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HomeMy WebLinkAbout9A - Crystal Bay Final Plat CITY COUNCIL AGENDA REPORT 16200 Eagle Creek Avenue S.E. Prior Lake, MN 55372-1714 MEETING DATE: AGENDA #: PREPARED BY: DECEMBER 1, 2003 9A JANE KANSIER, PLANNING COORDINATOR AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION APPROVING THE FINAL PLANNED UNIT DEVELOPMENT PLAN AND PUD DEVELOPMENT CONTRACT AND APPROVAL OF A RESOLUTION APPROVING THE FINAL PLAT AND DEVELOPMENT CONTRACT FOR CRYSTAL BAY DISCUSSION: History: On September 15,2003, the City Council adopted Resolution #03-156 approving a Planned Unit Development Preliminary Plan for Crystal Bay, which consists ofa 10.62 acre site located on the south side of CSAH 82, directly east of Fremont Avenue and approximately Yz mile west of CSAH 21. At the same time, the City Council adopted Resolution #03-155 approving the preliminary plat for Crystal Bay. Final PUD Plan: The plan proposes 24 townhouse units on a total of 10.62 acres. Density is based on the buildable acres of the site, or in this case on 8.99 net acres. The overall density proposed in this plan is 2.66 units per acre. Maximum permitted density in the R-l district is 3.6 units per acre. Buildine Styles: The proposed townhouses are a 3-story walkout, attached single family style dwelling with an attached garage. Each of the units in these buildings includes a 3-car garage, rear yard decks, and approximately 4,610 square feet of floor area. The buildings are 34' high at the front, with exteriors consisting of a combination of brick and stucco. Building elevations and sample floor plans for each of these buildings are attached to this report. Setbacks: The plan proposes a 20' setback from the front property line, a 25' setback from CSAH 82, a 15' setback from Fremont Avenue, 112.5' setback from the Ordinary High Water Elevation for Prior Lake, and a minimum 20' building separation (foundation to foundation) between the townhouses. The City Council approved a modification to the required front and side elevations as part of the Preliminary PUD Plan approval. 1:\03 files\03 pud's\crystal bay\final pud\finalcc.doc 'ty f . I k WWW.clopnorae.com Page 1 Phone 952.447.4230 / Fax 952.447.4245 Lot Covera2e: The R-l district allows a maximum ground floor area of 0.30. The ground floor area proposed in this plan is 0.23. Impervious Surface: The maximum impervious surface allowed in the Shoreland District is 30% of the lot area above the OHW. In this case, 30% of the lot area is 2.7 acres. Impervious surface coverage is further limited to 25% of each tier area in a Shoreland District PUD. In this case, 1.26 acres of impervious surface is allowed in tier 1, and 1.23 acres is allowed in tier 2. The Planning Commission and the City Council approved a modification for the impervious surface requirements in each tier for two reasons. First of all, the applicant is dedicating more right-of-way than would normally be required because of the adjacent County road. Second, the applicant will be using pervious pavers for the driveways to reduce the impact of the impervious surface on the site. Useable Open Space: The R-l district also requires 600 square feet of useable open space per unit for cluster developments. The required open space for this development is 15,600 square feet; the plan indicates a total of 15,875 square feet. Shoreland Open Space Requirements: The Shoreland ordinance requires at least 50% of the total project area within a PUD be preserved as open space. The common lot for this development meets the 50% requirement. The Shoreland PUD ordinance also requires that 70% of the shore impact zone (50% of the setback from the OHW) be preserved in its natural state. The Shore Impact Zone on this site includes 58,433 square feet. The preserved area is 40,992 square feet or 70.2%, which is consistent with the ordinance requirement. Parkine: The proposal provides at least 3 spaces per dwelling unit, which is consistent with the minimum Zoning Ordinance requirements. Each of the units have three-car garage. Landscapine: The developer has submitted a landscaping plan that identifies 73 trees. The plan is consistent with ordinance requirements for the number, size and species of the plantings. The developer has also submitted an irrigation plan for this site. The landscaping plan also provides a total of352 caliper inches, or 147 trees, for tree replacement purposes. This is also consistent with the tree preservation requirements of the Zoning Ordinance. 1:\03 files\03 pud's\crystal bay\final pud\finalcc.doc Page 2 ,___..,.<'._.,,_....~~~._..........., ".".~~_,"~ ~ A ......~..._..__,__~.__,_~.__~_._~~,__..__,......~_"_.... . .".._'"'"'..~_..._,__.~;~'.'~..""'~'u.."...~__~_._. ._-".._-~....~"'~'"--,,~-_...,~'._-"'---~ Si2ns: This proposal includes 2 project monument sign, one at each entrance to the development. The proposed sign is consistent with the Zoning Ordinance requirements. Lighting: Streetlights will be provided on the private streets. The cost and maintenance of the streetlights on the private streets will be borne by the homeowner's association. Streets: The PUD plan includes the use of private streets to serve the townhouse development, which will be maintained by a homeowner's association. The streets also meet the Subdivision Ordinance requirements. Parkland/Shore Recreation Facilities: There is no public parkland located within this development; parkland dedication requirements will be satisfied by a cash dedication of$64,104.00 in lieu ofland. The developer is also proposing to install 21 boat slips to serve this development. The number of boat slips is consistent with Zoning Ordinance requirements. Phasine: This project is proposed to be completed In 2 phases, beginning in 2003 and ending in 2004. Final Plat: The final plat to be known as Crystal Bay includes the entire 10.92 acres. It creates 24 townhouse unit lots, 1 lot for common open space for the townhouse development, and 2 outlots for the private streets. Current Circumstances: The Planning Commission considered the Final PUD Plan on November 24,2003. The Planning Commission found this plan to be in substantial compliance with the approved preliminary PUD plan. The Planning Commission recommended approval of the final PUD plan, subject to the following conditions. 1 The Final Plat and Development Contract must be approved by the City Council. 2 A signed PUD agreement must be approved by the City Council. The principal requirement for approval of a Final PUD Plan is first of all, whether or not the plan conforms to the approved preliminary PUD plan. Second, the developer must enter into a development contract for the PUD outlining the terms and conditions of approval of the PUD plan. This contract is separate from the development contract associated with a final plat in that it does not focus on the required improvements, but on the design and conditions of the PUD plan. 1:\03 files\03 pud's\crystal bay\final pud\finalcc.doc Page 3 .. ._ +._______.__..._...._'.__. ,_"",~__~,_,,~_,___,~,___"_"_'~ _"_,~"__,,,,.__'__'~'M____~.'__"__.~_'____"___'___''''.__..h .... In considering a final PUD plan, the Council may either act to approve the plan on December 1 st, or set a public hearing for review ofthe final plan if it deems such a hearing necessary. In any event, the Council must make a decision on the final PUD plan within 60 days of its first consideration. The principal requirements for final plat approval include a signed "Development Contract" with surety for the installation of utilities and streets and the satisfactory completion of all preliminary plat conditions. The attached "Development Contract" specifies the required improvements for this plat. Sanitary sewer and water main trunk area charges, storm water management charges and collector street construction charges are outlined in the contract. This is the standard Development Contract used in all final plats. Staff has reviewed the final PUD plan and the final plat and finds them to be in substantial compliance with the approved preliminary PUD plan and the approved preliminary plat. In addition to the "Development Contract", the attached "Contract for Development of Land as a Planned Unit Development" spells out the terms and conditions of approval of the final PUD plan. This contract includes provisions identifying the approved final plans, the phasing of the development, and the covenants and homeowners association documents. It must be noted there are still some blanks in the PUD contract. These blanks are for the unknown approval dates, resolution numbers, and so on. They will be completed upon Council approval of the final plans. The Issues: The City Attorney has reviewed and approved the PUD contract. The Development Contract for the plat is the City's standard development contract. The Developer has also reviewed and approved the contracts. Signed copies of the contracts will be returned to staff prior to the City Council meeting. Conclusion: The Final PUD Plan is in compliance with the approved preliminary PUD plan. The staff would recommend approval of the Final PUD Plan be subject to the following conditions: 1. The Final Plat and Development Contract must be approved by the City Council. 2. The Final PUD Plan and PUD Development Contract must be approved by the City Council. These conditions can be satisfied prior to release of the final plat documents. A copy of the PUD contract is attached to this report. 1:\03 files\03 pud's\crystal bay\fina1 pud\fina1cc.doc Page 4 ~_._."~,,-,---~-,-,~....--.......,~._,.,.,....,-,.._..,.._-,,"'*"--_._"--"'--"'-"'"--""---""'--"'---~---~-'----'..--.-...-.-..... FISCAL IMPACT: ALTERNATIVES: RECOMMENDED MOTION: REVIEWED BY: A copy of the development contract for Crystal Bay is also attached to this report. Staff will be available to discuss the details of this contract with the Council. All of the conditions placed on the preliminary plat have been satisfied. The final plat is subject to six conditions which will be satisfied prior to the release of the final plat documents. Bud/{et Impact: Approval of this final PUD plan and final plat will allow construction of new dwellings, which will contribute to the City's tax base. The required development fees are deposited into the appropriate City accounts. The City Council has four alternatives: 1. Adopt a Resolution approving the Final PUD Plan and PUD Contract, and a Resolution approving the final plat and Development Contract for Crystal Bay. 2. Deny the Resolutions approving the Final PUD Plan and the Final Plat for Crystal Bay. 3. Defer this item until the developer provides City staffwith signed copies of the contracts, or provide staffwith specific direction. 4. Determine if a public hearing on the Final PUD Plan is warranted. If the City Council determines a public hearing should be conducted, direct staff to schedule a hearing and publish notice of the hearing as required by Minnesota statutes. The staff recommends Alternative #1. This requires the passage of the following two motions: 1. A motion and second to adopt a Resolution approving the final PUD Plan and PUD Contract for Crystal Bay and authorizing the Mayor and City Manager to sign the Development Contract. 2. A motion and second to adopt a Resolution approving the final plat and Development Contract for Crystal Bay and authorizing the Mayor and Cit)j anager to sign the Development Contract. V 1:\03 files\03 pud's\crystal bay\final pud\finalcc.doc Page 5 ..... _......__..--~..,-.~.. ~"-><~..-.,...-,,,,,.,..~..,~.~..,.,,.,~-_._,._,-,._._~..;.,,-.,..,-,._,...,....__.,~.,.~._.~-_._~--.~-,,-,,_.,---~ ._,.._,.,.._-~_.,._-_.~-_.'.._",._..._..~.__. ,.._._,--~-- 16200 Eagle Creek Avenue S.E. Prior Lake, MN 55372-1714 PLANNED UNIT DEVELOPMENT FINAL PLAN RESOLUTION 03-XX RESOLUTION APPROVING A PLANNED UNIT DEVELOPMENT FINAL PLAN TO BE KNOWN AS CRYSTAL BAY MOTION BY: SECOND BY: WHEREAS: 212 Development Group, LLC have submitted an application for a Planned Unit Development Final Plan to be known as Crystal Bay; and WHEREAS: The Prior Lake Planning Commission considered the proposed Final PUD Plan on November 24, 2003; and WHEREAS, the Planning Commission found the Final PUD Plan to be in substantial compliance with the approved preliminary plan and recommended approval of the Final PUD Plan; and WHEREAS: The Prior Lake City Council considered the proposed Final PUD Plan on December 1, 2003; and WHEREAS: The City Council finds the Final PUD Plan in substantial compliance with the approved Preliminary PUD Plan; and WHEREAS: The City Council finds the PUD Final Plan is compatible with the stated purposes and intent of the Section 1106 Planned Unit Developments of the Zoning Ordinance. NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA: 1. The recitals set forth above are incorporated herein as if fully setforth. 2. The City Zoning Ordinance specifies certain criteria be considered as part of evaluating a Planned Unit Development application. 3. The City Council hereby adopts the following findings: a) Greater utilization of new technologies in building design, materials, construction and land development. The developer has attempted to design the buildings so they fit the land, rather than force the land to fit the building design. The use of permeable pavement for the driveways on the site will reduce the runoff and allow further treatment of the storm water. b) Higher standards of site and building design. The density of this site is clustered to the north and set back further from the lake shore than would be required under a conventional development. The units have also been placed so as to preserve the trees on the east boundary of the site. The utilization of private streets further reduces the impervious surface on the site. www.cityofpriorlake.com 1:\03 files\03 pud's\crystal bay\final pud\pudres'~one 952.447.4230 / Fax 952.447.4245 PAGE 1 c) More efficient and effective use of streets, utilities, and public facilities to support high quality land use development at a lesser cost. Maintenance of private streets, including plowing and future repairs, is done by the homeowners association. This reduces City costs in providing services to these homes. d) Enhanced incorporation of recreational, public and open space components in the development which may be made more useable and be more suitably located than would otherwise be provided under conventional development procedures. The developer is providing a private beach and recreation area for the residents of the development, as well as private walking trails. These trails will connect to the public trail along CSAH 82. e) Provides a flexible approach to development which allows modifications to the strict application of regulations within the various Use Districts that are in harmony with the purpose and intent of the City's Comprehensive Plan and Zoning Ordinance. The density and variety of housing units is consistent with the Comprehensive Plan goals to provide a variety of housing styles. f) Encourages a more creative and efficient use of land. The PUD allows the higher density areas to be clustered, and preserves open space. g) Preserves and enhances desirable site characteristics including flora and fauna, scenic views, screening and buffering, and access. The townhouse units are sited to take advantage of the natural terrain. h) Allows the development to operate in concert with a Redevelopment Plan in certain areas of the City and to insure the redevelopment goals and objectives within the Redevelopment District will be achieved. This criterion is not applicable. i) Provides for flexibility in design and construction of the development in cases where large tracts of land are under single ownership or control and where the users) has the potential to significantly affect adjacent or nearby properties. The use of the PUD allows the clustering of the homes and the use of private streets. j) Encourages the developer to convey property to the public, over and above required dedications, by allowing a portion of the density to be transferred to other parts of the site. There is no additional parkland dedication with this plan. k) The design shall consider the whole of the project and shall create a unified environment within the boundaries of the project by insuring architectural compatibility of all structures, efficient vehicular and pedestrian circulation, aesthetically pleasing landscape and site features, and efficient use and design of utilities. The design creates a unified environment. Revision of the landscaping plan to meet the requirements of the Zoning Ordinance will also enhance this area. I) The design of a PUD shall optimize compatibility between the project and surrounding land uses, both existing and proposed and shall minimize the potential adverse impacts of the PUD on surrounding land uses and the potential adverse effects of the surrounding land uses on the PUD. The use of the PUD will allow the clustering of the townhouse units and provide a greater setback from the shore line. 1:\03 files\03 pud's\crystal bay\final pud\pudres.doc PAGE 2 m) If a project for which PUD treatment has been requested involves construction over a period of time in two or more phases, the applicant shall demonstrate that each phase is capable of addressing and meeting each of the criteria independent of the other phases. This project will be completed in two phases. The utilities, roads and landscaping will be completed for each phase. n) Approval of a PUD may permit the placement of more than one building on a lot. This is not applicable. 0) A PUD in a Residential Use District shall conform to the requirements of that Use District unless modified by the following or other provisions of this Ordinance. 1) The tract of land for which a project is proposed shall have not less than 200 feet of frontage on a public right-of-way; 2) No building shall be nearer than its building height to any property line when the property abutting the subject property is in an "R-1" or "R-2" Use District; 3) No building within the project shall be nearer to another building than ~ the sum of the building heights of the two buildings, except for parking ramps which may be directly connected to another building; and 4) Private roadways within the project site may not be used in calculating required off-street parking spaces. The project meets the above requirements; as approved, the Planned Unit Development will allow the developer to utilize private streets, which is permitted under the Planned Unit Development provisions of the Zoning Ordinance at the discretion of the Council. The plan also reduces the required setbacks on the private streets and the setbacks between the buildings in order to allow the clustering of the units. The Council also found the modification to the impervious surface appropriate since the overall impervious surface is less than 30% and the ponding is sized to accommodate all of the driveways, roads, and other areas. The Commission also reasoned that a conventional development could include impervious surface up to the 30% maximum. 4. The Planned Unit Development Final Plan is hereby approved subject to the following conditions a) The Final Plat and Development Contract must be approved by the City Council. b) The Final PUD Plan and PUD Development Contract must be approved by the City Council. 5. The Mayor and City Manager are hereby authorized to execute the PUD Development Contract on behalf of the City. Passed and adopted this 1 sl day of December, 2003. YES NO Haugen Haugen Blomberg Blomberg LeMair LeMair Petersen Petersen Zieska Zieska {Seal} Frank Boyles, City Manager 1:\03 files\03 pud's\crystal bay\finaI pud\pudres.doc PAGE 3 16200 Eagle Creek Avenu~OLUTION 03-XX Prior Lake, MN 55372-1714 RESOLUTION OF THE PRIOR LAKE CITY COUNCIL APPROVING THE FINAL PLAT OF "CRYSTAL BAY" AND DEVELOPMENT CONTRACT AND SETTING FORTH CONDITIONS TO BE MET PRIOR TO RELEASE OF THE FINAL PLAT. MOTION BY: SECOND BY: WHEREAS: on September 15, 2003, the City Council approved the preliminary plat known as Crystal Bay Townhomes, subject to conditions identified by Resolution 03- 155; and WHEREAS: The City Council has found that the final plat of "Crystal Bay Townhomes" is in substantial compliance with the approved preliminary plat for Crystal Bay Townshomes; and WHEREAS: The City Council has approved the final plat of "Crystal Bay Townhomes." NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF PRIOR LAKE, MINNESOTA, that it should and hereby does require the following conditions to be met, prior to release of, and recording of said plat: 1. The recitals set forth above are incorporated herein as if fully set forth. 2. The final plat of "Crystal Bay Townhomes" is approved subject to the conditions set forth in this resolution. 3. The final plat of "Crystal Bay Townhomes" is subject to the following conditions, which shall be met prior to release of and recording of the final plat: a. A current title opinion or commitment of title insurance must be submitted acceptable to the City Attorney. b. Payment of all fees prior to release of the final plat mylars. c. Reductions of the entire final plat be submitted, to the following scales: 1" = 200'; and one reduction at no scale which fits onto an 81/2" x 11" sheet of paper. d. Four mylar sets of the final plat with all required signatures must be submitted. e. The developer must provide financial security, acceptable to the City Engineer prior to release of the final plat mylars. f. The final plat and all pertinent documents must be filed with Scott County within 90 days from the date of final plat approval. Failure to record the documents by March 1, 2004, will render the final plat null and void. 4. The Mayor and City Manager are hereby authorized to execute the Development Contract on behalf of the City. 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\Dlat resoLution.doc I k www.cnyorpfibrae.com Page 1 Phone 952.447.4230 / Fax 952.447.4245 Passed and adopted this 1 sl day of December, 2003. YES NO Haugen Haugen Blomberg Blomberg LeMair LeMair Petersen Petersen Zieska Zieska Frank Boyles, City Manager 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\plat resolution.doc Page 2 CONTRACT FOR DEVELOPMENT OF LAND AS A PLANNED UNIT DEVELOPMENT IN THE CITY OF PRIOR LAKE, MINNESOTA, TO BE KNOWN AS CRYSTAL BAY THIS CONTRACT, made and entered into as of the 1st day of December, 2003, by and between the City of Prior Lake, (hereinafter "CITY") a municipal corporation organized under the laws of the State of Minnesota and 212 Development Group, LLC., (hereinafter "DEVELOPER") a Minnesota Limited Liability corporation. RECITALS WHEREAS, DEVELOPER is duly organized to do business in the State of Minnesota and owns the PROPERTY within the City of Prior Lake; Scott County, Minnesota legally described in attached Exhibit A, and WHEREAS, DEVELOPER desires to develop the PROPERTY legally described and depicted in Exhibit A ("PROPERTY"); and WHEREAS, the City has approved a preliminary plat and final plat for the PROPERTY, which approval is subject to certain conditions including the Developer enter into the City's standard development contract; and WHEREAS, DEVELOPER has made application to City Council for approval to develop the PROPERTY as a Planned Unit Development (Planned Unit Development); and WHEREAS, on September 15, 2003, the DEVELOPER received approval of a preliminary Planned Unit Development plan and a preliminary PLAT for the development known as Crystal Bay; and WHEREAS, on September 16,2003, the DEVELOPER filed an application for approval of Planned Unit Development Final Plan; and 1:\03 files\03 pud's\crystal bay\fmal pud\pud contract.doc Page I WHEREAS, the CITY has granted preliminary Planned Unit Development approval and final Planned Unit Development approval to the DEVELOPER subject to certain conditions including that the DEVELOPER enter into this CONTRACT and meet all of the terms and conditions hereafter set forth; and WHEREAS, under authority granted pursuant to Minnesota Statutes Chapter 462 and the Zoning Ordinance of the City of Prior Lake the CITY COUNCIL has agreed subject to the terms and conditions set forth herein, to approve the final Planned Unit Development FINAL PLANS. NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions contained herein, the sufficiency of which is not disputed, it is hereby agreed as follows: 1. RECITALS The Recitals set forth above are herein incorporated as if fully set forth. 2. PURPOSE OF CONTRACT 2.1 The purpose of this Contract is to set out the terms and conditions pursuant to which the City Council of the City of Prior Lake grants its approval for the Developer to develop the PROPERTY as a Planned Unit Development. The terms and conditions set forth herein are intended to promote and protect the orderly development of land within the City and to assure that the development of the PROPERTY is done in a manner to protect and preserve the health, safety and welfare ofthe citizens and property within the City. 2.2 This CONTRACT is intended to achieve the following objectives: a) To insure compliance with the purpose, requirements and criteria set forth in Section 1106 in the Zoning Ordinance for a Planned Unit Development. b) To clarify the rights and responsibilities of the parties to this CONTRACT. c) To incorporate, as an integral part of this CONTRACT, a Developers Contract dated December 1, 2003 by and between the CITY and DEVELOPER relating to the Final PLAT of Crystal Bay. 3. FINDINGS 3.1 The Prior Lake Zoning Ordinance sets out goals and objects against which all applications for Planned Unit Developments must be evaluated against. The final Planned Unit Development plan is consistent with the goals and objectives of a 1:\03 files\03 pud's\crysta1 bay\fma1 pud\pud contract.doc Page 2 _'"'_~"~~_.'._'_'"'_"'~"._---~--..,.,".,,,,".....'._,--'~__M"_~ 0",_,_ m..__._.~__M__._.__".~~...._".._.._~,__........._."_.,.~...~....~... '_'M_~__'~"-;_"__'M_"_'_"".__~_"m_."_______ """_"~"""""_~"__'W'___~'.~~__ _. ....A,._. "_'_"_"~______""'_______"'__"____~__'______"__,,,~'m.', Planned Unit Development as specified in the Zoning Ordinance. To that effect, the City Council has made the following findings: 3.1.1 Greater utilization of new technologies in building design, materials, construction and land development. The developer has attempted to design the buildings so they fit the land, rather than force the land to fit the building design. The use of permeable pavement for the driveways on the site will reduce the runoff and allow further treatment of the storm water. 3.1.2 Higher standards of site and building design. The density of this site is clustered to the north and set back further from the lake shore than would be required under a conventional development. The units have also been placed so as to preserve the trees on the east boundary of the site. The utilization of private streets further reduces the impervious surface on the site. 3.1.3 More efficient and effective use of streets, utilities, and public facilities to support high quality land use development at a lesser cost. Maintenance of private streets, including plowing and future repairs, is done by the homeowners association. This reduces City costs in providing services to these homes. 3.1.4 Enhanced incorporation of recreational, public and open space components in the development which may be made more useable and be more suitably located than would otherwise be provided under conventional development procedures. The developer is providing a private beach and recreation area for the residents of the development, as well as private walking trails. These trails will connect to the public trail along CSAH 82. 3.1.5 Provides a flexible approach to development which allows modifications to the strict application of regulations within the various Use Districts that are in harmony with the purpose and intent of the CITY's Comprehensive Plan and Zoning Ordinance. The density and variety of housing units is consistent with the Comprehensive Plan goals to provide a variety of housing styles. 3.1.6 Encourages a more creative and efficient use of land. The PUD allows the higher density areas to be clustered, and preserves open space. 3.1.7 Preserves and enhances desirable site characteristics including flora and fauna, scenic views, screening and buffering, and access. The townhouse units are sited to take advantage of the natural terrain. 1:\03 fi1es\03 pud's\crysta1 bay\fma1 pud\pud contract.doc Page 3 3.1.8 Allows the development to operate in concert with a Redevelopment Plan in certain areas of the CITY and to insure the redevelopment goals and objectives within the Redevelopment District will be achieved. This criterion is not applicable. 3.1.9 Provides for flexibility in design and construction of the development in cases where large tracts of land are under single ownership or control and where the use(s) has the potential to significantly affect adjacent or nearby properties. The use of the PUD allows the clustering of the homes and the use of private streets. 3.1.10 Encourages the DEVELOPER to convey property to the public, over and above required dedications, by allowing a portion of the density to be transferred to other parts of the site. There is no additional parkland dedication with this plan. 3.1.11 The design shall consider the whole of the project and shall create a unified environment within the boundaries of the project by insuring architectural compatibility of all structures, efficient vehicular and pedestrian circulation, aesthetically pleasing landscape and site features, and efficient use and design of utilities. The design creates a unified environment. Revision of the landscaping plan to meet the requirements of the Zoning Ordinance will also enhance this area. 3.1.12 The design of a Planned Unit Development shall optimize compatibility between the project and surrounding lal1;d uses, both existing and proposed and shall minimize the potential adverse impacts of the Planned Unit Development on surrounding land uses and the potential adverse effects of the surrounding land uses on the Planned Unit Development. The use of the PUD will allow the clustering of the townhouse units and provide a greater setback from the shore line. 3.1.13 If a project for which Planned Unit Development treatment has been requested involves construction over a period of time in two or more phases, the applicant shall demonstrate that each phase is capable of addressing and meeting each of the criteria independent of the other phases. This project will be completed in two phases. The utilities, roads and landscaping will be completed for each phase. 3.1.14 A Planned Unit Development in a Residential Use District shall conform to the requirements of that Use District unless modified by the follOWing or other provisions of this Ordinance. 1) The tract of land for which a project is proposed shall have not less than 200 feet of frontage on a 1:\03 files\03 pud's\crystal bay\final pud\pud contract.doc Page 4 public right-of-way; 2) No building shall be nearer than its building height to any property line when the property abutting the subject property is in an "R-l" or "R-2" Use District,' 3) No building within the project shall be nearer to another building than ~ the sum of the building heights of the two buildings, except for parking ramps which may be directly connected to another building; and 4) Private roadways within the project site may not be used in calculating required off-street parking spaces. The PROJECT meets the above requirements; as approved, the Planned Unit Development will allow the DEVELOPER to utilize private streets, to reduce the front yard setback on the private streets and on Fremont Avenue, and to increase the amount of impervious surface in Tier 2. These modifications are permitted under the PUD provisions at the discretion of the Council. The City Council found these modifications to be consistent with the goals and intent of the PUD criteria in that they allowed the clustering of the townhouses to preserve the natural terrain. The Council also found the modification to the impervious surface appropriate since the overall impervious surface is less than 30% and the ponding is sized to accommodate all of the driveways, roads, and other areas. The Commission also reasoned that a conventional development could include impervious surface up to the 30% maximum. 4. DEFINITIONS, RULES OF INTERPRETATION, AND EXHIBITS 4.1 Definitions In this CONTRACT the following terms shall have the following respective meanings unless the context hereof clearly requires otherwise: 4.1.1 "APPROVED FINAL PLAN" means all those plans, specifications, drawings and surveys attributable to the DEVELOPER and the DEVELOPER INSTALLED PUBLIC IMPROVEMENTS listed in Exhibit F. 4.1.2 "CITY" means the City of Prior Lake, a governmental subdivision of the State of Minnesota. 4.1.3 "CITY ATTORNEY" means the City Attorney of the City of Prior Lake. 4.1.4 "CONTRACT" means this Contract for Development of Land as a Planned Unit Development in the City of Prior Lake, Minnesota, and all referenced and incorporated exhibits by and between CITY and DEVELOPER, as the same may be from time to time modified, amended or supplemented. 4.1.5 "DEVELOPER" means 212 Development, LLC, or its heirs successors and assigns. 1:\03 files\03 pud's\crystal bay\final pud\pud contract.docr Page 5 4.1.6 "DEVELOPER INSTALLED IMPROVEMENTS" means all those improvements listed in Exhibit F. 4.1.7 "DEVELOPMENT CONTRACT FOR PUBLIC IMPROVEMENTS" means the contract titled Development Contract for Crystal Bay and signed by and between the DEVELOPER and the CITY required as a condition for the construction of all required public improvements related to this development. 4.1.8 "DEVELOPMENT PLAN" means the final Planned Unit Development plans approved by the Council attached as Exhibit B. 4.1.9 "INCLUDING" means including, but not limited to. 4.1.1 0 "PLAT" means the final plat and all related documents approved by the CITY. 4.l.11 "PROJECT" means the development of 10.62 gross acres into 24 dwelling units pursuant to the terms and conditions of the approved final Planned Unit Development, the approved final PLAT and this CONTRACT. 4.1.12 "PROPERTY" means the real property, together with improvements, if any, described in Exhibit A. 4.2 Exhibits The following exhibits are attached hereto, incorporated by reference herein and made a part of this CONTRACT as if fully set forth herein. 4.2.1 Exhibit A - Legal Description of PROPERTY 4.2.2 Exhibit B - Approved Final Planned Unit Development Plans dated _ 4.2.3 Exhibit C - City Council Resolution 03-_ approving the Final Planned Unit Development Plans and the CONTRACT FOR THE DEVELOPMENT OF LAND AS A PLANNED UNIT DEVELOPMENT 4.2.4 Exhibit D - Covenants and Homeowner's Association Documents 4.2.5 Exhibit E - DEVELOPMENT CONTRACT FOR PUBLIC IMPROVEMENTS for the Approved Final PLAT known as Crystal Bay. 4.2.6 Exhibit F - DEVELOPER INSTALLED PUBLIC IMPROVEMENTS 5. SCOPE OF PROJECT 5.1 The PROJECT to be known as Crystal Bay consists of 10.62 acres, legally described as shown on Exhibit A, to be developed with a total of 24 units. The PROJECT includes 24 townhouse units in 12, two-unit buildings. The PROJECT also includes the development of a private street system, private open space, parking and landscaping. The PROJECT shall be developed as shown on the Approved Planned Unit Development Plans, attached hereto as Exhibit B. These plans include, but are not limited to site plans, landscaping plans, signage plans, lighting plans and building elevations. 1:\03 files\03 pud's\crysta1 bay\fmal pud\pud contract.doc Page 6 5.2 The PROJECT is to be developed in a two phases, beginning in 2003 and ending in 2004. 6. DEVELOPER IMPROVEMENTS 6.l The required DEVELOPER Improvements are described in the attached DEVELOPMENT CONTRACT FOR PUBLIC IMPROVEMENTS, which is incorporated as Exhibit E. 6.2 The DEVELOPER is responsible for the installation of the permeable pavers as approved in the Final PUD plans and Final Plat plans. The DEVELOPER shall also be responsible for the maintenance of these areas as outlined in Section 9.4 of the Crystal Bay Townhome Association Declarations attached hereto as Exhibit D. The DEVELOPER shall provide the City with a security in the form of a cash deposit or Letter of Credit to be renewed annually initially in the amount of Ten Thousand and No/100's ($10,000) to secure performance of the annual Maintenance ("Security Deposit"). After the first annual Maintenance is performed, the Security Deposit shall be in an amount equal to 125% of the cost of the last annual Maintenance. The DEVELOPER shall maintain the Letter of Credit until renewed by the Homeowner's Association. 6.3 Access. The DEVELOPER hereby grants to the CITY, its agents, employees, officers, and contractors a non-revocable license to enter the PLAT during the installation and for the maintenance of DEVELOPER INSTALLED IMPROVEMENTS to perform all work and inspections deemed appropriate by the CITY. 7. DEVELOPER REPRESENTATIONS 7.1 DEVELOPER represents and warrants that neither the execution and delivery of this CONTRACT, the consummation of the transactions contemplated hereby, nor the fulfillment or the compliance with the terms and conditions of this CONTRACT is prevented or limited by, or in conflict with or will result in breach of, the terms, conditions or provisions of any restriction of DEVELOPER, or evidence of indebtedness, contract or instrument of whatever nature to which DEVELOPER is now party or by which it is bound or will constitute a default under any of the foregoing. 7.2 DEVELOPER agrees to hold harmless, indemnify and defend CITY, its Council, agents, employees and CITY ATTORNEY against any claims or actions brought as a result of DEVELOPER's performance under this CONTRACT or as a result of alleged actions or omissions on the part of DEVELOPER, its employees or agents. 1:\03 files\03 pud's\crystal bay\fmal pud\pud contract.doc Page 7 8. RELEASE, HOLD HARMLESS AND INDEMNIFICATION 8.1 DEVELOPER releases from and covenants and agrees that CITY, its City Council, officers, agents, servants, attorneys and employees thereof (hereinafter for purposes ofthis paragraph, the "indemnified parties") shall not be liable for and agrees to indemnify and hold harmless the indemnified parties against any loss or damage to PROPERTY or any injury to or death of any person occurring at or about or resulting from any defect in the PROPERTY, development of PROPERTY or DEVELOPER IMPROVEMENTS. 9. EVENT OF DEFAULT 9.1 Event of Default Defined. Event of default is anyone or more of the following events: 9.1.1 Failure by DEVELOPER to timely pay all real property taxes assessed with respect to the PROPERTY; 9.1.2 Failure to construct the DEVELOPER's Improvements pursuant to the terms, conditions and limitations of the DEVELOPMENT CONTRACT FOR PUBLIC IMPROVEMENTS; 9.1.3 Failure by DEVELOPER to observe or perform any covenant, condition, obligation or contract on its part to be observed or performed under this CONTRACT; 9.1.4 Transfer of any interest in the development; 9.1.5 Failure by DEVELOPER to reimburse CITY for any costs increased by CITY in connection with this CONTRACT, including the enforcement thereof; including, but not limited to engineering fees, inspection and testing fees, attorney fees and other professional fees. 9.2 Remedy Upon Event of Default. Whenever an event of default occurs, the CITY after providing DEVELOPER notice as provided in paragraph 15, and may take anyone or more of the following actions: 9.2.1 CITY may cancel and rescind this CONTRACT. 9.2.2 CITY may draw upon and/or bring an action upon any or all ofthe securities including but not limited to the Irrevocable Letter of Credit, the Payment Bond, the Performance Bond or the Warranty Bond provided to CITY pursuant to the Development Contract for the PLAT of Crystal Bay (Exhibit E). 9.2.3 CITY may take whatever action, including legal or administrative action, which may be necessary or desirable to CITY to collect any payments due under this CONTRACT or to enforce performance and/or observance of any obligation, contract or covenant of DEVELOPER under this CONTRACT. 1:\03 files\03 pud's\crystal bay\fmal pud\pud contract.doc Page 8 9.2.4 CITY may suspend issuance of Building Permits and/or Occupancy Permits on DEVELOPER's lots. 9.2.5 CITY may draw upon the Irrevocable Letter of Credit provided pursuant to the Development Contract for the PLAT of Crystal Bay if CITY receives Notice that the bank elects not to renew the Irrevocable Letter of Credit. 9.3 Whenever an Event of Default occurs and CITY shall employ attorneys or incur other expenses, including employment of experts, for the collection of payments due or to become due or for the enforcement or performance or observance of any obligation or contract on the part of DEVELOPER herein contained, DEVELOPER agrees that it shall, on demand thereof, pay to CITY the reasonable fees of such attorneys and such other expenses so incurred by CITY. 9.4 Nonexclusive Remedy. None of the actions set forth in this Section are exclusive or otherwise limit the CITY in any manner. 10. WAIVER Failure of the CITY at any time to require performance of any provision of this CONTRACT shall not affect its right to require full performance thereof at any time thereafter and the waiver by the CITY of a breach of any such provision shall not be taken or held to be a waiver of any subsequent breach thereof or as nullifying the effectiveness of such provision. 11. ASSIGNMENT 11.1 DEVELOPER represents and agrees for itself, its heirs, its successors and assigns that DEVELOPER has not made or created and that it will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance or any trust or power to transfer in any other mode or form of or with respect to this CONTRACT or in DEVELOPER without the prior written approval of the CITY. 11.2 The DEVELOPER may not transfer or assign this CONTRACT without the prior written permission of the CITY COUNCIL of the City of Prior Lake. The DEVELOPER's obligations hereunder shall continue in full force and effect, even if the DEVELOPER sells one or more lots, the entire PLAT, or any part thereof. 12. PERMITS 12.1 The DEVELOPER shall obtain all necessary approvals, permits and licenses from the CITY, and any other regulatory agencies and the utility companies. If any of the entities request a change to the APPROVED FINAL PLANS submitted for review, the DEVELOPER shall submit these changes to the CITY for approval. 1:\03 files\03 pud's\crystal bay\final pud\pud contract.doc Page 9 12.2 All costs incurred to obtain said approvals, permits and licenses, and also all fines or penalties levied by any agency due to the failure of the DEVELOPER to obtain or comply with conditions of such approvals, permits and licenses, shall be paid by the DEVELOPER. 12.3 The DEVELOPER's shall defend and hold the CITY hannless from any action initiated by the other regulatory agencies and the utility companies resulting from such failures of the DEVELOPER. 13. RECORDING 13.1 This CONTRACT shall be recorded by DEVELOPER within sixty (60) days from approval of the Resolution approving the Final Planned Unit Development and Final PLAT, and all terms and conditions of this CONTRACT shall run with the land herein described, and shall be binding upon the heirs, successors, administrators and assigns of the DEVELOPER. The DEVELOPER shall provide and execute any and all documents necessary to implement the recording. If there be more than one developer, references herein to DEVELOPER shall mean each and all of them. 13.2 All recording fees, if any, shall be paid by the DEVELOPER. 14. NOTICE 14.1 Required Notices to the DEVELOPER shall be in writing, and shall be either hand delivered to the DEVELOPER, its employees or agents, or mailed to the DEVELOPER by certified mail at the following address: 212 Development Group, LLC, P.O. Box 89, 350 East Highway 212, Chaska, MN, 55318. Notices to the CITY shall be in writing and shall be either hand delivered to the City Manager, or mailed to the CITY by certified mail in care of the City Manager at the following address: City of Prior Lake, 16200 Eagle Creek Avenue, Prior Lake, Minnesota 55372-1714. Concurrent with providing Notice to the CITY, Notice(s) shall be served upon the CITY ATTORNEY Suesan Lea Pace, Esq. at Halleland Lewis Nilan Sipkins & Johnson, Pillsbury Center South, 220 South Sixth Street, Suite 600, Minneapolis, Minnesota, 55402-4501. 14.2 The Notice period shall be fifteen (15) calendar days. 14.3 The Notice shall state a time by which the default must be cured. The time the CITY gives the DEVELOPER shall be determined in the sole discretion of the CITY; however, such time shall be a reasonable time. 1:\03 files\03 pud's\crystal bay\final pud\pud contract.doc Page 10 " -,- .......--..,.._..~......"..._,_. .__....'_...",...,,_......_..__.._____.._m..~~'.,.._"..,,_,.,_'__..,"'..__~~_____.~_.__~._._...._.;.,.,_~___"__..__._,_~~__.,,_.......__.,._-.-_,__~__,.,_~__.__..,_,..._"..'""_. 15. MODIFICATIONS OR AMENDMENT This CONTRACT may be amended by the parties hereto only by written instrument executed in accordance with the same procedures and formality followed for the execution of this CONTRACT. 16. PROOF OF TITLE DEVELOPER shall furnish a title opinion or title insurance commitment addressed to the CITY demonstrating that DEVELOPER is the fee owner or has a legal right to become fee owner of the PROPERTY upon exercise of certain rights and to enter upon the same for the purpose of developing the PROPERTY. DEVELOPER agrees that in the event DEVELOPER's ownership in the PROPERTY should change in any fashion, except for the normal process of selling or conveying lots, prior to the completion of the PROJECT and the fulfillment ofthe requirements of this CONTRACT, DEVELOPER shall forthwith notify the CITY of such change in ownership and seek the CITY's approval to transfer the responsibility under this CONTRACT. Any change in ownership shall not release DEVELOPER from any of its obligations under this CONTRACT, unless or until the CITY has approved transfer of this CONTRACT and then only to the extent agreed to by the CITY. 17. HEADINGS Headings at the beginning of paragraphs herein are for convenience of reference, shall not be considered a part of the text of this CONTRACT and shall not influence its construction. 18. SEVERABILITY In the event any provisions of this CONTRACT shall be held invalid, illegal, or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof, and the remaining provisions shall not in any way be affected or impaired thereby. 19. CONSTRUCTION This CONTRACT shall be construed in accordance with the laws of the State of Minnesota. IN WITNESS WHEREOF, CITY and DEVELOPER have caused this CONTRACT to be duly executed on the day and year first above written. Approved by the City Council on the 1st day of December, 2003. 1:\03 files\03 pud's\crystal bay\fmal pud\pud contract.doc Page 11 APPROVED AS TO FORM: DEVELOPER: 212 Development, LLC by Suesan Lea Pace, City Attorney By Its CITY OF PRIOR LAKE By: Its Manager By: Its Mayor This Development Contract must be signed by all parties having an interest in the PROPERTY. STATE OF MINNESOTA COUNTY OF SCOTT On the day of , 20_, before me, a Notary Public, with and for . said County personally appeared Jack G. Haugen and Frank Boyles, to me personally known, being each by me duly sworn did say that they are the Mayor and City Manager, respectively, of the City of Prior Lake, a Minnesota municipal corporation, named in the foregoing instrument; and that said instrument was signed on behalf of the municipal corporation and acknowledged said instrument to be the free act and deed of said municipal corporation. Notary Public STATE OF MINNESOTA COUNTY OF SCOTT The foregoing instrument was acknowledged before me this ,20_ by and by and of Corporation, on behalf of said corporation. day of who are the , a Minnesota Notary Public 1:\03 files\03 pud's\crystal bay\fmal pud\pud contract.doc Page 12 This instrument prepared by: City of Prior Lake 16200 Eagle Creek Avenue S.E. Prior Lake, MN 55372 1:\03 files\03 pud's\crysta1 bay\fma1 pud\pud contract.doc Page 13 FEE OWNER CONSENT TO DEVELOPMENT CONTRACT , fee owners of all or part of the subject property, the development of which is governed by the foregoing Contract for Development of Land as a Planned Unit Development in the City of Prior Lake, affirm and consent to the provisions thereof and agree to be bound by the provisions as the same may apply to that portion of the subject property owned by them. Dated this _ day of ,20_. STATE OF MINNESOTA ) ( ss. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this _ day of ,20_, by NOTARY PUBLIC 1:\03 files\03 pud's\crysta1 bay\fina1 pud\pud contract.doc Page 14 EXHIBIT A LEGAL DESCRIPTION OF PROPERTY WITHIN CRYSTAL BAY pun PLAN The east 330 feet of Government Lot 2, Section 34, Township 115 North, Range 22 West, Scott County, Minnesota which lies northerly of the shoreline of Prior Lake. Also: The West three hundred fifty-four (354.0) feet of the East six hundred eighty-four (684.0) feet of Government Lot Two (2), Section Thirty-four (34), Township one hundred fifteen (115), Range Twenty-two (22), Scott County, Minnesota. Also: The West two hundred sixty (260) feet ofthe East nine hundred forty-four (944) feet of the North four hundred nineteen (419) feet of Government Lot Two (2), Section thirty- four (34), Township one hundred fifteen (115) Range Twenty-two (22), Scott County, Minnesota. 1:\03 files\03 pud's\crystal bay\fmal pud\pud contract.doc Page 15 EXHIBIT F DEVELOPER INSTALLED IMPROVEMENTS DEVELOPER INSTALLED IMPROVEMENTS include the construction work to be installed and financed by the Developer on the PROPERTY and identified on the approved plans including, but not limited to, the following: · Streets, Curb and Gutter, both public and private · Water Supply · Sanitary Sewer · Storm Sewer/Stormwater improvements, both public and private · Grading, Drainage, and Erosion Control improvements · Sidewalks and Driveways, curb-stop adjustments · Required Landscaping, including trees, topsoil and sodding · Tree Replacement Requirements · Street Lighting, both public and private · Traffic Signing improvements · Permeable Pavers for private drives as shown on the approved plans ".".,. ..._.....--~...._~..",~'."'"'- ..... .._..........."--~,_.,..."~_...~~,_...._,,.,~~.~_'...K'...""_,_._. .. '__''''''~''__~~_~__"",___, ___'__.__~"______'__....___.___.,._.,~..~_._._____~~__~,_.,__."."._......_....__..._._ DEVELOPMENT CONTRACT CRYSTAL BAY PROJECT #02-34 This DEVELOPMENT CONTRACT is entered into this 151 day of December, 2003, by and between the CITY OF PRIOR LAKE, a Minnesota municipal corporation ("City"), and 212 Development Group, LLC, a Minnesota Limited Liability Corporation (the "Developer"). Based on the mutual promises and covenants set forth herein, the sufficiency of which is not disputed, the City and the Developer (collectively "Parties") agree as follows: 1. REOUEST FOR PLAT APPROVAL. The Developer has asked the City to approve a Plat for Crystal Bay (referred to in this Development Contract as the "Plat"). The land is legally described as: shown on attached Exhibit A which is incorporated herein as if fully set forth. 2. CONDITIONS OF PLAT APPROVAL. The City hereby approves the Plat on condition that the Developer enter into this Development Contract, furnish the Security required by it, and record the Plat and Development Contract with the County Recorder or Registrar of Titles within 90 days after the City Council approves the final Plat. 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\development contract.doc 11/21/03 Page 1 DRAFT 3. RIGHT TO PROCEED. Within the Plat or land to be platted, the Developer may not construct sewer lines, water lines, streets, utilities, public or private improvements, or any buildings until all the following conditions have been satisfied: l) this Development Contract has been fully executed by both parties, 2) the necessary security, development fees and insurance have been received by the City, and 3) the City Engineer or Designee has issued a letter that all conditions have been satisfied and that the Developer may proceed. The foregoing restriction on the Developer's "Right To Proceed" does not apply to grading or other approvals set forth in Resolution No. 03-155, dated September 15,2003, approving the Preliminary Plat for Crystal Bay. 4. PHASED DEVELOPMENT. If the Plat is a phase of a multiphased preliminary Plat, the City may refuse to approve Final Plats of subsequent phases if the Developer has breached this Development Contract or any terms or conditions set out in the Resolution approving the Final Plat and the breach has not been remedied. Development of subsequent phases may not proceed until the City approves Development Contracts for such phases. Fees and charges collected by the City in connection with infrastructure, public improvements and parkland dedication requirements are not being imposed on outlots, if any, in the Plat that are designated in an approved Preliminary Plat for future subdivision into lots and blocks. Such charges will be calculated and imposed when the outlots are subdivided into lots and blocks. 5. PRELIMINARY PLAT STATUS. If the Plat is a phase of a multiphased preliminary Plat, the Developer shall submit a Staging Plan for City Council approval which may allow the Developer more than one (1) year to subdivide the property into lots and blocks. 6. DEVELOPMENT PLANS. The Plat shall be developed in accordance with the Plans identified below. The plans shall not be attached to this Development Contract, but are incorporated by reference and made a part of this Development Contract as if fully set forth herein. If the plans vary from 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\development contract.doc 11/21/03 Page 2 DRAFT the written terms of this Development Contract, the more specific or stringent controls shall apply. The Plans are: Plan A -- Final Plat Dated September 19, 2003 (Prepared by Otto Associates) Plan B -- Final Grading, Development, and Erosion Control Planes) Dated October 23,2003 (Prepared by Otto Associates) Plan C -- Tree Preservation and Replacement Plans Dated October 20, 2003 (Prepared by Dahlgren, Shardlow and Uban) Plan D -- Landscaping Plan Dated October 20, 2003 (Prepared by Dahlgren, Shardlow and Uban) Plan E -- One set of Plans and Specifications for Developer Installed Improvements Dated October 23,2003 (Prepared by Otto Associates) Plan F -- Street Lighting Plan Dated October 16, 2003 (Prepared by MVEC) All plans set forth above are incorporated herein and made part of this Development Contract. 7. DEVELOPER INSTALLED IMPROVEMENTS. The Developer shall install and pay for the following: A. Sanitary Sewer System B. Water System C. Storm Sewer D. Streets E. Concrete Curb and Gutter F. Street Lights G. Site Grading and Ponding H. Underground Utilities I. Traffic Control Signs J. Street Signs K. Setting of Iron Monuments L. Sidewalks and Trails M. Landscaping 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\development contract.doc 11/21/03 Page 3 DRAFT The Developer Installed Improvements shall be installed in accordance with the City's Subdivision Ordinance, City standard specifications for utilities and street construction, the City's Public Works Design Manual, and any other applicable City ordinances, all of which are incorporated herein by reference. The Developer shall submit plans and specifications, which have been prepared by a Minnesota registered professional civil engineer to the City for approval by the City Engineer. The Developer shall obtain all necessary permits and approvals from any other agencies having jurisdiction before proceeding with that aspect of the construction as it relates to that permit. The Developer, its contractors and subcontractors, shall follow all instructions received from the City's authorized personnel. The Developer or the Developer's engineer shall schedule a preconstruction meeting with all parties concerned, including the City staff, to review the program for the construction work. Before the Security for the completion of utilities is released, iron monuments must be installed in accordance with Minn. Stat. 9505.02. The Developer's surveyor shall submit a written notice to the City certifying that the monuments have been installed. 8. CONSTRUCTION OBSERVATION The City's authorized personnel shall provide construction observation during the installation of the Developer Installed Improvements in accordance with the Public Works Design Manual. These services by the City shall include: A. Construction observation during installation of required Developer Installed Improvements, which include grading, sanitary sewer, watermain, storm sewer/ponding and street system. B. Documentation of construction work and all testing of Developer Installed Improvements. C. As-built location dimensions for sanitary sewer, watermain and storm sewer facilities. 1:\03 files\03 subdivisions\03 final plat\crysta1 bay revised\deve1opment contract.doc 11/21/03 Page 4 DRAFT 9. DEVELOPER PROVIDED CONSTRUCTION SERVICES. The Developer shall be responsible for providing all other construction services including, but not limited to: A. Construction surveying B. As-built drawings of grading plans. C. As-built drawings showing location, dimensions and elevations of all utility improvements, including but not limited to top nut of hydrants, manhole rims, manhole inverts. (Tie dimensions to sewer and water services from City staff or City consultants.) D. Project Testing: The Developer is responsible, at the Developer's sole cost, to provide testing to certify that Developer Installed Improvements were completed in compliance with the approved final plans and specifications. The personnel performing the testing shall be certified by the Minnesota Department of Transportation. The City Engineer has the sole discretion to determine if additional testing is necessary. The cost of additional testing is to be paid by the Developer. E. Lot comers and monuments. 10. BOULEVARD AND AREA RESTORATION. The Developer shall seed or lay cultured sod in all boulevards within thirty (30) days, or within a timeline established by the City Engineer, of the completion of street related improvements and restore all other areas disturbed by the development grading operation. Boulevard and Area Restoration shall be in accordance with the approved erosion control plan. Upon request ofthe City Engineer, the Developer shall remove the silt fences after turf establishment. 11. SUBDIVISION MONUMENTS. The Developer shall install all subdivision monumentation within one (1) year from the date of recording the plat, or the monumentation shall be installed on a per lot basis at the time the building permit for the subject lot is issued, whichever occurs first. At the end of the one (1) year period from recording of the Plat, the Developer shall submit to the 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\development contract.doc 11/21/03 Page 5 DRAFT City Engineer written verification by a registered land surveyor that the required monuments have been installed throughout the plat. 12. TIME OF PERFORMANCE. The Developer shall install all required public improvements by July 31,2004, with the exception of the final wear course of asphalt on streets. The final wear course on streets shall be installed the first summer after the base layer of asphalt has been in place for one freeze thaw cycle. The Developer and the City shall consult about an extension of time. If an extension is granted, it shall be in writing and conditioned upon updating the Security posted by the Developer to reflect cost increases and the extended completion date. 13. LICENSE. The Developer hereby grants the City, its agents, employees, officers and contractors anon-revocable license to enter the Plat to perform all work and inspections deemed appropriate by the City in conjunction with the development ofthe Plat. 14. EROSION CONTROL. Prior to initiating site grading, the erosion control plan, Plan B, shall be implemented by the Developer and inspected and approved by the City. The City may impose, at no cost to the City, additional erosion control requirements if they are necessary to meet erosion control objectives. All areas disturbed by the excavation and backfilling operations shall be reseeded immediately after the completion of the work in that area. All seeded areas shall be mulched, and disc anchored as necessary for seed retention. The parties recognize that time is of the essence in controlling erosion. If the Developer does not comply with the erosion control plan and schedule or supplementary conditions imposed by the City, the City may take such action as it deems appropriate to control erosion. The City will endeavor to notify the Developer in advance of any proposed action, but failure of the City to do so will not affect the Developer's and City's rights or obligations hereunder. The Developer shall be solely responsible for any costs incurred by the City for erosion control measures. The Developer shall fully reimburse the City for any cost incurred within ten (10) days of the date of the 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\development contract.doc 11/21/03 Page 6 DRAFT City's invoice. If the Developer does not reimburse the City for any cost the City incurred for such work within ten (10) days, the City may, without further notice to the Developer, draw down the Irrevocable Letter of Credit to pay any costs. No development, utility or street construction will be allowed unless the Plat is in full compliance with the erosion control requirements. The notice provisions set out in Paragraph 40 shall not apply to notifications to the Developer under this paragraph. 15. CLEAN UP. The Developer shall clean dirt and debris from streets that has resulted from any and all construction work by the Developer, homebuilders, contractors and subcontractors, their agents or assigns. Prior to any construction in the Plat, the Developer shall identify, in writing, a responsible party and schedule for erosion control, street cleaning, and street sweeping. If the Developer fails to perform the required clean-up within 24 hours of receiving instructions and notice from the City, the City, without further notice, will perform the work and charge the associated cost to the Developer. If the Developer does not reimburse the City for any cost the City incurred for such work within ten (10) days of receipt of the invoice, the City may draw down, without further notice, the Irrevocable Letter of Credit to pay any costs. The notice provisions set out in Paragraph 40 shall not apply to notifications to the Developer under this paragraph. 16. GRADING PLAN. A. The Plat shall be graded in accordance with the approved grading, development and erosion control planes), (plan B). The plans and work shall conform to City of Prior Lake Public Works Design Manual. B. As-bunts. Before the City releases the Grading Security, the Developer shall provide the City with an as built grading plan and a certification by a registered land surveyor or engineer that all ponds, swales, and ditches have been constructed on public easements or land owned by the City. The as built plan shall include field verified elevations of the following: a) cross sections of ponds, b) 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\development contract.doc 11/21/03 Page 7 DRAFT location and elevations along all swales and ditches, and c) lot comers and house pads. The City may withhold issuance of building permits until the approved certified grading plan is on file with the City and all erosion control measures are in place as determined by the City Engineer. 17. OWNERSHIP OF DEVELOPER INSTALLED IMPROVEMENTS. Upon completion of the Developer Installed Improvements required by this Development Contract and final written acceptance by the City Engineer, the improvements lying within public right-of-way and easements shall become City property without further notice or action. 18. STREET MAINTENANCE. Developer shall be responsible for all street maintenance until final written acceptance by the City of the Developer Installed Improvements. Warning signs and detour signs, if determined to be necessary by the City Engineer, shall be placed when hazards develop in streets to prevent the public from traveling on same and directing attention to detours. If and when streets become impassable, such streets shall be barricaded and closed. For the purpose of this subparagraph, "street maintenance" does not include snow plowing or normal sweeping. 19. CONSTRUCTION ACCESS. Construction traffic access and egress for grading, public utility construction, and street construction is restricted to CSAH 82 and Fremont Avenue. No construction traffic is permitted on the adjacent local streets. 20. IMPROVEMENTS REOUIRED BEFORE ISSUANCE OF BUILDING PERMITS. A. Grading, curbing, and one lift of bituminous shall be installed on all streets providing access and adjacent to a lot prior to issuance of any building permits for that lot. If building permits are issued prior to the acceptance of Developer Installed Improvements, the Developer assumes all liability and costs resulting in delays in completion of the Developer Installed Improvements and damage to Developer Installed Improvements caused by the City, or its agents or contractors, the Developer, its contractors, subcontractors, material men, employees, agents or third parties. 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\development contract.doc 11/21/03 Page 8 DRAFT B. A permanent Certificate of Occupancy shall not be issued for any building in the plat until water and sanitary sewer improvements have been installed and the streets have been completed and the first lift of bituminous has been placed and said improvements have been inspected and determined by the City to be available for use. 21. CITY ADMINISTRATION. The Developer shall pay a fee for City administration. City administration will include all activities necessary to implement this Developer's Contract. These activities include, but are not limited to, preparation of the Development Contract, consultation with Developer and its engineer on the status of or problems regarding the development of the Plat, project monitoring during the warranty period, and processing of requests for reduction in security. Fees for this service shall be four percent (4%) of the estimated construction cost as detailed in Exhibit E, less oversizing costs outlined in Exhibit D, Section A, assuming normal construction and project scheduling. 22. REIMBURSEMENT OF CITY ADMINISTRATION FEES. Once the City approves the construction costs or estimates for the Developer Installed Improvements there will not be any reimbursement to the City by the Developer or to the Developer by the City for City Administration fees. 23. CITY CONSTRUCTION OBSERVATION. Construction observation shall include, but is not limited to, part or full-time inspection of proposed grading, public utilities and street construction and City legal expenses. The Developer shall deposit an amount equal to five percent (5%) of the estimated construction cost, less oversizing costs outlined in Exhibit D, Section A, for construction observation performed by the City's authorized personnel and incurred pass-through legal expenses. This amount shall be maintained by the City in escrow until final acceptance of all Developer Installed Improvements by the City. Any balance remaining in the escrow account will be returned to the Developer at that time. Extraordinary costs incurred by the City over and above the five percent (5%) Construction Observation 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\development contract.doc 11/21/03 Page 9 DRAFT fee shall be billed to the Developer. Extraordinary costs are defined as costs resulting from change orders applied to the project and costs incurred as a result of unknown conditions at the time of design. 24. STORM WATER MANAGEMENT FEE. The Developer shall pay a storm water management fee of $25,663.00 prior to the City signing the final Plat. The amount was calculated as follows: 8.72 acres at $2,943.00 per acre (R-l, R-2 and R-3). This calculation was determined by the Trunk Storm Sewer Fee Determination Study adopted by City Council Resolution #01-03 on January 8, 2001. 25. SANITARYSEWERAND WATERMAINTRUNKAREA CHARGES. ASanitarysewer and watermain trunk area charge of $30,520.00 shall be paid by the Developer for sanitary sewer and watermain trunk improvements prior to the City signing the [mal Plat. The amount was calculated as follows: 8.72 acres at $3500.00 per acre. 26. CITY-WIDE COLLECTOR STREET CONSTRUCTION CHARGE. This Development Contract requires the Developer to pay a City-wide Collector Street Construction Charge of $13,080.00 for collector street improvements prior to the City signing the final Plat. The amount was calculated as follows: 8.72 acres at $1500.00 per acre. 27 PARK AND TRAIL DEDICATION. The Developer shall dedicate to the public an amount of cash or land or a combination of both as established by the City. This calculation was determined by the Park Fee Study adopted by City Council Resolution #01-10 on February 5, 2001, and updated in April, 2003. The required amount of dedication ofland or cash payment shall be determined by the provisions of Section 1004.1000 if the City Subdivision Ordinance, or by the fee scheduled adopted by resolution of the City Council. The fee shall be paid prior to the City signing the final Plat. This Development Contract requires the Developer to pay a Park and Trail Dedication Fee of $64,104.00 prior to the City signing the final Plat. The amount was calculated as follows: 24 units at $2,670.00 per unit. 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\development contract.doc 11/21/03 Page 10 DRAFT 28. STREET LIGHTS AND OPERATIONAL COSTS. The Developer is responsible for the installation of the street lighting. The Developer shall pay the full capital cost of every light to be installed; this includes poles, fixtures, underground wiring, and all appurtenant work. The Developer shall pay operation and maintenance for the streetlights until the City accepts the Developer Installed Improvements, at which time the billing shall be transferred to the City. The street light plan must be acceptable to the City Engineer and in accordance with the Public Works Design Manual. 29. LANDSCAPING. Landscaping for this Plat shall comply with Plan D. The cost of the landscaping requirements shall be provided by the Developer, subject to approval by the City. Subject to approved Plan D, the Developer shall provide a financial guarantee of $147,213.00 based on an amount equal to 125% of the estimated cost, as set out in Plan D, to furnish and plant the required landscaping and irrigation system. 30. TREE PRESERVATION AND REPLACEMENT. Subject to approved Plan C, and to the provisions of Section 1107.2100 of the City Zoning Ordinance, the Developer shall provide a financial guarantee of $68,134.00 based on an amount equal to 125% of the estimated cost to furnish and plant the replacement trees. The City shall maintain the Security for at least one (1) year after the date the last replacement tree has been planted. At the end of such year, or such longer period as the City determines to be reasonable, the portion of the Security equal to 125% of the estimated cost of the replacement trees, which are alive and healthy may be released. Any portion of the Security not entitled to be released shall be maintained and shall secure the Developer's obligation to remove and replant replacement trees, which are not alive or are unhealthy, and to plant missing trees. Upon completion of the replanting or planting of these trees, the Security shall be maintained for at least one (1) year after the date of the replanting or planting of these trees. If, at the end of this period, all of the required trees are alive and healthy, the entire Security may be released. 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\deve!opment contract.doc 11/21/03 Page 11 DRAFT 31. ESCROW FOR THE CONSTRUCTION OF FREMONT A VENUE. The Developer shall be responsible for half the cost of constructing 420 feet of Fremont Avenue. The City of Prior Lake and Scott County are anticipating construction of this segment of Fremont Avenue in 2004-2005. The estimated cost for the improvement is $101,202.50. The Developer shall deposit $50,601.00 with the City prior to the City signing the final plat. This amount half the construction cost based on the engineer's estimate for the work as shown in Exhibit E-l. This amount shall be held in escrow to pay for the construction of Fremont Avenue. Upon completion of the project, the unused portion of the escrow funds, without interest, shall be returned to the Developer. 32. SECURITY. To guarantee compliance with the terms of this Development Contract, payment of the costs of all Developer Installed Improvements, and construction of all Developer Installed Improvements, the Developer shall furnish the City with an Irrevocable Letter of Credit in an amount equal to 125% of the estimated Developer Improvement Costs. The Irrevocable Letter of Credit ("Security") shall be in the form attached hereto as Exhibit B, from a bank for $460,345.00. The amount ofthe Security was calculated as follows: DEVELOPER INSTALLED IMPROVEMENTS COSTS: Sanitary Sewer Streets/Sidewalks/Trails/Erosion Control $ 52,107.00 $ 50,493.00 $ 49,245.00 $ 42,153.00 $ 500.00 $ 1,500.00 $ 117,771.00 $ 54,507.00 Page 12 Watermain Storm Sewer Street Signs Traffic Control Signs Landscaping Tree Preservation and Replacement 1:\03 files\03 subdivisions\03 final plat\crysta1 bay revised\development contract.doc 11/21/03 DRAFT ESTIMATED DEVELOPER INSTALLED IMPROVEMENTS SUBTOTAL $ 368,276.00 X 1.25 TOTAL FOR IRREVOCABLE LETTER OF CREDIT AMOUNT $ 460,345.00 This breakdown is for historical reference; it is not a restriction on the use of the Security. The bank on which the Irrevocable Letter of Credit is drawn shall be subject to the approval of the City. The bank shall be authorized to do business in the State of Minnesota with a principal branch located within the seven County Twin City Metropolitan area. The Security shall be for a term ending December 31,2005. Individual Security instruments may be for shorter terms provided they are replaced at least forty-five (45) days prior to their expiration. If the required Developer Installed Improvements are not completed at least thirty (30) days prior to the expiration of the Security, the City may draw it down. If the Security is drawn down, the proceeds shall be used to cure the default. 33. CITY DEVELOPMENT FEES. The Developer shall also furnish the City with a cash fee of$201,608.00 for City Development Fees. The amount ofthe cash fee was calculated as follows: CITY DEVELOPMENT FEES: City Administration Fee (4%) $ 7,840.00 $ 9,800.00 $ 25,663.00 $ 30,520.00 $ 13,080.00 $ 64,l04.00 $ 50,601.00 $ 201,608.00 Page 13 City Construction Observation (5%) Storm Water Management Fee Sanitary Sewer and Watermain Trunk Area Charges City-Wide Collector Street Construction Charge Park and Trail Dedication Fee (if in lieu ofland) Escrow for Construction of Fremont Avenue TOTAL CITY DEVELOPMENT FEES 1:\03 files\03 subdivisions\03 final plat\crysta1 bay revised\development contract.doc 11/21/03 DRAFT 34. REDUCTION OF SECURITY. Upon receipt of proof satisfactory to the City that the required work has been satisfactorily completed and financial obligations to the City have been satisfied, the Security may be reduced by seventy-five percent (75%) of the financial obligations that have been satisfied upon written authorization by the City Engineer. Any requests for reductions in the Security must be made in writing to the City Engineer and must be accompanied by lien waivers from any contractor or subcontractor for the Developer. Twenty-five percent (25%) of the Security shall be retained until all Developer Installed Improvements and other obligations under this Development Contract have been completed, including, but not limited to, all financial obligations to the City, and the receipt of all required as-built street, utility and grading plans by the City. In no event shall the five percent (5%) Security be released until the Developer provides the City Engineer with a certificate from the Developer's registered land surveyor stating that all irons have been set following site grading and utility and street construction. 35. WARRANTY. The Developer warrants all Developer Installed Improvements required to be constructed by it pursuant to this Development Contract against poor material and faulty workmanship. The warranty period for streets is one year. The warranty period for underground utilities is two years. The warranty period on Developer Installed Improvements shall commence on the date the City Engineer issues written acceptance of the improvement. The Developer shall post warranty bonds as security. The City shall retain twenty-five percent (25%) of the Security posted by the Developer until the City Engineer accepts the Developer Installed Improvements and the warranty bonds are furnished to the City. All punch list items must be completed and "as-built" drawings received prior to the commencement of the warranty period. The retained Security may be used by the City to pay for warranty work. The City standard specifications for utilities and street construction identify the procedures for final acceptance of streets and utilities. These standards are set out in the Public Works Design Manual. 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\deve1opment contract.doc 11/21/03 Page 14 DRAFT 36. OVERSIZING. City and Developer agree that the Developer Installed Improvements should be oversized for the benefit of future development. Oversizing is the construction of a Developer Installed Improvement to City specifications that exceeds those that would otherwise be required of the Developer. Oversizing improvements include, but are not limited to, sanitary sewer, water, storm drainage facilities, and road improvements. If the City Engineer determines that oversizing is required, the City shall reimburse the Developer for the costs associated with this work and as approved in this contract. City and Developer agree that the cost of system oversizing to be reimbursed to the Developer is $0.00 based upon a cost estimate by the City Engineer as determined by an engineer's estimate or contractors bid to be provided by the Developer and application of the City's Assessment Policy based on a final engineering design. The calculation for oversizing is attached as Exhibit D. 37. CLAIMS. A. City Authorized to Commence Interpleader Action. In the event that the City receives claims from labor, materialmen, or others that work required by this Development Contract has been performed, the sums due them have not been paid, and the laborers, materialmen, or others are seeking payment from the City, the Developer hereby authorizes the City to commence an Interpleader action pursuant to Rule 22, Minnesota Rules of Civil Procedure for the District Courts, to draw upon the Irrevocable Letter of Credit Security in an amount up to 125% of the claim(s) and deposit the funds in compliance with the Rule, and upon such deposit, the Developer shall release, discharge, and dismiss the City from any further proceedings as it pertains to the letters of credit deposited with the District Court, except that the Court shall retain jurisdiction to determine attorneys' fees pursuant to this Development Contract. B. Prompt Payment to Subcontractors Required. The Developer shall pay any subcontractor within ten (10) days of the Developer's receipt of payment by the City for undisputed 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\development contract.doc 11/21/03 Page 15 DRAFT services provided by the subcontractor. If the Developer fails within that time to pay the subcontractor any undisputed amount for which the Developer has received payment by the City, the Developer shall pay interest to the subcontractor on the unpaid amount at the rate of 1 Yz percent (1.5%) per month or any part of a month. The minimum monthly interest penalty payment for an unpaid balance of$100 or more is $10. For an unpaid balance of less than $100, the Developer shall pay the actual interest penalty due to the subcontractor. A subcontractor who prevails in a civil action to collect interest penalties from the Developer shall be awarded its costs and disbursement, including attorney's fees. incurred in bringing the action. (See Minn. Stat. S471.425, Subd. 4a.) 38. RESPONSIBILITY FOR COSTS. A. The Developer shall reimburse the City for costs incurred in the enforcement of this Development Contract, including engineering and attorneys' fees. B. Except as provided in Paragraphs 14 and 15 of this Development Contract, the Developer shall pay in full all bills submitted to it by the City for obligations incurred.under this Development Contract within thirty (30) days after receipt. If the bills are not paid on time, the City may issue a stop work order until the bills are paid in full. 39. DEVELOPER'S DEFAULT. A. Definition. In the context of this Development Contract, "Event of Default" shall include, but not be limited to, anyone or more of the following events: (1) failure by the Developer to pay, in a timely manner, all real estate property taxes and assessments with respect to the development property; (2) failure by the Developer to construct the Developer Installed Improvements pursuant to the terms, conditions and limitations of this Development Contract; (3) failure by the Developer to observe or perform any covenant, condition, obligation or agreement on its part to be observed or performed under this Development Contract; (4) transfer of any interest in the Plat; (5) failure to correct any warranty 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\development contract.doc 11121/03 Page 16 DRAFT deficiencies; (6) failure by the Developer to reimburse the City for any costs incurred by the City in connection with this Development Contract; (7) failure by the Developer to renew the Irrevocable Letter of Credit at least forty-five (45) days prior to its expiration date; (8) receipt by the City from the Developer's insurer of a notice of pending termination of insurance; (9) a breach of any material provision of this Development Contract. With respect to this paragraph, "material provision" shall be construed broadly to offer the City the fullest protection and recourse possible. B. Event of Default - Remedies. Whenever an Event of Default occurs, the City, after providing the Developer with ten (10) days written notice in accordance with the terms of Paragraph 40 of this Development Contract, may take anyone or more of the following actions: 1. The City may suspend its performance under this Development Contract. 2. The City may cancel or suspend this Development Contract. 3. The City may draw upon or bring action upon any or all of the Securities provided to the City pursuant to any ofthe terms of this Development Contract. 4. The City may take whatever action, including legal or administrative action, which may be necessary or desirable to the City to collect any payments due under this Development Contract or to enforce performance and/or observance of any obligation, agreement or covenant of development under this Development Contract. 5. The City may suspend issuance of building permits and/or certificates of occupancy on any of the lots, including those lots sold to third parties, in this Plat. 6. The City may draw upon the Irrevocable Letter of Credit if the City receives notice that the bank elects not to renew the Irrevocable Letter of Credit. 7. The City may, at its option, install or complete the Developer Installed Improvements. 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\development contract.doc 11/21/03 Page 17 ~"_----'----~____._~'''~_''''____''''''''',._.-+o,.___.._~,_."""_~'_"_.__n',""_""_""_""",_'_",,,__~__.,__,,,,~_,__.~_.._......._,.,..__.....,~.." ,.. .. '",_ ._,..,_......~'^...,,_'".,,_,.~,._~_,..."___._..~_.... DRAFT 8. Any fees incurred by the City associated with enforcing any of the provisions set out in sections 1-7 above shall be the sole responsibility ofthe Developer. C. Election of Remedies. None of the actions set forth in this Section are exclusive or otherwise limit the City in any manner. 40. NOTICES. Whenever any paragraph in this Development Contract, with the exception of paragraphs 14 and 15, requires Notice to be provided to the Developer, the notice shall include the following: (1) the nature ofthe breach of the term or condition that requires compliance by the Developer, or the Event of Default that has occurred; (2) what the Developer must do to cure the breach or remedy the Event of Default; and (3) the time the developer has to cure the breach or remedy the Event of Default. Required Notices to the Developer shall be in writing, and shall be either hand delivered to the Developer, its employees or agents, or mailed to the Developer by certified mail at the following address: 212 Development Group, LLC, P.O. Box 89, 350 East Highway 212, Chaska, MN, 55318. Notices to the City shall be in writing and shall be either hand delivered to the City Manager, or mailed to the City by certified mail in care of the City Manager at the following address: City of Prior Lake, 16200 Eagle Creek Avenue, Prior Lake, Minnesota 55372-1714. Concurrent with providing Notice to the City, Notice(s) shall be served upon the City Attorney Suesan Lea Pace, Esq. at Halleland Lewis Nilan Sipkins & Johnson, Pillsbury Center South, 220 South Sixth Street, Suite 600, Minneapolis, Minnesota, 55402-4501. 41. INDEMNIFICATION. Developer shall indemnify, defend, and hold the City, its Council, agents, employees, attorneys and representatives harmless against and in respect of any and all claims, demands, actions, suits, proceedings, liens, losses, costs, expenses, obligations, liabilities, damages, recoveries, and deficiencies, including interest, penalties, and attorneys' fees, that the City incurs or suffers, which arise out of, result from or relate to this Development Contract. The responsibility to indemnify and hold the City harmless from claims arising out of or resulting from the actions or inactions of the City, its 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\development contract.doc 11/21/03 Page 18 DRAFT Council, agents, employees, attorneys and representatives does not extend to any willful or intentional misconduct on the part of any of these individuals. 42. NO THIRD PARTY RECOURSE. The City and Developer agree that third parties shall have no recourse against the City under this Development Contract. The Developer agrees that any party allegedly injured or aggrieved as a result of the City's approval of the Plat shall seek recourse against the Developer or the Developer's agents. In all such matters, including court actions, the Developer agrees that the indemnification and hold harmless provisions set out in Paragraph 41 shall apply to said actions. 43. INSURANCE REQUIREMENTS. Developer, at its sole cost and expense, shall take out and maintain or cause to be taken out and maintained, until the expiration of the warranty period(s) on the Developer Installed Improvements, public liability and property damage insurance covering personal injury, including death, and claims for property damage which may arise out of Developer's work or the work of its subcontractors or by one directly or indirectly employed by any of them. Limits for bodily injury and death shall be not less than $1,000,000 for one person and $2,000,000 for each occurrence; limits for property damage shall be not less than $500,000 for each occurrence; or a combination single limit policy of $1 ,000,000 or more. The City shall be named as an additional insured on the policy, and the Developer shall file with the City a certificate evidencing coverage prior to the City signing the Plat. The certificate shall provide that the City must be given thirty (30) days advance written notice of the cancellation of the insurance. The Certificate shall be in the form attached hereto as Exhibit C. 44. RECORDING DEVELOPMENT CONTRACT. This Development Contract shall run with the land. The Developer, at its sole cost and expense, shall record this Development Contract against the title to the property within ninety (90) days of the City Council's approval of the Development Contract. The Developer shall provide the City with a recorded copy of the Development Contract. The Developer covenants with the City, its successors and assigns, that the Developer is well seized in fee title 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\deve!opment contract.doc 11/21/03 Page 19 DRAFT of the property being final platted and/or has obtained consents to this Development Contract, in the form attached hereto, from all parties who have an interest in the property; that there are no unrecorded interests in the property being final platted; and that the Developer indemnifies and holds the City harmless for any breach ofthe foregoing covenants. 45. SPECIAL PROVISIONS. The following special prOVISIOns shall apply to Plat development: A. Compliance with all of the conditions listed in the Resolution approving the final Plat. B. The Developer is required to submit the final Plat III electronic format. The electronic format shall be compatible with the City's current software. C. The Developer hereby waives any claim against the City for removal of signs placed in the right-of-way in violation of the City Zoning Ordinance and State Statutes. The City shall not be responsible for any damage to, or loss of, signs removed pursuant to this provision. 46. MISCELLANEOUS. A. Compliance With Other Laws. The Developer represents to the City that the Plat complies with all county, metropolitan, state, and federal laws and regulations, including but not limited to: subdivision ordinances, zoning ordinances, and environmental regulations. If the City determines that the Plat does not comply, the City may, at its option, refuse to allow construction or development work in the Plat until the Developer does comply. Upon the City's demand, the Developer shall cease work until there is compliance. B. Severability. If any portion, section, subsection, sentence, clause, paragraph, or phrase of this Development Contract is for any reason held invalid, such decision shall not affect the validity of the remaining portion of this Development Contract. 1:\03 files\03 subdivisions\03 final p1at\crystal bay revised\deve1opment contract.doc 11/21/03 Page 20 - -.. .,.__~_.>m__.._.__._,.__...-....~..._..._~_..._,.~,.",..,...~.~_",'.__.._', "'___""'_"__~~'_'_'_"_'" ,."_,.~m__....~__..,.,...,_.~,,",,,"'~____'"'_->--._""""_""""__'_"_"__._.____~. _'"_"".'~"____"'_"___"_'_^""_"~'_"_' _',_,,_,_~'.4,__ ___._.~_..___.,_ __ .. ...~__. DRAFT C. Amendments. There shall be no amendments to this Development Contract unless in writing, signed by the parties and approved by resolution of the City Council. The City's failure to promptly take legal action to enforce this Development Contract shall not be a waiver or release. D. Assignment. The Developer may not assign this Development Contract without the prior written approval ofthe City Council. The Developer's obligation hereunder shall continue in full force and effect even if the Developer sells one or more lots, the entire Plat, or any part of it. E. Interpretation. This Development Contract shall be interpreted in accordance with and governed by the laws of the State of Minnesota. The words herein and hereof and words of similar import, without reference to any particular section or subdivision, refer to this Development Contract as a whole rather than to any particular section or subdivision hereof. Titles in this Development Contract are inserted for convenience of reference only and shall be disregarded in constructing or interpreting any of its prOVIsIons. F. Jurisdicition. This Development Contract shall be governed by the laws of the State of Minnesota. CITY OF PRIOR LAKE (SEAL) By: Jack G. Haugen, Mayor By: Frank Boyles, City Manager DEVELOPER: By: Its: By: Its: 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\development contract.doc 11/21/03 Page 21 DRAFT STATE OF MINNESOTA ) ( ss. COUNTY OF SCOTT) The foregoing instrument was acknowledged before me this _ day of , 20_, by Jack G. Haugen, Mayor, and by Frank Boyles, City Manager, of the City of Prior Lake, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its City Council. NOTARY PUBLIC STATE OF MINNESOTA ) ( ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of ,20_, by NOTARY PUBLIC DRAFTED BY: City of Prior Lake 16200 Eagle Creek Avenue SE Prior Lake, Minnesota 55372 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\development contract.doc 11/21/03 Page 22 DRAFT FEE OWNER CONSENT TO DEVELOPMENT CONTRACT , fee owners of all or part of the subject property, the development of which is governed by the foregoing Development Contract, affirm and consent to the provisions thereof and agree to be bound by the provisions as the same may apply to that portion of the subject property owned by them. Dated this _ day of ,20_ STATE OF MINNESOTA ) ( ss. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of 20_, by NOTARY PUBLIC DRAFTED BY: City of Prior Lake 16200 Eagle Creek Avenue SE Prior Lake, Minnesota 55372 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\development contract.doc 11/21/03 Page 23 DRAFT MORTGAGEE CONSENT TO DEVELOPMENT CONTRACT , which holds a mortgage on the subject property, the development of which is governed by the foregoing Development Contract, agrees that the Development Contract shall remain in full force and effect even if it forecloses on its mortgage. Dated this _ day of ,20_ STATE OF MINNESOTA ) ( ss. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of 20_, by NOTARY PUBLIC DRAFTED BY: City of Prior Lake 16200 Eagle Creek Avenue SE Prior Lake, Minnesota 55372 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\development contract.doc 11/21/03 Page 24 DRAFT CONTRACT PURCHASER CONSENT TO DEVELOPMENT CONTRACT , which/who has a contract purchaser's interest in all or part of the subject property, the development of which is governed by the foregoing Development Contract, hereby affirms and consents to the provisions thereof and agrees to be bound by the provisions as the same may apply to that portion of the subject property in which there is a contract purchaser's interest. Dated this _ day of ,20_ STATE OF MINNESOTA ) ( ss. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of 20_, by NOTARY PUBLIC DRAFTED BY: City of Prior Lake 16200 Eagle Creek A venue SE Prior Lake, Minnesota 55372 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\development contract.doc 11/21/03 Page 25 EXHIBIT A I I Slfl~W' ~ l!~f!~f' ~ fl ~ '1~~llW'l ~ l~.tl'f'l ~ a.'.I.! ~ of!..I.! ~ ~I . ,ii1l.!a l~=!,"i!a t-ll!" ',.rl!f' '. laa,.J'~ ,t'l.-'~ 'irl.lf I~alf'lf :~a '1llilf t!ta,;lf 'I !~i~ 1~8~$~i~ ~ .' 1~ ifa8ilt~ I~~I~li tl!flili ~~ !iliili !~~II:'J j~;i~'~ f'lfill.~ I! ~ii'l.~ l~l,if! t . f8f. ;r':"l:;';-~itl [I 8! il 1''' ~rl" , l!.tl!; lllilr~ -j t.'l'f; Jr,.f ~ rl'l r ',llil r fa ,~',I r tal" r a'a.}f iIJf,.fi 'f ra~!~ i '!JII i 16a; ~ alll...~ f; If8al ~ Illlt ~ l:!.ior !i1iir1r Itl- ,;!.!.- f iJ'JI f lifli: r~ll[;~~ . trri~: !~~I~ : .~[l~i !a!l.-~; . i!!!I; fl,1; ; III"> ta,..II' ~ ~a,l' 11'lf ! ilJllI l!.'!=iII J 1ft; I ~11!j i Iltrf~ ;tlt. ~ ~ . I, ~ a.[ a . . 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Ii ~~ ~i I i It r d - r r '{ f : . ~ I i Ii ~. . 1 ' I f ~J ' f I 2 ~ 1 . 1 I. . .: a~ i [ . i ;1 , c f " .. I ! r: : I I , Q It 'I I , I ~ If I i . t [ I r ~ I ~f 'I r . j , rl Ii r f I f f ~ .1 . II ~ " .1 " .. " , l f J r i'~ ::;j n 1 1- f.t -; I: ! r - lLJ l I ~ s' !k9 : f I I " ~ .1 l..i 1 ~ ._._~ p~ I I ::;j iO (;j J L ~-'-~-~~--~-"""'"-'-'-'~ () ::0 ~ ~ r- OJ )> -< 6 ~ :r: o ~ rn (J) \ \.. r L _~&U_ -:'-~-';;:-7~~';- I .JL> It).. o. -x' I . r " I r v 7\ '1 ,1 I .,-'?-' or I (~ 'I ,I I' r I f'l " ., Ii ,1 i f- i I ir f8 ,I 18 ,r 'L..--1 ., (' I ir I C) I ~ J I 'L--f I m ~~lj ~~_l_ ~_L_ ~~_ I I EXHIBIT A /'1 \/AflAIA-rr:..-CJ \...7LIIVH/I/L/\ F"ii,/E/vtO,\'"{ (J1 __ :,j (i) ~- s: -tJ r~r ). -. ::Q )~ c) S~ (~ Hi CJ . ~IJ Iii CJ ",- S 6l" :i r'l i 'rr c') ::~ It :. ,. -'1 ~ "'t.~.~ '::s!!'/' If ''$0 '~ -------- \~ \~\'" m ", f!r "1J ri~ C1 \~ "~ 0 '1\ 1_, ::0 I '~I r- II IS' l> :\ !il iri I :J' I I.~ ~) ~:! ~ h ~;:;; /:? ~ rI /;~ j~/I - -...," - r , / I or I l/ 'S ~I!' 4 / I ~ ~,~I ;j, 1 I~ ir il ,1/ 1 . 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TRAIL I rn I en \ \ j;;i=:~e~;~1 10 ! it~ ! f"" I )> i~J 0 1. f!r \I ::0 r:~ ~ '~e 0 ~ ~~I ;0 - li~ ); 2: _77.1 ~-I " C/) ~ ~h 111 rn S." .., ~fi lli' .- ):. r- III "or I r"" ~ m -< -I 0 ~rfH ~ ~ii' ...... !i:!j :c ~ 0 s: rn '" ~J C/) 88 ...'" son.r......."N ~ ~ '[f'l o. -l i ii HI ~fk9 d~ i ~ fh W ~ ~~ii <... I cm~1 ~p:j I!~ . I{ ',- ~ iO (;J J L r EXHIBIT A o c: j::! r 0 l ti DRAFT EXHIBIT "B" SAMPLE IRREVOCABLE LETTER OF CREDIT No. Date: TO: City of Prior Lake 16200 Eagle Creek Avenue Prior Lake, Minnesota 55372-1715 Dear Sir or Madam: We hereby issue, for the account of (Name of Developer) and in your favor, our Irrevocable Letter of Credit in the amount of $ , available to you by your draft drawn on sight on the undersigned bank. The draft must: a) Bear the clause, "Drawn under Letter of Credit No. (Name of Bank) "; , dated , 20_, of b) Be signed by the Mayor or City Manager of the City of Prior Lake. c) Be presented for payment at (Address of Bank) , on or before 4:00 p.m. on November 30, 20_. This Letter of Credit shall automatically renew for successive on6-year terms unless, at least forty-five (45) days prior to the next annual renewal date (which shall be November 30 of each year), the Bank delivers written notice to the Prior Lake City Manager that it intends to modify the terms of, or cancel, this Letter of Cr:edit. Written notice is effective if sent by certified mail, postage prepaid, and deposited in the U.S. Mail, at least fory-five (45) days prior to the next annual renewal date addressed as follows: Prior Lake City Manager, Prior Lake City Hall, 16200 Eagle Creek Avenue, Prior Lake, Minnesota 55372-1714, and is actually received by the City Manager at least forty-five (45) days prior to the renewal date. This Letter of Credit sets forth in full our understanding which shall not in any way be modified, amended, amplified, or limited by reference to any document, instrument, or agreement, whether or not referred to herein. This Letter of Credit is not assignable. This is not a Notation Letter of Credit. More than one draw may be made under this Letter of Credit. This Letter of Credit shall be governed by the most recent revision of the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce Publication No. 400. We hereby agree that a draft drawn under and in compliance with this Letter of Credit shall be duly honored upon presentation. BY: Its 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\development contract. doc 11/21/03 Page 29 DRAFT EXHIBIT "C" SAMPLE CERTIFICATE OF INSURANCE PROJECT: CERTIFICATE HOLDER: City of Prior Lake 16200 Eagle Creek Avenue Prior Lake, Minnesota 55372-1714 INSURED: ADDITIONAL INSURED: City of Prior Lake AGENT: WORKERS' COMPENSATION: Policy No. Effective Date: Expiration Date: Insurance Company: COVERAGE - Workers' Compensation, Statutory. GENERAL LIABILITY: Policy No. Effective Date: Expiration Date: Insurance Company: ( ) Claims Made ( ) Occurrence LIMITS: [Minimum] Bodily Injury and Death: $1,000,000 for one person $2,000,000 for each occurrence Property Damage: $500,000 for each occurrence -OR- Combination Single Limit Policy $1,000,000 or more COVERAGE PROVIDED: 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\deve1opment contract.doc 11/21/03 Page 30 DRAFT Operations of Contractor: YES Operations of Sub-Contractor (Contingent): YES Does Personal Injury Include Claims Related to Employment? YES Completed Operations/Products: YES Contractual Liability (Broad Form): YES Governmental Immunity is Waived: YES Property Damage Liability Includes: Damage Due to Blasting YES Damage Due to Collapse YES Damage Due to Underground Facilities YES Broad Form Property Damage YES AUTOMOBILE LIABILITY: Policy No. Effective Date: Expiration Date: Insurance Company: (X) Any Auto LIMITS: [Minimum] Bodily Injury: $1,000,000 each person $2,000,000 each occurrence Property Damage: $500,000 each occurrence -OR- Combined Single Limit Policy: $1,000,000 each occurrence ARE ANY DEDUCTIBLES APPLICABLE TO BODILY INJURY OR PROPERTY DAMAGE ON ANY OF THE ABOVE COVERAGES: If so, list: Amount: $ [Not to exceed $1,000.00] SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL MAIL THIRTY (30) DAYS WRITTEN NOTICE TO THE PARTIES TO WHOM TillS CERTIFICATE IS ISSUED. Dated at On BY: Authorized Insurance Representative 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\development contract.doc 11/21/03 Page 31 DRAFT EXHIBIT "D" TO DEVELOPMENT CONTRACT (Oversizing Calculations for Developer Installed Improvements) A. OVERSIZING There is no oversizing with this contract. 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\development contract.doc 11/21/03 Page 32 "EXHIBIT E" ENGINEER'S ESTIMATE CRYSTAL SAY TOWNHOMES Utiiity and Street Construction 212 DEVELOPMENT GROUP, LLC PRIOR LAKE, MN Project No. 2-03-0122 September 23, 2003 LF 1177 .:"1: I~e. 5<) Each 6 1.:< 900. CX) Each 24 1 ::.. 9(.., 00 LF 650 5. 5"'? O. 00 LF 37 ,318. t.a SF 192 ~U.oo Cy 130 {gt:;o. 00 Each 1 I L/.Oo. 00 Sy 56 I 0 :J.OC LF 1510 .3 020,00 $Dl lex,. 70 LF 50 LF 1278 Each 3 Each 3 Each 26 Each 26 LF 620 cy 140 Each 1 Each , SY 25 "EXHIBIT E" ENGINEER'S ESTIMATE CRYSTAL BAY TOWNHOMES Utility and Street Construction 212 DEVELOPMENT GROUP, lLC PRIOR LAKE. MN Project No. 2-{)3-0122 September 23, 20Q3 IS" RCP Stann Sewer CL m J 8" RCP Slol1n Sewer CL m 30" RCP Stonn SewcrCL m 15~ RCP' FES wlTraz;h Gwu-d & Cl. In . R.ap I~" RCP FES wiTnsh Guard & CI UI RipRII Outlet Control Structure (CompIClt~ PC" Dc:ail) 12" PVC Storm Sewer 15" PYe Stcmn Sewer RemO\re & Reins~I1 Existing 30" RcP FBS w/Cl. ill RizlR Construct Catch Basin Manhole, 48" Dill. Construct Catch Basin Manhole 48" w/3' Su Conmuct Can::h Basin 27- Dia. Construct Catch Basin 24" X 36" CODStruct Staon Manhole 48- Dia. CODBtruct Storm Manhole 60" Dia. Rmuwc: .t. R.einstall Zxislu,l( 30" RcP Slorm Sewe:' Build 60" ~lch Basin MJIlhole Ove:.- E;n,l. 30" RO' 4" To Paiorated DraiIltile LF IF LF Each Each Each LF LF LF Each Each Each Each Each Each LF Each LF S+"ee+ S"'5"~ -r('",r~:<.:... 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Q) I x .(0, 011 I'-J - ,A- --..J IA- 16' -0. 1 10'1 ,(.11 EXHIBIT E-1 BID SCHEDULE CITY OF PRIOR LAKE FREMONT AVENUE FROM c.S.A.H. 82 TO 420 FEET SOUTH FREMONT AVENUE STREET CALCULATION Assume no storm sewer as all drainage would flow to catch basins approx. 800 feet south of CSAH 82 Assume 2' subcut, 12" aggregate base, 2.5" bit base, 1.5" bit wear Assume 32 foot wide street and 420 feet from cSAH 82 to Crystal Bay south property line. ENGINEER'S ESTIMATE SCHEDULE NO.1 (STREET) SPEC. ITEM # REF DESCRIPTION UNIT QTY UNIT PRICE 1 2021.501 MOBILIZATION LS 1 $ 5,000.00 2 2104.501 REMOVE CURB & GUTTER LF 840 $ 3.00 3 2104.503 REMOVE BITUMINOUS PAVEMENT SY 1167 $ 1.50 4 2104.513 SAWING BITUMINOUS PAVEMENT LF 72 $ 4.50 5 2104.523 SALVAGE & REINSTALL SIGN EA 2 $ 110.00 6 2105.501 COMMON EXCAVATION (P) CY 916 $ 6.00 7 2105.522 SELECT GRANULAR BORROW (CV) CY 700 $ 10.00 8 2105.525 TOPSOIL BORROW (CV) CY 156 $ 17.00 9 2105.603 SUBGRADE EXCAVATION CY 1375 $ 14.00 10 2112.501 SUBGRADE PREPARATION RS 4.2 $ 220.00 11 2211.501 AGGREGATE BASE, CLASS 5 TON 1071 $ 12.00 12 2331.508 TYPE 41A, WEARING COURSE MIXTURE TON 115 $ 35.00 13 2331.514 TYPE 31 B, BASE COURSE MIXTURE TON 190 $ 30.00 14 2357.502 BIT. MATERIAL FOR TACK COAT GAL 68 $ 2.00 15 2504.602 ADJUST VALVE BOX EA 2 $ 150.00 16 2506.521 INSTALL MC1301-A CASTING EA 1 $ 350.00 17 2506.522 ADJUST FRAME & RING CASTING EA 1 $ 200.00 18 2521.501 4" CONCRETE WALK SF 2100 $ 3.25 19 2531.501 CONCRETE CURB & GUTTER, DESIGN B618 LF 840 $ 8.00 20 2531.507 6" CONCRETE DRIVEWAY PAVEMENT SY 20 $ 38.00 21 2531.507 CONCRETE DRIVEWAY APRONS SY 31 $ 38.00 22 2531.602 CONCRETE PEDESTRIAN CURB RAMP EA 3 $ 100.00 21 2563.601 TRAFFIC CONTROL LS 1 $ 10,000.00 22 2573.502 SILT FENCE, HEAVY DUTY LF 840 $ 3.00 23 2575.505 SODDING, LAWN & BOULEVARD SY 1400 $ 3.00 T SCHEDULE NO.1 (STREET) TOTAL 50% OF THE TOTAL CONSTRUCTION (DEVELOPER RESPONSIBILITY) Cost estimate for Fremont11/17/03 5A TOTAL PRIC $ 5,000.0 $ 2,520.0 $ 1,750.5 $ 324.0 $ 220.0 $ 5,496.0 $ 7,000.0 $ 2,652.0 $ 19,250.0 $ 924.0 $ 12,852.0 $ 4,025.0 $ 5,700.0 $ 136.0 $ 300.0 $ 350.0 $ 200.0 $ 6,825.0 $ 6,720.0 $ 760.0 $ 1,178.0 $ 300.0 $ 10,000.0 $ 2,520.0 $ 4,200.0 $ 101,202.5 $ 50,601 DRAFT EXHIBIT "F" TO DEVELOPMENT CONTRACT CONDITIONS OF PLAT APPROVAL 1. A current title opinion or commitment of title insurance is submitted acceptable to the City Attorney. 2. Payment of all fees prior to release of the final plat mylars. 3. Reductions of the entire final plat be submitted, to the following scales: I" = 200'; and one reduction at no scale which fits onto an 81/2" x 11" sheet of paper. 4. Four mylar sets of the final plat with all required signatures are submitted. 5. The developer provides financial security, acceptable to the City Engineer prior to release of the final plat mylars. 6. The final plat and all pertinent documents must be filed with Scott County within 90 days from the date of final plat approval. Failure to record the documents by March 1,2004, will render the final plat null and void. 1:\03 files\03 subdivisions\03 final plat\crystal bay revised\development contract.doc 11/21/03 Page 40 U) UJ ~ o :c ~ o ~ >- <( co -J ~ ~ a:: () j ~ gel ~ I I .....h ~ ft I 1 EB=i "l . t ft Jl ~! ~ I f I q. 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" -\ " \ U\ fi ~'t \ f I y;. ,'. (J I r COMMON INTEREST COMMUNITY NUMBER A Planned Community CRYSTAL BAY TOWNHOME ASSOCIATION, INC. DECLARATION SECTION 1 SECTION 2 SECTION 3 SECTION 4 SECTION 5 SECTION 6 SECTION 7 SECTION 8 SECTION 9 SECTION 10 SECTION 11 SECTION 12 SECTION 13 SECTION 14 SECTION 15 SECTION 16 SECTION 17 SECTION 18 CRYSTAL BAY TOWNHOME ASSOCIATION, INC. DECLARATION TABLE OF CONTENTS DEFINITIONS ...... ... ....... ....... ..... ..... ............................ ........................... -4- DESCRIPTION OF UNITS AND APPURTENANCES ....................... -6- COMMON ELEMENTS AND LIMITED COMMON ELEMENTS............................................................................................ -7- ASSOCIATION MEMBERSHIP: RIGHTS AND OBLIGATIONS..... -9- ADMINISTRATION .... ..... ....... ....... ..................................................... -10- ASSESSMENTS FOR COMMON EXPENSES.................................. -11- RESTRICTIONS ON USE OF PROPERTy....................................... -l5- ARCHITECTURAL CONTROL .... ....... ........... ......................... .......... -17- MAINTENANCE ....... .......................................................................... -19- PARTY WALLS.. ............... ............................ ...................................... -21- INSURANCE ................ ..... ....... ........................................................... -22- RECONSTRUCTION, CONDEMNATION AND EMINENT DOMAIN ...... ..... ..... ....... ....................................................................... -24- EASEMENTS ........... ..... ..... ....... ....................... ................................... -25- COMPLIANCE AND REMEDIES ...................................................... -26- SPECIAL DECLARANT RIGHTS...................................................... -29- AMENDMENTS.................................................................................. -30- RIGHTS OF ELIGIBLE MORTGAGEES........................................... -30- MISCELLANEOUS............................................................................. -32- -2- COMMON INTEREST COMMUNITY NUMBER A Planned Community CRYSTAL BAY TOWNHOME ASSOCIATION, INC. DECLARATION This Declaration is made in the County of Scott, State of Minnesota, on by 212 Development Group, LLC, a Minnesota limited liability company (the "Declarant"), pursuant to the provisions of Minnesota Statutes Chapter 515B, known as the Minnesota Common Interest Ownership Act (the "Act"), for the purpose of creating Crystal Bay, a planned community. WHEREAS, Declarant is the owner of certain real property located in Scott County, Minnesota, legally described in attached hereto and Declarant desires to submit said real property and all improvements thereon (collectively the "Property") to the Act; and WHEREAS, Declarant desires to establish on the Property a plan for a permanent residential community to be owned, occupied and operated for the use, health, safety and welfare of its resident Owners and Occupants, and for the purpose of preserving the value, the structural quality, and the original architectural and aesthetic character, of the Property; and WHEREAS, the Property is not subject to an ordinance referred to in Section 515B.1-106 of the Act, governing conversions to common interest ownership, and is not subject to a master association as defined in the Act; and WHEREAS, Crystal Bay Townhome Association, Inc., a Minnesota non-profit corporation, has been formed as a unit owners association to receive the power to attend to and effectuate policies and programs for the Property, to administer and enforce the covenants and restrictions herein, and to collect and disburse the assessments and charges hereinafter created. NOW, THEREFORE, Declarant makes the Declaration and submits the Property to the Act as a planned community under the name "CRYSTAL BAY TOWNHOME ASSOCIATION" consisting of the Units referred to in Section II, declaring that this Declaration shall constitute covenants to run with the Property, and that the Property shall be owned, used, occupied and conveyed subject to the covenants, restrictions, easements, charges and liens set forth herein, all of which shall be binding upon all Persons owning or acquiring any right, title or interest therein, and their heirs, personal representatives, successors and assigns. -3- SECTION 1 DEFINITIONS The following words when used in the Governing Documents shall have the following meanings (unless the context indicates otherwise): 1.2 "Association" shall mean Crystal Bay Townhome Association, Inc., a nonprofit corporation which is governed pursuant to Chapter 317 A of the laws of the State of Minnesota and Minnesota Statutes Section 515B.3-101, whose members consist of all Owners as defined herein. 1.3 "Board" shall mean the Board of Directors of the Association as provided for in the Bylaws. 1.4 "Bylaws" shall mean the Bylaws governing the operation of the Association, as amended from time to time. 1.5 "Common Elements" shall mean all parts of the Property except the Units, including all improvements thereon, owned by the Association for the common benefit of the Owners and Occupants. The Common Elements are legally described in attached hereto. 1.6 "Common Expenses" shall mean and include all expenditures made or liabilities incurred by or on behalf of the Association and incident to its operation, including without limitation allocations to reserves and those items specifically identified as Common Expenses in the Declaration or Bylaws. 1.7 "Dwelling" shall mean a part of a building consisting of one or more floors, designed and intended for occupancy as a single family residence, and located within the boundaries of a Unit. The Dwelling includes any garage attached thereto or otherwise included within the boundaries of the Unit in which the Dwelling is located. 1.8 "Eligible Mortgagee" shall mean a person or entity owning a mortgage on any Unit, which mortgage is first in priority upon foreclosure to all other mortgages which affect the Unit, and which has requested the Association, in writing, to notify it regarding any proposed action which requires approval by a specified percentage of Eligible Mortgagees. 1.9 "Governing Documents" shall mean this Declaration, and the Articles of Incorporation and Bylaws of the Association, as amended from time to time, all of which shall govern the use and operation of the Property. -4- 1.10 "Member" shall mean all persons who are members of the Association by virtue of being Owners as defined in this Declaration. The words "Owner" and "Member" may be used interchangeably in the Governing Documents. 1.11 "Occupant" shall mean any person or persons, other than an Owner, m possession of or residing in a Unit. 1.12 "Owner" shall mean a Person who owns a Unit, but excluding contract for deed vendors, mortgagees and other secured parties within the meaning of Section 515B.I-I03(29) of the Act. The term "Owner" includes, without limitation, contract for deed vendees and holders of a life estate. 1.13 "Party Waif' shall mean the shared wall between two Dwellings. 1.14 "Person" shall mean a natural individual, corporation, limited liability company, partnership, trustee, or other legal entity capable of holding title to real property. 1.15 "Plat" shall mean the recorded plat depicting the Property pursuant to the requirements of Section 515B.2-11 O( d) of the Act, and satisfying the requirements of Minnesota Statutes Chapter 505, 508 or 508A, as applicable, including any amended or supplemental Plat recorded from time to time in accordance with the Act. 1.16 "Property" as previously set forth above shall mean all of the real property submitted to this Declaration, including the Dwellings and all other structures and improvements located thereon now and in the future. 1.17 "Rules and Regulations" shall mean the Rilles and Regulations of the Association as approved from time to time pursuant to Section 5.6. 1.18 "Unit" shall mean any platted lot subject to this Declaration upon which a Dwelling is located or intended to be located, as shown on the Plat, including all improvements thereon, but excluding the Common Elements. Any terms used in the Governing Documents, and defined in the Act and not in this Section, shall have the meanings set forth in the Act. -5- SECTION 2 DESCRIPTION OF UNITS AND APPURTENANCES 2.1 Units. all of which are restricted exclusively to residential use. Each Unit constitutes a separate parcel of real estate. No additional Units may be created by the subdivision or conversion of Units pursuant to Section 515B.2-112 of the Act. The Unit identifiers and locations of the Units are as shown on the Plat, which is incorporated herein by reference, and a schedule of Units is set forth on The Unit identifier for a Unit shall be its lot and block numbers and the subdivision name. 2.2 Unit Boundaries. The front, rear and side boundaries of each Unit shall be the boundary lines of the platted lot upon which the Dwelling is located or intended to be located as shown on the Plat. The Units shall have no upper or lower boundaries. Subject to this Section 2 and Section 3.2., all spaces, walls and other improvements within the boundaries of a Unit are a part of the Unit. 2.3 Access Easements. Each Unit shall be the beneficiary of an appurtenant easement for access to a public street or highway on or across the Common Elements as shown on the Plat, subject to any restrictions set forth in the Declaration. 2.4 Use and Enjoyment Easements. Each Unit shall be the beneficiary of appurtenant easements for use and enjoyment on and across the Common Elements, and for use and enjoyment of any Limited Common Elements allocated to the Unit, subject to any restrictions authorized by the Declaration. 2.5 Utility and Maintenance Easements. Each Unit shall be subject to and shall be the beneficiary of appurtenant easements for all services and utilities servicing the Units and the Common Elements, and for maintenance, repair and replacement as described in Section 13. 2.6 Encroachment Easements. Each Unit shall be subject to and shall be the beneficiary of the appurtenant easements for encroachments as described in Section 13. 2.7 Recorded Easements. The Property shall be subject to such other easements as may be recorded against it or otherwise shown on the Plat. 2.8 Easements are Appurtenant. All easements and similar rights burdening or benefiting a Unit or any other part of the Property shall be appurtenant thereto, and shall be permanent, subject only to termination in accordance with the Act or the terms of the easement. Any recorded easement benefiting or burdening the Property shall be construed in a manner consistent with, and not in conflict with, the easements created by this Declaration. -6- 2.9 Impairment Prohibited. No person shall materially restrict or impair any easement benefiting or burdening the Property; subject to the Declaration and the right of the Association to establish and enforce reasonable Rules and Regulations governing the use of the Property. 2.7 Declarant's Easements. Declarant shall have and be the beneficiary of easements for construction and sales activities as described in Section 15. SECTION 3 COMMON ELEMENTS AND LIMITED COMMON ELEMENTS 3.1 Common Elements. The Common Elements and their characteristics are as follows: a. All of the Property not included within the Units constitutes Common Elements. The Common Elements include those parts of the Property described in Exhibit C or designated as Common Elements on the Plat or in the Act. The Common Elements are owned by the Association for the benefit of the Owners and Occupants. b. The Common Elements shall be subject to certain easements as described in Section 2, and to the rights of Owners and Occupants in Limited Common Elements appurtenant to their Units. c. Subject to Sections 5, 6 and 9, all maintenance, repair, replacement, management and operation of the Common Elements shall be the responsibility of the Association. d. Common Expenses for the maintenance, repair, replacement, management and operation of the Common Elements shall be assessed and collected from the Owners in accordance with Section 6. 3.2 Limited Common Elements. The Limited Common Elements are those parts of the Common Elements reserved for the exclusive use of the Owners and Occupants of the Units to which they are allocated, and the rights to the use and enjoyment thereof are automatically conveyed with the conveyance of such Units. The Limited Common Elements are described and allocated to the Units as follows: a. Chutes, flues, ducts, pipes, wires, conduit or other utility installations, bearing walls, bearing columns, or any other components or fixtures lying partially within and any partially outside the boundaries of a Unit, and serving only that Unit, are allocated to the Unit they serve. Any portion of such installations serving or affecting the function of more than one Unit or any portion of the Common Elements is a part of the Common Elements, but is not a Limited Common Element. -7- b. Improvements such as decks, patios, balconies, shutters, awnings, window boxes, doorsteps, stoops, perimeter doors and windows, constructed as part of the original construction to serve a single Unit, and authorized replacements and modifications thereof, if located outside the Unit's boundaries, are Limited Common Elements allocated exclusively to that Unit. c. The Property is approved for in instillation and maintenance of a dock with twenty- one (21) individual boat slips (hereinafter "Slips" or "Slip"). Attached as Exhibit D is the "Boat Slip Ledger" which identifies, by Slip Number, the Unit to which the Boat Slip is assigned as a Limited Common Element a. Slip Identification. Each Boat Slip shall be numbered from I to 21 in sequential order and shall remain a Limited Common Element of the Assigned Unit. b. Rights. The Association shall own the dock including the main and individual runners. The Units assigned a Boat Slip as a Limited Common Element shall have the right to utilize the area between the main dock and individual runners of the assigned Boat Slip for mooring watercraft. The owner of the assigned Boat Slip may also utilize the dock and runners which create the Unit Owner's assigned Boat Slip for the mooring of the Owner's watercraft. c. Use. The Boat Slips shall be utilized exclusively for the mooring of recreational watercraft owned or controlled by the Unit Owner. No Owner or Holder of Boat Slip Ownership Certificate shall use or permit its boat slip to be used for commercial purposes. d. Unit Sale. The Boat Slip is a Limited Common Element and is transferred upon sale of the Unit to the new owner and all subsequent owners. The selling Unit owner shall retain no interest in the Boat Slip. e. Maintenance. The dock and individual runners shall be owned by the Association as a Limited Common Element. For purposes of allocating cost and assessments associated with the maintenance, repair, replacement, insurance and all other cost associated with the maintenance of the dock and individual runners shall be paid by the Unit Owners assigned Boat Slips as Limited Common Elements. The cost shall be prorate among the Units owners assigned Boat Slips on a pro rata basis with the numerator being the total associated costs and the denominator being the number of boat slips. f. Rilles. The Association Board may adopt rules and regulations for the operation of the dock and boat slips provided a majority of the Associations Board are Holders of Boat Slip Ownership Certificates. Said Rules and Regulations shall control the operation of the dock and boat slips. At no time may the board elect -8- to reduce the number of Boat Slips to a number less than 21 nor may the Board eliminate or abolish the maintenance of a 21 slip dock on the Property. SECTION 4 ASSOCIATION MEMBERSHIP: RIGHTS AND OBLIGATIONS Membership in the Association and the allocation to each Unit of a portion of the votes in the Association and a portion of the Common Expenses of the Association shall be governed by the following provisions: 4.1 Membership. Each Owner shall be a member of the Association by virtue of Unit ownership, and the membership shall be transferred with the conveyance of the Owner's interest in the Unit. An Owner's membership shall terminate when the Owner's ownership terminates. When more than one Person is an Owner of a Unit, all such Persons shall be members of the Association, but multiple ownership of a Unit shall not increase the voting rights allocated to such Unit nor authorize the division of the voting rights. 4.2 Voting and Common Expenses. Voting rights and Common Expense obligations are allocated equally among the Units; except that special allocations of Common Expenses shall be permitted as provided in Section 6.1. 4.3 Appurtenant Rights and Obligations. The ownership of a Unit shall include the voting rights and Common Expense obligations described in Section 4.2. Said rights, obligations and interests, and the title to the Units, shall not be separated or conveyed separately. The allocation of the rights, obligations and interests described in this Section may not be changed, except in accordance with the Governing Documents and the Act. 4.4 Authority to Vote. The Owner, or some natural person designated to act as proxy on behalf of the Owner, and who need not be an Owner, may cast the vote allocated to such Unit at meetings of the Association; provided, that if there are multiple Owners of a Unit, only the Owner or other Person designated pursuant to the provisions of the Bylaws may cast such vote. The voting rights of Owners are more fully described in Section 3 of the Bylaws. -9- SECTION 5 ADMINISTRATION The administration and operation of the Association and the Property, including but not limited to the acts required of the Association, shall be governed by the following provisions: 5.1 General. The operation and administration of the Association and the Property shall be governed by the Governing Documents, the Rules and Regulations, and the Act. The Association shall, subject to the rights of the Owners set forth in the Governing Documents and the Act, be responsible for the operation, management and control of the Property. The Association shall have all powers described in the Governing Documents, the Act and the statute under which it is incorporated. All power and authority of the Association shall be vested in the Board, unless action or approval by the individual Owners is specifically required by the Governing Documents or the Act. All references to the Association shall mean the Association acting through the Board unless specifically stated to the contrary. 5.2 Operational Purposes. The Association shall operate and manage the Property for the purposes of (i) administering and enforcing the covenants, restrictions, easements, charges and liens set forth in the Governing Documents and the Rules and Regulations (ii) maintaining, repairing and replacing those portions of the Property for which it is responsible and (iii) preserving the value and architectural uniformity and character ofthe Property. 5.3 Binding Effect of Actions. All agreements and determinations made by the Association in accordance with the powers and voting rights established by the Governing Documents or the Act shall be binding upon all Owners and Occupants, and their lessees, guests, heirs, personal representatives, successors and assigns, and all secured parties as defined in the Act. 5.4 Bylaws. The Association shall have Bylaws. The Bylaws and any amendments thereto shall govern the operation and administration of the Association. 5.5 Management. The Board may delegate to a manager or managing agent the management duties imposed upon the Association's officers and directors by the Governing Documents and the Act; provided, however, that such delegation shall not relieve the officers and directors of the ultimate responsibility for the performance of their duties as prescribed by the Governing Documents and by law. 5.6 Rules and Regulations. The Board shall have exclusive authority to approve and implement such reasonable Rules and Regulations as it deems necessary from time to time for the purpose of operating and administering the affairs of the Association and regulating the use of the property; provided that the Rules and Regulations shall not be inconsistent with the Governing Documents or the Act. The inclusion in other parts of the Governing Documents of authority to approve Rules and Regulations shall be deemed to be in furtherance, and not in limitation, of the -lO- authority granted by this Section. New or amended Rules and Regulations shall be effective only after reasonable notice thereof has been given to the Owners. 5.7 Association Assets; Surplus Funds. All funds and real or personal property acquired by the Association shall be held and used for the benefit of the Owners for the purposes stated in the Governing Documents. Surplus remaining after payment of or provision for Common Expenses and reserves shall be credited against future assessments or added to reserves, as determined by the Board. SECTION 6 ASSESSMENTS FOR COMMON EXPENSES 6.1 General. Assessments for Common Expenses shall be determined and assessed against the Units by the Board, in its discretion; subject to the limitations set forth in Section 6.2 regarding annual assessments, Section 6.3 regarding special assessments, and the requirements of Article IX of the Bylaws. Assessments for Common Expenses shall include annual assessments and may include special assessments. Assessments shall be allocated among the Units according to the Common Expense allocations set forth in Section 4.2, subject to the following qualifications: a. Any Common Expense associated with the maintenance, repair, or replacement of a Limited Common Element undertaken by the Association may be assessed exclusively against the Unit or Units to which that Limited Common Element is assigned, on the basis of (i) equality, (ii) square footage of the area being maintained, repaired or replaced, or (iii) the actual cost with respect to each Unit. b. Any Common Expense or portion thereof benefiting fewer than all of the Units may be assessed exclusively against the Units benefited, on the basis of (i) equality, (ii) square footage of the area being maintained, repaired or replaced, or (iii) the actual cost incurred with respect to each Unit. c. The costs of insurance may be assessed in proportion to value, risk or coverage, and the costs of utilities may be assessed in proportion to usage. d. Reasonable attorneys' fees and other costs incurred by the Association in connection with (i) the collection of assessments and (ii) the enforcement of the Governing Documents, the Act, or the Rules and Regulations, against an Owner or Occupant or his or her guests, may be assessed against the Owner's Unit. e. Fees, charges, late charges, fines and interest may be assessed as provided in Section 14. -11- f. Assessments levied under Section 5l5BJ-116 of the Act to pay a judgment against the Association may be levied only against the Units existing at the time the judgment was entered, in proportion to their Common Expense liabilities. g. If any damage to the Common Elements or another Unit is caused by the act or omission of any Owner or Occupant, or his or her guests, the Association may assess the costs of repairing the damage exclusively against the Owner's Unit to the extent not covered by insurance. h. If any installment of an assessment becomes more than thirty (30) days past due, then the Association may, upon ten (10) days written notice of the Owner, declare the entire amount ofthe assessment immediately due and payable in full. 1. In the event Common Expense liabilities are reallocated for any purpose authorized by the Act, Common Expense assessments and any installments thereof not yet due shall be recalculated in accordance with the reallocated Common Expense liabilities. J. Assessments under Subsections 6.1 a through h shall not be considered special assessments as described in Section 6.3. 6.2 Annual Assessments. Annual assessments shall be established and levied by the Board, subject only to the limitations set forth in this section and in Section 6.3. Each annual assessment shall cover all of the anticipated Common Expenses of the Association for that year. Annual assessments shall provide, among other things, for contributions to a separate reserve sufficient to cover the periodic cost of maintenance, repair and replacement of the Common Elements and those parts of the Units for which the Association is responsible. a. Until a Common Expense assessment is levied, Declarant shall pay all accrued expenses of the common interest community. b. After a Common Expense assessment is levied, the annual assessment may be subsequently increased by the Board, subject to Section 6.2 c. c. Until the termination of the period of Declarant control described in Section 15. 7, the increase in the annual assessment for any year shall not exceed the greater of (i) the increase in the U.S. Department of Labor Revised Consumer Price Index for Urban Wage Earners and Clerical Workers for All Items for the prior year; or (ii) 5% of the total annual assessment for the Association's previous year, unless such increase is approved by the vote of a majority of those Owners voting, in person or by proxy, at a meeting called for that purpose. Written notice of the meeting shall be sent to all Owners not less than 21 days nor more than 30 days in advance of the meeting. -12- 6.3 Special Assessments. In addition to annual assessments, and subject to the limitations set forth hereafter, the Board may levy in any assessment year a special assessment against all Units for the purpose of defraying in whole or in part (i) the cost of any foreseen or unbudgeted Common Expense, (ii) general or specific reserves for maintenance, repair or replacement, and (iii) the maintenance, repair or replacement of any part of the Property, and any fixtures or other property related thereto. Notwithstanding the foregoing, any special assessment shall be subject to approval by the vote of a majority of those Owners voting, in person or by proxy, at an annual meeting or at a meeting called for that purpose. Written notice of the meeting shall be sent to all Owners as described in the Bylaws. 6.4 Liability of Owners for Assessments. The obligation of an Owner to pay assessments shall commence at the later of (i) the time at which the Owner acquires title to the Unit, or (ii) the due date of the first assessment levied by the Board, subject to the alternative assessment program described in Section 6.6. The Owner at the time an assessment is payable with respect to the Unit shall be personally liable for the share of the Common Expenses assessed against such Unit. Such liability shall be joint and several where there are multiple Owners of the Unit. The liability is absolute and unconditional. No Owner is exempt from liability for payment of his or her share of Common Expenses by right of set-off, by waiver of use or enjoyment of any part of the Property, by absence from or abandonment of the Unit, by the waiver of any other rights, or by reason of any claim against the Association or its officers, directors or agents, or for their failure to fulfill any duties under the Governing Documents or the Act. The Association may invoke the charges, sanctions and remedies set forth in Section 14, in addition to any remedies provided elsewhere in the Governing Documents, the Rules and Regulations, or by law, for the purpose of enforcing its rights hereunder. 6.5 Declarant's Alternative Assessment Program. The following alternative assessment program is established pursuant to Section 515B.3-115(a)(2) of the Act. Notwithstanding anything to the contrary in this Section 6, if a Common Expense assessment has been levied, any Unit owned by Declarant for initial sale shall be assessed at the rate of 25% of the assessment levied on other Units of the same type until a certificate of occupancy has been issued with respect to the Declarant's Unit by the municipality in which the Unit is located. This reduced assessment shall apply to each Unit owned by Declarant at the time that the Unit is created, and shall continue with respect to the Unit until the certificate of occupancy is issued for that Unit. There are no assurances that this alternative assessment program will have no effect on the level of services for items set forth in the Association's budget. 6.6 Assessment Lien. The Association has a lien on a Unit for any assessment levied against that Unit from the time the assessment becomes due. If an assessment is payable in installments, the full amount of the assessment is a lien from the time the first installment thereof becomes due. Fees, charges, late charges, fines and interest charges imposed by the Association pursuant to Section 515B.3-102(a)(1O), (11) and (12) of the Act are liens, and are enforceable as assessments, under this Section. Recording of the Declaration constitutes record notice and perfection of any lien under this Section, and no further recordation of any notice of or claim for the lien is required. -13- 6.7 Foreclosure of Lien; Remedies. A lien for Common Expenses may be foreclosed against a Unit under the laws of the State of Minnesota (i) by action, or (ii) by advertisement as a lien under a mortgage containing a power of sale. The Association, or its authorized representative, shall have the power to bid at the foreclosure sale and to acquire, hold, lease, mortgage and convey any Unit so acquired. The Owner and any other Person claiming an interest in the Unit, by the acceptance or assertion of any interest in the Unit, grants to the Association a power of sale and full authority to accomplish the foreclosure. The Association shall, in addition, have the right to pursue any other remedy at law or in equity against the Owner who fails to pay any assessment or charge against the Unit. 6.8 Lien Priority; Foreclosure. A lien under this Section is prior to all other liens and encumbrances on a Unit except (i) liens and encumbrances recorded before the Declaration, (ii) any first mortgage on the Unit, and (iii) liens for real estate taxes and other governmental assessments or charges against the Unit. Notwithstanding the foregoing, if (i) a first mortgage on a Unit is foreclosed, (ii) the first mortgage was recorded on or after June l, 1994, and (iii) no Owner redeems during the Owner's period of redemption provided by Chapters 580, 581, or 582, then the holder of the sheriffs certificate of sale from the foreclosure of the first mortgage shall take title to the Unit subject to unpaid assessments for Common Expenses levied pursuant to Sections 515B.3-115(a), (h)(1) to (3), (i), and (1) of the Act which became due, without acceleration, during the six months immediately preceding the first day following the end of the Owner's period of redemption. 6.9 Voluntary Conveyances; Statement of Assessments. In a voluntary conveyance of a Unit the buyer shall not be personally liable for any unpaid assessments and other charges made by the Association against the seller or the seller's Unit prior to the time of conveyance to the buyer, unless expressly assumed by the buyer. However, the lien of such assessments shall remain against the Unit until satisfied. Any seller or buyer shall be entitled to a statement, in recordable form, from the Association setting forth the amount of the unpaid assessments against the Unit, including all assessments payable in the Association's current fiscal year, which statement shall be binding on the Association, seller and buyer. 6.10 Special Fees Due upon Closing of Initial Sale. There is an initial or special fee due from the purchaser to the Association at closing of the initial sale from Declarant to Purchaser in the amount equal to two month's Association Dues as determined by Declarant. -14- SECTION 7 RESTRICTIONS ON USE OF PROPERTY All Owners and Occupants, and all secured parties, by their acceptance or assertion of an interest in the Property, or by their occupancy of a Unit, covenant and agree that, in addition to any other restrictions which may be imposed by the Act or the Governing Documents, the occupancy, use, operation, alienation and conveyance of the Property shall be subject to the following restrictions: 7.1 General. The Property shall be owned, conveyed, encumbered, leased, used and occupied subject to the Governing Documents and the Act, as amended from time to time. All covenants, restrictions and obligations set forth in the Governing Documents are in furtherance of a plan for the Property, and shall run with the Property and be a burden and benefit to all Owners and Occupants and to any other Person acquiring or owning an interest in the Property, their heirs, personal representatives, successors and assigns. 7.2 Subdivision Prohibited. Except as permitted by the Act, no Unit nor any part of the Common Elements may be subdivided or partitioned without the prior written approval of all Owners and all secured parties holding first mortgages on the Units. 7.3 Residential Use. The Units shall be used by Owners and Occupants and their guests exclusively as private, single family residential dwellings, and not for transient, hotel, commercial, business or other non-residential purposes, except as provided in Section 7.4. Any lease of a Unit (except for occupancy by guests with the consent of the Owner) for a period of less than seven (7) days, or any occupancy which includes any services customarily furnished to hotel guests, shall be presumed to be for transient purposes. 7.4 Business Use Restricted. No business, trade, occupation or profession of any kind whether carried on for profit or otherwise, shall be conducted, maintained or permitted in any Unit or the Common Elements; except (i) an Owner or Occupant residing in a Unit may keep and maintain his or her business or professional records in such Unit and handle matters relating to such business by telephone or correspondence therefrom, provided that such uses are incidental to the residential use, do not involve physical alteration of the Unit and do not involve any observable business activity such as signs, advertising displays, bulk mailings, deliveries, or visitation or use of the Unit by customers or employees, and (ii) the Association may maintain offices on the Property for management and related purposes. 7.5 Leasing. Leasing of Units shall be allowed, subject to reasonable regulation by the Association, and subject to the following conditions: (i) that no Unit shall be leased for transient or hotel purposes, (ii) that no Unit may be subleased, (iii) that all leases shall be in writing, and (iv) that all leases shall provide that they are subordinate and subject to the provisions of the Governing Documents, the Rules and Regulations and the Act, and (v) that any failure of the lessee to comply -15- with the terms of such documents shall be a default under the lease. The Association may impose such reasonable Rules and Regulations as may be necessary to implement procedures for the leasing of Units, consistent with this Section. 7.6 Parking. Garages and parking areas on the Property shall be used only for parking of vehicles owned or leased by Owners and Occupants and their guests, and such other incidental uses as may be authorized in writing by the Association. The use of garages, driveways and other parking areas on the Property, and the types of vehicles and personal property permitted thereon, shall be subject to regulation by the Association, including without limitation the right of the Association to tow illegally parked vehicles or to remove unauthorized personal property. 7.7 Animals. No animal may be bred, kept or maintained for business or commercial purposes, anywhere on the Property. However, the Board shall have the exclusive authority to prohibit, or to allow and regulate, by Rules and Regulations, the keeping of animals on the Property. The word "animal" shall be construed in its broadest sense and shall include all living creatures except human beings. 7.8 Quiet Enjoyment; Interference Prohibited. All Owners and Occupants and their guests shall have a right of quiet enjoyment in their respective Units, and shall use the Property in such a manner as will not cause a nuisance, nor unduly restrict, interfere with or impede the use of the Property by other Owners and Occupants and their guests. 7.9 Compliance with Law. No use shall be made of the Property which would violate any then existing municipal codes or ordinances, or state or federal laws, nor shall any act or use be permitted which could cause waste to the Property, cause a material increase in insurance rates on the Property, or otherwise cause any unusual liability, health or safety risk, or expense, for the Association or any Owner or Occupant. 7.10 Alterations. Except for those made by Declarant in consideration of its initial sale of a Unit, no alterations, changes, improvements, repairs or replacements of any type, temporary or permanent, structural, aesthetic or otherwise (collectively referred to as "alterations") shall be made, or caused or allowed to be made, by any Owner or Occupant, or their guests, in any part of the Common Elements, or in any part of the Unit which affects the Common Elements or another Unit or which is visible from the exterior of the Unit, without the prior written authorization of the Board, or a committee appointed by it, as provided in Section 8. The Board, or the appointed committee if so authorized by the Board, shall have authority to establish reasonable criteria and requirements for alterations, and shall be the sole judge of whether the criteria are satisfied. 7.11 Time Shares Prohibited. The time share form of ownership, or any comparable form of lease, occupancy rights or ownership which has the effect of dividing the ownership or occupancy of a Unit into separate time periods, is prohibited. 7.12 Access to Units. In case of emergency, all Units and Limited Common Elements are subject to entry, without notice and at any time, by an officer or member of the Board of the -16- Association, by the Association's management agents or by any public safety personnel. Entry is also authorized for maintenance purposes under Section 9 and for enforcement purposes under Section 14. SECTION 8 ARCIDTECTURAL CONTROL 8.1 Restrictions on Alterations. The following restrictions and requirements shall apply to alterations on the Property: a. Except as expressly provided in this Section 8, and except for alterations made by Declarant in consideration of its initial sale of a Unit, no structure, building, addition, deck, patio, fence, wall, enclosure, window, exterior door, sign, display, decoration, color change, shrubbery, material topographical or landscaping change, nor any other exterior improvements to or alteration of any Dwelling or any other part of a Unit which is visible from the exterior of the Unit (collectively referred to as "alterations"), shall be commenced, erected or maintained in a Unit, unless and until the plans and specifications showing the nature, kind, shape, height, color, materials and locations of the alterations shall have been approved in writing by the Board of Directors or a committee appointed by it. Notwithstanding the foregoing, Declarant's written consent shall also be required for alterations until Declarant no longer owns any unsold Unit and has no further rights to add Additional Real Estate to the Property . b. The criteria for approval shall include and require, at a minimum, (i) substantial uniformity of color, size, location, type and design in relation to existing improvements and topography, (ii) comparable or better quality of materials as used in existing improvements, (iii) ease of maintenance and repair, (iv) adequate protection of the Property, the Association, Owners and Occupants from liability and liens arising out of the proposed alterations, and (v) compliance with governmental laws, codes and regulations. c. Approval of alterations which encroach upon another Unit or the Common Elements shall create an appurtenant easement for such encroachment in favor of the Unit as to which the alterations are approved; provided, that any easement for a deck or patio other than as originally constructed shall be approved by resolution of the Board of Directors and a file of such resolutions shall be maintained permanently as a part of the Association's records. d. Alterations described in Section 16 shall be governed by that Section. -17- 8.2 Review Procedures. The following procedures shall govern requests for alterations under this Section: a. Detailed plans, specifications and related information regarding any proposed alteration, in form and content acceptable to the Board of Directors, shall be submitted to the Board of Directors at least sixty (60) days prior to the projected commencement of construction. No alterations shall be commenced prior to approval. b. The Board of Directors shall give the Owner written notice of approval or disapproval. If the Board of Directors fails to approve or disapprove within sixty (60) days after receipt of said plans and specifications and all other information requested by the Board of Directors, then approval will not be required, and this Section shall be deemed to have been fully complied with so long as the alterations are done in accordance with the plans, specifications and related information which were submitted. c. If no request for approval is submitted, approval is denied, unless (i) the alterations are reasonably visible and (ii) no written notice of the violation has been given to the Owner in whose Unit the alterations are made, by the Association or another Owner, within six (6) months following the date of completion of the alterations. Notice may be direct written notice or the commencement of legal action by the Association or an Owner. The Owner of the Unit in which the alterations are made shall have the burden of proof, by clear and convincing evidence, that the alterations were completed and reasonably visible for at least six (6) months following completion and that the notice was not given. 8.3 Remedies for Violations. The Association may undertake any measures, legal or administrative, to enforce compliance with this Section and shall be entitled to recover from the Owner causing or permitting the violation all attorneys' fees and costs of enforcement, whether or not a legal action is started. Such attorneys' fees and costs shall be a lien against the Owner's Unit and a personal obligation of the Owner as further described in the Act. In addition, the Association shall have the right to enter the Owner's Unit and to restore any part of the Dwelling or Unit to its prior condition if any alterations were made in violation of this Section, and the cost of such restoration shall be a personal obligation of the Owner and a lien against the Owner's Unit as further described in the Act. -18- SECTION 9 MAINTENANCE 9.1 Maintenance by Association. The Association shall provide for all maintenance, repair or replacement (collectively referred to as "maintenance") of the Common Elements. In addition, for the purpose of preserving the architectural character, quality, uniformity and high standards for appearance of the Property, the Association shall (i) provide for exterior maintenance upon the Dwelling in each Unit that is subject to assessment as follows: paint and replace roofs, gutters, downspouts, decks, garage doors (except hardware), and exterior siding and other building surfaces, (ii) provide for lawn, shrub and tree maintenance on all Units, except for watering, (iii), repair and replace the driveway surface with an impervious surface only and not with asphalt or cement, (iv) repair, maintain and replace the main sewer and water lines and lateral lines serving each Dwelling, to the point where such lateral lines physically intersect with the walls of the Dwelling. The Association's obligations shall exclude entry doors, door hardware, air conditioning equipment, glass and window frames, foundations and foundation walls, structural members and any other items not specifically referred to in this Section, unless otherwise approved under Section 9.2. In addition, the Association shall provide for snow removal from the driveway areas, lawn mowing and sprinkler system maintenance. The Association shall have easements as described in Section 13 to perform its obligations under this Section 9. 9.2 Optional Maintenance by Association. In addition to the maintenance described in this Section the Association may, with the approval of a majority of votes cast in person or by proxy at a meeting called for such purposes, undertake to provide additional exterior maintenance to the Units or Dwellings, or maintenance of water and sewer systems within the Units. 9.3 Maintenance by Owner. Except for the exterior maintenance required to be provided by the Association under Section 9.1 or 9.2, all maintenance of the Dwellings and Units shall be the sole responsibility and expense of the Owners thereof. However, the Owners and Occupants shall have a duty to promptly notify the Association of defects in or damage to those parts of the Property which the Association is obligated to maintain. The Association may require that any exterior maintenance to be performed by the Owner be accomplished pursuant to specific uniform criteria established by the Association. The Association may also undertake any exterior maintenance which the responsible Owner fails to or improperly performs and assess the Unit and the Owner for the cost thereof. 9.4 Damage Caused by Owner. Notwithstanding any provision to the contrary in this Section, if, in the judgment of the Association, the need for maintenance of any part of the Property is caused by the willful or negligent act or omission of an Owner or Occupant, or his or her guests, or by a condition in a Unit which the Owner or Occupant has willfully or negligently allowed to exist, the Association may cause such damage or condition to be repaired or corrected (and enter upon any Unit to do so), and the cost thereof may be assessed against the Unit of the Owner responsible -19- for the damage. In the case of party walls between Dwellings, the Owners of the affected Dwellings shall be liable as provided in Section 10. 9.5 Pervious Areas. All driveways, sidewalks and patio areas constructed with permeable pavers shall be maintained as pervious areas. At no time shall the Association or individual owners replace any driveway, sidewalk or patio without the written approval of the Prior Lake - Spring Lake Watershed District ("Watershed District") and City of Prior Lake ("City"), which shall have the joint authority for approval of the replacement materials. With the installation of the pervious areas, the Association shall (i) monitor final site grading and landscape of green areas for prevention of sediments entering base and permeable_pavement surfaces; (ii) install vegetation around permeable pavement to encourage or filter storm water run-off; and (iii) install an observation well to monitor infiltration. Twice each year commencing on May 1, 2006 and October 1, 2006 and on or before each anniversary of those dates ("Inspection Dates"), the Association shall perform an inspection of the driveways, sidewalks and patio areas to assure (i) there are no broken, damaged or raised (114") paving material; (ii) there is no standing water on the paved area; (iii) there is no excess vegetation around the permeable pavement to prevent storm water run-off; (iv) that the surrounding vegetation is in good condition sufficient to aide in storm water run-off; (v) that the observation wells indicate that the system is functioning properly. If the inspection determines that any of the above referenced conditions occur the Association shall perform the required maintenance. Maintenance on the pervious driveways, sidewalks and patios shall include vacuuming, power brushing or machine sweeping sufficient to remove all loose impediments and vegetation between the paving blocks, the replacement of any damaged, raised or missing paving blocks, the reapplication of sand sufficient to fill all gaps, openings or empty crevasses between the paving blocks and replacement of any surrounding dead vegetation ("Maintenance"). The Maintenance shall be performed at a minimum of once per year and a written report of the maintenance shall be filed with the City and Watershed District. The report shall include the nature of the work performed and the name, address and telephone number of the contractor performing the work. If the Association fails to perform the Maintenance on or before the Maintenance Date or fails to perform the Maintenance on any anniversary of the Maintenance Date, the City of Prior Lake or then current City Authority ("City"), after providing the Association written notice of its failure to perform the scheduled Maintenance and thirty (30) days to perform the scheduled Maintenance thereby complying with this provision, is provided the absolute right to draw down the Letter of Credit to contract the scheduled Maintenance and recover the cost of the Maintenance from the Association. The Association shall provide security in the form of a cash deposit or Letter of Credit to be renewed annually initially in the amount of Ten Thousand and No/tOO's ($10,000) to secure performance of the annual Maintenance ("Security Deposit"). After the first annual Maintenance is -20- performed, the Security Deposit shall be in an amount equal to 125% of the cost of the last annual Maintenance. Furthermore, when the permeable pavers have to be removed for Maintenance of the City utilities within its easements, it will be the responsibility of the Association to replace the paver system in its entirety including base, sand and pavers. The City will use reasonable care in removing pavers. Any costs incurred under Provision 9.5 by the City if unpaid by the Association shall become a lien upon the Property. SECTION 10 PARTY WALLS 10.1 General Rules of Law to Apply. Each Dwelling wall built as part of the original construction of the Dwelling and located on the boundary line between Units shall constitute a party wall, and, to the extent not inconsistent with the provisions of this Section, the general rules of law regarding party walls and liability for property damage due to negligent or willful acts or omissions shall apply thereto. 10.2 Repair and Maintenance. The Owners of the Units which share the party wall shall be responsible for the maintenance repair and replacement of the party wall in proportion with their use; provided (i) that any maintenance, repair or replacement necessary due to the acts or omissions of a certain Owner or Occupant sharing such party wall shall be paid for by such Owner, and (ii) that the Association may contract for and supervise the repair of damage caused by an Owner or Occupant and assess the Owners for their respective shares of the cost to the extent not covered by Insurance. 10.3 Destruction by Fire or Other Casualty. If a party wall is destroyed or damaged by fire or other casualty, any Owner who has use of the wall may, with the consent ofthe Association, restore it, and the other Owner shall promptly reimburse the Owner who restored the wall for his or her share of the cost of restoration thereof; provided, however, that the cost of restoration resulting from destruction or other casualty resulting from the acts or omissions of any Owner shall be the financial responsibility of such Owner, and the Association may assess the responsible Owner for his or her share of the costs, without prejudice to the right of an Owner to recover a larger contribution from the other Owner. Insurance claims shall be made promptly following any casualty. 10.4 Weatherproofing. Notwithstanding any other provision of this Section, any Owner who, by his or her negligent or willful act, causes a party wall to be exposed to the elements shall bear the whole cost of the repairs necessary for protection against such elements. 10.5 Right to Contribution Runs With Land. The right of any Owner to contribution from any other Owner under this Section shall be appurtenant to the Unit and shall pass to such Owner's assign and successors in title. -21- '......_^"__,..,"~_." " . ___...."~.~~,,~__.,..__,_'''_~___~,_.~'''_'_,._.,.,_.._.~_.~__......_,,'"_~._<,__,.."."<."M~"..'_~....~..~_.~.,,_~___,..~__.._ 10.6 Arbitration. In the event of any dispute arising concerning a party wall, and if the same is not resolved within thirty (30) days of the event causing the dispute, the matter shall be submitted to binding arbitration under the rules of the American Arbitration Association, upon the written demand of the Association or any Owner whose Dwelling shares the party wall. Each party agrees that the decision of the arbitrators shall be final and conclusive of the questions involved. The fees of the arbitrators shall be shared equally by the parties, but each party shall pay its own attorney fees or other costs to prove its case. SECTION 11 INSURANCE 11.1 Required Coverage. The Association shall obtain and maintain, at a minimum, a master policy or policies of insurance in accordance with the insurance requirements set forth in the Act and the additional requirements set forth herein, issued by a reputable insurance company or companies authorized to do business in the State of Minnesota, as follows; a. Property Insurance in broad form covering all risks of physical loss in an amount equal to one hundred percent (tOO%) of the insurable "replacement cost" of the Property, less deductibles, exclusive of land, footings, excavation and other items normally excluded from coverage (but including all building service equipment and machinery). The policy or policies shall cover personal property owned by the Association. The policy or policies shall also contain "Inflation Guard" and "Agreed Amount" endorsements, if reasonably available. Such policy or policies shall include such additional endorsements, coverages and limits with respect to the foregoing and other hazards as may be required from time to time by the regulations of the FHA or Federal National Mortgage Association ("FNMA") as a precondition to their insuring, purchasing or financing a mortgage on a Unit. The Board may also, on behalf of the Association, enter into binding written agreements with a mortgagee, insurer or servicer, including without limitation the FHA or FNMA, obligating the Association to keep certain specified coverages or endorsements in effect. b. Comprehensive public liability insurance covering the use, operation and maintenance of the Common Elements, with minimum limits of $1,000,000 per occurrence, against claims for death, bodily injury and property damage, and such other risks as are customarily covered by such policies for projects similar in construction, location and use to the Property. The policy shall contain a "severability of interest" endorsement which shall preclude the insurer from denying the claim of an Owner or Occupant because of negligent acts of the Association or other Owners or Occupants. The policy shall include such additional endorsements, coverages and limits with respect to such hazards as may be required by the -22- regulations of the FHA or FNMA as a precondition to their insuring, purchasing or financing a mortgage on a Unit. c. Fidelity bond or insurance coverage against dishonest acts on the part of directors, officers, manager, trustees, employees or persons responsible for handling funds belonging to or administered by the Association if deemed to be advisable by the Board or required by the regulations of the FHA or FNMA as a precondition to the purchase or fInancing of a mortgage on a Unit. The fidelity bond or insurance shall name the Association as the named insured and shall, if required by the regulations of the FHA or FNMA as a precondition to their insuring, purchasing or financing of a mortgage on a Unit, be written in an amount equal to the greater of (i) the estimated maximum of Association funds, including reserves, in the custody of the Association or management agent at any given time while the bond is in force, or (ii) a sum equal to three months aggregate assessments on all Units plus reserves. An appropriate endorsement to the policy to cover any persons who serve without compensation shall be added if the policy would not otherwise cover volunteers, or a waiver of defense based upon the exclusion of persons serving without compensation shall be added. d. Workers' Compensation insurance as required by law. e. Directors' and officers' liability insurance with such reasonable limits and coverages as the Board shall determine from time to time. f. Such other insurance as the Board may determine from time to time to be in the best interests of the Association and the Owners. 11.2 Premiums; Improvements; Deductibles. All insurance premiums shall be assessed and paid as a Common Expense. The insurance need not cover improvements and betterments to the Units installed by Owners, but if improvements and betterments are covered, any increased cost may be assessed against the Units affected. The Association may, in the case of a claim for damage to a Unit, (i) pay the deductible amount as a Common Expense, (ii) assess the deductible amount against the Units affected in any reasonable manner, or (iii) require the Owners of the Units affected to pay the deductible amount directly. 11.3 Loss Payee; Insurance Trustee. All insurance coverage maintained by the Association shall be written in the name of, and the proceeds thereof shall be payable to, the Association (or a qualified insurance trustee selected by it) as trustee for the benefit of the Owners and secured parties, including Eligible Mortgagees, which suffer loss. The Association, or any insurance trustee selected by it, shall have exclusive authority to negotiate, settle and collect upon any claims or losses under any policy maintained by the Association. 11.4 Waivers of Subrogation. All policies of insurance shall contain waivers of subrogation by the insurer against the Association, or an Owner, members of the Owner's -23- household, officers or directors, as applicable, and, if available, waivers of any defense based on co- insurance or of invalidity from any acts of the insured. 11.5 Cancellation; Notice of Loss. All policies of property insurance and comprehensive liability insurance maintained by the Association shall provide that the policies shall not be canceled or substantially modified, for any reason, without at least thirty (30) days prior written notice to the Association, to the FHA or FNMA (if applicable), all of the insureds and all Eligible Mortgagees. 11.6 Restoration in Lieu of Cash Settlement. All policies of property insurance maintained by the Association shall provide that, despite any provisions giving the insurer the right to elect to restore damage in lieu of a cash settlement, such option shall not be exercisable (i) without the prior written approval of the Association (or any Insurance Trustee) or (ii) when in conflict with provisions of any insurance trust agreement to which the Association may be a party, or any requirement by law. 11.7 No Contribution. All policies of insurance maintained by the Association shall be the primary insurance where there is other insurance in the name of the Owner covering the same property, and may not be brought into contribution with any insurance purchased by Owners or their Eligible Mortgagees. 11.8 Effect of Acts Not Within Association~ Control. All policies of insurance maintained by the Association shall provide that the coverage shall not be voided by or conditioned upon (i) any act or omission of an Owner or Eligible Mortgagee, unless acting within the scope of authority on behalf of the Association, or (ii) any failure of the Association to comply with any warranty or condition regarding any portion of the Property over which the Association has no control. 11.9 Owner's Personal Insurance. Each Owner may obtain additional personal insurance coverage at his or her own expense covering fire and other casualty to the Unit, personal property or personal liability. All insurance policies maintained by Owners shall provide that they are without contribution as against the insurance purchased by the Association. SECTION 12 RECONSTRUCTION, CONDEMNATION AND EMINENT DOMAIN 12.1 Reconstruction. The obligations and procedures for the repair, reconstruction or disposition of the Property following damage or destruction thereof shall be governed by the Act. Any repair or reconstruction shall be substantially in accordance with the plans and specifications of the Property as initially constructed and subsequently improved. The Association shall have all authority necessary to cause the Property to be reconstructed, including without limitation the authority (i) to require the Owners to enter into reconstruction contracts on their respective Units, or -24- (ii) to contract for the reconstruction of the Units on behalf of the Owners. Notice of substantial damage or destruction shall be given pursuant to Section 18.10. 12.2 Condemnation and Eminent Domain. In the event of a taking of any part of the Property by condemnation or eminent domain, the provisions of the Act shall govern; provided, that notice shall be given pursuant to Section 18.10. Eligible Mortgagees shall be entitled to priority for condemnation awards in accordance with the priorities established by the Act and the Governing Documents, as their interests may appear. 12.3 Notice. All Eligible Mortgagees shall be entitled to receive notice of any condemnation proceedings or substantial destruction of the Property, and the Association shall give written notice thereof to an Eligible Mortgagee pursuant to Section 18.10. SECTION 13 EASEMENTS 13.1 Easement for Encroachments. Each Unit and the Common Elements, and the rights of the Owners and Occupants therein, shall be subject to an exclusive easement for encroachments in favor of the adjoining Units for fIreplaces, walls, roof overhangs, air conditioning systems, decks, balconies, porches, patios, utility installations and other appurtenances (i) which are part of the original construction of the adjoining Unit or the Property or (ii) which are added pursuant to Section 8. If there is an encroachment by a Dwelling, or other building or improvement located in a Unit, upon another Unit or Dwelling as a result of the construction, reconstruction, repair, shifting, settlement or movement of any part of the Property, an appurtenant easement for the encroachment, for the use, enjoyment and habitation of any encroaching Dwelling, building or improvement, and for the maintenance thereof, shall exist; provided that with respect to improvements or alterations added pursuant to Section 8, no easement shall exist unless the same have been approved, and the proposed improvements constructed, as required by this Declaration. Such easements shall continue for as long as the encroachment exists and shall not affect the marketability of title. 13.2 Easementfor Maintenance, Repair, Replacement and Reconstruction. Each Unit, and the rights of the Owners and Occupants thereof, shall be subject to the rights of the Association to an exclusive, appurtenant easement on and over the Units for the purposes of maintenance, repair, replacement and reconstruction of the Units, and utilities serving the Units, to the extent necessary to fulfill the Association's obligations under the Governing Documents. 13.3 Utilities Easements. The Property shall be subject to non-exclusive, appurtenant easements for all utilities, water and sewer, and similar services, which exist from time to time, as constructed or referred to in the Plat, or as otherwise described in this Declaration or any other duly recorded instrument. a. General non-exclusive Easement. Each Unit, and the rights of the Owners and -25- Occupants thereof, shall be subject to a non-exclusive easement in favor of the other Units for all such services, including without limitation any sewer or water lines servicing other Units. Each Unit shall also be subject to an exclusive easement in favor of the Association and all utilities companies providing service to the Units for the installation and maintenance of utilities metering devices. 13.5 Continuation and Scope of Easements. Notwithstanding anything in this Declaration to the contrary, in no event shall an Owner or Occupant be denied reasonable access to his or her Unit or the right to utility services thereto. The easements set forth in this Section shall supplement and not limit any easements described elsewhere in this Declaration or recorded, and shall include reasonable access to the easement areas through the Units and the Common Elements for purposes of maintenance, repair, replacement and reconstruction. SECTION 14 COMPLIANCE AND REMEDIES Each Owner and Occupant, and any other Person owning or acquiring any interest in the Property, shall be governed by and comply with the provisions of the Act, the Governing Documents, the Rules and Regulations, the decisions of the Association, and such amendments thereto as may be made from time to time. A failure to comply shall entitle the Association to the relief set forth in this Section, in addition to the rights and remedies authorized elsewhere by the Governing Documents and the Act. 14.1 Entitlement to Relief The Association may commence legal action to recover sums due, for damages, for injunctive relief or to foreclose a lien owned by it, or any combination thereof, or an action for any other relief authorized by the Governing Documents or available at law or in equity. Legal relief may be sought by the Association against any Owner, or by an Owner against the Association or another Owner, to enforce compliance with the Governing Documents, the Rules and Regulations, the Act or the decisions of the Association. However, no Owner may withhold any assessments payable to the Association, or take (or omit) other action in violation of the Governing Documents, the Rules and Regulations or the Act, as a measure to enforce such Owner's position, or for any other reason. 14.2 Sanctions and Remedies. In addition to any other remedies or sanctions, expressed or implied, administrative or legal, the Association shall have the right, but not the obligation, to implement anyone or more of the following actions against Owners and Occupants and/or their family, guests, tenants or invitees, who violate the provisions of the Governing Documents, the Rules and Regulations or the Act: a. Commence legal action for damages or equitable relief in any court of competent jurisdiction. -26- b. Impose late charges in any reasonable amount as determined by the Board of Directors in its discretion from time to time for each past due assessment or installment thereof, and any other amounts lawfully assessed against an Owner or a Unit and interest at up to the highest rate permitted by law. c. In the event of default of more than thirty (30) days in the payment of any assessment or installment thereof, all remaining installments of assessments assessed against the Unit owned by the defaulting Owner may be accelerated and shall then be payable in full if all delinquent assessments, together with all costs of collection and late charges, are not paid in full prior to the effective date of the acceleration. Reasonable advance written notice of the effective date of the acceleration shall be given to the defaulting Owner. d. Impose reasonable fines, penalties or charges for each violation of the Act, the Governing Documents or the Rules and Regulations of the Association. e. Suspend the rights of any Owner or Occupant and their family, guests, tenants or invitees to use any Common Element amenities; provided, that this limitation shall not apply to Limited Common Elements or deck, balcony, porch or patio easements, appurtenant to the Unit, and those portions of the Common Elements providing utilities service and access to the Unit. Such suspensions shall be limited to periods of default by such Owners and Occupants in their obligations under the Governing Documents, and for up to thirty (30) days thereafter, for each violation. f. Restore any portions of the Common Elements or Limited Common Elements damaged or altered, or allowed to be damaged or altered, by any Owner or Occupant or his or her family, guests, tenants or invitees in violation of the Governing Documents, and to assess the cost of such restoration against the responsible Owners and their Units. g. Enter any Unit or Limited Common Element in which, or as to which, a violation or breach of the Governing Documents exists which materially affects, or is likely to materially affect in the near future, the health or safety of the other Owners or Occupants, or their guests, or the safety or soundness of any Dwelling or other part of the Property or the property of the Owners or Occupants, and to abate and remove, at the expense of the offending Owner or Occupant, any structure, thing or condition in the Unit or Limited Common Elements which is causing the violation; provided, that any improvements which are a part of a Unit may be altered or demolished only pursuant to a court order or with the agreement of the Owner. h. Foreclose any lien arising under the provisions of the Governing Documents or under law, in the manner provided for the foreclosure of mortgages by action or under a power of sale in the state where the Property is located. -27- 14.3 Rights to Hearing. In the case of imposition of any of the remedies authorized by Section 14.2 d., e., f. or g. of this Section, the Board shall, upon written request of the offender, grant to the offender a fair and equitable hearing as contemplated by the Act. The offender shall be given notice of the nature of the violation and the right to a hearing, and at least ten (10) days within which to request a hearing. The hearing shall be scheduled by the Board and held within thirty (30) days of receipt of the hearing request by the Board, and with at least ten (10) days prior written notice to the offender. If the offending Owner fails to appear at the hearing then the right to a hearing shall be waived and the Board may take such action as it deems appropriate. The decision of the Board and the rules for the conduct of hearings established by the Board shall be final and binding on all parties. The Board's decision shall be delivered in writing to the offender within ten (10) days following the hearing, if not delivered to the offender at the hearing. 14.4 Lien for Charges, Penalties, etc. Any assessments, charges, fines, penalties or interest imposed under this Section shall be a lien against the Unit of the Owner or Occupant against whom the same are imposed and the personal obligation of such Owner in the same manner and with the same priority and effect as assessments under Section 6. The lien shall attach as of the date of imposition of the remedy, but shall not be final as to violations for which a hearing is held until the Board gives written notice following the hearing. All remedies shall be cumulative, and the exercise of, or failure to exercise, any remedy shall not be deemed a waiver of the right to pursue any others. 14.5 Costs of Proceeding and Attorneys' Fees. With respect to any collection measures, or any measures or action, legal, administrative, or otherwise, which the Association takes to enforce the provisions of the Act, Governing Documents or Rules and Regulations, whether or not finally determined by a court or arbitrator, the Association may assess the violator and his or her Unit with any expenses incurred in connection with such enforcement, including without limitation fines or charges previously imposed by the Association, reasonable attorneys' fees, and interest (at the highest rate allowed by law) on the delinquent amounts owed to the Association. 14.6 Liability of Owners' and Occupants' Acts. An Owner shall be liable for the expense of any maintenance, repair or replacement of the Property rendered necessary by such Owner's acts or omissions, or by that of Occupants or family, guests, tenants or invitees in the Owner's Unit, to the extent that such expense is not covered by the proceeds of insurance carried by the Association or such Owner or Occupant. However, any insurance deductible amount and/or increase in insurance rates, resulting from the Owner's acts or omissions may be assessed, against the Owner responsible for the condition and against his or her Unit. 14.7 Enforcement by Owners. The provisions of this Section shall not limit or impair the independent rights of other Owners to enforce the provisions of the Governing Documents, the Rules and Regulations, and the Act as provided therein. -28- SECTION 15 SPECIAL DECLARANT RIGHTS Declarant hereby reserves exclusive and unconditional authority to exercise the following special declarant rights within the meaning of Section 515B.l-103 (32) of the Act for as long as it owns a Unit, or for such shorter period as may be specifically indicated: 15.1 Complete Improvements. To complete all the Units and other improvements indicated on the Plat, or otherwise included in Declarant's development plans or allowed by the Declaration, and to make alterations in the Units and Common Elements to accommodate its sales facilities; 15.2 Relocate Boundaries and Alter Units. To relocate boundaries between Units and to alter Units owned by it, to the extent permitted by Section 16. 15.3 Sales Facilities. To construct, operate and maintain a sales office, management office, model Units and other development, sales and rental facilities within the Common Elements and any Units owned by Declarant from time to time, located anywhere on the Property. 15.4 Signs. To erect and maintain signs and other sales displays offering the Units for sale or lease, in or on any Unit owned by Declarant and on the Common Elements. 15.5 Easements. To have and use easements, for itself, its employees, contractors, representatives, agents and prospective purchasers through and over the Common Elements for the purpose of exercising its special declarant rights; 15.6 Control of Association. To control the operation and administration of the Association, including without limitation the power to appoint and remove the members of the Board pursuant to Section 515B.3-103 of the Act, until the earliest of: (i) voluntary surrender of control by Declarant, (ii) an Association meeting which shall be held within 60 days after conveyance to Owners other than a Declarant of 75% of the total number of Units authorized to be included in the Property or (iii) the date five (5) years following the date of the first conveyance of a Unit to an Owner other than a Declarant. Notwithstanding the foregoing, the Owners other than a Declarant shall have the right to nominate and elect not less than 33 113 % of the directors at a meeting of the Owners which shall be held within 60 days following the conveyance by Declarant of 50% of the total number of Units authorized to be included in the Property. 15.7 Consent to Certain Amendments. As long as Declarant owns any unsold Unit for sale, Declarant's written consent shall be required for any amendment to the Governing Documents or Rules and Regulations which directly or indirectly affects or may affect Declarant's rights under the Governing Documents or the Act. -29- 15.8 Control over Dock and Individual Slips. Declarant retains control and ownership over the dock and individual slips until the Declarant turns the Association over to Owners. SECTION 16 AMENDMENTS This Declaration may be amended by the consent of (i) Owners of Units to which are allocated at least sixty-seven percent (67%) of the votes in the Association, (ii) the percentage of Eligible Mortgagees (based upon one vote per first mortgage owned) required by Section 18 as to matters prescribed by said Section and (iii) the consent of Declarant to certain amendments as provided in Section 15.8. Consent of the Owners may be obtained in writing or at a meeting of the Association duly held in accordance with the Bylaws. Consents of Eligible Mortgagees and the Declarant shall be in writing. Any amendment shall be subject to any greater requirements imposed by the Act. The Amendment shall be effective when recorded as provided in the Act. An affidavit by the Secretary of the Association as to the outcome of the vote, or the execution of the foregoing agreements or consents, shall be adequate evidence thereof for all purposes, including without limitation, the recording of the amendment. SECTION 17 RIGHTS OF ELIGIBLE MORTGAGEES Notwithstanding anything to the contrary in the Governing Documents, and subject to any greater requirements of the Act or other laws, Eligible Mortgagees shall have the following rights and protections: 17.1 Consent to Certain Amendments. The written consent of Eligible Mortgagees representing at least fifty-one (51%) percent of the Units that are subject to first mortgages held by Eligible Mortgagees (based upon one vote per first mortgage owned) shall be required for any Amendment to the Governing Documents which causes any change in the following: (i) voting rights; (ii) increases in assessments that raise the previously assessed amount by more than twenty- five (25%) percent, assessment liens, or priority of assessment liens; (iii) reductions in reserves for maintenance, repair and replacement of Common Elements; (iv) responsibility for maintenance and repairs; (v) reallocation of interests in the Common Elements, or Limited Common Elements, or rights to their use; (vi) redefinition of any Unit boundaries; (vii) convertibility of Units into Common Elements or vice versa; (viii) expansion or contraction of the Property or the addition, annexation or withdrawal of property to or from the Property; (ix) hazard or fidelity insurance requirements; (x) leasing of Units; (xi) imposition of any restrictions on the leasing of Units; (xii) if the common interest community consists of 50 or more Units, a decision by the Association to establish self management when professional management is in effect as required previously by the Governing Documents or by an Eligible Mortgagee; (xiii) restoration or repair of the Property (after a hazard damage or partial condemnation) in a manner other than that specified in the Governing Documents; (xiv) any action to terminate the legal status of the common interest community after -30- substantial destruction or condemnation occurs; or (xv) any provisions that expressly benefit mortgage holders, or insurers or guarantors of mortgages. Notwithstanding the foregoing, implied approval of a proposed amendment shall be assumed when an Eligible Mortgagee fails to submit a response to any written proposal for an amendment within 30 days after it receives proper notice of the proposal, provided that the notice was delivered by certified mail with a return receipt requested. 17.2 Consent to Certain Actions. The written consent of Eligible Mortgagees representing at least sixty-seven (67%) percent of the Units that are subject to first mortgages (based upon one vote per first mortgage owned) shall be required to abandon or terminate the common interest subject to any greater requirements contained in the Act. 17.3 Consent to Subdivision. No Unit may be partitioned or subdivided without the prior written approval of the Owner and Eligible Mortgagee thereof, and the Association. 17.4. No Right of First Refusal. The right of an Owner to sell, transfer or otherwise convey his or her Unit shall not be subject to any right of first refusal or similar restrictions. 17.5 Priority of Lien. Any holder of a first mortgage on a Unit or any purchaser of a first mortgage at a foreclosure sale, that comes into possession of a Unit by foreclosure of the first mortgage or by deed or assignment in lieu of foreclosure, takes the Unit free of any claims for unpaid assessments or any other charges or liens imposed against the Unit by the Association which have accrued against such Unit prior to the acquisition of possession of the Unit by said first mortgage holder or purchaser; (i) except as provided in Section 6.7 and the Act and (ii) except that any unpaid assessments or charges with respect to the Unit may be reallocated among all Units in accordance with their interests in the Common Elements. 17.6 Priority of Taxes and Other Charges. All taxes, assessments and charges that may become liens prior to the first mortgage under state law shall relate only to the individual Units and not to the Property as a whole. 17.7 Priority for Condemnation Awards. No provision of the Governing Documents shall give an Owner, or any other party, priority over any rights of the Eligible Mortgagee of the Unit pursuant to its mortgage in the case of a distribution to such Owner of insurance proceeds or condemnation awards for losses to or a taking of the Unit and/or the Common Elements. The Association shall give written notice to all Eligible Mortgagees of any condemnation or eminent domain proceeding affecting the Property promptly upon receipt of notice from the condemning authority. 17.8 Requirements of Management Agreements. The term of any agreement for professional management of the Property may not exceed two (2) years. Any such agreement must provide at a minimum for termination without penalty or termination fee by either party, (i) with cause upon (30) days prior written notice, and (ii) without cause upon ninety (90) days prior written notice. -31- 17.9 Access to Books and Records/Audit. Eligible Mortgagees shall have the right to examine the books and records of the Association upon reasonable notice during normal business hours, and to receive free of charge, upon written request, copies of the Association's annual reports and other financial statements. Financial statements, including those that are audited, shall be available within one hundred twenty (120) days of the end of the Association's fiscal year. If a request is made by FNMA or any institutional guarantor or insurer of a mortgage loan against a Unit, for an audit of the Association's financial statements for the preceding year, the Association shall cause an audit to be made and deliver a copy to the requesting party. 17.10 Notice Requirements. Upon written request to the Association, identifying the name and address of the holder, insurer or guarantor of a mortgage on a Unit, and the Unit number or address, the holder, insurer or guarantor shall be entitled to timely written notice of: a. a condemnation loss or any casualty loss which affects a material portion of the Property or the Unit securing the mortgage; b. a 60 day delinquency in the payment of assessments or charges owed by the Owner of a Unit on which it holds a mortgage; c. a lapse, cancellation or material modification of any insurance policy maintained by the Association; and d. a proposed action that requires the consent of a specified percentage of Eligible Mortgagees. SECTION 18 MISCELLANEOUS 18.1 Severability. If any term, covenant, or provision of this instrument or any exhibit attached hereto is held to be invalid or unenforceable for any reason whatsoever, such determination shall not be deemed to alter, affect or impair in any manner whatsoever any other portion of this instrument or exhibits. 18.2 Construction. Where applicable the masculine gender of any word used herein shall mean the feminine or neutral gender, or vice versa, and the singular of any word used herein shall mean the plural, or vice versa. References to the Act, or any section thereof, shall be deemed to include any statues amending or replacing the Act, and the comparable sections thereof. 18.3 Tender of Claims. In the event that any incident occurs which could reasonably give rise to a demand by the Association against Declarant for indemnification pursuant to the Act, the Association shall promptly tender the defense of the action to its insurance carrier, and give -32- Declarant written notice of such tender, the specific nature of the action and an opportunity to defend against the action. 18.4 Notices. Unless specifically provided otherwise in the Governing Documents or the Act, all notices required to be given by or to the Association, the Board of Directors, the Association officers or the Owners or Occupants shall be in writing and shall be effective upon hand delivery, or mailing if properly addressed with postage prepaid and deposited in the United States mail; except that registrations pursuant to Section 2.2 of the Bylaws shall be effective upon receipt by the Association. 18.5 Conflicts Among Documents. In the event of any conflict among the provisions of the Act, the Declaration, the Bylaws or any Rules or Regulations approved by the Association, the Act shall control. As among the Declaration, Bylaws and Rules and Regulations, the Declaration shall control, and as between the Bylaws and the Rules and Regulations, the Bylaws shall control. IN WITNESS WHEREOF, the undersigned has executed this instrument the day and year first set forth in accordance with the requirements of the Act. 212 DEVELOPMENT GROUP, LLC, a Minnesota limited liability company By: Its: STATEOFMINNESOTA ) ) COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of 2002, by the of212 Development Group, LLC, a Minnesota limited liability company, on behalf of the company. Notary Public -33- THIS INSTRUMENT DRAFTED BY: John F. Cameron Cameron Law Office 33 South 6th Street, Suite 4tOO Minneapolis, MN 55402 (612) 341-0394 -34- COMMON INTEREST COMMUNITY NUMBER Planned Community CRYSTAL BAY TOWNHOME ASSOCIATION EXHIBIT A TO DECLARATION LEGAL DESCRIPTION OF PROPERTY SUBJECT TO DECLARATION Lots 1 through 24, Block 1, Crystal Bay, Scott County, Minnesota Outlots A and B, Crystal Bay, Scott County, Minnesota -35- COMMON INTEREST COMMUNITY NUMBER A Planned Community CRYST AL BAY EXHIBIT B TO DECLARATION SCHEDULE OF UNITS 1. Lot 1, Block 1, Crystal Bay, Scott County, Minnesota 2. Lot 2, Block 1, Crystal Bay, Scott County, Minnesota 3. Lot 3, Block 1, Crystal Bay, Scott County, Minnesota 4. Lot 4, Block 1, Crystal Bay, Scott County, Minnesota 5. Lot 1, Block 2, Crystal Bay, Scott County, Minnesota 6. Lot 2, Block 2, Crystal Bay, Scott County, Minnesota 7. Lot 3, Block 2, Crystal Bay, Scott County, Minnesota 8. Lot 4, Block 2, Crystal Bay, Scott County, Minnesota 9. Lot 1, Block 3, Crystal Bay, Scott County, Minnesota to. Lot 2, Block 3, Crystal Bay, Scott County, Minnesota 11. Lot 3, Block 3, Crystal Bay, Scott County, Minnesota 12. Lot 4, Block 3, Crystal Bay, Scott County, Minnesota 13. Lot 1, Block 4, Crystal Bay, Scott County, Minnesota 14. Lot 2, Block 4, Crystal Bay, Scott County, Minnesota 15. Lot 3, Block 4, Crystal Bay, Scott County, Minnesota 16. Lot 4, Block 4, Crystal Bay, Scott County, Minnesota 17. Lot 1, Block 5, Crystal Bay, Scott County, Minnesota 18. Lot 2, Block 5, Crystal Bay, Scott County, Minnesota 19. Lot 3, Block 5, Crystal Bay, Scott County, Minnesota 20. Lot 4, Block 5, Crystal Bay, Scott County, Minnesota 21. Lot 5, Block 5, Crystal Bay, Scott County, Minnesota 22. Lot 6, Block 5, Crystal Bay, Scott County, Minnesota 23. Lot 7, Block 5, Crystal Bay, Scott County, Minnesota 24. Lot 8, Block 5, Crystal Bay, Scott County, Minnesota -36- COMMON INTEREST COMMUNITY NUMBER A Planned Community CRYST AL BAY EXHIBIT C TO DECLARATION DESCRIPTION OF COMMON ELEMENTS Outlot B, Crystal Bay, Scott County, Minnesota -37- COMMON INTEREST COMMUNITY NUMBER CRYST AL BAY EXHmIT D TO DECLARATION DESCRIPTION OF ADDITIONAL REAL ESTATE Outlot A and Outlot C, Crystal Bay, Scott County, Minnesota -38- ARTICLES OF INCORPORATION OF CRYSTAL BAY TOWNHOME ASSOCIATION The undersigned, being of legal age, for the purposes of forming a nonprofit corporation under Chapter 317 A of Minnesota Statutes, as amended, and in compliance with the requirements thereof, do hereby voluntarily associate ourselves as a body corporate, not for profit, but for the purposes herein conferred and adopt these Articles of Incorporation. ARTICLE I NAME The name ofthis Corporation shall be CRYSTAL BAY TOWNHOME ASSOCIATION. ARTICLE II REGISTERED OFFICE The registered office of this Corporation shall be at 350 East Highway 212, Chaska, MN 44318. ARTICLE III PURPOSES AND AUTHORITY This Corporation is formed generally for civic, recreational, social and community welfare purposes, and specifically for the purposes of constituting and acting as an association of the owners of units in that certain platted subdivision situated in the City of Prior Lake, Scott County, Minnesota, on property legally described in Exhibit A attached hereto and incorporated herein by reference, (the "Subject Property"). The property is being developed as a townhouse development and is a "planned community" as defined in Chapter 515B of the Minnesota Statutes. For the purposes of managing, maintaining, repairing, replacing and operating certain buildings and facilities located thereon, and any additions thereto as may be made in accordance with the Declaration hereinafter referred to, all for the preservation of the value and amenities of said development, and such additions as may be made thereto as provided in said Declaration, and in fulfillment of such purposes, this Corporation shall have the power: (a) To exercise all of the powers and privileges and to perform all of the duties and obligations of the Association described in that certain Declaration of Covenants, Conditions and Restrictions herein referred to as the "Declaration", applicable to the aforementioned property and recorded or to be recorded in the Office of the County Recorder (or Registrar of Titles) of Scott County, Minnesota, and as the same may be amended from time to time as therein provided, said Declaration being incorporated herein as if set forth at length; (b) To fix, levy, collect and enforce the payment of, by any lawful means, all charges or assessments pursuant to the terms of the Declaration; to pay all expenses in connection therewith and all office and other expenses incident to the conduct of the business of the Association, including all licenses, taxes or governmental charges levied or imposed against the aforementioned property ofthe Association; (c) To acquire (by gift, purchase or otherwise), own, hold, improve, build upon, operate, maintain, convey, sell, lease, transfer, dedicate for public use or otherwise dispose of real or personal property in connection with the affairs of the Association; (d) To borrow money, and with the assent of all the members of each class of membership, mortgage, pledge, deed in trust, or hypothecate any or all of its real or personal property as security for money borrowed or debts incurred; ( e) To dedicate, sell or transfer all or any part of the Common Area to any public agency, authority, utility for such purposes and subject to such conditions as may be agreed to by the members. No such dedication or transfer shall be effective unless an instrument has been signed by all members, agreeing to such dedication, sale or transfer; (f) To participate in mergers and consolidations with other nonprofit corporations organized for the same purposes, provided that any such merger or consolidation shall have the assent of all members; (g) To provide garbage and trash collection; (h) To enforce provisions of the Declaration, and any and all other covenants, conditions or restrictions applicable to the aforementioned property; and (i) To, insofar as permitted by law, and consistent with the provisions and purposes hereof and of the Declaration, do any other thing that, in the opinion of the Board of Directors, will promote the common benefit and enjoyment of the members, including cooperative developments or undertakings with adjacent properties. ARTICLE IV NO PECUNIARY GAIN TO MEMBERS This Corporation does not and shall not afford pecuniary gain, incidentally or otherwise, to its members. None of its members shall be personally liable for corporate debt. Members, however, shall be liable to this Corporation for the assessments as specified in the Declaration. 2 ARTICLE V MEMBERSHIP Every person or entity who is a record owner of a fee or undivided fee simple interest or a contract vendee, in any Unit as described in the Declaration (an "Owner"), shall be a member of this Corporation. The foregoing is intended to exclude contract vendors, unless the contract provides otherwise, and other persons or entities who hold an interest in any Unit merely as security for the performance of any obligation. Membership in this Corporation shall be appurtenant to and may not be separated from the above-described ownership interest in each such Unit. The Owner of any Unit created by the addition of any portion of the Additional Property to the Condominium shall become a Member of the Association upon the recording of an amendment to the Declaration that creates the new Unit. ARTICLE VI VOTING RIGHTS This Corporation shall not have capital stock, but shall have two classes of voting membership: Class A. All members described in Article V hereinabove, with the exception of the Class B member, its successors and assigns, shall be Class A members and shall be entitled to one vote for each Unit owned. When more than one (1) person holds the interest in a Unit required by Article V for membership, all such persons shall be members but the vote for such Unit shall be exercised as they among themselves shall determine, subject, however, to limitation that the voting power for any Unit may not be split. The vote for any Unit which is owned by more than one (1) member may not be cast at any meeting unless such members have filed with the Secretary of the Association prior to such meeting the name of one (1) of their number who then shall be the only person authorized to cast such vote at such meeting. In lieu of such filing prior to every meeting, such members may file, as aforesaid, a document executed by all of them, designating one (1) of their number as the person authorized to cast their vote at all future meetings and such authorization shall continue to be valid until such time as such authorization shall have been rescinded in writing by all of such members. Class B. The Class B member shall be the Declarant (as defined in the Declaration), its successors and assigns, which shall be entitled to three (3) votes for each Unit owned. Upon the end of the Declarant Control Period (as hereinafter defined), the Class B membership shall cease and the Class B member shall be deemed to be a Class A member, if then an Owner, the Declarant shall be entitled to one vote for each Unit in which Declarant holds the interest required for Class A membership. The "Declarant Control Period" shall mean the period commencing on the date of the first conveyance of a Unit to an Owner other than the Declarant and continuing until the earlier of: (i) the date five (5) years after said date or (ii) the date sixty (60) days after the conveyance of seventy-five percent (75%) of the Units to Owners other than Declarant. In determining the 3 Declarant Control Period, the percentage of Units that have been conveyed shall be computed by including all Units that the Declarant has built or reserved the right to build on the Additional Property in the Declaration. The right of any Member to vote and the right of any Member, the Member's family or guests to use any recreational facilities, if any, that may be acquired by the Association shall be suspended during any period in which such Member shall be in default in the payment of any assessment levied by the Association. Such rights may also be suspended, after notice and hearing, for a period not to exceed sixty (60) days for any infraction of any rules or regulations adopted by the Association. ARTICLE VII BOARD OF DIRECTORS The business and affairs of this Corporation shall be managed by a Board of Directors consisting of three Directors, or such other number of Directors as may be determined in accordance with the By-Laws. Until the first full Board of Directors consisting of three members shall have been elected, the first and interim Board of Directors shall consist of three Directors whose names and addresses are as follows: Name Address John Klingelhutz 350 East Highway 212 P.O. Box 89 Chaska, MN 55318 Dennis R. Safe 8929 Aztec Drive Eden Prairie, MN 55347 Tom Heiland 350 East Highway 212 P.O. Box 89 Chaska, MN 55318 Said first directors shall serve until the first annual meeting of the members or until their successors have been duly elected and qualified. ARTICLE VIII ELECTION OF DIRECTORS At the first annual meeting, the members shall elect Directors, each for a term of one year and until their successors have been duly elected and have qualified; and at each annual meeting thereafter the members shall elect any new members to the Board of Directors for a term of one year. 4 ._............-__"_.___"~__~~__,~__~"~_----...___._...._._..._.,,."._.._"'_ ,_.' M.~^.~.'_.~n""^___,~__.._,.____._"_~",,.,>.__.__"" ... Not later than sixty (60) days after the conveyance of fifty percent (50%) of the Units that may be created to owners other than the Declarant (or an affiliate of the Declarant), a special meeting shall be held to elect Directors (the "First Special Election"). At the First Special Election and at all subsequent elections at annual meetings, all members other than the Declarant (or affiliates of the Declarant) shall have the right to nominate and elect not less than 33 113% of the Directors. Directors elected at the First Special Election shall serve until the next annual meeting. For the purposes of this Article, the percentage of the Units which have been conveyed shall be computed by including all Units which the Declarant has reserved the right to build in the Declaration. Not later than the end of the Declarant Control Period, a special meeting shall be held to elect Directors (the "Second Special Election"). At the Second Special Election, all members shall elect a new Board of Directors. A majority of the Directors elected at the Second Special Election and in all elections of Directors thereafter shall be members other than the Declarant (or an affiliate of Declarant). ARTICLE IX WRITTEN ACTION BY DIRECTORS Any action required or permitted to be taken at a meeting of the board of directors of this Corporation may be taken by written action signed by the number of directors that would be required to take the same action at a meeting of the board at which all directors were present. ARTICLE X DIRECTOR LIABILITY To the fullest extent permitted by Chapter 317 A, Minnesota Statutes, as the same exists or may hereafter be amended, a director of this corporation shall not be personally liable to the Corporation or its members for monetary damages for breach of fiduciary duty as a director. ARTICLE XI DURATION The duration of this Corporation shall be perpetual. ARTICLE XII DISSOLUTION This Corporation may be dissolved only with the written consent of members holding at least 90% of the voting power of the Corporation. Written notice of a proposal to dissolve, setting forth the reasons therefor and the disposition to be made of its assets (which shall be consistent with 5 Article XIII hereof) shall be mailed to every member at least ninety (90) days prior to any meeting at which such dissolution shall be voted upon. ARTICLE XIII DISPOSITION OF ASSETS UPON DISSOLUTION Upon dissolution of this Corporation, all of its property and assets, both real and personal, including, but not limited to, sewer and water lines, if any, first shall be dedicated or transferred to an appropriate municipality, public agency or utility, or if such transfer or dedication be refused, such assets then shall be granted, conveyed and assigned to any nonprofit corporation, association, trust or other entity, to be devoted to purposes as nearly as practicable the same as those to which they were required to be devoted by this Corporation. No disposition of the assets of this Corporation shall be effective to divest or diminish any vested right or title of any member in any such assets arising under recorded covenants and deeds applicable to such assets unless made in accordance with the provisions of such covenants and deeds. ARTICLE XIV AMENDMENTS These Articles of Incorporation may be amended only with the assent of 75% of the Members of each class. ARTICLE XV FHA APPROVAL For so long as there is a Class B membership, the following actions will require the prior approval of the Federal Housing Administration: annexation of additional properties, mergers and consolidations, mortgaging of Common Area; dedication of Common Area, dissolution, and amendment of these Articles. ARTICLE XVI INCORPORATORS The following person constitutes the incorporator who is forming this Corporation: Name Address John F. Cameron Cameron Law Office 33 South Sixth Street, Suite 4100 Minneapolis, MN 55402 6 IN WITNESS WHEREOF, we have hereunto executed these ARTICLES OF INCORPORATION effective this _ day of ,2003. John F. Cameron STATEOFMINNESOTA ) ) SS COUNTY OF HENNEPIN ) On this _ day of , 2003, before me, a notary public, personally appeared John F. Cameron, incorporator of the Cameron Law Office to me known to be the person described in, and who executed, the foregoing instrument, and acknowledged that he executed the same as his free act and deed. Notary Public THIS INSTRUMENT WAS DRAFTED BY: Cameron Law Office (JFC) 33 South Sixth Street, Suite 4100 Minneapolis, MN 55402 7 , ---~---_'_~,..---...._---_.~-~~~.~,--,_._-"",--"..,...",>.~,.-- ~". .. '''''-'''~---'"''''-+'''''-'''''--''-''''--'''''''''''._'-"''''.-..--- EXHIBIT A TO ARTICLES OF INCORPORATION OF CRYSTAL BAY TOWNHOME ASSOCIATION SUBJECT PROPERTY LEGAL DESCRIPTION EXHIBIT B TO ARTICLES OF INCORPORATION OF CRYSTAL BAY TOWNHOME ASSOCIATION ADDITIONAL PROPERTY LEGAL DESCRIPTION