HomeMy WebLinkAboutDev. Agreement Draft - City of PL and Stan Anderson 4/97
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, DRAFT
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF PRIOR LAKE
AND
STAN ANDERSON
APRIL, 1997
TABLE OF CONTENTS
ARTICLE I DEFINmONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.1. DEF11'n110NS ...........................................;................ 2
ARTICLE IT REPRESENTATIONS AND WARRANTIES........................................ 4
SECTION 2.1. REPRESENTATIONS AND WARRANTIES OF mE CITY ........................ 4
SECTION 2.2. REPRESENTATIONS AND WARRANTIES OF TIlE DEVELOPER ................. 5
ARTICLE ill UNDERTAKINGS BY DEVELOPER AND CITY ................................... 7
SECTION 3.1. COST ESTIMATE REIATING TO ACQUISmON OF TIIE DEVELOPMENT
PROPERTY, INFRASTRUcruRE. SITE IMPROVEMENTS AND SOIL CORRECTION . . . . . . . . . . . . . 7
SECTION 3.2. ASSESSMENT AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.3. REIMBURSEMENT: DEVELOPER PAYMENTS AND TAX INCREMENT REVENUES. 8
SECTION 3.5. GUARANTEE OF PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.6. TAXES AND SPECIAL ASSESSMENTS ........................................ 8
SECTION 3.7. EXCESS TAX INCREMENT REVENUES ...................................... 8
ARTICLE IV EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 4.1. EVENTS OF DEFAULT DEFINED ...................................:....... 9
SECTION 4.2. REMEDIES ON DEFAULT ................................................. 9
SECTION 4.3. NO REMEDY EXCLUSIVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.4. NO IMPIlED WAIVER .................................................... 10
SECTION 4.5. AGREEMENT TO PAY AITORNEY'S FEES AND EXPENSES .................... 10
SECTION 4.6. INDEMNIFICATION OF CITY ............................................... 10
ARTICLE V INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.1. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE VI ADDmONAL PROVISIONS ...................;.............................. 13
SECTION 6.1. RESTRICTIONS ON USE .................................................. 13
SECTION 6.2. CONFLICfS OF INTEREST ......... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 6.3. TITLES OF ARTICLES AND SECTIONS .................. . . . . . . . . . . . . . . . . . . . . 13
SECTION 6.4. NOTICES AND DEMANDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 6.5. COUNTERPARTS ........................................................ 13
SECTION 6.6. LAW GOVER.."'lING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 6.7. SEVERABILITY.......................................................... 13
SECTION 6.8. PROMPT PAYMENT OF SUBCONTRACTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE vn DEVELOPER'S OPTION TO TERMINATE AGREEMENT .......................... 15
SECTION 7.1. TIIE DEVELOPER'S OPTION TO TERMINATE ................................ 15
SECTION 7.2. ACTION TO TERMINATE ................................................. 15
SECTION 7.3. EFFECT OF TERMINATION ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 7.4. LIMITATION OF DAMAGES................................................ 15
EXHIBIT A DESCRIPTION OF DEVELOPMENT DISTRICT .................................... A-I
EXHIBIT B DESCRIPTION OF DEVELOPMENT PROPERTY................................... B-1
EXHIBIT C ASSESSMENT AGREEMENT ................................ :-. . . . . . . . . . . . . . . . . . C-1
ill.
DEVELOPMENT AGREEMENT
TIllS AGREEMENT, made as of the _ day of , 1997, by and between the City of Prior
Lake, Minnesota (the "City"), a Minnesota municipal corporation and Stan Anderson, an individual, his
personal representatives, successors and assigns, (the "Developer"),
WITNESSETII:
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. 2-8 (the "Tax Increment District"), the legal description of which is
attached hereto as Exhibit B and will adopt a tax increment financing plan April 7, 1997, therefore (the "Tax
Increment Plan") which provides for the use of tax increment financing in connection \-vith 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 Citvhas previouslv acquired and imoroved property in the Waterfront Passage Business
Park a portion of which \}..iIl be utilized bv the Developer for an industrial expansion. and the Developer has
alrreed to reimburse City costs through the generation and guarantee of Tax Increment revenues, pursuant
to 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 Deve!opment Program, the City has determined to assist the Developer with the financing of the
Development Property as defined 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 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:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. All capitalized terms used and not otherwise defined herein shall have the
following meanings unless a different meaning clearly appears from the context:
Agreement means this Agreement, as the same may be from time to time modified, amended or
supplemented;
Business Day means any day except a Saturday, Sunday or a legal holiday or a day on which banking
institutions in the City are authorized by law or executive order to close;
Certificate of Completion means the certification in the form of the certificate attached hereto as
Exhibit E and hereby made a part of this Agreement, provided to the Developer pursuant to Section 4.2 of
this Agreement; - .
City means the City of Prior Lake, Minnesota;
County means Scott County, Minnesota;
Developer means Stan Anderson, individually;
Development District means the real property described in Exhibit A;
Development PiOgram means the development program approved in connection with the Development
District;
Excess Tax Increment Revenues means annual Tax Increment Revenues generated from the Project in
excess of the estimated revenues anticipated from the initial Project to be constructed by the Developer.
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;
Legal 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, .1998, and each December 15 and July 15 of each year thereafter to and
including December 15,2006; provided, that if any such Payment Date should not be a Business Day, the
Payment Date shall be the next succeeding Business Day;
Proiect means the approximate 12,000 square foot production/warehouse facility and any future
expansions of said facility to be located on the Development Property;
Site Improvements means excavation, grading, fill~ng, utility improvements and extensions, landscaping
and access and parking preparations;. -
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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. 2-8 to be established on April 7,
1997 on property legally described in Exhibit B to be qualified as an economic development district under
the Tax Increment Act;
Tax Increment Financing 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
ami/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.
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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 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.
(4) The City has previouslv acquired and improved the Development Property which will be utilized
Qy the Developer in accordance with the Plan and this Agreement.
(5) The City will cooperate with the Developer with respect to any litigation commenced by third
parties in connection with tllis Agreement.
(6) 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
(7) 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.
(8) 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.
(9) The City has no knowledge of any requirements to construct pending on the Development Property
. to accommodate storm water retention.
(10) 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 Infrastructure and Site
Improvements in the Development District as further provided in this Agreement.
(11) 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, v.ith respect to such property and the City is not aware of any violation
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of any local, state or federal law, reguhltion or review procedure which would give rise to ,a valid claim under
the Minnesota Environmental Rights Act or other state or federal environmental statute.
(12) 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.
(13) 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. 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 is an individual 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, environmental, zoning, energy conservation, building codc 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 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.
(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
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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.
(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, 1997 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, 1997, 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. Cost Estimate Relatin~ to Acquisition of the Development Property. Administration,
Infrastructure. Site Improvements. The parties agree that the Infrastructure and 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,Administration, Infrastructure and Site Improvements, which
shall include engineering and all other costs directly related to the making of the Site Improvements, together
with the Legal and Administrative expenses, and interest expense, are estimated as follows:
Land Acquisition, Site Improvements
and Infrastructure (1.65 acres)
Administrative, Interest Expense and Legal Expenses
TOTAL
$165,310
75.118
$255,428
Sources of reimbursement to the City for the identified Project costs are as follows:
City Contribution (Unrestricted Funds)
TIF Revenues
TOTAL
48,325
207.103
$255,421
(1) The City has undertaken actions for construction of Infrastructure 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 12,000 SF facility. In the event that the structural Soil
Correction and Site Improvement cost for the Development Property based upon good faith estimates shall
exceed $25,000 the Developer shall have seven (7) days to terminate this Agreement without any further
obligation by either party and Developer shall be entitled to a refund of all monies previously paid to the
City relative to this transaction.
(2) The City will utilize Tax Increment Financing revenues generated from the Project along with
contributions of unrestricted funds to finance $255,428 in Land Acquisition, Administration, and
Infrastructure costs.
Section 3.2. Assessment Agreement. The parties covenant that, effective January 2,1998, the Develop-
ment Property shall have a minimum market value of $381,000 for purposes of determining tax capacity.
Developer will not challenge any market valuation of the Development Property determined by the Scott
County Assessor for taxes assessed on- or after January 2,1998 to the extent that such valuation is at or below
$381,000. Should the Scott County assessor for any year up to and including 2007, establish a market value
for taxes payable in such year in excess of $381,000, 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 $381,000.
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Section 3.3. Reimbursement: Developer Pavments and Tax Increment Revenues. (1) The City shall
receive reimbursement for Acquisition, Administration, Infrastructure and Site Improvements made on behalf
of the Developer under Section 3.1 through the receipt of tax increment revenues generated from Tax
Increment Financing District No. 2-8. Following is a schedule of anticipated Developer payments and tax
increment payments to be made available for reimbursement of City costs:
Schedule of Payment
July 15, 1998 - $10,725
December 15, 1998 - $10,725
July 15, 1999 - $10,725
December 15, 1999 - $10,725
July 15,2000 - $10,725
December 15,2000 - $10,725
July 15, 2001 - $10,725
December 15,2001 - $10,725
July 15, 2002 - $10,725
December 15,2002 - $10,725
July 15,2003 - $10,725
December 15,2003 - $10,725
July 15,2004 - $10,725
December 15,2004 - $10,725
July 15,2005 - $10,725
December 15,2005 - $10,725
July 15, 2006 - $10,725
December 15,2006 - $10,725
Section 3.4. Guarantee ofPavrnents. In the event that the tax increment revenues are less than $10,725
for any of the specific payment dates commencing July 15, 1999 through December 15, 2007 pursuant to the
schedule within Section 3.6, 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 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 3.5. Taxes and Special Assessments. Real estate taxes due and payable prior and in the year
of closing shall be paid by the City. Real estate taxes due and payable in the years subsequent to the closing
shall 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 3.6. Excess Tax Increment Revenues. As an inducement to the Developer, the City agrees to
share on a 1:1 pro rata basis, annual tax increment revenues in excess of $18,923; these revenues shall be
defined as Excess Tax Increment Revenues. The Excess Tax Increment Revenues shall be made available
to the Developer for reimbursement of any initial payments made for land acquisition. Payment of these
Excess Tax Increment Revenues shall be net of any penalties or loss of local government aid incurred by the
City in relation to the collection of the proceeds. The maximum amount remitted to the Developer is limited
to the initial land acquisition cost and a 9% interest factor.
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;:1.-
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 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
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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.
(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 Agre-ement should be
breached by any party and thereafter waived by any other party, such waiver shall be limited to the particular
breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach
hereunder. .
Section 4.5. Agreement to 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.
Section 4.6. Indemnification of City.
(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 (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 arising out of the design, construction, maintenance, or use by
Developer, its successors, assigns, his agents, employees, or contractors of 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 willfu~ 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 ordinary negligence of
the City to the extent that the Developer is not insured for the event at issue (but provided further that the
City's liability in such event shall not exceed the limitations under Minnesota Statute Chapter 466) nor 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 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
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,., .
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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.
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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 nonreporting 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 (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
construction of the Project.
12
"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 tenants which shall operate in conformance with all applicable City ordinances.
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 othernise 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:
Stan Anderson
2500 W. Co. Rd. 42.
Burnsville, MN 55337
(2) in the case of the City is addressed to or delivered personally to the City at:
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. Ccunteroarts. This Agreement may be executed in any number of counterparts, each of
which shall constitute one and the. same instrument.
Section 6.6. Law Governing. This Agreement will be governed and construed in accordance with the
laws of the State of Minnesota.
Section 6.7. Severability. To the extent any portion of this Agreement is held unenforceable by a court
of competent jurisdiction, the remaining provisions of this Agreement~hall remain effective; as if, the
unenforceable provision had never been included herein.
Section 6.8. Prompt 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
13
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 1 1-/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 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.
14
_i
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 (ii) the City fails to comply with any material term of this Agreement, and, after written notice
by the Developer of such failure, the City has failed to cure such noncompliance within ninety (90) days of
receipt of such notice, or, if such noncompliance cannot reasonably be cured by the City within ninety (90)
days, of receipt of such notice, the City has not provided assurances, reasonably satisfactory to the Developer,
that such noncompliance will be cured as soon as reasonably possible.
Section 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 \.\ithout 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 3.5.
Section 7.4. Limitation of Damag:es. By Mav 31. 1997, if the Developer in his 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 June 15. 1997. 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.
15
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
Stan Anderson
By
Its
By
Its
Drafted by:
Advance Resources for Development, Inc.
P. O. Box 3027, Mankato, MN 56002-3027
This is a signature page to the Development Agreement dated as of
by and between the City of Prior Lake and Stan Anderson.
, 1997,
16
STATE OF MI~~OTA )
): ss
COUNTI' OF SCOTT )
The foregoing instrument was acknowledged before me this _ day of ,
1997, 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
STATE OF MINNESOTA)
): ss
COUNTY OF scan )
The foregoing instrument was acknowledged before me this _ day of
1997, by Stan Anderson.
Notary Public
17
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-I
,-.zr-
EXHIBIT B
Economic Development District No. 2-8
and
Legal Description of Development Property
That part of Block 2, WATERFRONT PASSAGE ADDITION, Scott County, Minnesota described as
follows:
An exact legal description will be provided upon completion of a survey for the property. In the
interim, the property is described as an approximate 1.65 acre parcel situated in Block 2 of Waterfront
Passage Business Park situated adjacent and immediately north of Lot 2, Block 2 (Keyland Homes) parcel
and immediately east of Fish Point Road. -
Containing 1.65 acres.
B-1
EXHIBIT C
ASSESSMENT AGREEMENT
~S AGREEMENT, dated as of this _ day of , 1997, by and among the City of
-::)r Lake (the "City"), Stan Anderson, ("Developer"), and the Assessor for Scott County (the
;sessor"):
WITNESSETH
~:EREAS, on or before the date hereof the City and Developer have entered into a Development
::eement dated as of , 1997 (the "Agreement"), regarding certain real property located
~he City (the "Development Property") which property is legally described on Exhibit A attached
:,eto and hereby made a part hereof;
-:":EREAS, it is contemplated that pursuant to said Agreement, the Developer will undertake the
-J"elopment of a 12,000 sq. ft. production/warehouse facility and related improvements (the "Project") on
-. Development Property;
-,ereas, the City and Developer desire to establish a minimum market value for the portion of the
>:Jelopment Property and the improvements constructed or to be constructed therebn, pursuant to
~nnesota Statutes, Section 469.177, Subdivision 8;
-:"':EREAS, the Developer has acquired the Development Property; and
'...ereas, the City and the Assessor have reviewed plans and specifications for the Project:
,)W, THEREFORE, the parties to this Agreement, in consideration of the promises, covenants and
;eements made by each to the other, do hereby agree as follows:
As of January 2, 1998 and thereafter until December 31,2007, the minimum market value which shall
- assessed for the Project shall be not less than $381,000.
The minimum market value herein established shall be of no further force and effect and this
-7eement shall terminate on December 31, 2007.
This Agreement shall be promptly recorded by the Developer along with a copy of Minnesota
%tutes, Section 469.177, Subdivision 8, attached as exhibit B and hereby made a part hereof, with the
.unty Recorded of Scott County, 1vfinnesota. The Developer shall pay all costs of recording.
The assessor represents that he has reviewed the plans and specifications for the improvements and
,~ market value previously assigned to the land upon which the improvements are to be constructed,
.d that the "minimum market value" as set forth above is reasonable.
Neither the preamble nor provisions of this Agreement are intended to modify, or shall they be
.l1strued as modifying, the terms of the Agreement between the City and the Developer.
This Agreement shall inure to the benefit of and be binding upon _t~e successors and assigns of the
- rties. .
C-1
DEVELOPER
BY
Stan Anderson
Signature page for Assessment Agreement by and among the City of Prior Lake, Minnesota, Stan
Anderson and the Assessor for Scott County.
C-3
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 $381,000 as of
January 2, 1998 and thereafter.
County Assessor for Scott County
STATE OF MINNESOTA )
) SS.
COUNTY OF SCOIT )
This instrument was acknowledged before me this
T. Arnoldi, the County Assessor of Scott County.
day of
, 1997, by Leroy
Notary Public
Signature page for Assessment Agreement by and among the City of Prior Lake, Minnesota, Stan
Anderson and the Assessor for Scott County.
C-5
STATE OF MINNESOTA )
) SS.
COUNTY OF SCOlT )
This instrument was acknowledged before me this
Anderson.
day of
, 1997, by Stan
Notary Public
-STATE OF MINNESOTA )
) SS.
COUNTY OF SCOTT )
This instrument was acknowledged before me this day of ' , 1997, by Lydia
Andren, the Mayor and Frank Boyles, the City Manager of the City of Prior Lake, Minnesota.
Notary Publi~
C-6
EXHIBIT A TO ASSESSMENT AGREEMENT
Legal Description
That part of Block 2, WATERFRONT PASSAGE ADDITION, Scott County, Minnesota described
as follows:
An exact legal description will be provided upon completion of a survey for the property. In the
interim, the property is described as an approximate 1.65 acre parcel situated in Block 2 of Waterfront
Passage Business Park situated adjacent and immediately north of Lot 2, Block 2 (Keyland Homes)
parcel and immediately east of Fish Point Road.
Containing 1.65 acres.
C-7
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