HomeMy WebLinkAboutRock Creek Dev Agreement
EXHIBIT C
DEVELOPMENT AGREEMENT
This Agreement is entered into this _ day of , 2005 by and between the City
of Prior Lake ("City"), a Minnesota municipal corporation and Rock Creek Designers &
Builders, LLC ("Developer"), a Minnesota Limited Liability Corporation.
RECITALS
WHEREAS, the City and Developer have executed a Purchase Agreement dated
, 2005, which Purchase Agreement is attached hereto and incorporated herein
as Exhibit 1; and
WHEREAS, the sale of the Property is subject to an AGREEMENT REGARDING THE
PURCHASE OF CITY OWNED PROPERTY dated , 2005, which Agreement
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WHEREAS, the City sold Developer real property located at Main Street and Hasting
Avenue, Prior Lake, Scott County, Minnesota as legally described in the aforementioned
Agreement in the preceding recital; and
WHEREAS, the Developer submitted a written proposal to the City dated May 27,
2005, which proposal is attached hereto and incorporated herein as Exhibit 3; anc:I
WHEREAS, the City desires to ensure that the property sold to the Developer is
developed as set forth in Developer's proposal.
NOW THEREFORE, based on the mutual promises and covenants set forth herein, the
sufficiency of which is not disputed, the parties agree as follows:
1. The Recitals set forth above are incorporated herein as if fully set forth herein.
2. The Developer shall execute this Development Agreement on and after October 7,
- 2005 _ but _before the date _of Closing _as _ pro\d.ded for in the _Purchase Agreement. _ _The _ Cash_
Deposit provided to the City with Developers' proposal dated May 27, 2005 shall remain in
place as security for performance pursuant to this Development Agreement.
3. Developer shall construct a three-story commercial retail and office building on
the Property consistent with its May 27, 2005 proposal, and in conformance with the building
plans for the building approved by the City. The height of the building will require a
conditional-use permit ("CUP") from the City. The Developer provides for a specific Project
Development Timeline set forth as follows, to wit:
a Submit Land Development RFP: May 27, 2005
b. Execute City Development Agreement: October 7,2005
c. Submit CUP Application and Preliminary Building
Plans Building Plans for City Review: August 26, 2005
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d. Submit Plans for and Secure a Building Permit:
e. Provide Financing Satisfactory to City:
f. Close on Purchase of Property:
g. Commence Construction:
h. Complete Construction
1. Final Certificate of Occupancy
October 3, 2005 *
August 26, 2005
October 22, 2005*
November 1, 2005*
Fourteen (14) months from
commencement of construction
Sixty (60) days from completion
of construction
* Subject to paid extensions described below.
Developer's financing requires that fifty percent (50%) of the building be leased (the
"Fifty Percent Lease Requirement") prior to funding of the construction loan and commencement
of construction. If Developer has not met the Fifty Percent Lease Requirement and obtained a
building permit by October 3,2005, this deadline may be extended by Developer, in increments
of forty-five (45) days, but in no event to later than January 3, 2006. The first extension shall run
-----------trom October 3;TOO)tfiioiigIi-Noveiiiliei17~-20()5 and the second exteri.Sioji,-if exercised:-wtlr----------
run from November 18, 2005 through January 3, 2006. As a condition to the grant of each
extension of forty-five (45) days, Developer shall pay to the City, a cashier's check in, the sum
of Fifteen Thousand and no/lOO Dollars ($15,000.00), in advance. If Developer fails to
commence construction on or before April 7, 2006, Developer forfeits all payments made for
each extension and the Cash Deposit and, in addition, the City shall have the rescission right
described in paragraph 5 below.
Construction must be completed within fourteen (14) months from commencement of
cOnstruction (April 7, 2006) and the final certificate of occupancy must be obtained with sixty
(60) days thereafter.
4. Developer shall construct the building and complete the project described in
Exhibit 3 in accordance with the Project Development Timeline formally set out in Paragraph 3
above. The failure of the Developer to meet any of the dates set forth in _ the Project
Development Timeline shall constitute a material breach of this Development Agreement.
5. In the event Developer fails to commence construction on or before April 7, 2006,
- the - City shall give Developer - notice - that it - Is - ili:nne<liiifu"Jy:-(1 J rescmamg tlie-saIe-- 6f"tlle
Property, (2) retaining the Cash Deposit in addition to the Purchase Price paid for the Property
by the Purchaser, and (3) retaining each of the Fifteen Thousand and no/l 00 Dollar ($15,000.00)
extension payments described above. If the sale of the property is rescinded the City shall be
entitled to retain the Purchase Price, the Cash Deposit and the extension payments and the
Developer hereby agrees to reconvey the Property to the City by appropriate documents of
conveyance approved by the City. Upon commencement of construction by Developer, the right
of rescission shall terminate and the City shall release the termination right by execution and
delivery of a quit claim deed to the Property. To commence construction, Developer must
commence construction of foundation footings and foundation, at a cost of not less that
$100,000, and must enter into a construction loan in an amount sufficient to fund, together with
Developer's equity, the completion of construction.
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In the event of breach of this Development Agreement, other than a breach of the
construction commencement date, the City shall provide Developer with (1) written notice of the
breach describing the breach and (2) a period of fifteen (15) days within which to cure the
breach. In the event Developer does not cure the breach within the said fifteen (15) day period,
the City shall have the right to: (1) draw upon the Fifteen Thousand and/no Dollars ($15,000.00)
Cash Deposit, (2)-retain each of the Fifteen Thousand and no/l 00 Dollars ($15,000.00) extension
payments described above, and (3) seek specific performance of this Agreement by Developer.
6. The Notice provided for in Paragraph 5 shall be sent to:
Rock Creek Designers & Builders, LLC
16817 Duluth Avenue, SE
Prior Lake, MN 55372
7. If Developer meets the completion construction date, the Fifteen Thousand and
no/lOO Dollars ($15,000.00) Cash Deposit shall continue to be held by the City and reduced, in
-'the-ev-ent of Developer's-defaUl~-' m an-amount" deieimiii-ed OJ the- City; in itS -sore-discretion; ui):fff--
the final certificate of occupancy is issued, at which time allor, if applicable, the remaining
amount of the Cash Deposit shall be released.
For purposes of this Agreement, the construction completion date shall be June 7. 2007,
which is fourteen (14) months after the date Developer is required to .commence construction.
Thereafter, the Developer shall have sixty (60) days to obtain a final certificate of occupancy. for
the Property. Developer agrees that on. May 1, 2006, Developer shall lease the City-owned
parking lot located adjacent to the Property. If Developer intends to utilize the City-owned
parking lot for construction of the building prior to May 1, 2006, the Lease shall start on the date
of such us~.
On May 1, 2007, or earlier as required in this paragraph, the=Developer shall execute and
deliver to the City two (2) originals of the Parking Lot Lease, attached hereto as Exhibit 4, to the
City and the City shall execute the two (2) originals and return one (1) fully-signed original to
Developer within five (5) days of the construction completion date.
8. Both parties acknowledge that they have been represented by legal counsel in
connectIon with 'the acquisition of the -Property, this Development Agreement ana The 'Parkiiig
Lease. Legal counsel for the parties have both been involved in drafting this Agreement.
9. This Agreement shall be recorded against the Property and released upon issuance
of the final Certificate of Occupancy.
10. This Agreement shall survive the closing on the sale of the Property and the
delivery of the deed to the Developer and shall be enforceable after the closing in accordance
with the terms and conditions contained herein. The doctrine of merger shall not apply to this
Agreement.
11. The Developer shall indemnify, defend and hold the City, its City Council,
agents, employees, attorneys and representatives harmless against any and all claims, demands,
actions, suits, proceedings, liens, losses, costs, expenses, obligations, liabilities, damages,
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recoveries or deficiencies, including interest, penalties, and attorneys' fees, that the City incurs
or suffers, which arise out of, result from or relate to this Development Agreement. Nothing
herein shall require Developer to indemnify, defend or hold the City harmless from any
intentional tort, reckless or negligent acts of the City or its employees, representatives and
agents.
12. This Development Agreement may not be assigned by Developer, other than to
the affiliate of Developer which will develop the Property, without the prior written consent of
the City. The City is not obligated for any reason to consent to an assignment.
13. If any portion, section, subsection, sentence, clause, paragraph, or phrase of this
Development Agreement is declared invalid by a court of competent jurisdiction, such decision
shall not affect the validity of the remaining portion of this Development Agreement.
14. There shall be no amendments to this Development Agreement unless in writing,
signed by the parties and approved by a resolution of the City Council.
15. This Development Agreement shall be governed by the laws of the State of
Minnesota.
16. Developer shall not be in default under this Agreement or the Purchase
Agreement for the Property due to delays caused by acts of God, acts of riot or terrorism,
weather conditions which delay construction, shortages of material and/or labor, delays caused
by entities or persons over whom or conditions over which Developer has no control. ,
By:
By:
DEVELOPER:
ROCK CREEK DESIGNERS & BUILDERS,
LLC
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STATE OF MINNESOTA )
) SS.
COUNTY OF SCOTT )
. The foregoing instrument was acknowledged before me this 11~ day of
Oe.,~ , 2005, by Jack G. Haugen, Mayor, and by Frank Boyles, City Manager, of the
City of Prior Lake; a Minnesota municipal corporation, on behalf of the corporation and pursuant
to the authority granted by its City Council.
,
~ ~;YPUBUl.-M1I"N"~Ulh ~:
,.., My c-.~llIv &pieS_ 31, 2010
CHARLOTTE R. GREEN
NOT ARY PUBLIC - MINNESOTA
, mmlsslon Exp:res Jan. 31. 2010
(!J/1JILdft~
Notary Public
STATE OF MINNESOTA )
--------..COUNTY OF ~JJ"/- -- -- j ss.
CHARLOTTE R. GREEN
NOTARY PUBLIC. MINNESOTA
My "COlilfnTsSloii Exp:resJan-:-31 ;-2010'
The foregoing ins~t was. agw.owledged before me this (iHr, day of
0('1-c) ~ , 2005, by Va1/t:d u.44!.(4Jresident of Rock Creek Designers &
Builders, a Minnesota limited liability company, on its behalf.
{I kaAvlo #e #-RRi--
Notary Public
DRAFTED BY:
City of Prior Lake
16200 Eagle Creek Avenue SE
Prior Lake, Minnesota 55372
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EXHIBIT 1
PURCHASE AGREEMENT
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EXHffiIT 2
AGREEMENT REGARDING THE PURCHASE OF CITY ON PROPERTY
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EXIDBIT 3
DEVELOPER'S MAY 27,2005 PROPOSAL
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EXHIBIT 4
PARKING LOT LEASE
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