HomeMy WebLinkAbout8A - Creekside Estates TIF
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
CITY COUNCIL AGENDA REPORT
MARCH 6, 2002
8A
DONALD RYE, PLANNING DIRECTOR
CONSIDER APPROVAL OF DEVELOPMENT AGREEMENT
FOR TAX INCREMENT DISTRICT 3-1, CREEKSIDE
ESTATES
History On February 27t\ 2001, the City Council adopted a resolution
approving in concept the use of Tax Increment Financing (TIP) to
assist in the development of a senior housing facility on Five Hawks
Avenue. This proj ect consists of 54 units of rental housing for seniors
and 20% of the units will have rents which will allow persons with
incomes of 50% of the County median income. The City Council held
a public hearing on the creation of Development District 3, TIP
District 3-1 and the TIF Plan on December 17th. Following the hearing,
the Council approved the necessary resolutions to create the
Development District and TIF District and to approve the TIF Plan.
The TIF Plan shows that the present value of the assistance to be
provided will be $516,246 over a 20-year period.
Current Circumstances As noted, the TIP plan has been approved as
has the PUD Plan that includes this development. The attached
development agreement is separate from the PUD agreement that
regulates the physical aspects of the project. This agreement spells out
the duties and responsibilities of the developer and the City in
undertaking the project. One of the features of the development
agreement is the income restrictions imposed on 11 (20% )of the units
in the building. This restriction requires that the rents for 11 units shall
not exceed 30% of 50% of the median family income for Scott County
based on U.S. Department of Housing and Urban Development
guidelines. These restrictions are imposed for a period of time that is
the later of 1) the final note payment date or 2), January, 2022 or 3),
the termination of the TIF District. The rates may also be adjusted
annually as a result of changes in the HUD guidelines.
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AN EQUAL OPPORTUNITY EMPLOYER
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ALTERNATIVES:
RECOMMENDED
MOTION:
REVIEWED BY:
This agreement recognizes this is a pay-as-you-go TIF District and any
financial risks as a result of market conditions, legislative changes or
other factors are borne solely by the developer.
City Attorney Suesan Pace has approved the document for form and
execution. Bond Attorney Mary Ippel and financial consultant Sid
Inman of Ehlers Associates have prepared and reviewed this agreement
and have approved the document.
Issues There do not appear to be outstanding issues related to this
agreement. All of the issues associated with this project appear to have
been resolved through the PUD process and the creation of the TIF
district.
r()n~ll1"i()n Staff concludes the agreement is ready for execution.The
developers have executed the attached agreement which is in
legislative format. We will have a clean copy prepared before the
March 6 meeting and ready for signature.
I. Approve execution of the proposed development agreement
2. Deny execution of the development agreement
3. Continue consideration of this request for specific reasons
Alternative 1
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DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF PRIOR LAKE
AND
EAGLE CREEK DEVELOPMENT LLC
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS................................................................................................. 2
Section 1.1 Definitions.......................... .................................................................. 2
ARTICLE II REPRESENTATIONS AND WARRANTIES...................... .................... ...... 4
Section 2.1 Representations and Warranties of the City......................................... 4
Section 2.2 Representations and Warranties ofthe Developer............................... 4
ARTICLE III UNDERTAKINGS BY DEVELOPER AND CITy....................................... 6
Section 3.1 Reimbursement of Site Improvements................................................. 6
Section 3.2 Reimbursement: Note......................................................................... 6
Section 3.3 Compliance With Low and Moderate Income Requirements.............. 7
Section 3.4 No Business Subsidy.. ................................................................... ....... 7
Section 3.5 No Representation Regarding Tax Increment...................................... 7
ARTICLE IV EVENTS OF DEFAULT ...................... ...... .......... ....................... ........... ......... 9
Section 4.1 Events of Default Defined ................................................................... 9
Section 4.2 Remedies on Default.............. ....... ......... ............... ........... ........... ......... 9
Section 4.3 No Remedy Exclusive........................................................................ 10
Section 4.4 No Implied Waiver ............................................................................ 10
Section 4.5 Agreement to Pay Attorney's Fees and Expenses .............................. 10
Section 4.6 Indemnification of City.............. ........................... ...................... ....... 10
ARTICLE V DEVELOPER'S OPTION TO TERMINATE AGREEMENT .....................12
Section 5.1 The Developer's Option to Terminate................................................ 12
Section 5.2 Action to Terminate ........................................................................... 12
Section 5.3 Effect of Termination.... ................................... ............. ..................... 12
ARTICLE VI ADDITIONAL PROVISIONS ...................................................................... 13
Section 6.1 Restrictions on Use ............................................................................ 13
Section 6.2 Conflicts ofInterest.................................. ................ ....... .......... ......... 13
Section 6.3 Titles of Articles and Sections ........................................................... 13
Section 6.4 Notices and Demands ........................................................................ 13
Section 6.5 Counterparts............................................................................ ..... ...... 14
Section 6.6 Law Governing.............................................. .... ................................ 14
Section 6.7 Expiration....... .................................................................................... 14
Section 6.8 Provisions Surviving Rescission or Expiration.................................. 14
Section 6.9 Assignability of Agreement and Note................................................ 14
SIGNAl. TURB S ....... .. .. ....... .. . .. .. .. .. .. ... .. .. .. .. .. .. . ... .. .. . .. .... .. .. . .. .... .. .. .. . .. .. . .. .. .. .. .. .. .. .. .. .. .. .. . .. .... 15 1 6
Section 6.10 Discrimin ation .................................................................................. 14
EXHIBIT A - Description of Development Property ...............................................................A-l 1
EXHIBIT B - Compliance Certificate....................................................................................... B-1 1
EXHIBIT C-----:; Form of Note ................................ ....................... .................... .......................... C-1
EXHIBIT D - Description of Site ImprovementE;Jmorovement.............................................. D-l
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DEVELOPMENT AGREEMENT
THIS AGREEMENT, made as ofthe2 8 day of February 2002, by and between the
City of Prior Lake, Minnesota (the "City"), a municipal corporation organized and existing under
the laws of the State of Minnesota and Eagle Creek Development LLC (the "Developer"), a
Minnesota limited liability company.
WITNESSETH:
WHEREAS, pursuant to Minnesota Statutes, Section 469.124 through 469.134, the City
has formed Development District No.3 (the "Development District") and has adopted a
development program therefor (the "Development Program"); and
WHEREAS, pursuant to the provisions of Minnesota Statutes, Section 469.174 through
469.179, as amended (hereinafter, the "Tax Increment Act"), the City has created, within the
Development District, Tax Increment Financing District No. 3-1 (the "Tax Increment District")
and has adopted a tax increment financing plan, dated December 17,2001 (the "Tax Increment
Plan") which provides for the use oftax increment financing in connection with certain
development within the Development District; and
WHEREAS, in order to achieve the objectives of the Development Program and
particularly to make the land in the Development District available for development by private
enterprise in conformance with the Development Program, the City has determined to assist the
Developer with the financing of certain costs of a Project (as hereinafter defined) to be
constructed within the Tax Increment District as more particularly set forth in this Agreement;
and
WHEREAS, the City believes that the development and construction of the Project, and
fulfillment ofthis Agreement are vital and are in the best interests of the City, the health, safety,
morals and welfare of residents of the City, and in accordance with the public purpose and
provisions of the applicable state and local laws and requirements under which the Project has
been undertaken and is being assisted.
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the other as follows:
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ARTICLE I
DEFINITIONS
Section 1.1 Definitions. All capitalized terms used and not otherwise defined herein
shall have the following meanings unless a different meaning clearly appears from the context:
Agreement means this Agreement, as the same may be from time to time modified,
amended or supplemented;
Business Day means any day except a Saturday, Sunday or a legal holiday or a day on
which banking institutions in the City are authorized by law or executive order to close;
City means the City of Prior Lake, Minnesota;
Compliance Certificate means the Compliance Certificate in substantially the form
attached hereto as Exhibit B;
Developer means Eagle Creek Development LLC, a Minnesota limited liability company,
its successors and assigns;
Development District means the real property described in the Development Program;
Development Program means the development program approved in connection with the
Development District;
Development Property means the real property described in Exhibit A attached to this
Agreement;
Event of Default means any of the events described in Section 4.1 hereof;
Note means the Tax Increment Revenue Note (Eagle Creek Development LLC Project) to
be executed by the City and delivered to the Developer pursuant to Article III hereof, a copy of
which is attached hereto as Exhibit C.
Note Payment Date means August 1, 2004, and each February 1 and August 1 of each
year thereafter to and including February 1,2024; provided, that if any such Note Payment Date
should not be a Business Day, the Note Payment Date shall be the next succeeding Business
Day;
Prime Rate means the rate of interest from time to time publicly announced by U.S. Bank
National Association in St. Paul, Minnesota, as its "prime rate" or "reference rate" or any
successor rate, which rate shall change as and when that rate or successor rate changes;
Project means the development of an approximately 54 unit senior housing facility
consisting of 14 one bedroom, 4 one bedroom plus den and 2 baths units, 32 two bedroom units
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and 4 two bedroom plus den and 2 baths units and related improvements to be located on the
Development Property;
PUD Agreement means Contract For Development of Land as a Planned Unit
Development in the City of Prior Lake to be known as Creekside Estates, dated December 18,
2000;
Site Improvements means the site improvements described on Exhibit D to be undertaken
on the Development Property;
State means the State of Minnesota;
Tax Increments means 90% of the tax increments derived from the Development
Property and received by the City in accordance with the provisions of Minnesota Statutes,
Section 469.177;
Tax Increment Act means Minnesota Statutes, Sections 469.174 through 469.179, as
amended;
Tax Increment District means Tax Increment Financing District No. 3-1 located within
the Development District, the description of which is set forth in the Tax Increment Financing
Plan, which was qualified as a housing district under the Tax Increment Act;
Tax Increment Financing Plan means the tax increment financing plan approved for the
Tax Increment District by the City Council on December 17,2001;
Tax Increment Note or Note means the Tax Increment Revenue Note (Eagle Creek
Development LLC Project) to be executed by the City and delivered to the Developer pursuant to
Article III hereof, a copy of which is attached hereto as Exhibit C;
Termination Date means the final Note Payment Date;
Unavoidable Delays means delays, outside the control of the party claiming its
occurrence, which are the direct result of. strikes, other labor troubles, unusually severe or
prolonged bad weather, acts of God, fire or other casualty to the Project, litigation commenced
by third parties which, by injunction or other similar judicial action or by the exercise of
reasonable discretion, directly results in delays, or acts of any federal, state or local
governmental unit (other than the City) which directly result in delays.
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ARTICLE II
REPRESENT A TIONS AND WARRANTIES
Section 2.1 Representations and Warranties of the City. The City makes the following
representations and warranties:
(1) The City is a municipal corporation and has the power to enter into this
Agreement and carry out its obligations hereunder.
(2) The Tax Increment District is a "housing district" within the meaning of
Minnesota Statutes, Section 469.174, Subdivision 11 and was created, adopted and approved in
accordance with the terms of the Tax Increment Act.
(3) The development contemplated by this Agreement is in conformance with the
development objectives set forth in the Development Program.
(4) To finance certain costs within the Tax Increment District, the City proposes,
subject to the further provisions of this Agreement, to finance a portion of the Site Improvements
installed in connection with the Project as further provided in this Agreement.
(5) The City makes no representation or warranty, either express or implied, as
the Development Property or its condition or the soil conditions thereon, or that the Development
Property shall be suitable for the Developer's purposes or needs.
Section 2.2 Representations and Warranties of the Developer. The Developer makes the
following representations and warranties:
(1) The Developer is a Minnesota limited liability company and has power to
enter into this Agreement and to perform its obligations hereunder and is not in violation of the
laws of the State.
(2) The Developer shall cause the Project to be installed in accordance with the
terms of this Agreement, the Development Program, the PUD Agreement, and all local, state and
federal laws and regulations (including, but not limited to, environmental, zoning, energy
conservation, building code and public health laws and regulations).
(3) The construction ofthe Project would not be undertaken by the Developer,
and in the opinion of the Developer would not be economically feasible within the reasonably
foreseeable future, without the assistance and benefit to the Developer provided for in this
Agreement.
(4) The Developer will use its best efforts to obtain, or cause to be obtained in a
timely manner, all required permits, licenses and approvals, and has met, in a timely manner, all
requirements of all applicable local, state, and federal laws and regulations and the PUD
Agreement which must have been obtained or met before the Project may be lawfully
constructed.
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(5) Neither the execution and delivery of this Agreement, the consummation of
the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of,
the terms, conditions or provision of any contractual restriction, evidence of indebtedness,
agreement or instrument of whatever nature to which the Developer is now a party or by which it
is bound, or constitutes a default under any of the foregoing.
(6) The Developer will cooperate with the City with respect to any litigation
commenced with respect to the Project.
(7) The Developer will cooperate with the City in resolution of any traffic,
parking, trash removal or public safety problems which may arise in connection with the
construction and operation of the Project.
(8) The construction of the Project will commence on or before m.C\ v""
200,?and, barring Unavoidable Delays, the Project will be substantially completed by
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ARTICLE III
UNDERTAKINGS BY DEVELOPER AND CITY
Section 3.1 Reimbursement of Site Improvements. The parties agree that the costs of the
installation ofthe Site Improvements are essential to the successful completion of the Project.
The cost ofthe Site Improvements shall be paid by the Developer. The City shall reimburse the
Developer for the lesser of $516,246 or the costs of the Site Improvements actually incurred by
the Developer as further provided in Section 3.2 hereof. The Developer has provided the City in
connection with the Project a development cost analysis which includes a project budget and a
total development cost (the "Total Development Cost"). The Developer shall provide the City
upon substantial completion of the Project an updated Total Development Cost in a form
acceptable to the City evidencing the actual Total Development Cost incurred by the D.eveloper.
In the event the Total Development Cost is less than $5,264,556 the amount of the Site
Improvements to be reimbursed by the City shall be reduced by the amount that the actual Total
Development Cost incurred by the Developer is less than $5,264,556. The amount of the Site
Improvements paid by the Developer (but not to exceed $516,246) after deducting the amount, if
any, required to be deducted by the foregoing sentence shall be referred to as (the
"Reimbursement Amount").
Section 3.2 Reimbursement: Note. The City shall reimburse for the costs identified in
Section 3.1 through the issuance of the City's Note in substantially the form attached to this
Agreement as Exhibit C, subject to the following conditions:
(1) The Note shall be issued and delivered when the Developer shall have
demonstrated in writing to the reasonable satisfaction of the City that the construction of the
Project has been substantially completed and (i) that the Developer has incurred and paid all of
the Site Improvement costs described in and limited by Section 3.1, (ii) shall have submitted to
the City paid invoices or statements for those costs in an amount not less than the
Reimbursement Amount, and (iii) the Developer has provided the City with the Total
Development Cost as provided in Section 3.1.
(2) The unpaid principal amount of the Note shall bear interest from the date of
issuance of the Note, at 7% per annum. Interest shall be computed on the basis ofa 360 day year
consisting of twelve (12) 30-day months. Interest accruing on the Note from the date of issuance
of the Note to February 1,2004 shall be added to the principal of the Note.
(3) The principal amount of the Note and the interest thereon shall be payable
solely from the Tax Increments.
(4) Provided that the Developer has filed a Compliance Certificate in accordance
with the provisions of Section 3.3, on each Note Payment Date and subject to the provisions of
the Note, the City shall pay, against the principal and interest outstanding on the Note, Tax
Increments received by the City during the preceding 6 months. All such payments shall be
applied first to accrued interest and then to reduce the principal of the Note.
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(5) The Note shall be a special and limited obligation of the City and not a
general obligation of the City, and only Tax Increments shall be used to pay the principal and
interest on the Note. If, on any Note Payment Date, the Tax Increments for the payment of the
accrued and unpaid interest on the Note are insufficient for such purposes, the difference shall be
carried forward, without interest accruing thereon, and shall be paid if and to the extent that on a
future Note Payment Date there are Tax Increments in excess of the amounts needed to pay the
accrued interest then due on the Note.
(6) The City's obligation to make payments on the Note on any Note Payment
Date or any date thereafter shall be conditioned upon the requirement that (A) there shall not at
that time be an Event of Default that has occurred and is continuing under this Agreement and
(B) this Agreement shall not have been rescinded pursuant to Section 4.2(b).
(7) The Note shall be governed by and payable pursuant to the additional terms
thereof, as set forth in Exhibit C. In the event of any conflict between the terms of the Note and
the terms of this Section 3.2, the terms of the Note shall govern. The issuance ofthe Note
pursuant and subject to the terms of this Agreement, and the taking by the City of such additional
actions as bond counsel for the Note may require in connection therewith, are hereby authorized
and approved by the City.
Section 3.3 Compliance With Low and Moderate Income Requirements. In accordance
with the provisions of Minnesota Statutes, Section 469.1761, the Developer covenants that for a
period ending on the later of (i) the final Note Payment Date, (ii) February _, 2022, or (iii) the
termination date of the Tax Increment District at least 20% of the residential units in the Project
will be occupied by individuals whose income is 50% or less of area median gross income. In
addition, the Developer covenants that maximum gross rent (which includes all tenant paid
utilities except telephone) for 20% of units shall not exceed 30% of 50% of the median family
income for Scott County. On or before January 1 and July 1 of each year during the term of this
Agreement commencing July 1,2004 the Developer shall submit to the City a Compliance
Certificate covering the 6 month period preceding the date of the Compliance Certificate
certifying that the Project is in compliance with the provisions of this Section 3.3. The
Developer will establish such monitoring procedures with respect to applicants for and occupants
of dwelling units in the Project as the City may reasonably require to assure compliance with this
Section.
Section 3.4 No Business Subsidy. This Agreement does not constitute a business
subsidy within the meaning of Minnesota Statutes, Sections 116J.993 to 116J.995 by reason of
the exception for assistance of housing.
Section 3.5 No Representation Regarding Tax Increment. The City's financial
commitment under this Agreement with regard to reimbursement for the Site Improvements is a
revenue obligation only and will be paid by the City only out of Tax Increments. The City
makes no representations or warranties that the Tax Increments will be sufficient to reimburse
the Developer for the Site Improvements. The Developer acknowledges that Tax Increment is
subject to calculations by the County and changes in State law and that some or all of the cost of
the Site Improvements may not be repaid prior to February 1,2024. The Developer
acknowledges that the 2001 State legislature enacted significant changes to the Tax Increment
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Act and to the property tax structure in the State, which changes may have an adverse impact on
the amount of Tux Increments. The Developer also acknowledges that the estimates of Tax
Increments which may have been made by the City or its agents, officers or employees are
estimates only and are not intended for the Developer's reliance.
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ARTICLE IV
EVENTS OF DEFAULT
Section 4.1 Events of Default Defined. The following shall be "Events of Default" under
this Agreement and the term "Event of Default" shall mean whenever it is used in this
Agreement anyone or more of the following events:
(a) Failure by the Developer to timely pay any ad valorem real property
taxes assessed with respect to the Development Property.
(b) Failure by the Developer to cause the construction of the Project to be
completed pursuant to the terms, conditions and limitations of this Agreement.
(c) Failure of the Developer to observe or perform any other covenant,
condition, obligation or agreement on its part to be observed or performed under this
Agreement.
(d) The holder of any mortgage on the Development Property or any
improvements thereon, or any portion thereof, commences foreclosure proceedings as a
result of any default under the applicable mortgage documents.
( e) If the Developer shall
(A) file any petition in bankruptcy or for any reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or similar relief
under the United States Bankruptcy Act of 1978, as amended or under any similar
federal or state law; or
(B) make an assignment for the benefit of its creditors; or
(C) admit in writing its inability to pay its debts generally as they
become due; or
(D) be adjudicated a bankrupt or insolvent; or if a petition or
answer proposing the adjudication of the Developer, as a bankrupt or its
reorganization under any present or future federal bankruptcy act or any similar
federal or state law shall be filed in any court and such petition or answer shall not
be discharged or denied within sixty (60) days after the filing thereof; or a
receiver, trustee or liquidator of the Developer, or of the Project, or part thereof,
shall be appointed in any proceeding brought against the Developer, and shall not
be discharged within sixty (60) days after such appointment, or if the Developer,
shall consent to or acquiesce in such appointment.
Section 4.2 Remedies on Default. Whenever any Event of Default referred to in Section
4.1 occurs and is continuing, the City, as specified below, may take anyone or more of the
following actions after the giving of thirty (30) days' written notice to the Developer citing with
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specificity the item or items of default and notifying the Developer that it has thirty (30) days
within which to cure said Event of Default. Uthe Event of Default has not been cured within
said thirty (30) days:
(a) The City may suspend its performance under this Agreement until it
receives assurances from the Developer, deemed adequate by the City, that the Developer
will cure its default and continue its performance under this Agreement.
(b) The City may cancel and rescind the Agreement.
(c) The City may take any action, including legal or administrative action,
in law or equity, which may appear necessary or desirable to enforce performance and
observance of any obligation, agreement, or covenant of the Developer under this
Agreement.
Section 4.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to the
City is intended to be exclusive of any other available remedy or remedies, but each and every
such remedy shall be cumulative and shall be in addition to every other remedy given under this
Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to
exercise any right or power accruing upon any default shall impair any such right or power or
shall be construed to be a waiver thereof, but any such right and power may be exercised from
time to time and as often as may be deemed expedient.
Section 4.4 No Implied Waiver. In the event any agreement contained in this Agreement
should be breached by any party and thereafter waived by any other party, such waiver shall be
limited to the particular breach so waived and shall not be deemed to waive any other concurrent,
previous or subsequent breach hereunder.
Section 4.5 Agreement to Pay Attorney's Fees and Expenses. Whenever any Event of
Default occurs and the City shall employ attorneys or incur other expenses for the collection of
payments due or to become due or for the enforcement or performance or observance of any
obligation or agreement on the part of the Developer herein contained, the Developer agrees that
they shall, on demand therefor, pay to the City the reasonable fees of such attorneys and such
other expenses so incurred by the City.
Section 4.6 Indemnification of City.
(1) The Developer releases from and covenants and agrees that the City, its
governing body members, officers, agents, including the independent contractors, consultants
and legal counsel, servants and employees thereof (hereinafter, for purposes of this Section,
collectively 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 Project, provided that the
foregoing indemnification shall not be effective for any actions of the Indemnified Parties that
are not contemplated by this Agreement.
(2) Except for any willful misrepresentation or any willful or wanton misconduct
of the Indemnified Parties, the Developer agrees to protect and defend the Indemnified Parties,
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now and forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit,
action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly
arising from the actions or inactions of the Developer (or if other persons acting on its behalf or
under its direction or control) under this Agreement, or the transactions contemplated hereby or
the acquisition, construction, installation, ownership, and operation of the Project; provided, that
this indemnification shall not apply to the warranties made or obligations undertaken by the City
in this Agreement or to any actions undertaken by the City which are not contemplated by this
Agreement but shall, in any event and without regard to any fault on the part ofthe City, apply to
any pecuniary loss or penalty (including interest thereon from the date the loss is incurred or
penalty is paid by the City at a rate equal to the Prime Rate) as a result of the Project causing the
Tax Increment District to not qualify or cease to qualify as a "housing district" under Section
469.174, Subdivision 11, of the Act or to violate limitations as to the use of Tax Increments as
set forth in Section 469.176, Subdivision 4d.
(3) All covenants, stipulations, promises, agreements and obligations of the City
contained herein shall be deemed to be the covenants, stipulations, promises, agreements and
obligations of the City and not of any governing body member, officer, agent, servant or
employee of the City.
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ARTICLE V
DEVELOPER'S OPTION TO TERMINATE AGREEMENT
Section 5.1 The Developer's Option to Terminate. This Agreement may be terminated
by Developer, if (i) the Developer is in compliance with all material terms of this Agreement and
no Event of Default has occurred; and (ii) the City fails to comply with any material term of this
Agreement, and, after written notice by the Developer of such failure, the City has failed to cure
such noncompliance within ninety (90) days of receipt of such notice, or, if such noncompliance
cannot reasonably be cured by the City within ninety (90) days, of receipt of such notice, the
City has not provided assurances, reasonably satisfactory to the Developer, that such
noncompliance will be cured as soon as reasonably possible.
Section 5.2 Action to Terminate. Termination of this Agreement pursuant to Section 5.1
must be accomplished by written notification by the Developer to the City within sixty (60) days
after the date when such option to terminate may first be exercised. A failure by the Developer
to terminate this Agreement within such period constitutes a waiver by the Developer of its
rights to terminate this Agreement due to such occurrence or event.
Section 5.3 Effect of Termination. If this Agreement is terminated pursuant to this
Article V, this Agreement shall be from such date forward null and void and of no further effect;
provided, however, the termination of this Agreement shall not affect the rights of either party to
institute any action, claim or demand for damages suffered as a result of breach or default of the
t,erms of this Agreement by the other party, or to recover amounts which had accrued and
become due and payable as of the date of such termination. Upon termination of this Agreement
pursuant to this Article V, the Developer shall be free to proceed with the Project at its own
expense and without regard to the provisions of this Agreement; provided, however, that the
City shall have no further obligations to the Developer with respect to reimbursement of the
expenses set forth in Section 3.2.
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ARTICLE VI
ADDITIONAL PROVISIONS
Section 6.1 Restrictions on Use. The Developer agrees for itself, its successors and
assigns and every successor in interest to the Development Property, or any part thereof, that the
Developer and such successors and assigns shall operate, or cause to be operated, the Project as a
senior housing facility that complies with the low and moderate income requirements set forth in
Section 3.3 and in the PUD Agreement and shall devote the Development Property to, and in
accordance with, the uses specified in this Agreement and in the PUD Agreement.
Section 6.2 Conflicts of Interest. No member of the governing body or other official of
the City shall have any financial interest, direct or indirect, in this Agreement, the Development
Property or the Project, or any contract, agreement or other transaction contemplated to occur or
be undertaken thereunder or with respect thereto, nor shall any such member of the governing
body or other official participate in any decision relating to the Agreement which affects his or
her personal interests or the interests of any corporation, partnership or association in which he
or she is directly or indirectly interested. No member, official or employee of the City shall be
personally liable to the City in the event of any default or breach by the Developer or successors
or on any obligations under the terms of this Agreement.
Section 6.3 Titles of Articles and Sections. Any titles of the several parts, articles and
sections of the Agreement are inserted for convenience of reference only and shall be
disregarded in construing or interpreting any of its provisions.
City at:
(b) in the case of the City is addressed to or delivered personally to the
City of Prior Lake
16200 Eagle Creek Road
Prior Lake, MN 55372-1787
or at such other address with respect to any such party as that party may, from time to time
designate in writing and forward to the other, as provided in this Section. '
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Section 6.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shull constitute one and the same instnlment.
Section 6.6 Law Governing. This Agreement will be governed and construed in
accordance with the laws of the State.
Section 6.7 Expiration. This Agreement shall expire on the Termination Date, unless
earlier terminated or rescinded in accordance with its terms.
Section 6.8 Provisions Surviving Rescission or Expiration. Sections 3.3, 4.5 and 4.6
shall survive any rescission, termination or expiration of this Agreement with respect to or
arising out of any event, occurrence or circumstance existing prior to the date thereof.
Section 6.9 Assignability of Agreement and Note. This Agreement and the Note may be
assigned only with the prior written consent of the City.
Section 6.10 Discrimination. The Developer a1!:rees to abide bv all provisions of
Minn. Stat. Section 181.59. as may be amended from time to time. entitled Discrimination
on Account of Race. Creed. or Color Prohibited in Contract. and the provisions of Minn.
Stat. Section 363.03. as may be amended from time to time. entitled Unfair Discriminatorv
Practices.
The Developer shall not discriminate a1!:ainst any Qualified persons with a disabilitv
who is an emplovee or applicant for emplovment and shall take affirmative action to ensure
that such Qualified individuals are treated without re1!:ard to their disabilitv in re1!:ard to
iob application procedures: the hirin1!: or advancement or dischar1!:e of emplovees:
compensation: iob trainin1!:: and other terms and conditions. and privile1!:es of emplovment
pursuant to the Americans With Disabilities Act of 1990 and Minnesota Human Ri1!:hts
Act.
The Developer a1!:rees that it will not discriminate in hirin1!:. advancement.
compensation. dischar1!:e and any other terms and conditions of emplovment a1!:ainst any
applicants for emplovment or emplovees based upon race. 1!:ender. national ori1!:in. a1!:e.
sexual orientation. affectional preference and/or any other characteristic protected bv
federal. state or City statutes. re1!:ulations or ordinances. The Developer a1!:rees that it will
complv with Title VII of the Civil Ri1!:hts Act of 1964. the EQual Pav Act. A1!:e
Discrimination in Emplovment Act. Minnesota Human Ri1!:hts Act. Minnesota A1!:e
Discrimination Act. all as amended. and other federal. state and City statutes and
ordinances prohibitin1!: discrimination in emDlovment.
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IN WITNESS WHEREOF, the City has caused this Agreement to be duly executed in its
name and on its behalf and its seal to be hereunto duly affixed, and the Developer has caused this
Agreement to be duly executed in its name and on its behalf, on or as of the date first above
written.
CITY OF PRIOR LAKE
By
Its Mayor
By
Its City Manager
(SEAL)
This is a signature page to the Development Agreement by and between the City of Prior Lake
and February _,2002.
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EAGLE CREEK DEVELOPMENT LLC
Bit~
This is a signature page to the Development Agreement by and between the City of Prior Lake
and Eagle Creek Development LLC dated FebruaryG,&, 2002.
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EXHIBIT A
Description of Development Property
Parcel Identification Number:
25-378-003-0
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EXHIBIT B
Compliance Certificate
The undersigned of does hereby certify that as of the
date of this Certificate not less than 20% of the residential units in the housing project as defined
in the Development Agreement dated as of February _,2002 between the City of Prior Lake
and Eagle Creek Development LLC (the "Project") are occupied by individuals whose income is
50% or less of area median gross income. The Developer certifies that maximum gross rent
(which includes all tenant paid utilities, except telephone) does not exceed 30% of 50% ofthe
median family income for Scott County.
Dated this<?2 day of F 8-'&1<-'-." rv",,\, ~LOQ <:::""
EAGLE CREEK DEVELOPMENT LLC
VZ~
By
Its (
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B-1
EXHIBIT C
Form of Note
No. R-
$
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF SCOTT
IN AND FOR THE CITY OF PRIOR LAKE
TAX INCREMENT REVENUE NOTE
(EAGLE L.AKECREEK DEVELOPMENT LLC PROJECT)
The City of Prior Lake, Minnesota (the "City"), hereby acknowledges itself to be
indebted and, for value received, hereby promises to pay the amounts hereinafter described (the
"Payment Amounts") to Eagle Lake Development LLC (the "Developer") or its registered
assigns (the "Registered Owner"), but only in the manner, at the times, from the sources of
revenue, and to the extent hereinafter provided.
The principal amount of this Note shall equal from time to time the principal amount
stated above, as reduced to the extent that such principal installments shall have been paid in
whole or in part pursuant to the terms hereof; provided that the sum of the principal amount
listed above shall in no event exceed $516,246 as provided in that certain Development
Agreement, dated as of February _,2002, as the same may be amended from time to time (the
"Development Agreement"), by and between the City and the Developer. The unpaid principal
amount hereof shall bear interest from the date of this Note at the simple non-compounded rate
of seven percent (7%) per annum. Interest shall be computed on the basis of a 360 day year
consisting of twelve (12) 30-day months. Interest accruing on the Note from the date of issuance
of the Note to Februarv 1, ~2004 shall be added to the principal of the Note.
The amounts due under this Note shall be payable on August 1, 2004, and on each
February 1 and August 1 thereafter to and including February 1, 2024, or, if the first should not
be a Business Day (as defined in the Development Agreement) the next succeeding Business
Day (the "Payment Dates"). On each Payment Date the City shall pay by check or draft mailed
to the person that was the Registered Owner of this Note at the close of the last business day of
the City preceding such Payment Date an amount equal to the sum of the Tax Increments
(hereinafter defined) received by the City during the 6 month period preceding such Payment
Date.
The Payment Amounts due hereon shall be payable solely from 90% of the tax
increments (the "Tax Increments") derived from the Development Property within the City's Tax
Increment Financing District No. 3-1 (the "Tax Increment District") within its Development
District No.3 which are paid to the City pursuant to the provisions of Minnesota Statutes,
Sections 469.174 through 469.179, as the same may be amended or supplemented from time to
time (the "Tax Increment Act"). All such payments shall be applied firstto pay accrued interest
and then to reduce the principal balance of the Note. This Note shall terminate and be of no
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further force and effect following the last Payment Date defined above, on any date upon which
the City shall have terminated the Development Agreement under Section 4.2(b) thereof or the
Developer shall have terminated the Development Agreement under Article V thereof, or on the
date that all principal interest payable hereunder shall have been paid in full, whichever occurs
earliest.
The City makes no representation or covenant, express or implied, that the Tax
Increments will be sufficient to pay, in whole or in part, the amounts which are or may become
due and payable hereunder.
The City's payment obligations hereunder shall be further conditioned on the fact that the
Developer has filed the Compliance Certificates as required by Section 3.3 of the Agreement and
that no Event of Default under the Development Agreement shall have occurred and be
continuing at the time payment is otherwise due hereunder, but such unpaid amounts shall
become payable if said Event of Default shall thereafter have been cured; and, further, if
pursuant to the occurrence of an Event of Default under the Development Agreement the City
elects to cancel and rescind the Development Agreement, the City shall have no further debt or
obligation under this Note whatsoever. Reference is hereby made to all of the provisions of the
Development Agreement, including without limitation Section 3.2 thereof, for a fuller statement
of the rights and obligations of the City to pay the principal of this Note, and said provisions are
hereby incorporated into this Note as though set out in full herein.
This Note is a special, limited revenue obligation and not a general obligation ofthe City
and is payable by the City only from the sources and subject to the qualifications stated or
referenced herein. This Note is not a general obligation ofthe City of Prior Lake, Minnesota,
and neither the full faith and credit nor the taxing powers of the City are pledged to the payment
ofthe principal of this Note and no property or other asset of the City, shall and except the
above-referenced Tax Increments, is or shall be a source of payment of the City's obligations
hereunder.
This Note is issued by the City in aid of financing a project pursuant to and in full
conformity with the Constitution and laws of the State of Minnesota, including the Tax
Increment Act.
This Note may be assigned only with the prior written consent of the City. In order to
assign the Note, the assignee shall surrender the same to the City either in exchange for a new
fully registered note or for transfer ofthis Note on the registration records for the Note
maintained by the City. Each permitted assignee shall take this Note subject to the foregoing
conditions and subject to all provisions stated or referenced herein.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things
required by the Constitution and laws of the State of Minnesota to be done, to have happened,
and to be performed precedent to and in the issuance of this Note have been done, have
happened, and have been performed in regular and due form, time, and manner as required by
law; and that this Note, together with all other indebtedness of the City outstanding on the date
hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the
City to exceed any constitutional or statutory limitation thereon.
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IN WITNESS WHEREOF, City of Prior Lake, Minnesota, by its City Council, has
caused this Note to be executed by the manual signatures of its Mayor and City Manager and has
caused this Note to be issued on , 200_.
City Manager
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Mayor
C-J,
CERTIFICATION OF REGISTRATION
It is hereby certified that the foregoing Note was registered in the name of and
that, at the request ofthe Registered Owner of this Note, the undersigned has this day registered
the Note in the name of such Registered Owner, as indicated in the registration blank below, on
the books kept by the undersigned for such purposes.
NAME AND ADDRESS OF
REGISTERED OWNER
DATE OF
REGISTRATION
SIGNATURE OF CITY
MANAGER
,200_
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EXHIBIT D
Description of Site Improvements
Site grading
Footing and foundations
Landscaping
Lighting for parking lot
SAC and WAC Charges
Sprinkler System
Public Utilities
Parking Facilities
Streets and Sidewalks
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