The URL can be used to link to this page

112315 EDACITY OF NEW HOPE EDA MEETING City Hall, 4401 Xylon Avenue North November 23, 2015 EDA Meeting will commence upon adjournment of the City Council Meeting President Kathi Hemken Commissioner john Elder Commissioner Andy Hoffe Commissioner Eric Lammle Commissioner Jonathan London Call to order — EDA Meeting of November 23, 2015 2. Roll call 3. Approval of Minutes: November 9, 2015 4. Resolution adopting a modification to the redevelopment plan for Redevelopment Project No. 1, establishing the Industrial Equities Tax Increment Financing District therein and adopting a tax increment financing plan therefor (project no. 971) 5. Resolution approving termination of easement over property platted as "New Hope Hy -Vee" 6. Resolution authorizing the acquisition of 4511 Boone Avenue North by the Economic Development Authority through redemption as a junior creditor (project no. 975) Resolution authorizing the execution of a contract for private redevelopment with Industrial Equities — New Hope, LLC (project no. 971) Adjournment CITY OF NEW HOPE 4401 XYLON AVENUE NORTH NEW HOPE, MINNESOTA 55428 EDA Minutes November 9, 2015 Regular Meeting City Hall CALL TO ORDER President Hernken called the meeting of the Economic Development Authority to order at 8:46 p.m. ROLL CALL Present: Kathi Hemken, President John Elder, Commissioner Andy Hoffe, Commissioner Jonathan London, Commissioner Absent: Eric Lammle, Commissioner Staff Present: Kirk McDonald, City Manager Aaron Chirpich, Community Development Specialist Tim Fournier, Police Chief Valerie Leone, City Clerk Susan Rader, Director of Parks & Recreation Jeff Sargent, Director of Community Development Stacy Woods, Assistant City Attorney APPROVAL OF Motion was made by Commissioner Hoffe, seconded by Commissioner MINUTES London, to approve the minutes of October 12, 2015. Voting in favor: Item 3 Hemken, Elder, Hoffe, London, voting against: None; Absent: Lammle; Abstained: None. Motion carried. IMP. PROJECT 965 President Hemken introduced for discussion EDA Item 4, Resolution Item 4 approving contract with Nitti Rolloff Services, Inc. for the site grading of 4415 Nevada Avenue North (improvement project no. 965). Mr. Aaron Chirpich, community development specialist, reported the city recently acquired the single family home located at 4415 Nevada Avenue North as part of the city's scattered site housing program. He stated the house has been removed to create two buildable lots for single family homes. He explained it is necessary to level the existing berm and re -grade the property to make the site suitable for construction. Mr. Chirpich stated staff received bids for the work, and the low bid was submitted by Nitti Rolloff Services. The city has used this company in the past and been pleased with their work. He stated EDA funds will be used and the city will be reimbursed with CDBG funds. RESOLUTION 2015-20 Commissioner Hoffe introduced the following resolution and moved its Item 4 adoption "RESOLUTION APPROVING CONTRACT WITH NFM ROLLOFF SERVICES, INC. FOR THE SITE GRADING OF 4415 NEVADA AVENUE NORTH (IMPROVEMENT PROJECT NO. 965)." The motion for EDA Meeting Page 1 November 9, 2015 the adoption of the foregoing resolution was seconded by Commissioner London, and upon vote being taken thereon, the following voted in favor thereof: Hernken, Elder, Hoffe, London; and the following voted against the same: None, Abstained: None; Absent: Lammle; whereupon the resolution was declared dulypassed and adopted, signed by the president which was attested to by the executive director. IMP. PROJECT 965 President Hemken introduced for discussion EDA Item 5, Resolution Item 5 approving temporary construction easement over 4315 Nevada Avenue North relating to the site grading of 4415 Nevada Avenue North (improvement project no. 965). Mr. Aaron Chirpich, community development specialist, stated a temporary easement for 4315 Nevada Avenue is necessary to allow the excavating contractor to enter 4415 Nevada Avenue in order to remove a retaining wall. He noted 4315 Nevada is directly south of the EDA -owned property, and the property owner has agreed to grant the city the temporary easement. Commissioner London inquired of liability to the city. Assistant City Attorney Stacy Woods indicated the contractor is required to provide evidence of insurance as part of the contract. RESOLUTION 2015-21 Commissioner London introduced the following resolution and moved its Item 5 adoption: "RESOLUTION APPROVING TEMPORARY CONSTRUCTION EASEMENT OVER 4315 NEVADA AVENUE NORTH RELATING TO THE SITE GRADING OF 4415 NEVADA AVENUE NORTH (IMPROVEMENT PROJECT NO. 965)." The motion for the adoption of the foregoing resolution was seconded by Commissioner Hoffe, and upon vote being taken thereon, the following voted in favor thereof: Hemken, Elder, Hoffe, London; and the following voted against the same: None; Abstained: None; Absent: Lammle; whereul2on the resolution was declared duly passed and ado ted signed by the president which was attested to by the executive director. ADJOURNMENT Motion was made by Commissioner London, seconded by Commissioner Hoffe, to adjourn the meeting. All present voted in favor. Motion carried. The New Hope EDA adjourned at 8:54 p.m. Respectfully submitted, /�"- oaft, Valerie Leone, City Clerk EDA Meeting Page 2 November 9, 2015 L , �1y hli.. rre.�l Fne Request for Action Originating Department I Approved for Agenda f Agenda Section Community Development : Jeff Sargent, Director of CD November 23, 2015 EDA Item No. Kirk McDonald, City Manager 4 Resolution adopting a modification to the redevelopment plan for Redevelopment Project No. 1, establishing the Industrial Equities Tax Increment Financing District therein and adopting a tax increment financing plan therefor (project no. 971) Requested Action A public hearing was held at the City Council meeting relating to this item. The Economic Development Authority (EDA) is also requested to pass a resolution adopting the modification and establishing the TIF district. Policy/Past Practice It is a past practice of the City Council to consider/approve providing financial assistance such as Tax Increment Finance (TIF) Districts for redevelopment projects in the city. Background It has been found necessary to create a TIF District in order to accommodate the redevelopment of the property located at 9449 Science Center Drive, as defined in the TIF plan. In order to create a TIF District, the EDA must approve the findings as outlined in the attached resolution. The TIF District will facilitate the redevelopment of a substandard property and the construction of a new 48,000 square foot office warehouse project in the city. The TIF assistance will specifically be used for the demolition of the existing structure, abatement of asbestos containing materials and some site restoration work. The necessity of the TIF District will authorize the expenditures for land/building acquisition, site improvements and preparation, utilities, administrative costs and other qualifying improvements. Stacie Kvilvang from Ehlers & Associates will be in attendance to answer any questions regarding the creation of this district. Motion byoe �L#�'l�l'Y1.& Second by To: u. v'0A & 1, dA 11 W ,,a av-A4 RFA \ COMM DEV \ Public Hearings 1 Q & R -TIF District industrial Equities public hearing (EDA) 11-23-15.doc Request for Action November 23, 2015 Page 2 Any time a modification is made to the city's TIF plan, including the creation of new district, the entire Redevelopment Plan and Tax Increment Financing Plan for the city must be modified, hence the long title of the resolution. Attachment(s) a Resolution Tax Increment Financing District Overview, prepared by Ehlers NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY CITY OF NEW HOPE HENNEPIN COUNTY STATE OF MINNESOTA RESOLUTION NO. RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJECT NO. 1, ESTABLISHING THE INDUSTRIAL EQUITIES TAX INCREMENT FINANCING DISTRICT THEREIN AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR WHEREAS, it has been proposed by the Board of Commissioners (the "Board") of the New Hope Economic Development Authority (the "EDA") and the City of New Hope (the "City") that the EDA adopt a Modification to the Redevelopment Plan (the "Redevelopment Plan Modification") for Redevelopment Project No. 1 (the "Project Area") and establish the Industrial Equities Tax Increment Financing District (the "District") and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the Redevelopment Plan Modification and the TIF Plan are referred to collectively herein as the "Plans"), all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.090 to 469.1082, and Sections 469.174 to 469.1794, inclusive, as amended (the "Act"), all as reflected in the Plans and presented for the Board's consideration; and WHEREAS, the EDA has investigated the facts relating to the Plans and has caused the Plans to be prepared; and WHEREAS, the EDA has performed all actions required by law to be performed prior to the adoption of the Plans. The EDA has also requested the City Planning Commission to provide for review of and written comment on the Plans and that the Council schedule a public hearing on the Plans upon published notice as required by law. NOW, TBEREFORE, BE IT RESOLVED by the Board as follows: 1. The EDA hereby finds that the District is in the public interest and is "renewal and renovation district" under Minnesota Statutes, Section 469.174, Subd. 10 (a)(1), and finds that the adoption of the proposed Plans conform in all respects to the requirements of the Act and will help fulfill a need to develop an area of the State of Minnesota which is already built up and that the adoption of the proposed Plans will help provide employment opportunities in the State and in the preservation and enhancement of the tax base of the City and the State because it will discourage commerce and industry from moving their operations to another state or municipality and thereby serves a public purpose. 2. The EDA further finds that the Plans will afford maximum opportunity, consistent with the sound needs for the City as a whole, for the development or redevelopment of the Project Area by private enterprise in that the intent is to provide only that public assistance necessary to make the private developments financially feasible. 3. The boundaries of the Project Area are not being expanded. 4. The reasons and facts supporting the findings in this resolution are described in the Plans. 5. The EDA elects to calculate fiscal disparities for the District in accordance with Minnesota Statutes, Section 469.177, Subd. 3, clause b, which means the fiscal disparities contribution would be taken from inside the District. 6. Conditioned upon the approval thereof by the City Council following its public hearing thereon, the Plans, as presented to the EDA on this date, are hereby approved, established and adopted and shall be placed on file in the office of the Executive Director of the EDA. 7. Upon approval of the Plans by the City Council, the staff, the EDA's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plans and for this purpose to negotiate, draft, prepare and present to this Board for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. Approval of the Plans does not constitute approval of any project or a Development Agreement with any developer. 8. Upon approval of the Plans by the City Council, the Executive Director of the EDA is authorized and directed to forward a copy of the Plans to the Minnesota Department of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a. The Executive Director of the EDA is authorized and directed to forward a copy of the Plans to the Hennepin County Auditor and request that the Auditor certify the original tax capacity of the District as described in the Plans, all in accordance with Minnesota Statutes 469.177. Approved by the Board on November 23, 2015. Kathi Hemken, President ATTEST: Kirk McDonald, Executive Director Tax Increment Financing District overview City of New Hope Industrial Equities Tax Increment Financing District The following summary contains an overview of the basic elements of the Tax Increment Financing Plan for Industrial Equities Tax Increment Financing District. More detailed information on each of these topics can be found in the complete Tax Increment Financing Plan. Proposed action: ➢ Establishment of Industrial Equities Tax Increment Financing District (District) and the adoption of a Tax Increment Financing Plan (TIF Plan). Modification to the Redevelopment Plan for Redevelopment Project No. 1 includes the establishment of the Industrial Equities Tax Increment Financing District, which represents a continuation of the goals and objectives set forth in the Redevelopment Plan for the Redevelopment Pro' ect No. 1. Type of TIF District: A renewal and renovation district Parcel Number: 07-118-21-22-0013 Proposed The District is being created to facilitate the redevelopment of a substandard Development: property and construction of a new 48,000 square foot office warehouse project in the City. Please see Appendix A of the TIF Plan for a more detailed project descri ion. Maximum duration: The duration of the District will be 15 years from the date of receipt of the first increment (16 years of increment). The City elects to receive the first tax increment in 2018. It is estimated that the District, including any modifications of the TIF Plan for subsequent phases or other changes, would terminate after December 31, 2033, or when the TIF Plan is satisfied. Estimated annual tax Up to $63,770 increment: wf- Aw 4.l EHLERS LEADERS IN PUBLIC FINANCE Authorized uses: The TIF Plan contains a budget that authorizes the maximum amount that may be expended: Land/]Building Acquisition.................................................... $250,000 Site Improvements/Preparation .............. $250,000 PublicUtilities........................................................................ $50,000 Other Qualifying Improvements ............................................ $14,280 Administrative Costs (up to 10%) ........................................... $80,082 PROJECT COSTS TOTAL .................................................. $644,362 Interest.................................................................................. $236,543 PROJECT COSTS TOTAL ............................................... See Subsection 2-10, on page 2-5 of the TIF Plan for the full budget authorization. Form of financing: The project is proposed to be financed by a pay-as-you-go note, and interfund loan. Administrative fee: Up to 10% of annual increment, if costs are justified. Interfund Loan If the City wants to pay for administrative expenditures from a tax increment Requirement: fund, it is recommended that a resolution authorizing a loan from another fund be passed PRIOR to the issuance of the check. 4 Year Activity Rule After four years from the date of certification of the District one of the (f 469.176 Subd. 6) following activities must have been commenced on each parcel in the District: • Demolition ® Rehabilitation • Renovation • Other site preparation (not including utility services such as sewer and water) If the activity has not been started by approximately November 2019, no additional tax increment may be taken from that parcel until the commencement of a qualifying activity. 5 Year Rule Within 5 years of certification revenues derived from tax increments must be (§ 469.1763 Subd. 3) expended or obligated to be expended. Any obligations in the District made after approximately November 2020, will not be eli'ble for repaymqt from tax increments. The reasons and facts supporting the findings for the adoption of the TIF Plan for the District, as required pursuant to M.S., Section 469.175, Subd. 3, are included in Exhibit A of the City resolution. Page 2 .r EHLERS LEADERS IN PUBLIC FINANCE MAP OF REDEVELOPMENT PROJECT NO. I AND THE INDUSTRIAL EQUITIES TAX INCREMENT FINANCING DISTRICT Page 3 EHLERS ' LEADERS IN PUBLIC FINANCE a' X Originating Department Community Development EDA Request for Action Approved for Agenda November 23, 2015 Agenda Section EDA Item No. Director of CD : Kirk McDonald, Resolution approving termination of easement over property platted as "New Hope Hy -Vee" Requested Action Staff requests the Economic Development Authority (EDA) to consider the approval of a resolution terminating an existing and unnecessary easement related to the Hy -Vee development. Policy and Past Practice The EDA has vacated easements in the past in order to accommodate new developments. Background The easement in question burdens the entirety of the Hy -Vee property and went unnoticed during the platting process. Through title work for the property, it was discovered that the easement exists, serves no purpose, and needs to be terminated in order to have a clean title. Being that Hy -Vee is in possible negotiations for the sale of the North Memorial parcel, a request has been made to the EDA to approve the termination of the easement. The easement benefitted the old State Bank of New Hope land, which later was purchase by Wells Fargo, but the easement document does not describe the land which was intended to be served by the easement. The easement appears on all of the Certificates of Title for the Hy -Vee tracts and also appears on the Certificate of Title of the Civic Plaza parcel, which is currently owned by the EDA. Once again, the easement is not specific in nature, but rather encumbers the entire area (outlined in blue in the attached document) for a variety of purposes. Since New Hope State Bank is no longer in existence, and the new owners of the land, namely Hy - Vee and the EDA, have no need for the easement, the two parties can terminate the easement. It should be noted that this is not a public easement needed for public use. For this reason, there is no need for a public hearing in order to terminate this easement. SECOND BY TO: 1j1&b645AW A4 L-1RFA\ COMM DEV\FWming\Q & R - Termination of Hy -Vee Easement 11-23-15.doc Request for Action November 23, 2015 Page 2 The City Attorney reviewed the proposal and prepared the attached resolution and is in favor of terminating the easement. Staff Recommendation Staff recommends that the EDA approve resolution terminating the aforementioned easement. Attachments • Resolution • Affidavit • Termination of Easement Agreement • Graphic depiction of affected easement areas • Certificate of Title EDA RESOLUTION NO. 15 - RESOLUTION APPROVING TERMINATION OF EASEMENT OVER PROPERTY PLATTED AS "NEW HOPE HY-VEE" BE IT RESOLVED by the Economic Development Authority, in and for the City of New Hope ("EDA"), as follows: WHEREAS, Hy -Vee, Inc., an Iowa corporation, is the owner of certain real property legally described as Lots 1, 2 and 3, Block 1, New Hope Hy -Vee ("Hy -Vee Property"); and WHEREAS, the EDA is the owner of certain real property adjacent to the Hy -Vee Property and legally described as Outlot A, New Hope Hy -Vee, Hennepin County, Minnesota; and WHEREAS, Hy -Vee has discovered that there exists a Permanent and Perpetual Easement dated November 6, 1976, entered into by its predecessors in interest, on the title to the Hy -Vee Property ("Easement"); and WHEREAS, Hy -Vee has requested the EDA to give its consent to the termination of the Easement by entering into that certain Termination of Easement to clear the title to the Hy -Vee Property of the Easement; and WHEREAS, EDA has no use for the Easement; and WHEREAS, it is in the best interests of the EDA to cooperate with Hy-Vee's request and enter into the Termination of Easement; and WHEREAS, City staff is hereby seeking approval from the EDA to authorize the execution of the Termination of Easement. NOW, THEREFORE, BE IT RESOLVED by the EDA in and for the City of New Hope as follows: 1. That the above recitals are incorporated herein by reference. 2.' The President, Executive Director and New Hope City staff are authorized and directed to sign all appropriate documents, and to take whatever additional actions are necessary or desirable, to execute the Termination of Easement as set forth on the attached Exhibit "A". Dated the day of November, 2015. Attest: Kirk McDonald, Executive Director AFFIDAVIT STATE OF MINNESOTA ) j ss. COUNTY OF HENNEPIN ) Kirk McDonald, being first duly sworn of oath states as follows: 1. That he is the Executive Director of the New Hope Economic Development Authority, a public body corporate and politic created pursuant to the laws of the State of Minnesota; 2. That he knows of his own knowledge that there are no persons in possession of the land described in Certificate of Title No. 1395519 under a deed or contract for deed. Signed and sworn to before me on _,2015. Notary Public THIS INSTRUMENT WAS DRAFTED BY Stinson Leonard Street LLP (MPJ) The Graif Building 3 Civic Center Plaza, Suite 400 Mankato, MN 56001 1 &H ESOTA!2064779.0003/13451926.1 Kirk McDonald NOTARIAL STAMP OR SEAL TERMINATION OF EASEMENT THIS AGREEMENT with an effective date of P 2015 is made and entered into by and between Hy -Vee, Inc,, an Iowa. corporation ("Hy -Vee"), New Hope Economic Development Authority, a public body corporate and politic created pursuant to the laws of the State of Minnesota, ("NiIEDA"), and Wells Fargo Bank, National Association, a national banking association, ("Wells Fargo"); WHEREAS, pursuant to a Permanent and Perpetual Easement ("Emement Agreement") dated November 6, 1976, and recorded January 17, 1977 in the office of the Hennepin County Registrar of Titles as Document No. 1206360, Developers Diversified, Ltd, an Ohio limited partnership, granted to New Hope State Bank, its successors and assigns, a non-exclusive permanent and perpetual easement for purposes of ingress, egress, parking aisles, driveways, sidewalks, parking spaces and service drives, together with the right to tie into and make use of the drainage system and sanitary sewer facilities, all located in over and across the tract of land described on Exhibit A. attached hereto. WHEREAS, From January 17, 1977 until March 1, 2012, New Hope State Bank and/or its successor, was the owner of the tract of land described on LIbibit B attached hereto. WHEREAS, the tracts of land so described on Exhibits A and B, have now been platted as NEW HOPE HY VEE, and consist of Lots 1, 2, and 3, Block 1, and Oudot A, NEW HOPE HY VEE. WHEREAS, Hy -Vee is the record owner of Lots 1, 2 and 3, Block 1, New Hope By Vee, as evidenced by Certificates of Title Nos. 1395 520, 1395521 and 1395522; WHEREAS, NHEDA is the record owner of Outlot A, New Hope Hy Vee, as is evidenced by Certificate of Title No. 1395519; WHEREAS, Wells Fargo is the successor by merger to New Hope State Bank; WHEREAS, Hy -Vee and NHEDA agree that the Easement Agreement referred to herein is no longer necessary for the benefit of either of them, their successors or assigns, or for the benefit of the lands described herein. NOW THEREFORE, Hy -Vee and NHEDA hereby mutually agree that said Easement Agreement is hereby terminated by each of them as record owners of the land which is burdened by, and the land intended to be benefitted by the easement; and Wells Fargo hereby affirms that it has no interest in the continuation of the Easement Agreement far its benefit and consents to the termination of said Easement Agreement. MINNESOTM2064779,0003112936588.1 IN WITNESS WHEREOF, HY-VEE, INC. has caused this Agreement to be executed on the day of , 2015. HY-VEE, INC. By: Its: STATE OF IOWA COUNTY OF ) The foregoing instrument was acknowledged before me this day of 2015, by _. . the , of Hy -Vee, Inc., an Iowa corporation, on behalf of the corporation. Notary Public MMESMAM64779.0003/12936588.1 IN WITNESS WHEREOF, NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY, has caused this Agreement to be executed on the day of _ .2015. NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY By: Kathi Hemken, Its: President By: Kirk McDonald Its: Executive Director STATE OF MINNESOTA ) COUNTY OF ) The foregoing instrument was aclmowiedged before me this day of , 2015, by Kathi Hemken, the President, and Kirit McDonald, the Executive Director, ofNew Hope Economic Development Authority, a public body corporate and politic created punmant to the laws of the State of Minnesota. Notary Public MINNESOTA/2064774.0003/12 083.1 IN WITNESS WHEREOF, WELLS FARGO BANK NATIONAL ASSOCIATION has caused this Agreement to be executed on the day of , 2015. WELLS FARGO BANK NATIONAL ASSOCIATION 0 Its: STATE OF MINNESOTA ) COUNTY OF } The foregoing instrument was acknowledged before me this day of 2015, by , the _ _ __ of Wells Fargo Bank, National Association, a national banking association, on behalf of the association. Notary Public MINNESOTA/2064779.0003/12936588.1 EXEP_rr A That part of the West % of the Northeast '/4 of Northeast '/a of Section 18, Township 118, Range 21, Hennepin County, Minnesota described as commencing on the East line of said subdivision at a point on said line 165 feet North measured along said line from the Southeast corner of said subdivision; THENCE West parallel to the South line of said subdivision 82.5 feet; THENCE South parallel to the East line of said subdivision 165 fret to the South line thereof; THENCE West along said South line to the Southwest corner of said subdivision; THENCE North along the West line thereof to the Northwest corner of said subdivision; THENCE East along the North line thereof to the Northeast corner of said subdivision; THENCE South along the East line thereof to the point of beginning; excepting therefrom the North 350.98 feet. Also excepting therefrom the South 223.58 feet of the West 190 feet. MINNESOTA/10&779.0003/12936588.1 EXIiIBYT B The South 223.58 feet of the West 194 feet of the West 16 of the Northeast 1/4 of the Northeast 1/ of Section 18, Township 118, Range 21, Hennepin County, Minnesota. MD+f ESOTAaW779.0003112936589.1 V� C7 t =?3il Fitt xwaw i7.has P a". ti $ RYA t fit � !^• j affil i oftii •i'------ I � S9 �f f 7 t sir � � AIIICAtelreM71171 it If jl.v lI�.�.aw -- — #ZtA AiE7JirY N�7i ' �'� I 1 I �� arwnrer..r ' � ��ul fop � ��w ��.✓art IQrt�i�ti�.� ` e"" i"`� ��I f•ic.i� 11a • 134 SS i `f' Certificate of Title Certificate Number: 1395519 Created by Document Number. 5212939 Transfer from: 1395517 Originally registered April 11, 1933 Volume: 168, Certificate No: 53544, District Court No: 4028 Also originally registered April 21, 1971, Volume: 1534, Certificate No: 463225, District Court No: 17097 State of Minnesota County of Hennepin S.S. Registration This is to certify that New Hope Economic Development Authority, whose address is 4401 Xylon Avenue North, New dope, Minnesota is now the owner of an estate in fee simple In the following described land situated in the County of Hennepin and State of Minnesota: 0utlot A, New Hope Hy Vee Subject to the interests shown by the following memorials and to the following rights or encumbrances set forth in Minnesota statutes chapter 508, namely: 7. Liens, claims, or rights arising under the laws or the Constitution of the United States, which the statutes of this state cannot require to appear of record; 2. Any real property tax or special assessment; 3. Any lease for a period not exceeding three years, when there is actual occupation of the premises under the lease; 4. All rights in public highways upon the land; 5. Such right of appeal or right to appear and contest the application as Is allowed by law,, G. The rights of any person In possession under deed or contract for deed from the owner of the certificate of title; 7. Any outstanding mechanics lien rights which may exist under sections 514.01 to 574.17. Memorials Document Date of FilingMonth Day, Number Documentio Year Time Amount Runnim to Favor Of T995954 Quit Claim Deed May 7,19712:55 PM City of New Hope. Granting an easement for public sheat purposes over pt of above land (See Inct) T9 D49810 Easement Oct 20, 1972 1 DAS AM County of Hennepin, Greening an easement for highway purposes over pt of above land (See Inst) Between Developers Diversified (an 4H lP), S.S. Kresge Company & T1132984 Amendment Feb 20, 1975 9:45 AM American National insurance Company (See Inst) Re-entered Dec 1, 1997 at 9A0 AM New Hope State Bank. Granting a non-exclusive permanent and T1206360 Easement Jan 17, 1977 3:30 PM perpetual easement for purposes of ingress & egress over above land. Subordinating Mtge Doc No 1025149 to this easement T1298621 Easement Oct 16, 1978 8:00 AM County of Hennepin. Granting a permanent easement for installation & maintenance of traffic signals over pt of above land. (See Inst) Between Kenneth Young & W & Z Properties, Ltd. T1306061 Easement Nov 29, 1978 12:00 PM Creating certain easements, rights, obligation and restrictions (See ]nst) T1359773 Highway Plat Nov 28, 1979 8:00 AM County of Hennepin. Hennepin County State Ptd Highway Number 9, Plat 58, As directed be Resolution Doc No 979240 County of Hennepin. Granting a permanent easement far the T1482551 Easement Sep 22, 1982 9:00 AM installation and maintenance of trefliic signals over pt of above iand. (See [net) Given to correct Doc. No. 1298621 Certificate Number: 1395519 This Is a non -certified copy Page 1 of 2 r T1558036 Quit Claim Deed Jan 17, 1984 5:00 PM T2152119 Resolution Jan 31, 1891 9:00 AM T3318388 Resolution Sep 26, 2000 4:00 PM T5212940 Easement Now 7,2014 J. -OO PM 'x6267659 Amendment Jun 24, 2015 3:14 PM T5298051 Amendment Oct 7, 2015 3:45 PM Indexes Verified through 1012!2015 L New Hope Volunteers of America Elderly Housing, Inc. (an LA corp) from ('Fallon Associates, a NY limited partnership, American National Insurance Company (a Tex corp) Kmart Corporation (a Mich corp) E 9 H Properties, Inc (a PA corp) Michael H. Goodman,Trustee & Continental Bank. Creating an easement for storm sewer purposes over other land for the benefit of above land. Re-entered April 20, 2012 ® 4:0013M By the City Council of the City of New Hope. Granting a conditional use permit (Sae Inst) Rescludon No 90-224 Resolution No. W159 By the Cay Council of the City of New Hope. Granting a conditional use permit. (Sae [net) Between Hy -Vee [no and New Hope Economic Development Authority. Granting a easement for parMV and other purposes together with said easement over other land. Amend Easement document s) 5212940. Between fiy.Vee, Inc & New Hope Economic Development Authority Amending document no(s) 5212940 In Witness Whereof, I have hereunto subscribed my name and affixed the seal of my office this 7th day of November, 2014. Martin McCormick Registrar of Titles, In and for the County of Hennepin and State of Minnesota. Certificate Number. 1395619 This is a non-certifled copy Pape 2 of 2 _ _ t _ ... : •.i:ti r� 1710360 � Y ' L EA5IMUT POMANENT AND YBRpf-25 i •. TKIS INVENTMEr Made this 6— day of .• • alkia DEVEtfi FIID.. ; 1476, batwe4M DLVBLi"RS DIVSRSI?jZD, . LTD- # Jan Ohio limited. Puxtneri ;ship, party of the first part, 'and NEW BWBMTE DANK.'a Minnesota` corporation, party of the aacond part, s :� ;s 1PI?NEB9ETH. That the sa£d party bf the first past, in.eansifleration of the Euro of one Dollax and other 9"d a t .skid . : �• :and Vainaase consideration" it in hand paid by' � '. i ' is', t,s� _acknow- pirty of the second part, the "receipt whereof }�- ledged, does hereby grant to said party of -Khe second partr ! successors and assi a, a non-exclusive- osr"vent and - POFr r • petval easement in, over, scrums and upon the following :describe@ tract at land, for purposes of fngr9 as'and c9*Qa F i Y 7Chat part of the Pest 1/2 of the Noathoast 1/4 of, a Northeast ./4 of Section 18, Township 118, Range , +` 21,, Hennepin county, Minnesota described as, t;ommnencing on the East line of said subdivision at a point i on said line 165 feet North measured �long. e$id;: iii,F ffl"i,u� t4a .aouLZwast GGY:,i3r 8f +5i.. +:w.. 4 i i3ENC: pest pmrallel to the south line of said T i subdivision 88,5 feet; G V 0. THENCE South parallel to the East line of said t u ,� N subdivision 165 feet to thk South line thereof; , "# a• THSNCE West along said south line to t2fe l3ogtheuest Icorner of said subdivision; I t� TsENCE north along the West line thereof to the nvrthaest corner of said "subdivision; i t f.i rxEpce Feet along the 'North line thereof to the , Northeast corner of said subdivisions Tt1ENCE South along the East lids thereof to the point I: of beginnings excepting therefrom the North 350.98 feet-. Also excepttherefrom the south 223.58 feet of.the West 190 feet. The above described property being subject to the rights of the public in 42nd Avenue north (CounCy [aottd B1 as ti, a=a is nnw laid out and constructed across said property, also subjectotfo� �cp+s secoxdi.ng Xyion Avenue Worth. by the Village xgg�tr�arnofWTitles954 on file in thOffice Of Hennepin CounL•ye the to Minnesota. , El 7.- 6-M Said party of the first part does hereby grant unto the party Of the second part, its custcm*Vep agents, owlayeas and independent acmLractors to VAM in COMMn with the party or the first part its tenants, -invitaes, successors and assigns, all Pdkking aisles, driveways, sidewalks, parking spaces and service drives located on the parcel hereinabove described fox purposes of this Eiq axs=mt excluding any r building aveas thereon, together Wi%h the right tp.tie limmat or MGM + Into and make use of. if necessary. the drainage system and sanitary newer facilities currently existing on said proqenY.,. The acceptanee and recording of this indenture, by party Of the second'P'aZt shall Serve- an its ackncwJW4ai&ent and acicep- tRocQ Of the tQCMB h6raIDAMV0 recited and shall hW the party of the second PMXt, its Buccessora and assigns as though fully executed by said party of the sewed part. Th6 Party of the second part hexeby agrees t� correct' or remedy any damage sustained by the occupanta of the -above captioned property as a direct -result of the rights granted herein and agrees to restore the surfaue of the Las—t area to its condition just prior to the commencement of Its 11 walk, installed In accordance herewith. Party of the second part further agrees in the use of said easement to I . . ry IndswAfy and zav* M=less the Party of the fi=st part, ii its specessors and/or assignei from any and all damages occasioned by the original constructim, use and exercise of such casements. and thereafter from the replacanient, reconstruct - i; tion, operation, regain, maiftenance, or use of said sasamats and appurtenances within the sassmat &%*a. E. TO HAVE AND To HOLD SAID RASRNENT unto said party of the second part, its Successors and assigns as appurtenant to said land. -2- 2DStIW 1r IN WITUgSS vjjzp", rpaid. party Of the first part has caused these presents to'be executed in its corporato name mu"W by its general partner and its corporate "al th be he affixed the day and year first above'uxitten. F alVa DJ�ELGPEM DUMIFTED1 DEVMPRRS DIVZMIPIED, LTD-. /An Obib Lixited., Parntership Y 't . Art. =Sofl, �G,�Xs IV rt L. Wolates, -qWW partner The undersigned consents to the above and joins in the execution hereof to sutbrdinats' Its right, title and interest in.and to a certain lease dated December 8, 1976, a memorandum of which was '.recorded MiXqh. 14,..1977, and known aM_rAM=Wnt M. 1025I40 to tH6 rights herein gxanted. consented to by the S. S. Kresge O=Pany • a AA The Cmderffigne d consents to the above and jolne In the Pr 01 exaeution hereof to subordinate its right, title and interest it - In and to a certain mortgage assigned to ALM dated August 23, 1972; j;ded August 25, M 1972., and being Anmep"A_JAA3_273, Uts herein granted. *7;. 'jo by the American National OWN 1. W? a Compan its avid V= PRFAMM" -3- } N ,ei�• r'�`W'r ..si'•' '.� :�,r'diit'r1. .:W, f'`�. .. '.! ,'�� .L :•,..Y��•.i'. •.!' •r; •;�r��,•!.%• �4e.•��{,'.+� 1 F." !; a-_i'u—'Y ST1,73 og t7t1I0 COMTY of CUTAHOGA I o hereby y tont on this loth say of - � 1476. Wave *C. X�_li�. f6 'f`ia . a Rotary Rabllc in and for the CDaaxy and State sfereaaid. aed duly com duaiooad, Pmreeaal4,aPrmcQd BERT L. VOLSTM, known to,mm tm'be this Ganeral Partner of D8V86DFm bIV'BRsum, LTD., awphio liwritsA partsaarahip, who. baing by to duly rarern, did depose mead say chat he resines in eUvelmad■ Ohio. than, ha Le. a tlesstral ?AT- m of D'LYtki.RWJ dit MIFISD, LTP.. an Ohio liv4ted paxtrershl*, dasrc'rthed la arA vhiah e m mrdd rich f0ra8oiag iDstrnteat; Chat he signed and deUvared vs:W tnstdumWt for t* uses and purposes therein act forth as Lis free sad volaetuY- sato and that ora : mitined htita mauc thereto by Ice stirder. Suld DEVELOP-•Di�fQtBIFIED. LTD., is also kn" its DEVELOPERS DIVERSWIED, an'Ohio 11feUd•parb a'ship. IN t7[4i'g8S5 WMMROF, l bane hereunto act wy,hmnd and afEiired uY of iaiml sial olio day -and year is this tarttficats first abaft vxittgul 14' My � DmIreas !'eoisa.at,n ' +�esillara,a. ate,, 11EA'f!3 OF iSltlii OAN COUM OF OAKLAND I da hereby cwft khat as this Sth dq of warmawr ' , lei 76. balers vac. Daoaa L. Perldns , a NaUwr PDh6e ire and for the 0muntir mud State afanso W, and duly cammbsioned, pewmay appeased 3. P - johaaaa mad Cs E. Letaar , ladovu tc we to he umvm Pnsi lcd and Assistant Semtwr of IL S. M.skme Omvnny. Who, being by me � swarry aid depose mut say drat ter ramida im 8f>sdagbsae, FdLchieaa ata Zlzvdm6am, tiiah%aa sapmfiw ig; that they are Um Via President rand Asr kmat Sea+ em reweft* of S. S. Km a®e t osapsa�t the aarpamdun 4mwlud In rad tiYbirlt wocu sed ibo toruvoiaa inlrummO Haat doer know ihasest ed "id mrperatiott; MAthe anal ILMMrd to ON ktelt M=t is On aosporasee #sal at saki eMara- do ; 0.4 nm beholt of said vmvu edea and by malar of its board or dinstaes. they O peed. anew and dessned said tmetruaaant far the uaaa arae parpaaa tideseias 1-10" ad: m iia and titiofr fret and vWtiratasy aid: acrd Umt Way signed their mom t'lrereto by bkc ardor. is 19itasas WILOM9. I kWM haMnta mat My hind sad afrMd my affil l swat the day Md yoar in this esrthfi=ta list above Wsittem. Z OF tart FravBa 90NEfil 1. PPRKIRS ttmrr Psntk Dallsad DO*. MW 1dr Rtes SePt 5.1979 9 r^ ,. - r''-�•. •'fir p�.�i'•�•'..�'1Li. �.. - ., .;p{'•. ' ,1•^ ;.a. -} •moi-. lr.' '. '� _ '� ;.*. .,. .1�S:rtis'm��'.:.ri... '•'i':Fi.. •. .. _,. ..... ....... .. ._ .e � rl_:.:.�•� .� •:r. ... .- ';:.., ...:.I�kb .. « 'r. .••. xM�i.; MOM �x-:- ti1,..t r. i•s, 3- jk STATS CP 4-a CDUM of I y essxti oa t',is',day ni .1476, before a -Notary Publikc•in and fox the C ey to Pose d c ■m ingm—d,•pexsona7ly sPsleated gp c I kodlm w `me to be this .. of kusriam National Nva• TalsurapGe nny, am duly wwra., d dspeas tbat awe reside in a>ad respectively; at they ane respectively of aft American Rational iiim Zusuraata Qempmy. Cher.ibrporaelNn + daseribad in and plhW csaxcuted the, faxcSofxsg iastrumexkt; that TbCY 'know _ j the seal of aaid earporatim; tbmt Lim seal affised•to said 1—tsnmsnt is the corporate -seal of eaid carperatums,,tAat, on bebalt of saw eomaratiou and by osdir'of its boord of directos:ao they sigzsedo se;lW and delivered naid instiument for this use& and puspuaea'thereis act forth, as . its cad their'Eree and vbiuntary.aati aad that thmy signed t7.eir siames thersta by likd order. Tse Vitneaa wbereoi. I haves hereunte set my bend PLUS mZfU" bi oftcial seal the day and year im tbix certificate first abova Writtea. kty O m"Asiou exginca: N6tatry psiblic . .Y I-tlb 0. Ault, XOtsay p:sblia In and for C=ty OR RaYvcston. sezem. my 06=118 w i'ven ft" 1s 19 , I floftby Cora& V*t M„ , bw&U=j. VIM ow k, m offimon The /7 �ufJM A.D. i7 ol Arso cfcio& hL, monm7po By DEC; RtGM7w7RM ew Trnmw no d*mpb* Mod fthdw a RMMm OM 510p4 41" MEOW! MY No A. too. FAP bM. wxmifta, is often b. A 4� Originating Department Community Development By: Aaron Chirpich, CD Specialist Jeff Sargent, CD Director EDA Request for Action Approved for Agenda November 23, 2015 By: Kirk McDonald, City Manager Agenda Section EDA Item No. 1.1 Resolution authorizing the acquisition of 4511 Boone Avenue North by the Economic Development Authority through redemption as a junior creditor (vroiect no. 975) Requested Action Staff requests the Council to authorize the purchase of 4511 Boone Avenue North as part of the scattered site housing program. Staff discussed the potential acquisition of this property at the November 16th work session and the Council was supportive of acquiring the single family home for demolition. Policy/Past Practice In the past, the EDA has successfully acquired distressed single family homes with the intent of removing the deficient structures in order to provide vacant lots for redevelopment. Background The EDA has directed community development staff to actively pursue the acquisition of distressed or functionally obsolete single-family homes as part of the scattered site housing program. In the past twelve months, the EDA has acquired five vacant single family homes as part of this program, In addition to these five units, staff has been researching and pursuing other available properties. 4511 Boone Avenue North Staff has been watching this property for quite some time. The home was damaged by fire in May of 2014 and subsequently abandoned. Since the fire, the city has received several complaints regarding the appearance of the property. Attempts made by staff to contact the former owner did not produce any results. The home has recently foreclosed and was sold back to the bank in October. The bank now has to wait for the six-month redemption period to expire in order to sell the home. Rather than waiting for the property to be sold on the open market, staff has been pursuing an option to secure the property ahead of the redemption Motion by A Second by To: ad Pl /?101O /5''i 4 I L1RPAICOMMDEV\Development\Housing\Q—R 4511 Boone Ave AccTuisition 11-23-15 Request for Action November 23, 2015 Page 2 Second Mortgage Purchase In many cases, foreclosed properties have additional liens beyond the primary mortgage. These liens are subordinate to the first mortgage. When foreclosed properties are re -sold by banks, subordinate lien holders are rarely paid off, as most sales do not provide sufficient proceeds to cover all debts against the property. However, the subordinate lien holders are given legal priority when the bank re -sells the property. In other words, they can buy back or redeem the property from the primary lender ahead of any other potential buyers. In reality this rarely happens, as typically there is not enough value in the property to make it worthwhile. Therefore, the subordinate lien holders are motivated to sell their interest in the property for whatever they can get. 4511 Boone Avenue has a second mortgage or subordinate lien in the amount of $45,000. Staff traced the lien back to the lender only to find that the note had been sold to an investor. This investor was initially interested in purchasing the home for rehabilitation and re -sale. The investor recently contacted staff to inquire about the property. Staff expressed the city's interest in seeing the home demolished and asked the investor to work with the city to meet that goal. After some consideration, the investor offered to sell the second mortgage to the city for a price of $6,000. Staff does not know what the investor paid for the second mortgage, but considers the asking price reasonable when looking at the overall structure of the purchase. If the city purchases the second mortgage from the investor, the city will be in a position to buy the home directly from the bank holding the first mortgage. The bank is required to sell the home at the price they paid at auction. Staff has confirmed that the home was bought by the bank for $76,500. Additionally, the bank can legally re -capture fees associated with their repurchase of the property. Staff has estimated such costs at $3,500. Therefore, the cost to buy the house back from the bank is estimated at $80,000, thereby making the total acquisition price for the property approximately $86,000 ($6,000 for the second mortgage + $80,000 for the first mortgage). Funding Funding for the acquisition and all costs associated with demolition of this home will initially come from EDA reserves. The EDA will be reimbursed with CDBG grant funds for eligible expenses at a later date. Recommendation Staff recommends the EDA approve the attached resolution prepared by the City Attorney that outlines the parameters of the transaction for the acquisition of 4511 Boone Avenue North. The first step in acquiring the property is the purchase of the second mortgage for $6,000. The EDA will then be positioned to redeem the property from the primary lender in March for an estimated cost of $80,000, making the total anticipated acquisition cost approximately $86,000. Attachments • Resolution • Project budget • Location map • Sample lot layout CITY OF NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 15 - RESOLUTION AUTHORIZING THE ACQUISITION OF 4511 BOONE AVENUE NORTH BY THE ECONOMIC DEVELOPMENT AUTHORITY THROUGH REDEMPTION AS A JUNIOR CREDITOR BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: WHEREAS, on September 22, 2014 the City Council adopted Resolution No. 14-126 at the City Council meeting authorizing City community development staff to actively pursue the acquisition of distressed, functionally obsolete single family homes for potential purchase by the Economic Development Authority in and for the City of New Hope, as part of the City's scattered site housing program.; and WHEREAS, the City Council has directed City staff to negotiate for the terms most favorable to the City, and the execution of purchase agreements so as to secure purchase rights for these real properties, contingent on the review and approval of the Economic Development Authority in and for the City of New Hope to the terms of the purchase agreements; and WHEREAS, New Hope City staff have identified the opportunity to acquire certain real property located at 4511 Boone Avenue North, New Hope, MN and legally described as: Lot 3, Block 3, Holiday Hills, Hennepin County, Minnesota (the "Property"); and WHEREAS, the Property is currently unoccupied and is in the redemption period following: mortgage foreclosure and Sheriff's Sale of the Property that occurred on September 14, 2015; and WHEREAS, the house located on the Property was damaged in a fire, greatly deteriorated and has been vacant for a number of years; and WHEREAS, City staff has learned of the opportunity to purchase the assignment of the second mortgage recorded against the Property that was recently purchased by and assigned to an investor; and WHEREAS, City staff has negotiated a purchase price of $6,000, to enable the EDA to obtain the assignment of the second mortgage from the investor, which will enable the EDA to redeem as a junior creditor following the termination of the mortgagor's redemption period; and WHEREAS, the EDA will be required to record a Notice of Intention to Redeem and pay the required amount to redeem the Sheriff's Certificate and generally follow Minnesota Statutes regarding redemption following mortgage foreclosure sale; and WHEREAS, the estimated amount to redeem as a junior creditor and obtain the Sheriff's Certificate will be approximately $80,000 plus any additional costs and expenses required to redeem; and WHEREAS, City star believes that the best use of the Property is demolition in order to maximize the tax base by maldng the lot available for the development of a new residential housing unit; and WHEREAS, the Property will be initially acquired using Economic Development Authority in and for the City of New Hope funds as well as potential reimbursement with CDBG grant funds for eligible expenses at a later date; and WHEREAS, it is in the best interest of the Economic Development Authority in and for the City of New Hope to acquire the Property through a creditor's redemption, in order to redevelop the Property in accordance with the City's scattered site housing program and policy; WHEREAS, the City staff is hereby seeking approval from the Economic Development Authority in and for the City of New Hope of the Purchase Agreement, subject to the review and approval by the City Attorney of proper title evidence and other terms relating to the redemption to acquire the Property. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: Attest: I. That the above recitals are incorporated herein by reference. 2. It is in the best interest of the Economic Development Authority and the City to acquire the Property for redevelopment in accordance with the City's scattered site housing program and policy. 3. That the acquisition of the Property by the Economic Development Authority in and for the City of New Hope through a creditor's redemption following mortgage foreclosure sale, for a sum not to exceed $90,000.00 (which includes the $6,000 to acquire the assignment of the second mortgage from the investor), with other terms and conditions as set forth in the Purchase Agreement attached hereto as Exhibit A, is approved subject to the review and approval by the City Attorney of proper title evidence and other terms relating to the acquisition of the Property. 4. That the payment of $6,000 to the investor to acquire an assignment of the second mortgage is approved. 5. The City shall use due diligence for correcting the Property's blighted condition and conducting any necessary environmental cleanup of the Property to pursue this redevelopment purpose and return the Property to the tax rolls for the benefit of all taxing jurisdictions. 6. The President and Executive Director and the New Hope City staff are authorized and directed to sign all appropriate documents, and to take whatever additional actions are necessary or desirable, to complete the successful redemption of the Property as a junior creditor following the mortgage foreclosure sale. Dated the day of November, 2015. Kirk McDonald, Executive Director Kathi Hemken, President P:1AttomeylSAs11 Client Files12 City of New Hope199-11381 4511 Boone Ave. NlResolution Approving P=hase of 4511 Boone Ave. N..docx City of New Hope Single -Family Acquisition and Demolition-- Scattered Site Housing Program Total Project Cost and Total Funding Sources USES Amount Acquisition 86,000 Demolition 25,000 Real Estate Taxes 1,900 Closing Costs (purchase) 1,024 Legal (purchase) 2,000 Asbestos Abatement 2,500 Utility Bills 250 Tree Removal 5,000 Demo Survey 650 Contingency 5,000 Closing Costs for Sale of Lot (legal) 1,500 Total 130,824 SOURCES Amount CDBG 75,824 EDA 55,000 Total 130,824 Sales Price "vacant lot" 55,000 Value Gap 75,824 4511 Boone Avenue New Hope MN, 55428 * I 1 Pu dh 6 � t I trill IL " tv k=}moi f> T §41 �MP' 4f" ANK 7! 4A 1C1}.'11114.7�� ju�.yi I 01 5 Nom# • - - - A 4 FDA A Request for Action Originating Department Approved for Agenda Agenda Section Community Development November 23, 2015 EDA Item No. By: Jeff Sargent, Director of CD By: Kirk McDonald, City Manager 7 Resolution Authorizing the Execution of a Contract for Private Redevelopment with Industrial Equities - New Hope, LLC (project no. 971) Requested Action Staff requests the Economic Development Authority (EDA) to approve a resolution authorizing the execution of a contract for private redevelopment with Industrial Equities - New Hope, LLC. Policy/Past Practice It is a past practice of the staff to get EDA approval/authorization for a development agreement with a private third -party owner of a land when a TIF District has been established on the property to make improvements to the land. Background Industrial Equities has requested $250,000 in TIF assistance to pay for demolition, abatement, and soil corrections on the site. When the EDA approves the TIF District for this property, it is common practice to also approve the development agreement to ensure that the required site improvements be completed in order to use tax increment to help the developer pay for those costs. Bob Deike, the city's redevelopment attorney, has been working with the legal counsel for Industrial Equities on creating the attached development agreement. Mr. Deike has also drafted and reviewed the resolution supporting the development agreement. Jason Aarsvold from Ehlers & Associates will be in attendance at the EDA meeting to help answer any questions that the EDA may have. Motion by Second by I:\RFA\COMMDEV\Develo ment\Q&cR-Develo meet AgreenuntlndustriaI Equities 1123-15.doc Request for Action November 23, 2015 Page 2 Recommendation Staff recommends that the EDA approve the development agreement with Industrial Equities. Attachments # Resolution * Draft Development Agreement NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 14 - RESOLUTION AUTHORIZING THE EXECUTION OF A PURCHASE AND DEVELOPMENT AGREEMENT WITH HY VEE, INC. BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY (the "Authority") AS FOLLOWS: WHEREAS, the Authority and the City of New Hope, Minnesota (the "City") have created Redevelopment Project No. 1 (the "Project") within the City in order to facilitate the redevelopment of the real property located within the Project; and WHEREAS, the Authority has acquired certain real property (the "Property") located within the Project; and WHEREAS, the Authority has received a proposal from Hy -Vee, Inc., (the "Developer") pursuant to which the Developer would purchase the Property from the Authority for the purpose of constructing a commercial development on the Property; and WHEREAS, there has been presented to the Authority's Board of Commissioners :i proposed Purchase and Development Agreement (the "Contract") between the Authority and the Developer setting forth the terms of the Authority's sale of the Property to the Developer and the construction of certain public improvements in connection with the Developer's proposed development. NOW, THEREFORE, be it hereby resolved by the Board of Commissioner of the Authority that the appropriate officers of the Authority are hereby authorized to execute the Contract in substantially the form presented to the Board of Commissioners, subject to such non -substantive changes as may be approved by the Executive Director and the Authority's legal counsel, and to take all appropriate and additional actions which are necessary to implement the terms of the Contract. Adopted this 22nd day of September, 2014. Kathi Hemken, President Attest: Kirk McDonald, Executive Director NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 15 - RESOLUTION AUTHORIZING THE EXECUTION OF A CONTRACT FOR PRIVATE REDEVELOPMENT WITH INDUSTRIAL EQUITIES — NEW HOPE, LLC BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY (the "Authority") AS FOLLOWS: WHEREAS, the Authority and the City of New Hope, Minnesota (the "City") are in the process of creating a new housing tax increment financing district (the "District"), pursuant to the Minnesota Tax Increment Financing Law, Minnesota Statutes, sections 469.174-469.1794 (the "Tax Increment Act"); and WHEREAS, the Authority has received a proposal from Industrial Equities — New Hope, LLC, (the "Redeveloper") pursuant to which the Redeveloper would construct an office/warehouse development (the "Minimum Improvements") within the District; and WHEREAS, the Redeveloper has also proposed that the Authority provide financial assistance to the Redeveloper using tax increment revenues from the District; and WHEREAS, there has been presented to the Authority's Board of Commissioners a proposed Contract For Private Redevelopment (the "Contract") between the Authority and the Redeveloper setting forth the terms of the Authority's provision of financial assistance to the Redeveloper in connection with the construction of the Minimum Improvements. NOW, THEREFORE, be it hereby resolved by the Board of Commissioner of the Authority as follows: 1.02. Execution of Contract and Issuance of the Note. The appropriate officers of the Authority are hereby authorized to execute the Contract in substantially the form presented to the Board of Commissioners, subject to such non -substantive changes as may be approved by the Executive Director and the Authority's legal counsel, to execute the Note at the time stated in the Contract and to issue and deliver the Note described therein at the time provided in the Contract; provided, that authority to execute the Contract is subject to the City and the Authority having created the District. Section 2. Form of Note. The Note shall be substantially in the form contained in the Contract, with the blanks properly filled in. Section 3. Terms, Execution and Delivery. 3.01. Dates; Interest Pa ent Dates. The Note shall be dated as of the date it is issued. Principal of and interest on the Note shall be payable to the owner of record thereof as of the close of business on the fifteenth day of the month preceding each Scheduled Payment Date, whether or not such day is a business day. 3.02. Registration. The Authority appoints the Executive Director as Note Registrar. The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at his/her principal office a Note register in which the Registrar shall provide for the registration of ownership of the Note and the registration of transfers or exchanges of the Note. (b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each interest .payment date and until such interest payment date. The Note shall not be transferred to any person other than an affiliate or other related entity of the Redeveloper, unless the a has been provided with an opinion of counsel, acceptable to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. (c) Cancellation. The Note surrendered upon any transfer shall be promptly canceled by the Registrar and thereafter disposed of as directed by the Authority. (d) Improper or Unauthorized Transfer. When the Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on the Note or separate instrument of transfer is valid and genuine and the requested transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name the Note is at any time registered in the Note register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of or interest on the Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the Authority upon the Note to the extent of the sum or sums so paid. (f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange and reasonable legal fees and other costs incurred in connection therewith. (g) Mutilated. Lost Stolen or Destroyed Note. In case the Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. Any Note so surrendered to the Registrar shall be canceled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.03. Preparation and Delivery. The Note shall be prepared under the direction of the Executive Director of the Authority and shall be executed on behalf of the Authority by the manual signatures of its Executive Director and President. In case any officer whose signature, or a facsimile of whose signature, shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. Notwithstanding such execution, the Note shall not be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on such Note has been duly executed by the manual signature of an authorized representative of the Registrar. The executed certificate of authentication on the Note shall be conclusive evidence it has been authenticated and delivered under this resolution. When the Note have been so executed and authenticated, it shall be delivered by the Executive Director to the Redeveloper. Section 4. Pledge of Available Tax Increment. The Authority hereby pledges to the payment of the principal of and interest on the Note Available Tax Increment, as defined in the Contract. Section 5. Certification of Proceedings. 5.01 Certification of Proceedings. The officers of the Authority are hereby authorized and directed to prepare and furnish to the purchaser of the Note certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the Authority as to the facts recited therein. Adopted this 23rd day of November, 2015. Kathi Hemken, President Attest: Kirk McDonald, Executive Director 11/17/15 CONTRACT FOR PRIVATE REDEVELOPMENT By and Between NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY and INDUSTRIAL EQUITIES n NEW HOPE, LLC Dated: .2015 This document was drafted by: BRADLEY & DEIKE, P. A. 4018 West 65`h Street Suite 100 Edina, MN 55435 Telephone: (612) 926-5337 TABLE OF CONTENTS Paye PREAMBLE 1 ARTICLE I Definitions Section 1.1. Definitions 3 ARTICLE II Representations Section 2.1. Representations by the Authority 6 Section 2.2. Representations by the Redeveloper 6 ARTICLE III Status of Property; Site Improvements Section 3.1. Status of Property 8 Section 3.2. Site Improvements 8 Section 3.3. Issuance of Note 8 Section 3.4. Conditions Precedent to Issuance of Note 9 Section 3.5. Payment of Administrative Costs 9 Section 3.6. No Business Subsidy 9 ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Minimum Improvements 11 Section 4.2. Construction Plans 11 Section 4.3. Commencement and Completion of Construction 12 Section 4.4. Certificate of Completion 12 (i) ARTICLE V Insurance and Condemnation Section 5.1. Insurance 14 Section 5.2. Condemnation 16 ARTICLE VI Taxes,• Tax Increment Section 6.1. Real Property Taxes 17 Section 6.2. Creation of Tax Increment District 17 Section 6.3. Tax Increment 17 ARTICLE VII Mort me Financing Section 7.1. Mortgage Financing 19 Section 7.2. Limitation on Encumbrance of Property 19 ARTICLE VIII Prohibitions Against Assigmment and Transfer,• Indemnification Section 8.1. Prohibition Against Transfer of Property and Assignment of Agreement 20 Section 8.2. Approvals 20 Section 8.3 Release and Indemnification Covenants 20 ARTICLE IX Events of Default Section 9.1. Events of Default Defined 22 Section 9.2. Authority's Remedies on Default 22 Section 9.3. No Remedy Exclusive 22 Section 9.4. No Additional Waiver Implied by One Waiver 22 Section 9.5. Costs of Enforcement 22 GO ARTICLE X Additional Provisions Section 10.1. Representatives Not Individually Liable 24 Section 10.2. Equal Employment Opportunity 24 Section 10.3. Restrictions on Use 24 Section 10.4. Titles of Articles and Sections 24 Section 10.5. Notices and Demands 24 Section 10.6. Disclaimer of Relationships 24 Section 10.7. Modifications 24 Section 10.8. Counterparts 25 Section 10.9. Judicial Interpretation 25 Section 10.10. Effect of Termination 25 SCHEDULE A Description of Redevelopment Property SCHEDULE B Note SCHEDULE C Description of Site Improvements CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, made on or as of the day of , 2015, by and between the New Hope Economic Development Authority, a public body corporate and politic (hereinafter referred to as the "Authority"), having its principal office at 4401 Xylon Avenue North, New Hope, Minnesota 55428, and Industrial Equities — New Hope, LLC, a Minnesota limited liability company (hereinafter referred to as the "Redeveloper"), having its principal office at 321 First Avenue N., Minneapolis, Minnesota 55401. WITNESSETH: WHEREAS, the Authority was created pursuant to Minnesota Statutes, sections 469.090- 469.108 (the "Act") and was authorized to transact business and exercise its powers by a resolution of the City Council of the City of New Hope (the "City") pursuant to the Act; and WHEREAS, in furtherance of the objectives of the Act, the Authority has undertaken a program for the clearance and reconstruction or rehabilitation of blighted, deteriorated, deteriorating, vacant, unused, under used or inappropriately used, areas of the City, and in this connection is engaged in carrying out a redevelopment project known as the New Hope Redevelopment Project No. 1 (hereinafter referred to as the "Project") in an area (hereinafter referred to as the "Project Area") located in the City; and WHEREAS, as of the date of this Agreement there has been prepared and approved by the Authority and the City Council of the City a redevelopment plan for the Project (which Plan is hereinafter referred to as the "Redevelopment Plan"); and WHEREAS, the Redeveloper owns certain real property located within the Project Area (which real property is referred to herein as the "Redevelopment Property"); and WHEREAS, the Redevelopment Property contains a substandard building that will necessitate the undertaking of extraordinary site preparation activities to prepare the Redevelopment Property for the construction of a building thereon; and WHEREAS, the Redeveloper has presented to the Authority a proposal for the development of the Redevelopment Property through the construction of an approximately 48,000 square foot officelwarehouse development, which proposal involves the Authority's use of tax increment pursuant to this Agreement to reimburse the Redeveloper for a portion of the cost of preparing the Redevelopment Property for the construction of the proposed building; and WHEREAS, the Redeveloper has requested that the Authority assist its development by paying certain public redevelopment costs that will be incurred to prepare the Redevelopment Property for construction of the Minimum Improvements; and WHEREAS, the Authority has created within the Project Area its Industrial Equities Tax Increment Financing District (the "Tax Increment District") pursuant to Minnesota Statutes. Sections 469.174-.1794, in order to create a fixnding source to finance the public redevelopment costs of the Project; and WHEREAS, the Authority believes that the development of the Project Area pursuant to the Redeveloper's proposal and the fulfillment generally of this Agreement are in the vital and best interests of the City and the health, safety, morals, and welfare of its residents, and in accord with the public purposes and provisions of the applicable State and local laws and requirements under which the Project has been undertaken and is being assisted, and is, therefore, willing to provide the financial assistance outlined herein. 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 469.090-469.108, as amended. "Agreement" means this Agreement, as the same may be from time to time modified, amended, or supplemented. I 'Authority"' means the New Hope Economic Development Authority, or any successor or assign. "Available Tax Increment" means ninety percent (90%) of the Tax Increment that is received by the Authority in the six (6) month period immediately preceding a Scheduled Payment Date. "City" means the City of New Hope. "Construction Plans" means the plans, specifications, drawings and related documents on the construction work to be performed by the Redeveloper on the Redevelopment Property which were submitted to and approved by the City, together with the provisions of any resolution of the City Council of the City approving the Construction Plans. "County" means Hennepin County, Minnesota. "Event of Default" means an action by the Redeveloper listed in Article IX of this Agreement. "Holder" means the owner of a Mortgage. "Market Value" means the market value of real property as determined by the County Assessor of the County for real estate tax purposes. "Maturity Date" means the date that the Note terminates or is paid in full, whichever occurs earlier. "Minimum Improvements" means the construction by the Redeveloper of an approximately 48,000 square foot officelwarehouse development, and related improvements, in accordance with the Construction Plans. "Mortgage" means any mortgage obtained by the Redeveloper which is secured, in whole or in part, by the Redevelopment Property and which is a permitted encumbrance pursuant to the provisions of Article VIII of this Agreement. 3 "Net Proceeds" means any proceeds paid by an insurer to the Redeveloper under a policy or policies of insurance required to be provided and maintained by the Redeveloper 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 Authority's limited revenue tax increment note to be issued by the Authority to the Redeveloper pursuant to Article III of this Agreement to reimburse the Redeveloper for its payment of the Site Improvement costs. "Project" means the Authority's Redevelopment Project No. 1. "Project Area" means the real property located within the boundaries of the Project. "Redeveloper" means Industrial Equities — New Hope, LLC, a Minnesota limited liability company, or its successors and assigns, or any future owners of the Redevelopment Property. "Redevelopment Property" means the real property described in Schedule A of this Agreement. "Redevelopment Plan" means the Authority's Redevelopment Plan for the Project, as amended as of the date of this Agreement. C. "Scheduled Payment" means a Scheduled Payment as defined in the Note. "Scheduled Payment Date" means a Scheduled Payment Date as defined in the Note. "Site Improvements" means the site preparation costs described on the attached Schedule "State" means the State of Minnesota. "Tax Increment" means that portion of the real property taxes paid with respect to the Redevelopment Property and Minimum Improvements which is remitted to the Authority as tax increment pursuant to the Tax Increment Act. "Tax Increment Act" means Minnesota Statutes, Section 469.174-469.179, as the same may be amended from time to time. "Tax Increment District" means the Authority's Industrial Equities Tax Increment Financing District. "Tax Official" means the County assessor; County auditor; City, County or State board of equalization, the commissioner of revenue of the State, or any State or federal district court, the tax court of the State, or the State Supreme Court. "Unavoidable Delays" means delays beyond the reasonable control of the party seeking to be excused as a result thereof which are the result of acts of God, adverse weather conditions, strikes, other labor troubles, delays in obtaining construction materials, machinery and/or equipment, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action, results in delays, or acts of any federal, state or local governmental unit (other than the Authority in enforcing its rights under this Agreement) which result in delays. ARTICLE H 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 Act. Under the laws of the State, the Authority has the power to enter into this Agreement and to perform its obligations hereunder. (b) The Project is a "redevelopment project" within the meaning of the Act and was created, adopted and approved in accordance with the terms of the Act. (c) The Authority will, at no cost to the Authority, cooperate with the Redeveloper with respect to any litigation commenced with respect to the Redevelopment Plan, Project, or Minimum Improvements. Section 2.2. Representations by the Redevelop The Redeveloper represents that: (a) The Redeveloper is a Minnesota limited liability company duly organized and authorized to transact business in the State, is not in violation of any provisions of its articles of organization, operating agreement or member control 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 governors. (b) The Redeveloper will construct the Minimum Improvements in accordance with the terms of this Agreement, the Redevelopment Plan 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) Except for facts disclosed in any environmental assessment or report prepared on behalf of the Authority or the Redeveloper, the Redeveloper has received no notice or communication from any local, state Lor federal official that the activities of the Redeveloper or the Authority in the Project Area may be or will be in violation of any environmental law or regulation, and the Redeveloper, to the best of its knowledge, 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. (d) The Redeveloper will, at no cost to Redeveloper, cooperate with the Authority with respect to any litigation commenced with respect to the Redevelopment Plan, Project, or Minimum Improvements. (e) Absent the financial assistance being provided by the Authority pursuant to this Agreement the Redeveloper would not proceed with the development of the Minimum Improvements. ARTICLE III Development Proposal: Site Im rovements Section 3.1. Development Proposal. The Redeveloper owns the Redevelopment Property. Because of the condition existing on the Redevelopment Property, it is necessary to incur extraordinary costs to prepare the Redevelopment Property for the construction of the Minimum Improvements. Such costs render the development of the Minimum Improvements financially infeasible absent financial assistance from the Authority. Therefore, the Authority is willing, subject to the terms and conditions of this Agreement, to reimburse the Redeveloper for a portion of its costs of preparing the Redevelopment Property for construction of the Minimum Improvements. In order to encourage and assist the Redeveloper's development, the Authority agrees that it will, by issuing the Note to the Redeveloper and using Available Tax Increment on a pay-as-you-go basis, reimburse the Redeveloper for its payment of certain costs related to the preparation of the Redevelopment Property for development of the Minimum Improvements, all as is more specifically provided in this Agreement. The obligation of the Authority to issue the Note is specifically subject to the satisfaction of all of the conditions set forth in this Agreement, including, without limitation, Section 3.4 hereof. Section 3.2 Site h rovements. (a) The Authority agrees that it will reimburse the Redeveloper for the payment of certain costs in connection with the preparation of the Redevelopment Property for construction of the Minimum Improvements (the "Site Improvements"). The Site Improvements are described on the attached Schedule C. The Authority agrees that it will reimburse, using Available Tax Increment on a pay-as-you-go basis, through the issuance and payment of the Note, up to $250,000 of the costs of completing the Site Improvements. (b) The Redeveloper shall be solely responsible for all aspects of completing the Minimum Improvements, including the Site Improvements. The Authority's reimbursement of the Redeveloper for the cost of the Site Improvements shall be accomplished through the Authority's issuance and delivery to Redeveloper of the Note. The Authority agrees that it will issue the Note at such time as the Redeveloper provides to the Authority invoices and certifications in such form as the Authority may reasonably require, demonstrating that the Site Improvements have been completed, that the Redeveloper has paid the costs of completing the Site Improvements, and that such costs equal or exceed $250,000, or if such costs are less than $250,000, then the amount of such costs shall be the principal amount of the Note. Section 3.3. Issuance of Note. The Authority's reimbursement of the Redeveloper for the cost of the Site Improvements shall be through the issuance of the Note which shall occur at the time stated in Section 3.2 of this Agreement. The Note shall be substantially in the form of the Note attached to this Agreement as Schedule B, with all blanks properly filled in and the payment schedule attached thereto adjusted to reflect the date of iss'uance. The Note shall be dated as of the date of its issuance and shall be payable together with simple non -compounding interest at the rate of four and one half percent (4.5%) per year from the date of the issuance of the Note until the Note is paid in full or terminated - 8 Section 3.4. Conditions Precedent to the Issuance of the Note. The Authority's obligation to issue the Note to the Redeveloper shall be subject to the satisfaction of all of the following conditions precedent: (a) the Redeveloper shall not be in default under the terms of this Agreement; (b) the Redeveloper shall have closed on financing, or provided evidence of self- financing pursuant to Section 7.1 of this Agreement, sufficient to pay all costs to be incurred in connection with the acquisition and construction of the Minimum improvements; (c) the Redeveloper shall have paid the costs of the Site Improvements and shall have provided to the Authority such documentation of such costs as the Authority shall reasonably request; and (d) the Redeveloper shall have completed construction of the Minimum Improvements Section 3.5. P4Ment of Administrative Costs. The Redeveloper 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 Redeveloper 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 Redeveloper 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 Redeveloper 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. Notwithstanding anything to the contrary herein, the Redeveloper 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 3.6. No Business Subsidy. The County assessor has estimated the current year's Market Value of the Redevelopment Property to be $400,000. The Redeveloper represents that the Redeveloper's investment in acquisition and site preparation of the Redevelopment Property will be not less than $652,923. The Redeveloper represents that because this is a redevelopment of a blighted property and the Redeveloper's investment in acquisition and site preparation will equal at least 70% or more of the assessor's current year's estimated market value of the Redevelopment Property ($652,923 is 163.23% of $400,000) the assistance provided to the Redeveloper does not constitute a "business subsidy" and therefore the provisions of the Business Subsidy Act, Minnesota Statutes, sections 116J.993 -116J.995, do not apply. The Redeveloper releases and waives any claim against the Authority, its governing body members and the officers, agents, servants and employees thereof arising from the application of the Business Subsidy Act to this Agreement, including without limitation any claim that the Authority failed to comply with the Business Subsidy Act with respect to this Agreement. 10 ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction and Q12eration of Minimum Improvements. The Redeveloper agrees that it will construct the Minimum Improvements on the Redevelopment Property in accordance with the approved Construction Plans, together with any changes approved by the Authority and any changes not requiring the Authority's approval, and at all times prior to the Maturity Date will operate and maintain, preserve and keep the Minimum Improvements or cause the Minimum Improvements to be maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good repair and condition. Section 4.2. Construction Plans. (a) The Redeveloper 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 Pian. 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 Redeveloper 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 Redeveloper 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 Redeveloper desires to make any material change in any Constriction Plans after their approval by the Authority, the Redeveloper shall submit the proposed change to the Authority for its approval. If the Construction Plans, as modified by the proposed change, are acceptable to the Authority, the Authority shall approve the proposed change and notify the Redeveloper 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 11 notice by the Authority to the Redeveloper, setting forth in detail the reasons therefor. Such rejection shall be made within ten (10) days after receipt of the notice of such change. (c) Nothing in this Agreement shall be deemed to modify the City's normal construction permitting process as it applies to the Redeveloper's plans for development and the Redeveloper shall in all respects be required to comply with such process. Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable Delays, the Redeveloper shall commence construction of the Minimum Improvements by May 1, 2016, or on such other date as the parties shall mutually agree. Subject to Unavoidable Delays, the Redeveloper shall complete the construction of the Minimum Improvements by May 1, 2017. All work with respect to the Minimum Improvements to be constructed or provided by the Redeveloper on the Redevelopment Property shall be in conformity with the Construction Plans, together with any changes approved by the Authority and any changes not requiring the Authority's approval, as submitted by the Redeveloper and approved by the Authority. The Redeveloper agrees for itself, its successors and assigns, and every successor in interest to the Redevelopment Property, or any part thereof, that the Redeveloper, and its successors and assigns, shall promptly begin and diligently prosecute to completion the redevelopment of the Redevelopment Property through the construction of the Minimum Improvements thereon, and that such construction shall in any event be commenced and completed within the period specified in this Section 4.3 of this Agreement and subject to Unavoidable Delays and/or mutual agreement of the parties hereto. Until construction of the Minimum Improvements has been completed, the Redeveloper 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 Redeveloper with respect to such construction. Upon substantial completion of the Minimum Improvements and upon request by the Redeveloper, the Authority shall provide to the Redeveloper a certificate in recordable form stating that the obligations of the Redeveloper with respect to the construction of the Minimum Improvements" under this Agreement have been satisfied. The Minimum Improvements shall be deemed to be completed when a certificate of occupancy has been issued by the City and the Redeveloper has provided security or other assurances reasonably satisfactory to the Authority assuring that any remaining items, including without limitation, landscaping, will be completed. Section 4.4. Certificate of Completion. (a) Promptly after completion of the Minimum Improvements in accordance with those provisions of this Agreement relating solely to the obligations of the Redeveloper to construct the Improvements, and upon request by the Redeveloper, the Authority will furnish the Redeveloper with a Certificate of Completion for the Minimum 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 furnished to the Redeveloper within ten (10) business day after request by the Redeveloper, and shall conclusively satisfy and terminate the agreements and covenants in this Agreement of the Redeveloper, and its successors and assigns, to construct the Minimum Improvements. Such certification and such determination shall not constitute evidence of compliance with or satisfaction of any obligation of the Redeveloper to any Holder of a Mortgage, or any insurer of a 12 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 Redeveloper for the Certificate of Completion, provide the Redeveloper with a written statement, indicating in adequate detail in what respects the Redeveloper 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 Redeveloper to take or perform in order to obtain the Certificate of Completion. (c) The construction of the Minimum Improvements shall be deemed to be completed when the City has issued a final certificate of occupancy for the Minimum Improvements (or when the Redeveloper 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 Redeveloper's development, including the establishment of any completion escrow, if necessary, have been satisfied. 13 ARTICLE V Insurance and Condemnation Section 5.1. Insurance. (a) The Redeveloper will provide and maintain at all times during the process of constructing the Minimum improvements and, from time to time at the request of the Authority, furnish the Authority with proof of payment of premiums on: (i) Builder's risk insurance, written on the so-called "Builder's Risk -- Completed Value Basis," in an amount equal to one hundred percent (100%) of the insurable value of the Minimum Improvements at the date of completion, and with coverage available in nonreporting form on the so called "all risk" form of policy. The interest of the Authority shall be protected in accordance with a clause in form and content satisfactory to the Authority; and (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 $1,000,000.00 for each occurrence (to accomplish the above -required limits, an umbrella excess liability policy may be used). The policies of insurance required pursuant to clauses (i) and (ii) above shall be in form and content reasonably 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 Minimum Improvements and prior to the Maturity Date, the Redeveloper 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 Minimum 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 Minimum Improvements, but any such policy may have a deductible amount of not more than $25,000.00. No policy of insurance shall be so written that the proceeds thereof will produce less than the minimum coverage required by the 14 preceding sentence, by reason of co-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 Minimum 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 Redeveloper 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 $1,000,000.00. (iii) Such other insurance, including worker's compensation insurance respecting all employees of the Redeveloper (if any), in such amount as is customarily carried by like organizations engaged in like activities of comparable size and liability exposure; provided 'glut '"we Redeveloper may be seif-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 Redeveloper which are authorized under the laws of the State to assume the risks covered thereby. Redeveloper shall be entitled, at its option, to use umbrella policies to satisfy the insurance requirements in Article V. (d) The Redeveloper agrees to notify the Authority immediately in the case of damage exceeding $25,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. In the event of any such damage, the Redeveloper will forthwith repair, reconstruct and restore the Minimum 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, the Redeveloper will apply the Net Proceeds of any insurance relating to such damage received by the Redeveloper to the payment or reimbursement of the costs thereof. The Redeveloper shall complete the repair, reconstruction and restoration of the Minimum Improvements, whether or not the Net Proceeds of insurance received by the Redeveloper for such purposes are sufficient to pay for the same. Any Net Proceeds remaining after completion of such repairs, construction and restoration shall be remitted to the Redeveloper. In the event of substantial or total destruction of the Minimum Improvements, the Redeveloper may elect to not repair or reconstruct the Minimum Improvements, in which case the Authority may, as its sole remedy, terminate its obligations under the Note. (e) The Authority agrees that its rights under this Section relative to the application of Net Proceeds of insurance provided under Section 5.1(a)(i) and (b)(i) and as provided in Section 5.1(d) shall be subordinate to the rights of a Holder of a Mortgage approved by the Authority; 15 provided, that the Authority's right to terminate the Note for a violation of the Redeveloper's obligations under this Section shall not be subordinated to the rights of a Holder. Section 5.2. Condemnation. In the event that title to and possession of the Minimum Improvements or any material part thereof shall be taken in condemnation or by the exercise of the power of eminent domain by any governmental body or other person (except the Authority) prior to the Maturity Date, the Redeveloper 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, the Redeveloper shall elect to either: (a) use the entire Condemnation Award to reconstruct the Minimum Improvements (or, in the event only a part of Minimum 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 Redevelopment Property and Minimum Improvements have been taken, the Authority's obligations under this Agreement and the Note shall terminate as of the date of the Condemnation taking. For purposes of this provision, "substantial portion" means a portion that includes all or a part of the building, comprising approximately 48,000 square feet of space, to be constructed on the Property pursuant to the terms of this Agreement. 16 ARTICLE VI Taxes; Tax Increment Section 6.1. Real Property Taxes. (a) The Redeveloper 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 Redevelopment Property. (b) The Redeveloper agrees that it will not take any of the following actions during. the term of this Agreement: (1) it will not seek administrative review or judicial review of the applicability of any tax statute determined by any Tax Official to be applicable to the Redevelopment Property, the Minimum Improvements or the Redeveloper or raise the inapplicability of any such tax statute as a defense in any proceedings, including delinquent tax proceedings; and (2) it will not seek administrative review or judicial review - of the constitutionality of any tax statute determined by any Tax Official to be applicable to the Redevelopment Property, the Minimum Improvements or the Redeveloper or raise the unconstitutionality of any such tax statute as a defense in any proceedings, including delinquent tax proceedings. For purposes of the previous sentence, "tax statute" does not include any income tax statute, and the Redeveloper shall retain all rights that it would otherwise have, but for this Section 6. 1, to contest any assessment of income tax. The Redeveloper further agrees that during last three (3) years of the term of the Tax Increment District it will not cause a reduction in the Market Value of the Redevelopment Property or Minimum Improvements through: (A) a request to the County assessor of the County to reduce the Market Value of all or any portion of the Redevelopment Property, (B) a petition to the board of equalization of the City or the board of equalization of the County to reduce the Market Value of all or any portion of the Redevelopment Property; (C) a petition to the board of equalization of the State or the commissioner of revenue of the State to reduce the Market Value of all or any portion of the Redevelopment Property; (D) an action in a District Court of the State or the Tax Court of the State pursuant to Minnesota Statutes, Chapter 278, seeking a reduction in the Market Value of the Redevelopment Property; (E) an application to the commissioner of revenue of the State requesting an abatement of real property taxes pursuant to Minnesota Statutes Chapter 270; and (F) any other proceedings, whether administrative, legal or equitable, with any administrative body within the City, the County, or the State or with any court of the State or the federal government to reduce the Market Value of the Redevelopment Property. The restrictions contained in the previous sentence shall not apply if prior to the Redeveloper's initiation of any of the prohibited actions the Redeveloper provides to the Authority financial security, in a form and amount acceptable to the Authority, available to be drawn against by the Authority in the event that as a result of the Redeveloper's taking of such actions the Market Value of the Redevelopment Property or Minimum Improvements is reduced for a year with respect to which the Authority has already made a payment under the Note, the Authority is required to repay to the County Tax Increment with respect to that year and there is no longer enough time left of the term of the Tax Increment District for the Authority to collect Tax Increment in the amount necessary to reimburse the Authority for the Tax Increment required to be repaid to the County. 17 Section 6.2. Creation of Tax Increment District. The Authority and the City have created the Tax Increment District as a "renewal and renovation district" within the meaning of the Tax Increment Act. Section 6.3. Tax Increment. Subject to the limitations contained in the Note and conditioned on the creation of the Tax Increment District by the Authority and the City, the Authority pledges to the payment of the Note the Available Tax increment. The Redeveloper acknowledges that the Authority has made no warranties or representations to the Redeveloper as to the amounts of Tax Increment that will be generated or that amounts pledged pursuant to this Section 6.3 will be sufficient to pay the Note in whole or in part. Nor is the Authority warranting that it will have throughout the terra of this Agreement and the Note the continuing legal ability under State law to apply Tax Increment to the payment of the Note, which continued legal ability is a condition precedent to the Authority's obligations under the Note. Tax Increment received by the Authority that is in excess of Available Tax Increment shall be the property of the Authority 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. 18 ARTICLE VII Morteaze FTmane' Section 7.1. Mortgage Financing. Before the Redeveloper commences construction of the Minimum Improvements and no later than , 2015, the Redeveloper shall submit to the Authority evidence of a commitment for financing, or evidence that the Redeveloper has funds, sufficient for construction of the Minimum Improvements. If the Authority finds that the financing is sufficiently committed, or that the Redeveloper has funds, adequate in amount to provide for the construction of the Minimum Improvements, and subject only to such conditions as the Authority approves then the Authority shall notify the Redeveloper in writing of its approval. Such approval shall not be unreasonably withheld and either approval or rejection shall be given within ten (10) days from the date when the Authority is provided the evidence of financing, or the financing shall be deemed approved. If the Authority rejects the evidence of financing as inadequate, it shall do so in writing specifying the basis for the rejection. In any event the Redeveloper shall submit adequate evidence of financing within thirty (30) days after such rejection. Section 7.1. Limitation Upon Encumbrance of P . Prior to the completion of the Minimum Improvements, as certified by the Authority, neither the Redeveloper nor any successor in interest to the Redevelopment Property, or any part thereof, shall engage in any financing or any other transaction creating any mortgage or other encumbrance or lien upon the Redevelopment Property, whether by express agreement or operation of law, or suffer any encumbrances or lien to be made on or attach to the Redevelopment Property, except: (a) for the purposes of obtaining funds only to the extent necessary for constructing the Minimum Improvements (including, but not limited to, land and building acquisition, including the purchase price paid, labor and materials, professional fees, real estate taxes, construction interest, organizational and other indirect costs of development, costs of constructing the Minimum Improvements, and an allowance for contingencies) or repaying any construction loan with permanent financing; and (b) only upon the prior written approval of the Authority, which approval shall not be unreasonably withheld or delayed. For the purposes of such mortgage financing as may be made pursuant to the Agreement, the Redevelopment Property may, at the option of the Redeveloper (or successor in interest), be divided into several parts or parcels, provided that such subdivision, in the reasonable opinion of the Authority, is not inconsistent with the purposes of this Agreement and is approved in writing by the Authority. 19 ARTICLE VIII Prohibitions Against Assignment and Transfer, Indemnification Section 8.1. Prohibition Against Transfer of Property and Assignment of Agreement. The Redeveloper represents and agrees that prior to the completion of construction of the Minimum Improvements, as evidenced by the issuance by the Authority of a certificate of completion: Except by way of security for the purpose of obtaining financing necessary to enable the Redeveloper or any successor in interest to the Redevelopment Property, or any part thereof, to perform its obligations with respect to making the Minimum Improvements under the Agreement, and any other purpose authorized by the Agreement, the Redeveloper (except as so authorized.) has not made or created, and will not make or create, or suffer to be made or created, any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Redevelopment Property or any part thereof or any interest herein or therein, or any contract or agreement to do any of the same, without the prior written approval of the Authority, which approval shall not be unreasonably withheld or delayed. Subsequent to completion of the Minimum improvements the Redeveloper shall be free to transfer the Redevelopment Property without the Authority's consent provided that the Redeveloper notifies the Authority of the transfer, the Redeveloper provides the Authority with copies of documents effecting the transfer, and the Redeveloper's transferee assumes the Redeveloper's obligations under this Agreement. In the absence of specific written agreement by the Authority to the contrary, no such transfer or approval thereof by the Authority shall be deemed to relieve the Redeveloper, or any other party bound in any way by this Agreement or otherwise with respect to the construction of the Minimum Improvements, from any of its obligations with respect thereto, nor shall Redeveloper or any other party bound by this Agreement be released from any obligations hereunder without the written release by the Authority. Notwithstanding anything in this Section to the contrary, the Redeveloper shall have the right to enter into commercial leases in the ordinary course of business, covering less than all of the building for a term of less than fifteen years, without notice to the Authority and without the Authority's approval. Section 8.2. Approvals. Any approval required to be given by the Authority under this Article VIII of this Agreement may be denied only in the event that the Authority reasonably determines that the ability of the Redeveloper to perform its obligations under this Agreement will be materially impaired by the action for which approval is sought. Section 8.3. Release and Indemnification Covenants. (a) The Redeveloper releases from and covenants and agrees that the Authority 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 and the governing body members, officers, agents, servants and employees thereof 20 against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Minimum Improvements, other than caused by the willful misconduct or negligence of the Authority or its governing body members, officers, agents, servants and employees. (b) Except for any willful misrepresentation, any willful or wanton misconduct, or any negligent actions of the following named parties, or in respect to any breach of any express representation in Section 2.1 of this Agreement, the Redeveloper agrees to protect and defend the City and the Authority 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 Minimum Improvements. The indemnification obligations of the Redeveloper pursuant to this subsection shall include, but not be limited to, in any event and without regard to any fault on the part of the Authority, any pecuniary loss or penalty (including interest thereon from the date that the loss is incurred or penalty paid by the Authority at the rate of interest in the Note) arising out of the Authority's creation of the Tax Increment District or the issuance and payment of the Note. (c) The Authority and the governing body members, officers, agents, servants and employees thereof shall not be liable for any damage or injury to the persons or property of the company or its officers, agents, servants or employees or any other person who may be about the Redevelopment Property or Minimum Improvements due to any act of negligence of any person other than the Authority or its governing body members, officers, agents, servants and employees. (d) All covenants, stipulations, promises, agreements and obligations of the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and not of any governing body member, officer, agent, servant or employee of the Authority in the individual capacity thereof. 21 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), subject to Unavoidable Delays, any failure by Redeveloper to substantially observe or perform any material covenant, condition, obligation or agreement on its part to be observed or performed hereunder. Section 9.2. Authority's Remedies on Default. Whenever any Event of Default by Redeveloper referred to in Section 9.1 of this Agreement occurs, the Authority may immediately suspend its performance under this Agreement and the Note until it receives assurances from the Redeveloper, deemed reasonably adequate by the Authority, that the Redeveloper will cure its default and continue its performance under the Agreement and may take any one or more of the following actions after providing thirty (30) days written notice to the Redeveloper of the Event of Default, but only if the Event of Default has not been cured within said thirty (30) days or if the Event of Default is by its nature incapable of being cured within said thirty (30) days and the Redeveloper has not provided to the Authority evidence reasonably satisfactory to the Authority that the Event of Default will be cured and will be cured as soon as reasonably possible: (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 Redeveloper under this Agreement. Section 9.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority or Redeveloper is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority or the Redeveloper to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article 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 22 on the part of the Redeveloper under this Agreement and the Authority prevails in such action or effort, the Redeveloper agrees that it shall, within thirty (30) days of written demand by the Authority pay to the Authority the reasonable fees of such attorneys and such other expenses so incurred by the Authority. 23 ARTICLE X Additional Provisions Section 10.1. Re rreesentatives Not Individually Liable. No member, official, or employee of the Authority shall be personally liable to the Redeveloper, or any successor in interest, in the event of any default or breach or for any amount which may become due to the Redeveloper or successor on account of any obligations under the terms of the Agreement. Section 10.2. EQual Employment QpportunitY The Redeveloper, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements provided for in the Agreement it will comply with all applicable federal, state and local equal employment and non-discrimination laws and regulations. Section 10.3. Restrictions on Use. The Redeveloper agrees for itself, and its successors and assigns, and every successor in interest to the Redevelopment Property, or any part thereof, that the Redeveloper, and such successors and assigns, shall until the Maturity Date devote the Redevelopment Property to, and only to and in accordance with, the uses specified in the Redevelopment Plan and this Agreement. Section 10.4. 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 10.5. 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 Redeveloper, is addressed to or delivered personally to the Redeveloper at 321 First Avenue N., Minneapolis, Minnesota 55401; and (b) in the case of the Authority, is addressed to or delivered personally to the Authority at, 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. Section 10.6. Disclaimer of Relationships. The Redevelgper acknowledges that nothing contained in this Agreement nor any act by the Authority or the Redeveloper shall be deemed or construed by the Redeveloper or by any third person to create any relationship of third -parry beneficiary, principal and agent, limited or general partner, or joint venture between 'the Authority and the Redeveloper and/or any third party. Section 10.7. Modifications. This Agreement may be modified solely through written amendments hereto executed by the Redeveloper and the Authority. 24 Section 10.8. Counterparts. This Agreement may be executed in any number of counterparts., each of which shall constitute one and the same instrument. Section 10.9. Judicial Interpretation. 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 10.10. Effect of Termination. In the event that this Agreement is terminated pursuant to any provision hereof, including, without limitation, Section 6.2, 3.4, or 9.2 or by court order, all provisions hereof shall terminate except that the Redeveloper's representations and agreements under Section 2.2, Section 3.5 (with respect to costs incurred prior to such termination) and Section 8.2 and the Authority's representations under Section 2.1 shall survive such termination and any cause of action arising hereunder prior to such termination shall not be affected. 25 IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and the Redeveloper has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. STATE OF MINNESOTA) )SS. COUNTY OF ) NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY IM I0 INDUSTRIAL EQUITIES — NEW HOPE, LLC LIMA 3 The foregoing instrument was acknowledged before me this day of , 2015, by and the President and Executive Director of the New Hope Economic Development Authority, a public body politic and corporate under the laws of the state of Minnesota. STATE OF MINNESOTA) SS. COUNTY OF ) Notary Public The foregoing instrument was acknowledged before me this day of , 2015, by , and the and of Industrial Equities — New Hope, LLC, a Minnesota limited liability company, on behalf of the company. Notary Public 26 SCHEDULE A Description of Redevelopment Property Lot 1, Block 1, Brandell Fourth Addition, City of New Hope, Hennepin County, State of Minnesota A-1 SCHEDULE B UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY LIMITED REVENUE TAX INCREMENT NOTE (INDUSTRIAL EQUITIES - NEW HOPE, LLC PROJECT) 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 Industrial Equities — New Hope, LLC, a Minnesota limited liability company, 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 Dollars ($ } (the "Principal Amount"), together with interest as described herein commencing on August 1, 2018, and continuing on each February 1 and August 1 thereafter until February 1, 2033 (the "Scheduled Payment Dates"). From and after the date of this Note simple non -compounding interest at the rate four and one half percent (4.5%)shall accrue on the outstanding Principal Amount until this Note has been paid in full or terminated in accordance with its terms. Interest shall be computed on the basis of a 360 day year consisting of twelve (12) thirty (30) day months. Each payment on this Note is payable in any com 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 fall 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 public redevelopment 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 NOT A DEBT OF THE CITY OF NEW HOPE OR THE STATE OF MINNESOTA (THE "STATE"), AND NEITHER THE CITY, THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON THE NOTE, NOR SHALL THIS NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN THE AVAILABLE TAX INCREMENT, AS DEFINED BELOW. The Scheduled Payment of this Note due on any Scheduled Payment Date is payable solely from and only to the extent of Available Tax Increment, which consists of a portion of the real property taxes received as tax increment by the Authority with respect to that certain real property described in the attached Exhibit A (hereinafter referred to as the "Redevelopment Property"). Available Tax Increment, with respect to each Scheduled Payment Date, shall have the meaning given to such term in that certain Contract for Private Redevelopment between the Authority and the Owner dated as of _ , 2015 (the "Contract") . The Authority shall not be in default under this Note for failure to make a Scheduled Payment using the Available Tax Increment and no interest shall accrue with respect to the Scheduled Payment not made until a date thirty (30) days after the Authority receives written demand for such payment from the Owner; provided, that the Authority shall endeavor to make Scheduled Payments when due or as soon as possible after receipt of the Owner's written demand. The Authority shall pay on each Scheduled Payment Date to the Owner the Available Tax increment. All payments made by the Authority shall be applied first to accrued interest and then to the Principal Amount. On the earlier of (i) when the Principal Amount and all accrued interest has been paid or (ii) February 1, 2033, after the payment is made on such date, this Note shall terminate and the Authority shall have no further obligations hereunder. Notwithstanding the foregoing, if Hennepin County fails to pay the Authority by February 1, 2033, tax increment derived from taxes timely paid in 2032, the Authority will make the payment to the Owner, otherwise due on February 1, 2033, as soon as practical after the Hennepin County pays such tax increment to the Authority. The Authority's obligations herein are subject to the terms and conditions of the Contract. Subject to Section 9.2 of the Contract, the Authority's payment obligations hereunder shall be suspended and this Note may be terminated by the Authority 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. 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 fiom or constitute a charge upon any funds of the Authority, and the Authority shall not be subject to any liability hereon or be deemed to have obligated itself to pay hereon from any funds except the Available Tax 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. IM 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 or delayed. 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 WITNESS 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 President and Executive Director of the Authority and has caused this Note to be dated 201. . IM EXHIBIT A TO NOTE Description of Redevelopment Property Lot 1, Block 1, Brandell Fourth Addition, City of New Hope, Hennepin County, State of Minnesota SCHEDULE C Description of Site Improvements The Site Improvements consist of the demolition of the existing building on the Redevelopment Property, the filling and compaction of the resulting hole, and the disposal of hazardous materials, and any other work described in the VEIT proposal of September 11, 2015 (estimated cost of $252,923), a copy of which has been supplied to Authority. However, the principal amount of the Site Improvements to be reimbursed by the Authority pursuant to the issuance of the Note shall be limited to $250,000. C-1