
the plan.
b) any planting or site improvements located in the public right of way
or easements may be removed by the City in conjunction with City
projects. Replacement of the landscaping andlor improvements shall
be the Developer's or property owner's responsibility at their
cost.
15. Developer shall provide a detail of the eight foot boundary line fence which shall be
subject to City approval.
16. If not previously approved, all building signs shall be subject to approval by the
City Council.
17. Light intensity regulations at the right of way lines and along 62nd Avenue were
approved by the City Council at its February 24, 2014 meeting. The resolution of
the City Council dated February 24, 2014 approving various items related to the
Project shall be amended to reflect such approval.
4
IS. Developer small comply with all ministerial matters set forth in the New Hope City
Code and required by the City, including but not limited to, those of the City
Engineer and Public Works, Community unity Development, City Manager and Clerk and
the City Attorney, i.e. title examination, execution of the Agreement, filing of letters
of credit and payment of all City fees for Planning Case 14-03.
19. The site plans and building plans submitted by Developer as part of Planning Case
14-03 shall be subject to the review and approval of the New Hope Fire Marshall.
20. Construction of and maintenance of the Project and Property shall comply with the
plans submitted by Developer as part of Planning Case 14-03, this Agreement,
subsequent approvals and local, state and federal laws, rules and regulations.
21. The Final Plat for Compass Pointe mast be filed and recorded within a reasonable
time. If the Final Plat is not timely filed or recorded, upon thirty (30) days written
notice from the City to the Developer, this Agreement and all approvals herein shall
be void with no further action required by the City Council
NOW, THEREFORE, IT IS HEREBY AGREED as follows.
L INCORPORATION OF RECITALS. The recitals above are incorporated herein by reference,
specifically including the conditions for this PUD Site Improvement Agreement.
2. THE WORK. The Work shall consist of the site improvements described in the Plans,
including the Secured Work as described below, and including any amendments to the Plans
which are approved by the City Council. The Work: shall be performed by the Developer to
the City s reasonable satisfaction and in compliance with all applicable codes, ordinances,
standards, and policies of the City.
3. THE SECURED WORK. The Secured Work includes all on-site exterior amenities shown on
the Site Plan as described by the City Engineer's April 10, 2014 Memorandum that is listed
below:
Improvement -
Estimated ela
a. Demolition
$3,000.00
b. Utilities
$15,000.00
c. Private Driveway
$22,000.00
d La &cmiug Restoration
$7.000.QQ
Subtotal
$47,000.00
+ 50% continM
$23.500.00
Letter of CTeditBond amount required
$70,500.00
The Developer shall maintain all Secured Work for as long as the Property is zoned PUD
District 12-04.
4. COMPLETION. The Developer agrees that the Work sha11 be completed in its entirety on or
5
before the 31 " day of December, 2015 (the Completion Date), except as this period of time is
extended by resolution of the City Council, or by the City taking no action to require
completion hereunder on a timely basis. It is understood and ag =d that failure of the City to
promptly take action to draw upon the bond or other security to enforce this Agreement after
the expiration of the time in which the Work is to be completed hereunder will not waive,
estop or release any rights of the City and the City can take action at any time thereafter to
require completion of the Work, and payment for same. Furthermore, the term of this
Agreement shall be deemed to be automatically extended until such time as the City Council
declares the Developer in default hereunder, and the statute of limitations shall not be deemed
to commence running until the City Council has been notified in waiting by the Developer that
the Developer has either complied with this Agreement, or that it refuses to for any reason.
These provisions shall be applicable to any person who shall give a financial guarantee to the
City as required below.
S. COST OF WORK. The Developer shall pay for all costs of persons doing work or famishing
skill, tools, machinery or materials, or insurance premiums or equipment or supplies and all
just claims for the same, and the City shall be under no obligation to pay the Developer or any
subcontractor any sum whatsoever on account thereof, whether or not the City shall have
approved the subcontract or subcontractor, and the Developer and its surety shall hold the City
harmless against any such claims, and provide the City with all necessary lien waivers.
6. DEFAULT. In the event of default by the Developer as to any of the Secured Work to be
performed hereunder, the City may, at its option, perform the Secured Work and the
Developer shall promptly reimburse the City for any expense incurred therein by the City,
provided the Developer is first given written notice by United States Mail of the Secured Work
in default and required to be done by the Developer, not less than thirty (30) clays being given
thereby to the Developer to remove the default status, said notice being addressed to the
Developer at the address set forth below. Notice given in this manner being sufficient as
described, by agreement of the parties hereto. Notice to the Developer shall also constitute,
without fiuther action, notice to any contractor or subcontractor, whether they are approved
and accepted by the City or not. In the event of emergency, as determined by the City
Engineer, the thirty (30) day notice requirement to the Developer shall be and hereby is
waived in its entirety by the Developer, and the Developer shall reimburse the City for any
expense so incurred by the City in the same manner as if mailed notice as described above had
been given It is understood by the parties, however, that the responsibility of the Developer is
limited by strikes and force majeure.
M
7. REVOCATION OF RENTAL PERMITS. The City Council approved this PUD Site
Improvement Agreement for the construction of a 68 unit apartment complex on the Property
subject to certain conditions including completion of the Work and compliance with the
provisions of New Hope Ordinance No. 12-06. As an additional remedy separate and
independent from any other remedy available to it, upon a breach of this Agreement by
Developer that materially and adversely affects the use of the Property, the City may revoke
The rental permits for the Property required by New Hope Code §3.31 et. al. Developer
acknowledges and agrees that the City may also revoke the rental permits for the Property for
failure of the Developer to satisfy any of the other conditions of this PUD Site Improvement
Agreement when such failure materially and adversely affects the use of the Properly. Upon
any breach or default by the Developer as described in this Section 7, the City shall provide
thirty (30) days' notice and right to cure any such breach or default prior to the revocation of
any rental permit to the Developer and its investor limited partner (the "Limited Partner").
The Limited. Partner shall have the right, but not the obligation, to cure any such breach or
default by the Developer and the City shall accept performance by the Limited Partner of any
obligation of the Developer as though tendered by Developer itself, provided such
performance by the Limited Partner has occurred during the thirty (30) day cure period
provided in this Section 7.
S. ADMMSTRATION COSTS. Developer agrees to reimburse the City for the actual costs to
the City associated with Planning Case 1403 and this Agreement, including but not limited to,
planning consultant, engineering and attomey's fees. Developer agrees that the fmancial
guarantee shall not be released until all such costs have been paid to the City.
9. HOLD HARMLESS. Except with respect to the gross negligence or willful misconduct of
the City, its agents, employees, or representatives, the Developer agrees to indemnify and hold
harmless the City and its agents, employees, and representatives against any and all claims,
demands, losses, damages and expenses (including attorney fees) arising out of or resulting
from the Developer's negligent or intentional acts, or any violation of any safety law,
regulation or code in the performance of this Agreement, without regard to any inspection or
review made or not made by the City, its agents, employees, or representatives, or failure by
the City, its agents, employees, or representatives to take any other prudent precaution. in the
event any City employee, agent or representative shall come under the direct or indirect
control of the Developer, or the City upon the failure of the Developer to comply with any
conditions of this Agreement, performs said conditions pursuant to the financial guarantec,the
Developer shall indemnify and hold harmless the City, its employees, agents and
representatives for its own negligent or intentional acts in the performance of the Developees
required work under this Agreement.
10. COST OF ENFORCEMENT. The Developer agrees to reimburse the City for all costs
incurred by the City in the enforcement of this Agreement, or any portion thereof, including
court costs and reasonable engineering and attomey's fees.
11. FINANCIAL GUARANTEE. The Developer shall Amush the City with a financial guarantee
acceptable to the City in one of the following forms: a) cash escrow; b) an irrevocable letter of
7
credit; c) an automatically renewing certificate of deposit in Developer's name but irrevocably
assigned to the City; d) other financial instruments which provide equivalent assurance to the
City. Said financial guarantee shall be furnished to the City as security to assure completion of
the items of Secured Work as set forth above, and payment of the costs of administration as set
forth above. The financial guarantee shall be in an amount of $70,500.00. The financial
guarantee provided shall continue in full force and effect until the City Council approves and
accepts all of the Secured Work undertaken and releases the surety and/or the Developer from
any further liability, and until all administrative costs are paid in frill. The City Council may
reduce the amount of the financial guarantee upon partial completion of the Secured Work and
payment of all outstanding administrative costs.
12. CITY ACKNOWLEDGMENT. The Project was mistakenly referred to as a '`market rate"
apartment development in City Council Resolution 2014-36. The City aclmowledges that the
Project is an affordable apartment development financed using Low Income Housing Tax
Credits and any references to "market rate" in City Council Resolution 201436 or other
similar documents or resolutions shall be corrected to "affordable."
13. NOTICE. The address of Property Owner and Tenant, for purposes of this Agreement is as
follows, and any notice mailed by the City to these addresses shall be deemed sufficient notice
to Property Owner and Tenant under this Agreement, until notice of a change of address is
given to the City in writing:
If to the Developer:
Compass Pointe Limited Partnership
7500 West 7e Street
Edina, MN 55439
Attention: Ronald E. Clark
With a copy to:
V,rmthrop & Weinstine, P.A.
225 South Sixth Street
Suite 3500
Minneapolis, MN 55402
Attention: Jeffrey J. Koerselman
If to the Limited Partner:
Wells Fargo Affordable Housing
Community Development Corporation
MAC D1053-170
301 South College Street, 116 Floor
Charlotte, NC 28202-6000
14. SEVERABILITY. If any portion, section, subsection, paragraph, sentence, clause or phrase of
this Agreement is for any reason held to be invalid, such decision shall not affect the validity
8
ofthe remaining portion of this Agreement
15. SUCCESSION. This Agreement shall be binding upon the parties, their heirs, successors or
assigns, as the case may be.
IN W rNESS WHEREOF, we have hereunto set our hands and seals.
CITY OF NEW HOPE
By: 44. 4JI41,
Its Mayor
ZABy: '
Its tify Manager
COMPASS POINTE LDUM
PARTNERSHIP
By: Compass Pointe LLC
Its General Partner
By:
Ronald E. Clark
Its Chief Manager
STATE OF MINNESOTA }
) ss.
COUNTY OF HEAINEPIN )
foregoingenL was acknowledged before me this .� day of
201 by thi Hemkea and Kirk McDonald, the Mayor and Manager,
respectively, of the City of New Hope, a Minnesota municipal corporation, on behalf of said
municipal corporation.
Notary Public
�,.aww..n..AC.�M�.,,ba,0.rJS.W1A1'I.1l�J.`•+.iJ4r
r�
of the remaining portion of this Agreement.
15. SUCCESSION. This Agreement shall be binding upon the parties, their heirs, successors or
assigns, as the case may be.
IN WITNESS WHEREOF, we have hereunto set our hands and seals.
CITY OF NEW HOPE
By:
Its Mayor
By:
Its City Manager
COMPASS POINTE LIMITED
PARTNERSHIP
By: Compass Pointe LLC
Its General Partner
By: /..,4/ Eaw
Ronald E. Clark
Its Chief Manager
STATE OF MNNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of
,201 by Kathi Hemken and Kirk McDonald, the Mayor and Manager,
respectively, of the City of New Hope, a Minnesota municipal corporation, on behalf of said
municipal corporation.
Notary Public
9
STATE OF MINNESOTA )
)Ss.
COUNTY OF .k�id r. n )
SARAH MARY bULONG
Notary P4d;Ao Nnnasda
W 13 esJtan 81, 2017
The foregoing instrument was acknowledged before me this 27 day of 'M , 201 , by
Ronald E. Clark, the Chief Manager of Compass Pointe LLC, a Minnesota limited liability
company, the general partner of Compass Pointe Limited Partnership, a Minnesota limited
partnership, on behalf of said limited liability company and limited partnership.
1U77; Iai1_►
JENSEN SONDRALL & PERSELLIN, P.A.
8525 Edinbrook Crossing, #201
Brooklyn Park, MN 55443
(763) 424881.1
PmftmrAs"tamoriAWCftyafNawH*Wn4WCmap WF&taWe:iffi0edaayl0ta PWPWft FW 3"kPwMW A,VW1d4d=
91931070
10
6>141 OlAt4�
19
AGREEMENT TO MAINTAIN UNDERGROUND
STORM WATER STORAGE SYSTEM
THIS AGREEMENT is made and entered into as of the Adt day of 2014, by and
between Compass Pointe Limited Partnership, a Minnesota Limited Partners (' veloper") and
the City of New Hope, a Minnesota municipal corporation ("City").
WITNESSETH:
WHEREAS, the Developer owns certain real property located in the City of New Hope,
County of Hennepin, State of Minnesota, legally described as follows (hereafter Property):
Lot 1, Block 1, Compass Pointe, according to the duly recorded plat thereof, Hennepin
County, Minnesota,
WHEREAS, permanent provisions for handling of storm water runoff on the Property as
provided in that certain Stormwater Management Operations and Maintenance Plan for Compass
Pointe attached hereto as Exhibit A (the "Maintenance Plan") are acceptable to the Shingle Creek
Watershed, including provisions for operation and maintenance of all stormwater runoff facilities
and detention ponds, as required, and such provisions are set forth in this Agreement; and
NOW, THEREFORE, in consideration of mutual covenants of the parties set forth
herein and other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Maintenance of the Underground Storm Water Storage. System. The Developer and its
successor or assigns as fee owner of the Property shall be responsible for maintaining and
observing all Drainage Laws governing the operation and maintenance of the underground
stormwater storage system located at the Property (hereafter, the "System"). The Developer shall
provide the City with a schedule acceptable to the City for Developer's inspection of the System
and its outlet control structures. The Developer shall make all such scheduled inspections, keep
records of all inspections and maintenance activities, and submit such records annually to the City.
The cost of all inspections and maintenance of the System shall be the obligation of the Developer
and its successors or assigns as the fee owner of the Property. Further, the Developer and its
successors or assigns, shall meet all of the requirements of the City's MS4 permit relating to the
System and comply with all structural storm water best management practices (BMP's) as
determined by the City.
�. LLC
i�NLa Commercial Partners Title
C&-
2
00 South Stith
Suite 1300
379 V 2— 6 �( `� of Minneapolis, MN 55402
2. City's Maintenance Rights. The Developer acknowledges and agrees the City may
maintain the storm water structures constructed on the Property, as provided in this paragraph, if
the City reasonably believes that the Developer or its successors or assigns have failed to maintain
the storm water structures in accordance with applicable Drainage Laws and BMP's, and such
failure shall continue for thirty (30) days after the City shall give the Developer written notice of
such failure. The City's notice shall specifically state which maintenance tasks are to be performed.
If Developer shall not complete the maintenance tasks within thirty (30) days after such notice is
given by the City, the City shall have the right to enter upon the Property at any reasonable time to
perform such maintenance tasks. In such case, the City shall send an invoice of its reasonable
maintenance costs to the Developer or its successors or assigns, who shall pay said costs within
thirty (30) days of receipt of said invoice. Notwithstanding the foregoing, in the event of an
emergency, as determined by the City Engineer, the thirty (30) day notice requirement to the
Developer for failure to perform maintenance tasks shall be and hereby is waived in its entirety by
the Developer, and the Developer shall reimburse the City for any expense so incurred by the City
in the same manner as if written notice as described above has been given. The Developer agrees
the City may levy and collect its maintenance costs as a special assessment against the Property's
real estate taxes in the event the City fails to receive payment of the maintenance costs in
accordance with this paragraph. Developer further agrees the maintenance costs incurred by the
City per this paragraph result from the City's elimination of a public health or safety hazard from
private property per Minn. Stat. §429.101.
3. Hold Harmless. Except with respect to the gross negligence or willful misconduct of the
City, its agents, employees or representatives, the Developer agrees to indemnify and hold
harmless the City and its agents and employees against any and all claims, demands, losses,
damages, and expenses (including reasonable attorneys' fees) arising out of or resulting from the
Developer's or the Developer's agents or employee's negligent or intentional acts, or any violation
of any safety law, regulation or code in the performance of this Agreement, without regard to any
inspection or review made or not made by the City, its agents or employees or failure by the City,
its agents or employees to take any other prudent precautions. in the event the City, upon the
failure of the Developer to comply with any conditions of this Agreement, performs said conditions
pursuant to its authority in this Agreement, the Developer shall indemnify and hold harmless the
City, its employees, agents and representatives for its own negligent acts in the performance of the
Developers required work under this Agreement, but this indemnification shall not extend to
intentional or grossly negligent acts.
4. Costs of Enforcement. The Developer agrees to reimburse the City for all costs incurred
by the City in the enforcement of this Agreement, or any portion thereof, including court costs and
reasonable attorneys' fees.
5. Notice. All notices required under this Agreement shall either be personally delivered
or be sent by certified or registered mail and addressed as follows:
2
5. Notice. All notices required under this Agreement shall either be personally delivered
or be sent by certified or registered mail and addressed as follows:
To the Developer: Compass Pointe Limited Partnership
7500 West 78"' Street
Edina, MN 55439
Attention: Ronald E. Clark
To the City: Kirk McDonald, City Manager
City of New Hope
4401 Xylon Avenue North
New Hope, MN 55428
All notices given hereunder shall be deemed given when personally delivered or two (2) business
days after being placed in the mail properly addressed as provided herein.
6. Successors. All duties and obligations of Developer under this Agreement shall also be
duties and obligations of Developer's successors and assigns.
7. Effective Date. This Agreement shall be binding and effective as of the date hereof.
DEVELOPER, COMPASS POINTE
LIMITED PARTNERSHIP,
a Minnesota limited partnership
By: Compass Pointe LLC
Its: peneral Partner
By: 11a'-0 OL -W
Ronald E. Clark
Its Chief Manager
STATE OF MINNESOTA )
) ss. SARAH MARY D1 LONG
COUNTY OF fi'tY1e�u-y ) Notary Public -Minnesota
�... My Codon aphaJMn 31.2017
The foregoing instntment was acknow edged before me this bti ay of dune, 2414, by
Ronald E. Clark, the Chief Manager of Compass Pointe LLC, a Minnesota limited liability company,
the general partner of Compass Pointe Limited Partnership, a Minnesota limited partnership, on
behalf of such limited liability company and Iimited partnership.
�AWL2491L -
N, tary Public
3
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
CITY OF NEW HOPE,
By: Kathi Hemken
Its Mayor
—� -4 k'MLS4
By: Kirk McDonald
Its City Manager
r�
' l The foregoing instrument was acknowledged before me this 4�3 day of '
201 K , by Kathi Hemken and Kirk McDonald, the Mayor and City Manager of the City of New
Hope, a Minnesota municipal corporation, on behalf said al corporation.
Notary Public
DRAFTED BY.-
JENSEN SONDRALL & PERSELLIN, P.A.
8525 Edinbrook Crossing, #201
Brooklyn Park, MN 55443
(763)424-8811
4
EXHIBIT A
MAINTENANCE PLAN
(Attached)
Stonnwater Management
Operations and Maintenance
Plan
For
Compass Pointe
New Mope, Minnesota
TABLE OF CONTENTS
1. PROJECT DESCRIPTION AND OVERVIEW
2. TRITON UNDERGROUND STORM SYSTEM O&M
MANUAL
3. OVERALL SITE UTILITY PLAN
4. TRITON UNDERGROUND STORM SYSTEM. SITE SPECIFIC
SHOP DRAWINGS
5. MAINTENANCE LOG
Project Description and Overview
Compass Pointe is a 68 unit residential apartment building on a 1.7 acre site in New
Hope, Minnesota. Due to size constraints on the site, storm water management is
obtained by an underground storm water storage system that was developed by Triton
Storm water Solutions. A detailed maintenance manual from Triton is part of this
maintenance plan. In addition to the underground system there are 18 storm sewer
structures on the site. These structures should be inspected for any obstruction by
debris or sediment buildup at the same time the underground system is inspected. The
storm sewer manhole just West of the underground system prior to discharge into the
system is a sump manhole. This should be cleaned of any sediment buildup at time of
inspection.
Triton recommends as a minimum annual inspections and at 6 months during the first
year of operation.
T-�ITON
swer A
Triton" Main He ader Row" O&M ManUal
Tdtone Main Header Row' O&M Manual
An important component of any Stormwater Pollution Pre-
vention Pian is inspection and maintenance. The Triton Main
Header Row" is a patent pending technique to inexpensively
The Maim Header Row is comprised of many Triton chambers
that sit on interconnecting sediment floors that are connec-
tioned to a nearby manhole for easy access. At the end of the
Main Header Row there is room for an optional Sump Basin
Assembly (shown as item 3 in Rgure 2) to help collect and con-
tain any sediment that is flushed out of the Main Header Row
during a ruin event or maintenance cleaning. The Sump Basin
Assembly can be accessed from above via a manhole or up to
a 33' (538.2mm) diameter stand pipe. The Main Header Row
feeds the distribution rows (shown as item 4 in Figura 2) via a
feed or distribution pipe. The feed pipe is at an elevated invert
height so the water in the Main Header Row must rise to the
invert height before flowing Into the distribution rows to cap-
ture the sediment in the Main Header Row. The Main header
Row protects the distribution chamber row storage areas from
any sediment accumulation. This preserves the infiltration rate
enhance enhance Total Suspended Salida CESS) removal and
provide easy access for inspection and maintenance.
of the area where the distribution rows are installed, allowing
the system to perform at the rate for which it was designed.
The sediment floors are designed to prevent scouring of the
underlying stone and to stop sediment infiltration into the ground
under the Main Header Row. The sediment floors lock together
and mate with the chambers so they will remain intact during
very high flow events and during high pressure cleaning.
The Main Header Rawls typically designed to capture the 'first
flush" and offers the versatility to be sized on a volume or flow
rate basis. An upstream manhole not only provides access to
the Main Header Row but typically includes a high flow outlet
that contrds excessive storm water flow in or volumes by
discharging overflow into surrounding stone or through a mad -
fold to the other Main Header Row chambers.
The Main Header Row may also be part of a treatment train, By
treating storm water prior to entry into the Main Header Row
system, service life can Fre extended and pollutants, such as
hydrocarbons, can be captured. Pre-treatment best manage-
ment practices can be as simple as deep sump catch basins
and oil -meter separators or as innovative as storm water treat-
ment devices. The design of the treatment train and selection
of pre-treatment devices by the design engineer are often driv-
en by regulatory requirements. Whether pre-treatment is em-
ployed or not, the Main Header Row is recommended by Triton
as an effective means of minimizing maintenance requirements
and costs.
2 Call Triton at 810.222 7652 for technical and product information or visit www tntonsws Com
The frequency of inspection and maintenance varies by loca-
tion. A routine inspection schedule needs to be established for
each individual location based on alte-specific variables. The
type of land use -- industrial, commercial, residential ---antici-
pated pollutant bad, percent Imperviousness, climate and so
on all play a critical role in determining the actual frequency of
inspection and maintenance practices.
At a minimum. Triton recommends annual inspections. The
Main Header Row should be inspected every 6 months for
the first year of operation. In subsequent years, the inspection
should be a4usted based an previous observation of sediment
deposits.
The Main Header Raw incorporates a combination of standard
manhole(s) and strategically located inspection ports. The hi-
spection ports allow for easy access to the system from the
surface, eliminating the need to perform a confined spade en-
try for inspection purposes_
The Main Header Row was designed to reduce the cost of
periodic maintenance. By capturing sediment in just one row,
costs are dramatically reduced by eliminating the need to
dean each row along the storage bed. If inspection Indicates
the need for maintenance, access is provided via a manhoWz)
located on the end of the Main Header Row. If entry into the
manhole is required, please foilow local and OSHA rules for
confined space entries. The inside dimensions of the Tftn
Main Header Row chambers measure 34" (863.6mm) tall by
48" (1219.2mm) wide.
If, upon visual Inspection, it is found that sediment has accu-
mulated, a stadia rod should be inserted to determine sedi-
ment depth. When the average depth of sediment exceeds 1.1 "
(279Amm) in the bottom of the Sump Basin and/or if there is
3" t76.2mm) throughout the length of the Main Header Row,
the Sump Basin and Main Header Row should be cleaned.
Basin and the Main Header How. They can be cleaned using
a JetVac process or can be cleaned using a water tank truck
or fire truck equipped with a nose to flush the sediment to the
Sump BaakL To use a water tanker or fire truck, simply insert
the hose into the upstream catch basin stricture and flush the
sediment to the end of the Main Header Row where the Sump
Basin is located. If the Sump Basin is located close to the inlet,
vacuum out the sediment first and then back flush the Main
Header Row into the Sump Basin.
NOTES The JetVac or high pressure hose process
should only be performed on the Whin Header Row
where the Tritan Sediment Floor System has been
installed. and only if there is 3" (76.2mm) of sedi-
ment throughout the length of the Main Header
Row
Maintenance is accomplished by removing the sediment that
has built up in the Sump Basin using a standard vacuum trick
as shown to the right. The Triton Main Header Row system
was designed for easy access to the Sump Basis via a man-
holeAnspection port or up to a 33" (838.2mm) diameter pipe.
There is no special process required to clean out the Sump
Call Triton at Bio.222.7652 For tectwilcai and product information orviat www t8tonswe.com
3
Triton® Main Header Row' O&M Manual
Step 1. Inspect Sump Basin and Wain Header
Raw for sediment
A. Inspection ports Cif present)
1. Remove lid from floor box frame
ii. Remove cap from inspection riser
III. Using a flashlight and stadia rod, measure
depth of sediment in the Sump Basin and
record results In the maintenance log
Iv. If sediment is at or above- I V (279.4mm)
depth, proceed to S" 2. If not, proceed to
step 3.
B. All Main Header Rows
ii- Remove cover from manhole at upstream end
of Main Header Flow
ii, Using a flashlight, inspect the Main Header
Row through outlet pipe and through each
distribution pipia that is connected in between
the Mein Header Row and the distribution row
of chambers
iii. If sediment is at- or above -11' (279.4mm)
mark in the sump bin, proceed to Step 2
1. Be sure to have proper footing when entering into
Main header Row
2. Fallow OSHA regulations for confined space entry if
entering Main Header Row
If not, proceed to Step 3
Step 2. Clean out the Sump Basin with a vacuum
truck
A. Remove any secondary filtration media that may
be installed in the Sump Basin
B. Vacuum Sump Basin as required
Step 3. Replace all caps, lids, and covens
Record observations and actions
Step 4, inspect and clean catch basins and man-
holes upstream of the Tritan system
1j.81
Revised 09/17/09. Supersedes all previous D&M manueis. 703 -2s13 -M
L� �•
_ '�'.'1 'moi
il—I'�If'•
.Til=li=il=fl'
F`
—ilk
Revised 09/17/09. Supersedes all previous D&M manueis. 703 -2s13 -M
.am°
ONI) 79 Z 9A IF
W �
_ 2
AVEMM
.11 114 11
13 i
•M1 t.!
I Itom
goNo
Ir�rtirl��
�,.�
} I
L r
r
i so
■" � tr�r
sails
vm'� r
InWom
Milo
opr k3O r
f 0
!men
� i
,10r�r -
10
= �
-low-
Now
low r
i [F` r ••
,r�•:rw�.,
t�1al� `t
�t�• 1/a,p,tL,R•f
lys,� r i i
lTad.�Pafw�l
�t�• 1/a,p,tL,R•f
'APA/08/2614/TUI 13:12
rn
C pn
m a
Q�l r 00
E aco11
-n
c�
w
a
v
0
PAX No,6514626990
0
C6
to
00
6
P. 004/006
!I�
IAPR/09/2014/TUE 13:12 ROYAL CONOOE FAX h.6514626390 P. 005/006
APR/00/2014/TUE 13:12 ROYAL G1MCRE'fE FAX Ho, 5514626990 P.006/006