HomeMy WebLinkAbout8C - Lakefront Plaza
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
CITY COUNCIL AGENDA REPORT
SEPTEMBER 3, 2002
SC1
JANE KANSIER, PLANNING COORDINATOR
CONSIDER APPROVAL OF A RESOLUTION AMENDING
RESOLUTION #01-137 VACATING THE PLATTED ALLEY
AND A 20' WIDE DRAINAGE AND UTILITY EASEMENT
LOCATED IN BLOCK 9, PRIOR LAKE ORIGINAL PLAT
(Case File #01-032)
History: On May 21,2001, the City Council adopted Resolution 01-
61, which approved the vacation of the platted alley and a 20' wide
drainage and utility easement on the property located on the north side
of Dakota Avenue, the west side of Main Avenue and south of
Lakefront Park. This resolution was subject to three conditions,
including the need to combine the existing lots and submit a
development application. The purpose of the conditions was to ensure
the City would maintain the public interest in the alley until the
development occurred. At the time the resolution was adopted, the
City expected the development to move forward in a timelier manner.
However, due to a variety of reasons, including changes to the State
Statutes, this development was delayed.
On December 17,2001, the City Council adopted Resolution 01-137,
amending the original Resolution to delete the original conditions of
approval included in Resolution 01-61. This Resolution was
subsequently recorded.
Current Circumstances: The original applicant has since sold this
property to Lakefront Plaza, LLC. Lakefront Plaza, LLC is in the
process of developing this property with an 80-unit senior
condominium building and 12,000 square feet of retail space. The
surveyor preparing the survey for this development has expressed the
concern that the resolution vacating the alley and easement is not
worded correctly and does not actually vacate the alley.
The Issues: To alleviate (without commenting on) the concerns the
surveyor has with the language, the staff is suggesting Resolution 01-
60 be further amended to satisfy the surveyor's concerns. The
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16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (952) 447-4230 / Fax (952) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
ALTERNATIVES:
RECOMMENDED
MOTION:
REVIEWED BY:
surveyor has suggested language. The amendment does not alter the
intent of the City Councilor the approved resolution in any way, since
the original intent was to vacate both the alley and the easement.
Conclusion: The staff recommends approval of the amended
Resolution. Approval of this Resolution will facilitate the
development of this site.
The City Council has two alternatives:
1. Amend the language in Resolution 01-137, adopted on December
17, 2001, approving the vacation.
2. Deny the amended resolution.
The staff recommends Alternative #1. A motion and second to amend
the language in Resolution 01-137 restating and approving the
vacation of the alley and easement is required.
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RESOLUTION 01-13'~
RESOLUTION PROVIDING FOR THE VACATION OF THE PLATTED ALLEY AND A 20'
WIDE DRAINAGE AND UTILITY EASEMENT LOCATED IN BLOCK 9, PRIOR LAKE
ORIGINAL PLAT
MOTION BY: ~ SECOND BY: ~!/(/./
WHEREAS,
A petition for the vacation of the platted alley and the 20' wide drainage and utility
easement on the property located north. of Dakota Street, west of Main Avenue and
south of Lakefront Park has been duly presented to the City of Prior Lake, signed by
the owners of the property abutting the following described platted alley and
easement situated in the City of Prior Lake, Scott County, Minnesota to wit:
LEGAL DESCRIPTION:
That part of the dedicated alley located within Block 9, PRIOR LAKE ORIGINAL
PLAT, according to the recorded plat thereof, Scott County, Minnesota, as delineated
and dedicated on said PRIOR LAKE ORIGINAL PLAT.
And
The drainage and utility easement described as follows: The North 20 feet of the
South 40 feet of Lot 9, Block 9, PRIOR LAKE ORIGINAL PLAT, Scott County,
Minnesota.
And
WHEREAS, Notice of the public hearing on said petition has been duly published and posted in
accordance with the applicable Minnesota Statutes, and
WHEREAS, A Public Hearing was held on said petition on Monday, May 21,2001, at 7:30 p.m.
in the Council Chambers at the Prior Lake Fire Station #1; and
WHEREAS, The City Council then proceeded to hear all persons interested in said petition and
persons interested afforded the opportunity to present their views and objections to
the granting of said petition; and
WHEREAS, The City Council of Prior Lake has determined that the vacation of said alley and
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Page 1
16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (952) 447-4230 / Fax (952) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
easement would be in the public interest.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, that:
1. The above recitals are herein fully incorporated herein as set forth above.
2. Pursuant to Minnesota Statues 412.851, the following described dedicated alley and drainage and
utility easement is hereby vacated:
Legal Description
That part of the dedicated alley located within Block 9, PRIOR LAKE ORIGINAL PLAT, according
to the recorded plat thereof, Scott County, Minnesota, as delineated and dedicated on said PRIOR
LAKE ORIGINAL PLAT.
And
The drainage and utility easement described as follows: The North 20 feet of the South 40 feet of Lot
9, Block 9, PRIOR LAKE ORIGINAL PLAT, Scott County, Minnesota.
3. The vacation of said dedicated alley and easement is in the public interest.
Passed and adopted this 3rd day of September, 2002.
YES
NO
Haugen Haugen
Gundlach Gundlach
LeMair LeMair
Petersen Petersen
Zieska Zieska
Frank Boyles, City Manager
{Seal}
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Page 2
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
CITY COUNCIL AGENDA REPORT
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SEPTEMBER 3, 2002
8-C-2
DONALD RYE, COMMUNITY DEVELOPMENT DIRECTOR
CONSIDER APPROVAL OF A DEVELOPMENT
AGREEMENT FOR TAX INCREMENT FINANCING
DISTRICT 1-3 AND AUTHORIZING EXECUTION OF SAID
AGREEMENT
History On December 17, 2001, the City Council adopted a resolution
establishing Tax Increment Financing(TIF) District 1-3 in the Downtown
area. The original TIF plan was based on the proposed construction of a
mixed use project consisting of 79 housing units for seniors and 12,000
square feet of commercial space. The original project was proposed by R
and K Sales and a draft development agreement between the City and R
and K Sales was drafted but never executed.
Subsequently, R and K Sales agreed to sell the project site to Wensmann
Homes. This sale is scheduled for closing on September 4th,
Current Circumstances Whilethe TIF agreement is transferable subject to
City approval, there is no signed development agreement as yet between
the parties, that is, between the City and Wensmann Homes. What the
Council is being asked to approve is a slightly modified version of the
agreement that was drafted for execution by Rand K Sales and the City.
The agreement outlines the undertakings for each party, specifies the
City's financial commitment to the project as contained in the TIF District
plan as well as a provision that the level of City assistance may be reduced
from the maximum amount contained in the TIP Plan if the developer's
actual costs fall below those estimated in this agreement.
Issues There are no significant issues involved in this agreement. The
significant issue faced in this process was whether to proceed with the
establishment of a TIP District initially and the amount of assistance that
would be provided. Execution of this agreement is in the nature of a
housekeeping item. It simply formalizes the understandings contained in
162oe\<EgW~~te~~~.rtS~~~5r Lake, Minnesota 55372-1714 / Ph. (952) 447-4230 / Fax (952) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
,~._~.
ALTERNATIVES:
RECOMMENDED
MOTION:
REVIEWED BY:
L:\02FILES\02eda'ccreportl-3agmt.doc
the TIP Plan. Changes in the agreement include a change of the
developer's name, change of dates and the like.
Conclusion Staff concludes that the agreement should be approved and
the Council should authorize its execution. To remain eligible for tax
increment, this agreement must be executed before the project is
undertaken.
1. Approve and authorize execution of a development agreement with
Wensmann Homes for the Lakefront Plaza project.
2. Do not approve the development agreement.
3. Defer action on this item for specific reasons.
Alternative 1. Motion approving a development agreement for Tax
Increment Financing District 1-3 and authorizing execution of said
agreement.
~
Frank
y Manager
2
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF PRIOR LAKE
AND
WENSMANN HOMES, INe.
1413289v3
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 ofthe City......................................... 4
Section 2.2 Representations and Warranties of the Deve1oper............................... 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 Housing Requirements ........................................... 7
Section 3.4 No Business Subsidy........ ...................... ........ ............ ...... ............. ....... 8
Section 3.5 No Representation Regarding Tax Increment...................................... 8
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
Section 6.10 Discrimination........... ................................. ...................... ........ .......... 14
Section 6.11 Prompt Payment to Subcontractors.................................................... 14
EXHIBIT A Description of Development Property ...................................................................... 1
EXHIBIT B Form of Note ............................................................................ ... ..... ...... ................... 1
EXHIBIT C Description of Site Improvements............................................................................. 1
1413289v3
DEVELOPMENT AGREEMENT
THIS AGREEMENT, made as of the 3rd day of September, 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 Wensmann Homes, Inc. (the "Developer"), a Minnesota
corporation.
WITNESSETH:
WHEREAS, pursuant to Minnesota Statutes, Section 469.124 through 469.134, the City
has formed Development District No.1 (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. 1-3 (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 of tax 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 ofthe Project, and
fulfillment ofthis Agreement are vital and are in the best interests ofthe 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:
1413289v3
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;
Developer means Wensmann Homes, Inc., a Minnesota corporation, 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 (Wensmann Homes, Inc. 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 B.
Note Payment Date means August 1, 2004, and each February 1 and August 1 of each
year thereafter to and including February 1,2025; 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 80 unit owner occupied senior housing facility and
12,000 square feet of retail space and related improvements to be located on the Development
Property;
Site Improvements means the site improvements described on Exhibit C to be undertaken
on the Development Property;
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2
State means the State of Minnesota;
Tax Increments means 75% 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. 1-3 located within
the Development District, the description of which is set forth in the Tax Increment Financing
Plan, which was qualified as a redevelopment 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 (Wensmann
Homes, Inc. 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 B;
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 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.
1413289v3
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ARTICLE II
REPRESENTATIONS 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 "redevelopment district" within the meaning
of Minnesota Statutes, Section 469.174, Subdivision 10 and Minnesota Statutes 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 corporation 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, 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 of the 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 which must have
been obtained or met before the Project may be lawfully constructed.
1413289v3
4
(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 October 1, 2002
and, barring Unavoidable Delays, the Project will be substantially completed by December 31,
2003.
1413289v3
5
ARTICLE III
UNDERTAKINGS BY DEVELOPER AND CITY
Section 3.1 Reimbursement of Site Improvements. The parties agree that the costs of the
installation of the 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 $945,160 or the costs of the Site Improvements related to the housing
portion of the Project only actually incurred by the Developer (the "Reimbursement Amount") 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 Developer. In the event the Total
Development Cost is less than $9,050,000 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 $9,050,000. The amount of the Site Improvements paid by the
Developer (but not to exceed $945,160) 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 B, 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 certified by the Architect for the Project as provided in Section 3.1.
(2) The unpaid principal amount ofthe Note shall bear interest from the date of
issuance of the Note, at 8% per annum. Interest shall be computed on the basis ofa 360 day year
consisting of twelve (12) 30-day months.
(3) The principal amount of the Note and the interest thereon shall be payable
solely from the Tax Increments.
(4) 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.
(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
1413289v3
6
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 ofthe 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 of the Note
pursuant and subject to the terms oftrus 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 Housing Requirements.
(1) For each of the units of the Project, the Developer shall provide to the City
upon the closing of the first sale of the unit evidence that one of the purchasers is a person who is
55 or older.
(2) The Developer must cause the Project to be legally established as a
condominium pursuant to the Minnesota Common Interest Ownership Act, Minnesota Statutes,
Chapter 515B. The declaration creating the Condominium must:
(a) state the Project is intended to qualify as "housing for older persons"
pursuant to 42 USCA, S3607(b )(2)(C);
(b) include restrictions which require 80% of the Units to be occupied by
persons 55 years of age or older;
(c) include covenants obligating the Association to publish and adhere to
policies and procedures that demonstrate the intent to qualify as "housing for older
persons" pursuant to 42 USCA, S3607(b )(2)(C);
(d) include covenants requiring the condominium owners' association and
the owners and occupants of each Unit to comply with the rules issued by the United
States Secretary of Housing and Urban Development as contemplated in 42 USCA,
3607(b )(2)( c )(iii);
( e) include covenants and restrictions requiring the condominium owners'
association and the owners and occupants of each Unit to comply with the requirements
of Section 1102.1102(7) of the Prior Lake City Code:
I 413289v3
7
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(f) include a provision stating that the covenants and restrictions this
Section 3.3(2) requires the Developer to include in the Declaration may not be modified
or eliminated without the written consent of the City.
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. No portion of the Tax Increments shall be used to
reimburse the Developer for the retail portion of the Project.
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 1,2025. The Developer
acknowledges that the 2001 State legislature enacted significant changes to the Tax Increment
Act and to the property tax structure in the State, which changes may have an adverse impact on
the amount of Tax 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.
1413289v3
8
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 while
owned by the Developer 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 ofthe 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
1413289v3
9
following actions after the giving of thirty (30) days' written notice to the Developer citing with
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. If the 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.
I 413289v3
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(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,
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 of the 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 "redevelopment district" under
Section 469.174, Subdivision 10, of the Act or to violate limitations as to the use of Tax
Increments as set forth in Section 469.176, Subdivision 4j.
(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 ofthis 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. Ifthis 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
terms 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 and retail facility and shall devote the Development Property to, and in
accordance with, the uses specified in this Agreement.
Section 6.2 Conflicts ofInterest. 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.
Section 6.4 Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand or other communication under this Agreement by any party to any
other shall be sufficiently given or delivered if it is dispatched by registered or certified mail,
postage prepaid, return receipt requested, or delivered personally, and
(a) in the case of the Developer is addressed to or delivered personally to:
Wensmann Homes, Inc.
1895 Plaza Drive
Suite 200
Eagan, MN 55122
(b) in the case of the City is addressed to or delivered personally to the
City at:
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.
1413289v3
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Section 6.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
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 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 ofthe City.
Section 6.10 Discrimination. The Developer agrees to abide by 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 Discriminatory Practices.
The Developer shall not discriminate against any qualified persons with a disability who
is an employee or applicant for employment and shall take affirmative action to ensure that such
qualified individuals are treated without regard to their disability in regard to job application
procedures; the hiring or advancement or discharge of employees; compensation; job training;
and other terms and conditions, and privileges of employment pursuant to the Americans With
Disabilities Act of 1990 and Minnesota Human Rights Act.
The Developer agrees that it will not discriminate in hiring, advancement, compensation,
discharge and any other terms and conditions of employment against any applicants for
employment or employees based upon race, gender, national origin, age, sexual orientation,
affectional preference and/or any other characteristic protected by federal, state or City statutes,
regulations or ordinances. The Developer agrees that it will comply with Title VII of the Civil
Rights Act of 1964, the Equal Pay Act, Age Discrimination in Employment Act, Minnesota
Human Rights Act, Minnesota Age Discrimination Act, all as amended, and other federal, state
and City statutes and ordinances prohibiting discrimination in employment.
Section 6.11 Prompt Payment to Subcontractors. The Developer shall pay any
subcontractor within ten (10) days of the Developer's receipt of payment by the City for
undisputed 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 one
and one-half percent (1.5%) per month or any part of a month. The minimum monthly interest
penalty payment for an unpaid balance of$IOO.OO or more is $10.00. For an unpaid balance of
less than $100.00, 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 disbursements, including attorney's fees, incurred in bringing the action.
1413289v3
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The Developer shall, by an appropriate agreement with each subcontractor, require each
subcontractor to make payments to his subcontractors in a similar manner.
1413289v3
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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 Wensmann Homes, Inc.
1413289v3
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WENSMANN HOMES, INe.
By
Its
This is a signature page to the Development Agreement by and between the City of Prior Lake
and Wensmann Homes, Inc.
1413289v3
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EXHIBIT A
Description of Development Property
Parcel Identification Number:
25-001-063-0
Legal Description:
Lots 1,2,3,4, 7, 8, 9, 10, 11 and 12, Block 9, PRIOR LAKE ORIGINAL PLAT,
according to the recorded plat thereof, Scott County, Minnesota.
Together with:
That part of the vacated alley lying within said Block 9 accruing thereto.
1413289v3
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EXHIBIT B
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
(WENSMANN HOMES, INe. 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 Wensmann Homes, Inc. (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 $945,160 as provided in that certain Development
Agreement, dated as of September 3, 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 eight percent (8.00%) per annum. Interest shall be computed on the basis of a 360 day year
consisting of twelve (12) 30-day months.
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 1,2025, 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 75% of the tax
increments (the "Tax Increments") derived from the Development Property within the City's Tax
Increment Financing District No. 1-3 (the "Tax Increment District") within its Development
District No.1 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 first to pay accrued interest
and then to reduce the principal balance of the Note. This Note shall terminate and be of no
further force and effect following the last Payment Date defined above, on any date upon which
1413289v3
B-1
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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 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 of the 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 of the City of Prior Lake, Minnesota,
and neither the full faith and credit nor the taxing powers of the City are pledged to the payment
of the 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.
1413289v3
B-2
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 of this 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.
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
Mayor
1413289v3
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CERTIFICATION OF REGISTRATION
It is hereby certified that the foregoing Note was registered in the name of and
that, at the request of the 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
Wensmann Homes, Inc.
1895 Plaza Drive
Suite 200
Eagan, MN 55122
,200_
1413289v3
B-4
EXHIBIT C
Description of Site Improvements
Demolition
Site Preparation
Paving
Utilities and Drainage
Landscaping
Footings and Foundations
Sewer Accessibility Charge
Curb and Gutter
Concrete Walks and Aprons
1413289v3
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CITY COUNCIL AGENDA REPORT
September 3, 2002 ~
8C (Item 3) 0(.
Frank Boyles, City Manager-\
AGENDA ITEM: Consider Approval of a Contract Regarding Use of City Property in
Connection with the Construction and Development of Lakefront Plaza.
DISCUSSION: History: Lakefront Plaza is the first step toward implementation of the 2020 Vision
in the Downtown area. The staff has been working with the developer to
determine those portions of City property which will be required during
construction or on a more permanent basis to facilitate this development.
ISSUES:
AL TERNA TIVES:
RECOMMENDED
MOTION:
Current Circumstances: The completion of Lakefront Plaza requires the use of
public property as follows:
1. For storm water ponding since no provision for runoff was incorporated in
the original development of Downtown.
2. For temporary construction access road to provide access to the north
portion of the building.
3. For storage of construction materials and utility installation.
The attached contract, drafted by the City Attorney, sets forth the conditions
associated with use of City property, restoration requirements and security
provisions. The Council will note that paragraph 6.8 needs a number filled in. We
are awaiting numbers from Wensmann's engineer to complete this section.
The developer has received a copy of this agreement and has submitted
comments. Typically, the City has limited use of public property for private
purposes. Given the importance of this project to the implementation of the 2020
Vision and Strategic Plan, there is a public purpose for the City Council to enter
into this agreement which authorizes both temporary and permanent use of public
property. The agreement does protect the public and its assets.
The Council has the following three alternatives:
(1) Motion and Second to adopt a resolution authorizing execution of the
contract as submitted.
(2) Adopt the resolution with amendments.
(3) Take no action or provide staff with further direction.
Alternative (1). Adoption of this resolution is required to execute the agreement
which authorizes conditional use of public property to make this project possible.
16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (952) 447-4230 / Fax (952) 447-4245
I :\COUNCIL\AGNRPTS\2002\LAKEFRONT P~tWSlOJ@6FfMilt:l<l~&RiRTY .DOC
A CONTRACT REGARDING THE USE OF CITY PROPERTY IN CONNECTION WITH
THE CONSTRUCTION AND DEVELOPMENT OF LAKEFRONT PLAZA
This Contract is entered into this 3rd day of September 2002 by and between the City of
Prior Lake, a Minnesota municipal corporation (hereinafter "City") and Wensmann
Homes, Inc., a Minnesota corporation (hereinafter "Lakefront Plaza").
RECITALS
Whereas, the City has adopted an ordinance designed to encourage and promote the
construction of senior housing in the downtown district (C3-Specialty Business); and
Whereas, the City has adopted a document titled 2020 Vision and Strategic Plan
("Vision") which creates a vision for the development of the City of Prior Lake over the
next 20 years; and
Whereas, critical elements of that Vision include: "... Downtown Redevelopment,
Economic Development, Housing Quality and Diversity, Infrastructure and [protection of
the City's] Natural Resources;" and
Whereas, Objective No.1, Suitable Housing and Environment Goals, in the City's 2020
Comprehensive Plan is to "provide opportunities for a variety of affordable, high quality
housing; and
Whereas, Objective No.2, Suitable Housing and Environmental Goals, in the City's 2020
Comprehensive Plan is to "maintain a choice of and encourage development of quality
residential environments; and
Whereas, Lakefront Plaza is an 80-unit senior condominium project with 12,000 square
feet of retail space ("Project") on property located on the north side of Dakota Street,
west of Main Avenue, and South of Lakefront Park and legally described as shown on
attached Exhibit A ("Site"); and
Whereas, Lakefront Plaza is consistent with the vision and critical elements of the 2020
Vision and Strategic Plan and the 2020 Comprehensive Plan; and
Whereas, the City Council has referred to the Lakefront Plaza project as the "corner
stone" of revitalizing the downtown business area; and
Whereas, the revitalization of the downtown business area is an integral part of the 2020
Vision and Strategic Plan; and
Whereas, the City Council is dedicated to developing partnerships with the private sector
to facilitate the vision elements of the City's 2020 Vision and Strategic Plan and the goals
and objectives of the City's 2020 Comprehensive Plan.
NOW THEREFORE, based on the mutual promises, covenants and consideration set
forth herein, the sufficiency of which is not disputed, the parties to this Contract agree as
follows:
1:\02files\02siteplan\lakefront plaza\lakefront plaza contract.doc
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1. Recitals. The Recitals set forth are incorporated herein as if fully set forth.
2. Purpose of this Contract. The purpose of this Contract is to set forth the
agreements and obligations between the City and Lakefront Plaza concerning the
development of the Project, including but not limited to the 80-unit building and
12,000 square feet of retail area, the storm water management facility and trails.
2.1. The Project will be constructed pursuant to various plans on file with the Prior
Lake Planning Department and requisite permits issued by the City. Failure
to comply with any plans or permits shall be a default of this Contract, the
remedies for which are setout in Paragraphs 12 and 13.
2.2. During and after construction of Lakefront Plaza, portions of City owned
property will be used for grading and erosion control, site access and storm
water management.
3. Grading Permit. Lakefront Plaza will obtain a grading permit from the City of Prior
Lake. The grading permit will allow Lakefront Plaza to grade the site, and to grade
portions of City property for City trails and storm water management facilities. The
grading permit will address all of the terms and conditions Lakefront Plaza must
abide by.
3.1. The storm water management facility will be located on City-owned property
as shown on attached Exhibit B.
3.1.1. The storm water management facility will be sized to accommodate
runoff from the Project and from the future planned reconstruction of
Main Avenue.
4. Work Within City Propertv/Right-of-way/Easement Permit. Lakefront Plaza will
obtain a permit to work within City property/right-of-way from the City. The permit
will allow Lakefront Plaza to use a portion of the public right-of-way on Erie Street,
Dakota Street, Main Avenue and Lakefront Park for grading, construction access,
and installation of security fencing during construction of the project. The permit
will address all of the terms and conditions Lakefront Plaza must abide by.
5. Demolition Permit. Lakefront Plaza will obtain a demolition permit from the City
for the demolition of the existing structures on the Site. The demolition permit will
address all of the terms and conditions Lakefront Plaza must abide by regarding
the demolition.
6. License. The City grants Lakefront Plaza, its agents, employees, officers and
contractors a non-revocable license to enter upon City property during the
construction of the Project.
6.1. The City Council intends for the construction of Lakefront Plaza to be an
informal public/private partnership.
6.2. Lakefront Plaza does not have on-site storm water storage capacity. The
City requires storm water storage capacity for runoff from Main Avenue. If
additional facilities are constructed within Lakefront Park, the City will need
storm water storage facilities ("Facility").
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6.3. Lakefront Plaza has agreed to construct, at no cost to the City, the Facility on
property owned by the City and within Lakefront Park, the location of which is
shown on Exhibit B. The capacity of the Facility will be such that it will be
sufficient to accommodate the City's foreseeable storm water storage needs.
6.3.1.ln exchange for Lakefront Plaza constructing the Facility generally
described in paragraph 6 of this Contract, the City permits Lakefront
Plaza to use the Facility to accommodate its storm water runoff needs.
6.4. This Contract shall serve in the place of the City's standard permit
agreement for the private use of public property.
6.4.1. This Contract authorizes Lakefront Plaza to use City property for the
Facility. This Contract in no way and under no circumstances conveys
to Lakefront Plaza any ownership interest in the City property or
Facility.
6.4.2. This Contract does not grant Lakefront Plaza exclusive use of the
Facility.
6.5. Ownership of Storm Water Manaaement Facility. Upon completion of the
Facility and final written acceptance by the City Engineer, the Facility lying
within the public right-of-way, easements or City property shall become City
property without further notice or action.
6.6. Maintenance. Once constructed and accepted by the City, the City will
maintain the Facility.
6.7. As-Builts. Upon completion of the Facility, and inspection thereof and prior
to acceptance by the City or issuance of a Final Certificate of Occupancy for
the Project, Lakefront Plaza shall provide to the City a complete set of as-
built elevations for the Facility in a form prescribed by and acceptable to the
City Engineer.
6.8. Warranty. Lakefront Plaza warrants the Facility, required to be constructed by
it pursuant to this Contract against poor material and faulty workmanship. The
warranty period is for two (2) years. The warranty period shall commence on
the date the City Engineer issues written acceptance of the Facility. Prior to
the City's issuance of a Final Certificate of Occupancy, Lakefront Plaza shall
provide the CITY with a warranty or maintenance bond, in a form acceptable
to the City Engineer, in the amount of $ '~lJc ~ . , which number represents
one hundred and twenty-five percent (125 0) of the cost of the Facility. The
warranty or maintenance bond shall remain in effect during the warranty
period .
6.9. Waiver of Claims. Lakefront Plaza acknowledges the City's ownership of
the subject property and knowingly waives any and all claims against the City
related to Lakefront Plaza's use of City right-of-way, easements, property or
the Facility.
7. Construction of Proiect.
7.1. The Project shall be installed in accordance with the plans and permits
approved and issued by the City, and in accordance with the City Public
Works Design Manual.
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7.2. The design of the Project and Facility will not be changed without prior
written approval of the CITY.
;
8. Street Maintenance. Lakefront Plaza shall be responsible for all street
maintenance until final written acceptance by the City of the Project. Warning
signs and detour signs, if determined 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 impassible,
such streets shall be barricaded and closed. For the purpose of this paragraph,
"street maintenance" does not include snow plowing or normal sweeping.
8.1. Lakefront Plaza shall clean dirt and debris from steets that has resulted from
any and all construction work by Lakefront Plaza, contractors and
subcontractors, their agents or assigns. Prior to any construction, Lakefront
Plaza shall identify, in writing, a responsible party and schedule for erosion
control, street cleaning, and street sweeping. If Lakefront Plaza 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 Lakefront Plaza. The notice provisions set out in
Paragraph 13 shall not apply to notifications to the Developer under this
paragraph.
9. Insurance. Lakefront Plaza, 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 on the Facility, public liability and property damage insurance covering
personal injury, including death, and claims for property damage which may arise out
of Lakefront Plaza'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 Lakefront Plaza shall file with the City a
certificate evidencing coverage prior to beginning work on the Project. 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 orm attached hereto as
Exhibit C.
10. Prompt Payment to Subcontractors Required. The provisions of Minnesota
Statute Section 471.425, Subd. 4a, attached as ExhibitD, are incorporated by
reference as if fully set forth herein.
11. Indemnification and Hold Harmless. Lakefront Plaza 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 approval of the
plans, issuance of any permits or any provision of this 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 Council, agents, employees, attorneys and
1:\02files\02siteplan\lakefront plaza\lakefront plaza contract.doc
Page 4
representatives does not extend to any willful or intentional misconduct on the part of
any of these individuals.
12. Default. A failure to comply with the plans, permits or any of the terms and
conditions of this Contract shall constitute a default of this Contract. In the event of
a default, the City shall provide Lakefront Plaza with notice as provided for in
Paragraph 13. The notice shall set forth the nature of the default and the time
within which the City must cure the default, which shall be not less than 48 hours,
except that in the event that the nature of the default is such that, in the sole
judgment of the City, it may pose an imminent potential risk to the health, safety or
welfare to persons or property, the City may enter the property legally described in
Exhibit A and perform the required work to cure the default. All costs incurred by
the City to cure the defaul~ including administrative costs, shall be the sole
responsibility of the Lakefront Plaza.
12.1. The City shall invoice Lakefront Plaza for the costs incurred to remedy or cure
the default.
12.2. Lakefront Plaza shall pay said invoice within thirty (30) days of receip thereof.
12.3. Lakefront Plaza agrees that if Lakefront Plaza fails to pay the invoiced amount
within the thirty (30) day period, the City may assess the invoiced amount
against the property described in Exhibit A.
13. Notices. Notices to Lakefront Plaza shall be in writing, and shall be either hand
delivered to Lakefront Plaza, its employees or agents, or mailed to Lakefront Plaza
by certified mail at the following address: Wensmann Homes, Inc., 1895 Plaza
Drive, Suite 200, Eagan, Minnesota, 55122. 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.
14. Election of Remedies. The City reserves the right to pursue any and all remedies
available to it in law or equity. No action by the City shall be construed as its
exclusive remedy or otherwise limit the City in any manner.
15. Heirs, Successors And Assians. This Contract shall run with the land legally
described in Exhibit A and shall be binding against all heirs, successors and
assignees of Lakefront Plaza.
15.1. Assianment. Lakefront Plaza may not assign this Contract without the prior
written approval of the City Council
16. Miscellaneous.
16.1. 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.
16.2. Waiver. Failure of either party at any time to require performance of any
provision of this Contract shall not affect its right to require full performance
1:\02files\02siteplan\lakefront plaza\lakefront plaza contract.doc
Page 5
thereof at any time thereafter and the waiver by either party 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
16.3. Enforcement of the Contract. Any fees incurred by the City associated
with enforcing any of the terms and conditions set forth in this Contract,
including but not limited to City staff, engineering and attorney's fees, shall
be the sole responsibility of Lakefront Plaza.
16.4. Third Party Recourse. Third parties shall have no recourse against the City
under this Contract.
16.5. Governina Law. This Contract shall be governed by the laws of the State of
Minnesota. This Contract shall constitute the entire understanding between
the parties and supercedes any prior oral or written contracts.
Executed by the parties hereto as of the day and date first above written.
CITY OF PRIOR LAKE
By:
WENSMANN HOMES, INC.
By:
Jack G. Haugen, Mayor
By:
By:
Frank Boyles, City Manager
STATE OF MINNESOTA )
) ss.
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this day of
2002, by Jack G. Haugen, Mayor, and by Frank Boyles, City Manager, of the City of Prior
Lake, a Minnesota municipal corporation, on behcif 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
2002, by
1:\02files\02siteplan\lakefront plaza\lakefront plaza contract.doc
Page 6
Reviewed as to Form and Execution:
By:
Suesan Lea Pace, City Attorney
DRAFTED BY:
City of Prior Lake
16200 Eagle Creek Avenue SE
Prior Lake, Minnesota 55372
1:\02files\02siteplan\lakefront plaza\lakefront plaza contract.doc
Page 7
CITY COUNCIL AGENDA REPORT
September 3, 2002
8C (Item 4) rv
Frank Boyles, City Manager X
I
AGENDA ITEM: CONSIDER APPROVAL 0 LEASE AGREEMENT FOR A TEMPORARY
SALES OFFICE AT 16175 HASTINGS AVENUE.
DISCUSSION: History: The preceding agenda items on the September 3,2002 agenda have set
the stage for the initiation of demolition of the two houses site and excavation of
approximately 13 feet of dirt from the Lakefront Plaza site. A number of additional
steps are necessary. We would like to meet with surrounding neighbors before
work begins so they will know what to expect and whom to contact. This meeting
is being arranged. Until the building is constructed, Wensmann Homes needs a
location for a temporary sales office for a 9-12 month period. This agenda item is
intended to address the temporary sales office.
Current Circumstances: Community Development Director Don Rye, Herb
Wensmann, Kelly Murray and I scouted the Downtown area for a temporary sales
office site. We looked at the Joe's Pizza site. Herb liked the fact thata portion of
Pleasant Avenue is being re-constructed to reflect the Downtown, but had some
concerns about the structure. We then looked at the lot just north of the municipal
lot on the east side of Main Street north of the parking lot at CSAH 21 and Main.
Herb was very enthused about this site as it was clearly observable from both
CSAH 21 and TH13 and was within a block of the Lakefront Plaza site.
Wensmann Homes would like to lease the property form the City for a period not
to exceed 12 months beginning in September. He will install a trailer on the lot.
The lot will be excavated so the trailer looks permanent. The trailer will be
connected to sewer and water and a curb cut will be added to Hastings Avenue
so handicapped persons can access the sales office. The site will be landscaped,
including a cobblestone walkway, flag display and a banner will identify the sales
office for Lakefront Plaza and the fact that this project is the first step of the 2020
Vision and Strategic Plan. We will also attempt to get one of the Downtown lights
to further underscore the Downtown look.
Wensmann Homes has agreed to completely restore the site once the need for
the sales office has been fulfilled. This includes disconnection from the municipal
sewer and water.
Conclusion: The lease is in production at this writing. We will share a copy with
Wensmann Homes, and with Councilmember, as soon as it is completed.
16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (952) 447-4230 / Fax (952) 447-4245
1:\COUNCIL\AGNRPTS\2002\WENSMANN L~JIOO)OPPORTUNITY EMPLOYER
ISSUES:
ALTERNATIVES:
RECOMMENDED
MOTION:
Wensmann will be paying monthly for use of the property so there is no issue of
private use of public property. The sales office will use the public parking lot as its
lot which could add cars to the area. The sales office is typically open to 8pm. By
locating the sales office here, prospective owners will have the opportunity to
become familiar with the Downtown. We plan to place some Downtown
redevelopment sketches in the office together with copies of the 2020 Vision and
Strategic Plan. By finishing, the sales office properly, we hope to give the public a
glimpse of our future Downtown.
The Council has the following alternatives:
(1) Approve the lease and authorize execution by the Mayor and City Manager
as proposed or with amendments.
(2) Take no action.
Alternate" (1).
1:\COUNCIL\AGNRPTS\2002\WENSMANN LEASE.DOC
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Parcel ID Number:
Property Address:
Property Information
250010210 Deeded Arces:
Owner:
/ (p / 7 5 f-/a.s~ r,a,.$
Ave.- .J
PRIOR LAKE CITY
2001
25
Owner Address:
Taxing District:
Taxing District Code:
Township/City Code:
School District:
Taxpayer:
Taxpayer Address:
719
Zoning:
City
Lot: 8
GIS Acres:
Block: 3
PLAT-25001 CITY OF PRIOR
LAKE
0.16
Taxpayer Address:
Taxpayer:
Plat Description:
A...............t.............:....
.:,,-,i;;~ ., '. .
<'.' .,,<
..
il
o
CITY OF PRIOR LAKE
16200 EAGLE CREEK
AV
PRIOR LAKE, 55372
CITY OF PRIOR LAKE
16200 EAGLE CREEK
AV
PRIOR LAKE, MN
55372
CITY OF PRIOR LAKE
16200 EAGLE CREEK
AV
PRIOR LAKE, MN
55372
Legal Description:
Building Characteristics
Model Type:
Year Built:
Architectural Style:
Foundation Size (Sq
Ft):
Garage Size (Sq Ft):
Bedrooms:
Bathrooms:
EX N 8'
Land:
Building:
Green Acres:
Property Value
$ 40000
$0
$0
$ 40000
Total:
Tax Information
$0
$0
$0
Net Taxes:
Special Assessments:
Net Tax plus Special
Assessments:
Outstanding Special
Assessments:
First half payment:
Second half payment:
Homestead Status:
Homestead Classification:
Exempt Status:
Green Acres:
Ag Preserve:
Complex Property:
o
o
o
o
o
Latest Sales Information
$0
$0
$0
Sale Date:
Sale Price:
N/A
N/A
N
Municipal Other
y