HomeMy WebLinkAbout8A Agreement/Am Glass/Metro cab
AGENDA #:
PREPARED BY:
SUBJECT:
DATE:
BACKGROUND:
DISCUSSION:
STAFF AGENDA REPORT
8 A . /P . I... ~ .
BONITA CARLSON, ASSISTANT CITY MANAGER 8t~r'-"
APPROVE DEVELOPMENT AGREEMENTS BETWEEN THE CITY OF
PRIOR LAKE AND METRO LEASING/PARTNERSHIP AND GUY AND
MARY SELlNSKE FOR THE CONSTRUCTION OF A 10,000 SQUARE
FOOT BUILDING. IN WATERFRONT PASSAGE ADDITION
OCTOBER 3,1994
The Economic Development Authority purchased and platted the
Waterfront Passage Addition in 1993. The land is designated as a
Business/Office Park and now, with water, sewer, curb, gutter and streets
installed, is available for development. Two developers, Metro
Cabinet/Part and Guy and Mary Selinske d/b/a American Glass and
Mirror, Inc., have entered into a purchase agreement for approximately
one acre which is adjacent to the Becker Arena Products lot (on the west
side) in the Waterfront Passage Addition. The City has negotiated
Development Agreements with the two parties to provide the necessary
Tax Increment Financing to allow them to construct a 10,000 square foot
multi-tenant building.
The developers for the project are both successful local businesses.
They are each operating in facilities which are undersized, with no
potential for expansion, and one case is an incompatible use according to
the City Zoning Code. These uses are permitted in the Waterfront
Passage Business/Office Park and are consistent with the type of
businesses envisioned by the City when the business office park was
established. The developers propose to construct a 10,000 square foot
building on a one acre lot.
The development agreements requires the development project to have a
minimum market value of $273,000 upon completion. The City agrees to
provide tax increment financing in the amount of $68,000 for land write
down and up to an additional $43,650 reimbursement for site
improvement and soil correction costs. This assistance will be divided
equally between the two developers. The captured tax increment is
estimated to be approximately $16,000 less Local Government Aid (LGA)
penalties of $4,500 for a net increment of $11,500 per year which is
pledged to provide the required assistance, (reimbursement of City costs
and write downs, and site improvements costs incurred by the developer).
In addition, the agreement specifies that up to $1,600 per year additional
reimbursement will be paid to the Developers if the development
generates increment in excess of the estimated increment. Further, the
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4629 Dakota St. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
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ALTERNATIVES:
RECOMMENDATION:
ACTION REQUIRED:
Reviewed by:
City Council:AgdevL wrt
City agrees to reimburse the developers up to $3,250 per year, to a
maximum of $29,250 if redevelopment occurs on the "Triangle Car Wash"
property at Highway 13 and 170th Street and produces sufficient
increment to cover the payment. All pledged tax increment financing
payments will end in the year 2005 and subsequent tax payments will be
distributed to the respective taxing districts.
The City Council has the following alternatives:
1. Approve the Development Agreements between the City of
Prior Lake and Metros Cabinet/ Partnership and Mary and
Guy Selinske.
2.Deny the approval of the Development Agreements.
Staff recommends Alternative #1
A motion and second t9 approve the Development Agreements between
the City of pr..ior LakEJ./~nd Metro Cabinet/Partnership and Mary and Guy
Selinske. a I /
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DEVELOPMENT AGREEMENT
BY AND BETWEEN
I
THE CITY OF PRIOR LAKE
AND
METRO LEASING/PARTNERSHIP
September 19,1994
.
TABLE OF CONTENTS
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 OF THE DEVELOPER ............. 4
ARTICLE III UNDERTAKINGS BY DEVELOPER AND CITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.1 ACQUISITION OF THE DEVELOPMENT PROPERTY AND SITE IMPROVEMENTS. 6
SECTION 3.2 REIMBURSEMENT: TAX INCREMENT 'REVENUES ........................ 6
SECTION 3.3 GUARANTEE OF PAYMENTS ....................................... 7
ARTICLE IV EVENTS OF DEFAULT.... . . . . . . ... . ..... . . . . .. . . . . . . . . . . . . . . .. . . . .. . . 8
SECTION 4.1 EVENTS OF DEFAULT DEFINED .................................... 8
SECTION 4.2 REMEDIES ON DEFAULT .......................................... 8
SECTION 4.3 NO REMEDY EXCLUSIVE .......................................... 9
SECTION 4.4 NO IMPLIED WAIVER ............................................. 9
SECTION 4.5 AGREEMENT TO PAY ATTORNEY'S FEES AND EXPENSES ................ 9
SECTION 4.6 INDEMNIFICATION OF CITY ........................................ 9
ARTICLE V INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.1 INSURANCE .................................................... 11
ARTICLE VI ADDITIONAL PROVISIONS
. . . . . .... . ... . . . . . . . . . . . . . . . . . . . . . . .. . . . . . .
12
SECTION 6.1 RESTRICTIONS ON USE .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 6.2 CONFLICTS OF INTEREST ......................................... 12
SECTION 6.3 TITLES OF ARTICLES AND SECTIONS ................................ 12
SECTION 6.4 NOTICES AND DEMANDS ......................................... 12
SECTION 6.5 COUNTERPARTS ................................................ 12
SECTION 6.6 LAW GOVERNING ............................................... 12
ARTICLE VII DEVELOPER'S OPTION TO TERMINATE AGREEMENT ...................... 13
SECTION 7.1 THE DEVELOPER'S OPTION TO TERMINATE ........................... 13
SECTION 7.2 ACTION TO TERMINATE .......................................... 13
SECTION 7.3 EFFECT OF TERMINATION . . . . . ...... ... . ...... . . .. . . . . . . ... . ... . . 13
EXHIBIT A DESCRIPTION OF DEVELOPMENT DISTRICT ............................... A-1
EXHIBIT B DESCRIPTION OF DEVELOPMENT PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
EXHIBIT C ASSESSMENT AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
EXHIBIT D ACQUIRED PROPERTY DEED. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1
DEVELOPMENT AGREEMENT
THIS AGREEMENT, made as of the _ day of September, 1994, by and between the City- of Prior Lake,
Minnesota (the "City"), a Minnesota municipal corporation and Metro Leasing/Partnership, a Minnesota
partnership, (the "Developer"),
WITNESSETH:
WHEREAS, pursuant to Minnesota Statutes, Section 469.124 through 469.134 the City has formed City
Development District No. 2 (the "Development District") the legal description of which is attached hereto as
Exhibit A and has adopted a development program therefore (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 will create, within the Development District, an
Economic Development District No. 2-3 (the "Tax Increment District"), the legal description of which is attached
hereto as Exhibit B and will adopt a tax increment financing plan, therefore (the "Tax Increment Plan") which
provides for the use of tax increment financing in connection with development within the Development District;
and
WHEREAS, the City will request the County to certify the original tax capacity of the Tax Increment District
pursuant to Section 469.177 of the Tax Increment Act; 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 the Development
Property and Site Improvements (as defined herein) on the Development Property (as defined herein) as more
particularly set forth in this Agreement; and
WHEREAS, the City believes that the development of a certain Project (as defined herein) and the
construction of the Project, and fulfillment of this Agreement are vital and are in the best interests of the City
and will result in increased employment and preservation/enhancement of the tax base and is 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: .
Acquired Property Deed means a deed, substantially in the form of the deed attached to this Agreement
as Exhibit D, used to convey the Development Property from the City to the Developer;
AQreement means this Agreement, as the same may be from time to time modified, amended or
supplemented;
Assessment AQreement means the agreement substantially in the form of the agreement attached to this
Agreement as Exhibit C.
Business Dav 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;
Certificate of Completion means the certification in the form of the certificate enclosed as Attachment A to
the Acquired Property Deed and hereby made a part of this Agreement, provided to the Developer pursuant to
Section 4.2 of this Agreement;
9!Y means the City of Prior Lake, Minnesota;
County means Scott County, Minnesota;
Developer means Metro Leasing/Partnership;
Development District means the real property described in Exhibit A;
Development ProQram means the development program approved in connection with the Development
District;
Infrastructure means the municipal utilities, roadways, grading and excavation improvements specified, bid
and contracted for by the City of Prior Lake within the Waterfront Passage Business Park.
Development Property means the real property described in Exhibit B of this Agreement;
LeQal and Administrative Expenses means the fees and expenses incurred in connection with the
adoption of the Tax Increment Financing Plan, the preparation of this Development Agreement, and the
issuance of the Tax Increment Note;
Event of Default means any of the events described in Section 4.1;
Payment Date means July 15, 1997, and each December 15 and July 15 of each year thereafter to and
including December 15, 2005; provided, that if any such Payment Date should not be a Business Day, the
Payment Date shall be the next succeeding Business Day;
Proiect or Minimum Improvements means the approximate 5,000 square foot production/Warehouse
facility to be owned by the Developer and any future expansions of said facility to be located on the Develop-
ment Property;
Site Improvements means excavation, grading, filling, utility improvements and extensions, and access
and parking preparations;
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Soil Correction means corrective measures or actions necessary to improve or upgrade soil conditions on
the Development Property. Such corrective measures or actions may involve construction techniques such
as"spread footings" and/or excavation of deficient soils and replacement with engineered fill.
State means the State of Minnesota;
Tax Increments means the tax increments derived from the Tax Increment District created in accordance
with the provisions of Minnesota Statutes, Section 469.1 n;
Tax Increment Act means the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 through
469.179, as amended;
Tax Increment District means Tax Increment Economic Development District No. 2-3 described in Exhibit
B and qualified as an economic development district under the Tax Increment Act and Tax Increment District
No. 2-4 qualified as a redevelopment district under th~ Tax Increment Act;
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"TrianClle Property" Redevelopment means the proposed redevelopment of the "Triangle Property" legally
described as Section 10, Township 114, Range 22, 3.62 acres in Government Lot 5 lying north and west of
Highway 13. This property is contained within Tax Increment District No. 2-4.
Tax Increment FinancinCl Plan means the plan approved for the Tax Increment District;
Unavoidable Delavs 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 and/or Site Improvements, litigation commenced by third parties which, by injunc-
tion 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
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 an "economic development district" within the meaning of Minnesota
Statutes, Section 469.174, Subdivision 12, to be created, adopted and approved in accordance with the terms
of the Tax Increment Act.
(3) The development contemplated by this Agr~ement is in conformance with the development objectives
set forth in the Development Program. I
(4) To finance the costs of the activities to be undertaken by the City and Developer, the City proposes,
subject to the further provisions of this Agreement, to apply Tax Increment generated by the Tax Increment
District and other revenues identified within this Agreement, to reimburse public and private costs incurred in
the acquisition of the Development Property and the construction of the Site Improvements and Soil Correction
in the Development District as further provided in this Agreement.
(5) The City has not received any notice from any local, state or federal official that the activities of the
Developer or the City with respect to the Development Property mayor will be in violation of any environmental
law or regulation (other than those notices, if any, of which the Developer has been notified). The City is not
aware of any state or federal claim filed or planned to be filed by any party relating to any violation of any local,
state or federal environmental law, regulation or review procedure, and the City is not aware of any violation of
any local, state or federal law, regulation or review procedure which would give any person a valid claim under
the Minnesota Environmental Rights Act or other state or federal environmental statute.
(6) The City has made the findings required by Section 469.175, Subdivision 3, of the Tax Increment
Financing Act for the Tax Increment District, and has set forth in writing the reasons and supporting facts for
each determination.
(7) The City will not unreasonably delay nor withhold any consent or action requested of it by the
Developer or otherwise contemplated by this Agreement provided such consent or requested action complies
with all applicable local, state or federal laws or regulations or this Agreement.
Section 2.2. Representations and Warranties of the Developer. The Developer makes the following
representations and warranties:
(1) The Developer has power to enter into this Agreement and to perform its obligations hereunder and is
not in violation of any local, state or federal laws.
(2) The Developer are individuals and/or who serve as operators and majority shareholders of a duly
organized corporation, validly existing under the laws of this State and have full power and authority to enter
into this Agreement and carry out the covenants contained herein.
(3) The Developer will 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).
(4) The Developer will obtain or cause to be obtained, in a timely manner, all required permits, licenses
and approvals, and will meet, in a timely manner, all requirements of all applicable local, state, and federal laws
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and regulations which must be obtained or met before the Project may be lawfully installed.
(5) The Developer has not received any notice or communication from any local, state or federal official
that the activities of Developer or the City with respect to the Development Property mayor will ~e in violation
of any environmental law or regulation. As of the date of the execution of this Agreement, Developer is aware
of no facts the existence of which would cause it to be in violation of any local, state or federal environmental
law, regulation or review procedure which would give any person a valid claim under the Minnesota Environ-
mental Rights Act.
(6) 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. The Developer is awaiting final approval from
Prior Lake State Bank on a request for first mortgage financing. Final commitment to undertake the Develop-
ment is contingent on notification of approval of first mortgage financing by December 1, 1994.
(7) Neither the execution and delivery of this Ag~eement, 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.
(8) The Developer will cooperate fully with the City with respect to any litigation commenced with respect
to the Project provided, however, that any such litigation settled by the City which would require payment by
the Developer would require that the City obtain the prior written consent of the Developer.
(9) The Developer agrees to pay the total amount of any costs, charges, expenses and attorneys fees
reasonably incurred or paid at any time by City because of any Event of Default by Developer as to any
stipulation, agreement, and covenant of this Agreement, resulting in any suit or proceeding at law or in equity
to which the City shall become a party in reference to the Developer's interest in the Property or the Project.
(10) The Developer will cooperate fully 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.
(11) The Developer will participate in a Site Plan Review by the City's Development Review Committee
and the City Planning Commission, and will comply with all terms and conditions as set forth within the City's
design standards and covenants for the Waterfront Passage Business Park and as reasonably enforced by said
Development Review Committee and Planning Commission. As part of this review process the Developer shall
submit complete construction plans including plans for site preparation, the facility and landscaping. The
Developer shall also identify a time frame for completion of the Project and receive City approval. Any
substantive amendment to the construction plans shall require resubmission of appropriate information and
approval by the City.
(12) Barring Unavoidable Delays, the Project will be completed by October 31, 1995 such that the City
will issue a Certificate of Completion on or before that date. The City has no knowledge of anything which
would prevent the Project from being completed by October 31, 1995, subject to Unavoidable Delays, including
within its knowledge, an estimate of the reasonable time for review of the Project by the City and its agencies
and commissions.
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ARTICLE III
UNDERTAKINGS BY DEVELOPER AND CITY
Section 3.1. ACQuisition of the Development Property. Site Improvements and Soil Correction. The
parties agree that the Site Improvements to be constructed by the City and Developer are essential to the
successful completion of the Project. The costs of the acquisition of the Development Property, Site
Improvements and the Soil Correction, which shall include engineering and all other costs directly related to
the making of the Site Improvements and Soil Correction, together with the Legal and Administrative expenses,
are estimated to be at least $30,000. The Developer shall make an initial payment of $3,500 to the City,
pursuant to the terms of the Purchase Agreement dated as of August 1, 1994, for costs of acquisition of the
Development Property, and Site Improvements. The Developer shall also pay $3,750 for administrative fees
relating to the tax increment financing program and pay other fees normally associated with development of a
commercial facility within the City of Prior Lake (e.g. building permit, sewer access charge, etc.). Upon receipt
of down payment for acquisition of land and payment of administrative fees the City shall provide an allowance
of $34,000 for land writedown. In addition the City sh~1I provide the Developer with up to $21,825 in
reimbursement for site improvement and soil correction costs, initially funded by the Developer, via tax
increment revenues generated from Tax Increment District No. 2-3 and the "Triangle Property" Redevelopment
contained within Tax Increment District No. 2-4. The balance of expenses shall be paid through Developer
payments.
(1) The City shall undertake actions pursuant to the plans and specifications for construction of infrastruc-
ture and site preparation within the Waterfront Passage Business Park. In regard to the Development Property,
the Developer will furnish soil borings and analysis, inspection of excavation, and soil density tests as
necessary, all in accordance with ASTM specifications and usual and accepted geotechnical engineering
practice, and an opinion from a registered Professional Engineer that the building pad has been properly
prepared and is capable of supporting the foundation for the proposed Development.
Section 3.2. Reimbursement: Tax Increment Revenues.
(1) The City shall receive reimbursement for acquisition, site improvements and soil correction made on
behalf of the Developer under Section 3.1 through the receipt of tax increment revenues generated from Tax
Increment Financing District No. 2-3. Following is a schedule of anticipated tax increment payments:
Schedule of Pavment
1994 - 0
1995 - 0
1996 - 0
July 15, 1997 - $3,600
December 15, 1997 - $3,600
July 15, 1998 - $3,600
December 15, 1998 - $3,600
July 15, 1999 - $3,600
December 15, 1999 - $3,600
July 15, 2000 - $3,600
December 15,2000 - $3,600
July 15, 2001 - $3,600
December 15,2001 - $3,600
July 15, 2002 - $3,600
December 15, 2002 - $3,600
July 15, 2003 - $3,600
December 15, 2003 - $3,600
July 15, 2004 - $3,600
December 15, 2004 - $3,600
July 15, 2005 - $3,600
December 15, 2005 - $3,600
(2) Pursuant to Section 3.1, the Developer shall receive additional reimbursement of up to $800/year if the
Development results in the generation of increment revenues in excess of the required payments identified in
Section 3.2 (1) of this Agreement. The payment of these excess revenues will occur over a nine year period
and shall be net of any potential LGA/HACA loss to the City and will not exceed a cumulative amount of
$14,400.
(3) In addition the city agrees to reimburse the developer with up to $1,625/year of tax increment revenues
generated as a result of redevelopment activities anticipated to occur on the "Triangle Property" situated within
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Tax Increment District No. 2-4. The payment of these revenues would occur over a nine year period beginning
in 1997 and would not exceed a cumulative amount of $14,625. In the event that the collection of the tax
increment from the Triangle Property is delayed the reimbursement to the Developer will begin within 18-24
months of redevelopment.
Section 3.3 Guarantee of Payments. In the event that the tax increment revenues are less than what is
depicted on the preceding schedule, Section 3.2 (1), the Developer will remit the amount of the shortfall to the
City on or before each July 15 or December 15, commencing on July 15, 1997.
(1) Developer shall not be liable to the City for any shortfall in the tax increment revenues resulting from
actions taken by the City or failure of the City to take any action which results in a reduction in the tax
increment revenues. Unless such actions by the City involve enforcement of regulatory standards or
requirements necessary to maintain the health, safety or welfare of the community and/or its residents.
Section 3.4 Assessment AQreement. On or bef9re the execution and delivery of the Acquired Property
Deed, the Developer and the City will execute and deliver the Assessment Agreement, substantially in the form
of Exhibit C of this Agreement. The Developer and City acknowledge that the purpose of the Assessment
Agreement is no~ to establish a market value on the Development Property and the Project that is greater than
the actual market value of the Development Property and the project but, rather, to establish a value that is the
minimum actual market value that could reasonably be established for the Development Property and the
Project and to limit the discretion of the Assessor to establish a lower market value. This will permit the City
and the Developer to establish a payment schedule for the tax increment payments set forth in section 3.2 of
this Agreement.
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ARTICLE IV
EVENTS OF DEFAULT
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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:
(1) Failure by the Developer to timely pay any ad valorem real property taxes assessed with respect to
the Development Property.
(2) Failure by the Developer to cause the installation of the Project to be completed pursuant to the
terms, conditions and limitations of this Agreement.
(3) The holder of any mortgage on the Development Property or any improvements thereon, or any
portion thereof, commences foreclosure proceedings ~s a result of any default under the applicable mortgage
documents.
(4) Failure by the Developer to substantially observe or perform any other covenant, condition, obligation
or agreement on its part to be observed or performed under this Agreement.
(5) If the Developer shall
(A) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjust-
ment, 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 adjucation 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 ninety (90) 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 ninety (90) days after such appointment, or if the Develop-
er, 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, but only if the Event of Default has not been cured within said
thirty (30) days.
(1) 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.
(2) The City may cancel and terminate this Agreement, except that no cancellation may be effective at
any time that the Developer is proceeding in good faith to cure the defect and/or reasonable assurances to the
City as required in (1) above, or if there exists a good faith dispute with the City, mortgagee or creditor as to an
event of default as defined above, and the Developer posts a bond or other security as reasonably adequate to
cure the alleged default.
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In the event that subsequent to conveyance of the Development Property to the Developer by the City and
prior to receipt by the Developer of the Certificate of Completion for the entire Project, and subject to the terms
of any First Mortgage, if an Event of Default as defined under this Agreement is not cured within thirty (30) days
after written notice to do so, then the City shall have the right to re-enter and take possession qf the Acquired
Property and any portion of the Project thereon and to terminate (and revest in the City pursuant to the
provisions of this Section subject only to any superior rights in any holder of a First Mortgage acquiesced in by
the City pursuant to this Agreement) the estate conveyed by the Acquired Property Deed to the Developer, it
being the intent of this provision, together with other provisions of this Agreement, that the conveyance of the
acquired Property to the Developer shall be made upon the condition that, in the event of any default under
this Section on the part of the Developer and failure on the part of the Developer to cure such default within the
period and in the manner stated in such subdivision, the City may declare a termination in favor of the City of
the title and of all the Developer's rights and interests in and to the Acquired Property conveyed to the
Developer, and that such title and all rights and interests of the City, and any assigns or successors in interest
of the Developer,and any assigns or successors in interest to and in the Acquired Property, shall revert to the
City, but only if the events stated in this Agreement h~ve not been cured within the time period provided above,
or, if the events cannot be cured within such time periods, the Developer does not provide assurance to the
City, reasonably satisfactory to the City, that the events will be cured as soon as reasonably possible.
(3) The City may take any action, including legal or administrative action, 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. Aareement 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 of performance or observance of any obligation or agreement on the part of the
Developer herein contained, the Developer agrees that it shall, on demand therefore, 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, 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
9
t
,
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 "economic development" under Section 469.174, Subdivision 12.
(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, as the case may be.
10
ARTICLE V
INSURANCE
Section 5.1. Insurance. The Developer will provide and maintain or cause to be maintained at all times
during the process of constructing the Project (and, from time to time at the request of the City, furnish the City
with proof of payment of premiums on):
(1) Builder's risk insurance, written on the scrcalled "Builder's Risk - Completed Value Basis', in an
amount equal to one hundred percent (100%) of the insurable value of the Project at the date of completion,
and with coverage available in non reporting form on the scrcalled 'all risk' form of the policy; the interest of the
City shall be protected in accordance with a clause in form and content satisfactory to the City;
(2) Comprehensive general liability insurance (irltcluding operations, contingent liability, operations of
subcontractors, completed operations and contractual liability insurance) together with an Owner's Contractor's
Policy with limits against bodily injury and property damage of not less that $1,000,000 for each occurrence (to
accomplish the above-required limits, an umbrella excess liability policy may be used); and
(3) Worker's compensation insurance, with statutory coverage for all persons engaged in the construction
of the Project.
11
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I:
~
ARTICLE VI
ADDITIONAL PROVISIONS
Section 6.1. Restrictions on Use. The Developer agrees for itself that it shall devote the Development
Property to, and in accordance with, the uses specified in this Agreement. The Developer shall not assign,
transfer or convey the Agreement without the prior written consent of the City except Developer may lease the
Development Property to Metro Cabinets, Inc.
Section 6.2. Conflicts of Interest. No member of the governing body or other official of the City shall
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 successor or on any obligations under the terms of this Agreement.
I
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 01 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
(1) in the case of the Developer is addressed to or delivered personally to:
Metro Leasing/Partnership
3775 170th St. S.W.
Prior Lake, Minnesota 55372
(2) in the case of the City is addressed to or delivered personally to the City at:
City of Prior Lake
4629 Dakota St. S.E.
Prior Lake, Minnesota 55372
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.
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 GoverninCl. This Agreement will be governed and construed in accordance with the
laws of the State of Minnesota.
12
ARTICLE VII
DEVELOPER'S OPTION TO TERMINATE AGREEMENT
Section 7.1. The Developer's Option to Terminate. This Agreement may be terminated by Developer, if (ij
the Developer is in compliance with all material terms 01 this Agreement and no Event 01 Default has occurred;
and (iQ the City fails to comply with any material term of this Agreement, and, after written notice by the
Developer 01 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, 01
receipt 01 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 7.2. Action to Terminate. Termination of this Agreement pursuant to Section 7.1 must be ac-
complished by written notification by the Developer to the City within thirty (30) days after the date when such
option to terminate may first be exercised. A failure QY 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 7.3. Effect of Termination. If this Agreement is terminated pursuant to this Article VII, 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 VII, 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 if
the City financed improvements on behalf of the Developer, the Developer is obligated for reimbursement of
the expenses as set forth in Section 3.2.
13
EXHIBIT A
Legal Description of Development District No.2
All of the Southeast Quarter of Section 1 , Township 114, Range 22, Scott County, Minnesota.
And that part of the East 1/4 of the Southwest Quarter, Section 1, Township 114, Range 22, Scott
County, Minnesota, lying northerly of the northerly right-of-way of Eagle Creek Avenue (County
Road 21). The west line of said East 1/4 shall be parallel with the east line of said Southwest
Quarter.
And that part of the Southwest Quarter, Section 1, Township 114, Range 22, Scott County,
Minnesota, lying southerly of the Northerly' right-of-way of Eagle Creek Avenue (County Road 21)
and southeasterly of the southeasterly rigMt-of-way line of Franklin Trail (County Road 39) except for
that part of BORGERDING SECOND ADDITION, according to the recorded plat thereof, lying within
said Southwest Quarter.
AND
Block 1, Lot 3 and Outlot A, Langhorst First Addition; Block 1, Lot 1, Cates Addition; the southerly
one-half of Lot 2, Block 14, Original Plat; and, Section 10, Township 114, Range 22, 3.62 acres in
Government Lot 5 lying north and west of Highway 13.
A-1
EXHIBIT B
Economic Development District No. 2-3
and
Legal Description of Development Property
That part of WATERFRONT PASSAGE ADDITION, Scott County, Minnesota described as follows:
That part of the Southwest Quarter of Section 1, Township 114, Range 22, Scott County, Minnesota
described as follows:
Upon completion of a site survey of the property by the Developer it is anticipated that the legal description for
the parcel will be identified as by a metes and bounds description within WaterFront Passage Business Park.
This property will be divided equally with 50% owned by Metro Leasing/Partnership and 50% owned by Guy J.
and Mary K. Selinske.
B-1
METRO LEASING/PARTNERSHIP
BY ~' d~
Timothy J. Sinnen ~
~~~~m':.!.,Bd /
Signature page for Assessment Agreement by and among the City of Prior Lake, Minnesota, and Timothy J.
Sinnen and Fredric W. Bargamann of Metro Leasing/Partnership and the Assessor for Scott County.
C-3
CONSENT TO ASSESSMENT AGREEMENT
The Prior Lake State Bank of Prior Lake, Minnesota (the "Bank"), does hereby consent to all terms, conditions
and provisions of the foregoing Assessment Agreement and agrees that, in the event it purchases the
Development Property at a foreclosure sale or acquires the Development Property through a deed in lieu of
foreclosure or otherwise in satisfaction of the indebtedness owed by the Developer, it and its respective
successors and assigns, shall be bound by all terms and conditions of the Assessment Agreement, including
but not limited to the provision which requires that the minimum market value of the Development Property
shall be not less than $136,500 as of January 2, 1996 and thereafter.
IN WITNESS WHEREOF, we have caused this Consent to Assessment Agreement to be executed in its name
and on its behalf as of this day of , 1994.
BY:
Bob Barsness
ITS: President
STATE OF MINNESOTA )
) SS.
COUNTY OF SCOTT )
This instrument was acknowledged before me this day of ,1994, by Bob Barsness,
the President of Prior Lake State Bank, a Corporation, on behalf of the Corporation.
Notary Public
C-4
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.
CERTIFICATION BY COUNTY ASSESSOR
The undersigned, having reviewed the plans and specifications for the improvements to be con!>>tructed and the
market value assigned to the land upon which the improvements are to be constructed, and being of the
opinion that the minimum market value contained in the forgoing Agreement appears reasonable, hereby
certifies as follows: The undersigned Assessor, being legally responsible for the assessment of the above
described property, hereby certifies that the market value assigned to such land and improvements upon
completion of the improvements to be constructed thereon shall not be less than $136,500 as of January 2,
1996 and thereafter.
County Assessor for Scott County
STATE OF MINNESOTA )
) SS.
COUNTY OF SCOTT )
This instrument was acknowledged before me this
Arnoldi, the County Assessor of Scott County.
day of
, 1994, by Leroy T.
Notary Public
Signature page for Assessment Agreement by and among the City of Prior Lake, Minnesota, Timothy J. Sinnen
and Fredric W. Bargamann of Metro Leasing/Partnership and the Assessor for Scott County.
C-5
STATE OF MINNESOTA )
) SS.
COUNTY OF SCOTT )
This instrument was acknowledged before me this ~ day of
Sinnen and Fredric W. Bargamann 01 Metro Leasing/Partnership.
94, by Timothy J.
CONNIE M. CARLSON
' Hor A.' PUlLIC - MINN.sorA
SCOTT COUNTY
My cornrniuion .lIp.,., 12-2-9'
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STATE.OF MINNESOTA )
4:.
"J.. '-.c ) SS.
COUNTY'OF SCOTT )
This instrument was acknowledged before me this day of , 1994, by Lydia Andren,
the Mayor and Frank Boyles, the City Manager of the City of Prior Lake, Minnesota.
Notary Public
C-6
EXHIBIT D
ACQUIRED PROPERTY DEED
THIS INDENTURE between the City of Prior Lake, a municipal corporation, organized pursuant to the Laws of
Minnesota (the "Grantor"), and Timothy J. Sinnen and Fredric W. Bargamann of Metro Leasing/Partnership, a
partnership existing under the laws of Minnesota, (the "Grantee"):
WITNESSETH, that Grantor in consideration of the sum of three thousand, five hundred dollars, ($3,500) and other
good and valuable consideration, the receipt whereof is hereby acknowledged, does hereby grant, bargain, conveys
and warrants to the Grantee, its successors and assigns forever, all the tract or parcel of land lying and being in the
County of Scott and State of Minnesota described on Attachment A attached hereto (such tract or parcel of land is
hereinafter referred to as the "Property"):
To have and to hold the same, together with th~ hereditaments and appurtenances thereunto belonging or in
anywise appertaining, to the said Grantee, its succedors and assigns, forever, provided as follows:
1. It is understood and agreed that this Deed is subject to the covenants, conditions, restrictions and
provisions of an agreement entered into between the Grantor and Grantee on the _ day of , 1994,
entitled "Development Agreement" (hereafter referred to as the "Agreement"), and that the Grantee shall not convey
this property, or any part thereof, without the consent of the Grantor until a certificate of completion releasing the
Grantee from certain obligations of said Agreement as to this Property or such part thereof then to be conveyed,
has been placed of record. This provision shall in no way prevent the Grantee from making transfers permitted by
the Agreement or mortgaging this Property in order to obtain funds for the purchase of Property hereby conveyed
and for erecting improvements thereon in conformity with the Agreement, any applicable redevelopment plan and
applicable provisions of the zoning ordinances of the City of Prior Lake, Minnesota.
Promptly after completion of the improvements in accordance with the provisions of the Agreement, the
Grantor will furnish the Grantee with a Certificate of Completion in the form attached to this Deed as Attachment A.
Such certification by the Grantor shall be (and the certification itself shall so state) a conclusive determination of
satisfaction and termination of the agreements and covenants of the Agreement and of this Deed with respect to the
obligation of the Grantee, and its successors and assigns, to construct improvements and the dates for the
beginning and completion thereof, it being the intention of the parties that upon the granting and filing of the
Certificate of Completion that all restrictions and reservations of title contained in Sections 1 and 2 of this Deed be
forever released and terminated and that any remaining obligations of the Grantee pursuant to the Agreement shall
be personal only.
All certifications provided for herein shall be in such form as will enable them to be recorded with the County
Recorder of Scott County, Minnesota. If the Grantor shall refuse or fail to provide any such certification in
accordance with the provisions of the Agreement and this Deed, the Grantor shall, within ten (10) days after written
request by the Grantee, provide the Grantee with a written statement indicating in adequate detail in what respects
the Grantee has failed to complete the improvements in accordance with the provisions of the Agreement or is
otherwise in default, and what measures or acts will be necessary, in the opinion of the Grantor, for the Grantee to
take or perform in order to obtain such certification.
2. In the event that an Event of Default occurs under Section 4.1 of the Agreement and the Grantee herein
shall fail to cure such default within the period and in the manner stated in Section 4.2 of the Agreement, then the
Grantor shall have the right to re-enter and take possession of the Property and to terminate and revest in the
Grantor the estate conveyed by this Deed to the Grantee, its assigns or successors in interest, in accordance with
the terms of the Agreement.
IN WITNESS WHEREOF, the Grantor has caused this Deed to be duly executed in its behalf by its Mayor and
City Manager and has caused its corporate seal to be hereunto affixed this _ day of , 1994.
(Seal)
Lydia Andren, Mayor
Frank Boyles, City Manager
D-1
STATE OF MINNESOTA )
) SS.
COUNTY OF SCOTT )
On this day of ,1994, before me personally appeared Lydia Andren, the Mayor
and Frank Boyles, to me personally known who by me duly sworn did say that they are the Mayor and City
Manager for the City of Prior Lake, Minnesota (the Grantor), named in the foregoing instrument; that the seal affixed
to said instrument is the seal of said Grantor; that said instrument was signed and sealed on behalf of said Grantor
pursuant to a resolution of its City Council; and said Lydia Andren and Frank Boyles acknowledges said instrument
to be the free act and deed of said.
Notary Public
Notary Public
D-2
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ATTACHMENT A TO ACQUIRED PROPERTY DEED
CERTIFICATE OF COMPLETION AND RELEASE OF FORFEITURE
-
WHEREAS, the City of Prior Lake, Minnesota (the "Granto""), a municipal corporation organized and operating
pursuant to laws of the State of Minnesota, by a Deed recorded in the Office of the County Recorder or the
Registrar of Titles in and for the County of Scott and State of Minnesota, as Deed Document Number _, has
conveyed to Metro Leasing/Partnership, (the "Grantee"), in the State of Minnesota, the following legally described
property, to wit:
That part of WATERFRONT PASSAGE ADDITION, Scott County, Minnesota described as follows:
That part ofthe Southwest Quarter of Section 1, Township 114, Range 22, Scott County, Minnesota described
as follows:
Upon platting of the property by the City it is anticipated that the legal description for the parcel will be identified as
one half of Lot 2, Block 1, WaterFront Passage Business Park.
and
WHEREAS, said Deed incorporated and contained certain covenants and restrictions, the breach of which by
the Grantee, its successors and assigns, would result in a forfeiture and right of re-entry by the Grantor, its
successors and assigns, said covenants and restrictions being set forth in said Deed and in a Development
Agreement executed by and between the Grantor and the Grantee and dated September 19, 1994 (The "Develop-
ment Agreement"); and
WHEREAS, the Grantee has to the present date performed said covenants and conditions insofar as it is able
in a manner deemed sufficient by the Grantor to permit the execution and recording of this certification:
NOW, THEREFORE, this is to certify that all building construction and other physical improvements specified to
be done and made by the Grantee have been completed and the above covenants and conditions in said Deed and
Development Agreement have been performed by the Grantee therein and that the provisions for forfeiture of title
and right to reentry for breach of condition subsequent by the Grantor, contained therein, are hereby released
absolutely and forever insofar as they apply to the land described herein, and the County Recorded or the Registrar
of Titles in and for the County of Scott and State of Minnesota is hereby authorized to accept for recording and to
record the filing of this instrument, to be a conclusive determination of the satisfactory termination of the covenants
and conditions of said Deed and the Development Agreement which would result in a forfeiture by the Grantee, its
successors and assigns, the right of the Grantor, its successors and assigns, to re-enter and take possession of the
property as set forth in said Deed and the Development Agreement, and that said Deed and the Development
Agreement shall otherwise remain in full force and effect.
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.
DEVELOPER
THE CITY OF PRIOR LAKE
Timothy J. Sinn en
BY
ITS
Fredric W. Bargamann
DEVELOPMENT AGREEMENT
BY AND BETWEEN
I
THE CITY OF PRIOR LAKE
AND
GUY J. AND MARY K. SELlNSKE
September 19,1994
T
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TABLE OF CONTENTS
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 OF THE DEVELOPER ............. 4
ARTICLE III UNDERTAKINGS BY DEVELOPER AND CITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.1 ACQUISITION OF THE DEVELOPMENT PROPERTY AND SITE IMPROVEMENTS. 6
SECTION 3.2 REIMBURSEMENT: TAX INCREMENT'.REVENUES ........................ 6
SECTION 3.3 GUARANTEE OF PAYMENTS ....................................... 7
ARTICLE IV EVENTS OF DEFAULT... .. . . . . .. . . ......... . . . . . ..... . .. . . . . . . . ... . . . 8
SECTION 4.1 EVENTS OF DEFAULT DEFINED .................................... 8
SECTION 4.2 REMEDIES ON DEFAULT .......................................... 8
SECTION 4.3 NO REMEDY EXCLUSIVE .......................................... 9
SECTION 4.4 NO IMPLIED WAIVER ............................................. 9
SECTION 4.5 AGREEMENT TO PAY ATTORNEY'S FEES AND EXPENSES ................ 9
SECTION 4.6 INDEMNIFICATION OF CITY ........................................ 9
ARTICLE V INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.1 INSURANCE .................................................... 11
ARTICLE VI ADDITIONAL PROVISIONS
12
SECTION 6.1 RESTRICTIONS ON USE ...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 6.2 CONFLICTS OF INTEREST ......................................... 12
SECTION 6.3 TITLES OF ARTICLES AND SECTIONS ................................ 12
SECTION 6.4 NOTICES AND DEMANDS ....... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 6.5 COUNTERPARTS ................................................ 12
SECTION 6.6 LAW GOVERNING ............................................... 12
ARTICLE VII DEVELOPER'S OPTION TO TERMINATE AGREEMENT ...................... 13
SECTION 7.1 THE DEVELOPER'S OPTION TO TERMINATE ........................... 13
SECTION 7.2 ACTION TO TERMINATE ...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 7.3 EFFECT OF TERMINATION .. ... ..... ... . .......... . .. . . .. ..... .. . . 13
EXHIBIT A DESCRIPTION OF DEVELOPMENT DISTRICT ............................... A-1
EXHIBIT B DESCRIPTION OF DEVELOPMENT PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
EXHIBIT C ASSESSMENT AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
EXHIBIT D ACQUIRED PROPERTY DEED. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1
DEVELOPMENT AGREEMENT
THIS AGREEMENT, made as of the _ day of September, 1994, by and between the City of Prior Lake,
Minnesota (the "City"), a Minnesota municipal corporation and Guy J. and Mary K. Selinske, joint owners and
operators of American Glass and Mirror, Inc. a Minnesota corporation (the "Developers"),
WITNESSETH:
WHEREAS, pursuant to Minnesota Statutes, Section 469.124 through 469.134 the City has formed City
Development District No.2 (the "Development District") the legal description of which is attached hereto as
Exhibit A and has adopted a development program therefore (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 ctty will create, within the Development District, an
Economic Development District No. 2-3 (the "Tax Increment District"), the legal description of which is attached
hereto as Exhibit B and will adopt a tax increment financing plan, therefore (the "Tax Increment Plan") which
provides for the use of tax increment financing in connection with development within the Development District;
and
WHEREAS, the City will request the County to certify the original tax capacity of the Tax Increment District
pursuant to Section 469.177 of the Tax Increment Act; 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 the Development
Property and Site Improvements (as defined herein) on the Development Property (as defined herein) as more
particularly set forth in this Agreement; and
WHEREAS, the City believes that the development of a certain Project (as defined herein) and the
construction of the Project, and fulfillment of this Agreement are vital and are in the best interests of the City
and will result in increased employment and preservation/enhancement of the tax base and is 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, THERE.FORE, 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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- T
I:
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:
Acauired Propertv Deed means a deed, substantially in the form of the deed attached to this Agreement
as Exhibit D, used to convey the Development Property from the City to the Developer;
Aareement means this Agreement, as the same may be from time to time modified, amended or
supplemented;
Assessment Aareement means the agreement substantially in the form of the agreement attached to this
Agreement as Exhibit C.
Business Dav 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;
Certificate of Completion means the certification in the form of the certificate enclosed as Attachment A to
the Acquired Property Deed and hereby made a part of this Agreement, provided to the Developer pursuant to
Section 4.2 of this Agreement;
~ means the City of Prior Lake, Minnesota;
County means Scott County, Minnesota;
Developer means Guy J. and Mary K. Selinske, jointly, as operators and majority shareholders of
American Glass and Mirror, Inc.;
Development District means the real property described in Exhibit A;
Development Proaram means the development program approved in connection with the Development
District;
Infrastructure means the municipal utilities, roadways, grading and excavation improvements specified, bid
and contracted for by the City of Prior Lake within the Waterfront Passage Business Park.
Development Propertv means the real property described in Exhibit B of this Agreement;
Leaal and Administrative Expenses means the fees and expenses incurred in connection with the
adoption of the Tax Increment Financing Plan, the preparation of this Development Agreement, and the
issuance of the Tax Increment Note;
Event of Default means any of the events described in Section 4.1;
Pavment Date means July 15, 1997, and each December 15 and July 15 of each year thereafter to and
including December 15, 2005; provided, that if any such Payment Date should not be a Business Day, the
Payment Date shall be the next succeeding Business Day;
Proiect or Minimum Improvements means the approximate 5,000 square foot productionjwarehouse
facility to be owned by the Developer and any Mure expansions of said facility to be located on the Develop-
ment Property;
Site Improvements means excavation, grading, filling, utility improvements and extensions, and access
and parking preparations;
2
Soil Correction means corrective measures or actions necessary to improve or upgrade soil conditions on
the Development Property. Such corrective measures or actions may involve construction techniques such
as.spread footings. and/or excavation of deficient soils and replacement with engineered fill.
State means the State of Minnesota;
Tax Increments means the tax increments derived from the Tax Increment District created in accordance
with the provisions of Minnesota Statutes, Section 469.1 n;
Tax Increment Act means the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 through
469.179, as amended;
Tax Increment District means Tax Increment Economic Development District No. 2-3 described in Exhibit
B and qualified as an economic development district under the Tax Increment Act and Tax Increment District
No. 2-4 qualified as a redevelopment district under the Tax Increment Act;
"TrianQle Property. Redevelopment means the proposed redevelopment of the .Triangle Property. legally
described as Section 10, Township 114, Range 22, 3.62 acres in Government Lot 5 lying north and west of
Highway 13. This property is contained within Tax Increment District No. 2-4.
Tax Increment Financinq Plan means the plan approved for the Tax Increment District;
Unavoidable Delavs 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 and/or Site Improvements, litigation commenced by third parties which, by injunc-
tion 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.
3
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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 an "economic development district" within the meaning of Minnesota
Statutes, Section 469.174, Subdivision 12, to be 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. i
(4) To finance the costs of the activities to be undertaken by the City and Developer, the City proposes,
subject to the further provisions of this Agreement, to apply Tax Increment generated by the Tax Increment
District and other revenues identified within this Agreement, to reimburse public and private costs incurred in
the acquisition of the Development Property and the construction of the Site Improvements and Soil Correction
in the Development District as further provided in this Agreement.
(5) The City has not received any notice from any local, state or federal official that the activities of the
Developer or the City with respect to the Development Property mayor will be in violation of any environmental
law or regulation (other than those notices, if any, of which the Developer has been notified). The City is not
aware of any state or federal claim filed or planned to be filed by any party relating to any violation of any local,
state or federal environmental law, regulation or review procedure, and the City is not aware of any violation of
any local, state or federal law, regulation or review procedure which would give any person a valid claim under
the Minnesota Environmental Rights Act or other state or federal environmental statute.
(6) The City has made the findings required by Section 469.175, Subdivision 3, of the Tax Increment
Financing Act for the Tax Increment District, and has set forth in writing the reasons and supporting facts for
each determination.
(7) The City will not unreasonably delay nor withhold any consent or action requested of it by the
Developer or otherwise contemplated by this Agreement provided such consent or requested action complies
with all applicable local, state or federal laws or regulations or this Agreement.
Section 2.2. Representations and Warranties of the Developer. The Developer makes the following
representations and warranties:
(1) The Developer has power to enter into this Agreement and to perform its obligations hereunder and is
not in violation of any local, state or federal laws.
(2) The Developer are individuals and/or who serve as operators and majority shareholders of a duly
organized corporation, validly existing under the laws of this State and have full power and authority to enter
into this Agreement and carry out the covenants contained herein.
(3) The Developer will 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).
(4) The Developer will obtain or cause to be obtained, in a timely manner, all required permits, licenses
and approvals, and will meet, in a timely manner, all requirements of all applicable local, state, and federal laws
4
"".
and regulations which must be obtained or met before the Project may be lawfully installed.
(5) The Developer has not received any notice or communication from any local, state or federal official
that the activities of Developer or the City with respect to the Development Property mayor will be in violation
of any environmental law or regulation. As of the date of the execution of this Agreement, Developer is aware
of no facts the existence of which would cause it to be in violation of any local, state or federal environmental
law, regulation or review procedure which would give any person a valid claim under the Minnesota Environ-
mental Rights Act.
(6) 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. The Developer is awaiting final approval from
Prior Lake State Bank on a request for first mortgage financing. Final commitment to undertake the Develop-
ment is contingent on notification of approval of first mortgage financing by December 1, 1994.
(7) 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.
(8) The Developer will cooperate fully with the City with respect to any litigation commenced with respect
to the Project provided, however, that any such litigation settled by the City which would require payment by
the Developer would require that the City obtain the prior written consent of the Developer.
(9) The Developer agrees to pay the total amount of any costs, charges, expenses and attorneys fees
reasonably incurred or paid at any time by City because of any Event of Default by Developer as to any
stipulation, agreement, and covenant of this Agreement, resulting in any suit or proceeding at law or in equity
to which the City shall become a party in reference to the Developer's interest in the Property or the Project.
(10) The Developer will cooperate fully 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.
(11) The Developer will participate in a Site Plan Review by the City's Development Review Committee
and the City Planning Commission, and will comply with all terms and conditions as set forth within the City's
design standards and covenants for the Waterfront Passage Business Park and as reasonably enforced by said
Development Review Committee and Planning Commission. As part of this review process the Developer shall
submit complete construction plans including plans for site preparation, the facility and landscaping. The
Developer shall also identify a time frame for completion of the Project and receive City approval. Any
substantive amendment to the construction plans shall require resubmission of appropriate information and
approval by the City.
(12) Barring Unavoidable Delays, the Project will be completed by October 31,1995 such that the City
will issue a Certificate of Completion on or before that date. The City has no knowledge of anything which
would prevent the Project from being completed by October 31,1995, subject to Unavoidable Delays, including
within its knowledge, an estimate of the reasonable time for review of the Project by the City and its agencies
and commissions.
5
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ARTICLE III
UNDERTAKINGS BY DEVELOPER AND CITY
Section 3.1. ACQuisition of the Development Property. Site Improvements and Soil Correctibn. The
parties agree that the Site Improvements to be constructed by the City and Developer are essential to the
successful completion of the Project. The costs of the acquisition of the Development Property. Site
Improvements and the Soil Correction, which shall include engineering and all other costs directly related to
the making of the Site Improvements and Soil Correction, together with the Legal and Administrative expenses.
are estimated to be at least $30,000. The Developer shall make an initial payment of $3,500 to the City.
pursuant to the terms of the Purchase Agreement dated as of August 1. 1994. for costs of acquisition of the
Development Property. and Site Improvements. The Developer shall also pay $3.750 for administrative fees
relating to the tax increment financing program and pay other fees normally associated with development of a
commercial facility within the City of Prior Lake (e.g. building permit, sewer access charge, etc.). Upon receipt
of down payment for acquisition of land and payment of administrative fees the City shall provide an allowance
of $34,000 for land writedown. In addition the City sHall provide the Developer with up to $21.825 in
reimbursement for site improvement and soil correction costs. initially funded by the Developer. via tax
increment revenues generated from Tax Increment District No. 2-3 and the "Triangle Property- Redevelopment
contained within Tax Increment District No. 2-4. The balance of expenses shall be paid through Developer
payments.
(1) The City shall undertake actions pursuant to the plans and specifications for construction of infrastruc-
ture and site preparation within the Waterfront Passage Business Park. In regard to the Development Property,
the Developer will furnish soil borings and analysis, inspection of excavation, and soil density tests as
necessary. all in accordance with ASTM specifications and usual and accepted geotechnical engineering
practice. and an opinion from a registered Professional Engineer that the building pad has been properly
prepared and is capable of supporting the foundation for the proposed Development.
Section 3.2. Reimbursement: Tax Increment Revenues.
(1) The City shall receive reimbursement for acquisition, site improvements and soil correction made on
behalf of the Developer under Section 3.1 through the receipt of tax increment revenues generated from Tax
Increment Financing District No. 2-3. Following is a schedule of anticipated tax increment payments:
Schedule of Pavment
1994 - 0
1995 - 0
1996 - 0
July 15, 1997 - $3,600
December 15. 1997 - $3,600
July 15, 1998 - $3,600
December 15, 1998 - $3,600
July 15. 1999 - $3,600
December 15, 1999 - $3,600
July 15, 2000 - $3,600
December 15,2000 - $3,600
July 15. 2001 - $3,600
December 15, 2001 - $3,600
July 15, 2002 - $3,600
December 15, 2002 - $3,600
July 15, 2003 - $3,600
December 15,2003 - $3,600
July 15, 2004 - $3,600
December 15. 2004 - $3,600
July 15, 2005 - $3,600
December 15,2005 - $3,600
(2) pursuant to Section 3.1. the Developer shall receive additional reimbursement of up to $8oo/year if the
Development results in the generation of increment revenues in excess of the required payments identified in
Section 3.2 (1) of this Agreement. The payment of these excess revenues will occur over a nine year period
and shall be net of any potential LGA/HACA loss to the City and will not exceed a cumulative amount of
$14,400.
(3) In addition the city agrees to reimburse the developer with up to $1,625/year of tax increment revenues
generated as a result of redevelopment activities anticipated to occur on the "Triangle Property- situated within
6
Tax Increment District No. 2-4. The payment of these revenues would occur over a nine year period beginning
in 1997 and would not exceed a cumulative amount of $14,625. In the event that the collection of the tax
increment from the Triangle Property is delayed the reimbursement to the Developer will begin within 18-24
months of redevelopment.
Section 3.3 Guarantee of Pavments. In the event that the tax increment revenues are less than what is
depicted on the preceding schedule, Section 3.2 (1), the Developer will remit the amount of the shortfall to the
City on or before each July 15 or December 15, commencing on July 15, 1997.
(1) Developer shall not be liable to the City for any shortfall in the tax increment revenues resulting from
actions taken by the City or failure of the City to take any action which results in a reduction in the tax
increment revenues. Unless such actions by the City involve enforcement of regulatory standards or
requirements necessary to maintain the health, safety or welfare of the community and/or its residents.
Section 3.4 Assessment Aareement. On or before the execution and delivery of the Acquired Property
Deed, the Developer and the City will execute and del~er the Assessment Agreement, substantially in the form
of Exhibit C of this Agreement. The Developer and City acknowledge that the purpose of the Assessment
Agreement is not to establish a market value on the Development Property and the Project that is greater than
the actual market value of the Development Property and the project but, rather, to establish a value that is the
minimum actual market value that could reasonably be established for the Development Property and the
Project and to limit the discretion of the Assessor to establish a lower market value. This will permit the City
and the Developer to establish a payment schedule for the tax increment payments set forth in section 3.2 of
this Agreement.
7
.- r
.
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:
(1) Failure by the Developer to timely pay any ad valorem real property taxes assessed with respect to
the Development Property.
(2) Failure by the Developer to cause the installation of the Project to be completed pursuant to the
terms, conditions and limitations of this Agreement.
(3) 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.
(4) Failure by the Developer to substantially observe or perform any other covenant, condition, obligation
or agreement on its part to be observed or performed under this Agreement. .
(5) If the Developer shall
(A) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjust-
ment, 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 adjucation 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 ninety (90) 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 ninety (90) days after such appointment, or if the Develop-
er, 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, but only if the Event of Default has not been cured within said
thirty (30) days.
(1) 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.
(2) The City may cancel and terminate this Agreement, except that no cancellation may be effective at
any time that the Developer is proceeding in good faith to cure the defect and/or reasonable assurances to the
City as required in (1) above, or if there exists a good faith dispute with the City, mortgagee or creditor as to an
event of default as defined above, and the Developer posts a bond or other security as reasonably adequate to
cure the alleged default.
8
In the event that subsequent to conveyance of the Development Property to the Developer by the City and
prior to receipt by the Developer of the Certificate of Completion for the entire Project, and subject to the terms
of any First Mortgage, if an Event of Default as defined under this Agreement is not cured within thirty (30) days
after written notice to do so, then the City shall have the right to re-enter and take possession of the Acquired
Property and any portion of the Project thereon and to terminate (and revest in the City pursuant to the
provisions of this Section subject only to any superior rights in any holder of a First Mortgage acquiesced in by
the City pursuant to this Agreement) the estate conveyed by the Acquired Property Deed to the Developer, it
being the intent of this provision, together with other provisions of this Agreement, that the conveyance of the
acquired Property to the Developer shall be made upon the condition that, in the event of any default under
this Section on the part of the Developer and failure on the part of the Developer to cure such default within the
period and in the manner stated in such subdivision, the City may declare a termination in favor of the City of
the title and of all the Developer's rights and interests in and to the Acquired Property conveyed to the
Developer, and that such title and all rights and interests of the City, and any assigns or successors in interest
of the Developer,and any assigns or successors in interest to and in the Acquired Property, shall revert to the
City, but only if the events stated in this Agreement have not been cured within the time period provided above,
or, if the events cannot be cured within such time penods, the Developer does not provide assurance to the
City, reasonably satisfactory to the City, that the events will be cured as soon as reasonably possible.
(3) The City may take any action, including legal or administrative action, 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. AClreement 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 of performance or observance of any obligation or agreement on the part of the
Developer herein contained, the Developer agrees that it shall, on demand therefore, 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, now and foreyer, 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
9
~ .'
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 -economic developmenr under Section 469.174, Subdivision 12.
(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, as the case may be.
10
ARTICLE V
INSURANCE
Section 5.1. Insurance. The Developer will provide and maintain or cause to be maintained at all times
during the process of constructing the Project (and, from time to time at the request of the City, furnish the City
with proof of payment of premiums on):
(1) Builder's risk insurance, written on the so-called "Builder's Risk - Completed Value Basis", in an
amount equal to one hundred percent (100%) of the insurable value of the Project at the date of completion,
and with coverage available in non reporting form on the so-called "all risk" form of the policy; the interest of the
City shall be protected in accordance with a clause in form and content satisfactory to the City;
(2) Comprehensive general liability insurance (ii;cluding operations, contingent liability, operations of
subcontractors, completed operations and contractual liability insurance) together with an Owner's Contractor's
Policy with limits against bodily injury and property damage of not less that $1,000,000 for each occurrence (to
accomplish the above-required limits, an umbrella excess liability policy may be used); and
(3) Worker's compensation insurance, with statutory coverage for all persons engaged in the construction
of the Project.
11
.
ARTICLE VI
ADDITIONAL PROVISIONS
Section 6.1. Restrictions on Use. The Developer agrees for itself that it shall devote the Development
Property to, and in accordance with, the uses specified in this Agreement. The Developer shall not assign,
transfer or convey the Agreement without the prior written consent of the City except Developer may lease the
Development Property to American Glass and Mirror, Inc.
Section 6.2. Conflicts of Interest. No member of the governing body or other official of the City shall
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 successor or on any obligations under the terms of this Agreement.
I
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
(1) in the case of the Developer is addressed to or delivered personally to:
Guy and Mary Selinske
c/o American Glass & Mirror, Inc.
19040 Southfork Dr.
Prior Lake, Minnesota 55372
(2) in the case of the City is addressed to or delivered personally to the City at:
City of Prior Lake
4629 Dakota St. S.E.
Prior Lake, Minnesota 55372
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.
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 Governina. This Agreement will be governed and construed in accordance with the
laws of the State of Minnesota.
12
ARTICLE VII
DEVELOPER'S OPTION TO TERMINATE AGREEMENT
Section 7.1. 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 (iij 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 7.2. Action to Terminate. Termination of this Agreement pursuant to Section 7.1 must be ac-
complished by written notification by the Developer to the City within thirty (30) days after the date when such
option to terminate may first be exercised. A failure by the Developer to terminate this Agreement within such
period constitutes a waiver by the Developer of its rights to terminate this Agreement due to such occurrence
or event.
Section 7.3. Effect of Termination. If this Agreement is terminated pursuant to this Article VII, 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 VII, 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 if
the City financed improvements on behalf of the Developer, the Developer is obligated for reimbursement of
the expenses as set forth in Section 3.2.
13
.
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.
DEVELOPERS
THE CITY OF PRIOR LAKE
~, s
By
Its
~~~.:h
By
Its
This is a signature page to the Development Agreement dated as of ~ 7 ~ ~ S''' ~ /:an., , 1994, by
and between the City of Prior Lake and Guy J. and Mary K. Selinske.
14
STATE OF MINNESOTA )
): ss
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this L day of
1994, by Lydia Andren and Frank Boyles the Mayor and the City Manager, respectively, of the City of Prior
Lake, Minnesota, a municipal corporation.
Notary Public
'1
STATE OF MINNESOTA )
): ss
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this2l ~y of ~1-1 ~-
1994, by Guy J. and Mary K. Selinske.
CMw~~
15
. ,
EXHIBIT A
Legal Description of Development District No.2
All of the Southeast Quarter of Section 1, Township 114, Range 22, Scott County, Minnesota.
And that part of the East 1/4 of the Southwest Quarter, Section 1, Township 114, Range 22, Scott
County, Minnesota, lying northerly of the northerly right-of-way of Eagle Creek Avenue (County
Road 21). The west line of said East 1/4 shall be parallel with the east line of said Southwest
Quarter.
And that part of the Southwest Quarter, Section 1, Township 114, Range 22, Scott County,
Minnesota, lying southerly of the Northerly right-of-way of Eagle Creek Avenue (County Road 21)
and southeasterly of the southeasterly right-of-way line of Franklin Trail (County Road 39) except for
that part of BORGERDING SECOND ADDITION, according to the recorded plat thereof, lying within
said Southwest Quarter.
AND
Block 1, Lot 3 and Outlot A, Langhorst First Addition; Block 1, Lot 1, Cates Addition; the southerly
one-half of Lot 2, Block 14, Original Plat; and, Section 10, Township 114, Range 22, 3.62 acres in
Government Lot 5 lying north and west of Highway 13.
A-1
EXHIBIT B
Economic Development District No. 2-3
and
Legal Description of Development Property
That part of WATERFRONT PASSAGE ADDITION, Scott County, Minnesota described as follows:
That part of the Southwest Quarter of Section 1, Township 114, Range 22, Scott County, Minnesota
described as follows:
Upon completion of a site survey of the property by the Developer it is anticipated that the legal description for
the parcel will be identified as by a metes and bounds description within WaterFront Passage Business Park.
This property will be divided equally with 50% owned by Metro Leasing/Partnership and 50% owned by Guy J.
and Mary K. Selinske.
B-1
EXHIBIT C
ASSESSMENT AGREEMENT
THIS AGREEMENT, dated as of this _ day of , 1994, by and among the City of Prior Lake
(the -City-), and Guy J. and Mary K. Selinske, (-Developer"), and the Assessor for Scott County (the -Assessor"):
WITNESSETH
WHEREAS, on or before the date hereof the City and Developer have entered into a Development Agreement
dated as of September 19, 1994 (the -Agreement"), regarding certain real property located in the City (the
-Development Property-) which property is legally described on Attachment A attached hereto and hereby
made a part hereof;
WHEREAS, it is contemplated that pursuant to said Agreement, the Developer will undertake the development
of a 5,000 sq. ft. multi-tenant production/warehouse facility and related improvements (the -Project-) on the
Development Property;
Whereas, the City and Developer desire to establish a minimum market value for the portion of the Develop-
ment Property and the improvements constructed or to be constructed thereon, pursuant to Minnesota
Statutes, Section 469.177, Subdivision 8;
WHEREAS, subject to the terms of the Agreement, the Developer will acquire the Development Property; and
Whereas, the City and the Assessor have reviewed plans and specifications for the Project:
NOW, THEREFORE, the parties to this Agreement, in consideration of the promises, covenants and agree-
ments made by each to the other, do hereby agree as follows:
1.As of January 2, 1996 and thereafter until December 31, 2005, the minimum market value which shall be
assessed for the Project shall be not less than $136,500.
2.The minimum market value herein established shall be of no further force and effect and this Agreement shall
terminate on December 31, 2005.
3.This Agreement shall be promptly recorded by the Developer along with a copy of Minnesota Statutes,
Section 469.1n, Subdivision 8, included as Attachment B and hereby made a part hereof, with the County
Recorded of Scott County, Minnesota. The Developer shall pay all costs of recording.
4.The assessor represents that he has reviewed the plans and specifications for the improvements and the
market value previously assigned to the land upon which the improvements are to be constructed, and that the
-minimum market value- as set forth above is reasonable.
5.Neither the preamble nor provisions of this Agreement are intended to modify, or shall they be construed as
modifying, the terms of the Agreement between the City and the Developer.
6.This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties.
C-1
IN WITNESS WHEREOF, the City, the Developer and the Assessor have caused this Agreement to be executed
in their names and on their behalf all as of the date set forth above.
THE CITY OF PRIOR LAKE, MINNESOTA
(SEAL) BY:
Lydia Andren, Mayor
BY:
Frank Boyles, City Manager
Signature page for Assessment Agreement by and among the City of Prior Lake, Minnesota, Guy J. and Mary
K. Selinske and the Assessor for Scott County.
C-2
GUY J. AND MARY K. SELlNSKE
BY A~ ~. ~b
Guy J~ Selins
~~~
BY ~ . AL
M'li'ry K. sel~ ' (..
Signature page for Assessment Agreement by and among the City of Prior Lake, Minnesota and Guy J. and
Mary K. Selinske and the Assessor for Scott County.
C-3
CONSENT TO ASSESSMENT AGREEMENT
The Prior lake State Bank of Prior lake, Minnesota (the wBankW), does hereby consent to all terms, conditions
and provisions of the foregoing Assessment Agreement and agrees that, in the event it purchases the
Development Property at a foreclosure sale or acquires the' Development Property through a deed in lieu of
foreclosure or otherwise in satisfaction of the indebtedness owed by the Developer, it and its respective
successors and assigns, shall be bound by all terms and conditions of the Assessment Agreement, including
but not limited to the provision which requires that the minimum market value of the Development Property
shall be not less than $136,500 as of January 2, 1996 and thereafter.
IN WITNESS WHEREOF, we have caused this Consent to Assessment Agreement to be executed in its name
and on its behalf as of this day of , 1994.
BY:
Bob Barsness
ITS: President
STATE OF MINNESOTA )
) SS.
COUNTY OF SCOTT )
This instrument was acknowledged before me this day of , 1994, by Bob Barsness,
the President of Prior lake State Bank, a Corporation, on behalf of the Corporation.
Notary Public
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CERTIFICATION BY COUNTY ASSESSOR
The undersigned, having reviewed the plans and specifications for the improvements to be constructed and the
market value assigned to the land upon which the improvements are to be constructed, and being of the
opinion that the minimum market value contained in the forgoing Agreement appears reasonable, hereby
certifies as follows: The undersigned Assessor, being legally responsible for the assessment of the above
described property, hereby certifies that the market value assigned to such land and improvements upon
completion of the improvements to be constructed thereon shall not be less than $136,500 as of January 2,
1996 and thereafter.
County Assessor for Scott County
STATE OF MINNESOTA )
) SS.
COUNTY OF SCOTT )
This instrument was acknowledged before me this
Arnoldi, the County Assessor of Scott County.
day of
, 1994, by Leroy T.
Notary Public
Signature page for Assessment Agreement by and among the City of Prior Lake, Minnesota, Guy J. and Mary
K. Selinske and the Assessor for Scott County.
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STATE OF MINNESOTA )
) SS.
COUNTY OF SCOTT )
This instrument was acknowledged before me this ~y of
Mary K. Selinske.
, 1994, by Guy J. and
Ie" . ..~ CONNIE M. CARLSON
. . .,'!Ii NOT AIY PUILlC - MINNESOTA
o.~ SCOTT COUNTY
· .. , My comminion eXPIres 12.2.98
STATE OF MINNESOTA )
) SS.
COUNTY OF SCOTT )
This instrument was acknowledged before me this day of , 1994, by Lydia Andren,
the Mayor and Frank Boyles, the City Manager of the City of Prior Lake, Minnesota.
Notary Public
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ATTACHMENT A TO ASSESSMENT AGREEMENT
Legal Description
That part of WATERFRONT PASSAGE ADDITION, Scott County, Minnesota described as follows:
That part ofthe Southwest Quarter of Section 1, Township 114, Range 22, Scott County, Minnesota
described as follows:
Upon completion of the site survey of the property by the Developer it is anticipated that the legal description
for the parcel will be identified as a metes and bounds description within WaterFront Passage Business Park.
This property will be divided equally with 50% owned by Metro Leasing/Partnership and 50% owned by Guy J.
and Mary K. Selinske.
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ATTACHMENT B TO ASSESSMENT AGREEMENT
Subd. S. ASSE~)IE='T AGREE)IE~~. An authoritJ. may enter into a ~Titten assess-
~ent agreement ~,th any person establishing a minimum market nlue of land, ex!stir:g
l~prO\'ements, or Impro\'ements to be ~o?stnlcted in a district, if the propert). is o\\lled or
\\,11 be o\\lled b,}' the person: The Ir.Jmmum market value established by an assessment
agreement maj' be fixed, or Increase or decrease in later J'ears from the initial minimum
market value. If an ~ . eement is fullv executed before Julv 1 of an assessment 'ear. the
market \'alue as rO\1de un er e a eement must e used v e county or oc assessor
as the ta."<l e market \. ue of t e rooertv for that assessment. eements execute on or
after Julv 1 of an assessment \"ear become effective for assessment U oses in e fo11o\\;n
asse~s:nent. year. An assessment agreement tenni?ates on the ear iest 0 e ate on wnich
cond.lUon~ In the assessment agreement for ternunation are satisfied, the termination date
speCified I~ the agr:ement, ~r. ~e date when ta.'( increment is no longer paid to the authority
under section 4Ss'1/S, subdmslon 1. The assessment agreement shall be presented to the
~ount~ assessor, o~ city assessor ha;ing ~he powers of the county assessor, of the jurisdiction
In which th: t3.,( Increment finanCing dlstrlct' an.d the property that is the subject of the
~greement IS located. The assesS<l!, shall reVlew the plans and specifications for the
Improvef!1ents to. be constructed, re',ew the market value pre\iously assigned to the land
upon which the Impro\'ements are to be constructed and, so long as the minimum market
value contained in the assessment agreement appears, in the judgment of the assessor to be
a reasonable estimate, shall execute the follo\\ing cerJfication upon the agreement: '
The undersigned assessor, being legally responsible for the assessment of the abo\'e
described property, certifies that the market values assigned to the land and improve-
ments are reasonable.
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ATTACHMENT B TO ASSESSMENT AGREEMENT
SubeL S. ASSE~)IE~"T AGREE)IE:,TS. An authorit). maj' t'nter into a'~,;tte~ assess-
~ent agreement ~,th any person esublishing a minimum market \"alue of la:1d, e:estir.g
lo:prO\'ements, or lmprO\'ements to be ~o:-structed in a district, if the property is o\\lled or
\\i11 be o\\lled by the person. The ITUmmum market value established by an assessment
agreement may be fixed, or increase or decrease in later )'ears from t.~e initial mini:r.um
market value. If an a . eement is fullv executed before Jul . 1 of an assessment 'ear. the
market \'alue as ro\ide un er e a eement must e used ... e county or oc assessor
as e ta.."(a Ie mar et \0 ue of e rooert.... for that assessment. ~eements execute on or
after ulv 1 of an assessment \'ear become efiecth'e for assessment uses in e follo\\in
asse~s:nent. year. An assessment agreement tenninates on e ear iest or e ate on which
con~uon~ m the assessment agreement for termination are satisfied, the termination date
speofied 1n the agreement, or the date when ta..'C increment is no longer paid to the authoritj'
under section 469.1i6, subdhision 1. The assessment agreement shall be presented to the
~ount~ assessor, o~ city assessor ha;'ing ~he powers of the county assessor, of the jurisdiction
m whIch th! ta.'t Increment nnanong district' an.d the property that is the subject of the
~greement IS located. The assessor shall reVlew the plans and specifications for the
lmprO\'e~ents to. be constructed, re\ie\\' the market value pre\iously assigned to the land
upon whIch the Impro\'ements are to be constructed and, so long as the minimum market
\"alue contained in the assessment agreement appears, in the judgment of the assessor, to be
a reasonable estimate, shall execute the foUo\\ing certification upon the agreement:
The undersigned assessor, being legall)' responsible for the assessment of the abo\'e
descn'bed property, certifies that the market values assigned to the la:1d and impl'o\'e'
ments are reasonable.
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EXHIBIT D
ACQUIRED PROPERTY DEED
.
THIS INDENTURE between the City of Prior Lake, a municipal corporation, organized pursuant to the Laws of
Minnesota (the "Grantor"), and Guy J. and Mary K. Selinske Owners/Operators of American Glass and Mirror, Inc. a
corporation existing under the laws of Minnesota, (the "Grantee"):
WITNESSETH, that Grantor in consideration of the sum of three thousand five hundred dollars, ($3,500) and other
good and valuable consideration, the receipt whereof is hereby acknowledged, does hereby grant, bargain, conveys
and warrants to the Grantee, its successors and assigns forever, all the tract or parcel of land lying and being in the
County of Scott and State of Minnesota described on Attachment A attached hereto (such tract or parcel of land is
hereinafter referred to as the "Property"):
To have and to hold the same, together with th~ hereditaments and appurtenances thereunto belonging or in
anywise appertaining, to the said Grantee, its succes~ors and assigns, forever, provided as follows:
1. It is understood and agreed that this Deed is subject to the covenants, conditions, restrictions and
provisions of an agreement entered into between the Grantor and Grantee on the _ day of , 1994,
entitled "Development Agreement" (hereafter referred to as the "Agreement"), and that the Grantee shall not convey
this property, or any part thereof, without the consent of the Grantor until a certificate of completion releasing the
Grantee from certain obligations of said Agreement as to this Property or such part thereof then to be conveyed,
has been placed of record. This provision shall in no way prevent the Grantee from making transfers permitted by
the Agreement or mortgaging this Property in order to obtain funds for the purchase of Property hereby conveyed
and for erecting improvements thereon in conformity with the Agreement, any applicable redevelopment plan and
applicable provisions of the zoning ordinances of the City of Prior Lake, Minnesota.
Promptly after completion of the improvements in accordance with the provisions of the Agreement, the
Grantor will furnish the Grantee with a Certificate of Completion in the form attached to this Deed as Attachment A.
Such certification by the Grantor shall be (and the certification itself shall so state) a conclusive determination of
satisfaction and termination of the agreements and covenants of the Agreement and of this Deed with respect to the
obligation of the Grantee, and its successors and assigns, to construct improvements and the dates for the
beginning and completion thereof, it being the intention of the parties that upon the granting and filing of the
Certificate of Completion that all restrictions and reservations of title contained in Sections 1 and 2 of this Deed be
forever released and terminated and that any remaining obligations of the Grantee pursuant to the Agreement shall
be personal only.
All certifications provided for herein shall be in such form as will enable them to be recorded with the County
Recorder of Scott County, Minnesota. If the Grantor shall refuse or fail to provide any such certification in
accordance with the provisions of the Agreement and this Deed, the Grantor shall, within ten (10) days after written
request by the Grantee, provide the Grantee with a written statement indicating in adequate detail in what respects
the Grantee has failed to complete the improvements in accordance with the provisions of the Agreement or is
otherwise in default, and what measures or acts will be necessary, in the opinion of the Grantor, for the Grantee to
take or perform in order to obtain such certification.
2. In the event that an Event of Default occurs under Section 4.1 of the Agreement and the Grantee herein
shall fail to cure such default within the period and in the manner stated in Section 4.2 of the Agreement, then the
Grantor shall have the right to re-enter and take possession of the Property and to terminate and revest in the
Grantor the estate conveyed by this Deed to the Grantee, its assigns or successors in interest, in accordance with
the terms of the Agreement.
IN WITNESS WHEREOF, the Grantor has caused this Deed to be duly executed in its behalf by its Mayor and
City Manager and has caused its corporate seal to be hereunto affixed this _ day of , 1994.
(Seal)
Lydia Andren, Mayor
Frank Boyles, City Manager
D-1
.~
STATE OF MINNESOTA )
) SS.
COUNTY OF SCOTT )
On this day of , 1994, before me personally appeared Lydia Andren, the Mayor
and Frank Boyles, to me personally known who by me duly sworn did say that they are the Mayor and City
Manager for the City of Prior Lake, Minnesota (the Grantor), named in the foregoing instrument; that the seal affixed
to said instrument is the seal of said Grantor; that said instrument was signed and sealed on behalf of said Grantor
pursuant to a resolution of its City Council; and said Lydia Andren and Frank Boyles acknowledges said instrument
to be the free act and deed of said.
Notary Public
Notary Public
D-2
ATTACHMENT A TO ACQUIRED PROPERTY DEED
CERTIFICATE OF COMPLETION AND RELEASE OF FORFEITURE
WHEREAS, the City of Prior Lake, Minnesota (the "Grantor"), a municipal corporation organized and operating
pursuant to laws of the State of Minnesota, by a Deed recorded in the Office of the County Recorder or the
Registrar of Titles in and for the County of Scott and State of Minnesota, as Deed Document Number _, has
conveyed to Guy J. and Mary K. Selinske, (the "Grantee"), in the State of Minnesota, the following legally described
property I to wit:
That part of WATERFRONT PASSAGE ADDITION, Scott County, Minnesota described as follows:
That part of the Southwest Quarter of Section 1, Township 114, Range 22, Scott County, Minnesota described
as follows:
Upon platting of the property by the City it is anticipatkd that the legal description for the parcel will be identified as
one half of Lot 2, Block 1, WaterFront Passage Business Park.
and
WHEREAS, said Deed incorporated and contained certain covenants and restrictions, the breach of which by
the Grantee, its successors and assigns, would result in a forfeiture and right of re-entry by the Grantor, its
successors and assigns, said covenants and restrictions being set forth in said Deed and in a Development
Agreement executed by and between the Grantor and the Grantee and dated September 19, 1994 (The "Develop-
ment Agreement"); and
WHEREAS, the Grantee has to the present date performed said covenants and conditions insofar as it is able
in a manner deemed sufficient by the Grantor to permit the execution and recording of this certification:
NOW, THEREFORE, this is to certify that all building construction and other physical improvements specified to
be done and made by the Grantee have been completed and the above covenants and conditions in said Deed and
Development Agreement have been performed by the Grantee therein and that the provisions for forfeiture of title
and right to reentry for breach of condition subsequent by the Grantor, contained therein, are hereby released
absolutely and forever insofar as they apply to the land described herein, and the County Recorded or the Registrar
of Titles in and for the County of Scott and State of Minnesota is hereby authorized to accept for recording and to
record the filing of this instrument, to be a conclusive determination of the satisfactory termination of the covenants
and conditions of said Deed and the Development Agreement which would result in a forfeiture by the Grantee, its
successors and assigns, the right of the Grantor, its successors and assigns, to re-enter and take possession of the
property as set forth in said Deed and the Development Agreement, and that said Deed and the Development
Agreement shall otherwise remain in full force and effect.
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.
DEVELOPER
THE CITY OF PRIOR LAKE
Guy J. Selit1Ske
'.
BY
ITS
Mary K, S~iftsf<e
r
.