HomeMy WebLinkAbout9E - NBC Products
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
FISCAL IMPACT:
CITY COUNCIL AGENDA REPORT
MAY 4,1998
9E
DONALD RYE, PLANNING DIRECTOR
CONSIDER APPROVAL OF DEVELOPERS AGREEMENT
FOR NBC PRODUCTS
History- On January 5, 1998, the City Council approved a
modification to TIF District 2-6 which provided for the expansion of
the District. The expansion was necessary to accommodate the
acquisition of approximately one acre of land by NBC Products
adjacent to its' existing site.
Current Circumstances- The next step in the process is to approve the
developers agreement. Following execution of the developers
agreement, the sale can be completed.
The Issues- One issue which arose during the EDA's discussion of the
developers agreement had to do with soil conditions on the site. In the
course of site investigation, NBC Products discovered the site had poor
soil conditions which required correction. NBC asked that the
City/EDA consider reimbursement of some or all of the soil correction
costs. The discussion at the EDA meeting on April 20 concluded with
a recommendation from the EDA that 60% of the soil correction costs
up to a maximum of $15,000 be reimbursed to NBC Products. Based
on bids NBC had received and the City Engineers review of the bids, it
appears that soil correction costs could approach $40,000.
The attached developers agreement (Section 3.4, number 4) provides
for reimbursement of soil correction costs of 60% of the actual cost not
to exceed $15,000.
Conclusion- It appears reasonable to provide for the reimbursement of
soil correction costs in this case. Similar provisions were applied to the
Becker Arena Products property and the Keyland Homes property.
Cost Recovery Analysis-Because the cash to the EDNCity has the
potential to be reduced by $15,000, the pro forma recently completed
by Advance Resources will be affected if the soil correction costs are
162009~~gij~\(\Q~.5SQID.Q<Prior Lake, Minnesota $5372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
ALTERNATIVES:
RECOMMENDED
MOTION:
REVIEWED BY:
L:\98FILES\98EDA \CC5-5E6.DOC
reimbursed. The effect will be a reduction in cash proceeds by the
amount of the reimbursement.
Budget Impact- The City budget will not be affected by approval of
the developers agreement.
1. Approve the developers agreement as presented.
2. Approve the developers agreement with specified modifications
3. Do not approve the developers agreement
Motion to approve the developers agreement as submitted and
authorize execution of the agreement
?
Frank Bo
2
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF PRIOR LAKE
AND
ANTHONY SHANKS
Initiated:
Amended:
September, 1995
March, 1998
\]\rn @ rn n~ rn I,t'
\~_APR 241998 t
TABLE OF CONTENTS
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE II REPRESENTATIONS AND WARRANTIES .....................................,....
SECTION 2.1 REPRESENTATIONS AND WARRANTIES OF THE CITY ............................
SECTION 2.2 REPRESENTATIONS AND WARRANTIES OF THE DEVELOPER .....................
ARTICLE III UNDERTAKINGS BY DEVELOPER AND CITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.1 SALES AND PURCHASE OF THE DEVELOPMENT PROPERTY. . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.2 PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.3 TITLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.4.COST ESTIMATE RELATING TO ACQUISITION OF THE DEVELOPMENT
PROPERTY, ADMINISTRATION,INFRASTRUCTUREAND SOIL CORRECTION.. .. ... . . . .. . .... ....
SECTION 3.5 ASSESSMENT AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.6 REIMBURSEMENT: EDA PAYMENTS, CITY PAYMENTS, DEVELOPER PAYMENTS AND
TAX INCREMENT REVENUES ........................................................
SECTION 3.7 GUARANTEE OF PAyMENTS.... ............. .. ......... ... . . . . . ....... ... .
SECTION 3.8 TAXES AND SPECIAL ASSESSMENTS ........................................
SECTION 3.9 SUBORDINATION.... ....... ... ........... . .. ........ . .. . .. .. . .. .... . .. ..
ARTICLE IV EVENTS OF DEFAULT .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.1 EVENTS OF DEFAULT DEFINED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.2 REMEDIES ON DEFAULT ...;.............................................
SECTION 4.3 NO REMEDY EXCLUSIVE .................................................
SECTION 4.4 NO IMPLIED WAIVER ....................................................
SECTION 4.5 AGREEMENT TO PAY ATTORNEY'S FEES AND EXPENSES .......................
SECTION 4.6 INDEMNIFICATION OF CITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE V INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.1 INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE VI ADDITIONAL PROVISIONS ...................................................
SECTION 6.1 RESTRICTIONS ON USE ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.2 CONFLICTS OF INTEREST ................................................
SECTION 6.3 TITLES OF ARTICLES AND SECTIONS .......................................
SECTION 6.4 NOTICES AND DEMANDS ........ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.5 COUNTERPARTS .......................................................
SECTION 6.6 LAW GOVERNING ......................................................
SECTION 6.7 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.8 PROMPT PAYMENT OF SUBCONTRACTORS ...................................
ARTICLE VII DEVELOPER'S OPTION TO TERMINATE AGREEMENT ..............................
SECTION 7.1 THE DEVELOPER'S OPTION TO TERMINATE ..................................
SECTION 7.2 ACTION TO TERMINATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.3 EFFECT OF TERMINATION ................................................
SECTION 7.4 LIMITATION OF DAMAGES. ................................................
EXHIBIT A DESCRIPTION OF DEVELOPMENT DISTRICT ......................................
EXHIBIT B DESCRIPTION OF DEVELOPMENT PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXHIBIT C TAX INCREMENT FINANCING PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXHIBIT D ASSESSMENT AGREEMENT ...................................................
EXHIBIT E ACQUIRED PROPERTY DEED ..................................................
EXHIBIT F LEASE AGREEMENT WITH NBC PRODUCTS, INC. ...................................
EXHIBIT G GUARANTEE OF DEVELOPER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
2
4
4
5
7
7
7
7
7
8
9
9
10
10
11
11
11
12
12
12
12
14
14
15
15
15
15
15
15
15
15
15
17
17
17
17
17
A-1
B-1
C-1
D-1
E-1
F-1
G-1
DEVELOPMENT AGREEMENT
THIS AGREEMENT, made as of the day of , 1998, by and between the City of Prior lake,
Minnesota (the "City"), a Minnesota municipal corporation and Anthony Shanks, an individual and president of NBC
Products, Inc., a Minnesota Corporation, his personal representatives. successors and assigns, (the "Develope!"'),
WITNESSETH:
WHER~S, pursuant to Minnesota Statutes, Section 469.1 ~4 through 469.1 ~4 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 has created, within the Development District, an Economic
Development District No. 2-6 (the "Tax Increment District"), the legal description of which is attached hereto as
Exhibit B and adopted a tax increment financing plan modification on January 5, 1998, 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, the City has agreed to sell and the Developer has agreed to purchase the Development Property
in consideration of the terms and conditions contained in this Agreement; 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 will result in
increased employment and preservation/enhancement ofthe 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:
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 PropertY Deed means a warranty deed, substantially in the form of the deed attached to this
Agreement as Exhibit E-1, used to convey the Development Property from the EDA to the Developer;
Aareement means this Agreement, as the same may be from time to time modified, amended or supplement-
ed;
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 attached hereto as Exhibit A of
the Acquired Property Deed and hereby made a part of this Agreement, provided to the Developer pursuant to
Section 4.2 of this Agreement;
Q!!y means the City of Prior Lake, Minnesota;
County means Scott County, Minnesota;
Developer means Anthony Shanks, individually;
Development District means the real property described in Exhibit A;
Development Proaram means the development program approved in connection with the Development
District;
Development PropertY means the real property described in Exhibit B of this Agreement;
EDA means the Prior Lake Economic Development Authority;
Event of Default means any of the events described in Section 4.1;
Excess Tax Increment Revenues means annual Tax Increment Revenues generated from the Project in excess
of the revenues required to reimburse the City for funds advanced to write down the cost of Administration, Land
Acquisition and related Infrastructure improvements;
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;
leaal and Administrative Expenses means the fees and expenses incurred in connection with the adoption
of the Tax Increment Financing Plan, preparation of this Development Agreement and ongoing Administration;
Pavment Date means July 15, 1998, 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;
2
Proiect means the approximate 19,200 square foot production/Warehouse facility constructed in 1995, an
approximate 14,OOOSF addition and any future expansions of said facility to be located on the Development
Property;
Site Imorovements means excavation, grading, filling, utility improvements and extensions, landscaping and
access and parking preparations;
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. To be eligible for
reimbursement of these corrective actions the Developer must present reports prepared by a registered soils
engineer and then submit invoices documenting the cost associated with the recommended actions;
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 469.177;
Tax Increment Act means the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 through
469.179, as amended;
Tax Increment District means Economic Development District No. 2-6 established on September 19, 1995 and
modified on January 5, 1998, on property legally described in the Tax Increment Financing District No. 2-6 Plan
attached as Exhibit C, qualified as an economic development district under the Tax Increment Act;
Tax Increment Financina 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, construction material shortages relating to building frame or envelope,
unusually severe or prolonged bad weather, acts of God, fire or other casualty to the Project and/or Site
Improvements, site conditions including the existence of environmental problems, litigation commenced by third
parties which, by injunction or other similar judicial action or by the exercise of reasonable discretion, directly
results in delays, or acts of any federal, state or local governmental unit which directly result in delays.
3
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. ReDresentations 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 shall be an "economic development district" within the meaning of Minnesota
Statutes, Section 469.174, Subdivision 12 and will 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 and delineated in the Tax Increment Financing Plan attached hereto as
Exhibit C.
(4) The City has acquired the Development Property and transferred the Development Property to the EDA.
The EDA will convey title to the Development Property to the Developer for uses in accordance with the Plan and
this Agreement.
(5) The City is not a party to any unrecorded contract or agreement affecting the Development Property that
will be binding on the Developer or that will prevent the Developer from completing, owning and operating the
Minimum Improvements as required by this Agreement.
(6) There are no claims, actions, suits or other proceedings outstanding to which the City is a party,
resolution of which could have a materially adverse effect on the Development Property, the Minimum
Improvements, or the transactions contemplated by this Agreement.
(7) The City has not incurred any obligation or liability (contingent to otherwise) for brokerage or finder's fee
or agent's commissions or other like payment in connection with this Agreement or the transaction contemplated
herein,
(8) The City has no knowledge of any requirements to construct pending on the Development Property to
accommodate storm water retention.
(9) 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 installation of Infrastructure and Legal and Administrative Expenses as
further provided in this Agreement.
(10) The City has not received any notice from any local, state or federal official that the activities of the
Developer or the City or third parties with respect to the Development Property or any immediately adjacent
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, with respect to such property and the City is not aware of any violation of any local, state or federal
law, regulation or review procedure which would give rise to a valid claim under the Minnesota Environmental
Rights Act or other state or federal environmental statute.
4
,~
It!
(11) The City shall make findings required by Section 469.175, Subdivision 3, of the Tax Increment Financing
Act for the Tax Increment District, and set forth in writing the reasons and supporting facts for each determination.
(12) The City will not unreasonably delay, withhold, or condition 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. Reoresentations and Warranties of the Develooer, 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 is a individual who serves as President and is the sole shareholder of a duly organized
corporation, validly existing under the laws of this State and has 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, environ-
mental, zoning, energy conservation, building code and public health laws and regulations).
(4) Subject to Unavoidable Delays, 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 and regulations which must be obtained or met before the Project may be lawfully
installed.
(5) To the best of the Developer's knowledge after reasonable investigation, 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 Environmental 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.
(7) To the best of the Developer's knowledge after reasonable investigation, 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 personally guarantees and 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.
5
(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.
(12) Barring Unavoidable Delays, the Project will be completed by December 31, 1998, provided construction
has commenced by May 1, 1998, 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 December 31,
1998, 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,
(13) The Developer and NBC Products, Inc. shall execute a lease agreement for the lease of the Development
Property on or before the closing date on the Development Property in substantially the form of Exhibit F attached
hereto. The lease payments shall be personally guaranteed by the Developer and the term of the lease shall
extend through December 15, 2005,
6
~..~
it'"
ARTICLE III
UNDERTAKINGS BY DEVELOPER AND CITY
Section 3.1. Sales and Purchase of the Develooment Prooertv. The City, via the EDA, agrees to sell, and
Developer agrees to purchase the Development Property.
Section 3.2. Purchase Price. In 1995 the Developer agreed to pay the EDA the Purchase Price of $154,125
for 1.8472 acres of Development Property, plus interest carrying costs, Legal and Administrative fees to be remitted
pursuant to the schedule of payments delineated in Section 3.6 of this Agreement.
At the present time, the Developer has agreed to pay the EDA an additional $96,262 for 1.16 acres of
Development Property, plus interest carrying costs, Legal and Administrative fees to be remitted pursuant to the
schedule of payments delineated in Section 3.6 of this Agreement.
Section 3.3. Title. City, at its option, will obtain and shall deliver to Developer an updated abstract of title or
a commitment for an owner's title insurance policy (AL T A Form B - 1987) issued by Scott County Abstract and Title,
Inc. as agent for Chicago Title Insurance Company naming the Developer as the proposed owner-insured of the
Development Property in the amount of the Purchase Price (the .Commitment"). The Commitment shall have a
current date as its effective date and shall commit to insure marketable title in Developer, free and clear of all
mechanics' lien claims, questions of survey, unrecorded interests, rights of parties in possession or other
exceptions. The Commitment shall set forth all levied real estate taxes and special assessments and shall contain
such endorsements as Developer may require. Said commitment shall have attached copies of all instruments of
record which create any easements or restrictions which are referred to in Schedule B of the title commitment.
Developer will be allowed 20 days after receipt of the abstract or the Commitment and the Survey (as hereinafter
defined) to make an examination thereof and to make any objections to the marketability to the Development
Property, said objections to be made by written notice or to be deemed waived.
If the title to the Development Property, as evidenced by the abstract or the Commitment and Survey, together
with any appropriate endorsements, is not good and marketable of record in City and is not made so by the Date
of Closing, Developer may either:
(a) Terminate this Agreement by giving written notice to the City in which event this Agreement shall become
null and void and neither party shall have any further rights or obligation hereunder; or
(b) Elect to accept the title in its unmarketable condition by giving written notice to the City, in which event
the Developer shall hold. back funds from the portion of the Purchase Price payable at the closing to cure the
defects and apply said holdback funds for the reasonable costs of curing such defects, including reasonable
attorneys' fees, and pay the unexpended balance to City. (If the amount of said holdback cannot be mutually
agreed to by the City and the Developer, the issuer of the Commitment shall determine the amount of said
holdback).
Section 3.4. Cost Estimate Relatina to Acauisition of the Develooment Prooertv. Administration. Infrastructure
and Soil Correction. The parties agree that the acquisition of the Development Property and Infrastructure to be
constructed by the City are essential to the successful completion of the Project. The costs of the acquisition of
the Development Property and Infrastructure, which shall include engineering and all other costs directly related
thereto together with the Legal and Administrative expenses relating to the initial transaction between the City and
Developer in 1995, are estimated as follows:
Land Acquisition
and Infrastructure
Administrative Expenses
Interest Expense
Contingency
TOTAL
$154,125
29,500
89,000
24.500
$297,125
7
Sources of funding for reimbursement of City costs for the initial Project are as follows:
Tax Increment Revenues
City Contribution Unrestricted Funds
TOTAL
$270,000
27.125
$297,125
Cost estimates for the purchase of additional Development Property pursuant to this amended Agreement are
estimated as follows:
Land Acquisition and Infrastructure
Administrative Expenses
Interest Expense
TOTAL
$96,262
10,000
42.069
$148,331
Sources of funds for reimbursement of City costs for the additional Project are identified as follows:
Developer Payments
Tax Increment Revenues
City Contribution of Unrestricted Funds
TOTAL
$39,603
98,844
9.884
$148,331
(1) The Developer made an initial payment of $75,000 to the EDA upon closing the initial Land Acquisition
in 1995. At the present time the Developer shall make an initial payment of $50,506 to the EDA for the acquisition
of additional Development Property. Reimbursement of City costs shall occur via Developer annual payments as
are outlined in Section 3.6 of this Agreement. To the extent that Excess Tax Increment Revenues are available as
defined herein, the Developer is eligible to receive reimbursement.
(2) The City has undertaken actions for the acquisition of the Development Property and construction of
Infrastructure within the Waterfront Passage Business Park. The cost to the City for these actions is $250,387.
(3) The City will utilize Tax Increment Financing revenues generated from the Project along with Developer
payments to obtain a minimum reimbursement for $308,247 of Land Acquisition, Administrative, Infrastructure costs
and interest carrying costs. To the extent that Tax Increment revenues exceed the amount necessary to satisfy
reimbursement of City costs for Land Acquisition, Administrative and Infrastructure, the City will pay Excess Tax
Increments to the Developer pursuant to the schedule of payments in Section 3.6 In the event that additional Tax
Increment Revenues are available in excess of the minimum payments due the City and Excess Tax Increment
Revenues due the Developer, the City will retain these revenues to reimburse the balance of its investment.
(4) To the extent that the Developer is able to document Soil Correction issues based upon geotechnical
analysis from a registered soil engineer requiring remediation activities that result in extraordinary expenses beyond
those costs normally associated with Site Improvements the Developer will be entitled to a rebate of up to 60% of
those costs not to exceed $15,000. The rebate would be paid upon delivery to the City of invoices documenting
the Soil Correction activities.
Section 3.5. Assessment Aareement. The parties covenant that, effective January 2, 1999, the Development
Property shall have a minimum market value of $500,000 for purposes of determining tax capacity and that effective
January 2, 1999, the minimum market value shall increase to $1,020,000, Developerwill not challenge any market
valuation of the Development Property determined by the Scott County Assessor for taxes assessed on or after
January 2, 1999 to the extent that such valuation is at or below $1,020,000, Should the Scott County Assessor
for any year up to and including 2005, establish a market value for taxes payable in such year in excess of
$1,020,000, the Developer may challenge at the Board of Equalization or by filing a tax petition or by such other
method as permitted by law, the valuation as determined by the Assessor but only to the extent that the value
exceeds $1,020,000.
8
Section 3.6. Reimbursement: EDA Pavments. City Pavments. Developer Pavments and Tax Increment
Revenues.
(1) The EDA shall receive payment for sale of the Development Property to the Developer as follows:
September, 1995 - $75,000
May, 1998 - $50,506
(2) The City shall receive reimbursement for Acquisition, Administrative,and Infrastructure Improvements made
on behalf of the Developer under Section 3.4 through the receipt of Developer payments and Tax Increment
Revenues generated from Tax Increment Financing District No. 2-6. To the extent that there are Excess Tax
Increment Revenues, the Developer shall be eligible for reimbursement of all costs relating to land acquisition of
the Development Property. Following is a schedule of anticipated Developer payments and tax increment
payments to be made available for reimbursement of City costs:
Schedule of Pavment
Payment to City Via Developer
and/or Tax Increment Revenues
July 15, 1997 - $5,850
December 15, 1997 - $5,850
July 15, 1998 - $45,453*
December 15, 1998 - $5,850
July 15, 1999 - $5,850
December 15, 1999 - $5,850
July 15, 2000 - $13,037
December 15,2000 - $13,037
July 15, 2001 - $13,037
December 15, 2001 - $13,037
July 15, 2002 - $18,787
December 15, 2002 - $18,787
July 15, 2003 - $18,787
December 15, 2003 - $18,787
July 15, 2004 - $18,787
December 15, 2005 - $18,787
July 15, 2005 - $18,787
December 15, 2005 - $18,787
* $39,603 of this amount is Developer payment via EDA.
Payment to Developer Via
Excess Tax Increment Revenues
July 15, 1998 - $9,500
December 15,1998 - $9,500
July 15, 1999 - $9,500
December 15, 1999 - $9,500
July 15, 2000 - $9,500
December 15,2000 - $9,500
July 15, 2001 - $9,500
December 15, 2001 - $9,500
July 15, 2002 - $3,750
December 15,2002 - $3,750
July 15, 2003 - $3,750
December 15, 2003 - $3,750
July 15, 2004 - $3,750
December 15, 2005 - $3,750
July 15, 2005 - $3,750
December 15,2005 - $3,750
(3) Pursuant to Section 3.4, the Developer is eligible to receive reimbursement of expenditures for land
acquisition. Payment ofthis reimbursement is contingent upon the availability of Excess Tax Increment Revenues
following reimbursement of City costs as defined herein.
Section 3.7. Guarantee of Pavments. In the event that the tax increment revenues are less than the amounts
due to the City for any of the specific payment dates commencing July 15, 1997 through December 15, 2005
pursuant to what is depicted on the schedule within Section 3.6 (2), the Developer will remit the amount of the
shortfall to the City on or before each of these dates.
(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
9
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 3.8. Taxes and Scecial Assessments. Real estate taxes due and payable prior to the year of closing
shall be paid by the City; thereafter real estate taxes are to be paid by the Developer. On or prior to the Date of
Closing, City shall pay all special assessments, whether or not then due, then levied against the Development
Property or pending for improvements with respect to which, as of the Date of Closing, the letting of contracts has
been duly authorized by appropriate governmental action,
Section 3.9. Subordination. The Developer has applied for and received financing approved from the Liberty
State Bank for the Project. The City shall subordinate to secure the financing for the Project, provided that such
subordination does not release the Developer from its obligation' under this Agreement and related Assessment
Agreement.
10
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 pay when due any amount required to be paid by the Developer under this
Agreement as amended or any related agreement.
(2) Failure by the Developer to timely pay any ad valorem real property taxes assessed with respect to the
Development Property,
(3) Failure by the Developer to cause the installation of the Project to be completed pursuant to the terms,
conditions and limitations of this Agreement.
(4) 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.
(5) 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.
(6) If the Developer shall
(A) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under the United States Bankruptcy Act of 1978, as amended or under
any similar federal or state law; or
(B) make an assignment for the benefit of its creditors; or
(C) admit in writing its inability to pay its debts generally as they become due; or
(D) be adjudicated a bankrupt or insolvent; or if a petition or answer proposing the 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 Developer, shall consent to or
acquiesce in such appointment.
Section 4.2. Remedies on Default. Whenever any Event of Default referred to in Section 4.1 occurs and is
continuing, the City, as specified below, may take anyone or more of the following actions after the giving of thirty
(30) days' written notice to the Developer, but only if the Event of Default has not been cured within said thirty (30)
days. The City shall not be required to elect, in the notice required herein, the remedy it will pursue.
(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 an irrevocable letter of credit in a form satisfactory to the City
Attorney in an amount reasonably adequate to cure the alleged default.
11
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 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 Remedv 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 Imolied 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 Pav Attornev's Fees and Exoenses.
(1) 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 therefor, pay to the City the reasonable fees of such attorneys and such other expenses so incurred
by the City,
(2) In the event the City fails to perform its' obligations required by this Agreement, and upon 10 days written
notice to the City of said failure, the City agrees to pay to the Developer its reasonable costs and expenses,
including its reasonable attorney's fees, incurred by the Developer to enforce the City's obligations.
Section 4.6. Indemnification of Citv.
(1) The Developer, its successors and assigns, its agents, employees and/or contractors of the Project
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 (collectively the -City-)
shall not be liable for and agrees to indemnify and hold harmless the City against any loss or damage to property
or any injury to or death of any person occurring at or about or arising out of the design, construction, mainte-
nance, or use by Developer, its successor, assigns, agents, employees, or contractors ofthe Project, provided that
the foregoing indemnification shall not be effective for any actions of the City that are not contemplated by this
Agreement.
(2) Except for any willful misrepresentation or any willful or wanton misconduct of the City, the Developer
agrees to protect and defend the Indemnified Parties, now and forever, and further agrees to hold the aforesaid
12
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; and 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.
13
ARTICLE V
INSURANCE
Section 5.1. Insurance. The Developerwill 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 ofthe 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 Dall 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 naming the City as a loss
payee and containing language providing the City with notice of proposed cancellation.
(2) Comprehensive general liability insurance naming the City as an additional insured (including 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 cqnstruction
of the Project. .
14
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 ofthe City except Developer may lease the Development
Property to NBC Products, Inc. of which the Developer is the sole shareholder.
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.
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:
Anthony Shanks
16873 Fish Point Rd.
Prior Lake, MN 55372
(2) in the case of the City is addressed to or delivered personally to the City at:
Frank Boyles, City Manager
City of Prior Lake
16200 Eagle Creek Ave. 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, Counteroarts. This Agreement may be executed in any number of counterparts, each of which
shall constitute one and the same instrument.
Section 6.6. Law Governinq. This Agreement will be governed and construed in accordance with the laws
of the State of Minnesota.
Section 6.7. Severabilitv. To the extent any portion of this Agreement is held unenforceable by a court of
competent jurisdiction, the remaining provisions of this Agreement shall remain effective; as if, the unenforceable
provision had never been included herein.
Section 6.8. Promot Pavment of Subcontractors. The Developer and/or Contractor hired by the Developer
shall insert the following language in any contract relating to the Project: The Contractor shall pay any
subcontractor within ten (10) days of the Contractor's receipt of payment by the City for undisputed services
provided by the subcontractor. If the Contractor fails within that time to pay the subcontractor any undisputed
amount for which the Contractor has received payment by the City, the Contractor shall pay interest to the
subcontractor on the unpaid amount at the rate of 11-/2 percent per month or any part of a month, The minimum
monthly interest penalty payment for an unpaid balance of $100 or more is $10. For an unpaid balance of less
15
that $100, the Contractor shall pay the actual interest penalty due to the subcontractor, A subcontractor who
prevails in a civil action to collect interest penalties from the Contractor shall be awarded its costs and
disbursements, including attorney's fees, incurred in bringing the action.
16
- --- ;T--
...
ARTICLE VII
DEVELOPER'S OPTION TO TERMINATE AGREEMENT
Section 7.1. The Develooer's Ootion 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 3.4.
Section 7.4. Limitation of Damaaes. By May 1, 1998, if the Developer in its sole discretion is unable to secure
adequate financing, acceptable construction bids, satisfactory appraisal report, satisfactory Phase I environmental
assessment or the parties to this Agreement are unable to reach mutual agreement on construction and related
terms and conditions as set forth within the City's design standards and covenants for the Waterfront Passage
Business Park, then the Developer shall have the option to terminate this Agreement by sending the City written
notice on or before May 15, 1998. Upon termination,in accordance with this Section, the Developer agrees to
execute and deliver to the City such documentation as the City shall deem necessary to effectively cancel this
Agreement.
17
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
Anthony Shanks
By
Its
By
Its
Drafted by:
Advance Resources for Development, Inc,
P. 0, Box 3027, Mankato, MN 56002
This is a signature page to the Development Agreement dated as of
between the City of Prior Lake and Anthony Shanks.
, 1998, by and
18
STATE OF MINNESOTA )
): ss
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this day of , 1998,
by Wes Mader and Frank Boyles the Mayor and the City Manager, respectively, of the City of Prior lake, Minnesota,
a municipal corporation.
Notary Public
STATE OF MINNESOTA )
): ss
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this
by Anthony Shanks.
day of
,1998,
Notary Public
19
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,
Waterfront Passage Addition, Cottonwood Condominium CIC No, 1026 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, Prior Lake; 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
Legal Description of Development Property
The original boundaries of the Development Property as conveyed to the Developer in September, 1995, are
as follows:
That part of Lot 1, Block 2, WATERFRONT PASSAGE ADDITION, according to the recorded plat thereof, Scott
County, Minnesota lying northwesterly of the following described line:
Commencing at the most easterly corner of said Lot 1; thence North 62 degrees 51 minutes 58 seconds West
along the northerly line of said Lot 1 a distance of 131.41 feet; thence northwesterly continuing along said
northerly line a distance of 79.85 feet on a tangential curve concave to the northeast having a radius of 530.00
feet and a central angle of 8 degrees 37 minutes 54 seconds; thence North 54 degrees 14 minutes 04
seconds West continuing along said northerly line and tangent to said curve a distance of 593.15 feet to the
point of beginning of the line to be described; thence South 61 degrees 45 minutes 56 seconds West a
distance of 106.00 feet; thence South 33 degrees 45 minutes 56 seconds West a distance of 33.69 feet;
thence North 89 degrees 25 minutes 19 seconds West a distance of 361.36 feet to the westerly line of said
Lot 1 and there terminating.
As a result of the proposed Project the City will convey additional Development Property described as follows:
That part of Lot 1, Block 2, WATERFRONT PASSAGE ADDITION, according to the recorded plat thereof, Scott
County, Minnesota, lying southerly of "Line A" and northwesterly of "Line B". Said "Line A" and "Line B" are
described as follows:
"Line A" is a line commencing at the most easterly corner of said Lot 1; thence North 62 degrees 51 minutes
58 seconds West, along the northerly line of said Lot 1, a distance of 131.41 feet; thence northwesterly
continuing along said northerly line a distance of 79.85 feet on a tangential curve concave to the northeast
having a radius of 530.00 feet and a central angle of 08 degrees 37 minutes 54 seconds; thence North 54
degrees 14 minutes 04 seconds West continuing along said northerly line and tangent to said curve a
distance of 593.15 feet; thence South 61 degrees 45 minutes 56 seconds West a distance of 106.00 feet;
thence South 33 degrees 45 minutes 56 seconds West a distance of 33.69 feet to the point of beginning of
said "Line A" to be described; thence North 89 degrees 25 minutes 19 seconds West a distance of 361.36
feet to the westerly line of said Lot 1, said "Line A" there terminating.
"Line B" is a line commencing at the most easterly corner of said Lot 1; thence North 62 degrees 51 minutes
58 seconds West, along the northerly line of said Lot 1, a distance of 131.41 feet; thence northwesterly
continuing along said northerly line a distance of 79.85 feet on a tangential curve concave to the northeast
having a radius of 530.00 feet and a central angle of 08 degrees 37 minutes 54 seconds; thence North 54
degrees 14 minutes 04 seconds West continuing along said northerly line and tangent to said curve a
distance of 593.15 feet; thence South 61 degrees 45 minutes 56 seconds West a distance of 106.00 feet;
thence South 33 degrees 45 minutes 56 seconds West a distance of 33.69 feet to the point of beginning of
said "Line B" to be described; thence continuing South 33 degrees 45 minutes 56 seconds West a distance
of 36.31 feet; thence South 14 degrees 15 minutes 56 seconds West a distance of 70.00 feet; thence South
49 degrees 45 minutes 56 seconds West a distance of 87.00 feet; thence South 75 degrees 45 minutes 56
seconds West a distance of 185.99 feet to the westerly line of said Lot 1, said "Line B" there terminating.
B-1
EXHIBIT 0
ASSESSMENT AGREEMENT
THIS AGREEMENT, dated as of this _ day of ,1998, by and among the City of Prior Lake (the
"City"), Anthony Shanks, ("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 , 1998 (the "Agreement"), regarding certain real property located in the City (the "Development
Property") which property is legally described on Exhibit 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 19,200 sq, ft. production/warehouse facility, and approximately 14,200SF addition 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 Development
Property and the improvements constructed orto be constructed thereon, pursuant to Minnesota Statutes, Section
469.177, Subdivision 8;
WHEREAS, the Developer has acquired 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 agreements
made by each to the other. do hereby agree as follows:
1. As of January 2. 1999 and thereafter until December 31. 2005. the minimum market value which shall be
assessed for the Project shall be not less than $1.020.000.
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
469.177, Subdivision 8, attached as exhibit B and hereby made a part hereof, with the County Recorder 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.
0-1
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:
Wes Mader, Mayor
BY:.
Frank Boyles, City Manager
Signature page for Assessment Agreement by and among the City of Prior lake, Minnesota, Anthony Shanks, and
the Assessor for Scott County,
0-2
",
~.~
.-T
II....
DEVELOPER
BY
Anthony Shanks
Signature page for Assessment Agreement by and among the City of Prior Lake, Minnesota, Anthony Shanks and
the Assessor for Scott County,
0-3
STATE OF MINNESOTA )
) SS,
COUNTY OF SCOTT )
This instrument was acknowledged before me this
day of
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF SCOTT )
This instrument was acknowledged before me this day of
Mayor and Frank Boyles, the City Manager of the City of Prior Lake, Minnesota,
Notary Public
0-4
, 1998, by Anthony Shanks,
, 1998, by Wes Mader, the
CONSENT TO ASSESSMENT AGREEMENT
The Liberty State Bank (the "Bank") of St. Paul, Minnesota, does hereby consent to all terms, conditions and
provisions of the Assessment Agreement attached to the Development Agreement as Exhibit D 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 $1.020,000 as of January 2. 1999 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 . 1998.
BY:
ITS:President
STATE OF MINNESOTA )
) SS.
COUNTY OF SCOTT )
This instrument was acknowledged before me this day of
the President of Liberty State Bank, a Corporation. on behalf of the Corporation.
,1998. by
Notary Public
D-5
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 $1,020,000 as of January 2, 1999 and thereafter.
County Assessor for Scott County
STATE OF MINNESOTA )
) SS.
COUNTY OF SCOTT )
This instrument was acknowledged before me this
the County Assessor of Scott County.
day of.
,1998, by Leroy T. Arnoldi,
Notary Public
Signature page for Assessment Agreement by and among the City of Prior Lake, Minnesota, Anthony Shanks and
the Assessor for Scott County.
0-6
EXHIBIT A TO ASSESSMENT AGREEMENT
Legal Description of Development Property originally conveyed:
That part of Lot 1, Block 2, WATERFRONT PASSAGE ADDITION, according to the recorded plat thereof, Scott
County, Minnesota lying northwesterly of the following described line:
Commencing at the most easterly corner of said Lot 1; thence North 62 degrees 51 minutes 58 seconds West
along the northerly line of said Lot 1 a distance of 131.41 feet; thence northwesterly continuing along said
northerly line a distance of 79.85 feet on a tangential curve concave to the northeast having a radius of 530.00
feet and a central angle of 8 degrees 37 minutes 54 seconds; thence North 54 degrees 14 minutes 04
seconds West continuing along said northerly line and tangent to said curve a distance of 593.15 feet to the
point of beginning of the line to be described; thence South 61 degrees 45 minutes 56 seconds West a
distance of 106.00 feet; thence South 33 degrees 45 minutes 56 seconds West a distance of 33.69 feet;
thence North 89 degrees 25 minutes 19 seconds West a distance of 361.36 feet to the westerly line of said
Lot 1 and there terminating.
AND
Legal Description of additional Development Property to be conveyed:
That part of Lot 1, Block 2, WATERFRONT PASSAGE ADDITION, according to the recorded plat thereof, Scott
County, Minnesota, lying southerly of "Line A" and northwesterly of "Line B". Said "Line A" and "Line B" are
described as follows:
"Line A" is a line commencing at the most easterly corner of said Lot 1; thence North 62 degrees 51 minutes
58 seconds West, along the northerly line of said Lot 1, a distance of 131.41 feet; thence northwesterly
continuing along said northerly line a distance of 79.85 feet on a tangential curve concave to the northeast
having a radius of 530.00 feet and a central angle of 08 degrees 37 minutes 54 seconds; thence North 54
degrees 14 minutes 04 seconds West continuing along said northerly line and tangent to said curve a
distance of 593.15 feet; thence South 61 degrees 45 minutes 56 seconds West a distance of 106.00 feet;
thence South 33 degrees 45 minutes 56 seconds West a distance of 33.69 feet to the point of beginning of
said "Line A" to be described; thence North 89 degrees 25 minutes 19 seconds West a distance of 361.36
feet to the westerly line of said Lot 1, said "Line A" there terminating.
"Line B" is a line commencing at the most easterly corner of said Lot 1; thence North 62 degrees 51 minutes
58 seconds West, along the northerly line of said Lot 1, a distance of 131.41 feet; thence northwesterly
continuing along said northerly line a distance of 79.85 feet on a tangential curve concave to the northeast
having a radius of 530.00 feet and a central angle of 08 degrees 37 minutes 54 seconds; thence North 54
degrees 14 minutes 04 seconds West continuing along said northerly line and tangent to said curve a
distance of 593.15 feet; thence South 61 degrees 45 minutes 56 seconds West a distance of 106.00 feet;
thence South 33 degrees 45 minutes 56 seconds West a distance of 33.69 feet to the point of beginning of
said "Line B" to be described; thence continuing South 33 degrees 45 minutes 56 seconds West a distance
of 36.31 feet; thence South 14 degrees 15 minutes 56 seconds West a distance of 70.00 feet; thence South
49 degrees 45 minutes 56 seconds West a distance of 87.00 feet; thence South 75 degrees 45 minutes 56
seconds West a distance of 185.99 feet to the westerly line of said Lot 1, said "Line B" there terminating.
D-7
EXHIBIT E
ACQUIRED PROPERrf DEED
THIS INDENTURE between the City of Prior Lake (the -Cityj, the Prior Lake Economic Development Authority, organized
pursuant to the Laws of Minnesota (the -Grantorj, and Anthony Shanks, a Developer and President of NBC Products, Inc. a
corporation existing under the laws of Minnesota, (the -Granteej:
WITNESSETH, that Grantor in consideration of the sum of fifty thousand fIVe hundred six dollars, ($50,506) to be paid upon
closing and other good and valuable consideration. as set forth in an Agreement entered into by the Grantor and Grantee 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 Exhibit
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 the hereditaments and appurtenances thereunto belonging or in anyway
appertaining, to the said Grantee, its successors 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 City and Grantee on the day of . 1998, entitled -Development Agreement"
(hereafter referred to as the "Agreement"), and that the Grantee shall not voluntarily convey this property, or any part thereof,
without the consent of the Grantor and the City 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.
Promptly after completion of the improvements in accordance with the provisions of the Agreement, the City will furnish the
Grantee with a Certificate of Completion in the form attached to this Deed as Attachment A. Such certification by the City 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 his successors and assigns,
other than those provisions of the Development Agreement relating to assessment of the Property. All remaining obligations of
the Grantee, pursuant to the Agreement and this Deed 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 or the City shall refuse or fail to provide any such certification in accordance with the
provisions of the Agreement and this Deed. the Grantor and the City 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 and the City, 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 and the City has caused this Deed to be duly executed in their behalf by its President,
Mayor and Executive Director and has caused its corporate seal to be hereunto affIXed this _ day of , 1998.
(Seal)
Robert Barsness, President, EDA
Frank Boyles, Executive Director, EDA
Wes Mader, Mayor
E-1
STATE OF MINNESOTA )
) SS.
COUNTY OF SCOTT )
On this day of , 1998, before me personally appeared Robert Barsness, the
President, Frank Boyles, Executive Director and Wes Mader, Mayor, to me personally known who by me duly sworn
did say that they are the President and Executive Director for the City of Prior Lake Economic Development
Authority (the -Grantor") and Mayor for the City of Prior Lake, Minnesota (the -City-), named in the foregoing
instrument; that said instrument was signed on behalf of said Grantor and City pursuant to a resolution of its
Economic Development Authority and City Council; and said Robert Barsness, Frank Boyles and Wes Mader
acknowledges said instrument to be the free act and deed of said.
Notary Public
Notary Public
E-2
EXHIBIT A TO ACQUIRED PROPERTY DEED (EXHIBIT E)
CERTIFICATE OF COMPLETION AND RELEASE OF FORFEITURE
WHEREAS, the City of Prior Lake, Minnesota (the "City"), the Prior Lake Economic Development Authority (the
"Grantor"), 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 Anthony Shanks, (the "Grantee"), in the State of Minnesota, the following
legally described property, to wit:
That part of Lot 1, Slock 2, WATERFRONT PASSAGE ADDITION, according to the recorded plat thereof, Scott
County, Minnesota lying northwesterly of the following described line:
Commencing at the most easterly corner of said Lot 1; thence North 62 degrees 51 minutes 58 seconds West
along the northerly line of said Lot 1 a distance of 131.41 feet; thence northwesterly continuing along said
northerly line a distance of 79.85 feet on a tangential curve concave to the northeast having a radius of 530.00
feet and a central angle of 8 degrees 37 minutes 54 seconds; thence North 54 degrees 14 minutes 04 seconds
West continuing along said northerly line and tangent to said curve a distance of 593.15 feet to the point of
beginning of the line to be described; thence South 61 degrees 45 minutes 56 seconds West a distance of
106.00 feet; thence South 33 degrees 45 minutes 56 seconds West a distance of 33.69 feet; thence North 89
degrees 25 minutes 19 seconds West a distance of 361.36 feet to the westerly line of said Lot 1 and there
terminating.
AND
The additional Development Property conveyed includes, that part of Lot 1, Block 2, WATERFRONT PASSAGE
ADDITION, according to the recorded plat thereof, Scott County, Minnesota, lying southerly of "Une A" and
northwesterly of "Une B". Said "Line A" and "Line B" are described as follows:
"Line A" is a line commencing at the most easterly corner of said Lot 1; thence North 62 degrees 51 minutes
58 seconds West, along the northerly line of said Lot 1, a distance of 131.41 feet; thence northwesterly
continuing along said northerly line a distance of 79.85 feet on a tangential curve concave to the northeast
having a radius of 530.00 feet and a central angle of 08 degrees 37 minutes 54 seconds; thence North 54
degrees 14 minutes 04 seconds West continuing along said northerly line and tangent to said curve a distance
of 593.15 feet; thence South 61 degrees 45 minutes 56 seconds West a distance of 106.00 feet; thence South
33 degrees 45 minutes 56 seconds West a distance of 33.69 feet to the point of beginning of said "Line A" to
be described; thence North 89 degrees 25 minutes 19 seconds West a distance of 361.36 feet to the westerly
line of said Lot 1, said "Line A" there terminating.
"Line B" is a line commencing at the most easterly corner of said Lot 1; thence North 62 degrees 51 minutes
58 seconds West, along the northerly line of said Lot 1, a distance of 131.41 feet; thence northwesterly
continuing along said northerly line a distance of 79.85 feet on a tangential curve concave to the northeast
having a radius of 530.00 feet and a central angle of 08 degrees 37 minutes 54 seconds; thence North 54
degrees 14 minutes 04 seconds West continuing along said northerly line and tangent to said curve a distance
of 593.15 feet; thence South 61 degrees 45 minutes 56 seconds West a distance of 106.00 feet; thence South
33 degrees 45 minutes 56 seconds West a distance of 33.69 feet to the point of beginning of said "Line S" to
be described; thence continuing South 33 degrees 45 minutes 56 seconds West a distance of 36.31 feet;
thence South 14 degrees 15 minutes 56 seconds West a distance of 70.00 feet; thence South 49 degrees 45
minutes 56 seconds West a distance of 87.00 feet; thence South 75 degrees 45 minutes 56 seconds West a
distance of 185.99 feet to the westerly line of said Lot 1, said "Line B" there terminating.
WHEREAS, Grantor has no knowledge of wells being located on the Development Property; 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 City and the Grantee and dated , 1998 (The "Development
Agreement"); and
E-3
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 Recorder 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 Grantor 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.
ANTHONY SHANKS, DEVELOPER THE CITY OF PRIOR LAKE
PRIOR LAKE ECONOMIC
DEVELOPMENT AUTHORITY
BY
ITS
BY
ITS
E-4
EXHIBIT G
GUARANTEE
Anthony Shanks hereby unconditionally guarantees the performance of each and every covenant and obligation
under Article III of the Development Agreement.
Anthony Shanks
STATE OF MINNESOTA )
) ss.
COUNTY OF SCOTT )
This instrument was acknowledged before me this
day of
, 1998, by Anthony Shanks.
Notary Public
G-1