HomeMy WebLinkAbout8A, Presbyterian Homes TIF�
EN HILLS
Request for Counc�� Action
Prepared By: 7i11 Hutmacher, Cammunity
Deveiopment Director Councii Meeting Date: December 20, 2010
Proposed TIF Disirict — Presbyter�an Homes Redevelopment
B�dgeted Amount: Actual Amount: Funding Source:
N/A N/A NIA
Recoutmendation:
1. Motion to adopt Resolution 2010-081, a resolution approving contract for private
development and awarding the saie of, and providing the form, ternns, covenants and
directions for the issuance of its $1,115,000 Tax Increment Reven�e Nate.
2. Motion ta adopt Resol�fion 2010-482, a resalntion adopting a modifcation to the
Development Progwam for DeveIopment Districi No, l.; and esfab�ishing Tax iucre�nent
Financing District No. 4 therein and adopting a Tax I�tcrement Finance Plan therefor.
3. Motion to adopt Resoluti�n 2010-083, a resoIution authoxizing an interfund loan �or
advance of certain costs �n connection with Tax Increment Financing District No. 4.
Su ortin Docume�nts:
i. Memo frorr� Ji�l Huimacher, dated Decernber 20, 201Q
2. AttacHment A: Black-lined copy of Cantract for Private Developtx�ent showing changes since
December i 3, 201 Q
3. Attachment B: Clean Copy of Coniract £or Private Developnnent
4. Atta.chment C: Revised Appendices F& G to the Tax ��crement Finance Plan far District No. 4
5. Attachrnent D: Resolution 2010-OS1
6. Attachrnent E: Resolution 2010-082
7. Attachment F: Resoiution 2010-083
�
EN HILLS
MEMORANDUM
DATE: December 20, 2010
TO: Mayor and City Council
FROM: Jill Hutmacher, Commu�xty Developm.ent Director
SUBJECT: Presbyterian Homes TIF Cantract
Back�round
At a wor�C session and the regitlar Ciiy Council rneeting on December 13, 20 � 0, the City Couzacil
reviewed and discussed the proposed modification to tk�e Development Progaram �'or
Development District Na. l and the establishment of Tax Increznent Financing Disfrict No. 4 ta
assisi with the redevelopment of Presbyt�rian Ho�nes of Ard�n Hills. Background information
was proeided in the agenc�a packet for �lie December 13, 2010 regular Cify Council meeting
(item 6B}.
The City Council provided directian regarding negotiatians an the TIF Con�ract w�th
Presbyterian Homes. This zx�.e�o describes chaza.ges to th.e contxact requested by the C�ty
Couz�cxi.
Contract Revisions
Attached are redlined and clean copies of the Presbyterian Homes Contract for Private
Development. Changes to the contract reviewed by the City Council on D�cember 13, 2010 are
descrzbed below.
�ectian 1.1. Def nitions. A definition far Environmental Response Actions was added. The
change to the definition of Housing Revenue Bonds reflects the changes to financing provisions
zn Articie V�I af the contract.
Sectian 3.5, subsection {d). Environmental matters. Changes to this section include:
• The City and Develaper will caopera�e on seeking granfs from the State and other sources;
• The Developer will enter inio any agreements necessary fo disburse and administer grant
pxoceeds;
• The Developer sha11 not be obligated to pay �rz�ore tlaan $50,400 over and above grant
proceeds for environmental remediation;
City of Arden Hills
City Council Work Session December 20, .2010
Page 1 of 2
• If the Developer's costs for environmental remediation exceed $50,000 over and above grar�t
proceeds, th� Developer will notify the City. The Ciiy fhen has two options:
o Reqttire �ie Developer to cleax and seed the paroperty and provzde the City with either
an open space covenant or a restrictive easement {to be determined by the City}; or
o Notify the Developer that the City u��l proceed to closing and accept responsibility
for any re�naining er�vironmental mitigation beyond the $50,040 obligation of the
Developer.
Section 4.5. Construction af Utility Improvements and County Road Improvements. Because
the City o� Roseviiie may want to assess their portion af the izx�provennents to County Road D, it
will need to be a publicly bid project. The Developer ancllor its contractor rnay choose to bid on
the project on the same basis as other bidders. The Developer may also choose to pay 100% of
project costs (including Roseville's portion) and construci the road improvernenis iiself. The
Develaper is required to corr�plete the project no later than December 31, 2016.
Section 7.1. Develaper Financing. The conduit debt issuance fee will be calculated as 1% of the
first $5 million in bonds, 0.5% of the next $I S million ($5-$20 million), and 0.25% of any bond
amount above $20 million. If Presbyterian Homes issues $38 million in bonds, this will result in
a total fee of $170,000. The fee will be calculated on an aggregate basis. For example, if
consecutive bonds of $15, $12, and $I 1 rnillion are issued, the fees will be $100,000, $42,540,
az�:d $27,500 for a total fee of $170,000. In all ather respects, cand�it debt fees wzll be consistent
with the City's exisiing Private Activity Bond Policies.
LHB Report
The City hired LHB, Inc. to prepare a Report of Inspection Procedures and Results for
Determining the Qualifications of a Tax Increment Financing District as a Renewal and
Renovation Distt�ict as required by State Statutes. Tl�e report has been revised to clarify ihai
although the Sutton Place buildin.g is zaot structuxally sub-standard, the building requires
substantial renovation or clearan.ce because it is obsolete and nat suita.ble for canversion. The
revised report will replace the report provided as Appendix F in t�e Tax Incre�nent Plan far
Disirict No. 4 provided in the December 13, 2010 agenda packet. A minor change has also been
made #o Appendix G in the Tax Tncrement Plan. Nothing else in the TIF Plan has changed since
fhe December 13, 2010 agenda.
Reco�nmendation
Staff recommends that the City Council approve ihe Contract for Private Developxzaenfi.
Attachmen�s
A: Black-lined copy of Contract far Private Development showing changes since Dec. 13, 2010
B: C�ean capy of Contract for Private Developmen�
C: Revised Appendices F& G to the Ta�c Increment Finance Plan for District No. 4
D: Resolution 2010-OS 1
E: Resplution 2010-0$2
F: Resolution 2010-083
City of Arden Hills
City Counczl Work 5ession December 20, 2010
Page 2 of 2
Attachment
Black-lined copy of Contract for
Private D�velopment showing
changes since Dec. 13, 2 010
City of�Irden Hills
City Council Meeting for December 20, 201 Q
�i�Ei� Draft De�ember 3�;� 2010{1�-p�r}
CONTRACT
�'OR
PRIVATE DEVELOPMENT
By and Se#ween
C1TY QF ARDEN HILLS, MINNESOTA
and
PRESBYTERIAN HOMES OF ARDEN HILLS, INC.
Dated: . 20I 0
This document was drafted by:
KENNEDY & GRAVEN, Chartered
470 U.S. Bank Plaza
Minneapolis, Minnesota. 55402
Telephone: {612) 337-9300
TASLE OF CONTENTS
_ Pa�e
PREAMBLE .................�-------•..............................................
..........................................................�----�---.. I
ARTICLE �
De#�nitions
Section1.1. Definitions .............................•----�-�-�-----------....................................-----�-�---------....................2
ARTICLE II
Representations and Warranties
5ection 2.i . Representations by the Cih' ................................................................................................5
Section 2.2. Representations and Warranties by the Developer .............................................................5
ARTICLE III
Public Develaument Costs; Financin� Convevance of Land
Sectior� 3.�. Status ofAroPert}'----� ......................................•-�--------...........................................-�-------�---�-�
Sectian 3.2. Public DeveloprnentCosis ............................•-�-�-�---------�-�--�--.............................-------�--------�
Section 33_ Reimb�rsernent of Public Development Costs ...................................................................7
Section3.4. Business Subsidy Act ...........................................�-�----..._.....__.............................----�-�---------8
Section 3.5. Con�eyance of Triangle Parcel .........--� ..............................................�-----------.....................8
Sectian3.6. Relocatian -----------�---��----� ..........................................................................................�----�� 1
Section 3r.�,3_7. Records_................... .-�.gl ]
................�---�----------�---...................................-�--�------------�-�--......
... _
Section3.8. TIF Lookback..---�-----------------�---................................------.............._................................�-9I l
ARTICLE IV
Construction of Minimum �mprovements; Publir Imnrovements
Section 4.1 _ Construction of lmprovements ......................................--.-.-------.------.............................�-�-� 3
Seetion4.2. Construction Plans .................................................................................�-----.................-3� 13
Section 43_ Commencement and Completion of Construction .........................................................�-�14
.___
5ection 4.4. Certificate of Completion ..........................................�----�---------..._.................................-�-�14
Section 4.5. Construction of Utility Improvements and County Road Improvements ......................�] 5
ARTICLE V
Insurance and Condemnation
Sec#ion 5.�. insurance .....................�--------.....---�................................--------�--�----................................-1-417
Section5.2. Subordination..--�----�-------� ...............................................�-�---.........._..............................�18
ARTICLE VI
Tax IncreEnent• Taxes
, . �----
Sectio� 6.I . Right to Collect Delinquent T�es .................................................................................1-619
__.
Section 6.2. Reduction of Taxes .........-�------� .............................................�-------�---............................-1-519
4
ART�CLE V�i�
Finanein�
Section 7. �
Section 7.2
DeveloperFinancing..... .................�-------------�-�----�.....-----�-.............................................�2a
S�bordination ......................................................................�-�------...._....._...................... �20
ARTICLE VIII
Prohibitions A�ainst Assi�nment_and Trans%r; IndeEnni�ication
Section 8.1 _ Representati�n as to Development------------------------------------•........................................... �$21
Section 8.2. Prahibition Against Developer's Transfer of Property and Assignment of
Agreement..........................................�----------�--�-�--...-------....._........................................�21
Section 83. Release and Indemnificatian Covenanfis .......................................................................�-922
ARTICLE IX
Evenfs of Defat�lt
Section 9.l . Events of Defa�ft Defined........... .................��---�----�-----�---�--..........................................�A24
Section 92. Remedies an Default.----� .................................................................................�------�----..�,$24
Section 9.3. No Remedy Exclusive..........----�-------------�------------�--�----..................................................�924
Section 9.4. No Additional Wai�er lmplied by One Waiver ...........................................................�;824
ARTICLE X
Additional Provisions
Section l 0. � .
Sectian I0.2.
Section � 03.
Section I0.4.
Section I0.5.
Section I0.6.
Section 10.7.
SEction 10.8.
Section ] 0.4.
Conf7ict of Interests; City Representatives Not Individua�ly Liable ............................. �-25
Equal Employmeni Opportunih'--------------�-----�---------.....................................................�I-25
Restrictionson Use ..........................................................................•-----��--------------------.�25
Pro�isions Not Merged With Deed ...............................................................................�25
Titles of Artieles anc� Sections ...................�---------�--�-----...........__.........................._........�i-�
Noticesand Demands.....-----�--� ......................................................................................�1-25
--
Counterparts.... .......................................................�-------------�---..................................... �26
Recording.....-----�-------------------------------•---...............................................---------------�--------- ��
Ter�ination ...................................................-•--�---.....-�--�-�-------._.._........._......................�26
TESTIMONIUM----� ..........................................................................�-----�-�--�----....................................... S-�
S�GNATURES .....................................................................�--�-------....-�--------------..................................... S-I
SCHEDULE A Development Praperty ....................................................�--.......................................A-1
SCHEDULE B Certificate of Completion ......................................................................................... B-1
SCHEDULE C Autharizing Resalution .............................................................................................C-1
ii
CUNTRACT FOR PRIVATE DEVELOPMENT
THIS AGKEEMENT, made as of the day of , 20i0, by and between the CiTY OF
ARDEN H1LLS, MINNESOTA, a Minneso#a municipal corporation (the "City"), and PRESBYTERTAN
HOMES OF ARDEN HILLS, INC., a Minnesota nonproft corporation (tY�e "Developer").
WITNESSETH:
WHEREAS, the City has undertaken a prograFn to promote economic deve�qprrrent and job
opportunities and to promote the development of land which is unc�erutilized within the City, and in this
connection created Development District No. 1{hereinafter refen-ed to as the "Project") in an area
(hereinafter referred to as the "Project Area"} located in the City and a Tax Increment Financing Distriet
No. 4{the "T1F District") within the Project Area, al( pursuant to Minnesota Siatutes, Sections 469.124 to
469.134 (the "Act") Minr�esota Statutes, Sections 469. � 74 ta 469.1799; and
WHEREAS, pursuant to the Act, the Ci#y is autt�orized to undertake cer�ain activities to prepare
suc� real pz'operty �or developrnent by private enterprise; and
WHEREAS, ir� order ta achieve the objectives af the De�elopment Plan far the Proj�ct the City is
prepared to pay certain puhlac ir►-�provement costs of the Project, in order to bring about development in
accordance with the Development Plan and this Agreement; and
WHEREAS, the City beiieves �hat the development of the Project Area pursuant to this
Agreemer�t, ar�d iulfllrnent generally af this Agreement, are in the vital and best interests of the City and
tl�e health, safety, moraIs, and welfare of its residents, and in accord with the public p�zrposes and
provisions of the applicable State and loca] laws and requirements under which the Project has been
undertaken an� is being assisted.
NOW, THEREFORE, in consideration of the premises and the m�t�a1 obligatia��s of the parties
hereto, each of them does hereby eovenant and agree with the other as follows:
(The remainder of tl�is page is intentiona]Iy left blank.)
ARTICLE i
Def nitions
context:
Section 1.1. Definitions. ln this Agreerf-fent, unless a different meaning clearly appears from the
"Act" means Minnesota StatutEs, Sections 469.124 to 469.134, as amended.
"Affliate" means with respect to Developer (a) any corporation, partnership, or other business
esttity or person contralling, controlled by or under common control with the Developer, a�d {b} any
successor to such party by rrterger, acquisitian, reorganization or similar iransaction involving all or
substantially all of the assets of such party (ar such Affiliate). For tl�e purpose hereof the words
"confirotling", "contro�led by" and "under comrnon control with" sJzall rnean, with respect to any
corporation, partnership, or other business entity, the ownership of ffty percent or more of t�e voting
interests in such entity passession, directIy or indirectly, of the power to direct ar cause the directian of
management policies of such entity, whether ownership of voting securities or by contract or otherwise_
"Agree�nent" means this Agreement, as the same may be from tirr�e to time modified, amended,
or supplemented.
"Autharizing Resolution" means the resolution of the City, substantially in the forrr� of the
attached ScheduIe C adapted by the City Council to authorize the issua�ce of the Nate.
"Availabte Tax Increment" has tne meaning provided in the Note.
`B�siness Subsidy Act" means Minnesota Statutes, Section 1] 6J.993 to l 16J.995, as amended.
"City" means #he City of Arden Hills, Minnesota.
"City Representative" rneans the City Administrator of the City of Arden Hi31s.
"Certi�cate of Completion" means the certification provided to the Developer, ar the purchaser of
any part, parceI or Unit of the Development Property, pursuant to Section 4.4 a�this Agreement.
"Closing" has the meaning pravided in Section 3.5(e}.
"Construction Plans" r�eans the plans, specifications, drawings and related documents on the
construction work to be performed by the De�eloper on the De�elopment Property, including the
Minimu�n Improvernents, which (a) shalI be as detailed as the plans, specifcations, drawings and reTated
docu3�ents which are submitted to the apprapriate building officiais of the City, and {b} shall include at
least the following: (1) foundation plan; (2} basement pians; (3} �toor plan for each floor; (4) cross
sections of each (lengt�t and width}; (5} elevations {all s�des}; (6) iandscape plan; anc� (7} such otl�er plans
or supplements to the foregoing plans as the City rr�ay reasonably reqUest to allow it to ascertain the
nature and qua�i�y of the proposed co�struction work. �n the case of Utiiity Improve�nents, the
Construction PIans must conform to the requirements specified in the definition of those terms herein.
"County' means the Co�nty of Ramsey, Minnesota.
2
"County Road Improvements" means the reconstruction of Caunty Road D from the intersection
of Lake Johar�na Blvd. easEerly to ihe intersection with Shorewood Dr; reconstructed street to be
nominally 32 feet wide with new concrete curb and gutter, and co�structed ta a 9-ton design in
aceordance w�th Minnesota Depart�nent of Transportatian design criteria.
"Developer" means Aresbyterian Homes of Arden Hills, Trac. or its per�nitted successors and
asszgns.
"Development Property" means the real property described in Schedule A of this Agreement,
provided that for the purposes of this Agreement, the term "Development �'roperiy" excludes any por�ion
of property described in Schec3ule A, or improvements thez'eon, that are determined by Ramsey County to
be exempt from ad �alarem property taxes as of the date of this Agreement.
"Development 1'Ian" means the Caty's Development Pragram far Development Distzict No. 1, as
arr�ended.
"Environrnental Resnonse Actions"has the meaning�provided i� Section 3.Sfd)•
"Eve�t of Default" means an action by the DeveIoper ]isted in Article lX of this Agreement.
"Ho1dEr" means the owner of a Mortgage_
"Housing Revenue Bonds" h�s� ,;;�u;;, 5�,:��;uL� � ���±��_- �.�means aualifiec� SOl�c1(31
revenue bonds issued b the Crtv under Minnesota_Stat�ttes Sections, 4b9.I 52 to 4b9.I 65 or Chanter 462C
in order ta f�nance ail or a__portion_of the Minimum Irn rovements, as further described rn Sectio�� 7.1
hereof. �
"Land De�elopment Agreement" means the develapmEnt agreement to be en#ered between the
City and the Developer in connection with the plat of ihe Development Property.
"Mat�rity Date" means the date that the Note has bee� paid in full, defeased or terminated in
accordance with its terms, whichever is earlrer.
"Mi�imum lm�ravements" means. (a) the foliawing improvements on the Deve�opment Properiy:
Phase IA: 54 units independent living
36 units assisted living
� $ units memory care
Phase IB: 40 units of assisted Iiving
1$ units of inemo�y care
Phase II.- 36 units of independ�Rt Iiving (brownstones); and
(b) The fol3owing improveme�ts within public rights of way or easements:
Utility Iniprovements: recanstruction af existin�. $" sanitary sewer aIong the easterly
frontage of Lake �ohanna from the existing lift station to the manhole in Sa�deen Rd,
using new 8" PVC pipe along approximately the sarne li�e and grade, and includi�g new
rna�l�oles.
"Mortgage" means any mortgage which is secured by the whole or any part of �he De�eIap�nent
Pro�erty and which is entered into to obtairt fnancing for i�npro�ement of the Development Property.
3
"Note" means a Tax Increment Revenue Note, substantially in the form eontained in the
Authorizing Resolution,
"Phase" means a portion of the Mini�num Improvements as described in the definition thereof
"Project" means the City's Development Distriet No. I.
"Pro�ect Area" means the real property located within �he boundaries of the Project.
"Public Development Costs" �neans those costs to be paid or reimbursed to the Developer by the
City in connection with the development hereunder as set forth in Section 3.2.
"State" means the State of Minnesota.
"Tax Incretnent" means that portian of the real property taxes which is paid with respect to the
Develapment Property and improvements thereon and which is remitted to the Ci#y as tax increment
pursuant to the Tax Inerement Act; provided that tF�e term Tax Inerement does not include any amounts
retained by or payable to t.�e SiatE a�ditor under Section 469.I 77, Subd. l 1 of the Tax tncrement Act, or
any ainounts described i� Section 4b9.174, Subd. 25, c)auses (2) through (4) of the Tax Inerement Act.
"Tax Increment Act" or "TIF Act" means the Tax Inerement Financing Act, Minnesota Statutes,
Sections 469. ] 74 to 469.1799, as ame�ded.
"Tax Increment District" or "TIF District" means the City's Tax Increment Finane�ng Distr�ct No.
4.
"Tax increment Plan" or "T1F Plan" means the Tax Increment Financing P�an for Tax Increment
Financing District No. 4, approved Dece�nber ] 3, za� a.
"Tax Official" means any County assessor, County auc�itor; County or State board of
equalization, tI�e comrnissianer of revenue of t�e State, ar any State or federa� co�rt including the
tax court of the State.
"Transfer" has the meaning pro�ided in Section $.l hereof.
"Triangle Parcel" means the praperty so described in ScheduIe A.
"Unavoidable Delays" means delays beyond the reasonable contral of the pariy seeking to be
excused as a res�lt thereof which az'e the c�irect result of strikes, other Iabor troubles, prqlonged adverse
weather or acts of God, fire or other easuaity to the Minirt-►um Irnprovements, litigation commenced by
third parties which, by injunction ar oiher similar judicial action, d�rectIy results in delays, or acts of any
federal, state or 3oca1 governmenta] unit (other than the City in exercising its rights under this Agreement}
which directIy result in delays. Unavoidable Delays shall not include delays in the Developer's obtaining
of permits or governrnental appro�als necessary to enable construction of the Minimum lmprovements by
the dates sucl� construction is required under SectioE� 4.3 of this Agreement.
"Utility �mpravements" has the meaning provided in the definition of Minimurn l�nprovements.
�
ART�CLE II
Representations and Warranties
Sectior� 2.1. Representations by the City. The City makEs the following representations as the
basis for the undertaking on its part herein contained:
(a} The City is a statutory ci#y duly organized anc� existing �nder the laws of t3�e State.
Under the provisions of the Act, the City has the power to enter inta this Agreement and carry out its
abligations hereunder, and execution ofthis Agreement has been du}y, properly and validly authorized by
the City.
(b) The City proposes to assist in financing certain Public Development Costs necessary to
serve che Develapment Praperty and Minirr�um Improvements in aecordance with the terms of this
Agreement.
Section 22. Representations a�d Warranfies by.the Developer. The Developer represents and
warrants that
(a) The Developer is a nonprofit carporation organized and in good standing under the ]aws
of the State, is duly authorized to transact business within the State, and has the power to enter into ihis
Agreement.
(b) The Devetoper will cause the Minimum Improvemertts to be constructed, operated and
marntained in accordance with the terms of this Agreement, che Development Plan and all }oca�, state and
fec�eral laws and regulations (including, but not limited to, environmental, zoning, buiIding cade and
public health laws and regu�ations).
(c) The Developer has received na notice or cammunication from any 1oca1, state or federaI
official that tkae activities of the Develaper ar the City in ihe Project Area may be or will be in vio}ation of
any environmental �aw ar regutation (ot�er than those notices or eommunications of which the City is
aware). The De�etoper is aware of no facts the existence of which would cause it to be in violation of or
give any person a valid ctaim under any locai, state or federal environrnentai law, regalation or review
procedu re.
(d) The De�eloper will canstruct the Minimum Improvements in aecordance witl� all }acal,
state or federa� energy-conservation laws or reg�latians.
(e) The De�eloper wiil obtain, in a tirrtely manner, al! required permits, licenses and
approvals, and wiil meet, in a timely manner, all requirements of aIl applicabie tocal, state and federal
laws and regulations whic�� m�st be obtained or met before the Minimum Improvernents tnay be ]awfully
const�-E.tcted.
{� Neither the execution and delivery af this Agreement, the consummation of the
transactions eontem�}ated hereby, ttor the fulfillment of or compliance with the terrr�s and conditions of
this Agreement is prevented, timited by or conflicts with or results in a breac� of, the terms, conditions or
provisions of any corparate restriction or any evidences of indebtedness, agreerrtent or �nstrument of
whatever natt�re to which the Developer is now a party or by which it is bo�nd, or canstitutes a default
under any o�the foregoing.
5
(g} The proposed developmer�t by the Developer Y�ereunder would not occur but for the tax
increment fnancing assisiance being provided by #he Ci#y hereunder,
(h) The Develaper shall promptly advise City in writing of ai] litigation or cIaims affecting
any part of the Minimum Improve�nents and all written co�r►plaints and charges rnade by a�y
governmenta] authority material}y affecting the Minimum Improvemenis or rnaterially affecting
Developer ar its business which tnay delay or require changes in construction of the Minimum
improvements.
(The remainder of this page is inte�tionally left blank.)
�
ART�CLE III
Public Develo ment Costs• Financin • Co�ve ance of Land
SectiQn 3.1. Status of Aroperty. (a) The DeveIoper currently hoIds fee tit�e to the Development
Property and tl�e Triangle Parcel. The CiEy has no obiigation to acquire the Development Property or any
portion thereof. The Developer will co�vey t�e TriangIe Parcel to the City in accordance with Section 3.5
hereof.
{b) Prior to commencement of construction of the Minimum Impravernents, the Deve[oper
wil} replat the Deveioptnent 1'roperty and in cot�nection w�th that effort wil] enter into the Land
Developmenf Agreement.
Section 3.2. A�h3ic Develapment Costs. In order to make development of the Minimum
Improvements economically feasible, the City wil] reimburse the De�e}oper (in the manner set forth in
Section 33) for a partion of the following "Pub�ic Development Cos#s" incurred by Developer on the
Development Property: demolition, exeavation, grading, filling, soil corrections, environmental
remediation, la�dscapi�g, parking, Utilities (excluding the UtiIity Improvements); footings a.nd
foundations, and o#her site improvetnents. The total principa� amount of P�blic Development Costs
subject to reirr�bursement will not exceed the lesser of $1,1 15,000 or the total actual, documented amount
of such costs. Public De�elopment Costs in excess of $1,� 15,Q00 are the responsibility of the Developer.
The Ciry shal] have no obligation io the Developer or to any third party with respect to any defects in the
construction of ir�-�provements financed or reimbursed by the City as Pub�ic Development Casts.
Section 33. Reimbursernent of Public Develop�nent Costs. (a) To finance rei�nbursement of a
portion of the Public Development Costs paid by the Developer, the City shai� issue aud the Developer
shall purchase the Note in #he maximum principal amount of $l,l 15,000, with the tenns, and substantially
in the form, set forth in the Authorizing Resol�tion attached as Scheduie C. The City an� the Developer
agree that the co�tsideration from the Developer for the purchase of the Note shall consist of the
Developer's payrnent of the Public Deve]opment Costs in at least the principal amount of the Note. The
City shall deliver the Note upon compiiance with Section 3.3{b) and detivery by the Developer of an
investment le�ter reasonably acceptable to tl�e City. The Note wi�l be dated as of delivery, and interest
wiIl accrue from the date of issue at the rate that is the tesser of (i) 6.25 percent per annum, or {ii) the tr�e
interest cost on the �rst series of long-term fxed rate Housing Revenue Bonds iss�eci to finance the
Minimuin Improvements, or if the fiirst Housing Revenue Bonds are not issued on a iong-terrn fxed rate
basis, t�e true intetest cost on such bonds if they had been issued on a tong-term fixed rate basis, as
evit�enced by an estimate provided by third party underwriter mutually selected by the City and
Deve�oper (at Developer's cost, if any). If the conditions for delivery of the Note have not been met
within �ive years after the date of certification of tt�e TIF District, the City's obligation to issue, and the
Deve}oper's right to receive the Note and any payments of Available Tax ]ncrerr►ent thereunde� shal]
terminate.
(b) As a conditian to issuance ar�d delivery of the Note, the Developer must s€tbmit to the City
Representative written evidence in a form satisfactory to the City Representative that Public De�elopment
Costs in at least the principaf amount of the Note requested have been paid. Such evidence shall incl�de,
at a minirrtum, paid invoices ar comparable evidence of payment. At the City's request, Developer shaIl
also provicfe evidence thai the costs are commercially reasonable, evidenced by requests for proposai, bid
solicitatiorts, ar similar rnaterials.
(c) The Developer unc�erstands and acknowledges that the Ciry makes �o representations or
warranties regarding the amount of A�ailable Tax Increment {as defined in the Note}, or that re�enues
7
pledged to the Note will be sufficient to pay the principa] of and interest or� the Note. Any estit�aates of
Tax Increment prepared by the City or its fnancial advisors in connectaan with the T1F District or this
Agreernent are for the bene�t af ihe City, and are not intended as representations on which the Developer
may rely.
Section 3.4. Business Subsid,y -Act. The parties agree and unc3erstand that any assistance
provided to the Deve�oper under this Agreement is no� a"business s�tbsidy" under Minnesota Statutes,
Section 116J.993, subd. 3 because the assistance is for housing.
Section 3.5. Conveyance of Triangle Parcel. (a) Generally. The Developer wiIl canvey the
Triangle Parcel to the City subject to the terms and conditions of this Section.
(b) Purchase Price, Costs. The Developer will convey the Triangle Parcel to the City for a
pt�rchase price af $1.04. At Closing {de�ne� below), Developer wii] pay any outstanding special
assessr�ents; costs af title evidence; ane-half o� any closing fee, state deed tax (if any); and the recordang
fee for recording aiI documents required to convey inarketable title to the Triang�e Parcel. Property taxes
due and payable in the year of Closing will be prorated between De�eloper and City as of the date of
Closing. The City wiI1 pay the cost af any title insurance premium, and ane-half of any closing fee. The
parties will each be responsible for any other costs they inc�r in connection with conveyance of the
Triangle Parcel.
(c} Tit1e. Promptly a�ter execution of this Agreer�tent, Developer shall furnish to the City a
commitment fqr an ALTA Owner's Policy of Title lnsurance insuring t�tle to the Triangle Parcel, in the
amou��t of $268,200 (which #he parties agree represents a reasonable estima�e of the market value of he
Triangle Parcel}. Withi�t 60 days after receiving such title commitment, the City may make written
objec�ions to the status of tit�e. Developer wil] have 60 days a�ter receipt of any abjeetions to cure the
objections. Develaper wil� use cotnmErcially reasanable efforts to cure any objectior�s within such GO day
period. If objeetions are not cured within the 60-day period, City may elect to either (i) tenninate this
Section o#'the Agreernent, without affecting �he remainder af the Agreement; or (ii) waive the abjections
and proceeds to Closing.
(d} Envirorrrrrental matters. Developer shal� undertake, at its cost, a PJzase I and, if
necessary, a Phase II enviranmental analysis of the Triang�e Parcel. Promptly upon receipt of the reports
resuiting from consultants, Developer shali deli�er to the City copies of all environmental reports related
to the Triangle Parcel prepared for Developer. Developer wil� also cause ihe party or parties preparing
such reports, upon request of the City and at City's cost, to deliver Ietters to the City allowing the City to
rely on such reports. Further, Developer grants to t�e City and its agents the right to entex the Triangle
Parcel to undertake its own inspections, tests, and investigations of the Triangle Parcef. If the City
determines, through its investigation or from any e»vironmenta� report, that any underground tanks or
hazardous substances (as de�ned in paragraph �{i) of this 5ection} are located on the Triangle Parcei,
Developer shall at its cost, and prior ta Closing, remove any tanks anc� remove or rernediate any
hazardo�s substances to a Minneso#a Pollutian ControI Agency standard for nan-residential land use:
3�t3�u=it�sta��ir�g--��y�i�t�ng- tt��-�%he -c���t'��y� ��e�-�e��a�,--�ev��oper -s�a��_....nm#--��-ob�igated...{�...��y._. r:�or�._�t�ar�
� �
�
1i v o.-.. r;;� � +t,o ,.4.� .- a
.b: ......,. ., .,. ,.., :;u��.. « -proEe�d-to-��osa� �n_
g.__ ,
such acEians bein __referred to as "Envrronmenta] Resvonse
Actio»s" : -..._ - �--- � ....___ __._
If the Citv_determines that a�� Environmenta� Response Actions_are r uired, Ehe City will cooperate with
Developer in seeking grants from the State e�ar�d other sources to assist ir� f�nancing such costs, and wil�
make such grant proceeds available to Developer to the extent the City is successful in grant applicatio�s.
Tl�e Deveio er will enter into an su lerraental a reements that are rea anabl re uired in orcier to
disburse and administer _rant roceeds. �
Noiwithstanding a»ything._ta �he, corrtr,ary ,herezn, Developer shall not be obli.g�ted to, pay more than.
$50 000 to ca out En�ironmental Res onse Actions labove and beyond the amount of anY �ra�tsl. If
Devetooer deterrnines that the total cost of Environmental Response Actions exceeds or is_.expected to
exceed 50 000 l� t�e amount of all grants anproved pzior to Clasin�. t_hen Develaner shall �rovide
written notice to Ci. to ether with reasonable evidence of.the costs. Within 60. days after receipt�of
such notice, ihe.Citv will either (in its sole dascretionl:
i Provide wriiten notice to DeveIo _er that the Ci will deeline to acee t conve anee of the
Trian Ie Parcel. In that eveni b no ]ater.than June 29 2012 Develo e�al�l} demolish the existing
buildin2 on the Triangle Parcel clear the site of rubble and debris, and seed the�roperiv: !21 deliver to
_ -- ---
the C_it�_ an executed instrument in recordab�e form that limits use of the Trian�ie Pareel, to open soace i�
e�r etuity sub�ect to an time limitatians under State ]awl. such instrurnent bein in the form of either a
restricti�e covenant or a conservatian easement..�as directed bv #he Ci afld (31 have no further
obli�ation to carry out Environmental Respa�sE Actions exce�t ta the extent otherwi.se required by_ law:
or mm ��
(ii�__ Provide written notice to Develo�er that„ Ci .ry will proceed to Clos�ng,, In that event.
Develoner shall remain obl� a#ed to carry out Environme�tal Resoonse Actions rior to Closin.g, and to
�ay�up to 50 OUO of such�costs above and be._Qnd the amou�t of an _�available rants�- the Cit shal�
assume res�ansibilitv for an�ional _eosts. and will na�r reimburse Develo�er for such excess on ar
befpre Closin� �
(e} Closing. The City's obIigation to close on acquisition of the Triangie Parcel is con#ir�gent
upon (i) the City ha�ing found titte accepta6le in accordance with paragraph (b} of this Section, (ii} the
City ha�ing determined, in its sole discretian, that it is satis�ed wit� conditions of the TrEangle i'arcel,
incl�de without limitation environmentai conditions; and (iii) Developer havi�g demolished the existing
building an the Triangle Parcet, cleared the site of al] rubble and debris, remo�ed any underground tanks
and removed or remediated any hazardot�s substances in accordance with paragraph (d} af this Sectior�,
and seeded the property. The closing on conveyance of the Triangle Parcel shall occur on the later of ten
business days after satisfaction of atl contingencies, or June 29, 2012 (the "Closing"). At closing,
Developer s}aa�I deliver to City a warranty deed to tl�e Triangle ParceI.
(� Developer Representations. The Developer hereby represents and warrants ta the City as
fo�lows:
(i) En�ironmental _Com Iip .ance. Developer has receivec� no notice af and is r�ot
aware of any violation related to the Triangle Paccel of app}icable law, statute, ordinance, rule,
regulation, order or determination of any governmental aathority with respect to hazardous
subsiances or of d�e presence of hazardous substances in or on the Triangle Parcet, except as
disclosed in any of the Environmental Reports. For purposes hereof "�azardous substances"
means any substance designaied pursuant to the Clean Water Act, Titte 33 U.S.C. Section 1321,
a��y e�ement, compound, mixture, solutior� or s�bstance desig�ated p�rsuant to the
Comprehensive En�iror�mental Response, Compensation and Liability Act, Title 42 U.S.C.
SecEion 9602, any hazardo�zs waste having #he characteristics identi�ed under or ]isted pursuant to
the SoGd Waste Disposal Act, Title 42, U.S.C. Sec#ion 692I, any toxic pollutant listecf under
Section 307(a} of the Clean Water Act, Title 33 U.S.C. Section ]3I7(a}, any hazardous air
pollutant listed under Section l 12 of the Clean Air Act, Titie 342 U.S.C. Section 7412, any
imrnine�tly hazardous chemical substance ar 3nixture with respect ta which the Administrator of
E
the EnvironmentaI Protection Agency has taken action pursuant to Section 7 of the Toxic
Substances Control Act, Title 15 U.S.C. Section 2606 and any hazardaus was#e, hazardous
substance, pollt�tant ar contarrtinant, as defined in the Minnesota Environmenta] Response and
Liabi�ity Act, Minnesota Statutes, Section 11 SB.02. The term also includes, but is not limited to,
polych�orinated biphenyls, asbestos, petroleurn prociucts and various constituents of such
praducts, urea for�naIdehyde and related substances.
(ii) Storage Tanks. Developer is not aware of any underground storage tanks locatecE
on or ir� the Triangle Parcel, but acknowledges its obligation #o remove any tanks disclosed by
any e�viron�tenta9 reports or investigatians by the City, in accordance with paragraph {d) of this
Section.
{iii} Pendin�ti ag tion. There is na condemnation or other litigation presently
pending or, to Developer's knowl�dge, under consideration by any party affecting, directly or
indirectly, t�e Triangle Farcel.
(iv} GovernmEntal Actian. Developer has not received notice of any action, suit or
proceeding instituted by any person or entity against or affecting the Triangle ParceI before any
federal, state, municipal or other governmental authority, including without limitation notice of
any eondemnation or taking far any �ublie right-of-way or utility.
(v) Authorization. Developer is the sole owner of the TriangIe Farcel, and has the
right, power and capacity to enter into this Section of this Agreement, to eonsummate the
transactions contetnplated hereby, and #o comply with the terms, conditions .and �rovisions
hereof
(vi} Condition of Trian le Parcel. Developer has received no notice, order or other
comrnunication fram any governme»tal body ]�aving jurisdiction over the Triangle �'arcel
requiring any improvement to or a�teration of the Triang�e Aarcet which has not been remedied,
a��d Develaper agrees to give Buyer prompt writter� rtotice of any such communicatian received
on or prior to Closin� Date.
(vii} Wells/Septic Svsterns. Developer either certifies and warrants that it is not aware
of ihe existence of a�►y wells on the Triangle Parcel within the meaning of Minn. Sta#. § 103I.045,
or if ca�not pro�ide such certification and warranty, will at or before Closing provide a we]I
diselosure statement in accordance with Minnesota Statues, Section 103I235. Developer is not
aware of any ir�dividua] sewage treatment system on the Triangle ParceI within the meaning of
Minn. Stat. § � l 5.55.
(viii) Ri�ht to Sell. Developer 3�as not entered into any ather unterminated contracts
for the sale of the Triangle Parcel, is not aware of any rights of first refusa] or options to purchase
the Triang�e Pareel, and consummation of the sale wil} not violate the pro�isions of any
governmental regulation or law applicable to Developer, nor of any agreement or instrument by
which Develaper is bouncE.
(ix) Parties in Possessian. There wiIl be no tenants or oiher parties in possession or
with the right to possession of the Triangle Aarcel on the Closing Date.
10
(g). Developer Duties 13efore Closing. At al] times prior to Closing, Developer shali comply
with the fo�lowing:
(i) Except far de�r►olition, cIearance and seeding, Developer shall maintain the
Triangle Parcel in the same condition as in existence on t�te date hereof and shall comply at a]]
times with all applicable cades arad ordinances;
(ii) Develaper shal] contir�ue to pay all real esta#e taxes and any installments oF
special assessrnen#s certified thereto which become due and payable'
(iii) Developer shall not permit the storage, release or disposal of hazardous or taxic
subsiances or contaminants on the Triaagle Parcel;
{iv) Developer shall not encumber, permit liens to attach to, or convey any interest in
the Tria�gle Parcel to any other party;
(v) No per�aner�t improvements shal� be constructed on the TriangIe Parce� without
the City's written consent; and
(vi) Developer shall pay al� utilities due up to and incIUding the Closing Date.
Section 3.6. Relocation. The parties agree and understand that Developer may temporar►ly relocate
residents af the existing buildings on Developmer�t Property during construction of the Mini�um
improvements, and rnay also terminate leases to tenants of the Triangle Parcel. Without Iimiting the
Developer�s obligations �nder Section $.3 hereaf, the Developer will indernnify, defend, and hold harm}ess
the City and its governing body members, errz�loyees, agents, and cantractors from any and all claiins for
benefts or payments arising out of the relocation or displacement of any p�rson from the existir�g
improvements on ihe Development Property, or termination of any lease of the Triangle Parcel, as a result of
the implementation of this Agreement_ Nothrng in this Section is intended to make any otl�er person or entity
a third-party beneficiary ofthis Agreement.
Section 3.7. Records. The City and its representatives shal� ha�e the righ# at all reasonab�e tirr�es
after reasonable notice to i��spect, examine and copy all books and records of Developer relating to the
Minimum lmpro�ements and the Publie Development Costs.
Sectior► 3.8. TTF Lookbaek. {a) De�eloper acknowledges that the levei of tax increment
assistance �n this Agreement is based on Developer's Public Development Costs, the costs of the
Minimum Irriprovements, and terms of the Housing Re�enue Bonds that are De�eloper's expected source
of capita] financing. Upon completion of the last Phase of �he Minirnum Irnprovements, issuance of the
last series of Housing Revenue Bonds, and completio� of at least one fscal year of operation of alI the
Minimum Improvernents (the "Calculation Date"), Developer will submit to #he City a pro farma updated
to reflect alI actual costs of deveIopment of the Minimu�t Improvetnents, incluciing an estimate of the
c�ebt service coverage ratio for all outstanding Hqusing Revenue Bonds for �ve fiscal years after
Calculation Date. For purposes of caiculating debt service coverage, operating re�enues from the
Developer's care center (which is located on the same property bttt is not part of the Minimurrt
lmprovements} wi11 be exclezded. If the mean projected [�ebt coverage ratio for all outstanding Housing
Revenue Bonds for those five fiscal years (ttte "Actuat Coverage") exceeds the debt service coverage for
those years that was used for purposes of marketing the outstanding Housing Re�enue Bonds, plus five
percentage points (t�e "Adjusted Marketing Caverage"}, the City wil] calculate the net present value (as
of the Calculation Date) of tl�e arr�ount by which the actua] cash flow after debt service on all Housing
Re�enue Bonds for the relevant five-year period exceeds the cash flow after debt service that would result
1�
if the cash flow matched the Adjusted Marketing Coverage. That net present value of excess cash #low is
referred to as the "Excess Amount." Present value is calculated using the mean true interest cost on ail
outstanding Housing Revenue Bonds. The Ad��sted Marketing Coverage must be evidenced by band
covenants, disclosure doct��ents, or other reasonable evidenee of the debt service coverage usee� for
marketing purposes at the time of issuance of each series of Housing Revenue Bonds.
Example: The average �ve year cash f7ow for rr�arketing purposes is 135%; therefore, the
Adjusted Marketing Percentage is 140%. lf actua] projected cash flow as of the Calcu�ation Date is
l50%, the �ve years of cash flow representipg ihe increase in Actual Coverage {150%) over Adjusted
Marketing Coverage (i4Q%} is present valued to the Calculation Date, yielding the Excess Atnount.
{b} If the City finds an Excess Amount under paragraph (a) of this Section, then the Excess
Amount will be applied to reduce the outs�anding principal amount of the TIF Note (as a deemed
prepayment) in accordance with th� terms of #he TIF Note. S�ch event tnust be e�idenced by de}�very by
the City to Developer of a written notice stating the Excess Amount. The Excess Amount will be deemed
prepaid as of the Calculation Date.
EThe remainder of this page is intentionally left blank.)
]2
ARTICLE N
Construction of Minimum Im rovements• Public Im rovements
Section 4.1. Construction o�Tm rovements_ The Developer agrees that it will eonstruct ar cause
ta be constructed the Minimum Improvements on the Development Property in accordance with the
approved Construction Plans and at ali times prior ta the Maturity Date, wilI operate and maintain,
preserve and keep the Minimurn Tmprovements or cause such improvements to be maintained, preserved
and kept with the appurtenances and every part and parcel thereof, in good repair and condition. T7ae City
shall have no obligation #o operate or rrtaintain the Minimum Impro�ements.
Section 4.2. Construction Plans_ {a) Before commencement of constructian oi the Minimum
Irnproverrzents, the Developer shail subrr�it to the City Construction Plans. The Construction Plans shali
pro�ide for the construction of the Minimurt-� improvements and shall be i� conformity with the
Develapment Plan, ihis Agreement, the Land Development Agreement, and alI app]icable State and local
laws and regulations. The City Representati�e will approve the Construction Plans rn writing if: (i) the
Construction Plans ca�form to the terms and conditions of this Agreement and the Land Development
A�reement; (ii) the Construction Pl.ans conform to the goals and oblectives of the DeveIopment Plan; {iii)
t�e Construction Plans conform to all applicable �edera�, sta#e and IacaI laws, ordinances, rules and
reg�lations; (iv) the Construction Plans are adequate ta provide for construction of #he Minimum
Improver�ents; (v} the Cons�ructian Plans do not provi�e for expenditures in excess of the funds available
to the Developer from all sources {including Developer's equity) far cor�struction of the Minimum
]mprovements; and (�i) no Event of Default has occurred. Approval rnay be based upon a re�iew by the
City's Building Official oithe Construction Plans. No approval by the City REpresenta#ive shall relie�e
the Developer of the ohligation to comply with the terms of this Agreement or of ihe Development Plan,
applicable federal, state and locaI laws, ordinances, r�les ancf regulations, ar ta construct the Mi�in-ium
]�nprovements i� accordance iherewitkt. No approval by the City Representaiive shal� constit�te a waiver
of an Event of Default. If approval of t�ie Construc#ion Plar�s is requested by the De�e3oper in writing at
tl�e tirr�e of subrr►ission, sueh Constructian Plans shaIl be deemed ap�roved unless rejected in writing by
the City Representative, in whole ar in part. Such rejections shall set farth in detail the reasons therefore.
and shall be made within ten business (IO) days after the date of their receipt by the City. If the City
Representative rejects a�ty Co2�struction Plans in whole or in part, the De�eloper shall subrnit �ew or
correcter� Construction Pla�s wiihin � 0 business days after written notification to #he Developer of the
rejection. The provisions of this Section relating to a�prova�, rejection and resubmissian of corrected
Construction Plans shal� continue to apply until the Constr�.�ction Plans have been approvet� by the City.
7'he City Representative`s appravaI sha]I not be tanreasonabty withheld; detayed or conditioned. Said
approvai shall constitute a concIusive determinatton that tl�e Constructian Fians {and the Minim�m
lmprovernents construeted an accordance witi� said plans) cornply to the City's satisfaction with the
provisions of this Agreement re�ating thereto.
(b} If the De�eloper desires to make any material change in the Construction Plans after their
approval by the City, the Developer shall submit ti�e proposed c�ange to the Ci�y for its approval. if the
Constr�ction Plans, as modified by the proposed change, confarm to ihe req�irerrtents of this Sectio� 4.2
of this Agreeme�t with respect to such previously approved Construction Plans, the City shal] approve the
proposed change and notify the Devetoper in writing of its approvat. Such change in the Consiruction
Pians shall, in any event, be deemed approved by the City unless rejected, in whole ar in part, by written
notice by the City to ihe Deve�oper, settir�g forth in detail the reasons therefor. Such rejection shaIl be
made within ten business (10) days after receipt af the �latice of such chan�e. The C�ty's approvaI of any
such change in the Construction Plans will ��ot be unreasonably withheld.
I3
Section 43. Commencement and Com �etion of Constructior�. Subject to Unavoidable Delays,
the Developer will commence and substantially complete the Minim�m Improve�nents in accordance with
the foliow�ng schedule:
Phase lA: Commence by December 3I, 20l 1
Compleie by December 31, 20I3
Phase IB ComFnence by May 1, 2413
Compiete by December 3l, 2014
Pl�ase II Conramence by December 31, 2Q34
Cornplete by December 3I, 201 b
Uti}ity
]mprovements_ Same as Phase IB
Dernol�tion: Must demolish Lakeview within 6�-►onths after the first certi�cat� of
occupancy for Phase IA.
Must de�nolish Sutton Place witlain 6 months after the firs� certificate of
occupancy for Ahase II.
A1} work with respect to the Minimum Improvements to be constructed or provided by the Devetoper on
the Deveiopment Property sY�ali be in conformity with t�e Construction Plans as submitted by the
Developer and approved by the City.
The Deve�oper agrees. far itself, its successors a�d assigns, and every successor in interest to the
Developrr�ent Praperty, ar any part thereof, that t�e Developer, and such successors and assig�s, shall
promptly begin and diligently prosecute to completion the deveIopment of the DeveIopment Pro�erty
through the construction of the Minimum Improvements thereon. After the date of this Agreement and
untii constr2.�etion of the Minimum Impro�ements lzas been completed, the Developer shalf make reports,
ir� such detai} and at such times as may reasonably be reqUested by the City, as to the actual progress of
the Developer with respect to such construction.
5ection 4.4. Certificate of Cor-n 3etion. {a) Promptly after cor�zp]etion of the Minimum
Irnpro�ements i� accordance with those provisions of the Agreement retating soleIy to the obligations of
the Developer ta construct the Minim�rn lmprovernents {including the dates for beginning and
completion thereofl, the City Representati�e will furnish the Developer with a Certificate shown as
Schedn�e B. Such certifcat�on and such deterc�ination shall nat cor�statute evidence of corrrpliance with
or satisfaction of any obligation of the Develaper to any Holr�er of a Mortgage, or any insurer of a
Mortgage, securing money loaned to fnance the Minirnum Impravements, or any parE thereoi
(b) If the City Representative sf�a]I refuse or fail to �ravide any certification in accordance
with the provisions of this Section 4.4 of t�iis Agreernen#, the City Re�resentative shall, within ten {10)
business days after written request by ihe DeveEoper, provide #he Developer with a written statement,
indicating in adequate detail in what respects the De�eloper has failed to complete the Minim�m
Improvements in accorda�ce with the provisions of the Agreemen#, or is otherwise in default, and what
measures or acts will be necessary, in the opinion of the City, for t�e Developer to take or perform in
orcler to obtain such certificatian.
14
(c) For the purposes of this Section, each Phase of Minimum Irr►provements wil} be deemed
s�bstantially complete upon issuance by the City of a certificate o� oceupancy (under City ordinances and
procedures) for that Phase; and in the case of Util�ty Irnprovements, will be deemed substantia�ly
comp�ete upon final acceptance of such irr3provement by the City as described in Section 4.5 hereo£
Upon Developer's request, the City will issue Certi�cates of Completion for each Phase and for the
Utility Irnpro�ements, to evidence satisfaction of Devetoper`s obligation regarding each portion of the
Minirr�u3n Improvements.
4.5. Construction of Utili Irn rovements and Coun Road Ir� rovements. (a} The parties
agree and understand �hat it is necessary and reaso�able for the DeveIoper to construct the Utility
lmprovements because {i) the Utility Improvements are lacated on an easement encumbering the
Development Property; are located close to existing buildings and the �ew Minimum lmprove�nents, will
se�-ve the Minimum Improvements, and can �nore practically and efficiently be constructed by
Developer's eontractars as part of the o�erall redevelopment efforts described in this Agreeme�i.
(b) Develaper shall const�-uct tl�e Utility Improvements in accordance with approved
Constructia� Plans. The improvements wilI be deemed substantially corr�plete upon acceptance thereof
by the City Representative, which acceptance will be given ir� writing when the City Represen#ative
determines that such work has been completed in accorc�ane� with the Construction Plans.
(c} �ieExce_t as otherwise �rovided in ara._ra h d of this Section. the City sha11
construct, or cause to be constructed, the County Road Improvements, in cooperation with the Cfty of
Rose�ille ("Rose�ille"). The parties agree and understand that Rose�ille intends to specially assess
benefited praperties in Rosevilie for Rosevi]Ie's one-�alf share af the cost of the County Road
Irnpro�emer�ts, and that s€�ch improvements wiIl be constructed {by either the City or RosevilIe) in
accordanee witl� Minnesota Statutes, Chapter 429. The City wi11 cause the County Road Irnpro�ements to
be substantially campleted (so that the reconstructed portion af Caunty Road D is placed in service) by
December 3l, 2017. Notwit}�standin an thin to the contra�herein. Developer_ Af�Iiates of Develop�r
or contractors or,.. a. ents retained b Develoner may submit bids to construct the Coun Road
)nn�rovements_on the same 6asis as other bit�ders in accordance with m�nicinal biddin� orocedures.
The Ciry will use its best efforts to coordinate s�e-��� -construction of the _ County Road
Ir�provements with Developer's construction af the Minimum Improvements so as to minimize
t�isruption of DeveIoper's work on the Development Property. Upan substantial completion of the
County Road Improvements, the Developer shall promptly reirnburse the City for the City's one-half
share of the to#al cost of the County Road �mprovements, inclading design and engineering costs. As a
condition �o the Developer's obligation to make such payment, the City shaIl s�bmit evidence to
Developer ihat it has paici County Road �mprovement costs (either to contractors or to Rosevitle) in the
arr�ount of the requested reimbursement. Such evidence shail include, at a minimur�, pait! invoices or
comparable evidence of payment.
�d�The_.parties a ree and understand that Rose�ille ex ects to s ecialI _.assess_a portio� of
RaseviIle's share of..the cost of the Coun _Road Imnrove�tents. However Develoner ma determine that
it is more effc�ent and �ractical �or DeveIoper to undertake the C un Road Imnroverr�ents as nart of the
redeveto _�pment deseribed Fn this A�eement. in nart because canstructio�t of the Minimum Imnrovements
- - - .. ..
s l�kely _to___im act_Coun Road D an�__Develo er__can inte_rate reeonstruction__,of the road�.�with
rt--
Devel_oper's other constructian work. Therefore De�etoper rr�a�, in its sole �rscretion_ eiec# to underEake
construction of tl�e Coun Road_Im ravements.�rovaded thaE Developer shal] be obli,�ateti t_pav the
entire_cost_af such work Eincludi, �n�ounts otherw�se a�located to Roseville . Deve�oper �nust_provide
writtenWnotice to the Citv of its intent to exercise this_o tion which notice must be delivered before the
- - _.._--- ---...__u _.. —__-_ _.._ ___.. _-- --.-__ ._.----
date of anv initial im�r�vement hearinQ hetd b� Rosevi]Ie under Minnesota Statutes, Chapter 429
IS
re�ardine the_ Countv Road_ Irrt_provements. After deliverin�„_a ti�nely notice to nroceed under this
�ara�rar�h. Developer shall construct the Countv Road Im�rovements} at Deve}oper's cost, in accordance
with �lans and_specifications a�proved b.v the Cit��and shall substantiall.��m�lete. such construction b.y_
the date reauired for cpmn}etion of Phase II under Section 4.3
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16
�T�cLE v
Insurance and Condemna#ion
Section S.I. Insurance. (a) The Developer wi�l provide and maintain at alI tirnes d�ring the
process of eonstructing the Minimum Improvements an A11 Risk Broad Form Basis Insurance Policy and,
from time to time d�ring that period, at the request of #he City, furnish the City with proof of payment of
�remiums on po}icies covering the foIlowing:
(i) Builder's risk insurance, written on the so-cal�ed `Builder's Risk -- Comp[eted
Value Basis," in an amount equal to one hundred percent (] 00%) of the i�surable value of the
Minimu�-n lmpro�ements at the date o� completian, and with coverage available in nonreporting
form on the so-called "all risk" form af policy.
(ii) Cornprehensive general ]iability insurance (including operations, co�tingent
liabi�ity, aperations of subcontractors, completed operations and contractual liabitity insurance}
together with an Owner's Protective Liability Policy vvith iimits against bodily injury and
property darrzage of not Iess than $1,U00,000 for each occurrence (ta accornplish the abo�e-
required lir�its, an umbrella excess liability policy may be used).
{iii) Workers' compensation insurance, with statutory co�erage, if the Develoger has
empioyees.
(b} Upan eompletion of eonstruction of t�e Minimum lmprovements a�d prior to the
Maturity Date, the Developer shall maintain, or cause to be �naintai�ted, at its cost and expense, and from
time to time at the request of the City sha31 furnish proof of the payment of premiums on, insurance as
foEEows:
(i) Insuranee against loss and/or damage to the Mini�nu�n Improvernents under a
policy or policies co�ering s�zch risks as are ordinarily insured against by similar businesses.
(ii} Compreher�sive general pub]ac Iiability insurance, inc�uding personal injury
liability (with employee exclusion deleted}, against liability for inj►aries to persons and/or
property, in the minimum amount for each occurrence anc� for each year of $I,000,000, and shal]
be endorsed to show the City as adctitional insured.
{iii) Such other insurance, inclvding workers' compensation insurance rEspecting all
e�n�Ioyees of the Developer, in such amount as is customarily camed by �ifce organizatians
engaged in ]ike activities of comparab3e size and liability exposure; provided that the Deve�oper
rrtay be self-insured with respect to all or any part of its liability %r workers' corrtpensation. �
(�} AII insurance required i� Article V of this Agreement shall be taken o�tt and maintained
in responsibie insurance co�-npanies selectec� by the Developer which are authorized under the laws of the
State to assume the risks covered thereby. Upon request, the Deve�oper wilI depasit annually with the
City policies evidencing all such insurance, or a certificate or certificates or binders of the respective
insurers stating that s�ch i�surance is in force and effect. Unless otherwise pro�ided in t�►is Article V of
this Agreemen� each policy sha�f contain a provision that the insurer sha11 not cance] nor modify it in such
a way as to red�ce the coverage provided below the amounts required herein without giving written notice
to the Developer anc� the City at least thirty (30} days before the caneellation or modifcation becames
effect�ve. In lieu of separate policies, the Developer may maintai� a singIe policy, blan3cet or umbrella
I7
policies, or a eombination thereof, having the coverage required herein, in which event the Developer
sha]] deposit with the Ciry a certificate or ce�tifcates of the respective insurers as to the amount of
coverage in force upon the Minimum Irnprovements.
{d) ln case of darrtage to the Minirr�um Improvements af $250,000 or less, Developer may in
its discretio» determine whether to repair, recanstruct or reconstr�ct sueh portion of the Minimum
Irnprovements. The Developer agrees to notify the City immediately in the case o� damage exceeding
$250,000 in aanount to, or destruction of, the Minirrtu� 13nprovements or any partion thereof resulting
from fire or other casualty. ln such event the Developer, to the extent insurance proceeds are available to
it, wi}I �orthwith repair, reconstruct and restore the Minimum �mprovements to substantially the same or
an ir�provecf condi�ion or value as it existed prior to the event causing such damage and, to the extep�
necessary to accomplish such repair, reconstruction and restoration, the DeveIoper will apply the Net
Proceecfs of any ins�rance relating ta such damage received by the Developer ta the payment or
reimburseznent of the costs thereof.
Ar�y Net Proceeds re�naini�tg after completio�i of sucl� reparrs, construction and restoration shall be the
properiy of the Developer.
(e) Notwithstanding anything to the contrary contained in this Agreement, in the event of
damage to the Minimum Improvernents in excess of $250,000 and the Developer fails to complete any
repair, reconstruction or restaration of the Minimum Improvernents withirr two years from the date of
darnage, the City r�tay, at its option, #erminate t3�e Note_ If the City terminates the Note, such terEnination
shal} constit�te the City's sole remedy under this Agreement as a result of the Developer's failure to
repair, reconstrEict or restore the Minimum Impravements. Thereafter, the City shail have no further
obl igations to make any payments under ilie Note.
{f} The Deve�oper and the City agree that al] of the insarance provisions set forth in this
Articie V shalI terminate upon the tert�ination oithis Agreement.
Section 52. Subordination. Notwithstandii�g anytlaing to the contrary contained in this Article V,
the rights of tl�e City with respect to the receipt and application of any proceeds of insurance shall, in all
respects, be sub�ect and subordinate to the rights of any lender under a Mortgage. -
(The remainder of this page is intentionaIly ]eft blank.)
I8
ARTICLE VI
Tax �neremen#; Taxes
Section 6. ]. Right ta Collect Delinquent Taxes. The Deve�oper acknowledges that the City is
providing substantia3 aid and assistance in furtherance oi the redeveIopment thraugh issuance of the Note.
The Developer undersiands that the Tax Increments pledged to payrr�ent on the Note are derived from real
estate taxes on tl�e Minimum Irnprovernents, which taxes m�st be promptly and timely paid. To t�at end,
the Developer agrees for itself, its successars and assigns, in addition to the obligation pursuant to statute
ta pay rea] estate taxes, that it is alsa o�ligated by reason of this Agreement, through the Maturity Date, to
pay befare delinquency all real estate taxes assessed against the DeveIopment Properly and t�e Minimurn
Irr�provements. The Develaper acknowledges t33at t�is obligation creates a co�tractual right on behalf of
the City to sue tl�e Developer or its successors and assigns to collect delinque�t real estate taxes and any
penalty or interest thereon and to pay over the same as a tax payment to the county a�zditar_ In any such
sui#, the City shall also be entitled to recover its costs, expenses and reasonable attorney fees. Nothing in
this paragraph shall prevent Developer from eantesting the ama�nt of real estate taxes (whether because
of valuation, classificatio�, or otl�erwise} in accorda�ce with Minnesota ]aw.
Sectio« 62. Reduction of Taxes. (a) Developer agrees that through the Maturity Date it will not
cause a reduction in the real property taxes paid in respect of the De�etopment Property through: (A)
willfui destruction af the Development Praperty ar ar�y part thereof; {B) willful refusal to reconstruct
damaged or destroyed property from i�surance proceeds availab}e to Developer for such purposes; {C}
apply for a deferral of property tax on the Deveiopment Property pursuant to any law; or (D) convey or
transfer or aliow conveyance or transfer of thE Deveiopment Property to any entity that is exempt from
payrrtent of real prope�ty taxes uncler Sfiate law (other than any portion thereof dedicated or conveyed to
the City in accordance with the plat of the Development Property).
(b) T��e Developer may use any adrtzxnistrati�e or legal process provided under State Iaw to
seek reduction af market value of the Developrnent Property and Minimum Ir�pro�ernents therean for ad
�alorem tax purposes, provided that {i) prompt�y upon fiIing any petition or claim with any Tax Official,
the Developer shali provicEe written notice of such action to the City; and (ii} if Developer fles sueh a
petition or claim, the City will withhold payment of any Available TaY Incre�nent (without interest) that is
ariributable to tax-payable year that is the subject of the petition or claim� until the petition or claim is
fu]Iy resolved such #hat tl�e County has fir�ally determined the amount of properiy taxes payable with
respect to the De�elaprt�ent Property for that year.
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19
ARTICLE VII
Finanein�
Section 7.1. Develo er Financin . (a) The parties agree and acknowledge that #he
Developer intends to finance the construction of the Minim�m lrf-iprovements throug� issuance by the
City of ��Q+-l{��-k�et�s����e��te be�td�F���Housing Revenue Bands"�. The City agrees to
issue the Ho�sing Revenue Bonds, subject to the terms and conditions of ihfs Section, and comn�iance
with alt reauarements of State iaw and the Interna] Revenue Code of 1986 as ar�ended and related
r�ulations. _..------_ - �_ _____
{b) The Housing Revenue Bonc�s may be issued in one or more series, at Developer's option.
Each series of T-lousing Revenue Bonds must be issued in accordance with a�l terms and conditior�s of the
City's Procedure for Application to the City of Arden Hills for Private Activity Re�enne Bond Financing
dated__Sentember 14. 2009. (the "Private Activity Bond Policies"� *'��+ �ra ;� ��� �* �r �F *�,� -'�*� �r
-- --- ----- -_ .._
���'�'� �" Notwit�standin an hin to the contra�in the
- �i• �..�-__..g -
Private Activit Bond_Policies, the �arties a�ree that ihe administrative fee re�uireci �nder Part II. Section
9 therein,�hall be na�able_in a lump surn at cIosin� on each series of Housin�Revenue Bonds. The Iumn
. _ __-- --- - _��
sum__shal] be one�ercent of the ori inal . rinci a] amount of t�e first 5 000 000 in Housin... _Revenue
Bonds issued; one-half percent af the ori . inal rinci al amount of the next_`$15,000.000 in ori�
�rincipal amount of_.HousinQ Revenue _Bonds assuEd: and one-auarEer�ercent of the ori�inal principai
----- --- _
amount of Nausin6 Reyenue Bonds issued_in excess of �20 000,000. For puipQses of the fee eaIculation,
the�ncinal amount of all Housin Revenue. Bonds will be ag�re ated as if alI_.were issued_o�► the same
date, b�t the adir�inistrative fees wiIl be�a, a�b}e upon closin� of each separate series. In accarc�ance with
Part Ill,._$ection 2 of the_Private Activ_it�$ond Policies, no additiQnal admin�strative fee is navabie u�on
... .. _
iss�ance of an� series of bonds to refund initial Housin Re.v..enue Bonds for which a fee was �aid at
closin _,__If an _series_of Housin. Revenue Bonds are issued in_ art to refund a� rior Housin Re�enue
—__._ _ _ . _ __.
Bond and in._.part to f nance construction of the Minimum Imoro_vements that is a mixed refunding ar�c�
.. . _.--
"new monev" bonti onl�the� principal amount of the bonds aliocable to the new monev nortion of that
--.._.__�. . _ __ � __. .._ � --- _.._
series will be taken into account in.determinin the adrr�inistrative fee for that series. �
(c} If ihe City determines ihat issuance of a�y se�ies Ha�sing Revenue Bonds is �-easonably
expec#ed to cause governmental bonds issued by the City in that calendar year ta be ineligible for
designation as "quaiified tax exempt abtigations" uncier Section 265(b}(3} of t�e Internal Revenue Code
of 1986, as amended (also known as "bank qualifed"), t�e Deveioper wi�l be required to reimburse the
City, at the time of issuance of the City's bonds in that calendar year, for any interest rate differential
between bank qualified and non-bank quaIified bonds, as determined by the City's independent �inancia9
advisor.
(d) Devetoper may not seek, ar�d City will not consent to, iss�ance of any series Housing
RevenUe Bonds by a�y unit of government other than the City_ r'T'���t�sse�l:�
Section 7.2. Subordination. In order to facilitate issuance of the Housing Revenue Bonds, the
Authority agrees to subor�inate its rights under this Agreement provided t}aat such subordination shatI be
subject to such reasonable terrns and conditions as t�e Authority and the underwriter and trustee far the
Housing Revenue Bonds mutualIy agree in writing.
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20
ARTICLE V�iI
Prohibitions A�ainst Assignment and Transfer; Indeanni�cation
Section S.l. Representation as #o Develop�nent. The DeveIope:r represents and agrees that its
undertakings pursua�# to this Agreement, are, and wi]] be used, for the purpose of rede�elopment of the
Deveiopment Froperty and r�at for specuEation in land hoiding.
Section 8.2. Prohibition A�ainst Devetoper's Transfer of Propert,y and Assig,��nent of
Agreement. T�ie Developer represents and agrees that priar to issuanc� of the Certificate of Comple�ion
for the Minim�m Improvements or rele�ant Phase thereof:
(a) Except as specifically described in this Agreement, the Developer has not made or
created and will nat make or create or suffer to be made ar created a�ty total or partia� sale, assignment,
conveyance, or lease, or any trust or power, or transfer in any other rt�ode or forfn of or with respect to the
Agreement or the Developme��t Properly ar any part thereof or any interest therein, or any contract or
agreement to do any of the same (collectively, a"Transfer") without the priar written approval of the City
CounciI unless the Developer remains liable and baund by this Agreement in which e�ent the City's
approval is not required_ The term "Transfer" does not include (i) encumbrances r�ade or granted by way
of security for, and only for, the purpose of obiaining construction, interim or permanent financing
necessary to e��able the Developer or any successor in interest to the Development Property or ta
construct the Minimum Improvements or component thereaf, (ii) any Iease, lice�se, easement or sirt�ilar
arrangeme�-�t entered into in the ordinary eourse of business related to operation of the M�nimum
Improvements, or (iii) any sale, co��veyance, or transfer in any farm to any Aff►liate. Any Transfer sha�l
be subject ta t�e provisions of#his Agreement.
(b} In the event the Developer, upon Transfer of the Develop�nent Properry or any Phase ar
partian thereaf, seeks to be released from its obtigations under this Agreement as ta the portions or Phase
of the Develop�ner�t Property that is transferred or assigned, the City shall be entitled to require, except as
otherwise provided ir� the Agreement, as conditions to a»y such release that:
(i) Aray proposed transferee shal� have the qualifications and financial responsibility,
in the reasonable judgment of the City, necessary ar�d adequate to �ulfill the obtigations
undertaken in this Agreement by the Developer as to the portion of the Developinent Property to
be transferred.
(ri} Any proposed transferee, by instrument in writing satisfactory to tl�e City and in
form recordable among the �ai�d records, shall, for itself and its successors and assigns, and
expressly for the benefit of the City, have expressiy assumed al� of the obligatior�s of the
Developer under this Agreerne�it as to the portion of the Development Property to be transferred
a�d agreed to 6e subjeet to all the conditions and restrictio�s to which the Developer is subject as
ta such portion; pro�ided, however, that the fact that any transferee of, or any other successor in
interest whatsoever to, the Development Property, or any part thereof, shatl not, far whatever
reason, have assumed such obligations or so agreec�, sF�alI r�ot {unIess and only to the extent
atl�erwise specifically provided i�� this Agreerner�t or agreed to in writing by t3�e City) deprive the
City of any rights or remedies or controls with respect to the Development Property or any part
thereof or the construction of the Minimum irrtprovements; it being the intent of the part�es as
expressed in this Agreemer�t that (to the fuIlest extent permitted at law and in equity and
excepting only in the manner and to tI�e extent speci�cal�y provided otherwise in this Agreement)
no transfer of, or change with respect to, ownership in the Develop3nent Property or any part
t}iereof, or any interest therein, hawever consummated or occur�-ing, anci whether volunta�-y or
22
involuntary, sha9] operate, legaity or practically, to deprive or limii the City of or with respect to
any rights or remedies on controts pravided in or resu�#ing from this Agreement with respect to
the Minimum Improvements that the City would have had, had there been no such transfer or
change. In the absence of specific w�itten agreement by the City to the contrary, no such transfer
or approval by the City thereof sha9� be deerned to relieve the De�eloper, or any other party
bound in a�y way by this Agreement or otherwise with respect to the construction of the
Minimum ImpraverrEents, from ar�y of i#s obligations with respect thereto.
(iii} Ar�y and aIl instruments and other lega] documents involved in effecting the
Transfer of any interest in this Agreement or t�e Development Property go�erned by this Article
VIII, shall be in a form reasonably satisfactory ta the City.
In the event the foregotn� conditions are satisfied then the Deveioper sha11 be released from its obligation
under this Agreement, as to the partion af t�e Development Property that is transferred, assigned or
otherwise conveyed.
(c) A�#er issuance of the Certificate of Completion for the Minimum Jmprovements, the
Developer may transfer ar assign any portion of tl�e Deveiopment Property ar the Developer's interest in
this Agreement without the prior written consent of the City, provided tha# the transferee or assignee is
bound by all the Developer's obligations hereunder. The Develo�er shatl submit to the City writter�
evidence of any such transfer or assignmen�, including the tra�tsferee or assignee's express assumption of
the Developer's obligations under this Agreement. If ihe Developer fails to provic�e such evidence of
transfer and assumption, the Deveioper shall remain bound by all its obligations under this Agreement.
Section 8.3. Retease and Inde�nni�cation Covena�ts. (a) The Developer refeases from and
covenants and agrees that the City and the governing body members, afficers, agents, servants and
employees thereof shall not be liable for and agrees to indemnify and ho�d harmless the City and the
governing body members, officers, agents, servants and employees #hereof against any ]oss or damage to
property or any in�ury to or deaih of any perso�� occurring at or about ar resulting from any defect in the
Minimum Improve�r�ents or any impro�ements financed as Public Development Costs.
(6) Except for any wilifui misrepresentation or any willful or wanton misconduct of the
folIowing named parties; the De�eloper agrees to proiect and defend the City and the governing body
members, officers, agents, servants ar�d e�nptoyees thereof, now or forever, anc� further agrees to hold the
afaresaic� harmless from any claim, derrtand, suit, action or other proceeding whatsoever by any perso� or
en#ity whatsoever arisin� or purportedly arising fror� this Agreement, or the transactions conte�n�lated
hereby or the acquisition, car�struc#ion, installation, ownership, maintenance and aperation of the
Minimum lrr�provements or any improvements �nanced as P�blic Development Costs, including without
limitation any cIaim arising under Minnesota Statues, Section 471.345.
(c} Except for the gross negligence or intentional misconduct of the following named parties,
the City and the goverr�ing bo�y members, officers, agents; servants and employees thereof sha31 3�ot be
Eiable for any damage or injury to the persons ar property of the Deve�oper or its officers, agents, servants
or employees or any other person wl�o ►nay be about the DevelQpr�ent Property or Minimum
Improvements.
(d) All covenants; stipulatio�3s, promises, agreements ar�d obligations of the City co�tained
herein shai] be deerned to be the cove�ants, stipulations, pramises, agreerr3ents and ohliga�ions of the City
and not of any governing body member, afficer, agent, servant or employee of the City in the indi�i�ual
capaci#y thereof.
23
(e) The provisions of this Section survive termination of this Agreement.
The rem.,ainder of this�age�is intert#ionaliy._teft blank.
24
ARTICLE IX
Events of Default
Section 9.1. Events of Default De�nEd. The following shall be "Events of Default" under this
Agreement and the term "Event of Default" shal� mean, whenever it is used in this Agreement {unless tt�e
context otherwise provides}, a�ty faiiure 6y any party to observe or periarm any cavenant, conditian,
obligation or agreerr�ent an its part to be observecf or performed under this Agreernent or the Land
Development Agreement, except a fail�re resulting from an llnavoidable Delay.
Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.l of
this Aga-eement accurs, the non-defaulting party may exercise its rights under #his Secti�n 92 after
prov�ding thirty days written notice to the defaulting party of the Event of Default, but only if the Event of
Default has �qt bee� cured withi� said thirty days or, if ti�e Event of Defa�it is by its na�ure i�curable
within thirty days, the c�efa�lting party does not provide assurances reasonably satisfactory to the non-
defaulting party that the Event of Default will be cured and will be cured as saon as reasonably possible:
(a) Suspend its performance €�nder the Agreement, including withl�olding of pay�nents on �he
Nate, until it receives assurances that the defaulting party will cure its default and continue its
performance under the Agreerraent.
(b) Upon a default by the Developer, and after failure ta cure within 360 days after notice
from the City {i�otwithstanding any contrary cure perio� described ir� ihis Section) the City may terminate
this Agreement, the Note a�d the T1F Drstrict_
(c} Take whatever action, including legal, ey€�itable or administrative action, which may
appear necessary or desirabie to collect ar�y payments due �nder this Agreerrient, or ta enforce
performance and observa��ce of any obligatior�, agreement, or covenant under this Agreement.
Section 9.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the City or
Developer is intended to be exclusive of ar�y ather available remedy or remedies, but each and every such
remedy shal] be cumulati�e and shall be in addition to every otl�er remet�y given under this Agreement or
now or hereafter existing at law or in equity or by statute. No delay or omission ta exercise any right o�
power accruing upon any defa�lt shall impair any stach rtght or pawer ar shall be construed to be a waiver
thereof, but any such right and power rrtay be exercised from time to time and as often as may be deemed
expedient. In order to entitle the City ta exercise any remedy reserved to it, it shall not be necessary to
give notice, otherthan sucn notice as inay be req�ired in this Article IX.
5ection 9.4. No Additional Wai�er im�lied by .One Waiver. In the event any agreement
contained in this Agreement should be breaehed by e�ther party and thereafter waived by ihe other party,
such wai�er shall be �imited to the particular breach so wai�ed and shal[ not be deemed to waive any
other cancurrent, previous ar subsequent breach hereunder.
(The re�nainder of this page is intentionally left blank.)
25
ARTICLE X
Additional Provisions
Section I O.I. Conflict of lnterests; Ci Re resentatives Not Individuali Liable. The City and
the De�eloper, to t�e best of their respeetive knawledge, represent and agree that tao member, official, or
errtplayee of the City shall have a�y perso�a] interest, direct or indireet, in the Agreernent, nor shall any
such rr�emb�r, offcial, or employee partictpate in any decision relating to the Agreernent which af�ects his
persona] interests or the interests of any corporation, liability company, or association in which he is,
directly or indirectly, interested. Na �nember, official, or emp�oyee of the City shaIl be personally ]iable
to the Developer, or any successor in interest, in the eve�t of any defauli or breach by the City or County
or for any amount which may become due ta the Developer or successor or on any ob�igations under the
terms of the Agreernent.
Section 10.2. Eqt�at Employrr�ent O�portunity. The Developer, for itself and its successors and
assigns, agrees that during the construction ofthe Minir�um lrnprovements provided for in the Agreement
it will comply with all applicable federal, state and 1oca1 equal emplayment and non-discrimination �aws
and reguiations.
Section i 0.3. Restrict�ons on llse. The Developer agrees that, prior to the Maturity Date, the
De�e3oper, and such successors and assigns, slzail �se the Development Property solely for the
development of co�ttrr�ercia} improvements in accordance with the terrt7s of this Agreement, and shaIl not
discriminate upon the basis of race, colar, creed, sex or national origin in the sale, 3ease, or rental or in the
use or occupancy of th� DeveIapment Froperty, the Minimum Improvements, or any irrtprove�nents
ereeted or to be erected thereon, or any part thereof.
Section � 0.4. Arovisions Not Mer ed With Deed. None of the provisions of this Agree�nent are
intended to or shall be merged by reason of any deed transferring any interest in the De�elopment
Property and any sueh deed shail not be deemecf io affect or impair the provisio2�s anc� eovenants of #his
Agreement.
Section 10.5. Titles of Artie�es and Seetions. Any titles af the several parts, Articles, and
Sections of the Agreement are inserted for co�lvenier�ce of reference only and shail be disregarded in
construing or interpreting any of its provisio��s_
Section l Q.6. NoEices and Demands. Except as otherwise expressly provided in this Agree►nent,
a notice, demand, or ather comrnunication �nder the Agreement by either party to the oiher shall bE
s�ffeientiy giver� or delivered if it is dispatcl�ed by registere� ar certified mail, postage prepaid, return
receipt requested, ar delivered personally; and
(a} in the case of the Developer, is addressed to or delivered personally to the Deve�oper clo
Presbyteria� Homes and Services; 2$45 Hatnline Ave. North, Roseville, MN: Attn: Chief Financial
Officer.
(b) in the case of the City, is addressed to or delivered personaliy to the City at City HaII,
1245 Highway 96 W, Arden Hills, MN 55112-5743; ATEn: City Administrator
ar at such other address with respect to either suct� party as that party may, from #ime to time, designate in
writing and forward to the other as pravided in this Section_
26
Section 10.7. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall constitute one and ihe same instrument.
Section I0.8. Recordin�. The City may record this Agreement and any arnendments thereto witJ�
the Ramsey County recarder. The Developer sha11 pay aIl costs for recording.
Seciion 10.9. Termination. This Agreement termi��ates on the Maturity Date or any earlier date
af tert�ination under Section 9.2(b). Section 83 hereof survives termination of the Agreement.
(The remainder of this page is intentionally �eft blank.}
27
IN WITNESS WHEREOF, the City has caused this Agreement to be duly executed in its name
and behalf and its seal to be hereunto duly affixed and �he Developer has caused thrs Agreement to be
duly executed in its name and behalf as of the date first above written.
CITY OF ARDEN HILLS, MINNESOTA
By
Its Mayor
By
Its City Administraior
STATE OF MINNESOTA )
) SS.
C011NTY OF RAMSEY }
The foregoing instrument was aeknawiedged before me this _ , 2a�o �y
and , the Mayor a�id City Administrator of the Ciry of
Arden Hills, Minnesota, on behalf ofthe City.
Notary Pub�ic
S-1
_ _ ._ ...
PRESBYTERIAN HOMES OF ARDEN HILLS,
INC.
:
;ts Chief Financial Officer
STATE OF MINNESOTA )
) SS.
COUNTY O�' )
The foregoing instrument was acknowledged before me this , 20l 0 by Mark
Meyer, the Chief Financial Of�cer of Presbyterian Homes of Arden HiEls, lnc., on behalf of the
corparation.
Notary P�blic
S-2
SCHEDULE A
DEVELOPMENT PROPERTY
TRIANGLE PARCEL
A-1
__ _
SCHEDULE B
CERTIFICATE OF COMPLETION
The �ndersigr�ed hereby certifes that PRESBYTERIAN HOMES OF ARDEN HILLS, INC. (the
"Developer"} has fully cornplied with its obligations under Articles liI and IV of that document titled
"Contract for Priva#e Development," dated _ 20l � between the City of Arden Hills,
M�nnesota and the Developer ("Agreement"); with respect to construction of the Minimurt� Improvements
in accordance witl� Article N of the Agreement, and ihat the Developer is reIeased and forever
discharged from i#s obligations wiih respect to co2�struction of the Minimum Impro�ements under Articles
III and IV of the Agreement.
Dated: , 20
CITY O�' ARDEN HILLS, M�NNESOTA
sy
City Representative
�
SCHEDULE C
AUTHORIZ�NG RESOLUTION
CITY OF ARDEN HILLS, MINNESOTA
RESOLUT�ON N�.
RESOLUTION APPROVING CONTRACT FOR PRIVATE
DEVELOPMENT AND AWARDING THE SALE OF, AND
PR�VIDING THE FORM, T�RMS, COVENANTS AND
DIRECTYONS FOR THE ISSUANCE OF ITS �1,115,000 TAX
INCREMENT REVENUE NOTE
BE IT RESOLVED BY the City Cou�cil ("Counci�") of the City of Arde�z Hikls; Minnesota (the
"City"} as fo]Iows:
Section ]. Authorization; Award of Sale.
].Ol. Authorization. The City has hereto%re approved tl�e esiablishment of Tax Ir�crement
Financing District No. 4{the "TIF District") within amended Devefopment District No. 1("Project"), and
has adopted a tax increment frnancing pJan for the purpose of financi��� certain improvements within t1�e
Project. 4
PursUant to Minnesata Statutes, 5ection 4b9.17$, the City is auThorized to issue and sell its bonds
far the purpose of financing a portio�► of the public development costs of the De�elopment District. Such
bonds are paya�le from all or any portion of revenues deri�ed from the TIF Distric# and p}edged to the
payment of the bonds. The City hereby finds and determines that it is in the best in#erests of the City that
it issue and sell its $1,�35,Ob0 Tax Increment Reve�3ue Note (the "Note") for the purpose of �nancing
certain public casts af the Project.
1.02_ A�reement Approved; Issuance, Sale., and Terms of the Note. The City hereby approves
the ConEract for Private Development between the City and the Owner {the "Agreemeni"), and authorizes
the Mayor and City Ac�ministratar ta execute such Agreement in substantial�y the form on fIe with City,
subject to modifications that do not alter the substance of the transactian and are approved by such
of�cia�s; provided that exeeution of tl�e Agreement by such offcials is conclusive evidence of their
approval. Pursuant to the Agreement, the Note shall be sold ta PRESBYTERIAN HOMES OF ARD�N
HILLS, INC. (the "Owner") and deiivered at the ti�ne and subject to the conditions of Section 3.3 of the
Agreement. The Nate shall be dated as of the date of delivery and shall bear inierest from the date of
original iss�e to the earlier of �naturity or prepayment, ai the rate that is the lesser af b.25 percent per
annum, or the true interest eosi on the first series of Housing Re�enue Bonds issued to finance the
Min�mum lmpro�ements in accordance with Article Vll of the Agree�nent. The consideration for tk�e sale
of the Note is the payment by the Owner of the Pubiic Development Costs as defined i�� the Agreement.
Section 2. Form af Note. The Note shall. be in substantially the following farm, with the bIanks
to be properly filled in and the principal amount anci payment sehec�ule adjusted as of the c�ate of issue.
C-3
UNITED STATE OF AMERICA
STATE OF MINNESOTA
COUNTY OF R4MSEY
CITY OF ARDEN H1LLS
No. R-1
$1,115,000
TAX INCREMENT REVENUE NOTE
SERIES 20_
Rate
%
Date of OriQinal lssue
, 2a
The C�#y of Arden Hills, Mrnnesota {the "City"), for value received; certifies that i� is indebted
and hereby prorr�ises to pay to PRESBYTERIAN HOMES OF ARDEN NILLS, INC. or registered
assigns (the "Owner"), the principal sum of $ and to pay interest thereon at the rate of
percEnt per annum, as and to t�e extent set forth herei�_ Unless the context clearly requires
otherwise, capitalized #erms in this Note have the meaning prov�ded in tl�e Contraet for Private
Development between the City and Owner dated as of December 13, 20l 0(�he "Agreerrtent").
1. Payments. Principal and interest ("Payments�'} shall be paid o�� A�gust ], 2014 and each
Fehruary 1 and August 1 thereafter ("Payment Dates") to and inc�uding February l, 2028, or such earlier
Payment Date when principal and accrued interest have been paid i�� fuil; and shal] be rnade in the
a�nounts and sotely from the sources set forEh in Sectio� 3 hereor�. Payments shal� be applied firs# to
accrued interest, and then to unpaid principal.
Payments are payable by mail ta the address of the Owner or such other adciress as the Owner
may designate upon thirty (30} days writ�en notice to the City. Payrnents on this Note are payable in any
coin ar curreney nf the United States of A�nerica which, on the Payment Date, is Iegat tender for the
payment of public and p�vate debts.
2. Interest. Interest at the rate staEed herein sha}t accrue on the unpaid princrpaI from and
after the date of issue of this Note. Interest accruing from the date oi issue through February �, 2q14 will
be compounded semiannually on eacI� Aug�st l and Febrr�ary l an� added to principal. Interest shall be
computed on �he basis of a 364-day year cor�sistin� oftwelve 30-day months.
3. Available Tax lncrement. Payments on this Note on eac�t Payment Date are payable
solely from a�zd in the amount of Available Tax Increment. The term "Availabie Tax Increment" �neans
(a) on Payment Da#es from August 1, 2414 through February 1, 2019, 90 percent of the Tax Increment
attributabte to the Minimum Improvements and Development Property that are paid to the City by
Ramsey County in the six {6) months preceding the Payment Date, and (b) on Payment Dates fror�
August �, 2419 to February l, 2028, 75 percent af tl�e Tax lncrement attributable to the Minim�m
Improvernents and Development Property that are paid to t3�e Ciry by Ramsey County in the six (6)
months preceding the Aayment Date.
Available Tax Increment shatl not include any Tax Increment if, as of any Payment Date, there is
an uncured Eve3it of Default under the Agreert-�ent or the Land Develapment Agreement; any amount of
Available Tax Increment so withheld shall be paid, without interest on the withheid amount, on the next
G�
Payment Date after the default is cured, unless the Note has been terminated in accordan.ce with Section
9.2(b) of the Agreement. Availab}e T� Tncrement shall also not include any Tax Inereaaaent if, as of a�y
Payment Date, there is an outstanding petitian or claim to reduce the market value of the Developrnent
Property as described in Section C.2(b) of the Agreement; any amount of Available Tax Increme�t so
withheld shall be paid, without interest on t�e wi�hheId amount, on the next Aayment Date after resolution
of the tax petition or claim in accordance wit� Section 6.2(b) of the Agreerne�t.
The City shali have no obligatior� to pay principal af and interest on this No#e on each Payment
Date from a�y source other tha� Available Tax Increment, and shall have no obligation to pay u�paid
balance of principal or acc�ed interest that may remain after the Payment on the final Payment Date
described in Section I hereof.
4. Prepayrr�ent. The principal sum and all aecrued interest payable under this Note is
prepayable in whole or in part a# any time by the City without premium or penalty, and is subject to
deemed prepaymenE in accordance with Section 3.8 of the Agree�nent.
5. NatUre of Ob�igation_ This Note is one of an issue in the total principal amour�f of
$l,l I5,0�0 issued to aid in financing certain pubiic development costs and administrative costs of a
�'roject undertaken by the City pursuant to Minnesota Statt�tes, Sections 469.125 through 469.I34, and is
issued pursuant to the Agree�nent and an authorizi�g resolution (the "ResoluNon"} duty adopted by the
City on December ] 3, 2010, and pursuant to and in full cor�farmity ��vit[� the Constitution and laws af the
State of Minnesota, including Minnesota Statutes, Seciior�s �k69.174 to 469.179, and the Special Laws.
This Note is a�irni�ed obligation of the City which is payable sotely from Availabie Tax Inerement
p�edged to the payment hereof under the Resolution. This Note and tl�e interest hereon shall not be
deemed to canstitute a generai ohligation of the 5tate of Minnesata or any poIitica3 subdivision tI�ereof,
including, without limitation, the City. Neither the State of Minnesota; nor any politicai subdi�isian
thereof shall be obIigatEd to pay the principal of or interest on this Note or other costs incident �ereta
except out of Available Tax Increment, and neither the fuil faith and credit nor the taxing power af the
State of Mi�nesota ar any political subdivision thereof is pledged ta the payment of the principal of or
interest on this Note or other casts incident hereto.
6. Registration and Transfer. This Note is issuab�e only as a fully registered nate witha�t
coupons. As provided in the Resolution, and subject to certai� limitations set forth therein, this Note is
transferable upon the books of the City kept for that purpose at the prineipal office of the City
Administrator, by the Owner hereof ir� person or by such Owner`s attorney duly authorized in writing,
upon surrender of this Note together with a wr�tEen instrumen# of iransfer satisfactory to the City, d�iy
executed by the Owner. Upan such transfer or exchange and the payment by the Owner of any tax, fee,
or gaverFtmentat charge required by law ta be paid by the City with respect to such transFer or exchange,
there will be iss�ed i� the name of ihe transferee a new Note of ihe sarrte aggregate pri�cipal amount,
bearing interes� at the same rate and maturing on the same dates.
Tl�is Note shall not be transferred to any persan otl�er tha�� an affiliate, or other rela�ed entity, of
the Owner untess the C�ty has been provided with an opinio�� of counsel or a certificate of the transferor,
in a form satisfactary to the City, that such transfer is exerr�pt from registration and praspectus detivery
require�nents of%deral and applicable state securities ]aws.
IT IS HEREBY CERTIFIED AND RECITED chat a�l acts, conditions, and thi�gs rec�uired by the
Constit�tion a�d laws of the State o� Minnesota to be done, to exist, to happen, and to be �erforrned in
order to make this Note a valid and binding limited obligation of ihe City according to its te�-ms, have
been do�te, do exist, have happened, and have been performed in due farm, time and manner as so
required.
GS
IN WITNESS WHEREOF, the City Cvuncil of the C�ty of Arden Hil}s, Minnesota has caused
this Nate to be executed with #he manual signatures of its Mayor and City Administrator, aIl as a� the
Date of Qriginal Issue speci�ed above.
CITY O�' ARDEN NILI,S, MINNESOTA
Mayor
City Administrator
REGIS'TRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond register of the
CiTy Administrator, in the name of the person last 3isted below.
Date of
Registration
Re�ered Ow��er
Signature of
Citv Administrator
,20
Presbyterian Homes af Arden
Hills, Inc.
Section 3. Tezms, Execution and Deliverv.
3.01. Denan�ination. Pa.�. The Note shall be issued as a single typewritten note numbered
R-1.
The Note shall be issuab�e only in fully registered form. Principal of a�d interest on the Note
shalt be payable by check or draft issued by t�e Registrar describe� herein.
3.02. Dates; Interest Payment Dates_ Principal of and interest on t[te Note shall be payable by
rnail ta the owner pf record thereof as of the close of business on the f�teent� day of the month preceding
the Payment Date, whether or not sueh day is a business day.
3.03. Registration. The City hereby appoints the City Administrator ta perform the functions
of registrar, tra�sfer agent and paying agent (the "Registrar"). Th� effect of re�istratian and the righ#s and
duties of the City and the Registrar with respect thereto sha13 be as follows:
(a) R�ister. The Registrar shall keep at its offce a bond register in which the Registrar
sha11 provide for the registration of ownership of the Note and the registration of transfers and exchanges
of the Note.
(b) Transfer of Note. Upon s�trrender for transfer of ihe Note duly ei�dorsec� by the registered
ownec thereof or aceompanied by a written instrument of transfer, in forrn reaso�ably satisfac#ory to the
C-6
Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the
registered owner in writing, the Registrar shall autheniicate and deliver, in the name of the designated
transferee or transfe�'ees, a n�w Note of a like aggregate pr�ncipal arr�ount and rr�a#urity, as requested by
the transferor. Notwithstandi�g the foregorr�g, the Note shall not be transferred to any person other than
an affiliate, or other related entity, of the Owner unless the City has been provided wi#h an o�inion af
counse� or a certifcate of the iransferor, in a forrn sai�sfactory to the Ci�ty, that such trans�er is exempt
from registration and prospectus deIivery requirements of federa] and applicable state securities faws.
The Registrar may close the baoks for registration of any transfer after the ffteenih cfay of the month
preceding each Payment Date and unti] such Payment Date.
(c} CaneelIatiatt. The Note surrendered upor� any transfer shal] be promptly car�celled by the
Registrar and thereafter disposed of as directed by the City.
(d) ]m ro er or Unauthorized Transfer. When #he Note is presented to the Registrar for
transfer, the Registrar �-►ay refuse to transfer the same u�til it is satisfied that the endorsement on such
Note or separate instr��nent of transfe�- is legally authorized. The Registrar sha�l incur no liabiliry for its
refusal, in good faith, to make transfers which it, in its judgrnent, deems improper or unauthorized.
{e) Fersons Deemed �wners. The City and the Registrar inay treat the person in whose
name the Note is at any time registered in the bond register as the absolute owner of the Note, whether the
Note shall be overdue or not, for the purpose of receiving payment of, or or� account of, the principal of
a�d �nterest on such Note and for all other purposes, and all such payments so ma�e to any such registered
owner or upar� �I�e owner's order sha11 be valid and effectual to satisfy and discharge tl-►e Iiabil�ty of the
City t�pon such Note to the extent of the sum or sums so paid.
(f) Taxes� Fees and Charges. For every transfer or exchange o� the Note, the Registrar may
irnpase a chargE upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other
govemmental charge required by law to be paid with respect to such transfer ar exchan�e.
(g) Mutilated, I,ost, Stoler� or Desiroyed Note. In case any Note sl�all become mutilated or
be lost, stolen, or destroyed, the Registrar shall d�iiver a new Note of li�Ce amonnt, maturity dates and
#enor in exchange and substitution for and upon canceliation of sueh mutilated No#e or in lieu of and i�
substitution for such Note lost, stolen, or destroyed, upon the payrr�ent of tl�e reasonabie expenses and
charges of the Registrar in connection therewith; and, in the case the Note is last, stolen, or destroyed,
upon filing with the Registrar of evidence satisfactory to it that such Note was last, stolen, or destroyed,
and of the owners3�ip thereof, and upon furnisi�ing #o the Registrar of an appropriate bond or indemnity in
form, substance, and amount satisfactory to it, in which hoth the City and the Registrar shal� be ��a�ned as
obfigees. The Note so surrendered to the Registrar sha�l be cartcelled by it and evidence of such
cancel�ation shalI be given to the City. If the mutilated, lost, stolen, or destrayed Note has already
matured or been called for redemption in accardance with its ter�ns, it shal] not be necessary to issue a
new Note prior to payment.
3.04. Preparation and Deliver�r. The Note shall be prepared under the direction of the Co�nty
Auditor and s13a19 be executed on behalf of the City by the signatures of its Mayor and City Administrator.
In casE any oificer whose signature shat� appear on the Note shall cease to be such officer before the
de1 ivery of the Note, such signatur� sha11 nevertheless be valid and sufficient for a}t purposes, the same as
if such officer had remai�ed in office until delivery. When the Note I�as been so executed, it sha�I be
delivered by the City Administrator to the Owner thereof upon clasin� on acquisition of the Development
Praperty in accordance wi#h the Agreement.
Section 4. Security Provisians.
C-7
_ _ . .. . ..
__ _
4.OI . Pled�e. (a) The City hereby p�edges to the payment of the principal of and interest on
the Note all Available Tax Inerernent as defined in the Note_ Availa6le Tax l�crer�ent shall be applied to
payment of the principal of and interest on the Note in acc�rdance with the terms of the Note.
4.02. Bond Fund. Unti� the date the Note is na IongEr outstanding and no pri�►cipa3 thereof or
interest thereon (to the extent required to be paid pursuant to this resolution) rertnains unpaid, the City
shall �naintain a separate and special "Bond Fund" to be used for no purpose other than the payment of
the principal of and interest on the Note. The City irrevocably agrees to appropriate to the Bo�rd Fund
upon or before each payment date alI A�ailable Tax Increment. Any Ar�aa]able Tax Increment remaining
in the Bond Fund shall be transferred to the City's account for TIF District No. 4 upon the payment of all
principal and interest to be paid with respect to the Note.
4.03. Additional Obli ations. While the Note is outstanding, the City shall r�ot pledge ar permit
the plec�ge of all or any portion of the Available Tax I�crement to the payment of principal of or interesi
on any obligations of ihe City unless and to the extent such pledge is subordinate to the pledge to the
No#e.
Section 5_ Certifcation ofProceedin�,s.
5.01. Certificatzon of Proceedin�s. The offcers of ihe City are hereby authorized and directed to
prepare and furnish to the Owner of the Note certifred capies of alt proceedings and records of the CiEy,
and such other affidavits, certificates, and information as may be req�tired to show the facts relating to the
legality and marketability of the Note as the same appear from tlze books and records under their custody
and control ar as o#herwise k�own to them, and all such certified copies, certificates, at�d affidavits,
including any heretofore furnished, shall bE deerned representatians of ihe City as to the facts recited
therein.
Section 6. �ffective Date. This resolution shall be effective upon fu91 exeeut�on of the
Agreement.
Adopted this �20`�' day of December, 2010.
Mayor
City Admi�istrator
G8
__ _ . _ _ .. ...
Doeument comparison by Workshare P�ofessiona! an Friday, December '[7, 2�10
9:4't :49 AM
_. ��tl�:-�x��.���0.. ,. � ��� s m _ .�._._. .... �:.�
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�.:.��� -.���� _: �e .����. � m e m �. _....�
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=Eex"�"'�^= .� :�=«.:.�.-.-�.� �:=�as� �e `�°'�',� �' � ��`. �� �� �:»:
_.�.ras�.ro .;:sa^^.,�: -..--�'�:��
COUCI�
Insertior�s 61
Deletions 53
Moved from 2
Moved to 2
S�yle change 0
Format cf�anged 0
Tota[ changes 118
Attachment
Clean Copy of Contract for Private
Development
City of�4rden Hills
City Council Meeting for December 20, 2010
Eighth Draft December 17, 2010
CONTRACT
FOR
PRTVATE DEVELOPMENT
By ar�d BeYween
CITY OF ARDEN HILLS, MINNESOTA
and
PRESBYTERIAN HOMES OF ARDEN HILLS, INC.
Dated: , 2U I d
This document was drafted by:
KENN�,DY & GRAVEN, Chartered
470 U.S. Bank Plaza
Mi�►neapolis, Minnesota 55402
Telephone: (6l2) 337-9300
3�sg9a��o sJB aRzao-�o
TABLE QF CONTENTS
AREAMBLE .....................................................�--------
ARTICLE Y
Definitions
Section l.] _ Definitions........--•-�--�--�-�----�---------- ...............
P_ _ a�e
.....................................�-------------------........... l
..........................�---------�...............................2
ARTICLE II
Re resentatioas and Warranfies
Seetion 2.l . Representations by the City ...............................�-------�-�--..........................................-�-------.5
Section 2.2. Representations and Warranties by the Developer .............................................................5
ARTICLE III
Pubiic Deve_lopment Costs; Financin�; Convevance of Land
Section 3.I .
Section 3.2_
Section 3.3.
Seetion 3_4.
Section 3.5_
Section 3.6_
Section 3.7.
Section 3.8.
S#atus of Property ...............................�--�-------.........................................-�-�-�------------�----.-.... 7
AublicDevelopment Costs .................................................................._.....-�--------�---�-�-�--....7
Rei�nburseFne�t of Public Development Costs ......... .............-------...................................... 7
B�zsiness Subsidy Act ......................�---��-------�--�----�--..............................---�---------------...--------8
Conveyanee of Triangfe Parcel ..............................................�------�----�---............................. 8
Aelocation.....................................---�--�--�-�-----�--� ...................................•-----------------�-�------. 1 1
Records........................�-�--------�----..........................................
............................................ i l
TIFLookback ............................................_..-�----------�--........................................-----�----.... � 1
ARTICLE N
Construetion oi'Minimum Improvements; Public Improvements
Section 4.I . Construction of Impravements ...........................................................................•--•---.----.--13
Section�.2. Construction Plans ...._....--�-�--�-----�--� ...........................................�-----�--�---�-........................13
Se�tion 43. Commencement ar�d Campletion of Constr�ction ............................................................ ] 4
Seetior� 4.4. Cer�ificate of Completfan ...........................�--�--�-�---------.................................-------------------- l4
Section 4.5. Construc#ion of Utility Ir�provements and County Road I�nprovements ......................... l 5
ARTiCLE V
Insurance and Condemnation
Section5.1. �nsurance..----------�--�-� ...................................�----�-------......----�-.....................................----�--- I 7
Section5.2. Subordination ...................................................�---------................................------------�------....IS
ARTICLE VI
Tax Increment; Taxes
Section 6.1 _ Right to Callect Detinquent Taxes .................................................................................... l 9
Section6.2. Reduction of Taxes -�--�------� .............................................�------........................................--- l 9
3�ssgo��a s3B ARzoo-�o �
ARTICLE VII
Financin�
Section7.1 _ De�eloper Financing......-•-------------�--------�--..............................-�-------.................................20
Section72. Subordinaiion .---------• ..................................�-----�--.............................--�- --........20
-�-----------------
ARTICLE VIII
Prohibitions A ainst Assi nment and Transfer• Indeznni�cation
Section $.1. Representation as to Development ....................................................................................2]
Section 8.2. Prohibitio�� Against Devetoper's Transfer of Properly and Assignment of
Agreement..................................�-----------------.............................--�----�--.............................. 21
5ectioi� 8_3. Release and lndemnifcation Covenants ...........................................................................22
ARTICLE �X
Events af Default
Se�tion 9.� . Events of Defautt Deftned------------------------�----�--._...............................................................24
Section 4.2. Remedies on Defau[t----� ...................................................�-�----..............................----�-�-----24
Seetion93. No Remedy Exclusive ..................�--�-------.-...............................--�--�-----------........................24
Section 9.4. No Additional Waiver I�plied by One Waiver ...............................................................24
ART�CLE X
Addit�onal Pravisians
5ection I4.I.
Sectio�� 10.2.
Sectiort 10.3.
Seciion I0.4.
Section 10.5.
Section 10.6.
Section I0.7.
Section 10.8.
Section 10.9.
Conflict of lnterests; Ciry Representatives Not Individually Liable .................................25
Eq�at Employment Opportunih' -------------•................................---------�---............................25
Restrictionson Use --�-� ...............................................�--�-------.........................----�-------�----�-25
Provisions Not Merged With Deed .---------� .....................................�---------.._......................25
Titles ofArticles and Sections .._....--�-�� ............................................�-------.........................25
Noticesand Demands.--�---� ................................................................................................25
Counterparts.............................................................................................�--...................... 26
Recarding..... ..........................--.............................. --- 26
----------------�.........................--•-------�---
Termination.........................................................................................�------�-�--�--...............26
TESTIMON]UM ...._..--�-----------�-� .................................................�--......._..............----.....-------�-�--.._............ S-1
SIGNATURES.........................................................�----�-----.................................--�------......._................... S-I
SCHEDULEA Development Property ..................�-----...---------•.......................................:.................A-1
SCHEDULES CertificateofCompletion ...................................................................................�--�--B-t
SCHEDULE C Authorizi�g Resolution.................._.-�----------� ..........................•�-�-�---�-�--�--�................G1
378990vED S.1S AR20D-tP �i
CONTRACT FOR PItIVATE DEVELOPMENT
THIS AGREEMENT, made as of the day of , 2010, by and between Ehe CITY OF
ARDEN HILLS, M3NNESQTA, a Minnesota municipal corporation (the "City"), a�d PRESBYTERIAN
HOMES OF ARDEN NiLLS, INC., a Minnesota nonprofit corporatio�� (the "Developer").
W�TNESSETN:
WHEREAS, the City has undertaken a program to prorrtote economic developrnent and job
opportunities and to pro�tote the development of land which is underutitized within the City, and in this
connection created Development Disirict No. 1(hereinafter referred to as the "Project") in an area
(hereirtafter referred #o as the "Project Area"} located in the City and a Tax Increment Finaneing District
No. 4(the "T�F Distri�t") within the Project Area, a]l pursuant to Minr�esota Statutes, Sections 469.124 ta
469. ] 34 (tlze "Act") Minnesota Stat�tes, Sections 469.i 74 to 464.1799; and
W HEREAS, pursuant to the Act, the City is authorized ta undertake certain activities to prepare
sucl� real �roperty %r developr�ent by private enterprise; and
WHEREAS, ir� arder to achieve the objectives of the Development Plat� for the project the City is
prepared to pay certain public improvement costs of the Project, in order to bring about deve�opment in
accordance with the Development Plan and this Agreement; and
WHEREAS, the City believes that the development of the 1'roject Area p�rsuant to this
A�reeme�t, and fulfillment generaliy of this Agreement, are in the vital and best interests ofthe City and
tl�e health_ sa�ety; morals, and wetfare of its residents, and in accord with the pubIic purposes and
provisio�zs of the applicable State and loca3 laws and requirements under whieh ihe Pro}ect has been
undertaken and is being assisted_
NOW, THEREFORE, in eonsideration of the pre�ises and ti�e mutual obligations of the parties
hereto, each of them does hereby co�enant and agree with the otl�er as fallows:
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37S490v10 S.fB AA200-10
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ARTICLE I
Defini#ions
Section �.1. Definitior�s. In this Agree�nent, unless a different rr�eaning clearly appears iror�t the
context:
"Act" zneans Minnesota Statutes, Sections 469.124 to 464.I34, as arnended.
"Affiliate" means with respect to Developer (a) any corporation, partnership, or other business
entity or perso�� con#rolling, controlled by or under common co�ttrol with the Developer, and (b) any
successor to such parry by merger, acquisition, reorganiza#ion ar siznilar transaction involving aI1 or
substantially all of the asse#s of such party (or s�ch Afflia#e). For the purpase hereai the words
"contralling", "controlled by" and "wzder comrnon control with" shall mean, wi#h respect to any
corporation, part��ership, ar other business entity, the ownersl�ip of �fty percent or mare of the voting
i3�terests in such entity possession, directly or indirectIy, of the power ta direci or cause the directiort of
managemen# policies af sucl� entity, whether ownership of voting securities or by contract or atherwise.
"Agreement" means this Agreeme�t, as the sart�e may be frorn tirne to time `modified, afnend�d,
or supplemented.
"Authorizing Resalution" �eans the resolution of ihe City, substantially in the form of the
attached Schedule C adopted by the City Council to authorize the issuanee of the Note.
"Available Tax Increme�zt" �as the meaning provided in the Nate.
"Business Subsicfy Act" means Mi��nesota Statutes, Section 1 I6.T.993 to I 163.995, as amended.
"City" means the City of Arden Hiils, Minnesota.
"City Representative" means the City Administrator of the City of Arde►� Hills.
"Certificate of Compietion" means the certification provided to the DeveIoper, or Ehe purchaser of
any part, parcel or unit of the Development Property, pursuant to Seciion 4.4 af this Agreement.
"Ciosing" l�as the rneaaing provided in 5ection 3.5(e).
"Construction Plans" rneans the ptans, specifcations, drawings and related documents on the
constructian work to be perforrried by the Developer o�i the Development Praperty, including the
Minimum improvements, which (a) shall be as detaiied as the plans, specifications, drawings and related
dac�ments which are submitted to the appropriate building offcials of tl�e City, and (b} shaIl include at
least the #'ollowing: (1) foundation p�an; (2} basement plans; (3) floor pian for each floor; (4) cross
sections of each (length and width); (5) ele�ations (all sides); (6) landscape plan; and (7) s�ch other p�ans
or supp�ements to the foregoing plans as the City rt�ay reasonabIy request to allow it to ascertain the
nature and qua}ity of the proposed eonstruction work. In the case of Utility Improvements, the
Construction Plans rr�ust conform to the requirements spe�ified in the de�nition of t�►ose terrns herein.
"County" rnea�s tl�e County of Ramsey, Minnesota.
378990v�0 SJB AR20D-]0 2
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"County Road improvements" means the reconstruction of County Road D from the intersection
of Lake Johanna Btvd. easterly to the intersection wi#h S�orewood Dr; recanstructed street io be
naminally 32 feet wide with new concrete curb and gutter, and eonstructed to a 9-tan design in
accordance with Minnesota Department of Transportation design criteria.
"De�eloper' means Presbyterian Homes of Arden Hills, Inc. or its pennitted successors and
assagns.
"Deve3opmeni Property" means the real property described in Schedute A of this Agreement,
provided that for the purposes of this Agreement, tl�e term "Development Property" excludes any portion
of property deseribed ij� Schedule A, or irrtproveinenis thereon, that are determined by Ra�-nsey Caunty to
be exempt from ad valorem property taxes as of the date af t�is Agreement.
"Development Plad' means the City's Development Program far Development District No. 1, as
ainended.
"Enviranmentaf Response Actions" has tl�e �neaning provided in Sect�on 3.5(d).
"Eve�i of DefaUlt" means an action by the Deveioper listed in Article IX of this Agreement_
"Holder" �neans the owner of a Mortgage.
"Housin� Reve�ue Bonds" rr3eans qualified 501{c}(3) revenue bonds issued by the City under
Minnesota Statutes, Sections 469. i 52 to 469.1 b5 or Chapter 4b2C in order to fina�►ce a�� or a portion of
the Minimurrt Improvements, as further described in Section 7.] hereof.
"Land Development Agreement" mea�is the development agreement tq be enterec� between the
City and the Developer in connection with the pIat of the Developrnent Properiy.
"Maturity Da#e" means the date that the Note has been paid in ful�, defeased or terminated in
accordance with its terms, whichever is earlier.
"IV�i��imum Improvements" means: (a) the folIowing improvements on the Deveiopment Properry:
Phase lA: 54 units inc�ependen# living
36 units assisted ]rv�ng
] 8 units rnemory care
Phase IB: 40 units of assisted living
3 8 un its of inemory care
Phase 77: 36 units of inc�epertdent �iving (brownsto�es); and
(b) The following impravements within pablic rights of way or easements:
Utility Inrproti�ef�aents: reco��structian of existing 8" sani#ary sewer along the easterly
frontage of Lake Joha�na from the existing ]ift station to #he manhole in Sandeen Rd,
using new 8" AVC pipe along approximate}y the same ]ir�e and grade, and inc�udang new
manholes.
"Mortgage" means any mortga�e which is secured by the whoIe or ar�y part of the Development
Property and which is eniered into to obtain financing for improvement of the Development Property.
37s99ov�o s�s aRzoa-�o 3
"Note�' rneans a Tax Increment Revenue Note, substantia]Iy in the form contained in the
Au#horizing Resotution.
"Pl�ase'' means a portion af the Minimum Improvements as described in the definition thereof.
"Projecr' �neans the City's Develop►r�ent District No. 1.
"Project Area" means the real property located within the boundaries af the Froject.
"Pu�lic Development Costs" means those costs to be paid ar reimbursed to the De�eloper by the
City ia� �onneciion wiih the development hereunder as set forth in Section 32.
"State" meails the State of Minnesota.
`Tax lncrement" �neans that portion of the real property taxes which is paid with respect to the
Development Aroperty and improvements thereon a�d which is remitted to the City as tax increment
pursuant to the �'ax Increrrtent Act; provided that the tez'm Tax lncrernent does not include any amounts
retained by or payable to the State auditor under Section 469.177, Subd. 1 I af the Tax lncrement Act, or
any amounts described in Section 469.174, Subd. 25, clauses {2) through (4) of the Tax Increment Act.
"Tax ]nerement Act" or "TIF Aci" means the Tax Increment Financi�g Act; Minnesata Statutes,
Sections 469.174 to 469.1799, as amended.
"Tax ]ncrement District" or "TIF District" means the City's Tax lncrement Financing District No.
4.
"Ta� Increment Plan" or "Tl� P3an" �neans the Tax Increment Financing Plan for Tax Incre�nent
Financing Disirict No. 4, approved Decernber ] 3, 2010.
"Tax Official" rneans any County assessor, County auditor, County or State board of
equa�ization_ the cammissioner of revenue of the State, or ar�y State or federal court includir�g the
tax caurt of the State.
"7�ransfer' l�as the meaning pravided in Section 8.l hereaf.
"Triangie Parce�" means tl�e property so descrihed in Schedule A.
"Unavoidable Delays" means delays beyond the reasanable control of the party seeking to be
excused as a result thereof which are the direct resuit of strikes, other labor troubles, proionged adverse
weather or acts of God, fire or other casualty to the Minimum Impravemer►ts, Iitigation co�nrnence� by
third parties which, by injunction or other similar judicial action, direetly resuits in delays, or acts of any
federa�, state or loca] governmentat unit (other than the City in exercising its rights unc�er this Agreement)
which directly resuIt in delays. Unavoidable Delays shall not inetude delays in the Developer's abtaining
af permi#s or govern��ental approvais �ecessary to enable construction ofthe Minirnum Improvements by
the dates such constructior� is rec�uired under Section 43 of this Agreement.
"Utility �mprovements" has the meaning provided in the defini�ion of Minimum Improvements.
3�sn9a.��o s.rB n�zoo-�o 4
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ARTICLE Il
Represer�tations and Warranties
Sectron 2.1. Representa�ions by the Ci#v_. The City makes the folIowing reprEsentations as the
basis for the undertaking on its part herein cantained:
(a} The City is a statutory ciry duly organizec! and existing under the laws o� the State.
U�der the provisions of tlie Act, ihe City has the power to e�ter into this Agree�ten� and carry out its
obligations hereunder; and execution of this Agreernent has been duly, properly and validly authorized by
the City.
(b) The City propases to assist in financing certain Public Development Costs necessary to
serve the Developme��t Property and Miniinum �mprovements in accordance with the terms of this
Agreement.
Section 22. Representations and Warranties by the De�eloper. The Developer represents and
warrants tha�_
(a) T��e IDe�elaper is a nonprofit corporation organized ar�d in good standir�g under the laws
of the State; is duly autharized to transact business wi#hin the State; and has the power to enter into this
Agreeme�3t.
{b} The Developer will cause the Minimum lmproverr�ents to be constructed, o�erated and
maintained in accordance with the terms o�this Agreement, the Development Plan and all lacal, sta#e and
federal laws and reg�iatians (including, but not limited to, environmental, zoning, building code and
public health laws and regulations).
(c) The Developer has received no notice or communication from any local, state or federa�
o�fcial that the aetivities of the Developer or the Ci#y in the Project Area may be or wil] be in violation of
any environmental lau� ar regu�ation (other than those notices or communications of which the City is
aware}. The Developer is aware of no facts the existence of which would cause it to be in �io}ation of or
give any person a valid claim under any �ocal, state or federa] environmental Iaw, regulat�on or review
procedure.
(cf) The De�eloper will canstruct the Minimum Impro�ements in accordance with alI local,
state ar #�ederal ene�gy-eo�servation laws or regulations.
(e) The Developer wi]I obtain, in a tir�ely manner, alI required permits, licenses and
approvals, and wil� meet, in a timely manner, all req�irements of all applicable local, state and federal
laws and regulatio�s which must be obtained or met before the Minimum Improvements may be lawful}y
con structed.
{� Neither the exec�tion and delivery of this Agreement, the consummation of t1�e
transactions contemplafed hereby, nar the fulfil�rr�e�t af or compliance with the terms and conditions of
this AgreemeE�t is prevented, limited by or co�flicts with or results ir� a breach of, the terms, canditions or
provisians oi any corporate restriction or any evidences of indebtedness, agreement or instrutnent of
whatever nat�re to whi�h the Developer is now a party or by whicl� it is bound, or constitutes a default
under any of the foregoing.
3�s99av�o s�B a,Rzflo-to
(g} The proposed deveiapment by the Developer hereunder woulci not occur but for the tax
increment financir�g assistance being pravided by the City hereun�er.
(h} The Developer sl�alI pramptly advise City in writing of aI� litigation or claims affecting
any part of the Minimum Improvements and alI written cornplaints and charges made by any
governmental authority materially affecting the Minimum Impravements ar materially affecting
Developer or its 17LI5117�55 which may delay or require changes in construction of the Minime�m
3raprovemenis.
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378990v1D SJB ARZDO-IO �
ARTICLE III
Public Develc�pment Costs; Financin�; Convevance of Land
Section 3.1. Status of Pro e r. (a) The Developer currently holds fee title to the Deve�opment
Property and the Triangle Parcel. The City has no obligation to acquire the Development Property or any
portion thereof. The De�eloper will convey the Triangle Parcel to th� City in accordance with Section 3.5
hereof.
(b) Arior to comme��cement of construction of the Minimurrt �mprovements, the Developer
will z'eplat the Development Property and in connection with ihat effort wi11 enter into the Land
Development Agree�nent.
Section 3.2. Publi� Developrnent Costs. In order to make development of the Minimum
Improvemen#s economicalty feasible, the City wtll reimburse the Deveioper (in the rnanner set forth in
Section 33) for a portion of the fo][owi�g "Public Development Costs" incurred by Developer on the
Deveiopment Property: dernolitioi�, exca�ation, grading, frlIing, soi] corrections, environmental
remediation, landscaping, parki��g, utilities (excluding t�e Utility Impravements), footings and
fo�ndatians, and other site improvements. The total prii�cipal amount of Pub�ic Development Costs
subject ta rei�nbursement wil3 nat exceed the lesser of $1,] ] 5,000 or the total actual, documented amount
of such costs. Public Development Costs i� excess of $l,l 15,Q00 are the responsibility of the Developer.
The Ci#y shalI have no obligation to the Developer or to any third party with respect to any defecis in the
consiruction of improvements fnanced or �eimb��rsed by the City as Public Development Costs.
5ection 33. Reimbursement of Public Deve�opment Costs. {a) To finance reirnbursement af a
portion o� the Public Development Costs paid by the De�eloper, the City shall issue and the Developer
shall purchase the Note rn the maximum principal amount of $1,115,000, with t3�e terms, and substantially
in the form, set forth in #�e Autllorizing Resolution attached as Sched�le C. The City and the Developer
agree t�at the consideration from the Deveioper for the p�trchase of the Note shall consist of the
Developer's payrneni of tl�e Public Development Casts in at least the principal amount of the Note. The
City shail deiiver the Note upon complia»ce with Section 3.3(b} and delivery by the Developer of a�
investment ]etter reasonab3y acceptable to the City. The Note wili be da�ed as of delivery, and interest
will accrue from the date of issue at the rate that is the Iesser of (i) 6.25 percent per annum, or (ii) the true
interest cost on the frst series of lo�g-term fixed rate Housing Revenue Bonds issued to finance the
Minimum Improvements, or if the f�rst Housing Revenue Bonds are nat isst�ed on a long-term fixed rate
basis, the true interest cost o�� such bonds if they had been issued on a long-term fixed rate basis, as
evidenced by an estimate provided �ay third �arty underwriter mutually selected by the City and
De�eIoper {at Developer's cost, if any}. �f tlie conditions for delivery of the Note ha�e not been met
within ii�e years after the date of certification af the TiF District, the City's obligation Eo issue, and the
Developer's right ta receive the Note and any payments of Availabie Tax Increment thereunder shal!
terminate.
(b} As a co�ditioi� ta issuance and delivery of the Note, the Developer must subrr�it to tl�e City
Representative written evidence in a form satis�actory to t�te City Representative #hat Public Developtnent
Costs in at least the principal a�nount of the Note reguested have been paid. Such e�idence sha�l include,
at a minimum, paid invoices or cornparab�e evidence o�payment. At #he City's request, Developer shall
also provide evidence that the costs are commercially reasonable, evidenced by requests for praposal, bid
soIicitations, or similar materials.
{c) The Developer understa�ds and acknawledges that the City rrsakes no representations or
warranties regarding ihe amount of Avai�able Tax Inerement (as de�ned in the Note), or �hat revenues
378990v10 S1B AR20D-i0 7
pledged to the Note wili be sufficie��t to pay the principal of a�d interest on the Note. Any estirnates of
Tax Increment prepared by the City or i#s financial ad�isors in connection with the TIF District or this
Agreement are for the beneft of the City, and are not intei�de� as representations on which the Developer
may rely.
Section 3.4. Business Subsidy. Act. The parties agree and understand that any assistance
provided to the Developer under this Agreement is not a"business subsidy" under Minnesota Statutes,
Section 116J.993, subd. 3 because the assistance is for housing.
Section 3.5. Conveyance of Tria�g�e Parcel. (a} Generally. The Developer wil} convey tl�e
Triangle Parcel to the City subject to the terms and conditions af this Section.
{b) Purchase Price, Costs. The Developer will convey the Triangle Parcel to the City for a
purchase price of $] .00. At Closing (defined below), Deve�oper will pay any outstanding special
assessments; costs af title e�idence; one-l�alf of any closing fee, state deed tax (if any); and the recording
fee for recording alt doc�ments req�ired to con�ey marketable title to the Triangle Parcel. Property taxes
due and payable in the year of Closing wili be prorated between Developer and City as of t�e c�ate af
Closing. The City will pay the cost of any titfe insurance premiu�n, and one-half of any closing fee. T�e
parties will each be responsible for a»y other costs they incur in connection with co�iveyance of the
Triangle Parcel.
(c} Title. Pramptly after execution of this Agreement, Developer shall furnish to the City a
commitment for an ALTA Owner s Poiicy of Title I�surance insuring title �o the Triangle Parcel, in the
amount of $268,200 (which the parties agree represents a reaso�abte estimate of the market �a1ue of he
Triangle Parcel). Within 60 days after receiving such title cammitrnent, the City may roake written
abjections to the status of tit�e. Deveioper wiil have 60 days a�ter receip# of any objections ta cr�re the
objections. Develaper will E�se commerciatly reasonabfe efforts to c�re any objections within s�eh 60 day
period. If objections ar-e not cured within the 64-day peraod, City may e�ect to either (i) terminate this
Section of the Agreement, without affectin� the remainder of the Agreement; or (ii) waive the objectaons
and proceeds to Closin�.
{d) Environn�enial matters. Developer shaIl �ndertake, at its cost, a Phase I and, if
necessary, a Phase I1 environmental a�alysis of the Triangle Parcel. Prorrtpily upon receipt of the reparts
resulting frorn consultants; Devetoper sha]} cleIiver to the City copies of all environmental reports related
to the Triangle Parcel prepared far Deve}oper_ Deveiaper will also cause the party or pa�ties preparing
sucl� reports, u�on requesi of the City and at City's cost, to deliver �etters to the City allowing the City ta
rely on such repo�ts. Further, Developer grants to the City and iis agents the right to enter the Triangle
Parcel to undertake i#s own inspections, tests; and investigations of the Triangle Parcel. If the City
deterrnines, through its investigation or fra�n any environmental report, that any underground tanks or
hazardo�s substanees (as defir�ed in paragraph (f}{i) of this Sectio�i) are located o� the Triangle Parcel,
Developer shail at its cost, and prior to Ciosing, remove any tanks and remove or remediate any
hazardo�s substances co a Minnesota PoltEttion Control Agency standard for non-resrdential iand use
(such actions being referred to as "Environmenta] Response Ac#ions"}.
If the City detErmir►es that any Environmental Response Actions are required, the City will cooperate with
Developer in seeking grants from the State and other sources ta assist in financing such casts, and wil]
make such grant proceeds available to DeveIoper to the extent the City is successiuI i� grant applicat�ons.
The Developer wil] enter into any supp�ementai agreements that are reaso�ably required in order to
disburse and administer grant proeeeds.
3 78990� 1 D S.iB AR260-10 g
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Notwithstanding anything to the contrary herein, De�eloper shall not be obligated to pay more than
$50,000 to carry out Environmental Response Actions (abo�e ancf beyond the arnount of any grants). If
Developer determines tl�at the total cost of Enviro�tmental Response Actions exceeds or is expected to
exceed $50,000 plus the amount of all grants approved prior to Ciosing, then Developer shall provide
written notice to City, toget�er with reasonabie evidence of the costs. Within 60 days after receipt of
such notice, the City will either (in its sole discretion):
(i} Provide written notice to Developer that the City will declane to accept conveyance of #he
Triangle ParceI. In that event, by no later ihan lune 29; 20I2, Devetoper shall: (I) demolish the existing
building on the Triangle Parcel, clear the site of rubble and debris, and seed the property; (2) deliver to
the City an executed i3�strument in recordabie form that limits use of the Triangle 1'arcel to open space in
perpetuity (subject to any time limitations Under State ]aw}, such instrument being in t�e fot'r3n of either a
restrictive covenant or a conservation easement (as dkrected by the City), and {3) have no further
obligation to carry out Environmental Response Actions except to the extent otherwise required by law;
or
(rti) Provide written notice to Deve�oper that City wil9 praceed to Closing. In that event,
Developer s�all rerr�ain oblrgated to carry out E»vironmenta] Response Actions prior to Ciosing, and to
pay up ta $50,000 of such costs (above and beyond the amount of any avaiIable grants); the City sha�l
assume responsibiliry for any addit�onal cosis, and will pay or reimburse De�eloper for such exeess on or
before Closing.
(e) Closirrg. The City's ob}igatian to close on acquisition of the Triangle Parcel is contingent
upon (i} the City having %und tiE}e acceptable in accordanee with paragraph (b) of this Section, {ii} the
City having determined, in its sole dis�retion, tl�at it is satisfied with conditions of the Triangle Parcel,
incl�de without Iimitation environmental conditions; and (iii) Devetoper having demoiishet� the existing
building on the Triangie Parcel, cieared the site oiall rubble and debris, removed any underground tanks
and removed or remediated any hazardous substances in accordance with paragraph (d) of this Section,
and seeded the property. The closing on canveyancE of tl�e Triangle Parcel shatl oecur on the �ater of ten
business days after satisfactio�� af alI contingencies, or June 29, 2012 (the "C�osing"). At closing,
Developer shall deliver to City a warranty deed to the Triangle Parcel.
follows:
(#} Develaper Representa�iorrs. T�e DeveIoper hereby represents and warrants to tl�e City as
(i} Environmenta] Compliance. Developer has received no notice of and is not
aware of any violation related to the Triangle Parcel of applicable law, statute, arciinance, rule,
reguta#ion, arder or determination of any �overnmental authority with respect to hazart�ous
substances or of the presence of hazarcious substances in or on the Triangle Parcel, except as
disclosed in ar�y of the En�ironmentat Reports. For purposes hereof "hazardous substances"
means any substa�ce designated pursuant to the Clean Water Aci, TitIe 33 U.S.C. Section 1321,
any element, compound, mixture, soiution or substance designated pursuant to the
Comprehensi�e �nviron�nental Response, Co�npensation and �,iab�lity Act, Title 42 U.S.C.
Section 9602, any hazardous wasie ha�ing #he characteristics identified �nder or ]isted pursuant to
the Solid Was#e DisposaI Act, Title 42, U.S.C. Section 6921, any toxic pollutant listed under
Section 307(a) of the Clean Water Act, Title 3� U.S.C. Section 1317(a}, any hazardous air
pol�utant listed under 5ection 1 I2 af the C3ean Air Act, Title 342 U.S.C. Section 7412, any
im�ninently hazardous chemical substance or mixture with respeci to which the Administrator of
the Environmenta! Protection Agency has taken action pursuant to Sectian 7 of the Toxic
Substanees Control Act, Tit1e 3 5 U.S.C. Section 2606 and any hazardous waste, hazardous
substa�ce, potlu#ant or contaminant, as de�ned in the Minnesota Environmental Response and
Liabili#y Act, Minnesota 5tat�ates, Section 1] SB.02. The tern-► also inc�udes, but is not Iimited to,
378990v1Q S.IB AR2p0-tU 9
polychlorinated biphenyls, asbestos, petroleum products and vario�s constituents of suc�
products, urea farmaldehyde and related substances.
{ii) Stora e Tanks. Developer is not aware of any underground storage tanks located
on or in the Triangle ParceI, but ackr�owledges its obligation to remove any tanks disclosed by
any en�ironmental repor�s ar investigations by tne Ciry, in accordance with paragraph {d) af this
Sec#ion.
{ii�) Pendin �,itigation. There is �io condemnation or other litigation presentty
pending or, to Developer's knowledge, un�er consideration by any parly affecting, directly or
indirectly, the Triangle Parcel.
{i�) Governinental Action. Developer has not received notice of any action, suit or
proceeding instituted by any person or e��tity against or affecting #he Triangle Parcel before any
federai, state, municipa] or other governmental authority, inc�uding without limita#ion r�otice of
any conc�em�aiion or taking for any public right-of way or �ztiIity.
{v) Authorization. Deve�oper is the soie owner of the Triangle Aarcel, and has the
right, power and capacity to enter into this Section o� this Agreernent, to consuznrnate the
transac#ions cantemplated 3�ereby; and to comply with the terms; conditions .and provisions
hereo�:
(vi} Condition of Triangle Parcel. Developer has received no notice, order or other
comrraunication from any governrnenta] bady �aving jurisdiction over the Triangle Parce]
requiring any improvement to or alteration of the Triangle Parcel which has not been remedied,
and Developer agrees to give Buyer prompt writEen notice of any such comm�nicatior� received
on or prior to Closing Date.
(�ii) WeIIs/Septic 5, sy tems. De�eloper either certifies and warrants that it is not aware
of the existence of any wells on the Triangle Aarcel within the rr►eanii�g of Minn. Stat. § 1031.405,
or if cannot provide such certification and warranty, will at or before Closing provide a we11
disclosure staternent ir� accordance with Minnesota Statues, Section 103I235. Developer is not
aware of any ir�dividual sewage treatment system on the Triangle Parcel within the mea�ing of
Minn. Stat. § 115.55.
(�iii) Ri�ht to SeIi. Deveioper has nat entered into any other unterminated contracts
far the sale of the Triangle Aarcel, is not aware of any rights of first refusal or options to purchase
the Triangle Parcel, and consummation of the sa}e wil] not violate the provisior�s of any
governmental regulation or iaw applicable ta De�etoper, nor of any agreement or instrument by
which Developer is baund_
(ix) Parties in Possessron. There will be no tenants or other parties in possession or
with the right to possession of the Triangle Parce� on the Closing Date.
(g}. Developer Duties Before Cl�sirrg. At alI times pr'ior to Closing, Developer shall compiy
with the following:
(i) Except for demalition, clearance and seeding, De�eloper shail maintain the
Triangle Parcel in the same condition as in existence on the date hereof and sha�l comply at al1
�irnes with all applicable codes and ordinances;
3�a9�ovto s�� axzoa-�o X �
(ii} Developer shall continue to pay a1I reaI estate taxes and any instal�ments flf
special assessments certified thereto which become due and payable'
(iii) Developer shall not pennit the storage, release or disposal of �azardous az' toxic
substances or contaminants on the Triangte Parcel;
(iv) De�eloper shall not encumber, permit liens to attach to, or convey any interest in
the Triang�e ParceI to any other party;
(v) No permanent improvements shall be constructed on the Triangle Parce] withot�t
the City's writter� consent; and
(vi) Developer shall pay al l utili#ies d�ze u� to and inc}uding t�e Closing Date.
Section 3.6. Relocation. The parties agree and understand that Develaper may te�nporari3y relocate
residents of the existing buildi37gs on De�e]op�nent Property during const�-�ction of tl�e Mini�rtum
lmprovements, anci rnay a�so terminate leases to tenants of the Triangle Parcel. Without �irr�iting the
Developer�s obligatio�s tznder Section 83 hereof. the Developer wil] indemnify, defend, and hold harmIess
the Ci#y and its governing body t�eEnbers, emplo��ees, agents, and contractors from any and all claims for
benefits or payt�ents arising out of tE�e relocation or dispIacement of any person fram the existing
impravements on the Development Property, or tern�ination of any Iease of the Triangle Parcel, as a result of
the implementation ofthis Agree�nent. Nothin� ir► this Section is inte�ded to make any other person or entity
a third-party beneficiary of ihis Agreement.
Section 3.7. Recards. The City and its representatives sha1F ha�e the right at all reasonable times
after reasonahle notice to inspect, exa�r�ine and �opy all books and records of Developer relating to the
Minirrtum Improvements and the A�bfic Development Costs.
Section 3.8. T1F Lookback. {a} Deveioper acknowledges tha# the level of tax inerement
assistance iz� this Agreement is based o� Developer's P�zblic Development Casts, the costs of the
Mintmum Improvements, and tenns of t13e Housing Re�en�e Bonds that are Developer's expected source
of capital fnancing. Upon carnpletian of the Iast Phase of the Minimum Improvements, issuance of the
last series of Housing Revenue Bonds, and completion of at least one �scal year of operation of al� the
Minimurrz Improve�ents (the "Caleulation Date'); De�eioper wiil s�bmit to the City a pro forma updated
to reflect a�l actual casts of cfevelopment of the Minimum lmprovements, inckuding an estimate of the
debt service coverage ratio for al] outstanding Housing Revenue Bonds for five fiscal years after
Calculation Date. For purposes of calculating debt service coverage, operati�g revenues frorr� the
Developer's care center (which is located on the sa�ne property but is not part oi the Minimum
Improvements) wi)1 be excluded. If the mean projected deb# coverage ratio for atl outstanding Housing
Revenue Bonds for those fve fiscal years (the "Actual Coverage") exceeds t�e debt service coverage for
those years that was used for purposes of marketinb the outstanding Housing Revenue Bonds, plus five
percentage points (the "Adjusted MarEceting Coverage"), the City wil] calculate the �set present va�ue (as
of ihe Calculatio� Date) of the amount by whicl� the actual cash flow after debt service on ail Housing
Revenue Bonds for the relevant five-year period exceeds t3�e cash flow after debt service that would result
if the cash flow rnatched the Adlusted Marketing Co�erage. That net present value of excess cash fiow is
referred ta as the "Excess Amount." Present value is calcn�ated using khe mean true interest cost on all
outstar�ding Ho�tsing Revenue Bonds. The Adjuste� Marketing Coverage must be evidenced by bond
covenants, disc�osure docurt�ents, or ather r�asonable evidence of the c�ebt service coverage used for
mariceting purposes at the time of issuance of each series of Housing Revenue Bonds.
378490v10S3k3AiZ204-EO � �
Example: The average five year cash flow for marketing purposes is 135%; therefore, the
Adjusted Marketing Percentage is 14Q%. If actual projected cash flow as of the Calculation Date is
150°/a, t�e five years of cash flow representir�g the increase in Actual Coverage { 150%} aver Adjusted
Marketing Co�erage (l4b%) is present valued to the Calculation Date, yielding the Exeess Amount.
(b} If the City finds an Excess Arr�ount under paragrap� (a) of this Section, iher� the Excess
Amount wil] be applied to reduce the outstandin� principaI amount of the TIF Note (as a deerned
prepayment) in accordance with tl�e tenns of the T1F Note. Suclz event must be evidenced by delivery by
the City to De�eloper of a written notice staiing the �xcess A�nount. The Excess Amount will be deelned
prepaid as of the Calcutation Date.
(The remair�der ofthis page is intentionaliy 3eft blan[c.)
378990vE0 SJB AR200-IO � �
_... _ _ .
ARTiCLE IV
Consfruction of Minimum Improve�nents; Pe�blie lmprovements
Section 4.] . Constructian of Ira�provements. The DeveEoper agrees that it wil] construct or cause
to be cans�ructed the Mini�num lmpravements on the Development Property in accordance with the
approved Construction Plans and xt all times prior to the Maturity Date, will aperate and maintain,
preserr�e and keep t�te Minimum Improvements or cause such irr�provements to be maintained, preserved
and kept with the appurtenances and every part and parcel ihereof, in good repair and candition. The City
shall have no obligation to operate or maintaiz� the Minimum lrnprovements.
Section 42. Construction AIans. {a} Before com�encement of construction of the Minimum
Improverr�ents, the Developer sha]I submit to the City Construction Plans. T�e Construction Plans sha]I
provide for the eonstruction of the Mini�num Impro�ernents and shali be in canfornaity witla �he
DeveIoprnent Plan, this Agreeme�t, the Land Develop�r�ent Agree�nent, and all appticabie State azad local
laws and regulations. TI�e City Representative will approve the Construction Alans in writing if {i) the
Constr€�ction Alans conform to the terrns and canditions of il�is Agreernent and the Land Development
Agreetnent; {ii) the Construction Plans conform to the goals and objectives of the Development Flan; (iii}
the Constr�actior� Plans conform to al] applicable federai, state and ]acaE laws, ordinar�ces, rules ane3
regutations; (iv) tlie Canstruction Plans are adequate to provide for eanstruction of the Minimu�n
Improvements; (v} the Canstruction Plans da not provide for expentlitures in excess of the funds available
to the Developer from all saurces {including Developer`s eq�ity} for construetion of the Minim�rr�
Impravernents; ancf {vi} no E�ent oi Deiault has Qccurred. Ap�rova] may be based �pon a revfew by the
City's Building Officiai of the Construction Plans. No approval by the City Repr�sentative shall relieve
Yhe Develaper of the obligation to comply with the terms of this Agreerr►ent or af #he Development Plan,
appIicable federal, state and local Iaws, ordinances, rules and re�u[ations, ar to construct the Minime�m
Improveznents in accordance therewith. No approva] by the City Representat�ve shall constitute a waiver
of an Event of Default. If approvaI of the Construction Plans is requested by the Developer in writing at
the time of submission, such Canstr�tetion Plans sl�all be deemed approved untess rejectec3 i�i writing by
the City Representative, in whole or in part. Such rejections sha3t set forth in detaiI the reasons therefore,
and shall be made within ten business (10) days after the date of their receipt by the City. If the City
Representative relects any Construction Plans in whole or in part, the Developer shall subr�it new or
corrected Construction Alans within l0 business days afier written notificatio� to the Develaper of the
rejection. The provisions of this Sectian relating to approvat. rejection and resubmission of corrected
Canstruction Plans sha11 conEin�e #o appIy un#il tl�e Construction Pla��s ha�e been approved by the City.
The City Representative's approval shall not be unreasonably withheld, delayed ar conditioned. Said
approval shall constitute a cortclusive detern-►ination tl�at t�e Construction Pians (and the Mi�timur�-�
Irr�pro�ements constructed in accordance with said plans) compty to the City's satisfaction with the
provisia�s of this Agreement relating thereto.
(b} If the Developer cfesires to make any material change i�i #he Construction Plans after their
approvai by the City, the Developer shat] submit the proposed change to the City far its approval. If the
Construction A�ans, as modified by the proposed change, cor►fon� Yo the requirements of this Section 42
of this Agreement with respect to such previously approved Construction Pians, the City shall approve the
proposed change and natify the Developer in writing of its approval. Snch change in the Constructian
Pians shall, in any event, be deeined approved by the City unless rejected, in whoIe or in part, by written
notice hy the City to the Developer, setting farth in detaif the reasans therefor. Such rejectio�► shalt be
rnade within ten business (10} days after receip# o�the notiee of such change. The City's approvai of ar�y
s�ch change in the Construc#ion Pla}3s will nat be unreasonably withheld.
378990v10 S.B AR20D-10 I3
_. . _ _ _
_ _
Section 4.3. Commencement and Co�letion.of Constr�ction. Subject to Unavoidab}e Delays,
the Developer wi�1 com�nence and substantially compiete the Minimum improvements in accordance with
the following schedule:
Phase lA: Comme�ce by December 31, 201 ]
Complete by December 31, 2013
Phase IB Co�nmence by May l, 2013
Complete hy December 3}, 2014
Phase I� Commenee by December 3], 20I 4
Complete by December 31, 2016
Utility
lrr�pr�vements: Same as Phase IB
Demolitian: Must demolish Lakeview within 6 3nonths after the first certificate of
occupancy for Phase IA.
Must demolish Sutton Alace within b months after the first certifcate of
occupancy for Phase ]l.
AII work with respect to the Minimum Improvements to be constrvcted ar provided by the Developer an
the Deveiopment Property shall be in eonformity with the Construction Plans as sub�nitted by the
Deve]opeF and approved by the City.
The Developer agrees for itsetf, its successors and assigz�s, and every successor in intEres� to the
De�elopmer�t Property, or any part thereof, that the DevelopEr, and sucl� successors and assigns, sha11
promptly begin and diligenily prosecute to completion tl�e de�elopment of the DeveIopment Praperty
through �he constz'uction of the Minimum Improvements thereon. After the date of ihis Agreemeni and
until construction of t�e Minimum lrnprovements has been eornpleted, che Developer sha�l make reports,
in such detail and at such times as may reasonably be requested by the City, as to the aetual progress of
the Developer with respect to such constructio��.
Section 4.4. Certifcate of Com letion_ (a} Promptiy after cornpletio� of the Minirnum
I�nprovements in accotdance with thase provisions af the Agreement relating soleiy to t�e obiigatians of
the Developer to canstruct the Minimum Improvements (i�cl�ding the dates fqr beginning and
completion thereo#}, the City Representative will furnish the Developer witl� a Certificate shown as
Schedule B. Such cer�i�cation ancf such determination shal] not co�lstitute evidence of catnpliance with
or satisfaction of a�y o6�igation of the Developer to any Holder of a Mortgage, or any insurer of a
Mortgage, securing money loaned to finance tl�e Minimum Improve�nents; or any part thereaf.
(�) If the City Representative shall refuse or fail to provide any certification in accordance
with the provisions of this Section 4.4 of this Agreernent, the City Represe»tative s�alf, within ten (1D}
business days after written request by the Developer, provide the De�eloper with a written statement,
indicating in a.dec�uate detai� in wha# respects the Developer has failed to complete the Minimum
Improverr�ents in accordance with the provisions af the Agreeme�tt, or �s o#herwise in defauI#, and what
rneasures or acts will be necessary, in the opinion of tl�e City, for the Deveioper to take or perf'orzn in
order to obtaij� such certification.
3�s9sav�a s.iB Arzzoa-�o � �
(c} For the purposes of this Section, each Phase oi Minimum Improvements wil� be deert�ed
substantial�y complete upon issuance by the City of a certificate of occ�pancy (under City ordinances and
procedures} for that Pi�ase; and in the case of Utility I�nprovemer�ts, will be deemed substantially
complete upon final aceepta�ce of sueh improvement by the City as descrbed in Sectian 4.S �tereof.
llpon Developer's rey�zest, the City will issue Certificates of Corrtptetion for eac� Phase and for the
Utility Improvements, to evidence satisfactron of Developer's obligation regarding each portiart of the
Minimum Irnprovements.
4.5. Constructiort of Utilitv Irtapravements and Cauntv Road Improvements. (a) The parties
agree and understand that it is necessary and reasonable for the Developer ta canstruct the Utility
Improvements because (i} the Utility Impro�ements are locatec� on an easement encumbering t�e
Development Property; are �ocated close to existing buildings and the new Minimum Impror�ements, will
serve the Minirnum Improvements, and can more practicaliy and efficient9y be constructed hy
Developer's eor�tractors as part of the o�erall redevelopFnent efforts described in this Agreement.
(b} Developer shall construct the Utility lmprovemenis in accordance with approved
Construction Plans. The irr�provements witl be deemed substantially comptete upon acceptance thereof
by the City Representative, which acceptanee wil[ be given in writing when the City Representative
determines that such work has been cofnpleted in a��orcfance with the Construction Plans.
(c) Excepi as otherwise pro�ided in paragraph (d) of this Section, the City shatl co�s�ruct, or
cause to be construeted, the County Road ]rnprovements; in cooperation with the City of Roseville
{"RoseviIle"). The parties agree and understand that Roseville intends to specially assess benefited
properties in Rose�ille far Raseville's one-hal� sf�are of the cast of the County Road Impro�ements, and
that s�zch improvements will be constructed {by either the Ciry or Raseville) in accordai�ce with
Minnesota Statutes, Chapter 429. T�e City will cause the County Road �mprovements to be substantialiy
completed (so that the reconstructed portio� of Cotmty Road D is placed in ser�ice} by December 3l,
2017. Notwithstanding anything ta the cantrary herein, Developer, Af#iliates of Deve�oper, or contractors
ar agents re�ained by Developer may submit bids to consEruct the Counry Road Improve3nen#s on t�e
same basis as other bit�ders in accordance with municipaE bidding procedures.
The City witl use its best efforts to coordinate construction of the Counry Road Impro�ernents
with Developer's construction af the Minimum lmpravements so as to minimize disruption of
Developer's work on the DeveIopment Property. Upon substantial completion of t��e County Roa�
Improvements, the Deveioper shali promptly reimburse the City for the City's one-]zalf share of the total
cost of the County Road Cmprovements, incI�ding des�gn and engineering costs. As a conc�ition to the
Developer's obligation to make such payment, tl�e City sha�t s�bmit evidence to Developer that it has
paid County Road Improvement costs (either to contractors ar ta Roseville) i�t the amount of tI�e
reqaested reimbursemer�t. Such evidence shall include, at a miE�itnum, paid invoices or comparable
evidence of payment.
(d} T��e parties agree and understand that Rose�ille expects to s�ecia3ly assess a portion of
RosevilIe's share of the cost of the County Road Impro�ements_ Hawever, De�eloper may detet�nine that
it is �nore effcient and practical for Developer to �ndertake the Co�nty Road Improvements as �a� of the
redevelopmen# described in this Agreement, in part because construction of the Minirnum lmprovements
is likely ta impact County Road D, and Developer can integrate reconstruction of the road with
Developer's other construction work. Therefore, De�eloper rnay, ir� its sole discretion, elect to undertake
construction of the County Road lmproveme�its, provided that Devetoper shail be obligated to pay the
entire cost of such work (including amounts otherwise altocated to Roseville). Developer m�st pro�ide
written notice to the Ciiy of its intent to exercise this option, which natice rr�ust be delivered before the
date of any initial improvement hearing held by Rosevilie under Minnesota Statutes, Chapter 429
3�saaa��o s�B ARzoo-�o � �
regarding the Caunty Road ImproveFnents. After delivering a timely r�otice to proceed under this
paragraph, Developer sha11 co�tstruct the County Raad ]mprovements; a# Developer's cost, in accordance
with plans and specif�cations appro�ed by the City, and shall substantia}Iy complete sucI� construction by
the date required �or comp}etion of i'hase II under Seetion 4.3
(The remainder of tnis page is intentionalty left blank.)
.��s99o��o sas Auzoa-�o � 6
ART�CLE V
Insurance and Conc�emnation
Section 5.1. Insurance. {a) The Dev�loper will pravide and maintain at all times during the
process of cons�ucting the Minirrt�am Improvements an A11 Risk Broad Form Basis 3�surance Policy and,
from time to time during ihat period, at the req�est of the City; fun�rsh tl�e City with proof of payment of
premiums on policies covering the foilowi�g:
(i) Builder's risk �nsurance, written on the sa-ea[Eed "Bui}der's Risk -- Cotnpletec�
Value Basis," in an arr�ount equal to one hundreci percent { 104%} of the insurable value of the
Minimum Improvements ai the date of completion, and witl� coverage availabte in nonreporting
forrn on the so-eaIled "al] risk" form of policy.
{ii} Comprehensive general liabitity insurance (including operations, contingent
liai�itity, operations of s�bcontractors, completed operations and contractua] liability insurance}
togetner with an Owner's Protective Liability Policy with lamits against badily injury and
property damage of not less than $1,000,000 for each occurrence (to accomplish the above-
required limits, an umbrella excess liability paticy may be used).
(iii) Workers' compensation ins�rance, with statutory covera�e, if the Developer has
employees.
(b) Upon completion of construction of the Mini�num lmprove�ents and prior to the
Matu�ity Date, the Developer shall rnaintain, or cause ta be maintained, at its cost and expense, and from
time to titne at the request of t�e City shal] furnish proof of the payment of premiums on, insurance as
fol tows:
{i) Insurance against loss and/or damage to the Minimum Irr�proverrtents under a
policy or policies covering s�ch risks as are ordinarily insured aaair�st by simi�ar businesses.
(ii) Co�nprehensive general public liability insurance_ ir�cluding personal in�vry
�iabili#y (with e�nployee exclusion deleted), against liability for injuries tp persons andlor
property, in the rninimum anaount for eac� occurrence and for each year of $1,0a0,000, and shail
be endorsed to show the City as additior�al ir�sured.
(iii) Such other insurance, i�3cl�zding workers' compensation insurance respecting all
employees of the Developer, in suci� amaunt as is customarily carrie� i�y like organizations
engaged in like activities of comparable size and liabiliry exposure; provided that the Developer
may be seIf-insured wFth respect to alI or any part of its liability for workers' compertsation.
(c) All insurance required in Article V af this Agreement shall be taken out and mai�tained
in responsible inst�rance companies selected by the Developer wl3ich are authorized under the laws of the
Sta#e to assume the risks covered thereby. Upon request, the De�eloper will deposit ar�nualty with the
City policies evi�encing a11 such insurance, or a certificate or �ertificates or binders of the respective
insurers stating that such insurance is in force and effect. Unless otherwise pravided in ihis Article V af
�his Agreement each policy shalI coi�tain a provision that tl�e insurer shall not ca�cel nor modify it in such
a way as to reduce the coverage provided below the amounts required herein without giving writte» notice
to the Developer and the CiEy at least t�irty (30) days before the cancellation or rnodificati�n beco�nes
effective. in iieu of separate policies, the Developer rnay mai��tain a sing�e policy, btanket or urt36re1ta
378990v10 S3B AR200-10 17
policies, or a co�nbination thereof, having the coverage required herein, in which event the De�eloper
shall deposit with the City a certi�cate or certificates of the respective insurers as to the amount of
coverage in force upon the Minimum Improvements.
(d} I�t case of damage to the Minimum Improvements of $250,OOQ or less; De�e�oper may in
its diseretion determ�ne whether to repair, reconstr€�ct or reconstr�et such portion of the Minimum
Improvements. The DeveIoper agrees to notify the City iznrnediately �n the case of damage exceeding
$250,U40 in amount to, or destruction of, the Minimum lmprovernents or any portion thereof resulting
from fire or other cas�alty. Ir� such event the Developer, to ihe extent insurance proceeds are available to
it, will forthwith repair, reconstruct and restore the M€ni3num Improvements to substantially the same or
an improved condition or �alue as it existed prior to the event causing such dar�age and, to the extent
necessary to accomplish such repair, reconstructian and restoration, the Developer wi]E apply the Net
Aroceeds o� any insurance relating ta se�ch damage received by the Developer to the payment or
reimburserr�ent of the costs thereaf.
Any Net Praceeds remaining after completion of such repairs, co�►structian and restaration shall be the
property of the De�eloper.
(e) Notwithstanding any�hing to the contrary contained in this Agreeinent, �n the e�ent of
damage to the Minimum Improvements in excess of $250,000 and the De�elpper fails ta complete any
repair, reconstruction or restoration of the Minim�m lmprovements within two years frott� the date of
damage, the City may, at its option, terminate tl�e Note. If the City termir�ates the Note, such termination
shall canstitute the City's sale remedy under #his Agreement as a result of the Developer's failure to
repair, reconstruct or z'estore the Minimum Improveinents. Thereafter, the City s3�all have no further
obligations to make any payrnents under the Note.
(f) The Developer and the City agree that ail of the insurance provisions set forEh in this
Article V sha19 terminate upon the termination of this Agreement.
5ection 52. Subordination_ Notwithstantling anything to the contrary cor�tained in this Articte V,
the righ#s afthe City with respect to the receipt and application af any proceeds af insura��ce shall, in a}I
respects, be s�b}ect and subordinate to the rights of any Iender under a Mortgage.
(The remain�er of this page is intentionatly left blank.)
��s��o�� 0 5as ARzoa-� o � g
ARTICLE VI
Tax Increment; Taxes
Section 6.1. Right to Collect Delinquent Taxes. The Developer acknowledges that the City is
pro�iding s�abstantial aid and assistance in furtheranee of the redevelopment through issuance of the Note.
The Deve�oper understands tha� tha Tax lncrements plecfged to payment on the Note are derived fram real
estate taxes on the Minirnum Irnprovements, which ta�ces mus� be promptly and timely paic�. To that end,
the Developer agrees for itself, its successors and assigr�s, in addition to the obligatior� pursuant ta statute
to pay real estate taxes, that at is also abligated by reason of this Agreernent, througl� the Maturity Date, to
pay before delinquency al� real estate taxes assessed against the Develapment Property and the Minirnum
Improvernents. The Developer acknow�edges that this obligation creates a contractual right on behalf of
the City to sue the Developer or its successors and assigns to coIiecE de}inquent real estate taxes and any
penalty or interest thereon and to pay aver the same as a tax payment to the cour�ty auditor. In any such
suit, the City shall alsa be entitled to recover ats costs; expenses and reasonable attorney fees. Nothing ir�
this paragraph shal] prevent Devetoper from contesting the amount of real estate taxes {whether because
of va�uation, classFfication, or otherwise} in accardance with Minnesota law.
Sectian 6.z. Reduction of Taxes. {a} Deveioper agrees that thro�agh the Maturiry Date it vvill not
caUse a reduction in the real property taxes paid in respect of the DeveIopment Properiy through: {A)
willful destruction of the Development Praperty or any part thereof; (B) willful refusal to recor�struct
damaged or destroyed property from insurance proceeds available to Develaper for such purposes; {C)
apply for a de%rral of property taY an the Development Property pursuant to any law; or {D) convey or
transfer or allow conveyance or transfer of the Development Property to any entity tl�at is exempt from
payrr�ent of real property taxes under State law (other than any portion thereof dec�icated or canveyed to
the City in accordance with the plat of the Deve�opment Praperty).
(b) The Developer may use any administrative or lega] pracess pravided under State law to
seek reduction of market value of the Development Aroperty and Minirn�m Improvemer�ts thereon for at!
valorern tax purposes, provided that (i} promptly upon fili�g any petition or cla�m with any Tax Official,
the Developer snali provide written notice of s�ch action to the City; and (ii) if Developer files such a -
petiiian or claim, the City will withhold payment of any Available Tax Increment {without interest) that is
attributable to taa�-payable year that is #he suhject of il�e petition ar cIaim unti] the petition or claim is
ful�y resolved such that the Caun#y has finally determined the amour�t of �roperty taxes payable with
respect to the Development Property for that year.
{The remainder oithis page is inte�tionally left blank.}
37899Dv}0 SJB AR200-]0 � g
ARTICLE VII
Fenancin�
Section 7.1. Developer Financin�_ (a) The parties agree and ac3cnowledge that the
Developer intends ta �inance the constr�ction of the Minimum Improvements through issuance by the
City of Housing Revertue Bonds". The City agrees ta issue the Housinb Re�en�e Bonds, subject to the
terms and conditions of this Section, and compliar�ce with all requirements of State law and the
internal Revenue Code of 19$6, as amended and related regulations.
(b) The Housing RevenUe Bonds may be issued in one or more series, at Developer's option.
Each series of Housing Revenue Bands m�st be issued in accardanee with all tenns and conditions af the
City's Pgocedzu-e for Appliea#ion to the City of Arden HiIIs for Private Activity Revenue Bond Financing
�ated September l4, 2009 (the "Private Acti�ity Bond Folicies"). Notwithstand�ng anything to the
contrary in the Private Activity Bond Policies, the pa�-ties agree that the admir�istrative fee required under
Part II, Sectian 9 therein, shall be payable in a lur�p sum at closing on each series of Housing Re�enue
Bands. The lump surn shall be one percent o� the original principaI amount of the first $S,Q00,000 i�
Housing Revenue Bonds issued; one-half percent of the original principal amount of the next $ I S,OOO,ObO
in original principal amount of Housing Rever�ue Bonds issued; and ane-quarter percent of the original
principal arrtount of Housing Revenue Bonds issued in excess of $20,000,000. For purposes of the fee
calcuIation, the pri�cipaI amount of all Housing Revenue Bonc�s will be ag�-egated; as if all were issued
on the sarrte date, but the administrative fees wi�i be payable upon closing of each separate series. In
accordance with Part DI, Section 2 of the Private Activity Bond Policies, no additional admi��istraci�e fee
is payable �pon issuar�ee of any series of bonds to refund initial Housing Revenue Bor�ds for which a fee
was paid at c3osing. If any series of Housing Revenue Bonds are issued in part to refund a prior Housing
Revenue Bond and in part to fnance construction of the Minimurn Ir�provements (that is, a mixed
refunding and "new money" bond}, only the principa} amount of the bonds a3locable to the new rr�oney
portion of that series wi�i be taken into account in determn�ing the administrative fee for tl�at series.
(c) Ifthe City determines that issua�ce of any series Housing Revenue Bonds is reaso��ably
expected to cause gavernmental bonds issued by the City in that calenc�ar year to be ineligible for
designation as "qualified tax exempt obligations" under Section 265(b)(3) of the Interna� Revenue Code
of I986, as a�nended (alsa known as "bank qualified"), the Developer wiIt be required to rei��burse the
City, at the time of issuance of the City's bonds in t3aat calendar year, for any interest rate differential
between bank qualified and rton-barik c�ualified bonds, as determined by tl-►e City`s independent financia]
advisor_
{d} Developer may not seek, and City will not consent to, issuance of any series Housing
Revenue Bonds by any unit of government other than the City.
Section 7.2. Subordination. ln order to facititate issuance of the Housing Revenue Bonds, the
Authority agrees to subordinate its rights under this Agreement pro�ided that such subordination shall be
subject to such reasor►abie terms and conditions as the Authority and the underwriter and trustee for the
Housing Revenue Bonds mutually agree in writing.
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378990vIQ SJB AA200-]0 2�
ARTICLE VIII
Prohibitions A�ainst Ass�_n�nent and Transfer; Indemni�cation
Section 8.1. Representation as to Development. The Developer represenis and a�ees that its
undertakings pursuant to this Agreement, are, an� wiI1 be used, for the purpose of redeve�op�nent of the
Develogment Froperty and �tot for speculatio�t in land hoIding.
Section 8.2. Prohibition Against Developer's Transfer of Prope�-ty and Assi�nment of
Agreement. 'Fhe Deveioper represents and agrees that prior #o issuance of the Certi�cate of Completion
for the Minimum Tmpro�ements or relevant Phase thereof:
{a) Except as specifically described in this Agree�nent, the Deve�oper has not made or
created and wil] not make or create or suffer to be made ar created any total or partial sale, assignment,
conveyance, or lease, ar any trust or power, or transfer in any other mode ar form of or with respect to the
Agreement or the Development Property or any part thereof or any interest therein, or any contract or
agreement ta do any of the same (collectively, a"Transfer"} without #he prior written approvai of the City
Council unIess the Developer rerraains liable and bounc� by this Agreement in wl�ich event the City's
approval is not required. The term "Trans%r" does not include (i) e��cumbrances made or granted by way
of security for, and only for, the purpose of obtainFng eonstruction, interim or permanent financ�ng
necessary to enable the Developer or any successar in interest to ihe Develop��ent Property or to
construct the Minimur� Improvements or component tIiereof, (ii) any lease, license; easement or sirnilar
arrangement et�tered irtto ira the ordinary course of business related to operation of the Minimwn
Irnpravements, or {iii) any sale, conveyance, ar transfer in any fonn to any Affiliate. Aiiy Transfer sl�atl
be subject to the pravisions of this Agreement.
(b) In the event the Developer, upon Trar�sfer of the Deve�oprne�zt Property or any Phase or
partian thereof, seeks to be reieased from its obligations under this Agreement as to the portions or Phase
of #he Development Property that is trarasferred or assigned, the City shall be entitled to require, except as
o#herwise provided in the Agreement, as conditions to any such release that:
(i) Any proposed transferee shall have the quali�ications a�d financial responsibility,
�rt the reasonable juc�gment of the City, �ecessary and adequate to fulfifl the obligatior�s
❑ndertaken in tl�is Agreement by the Developer as to the portion of the Development Property to
be transferred.
(ii) Any propased tra�sferee, by instrument in writing satisfactory to the City and in
form recorda6le among the ]and records, shall, for itseff and its successors and assig�s, a�d
expressly for the beneft of the City, ha�e expressly assumed ail of the obli�ations af ihe
Developer under this Agreement as to the portion of tl�e Development Property to be transferred
and agreec� to be subject to all the conditions and resh-ictions to which the Developer is subject as
to such portio�t; provided, however, that the fact that any transferee of, or any other successor in
interest whatsoever to, the Development Property, or any pa�-t thereof shatl not, for whatever
reason, have assumed such obligations or so agreed, sl�all not (unless and only to the extent
otherwise specifically provided in this Agreeme�tt or agreed to in writing 6y the City) depri�e the
City of any rights or remedies or controls with respect to the Development Property or any part
thereof or the construction of the Minimum Improvements; it being the intent of the parties as
expressed in this Agreement that (to thE fullest extent permitted at law and �n ec�uity and
excepting only in the manner and to the extent speci�cally provided othe�-wise in this Agreer�e�t)
no transfer of, or change with respect to, ownership in the Development Property or any part
thereof, or any interest therein, l�owever consummated or occurring, and whether valuntary or
378990vt0 SJB AR2DD-i0 2 �
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invo�untary, shaIl operate, legally or praetically, to depr�ve or limit the City af or with respect to
any rights or remedies on car�troIs provided in or resulting fro�n this Agreement with respect to
the Minimur� Improvements that the City would have had, had there been no such transfer or
ehange. ln the absence of speeific written agreement by the City to the contrary, no such #ransfer
or appro�al by tl�e City thereof shaiI be deemed to reiieve the Developer; or any ather party
bound in any way by this Agreement ar otherwise wit� respect to the constr�tction of ihe
Minimum Improvemen#s, from any af its obligations with respect thereto.
(ii�) Any and all instruments and other legal documents involved in effecting the
Transfer of any inierest in this Agreement or #he Develapment Property governed by this Article
VIII, shalI be in a form reasonably satisfactory to the City.
In the event the foregoing conditions are satisfied then t�e Deve{oper shal� be re�eased from its obligation
under this Agreement, as to the portion of the De�elopment Property that is transferred, assigned or
atherwise conveyed.
{c) After issuance of the Certificate of Completion for the Minimum Improvements, the
DeveIoper may transfer or assign any portian �f the Development Aroperty or the Developer's interest in
this Agreement without the prior written consent of the City, provided that the transferee or assignee is
bound by all the Developer's abligations hereunder. The Developer shal} submit ta the City written
evidence of any such transfer or assignment, including the transferee or assignee's express assumption of
the De�eloper's obIigations under this Agreement. If the Developer faits to provide such e�idence of
transfer and assumption, the Developer shall remain bound by al1 its obligations under this Agreement.
Sectian 83. Release and Indemnification Covenants. (a} The Deveioper releases from and
co�enants and agrees that the City and tne gover�ing body members, of#icers, agents, servants and
employees thereof shall not be liabte for and agrees to indemnify and hold harmless the City a��d the
governing body mernbers, officers, agents, servants and employees thereof against any loss or damage ta
property or any injury to ar death of any pez'son occurring at ar about or res�lting fraEt� any defect in the
Minimum Improvemer�ts or a�y improvements fnanced as P�ablic Development Costs.
(b) Except for any willful misrepresentation or any wi�lful or wanto« miscanduct of the
foIlowing named parties, the Developer agrees #o protect and defend the City and the governing body
members, offcers, agents, servants and emp�oyees thereof, now or forever, and fi�rther agrees io hald the
aforesaid harmless from any claim, demand, suit, action or other proceeding wl�atsoever by any person ar
entity whatsoever arising or p��-portedly arising from this Agree�nent, or the transactions contemplated
hereby or the acquisition, constructian, installation, awnership, maintenance and aperation of the
Minimur� [rnprovenaents or any improvements fnanced as Public Develapment Costs, including witho�t
limitation any claim arising under Minnesota Statues, Sect�on 471.345.
(c) Except for the gross negIigence ar intentional misconduct of the fo�lowing named parties,
the City and the governing body members, officers, agents, servants a�d employees thereof shall nat be
liable for any damage ar injury to the persons or property of the Deveioper or its officers, agents, servants
or employees or any other person who �nay be abaut the Development Property or Minimu�
lmprove�nents.
(d) AlI covenants, stip�lations, promises, agreements and obligatio�s of the City contained
herein shafl be dee�ned to be the covenants, stipulations, promises, agreements and obligations of the City
and not of any governing body member, officer, agent, servant or emp]oyee of the City in the indivicEual
capaciiy thareof.
37S940v E 0 SJB AR200-10 22
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(e) The provisions of this Section s�rvive ter�ination of this Agreement.
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3�s99ov�o s�s a�zzoo-�o 23
ART�CLE IX
Events of Default
Section 9.1. Events of Default Defined. The fol]owing shall be "Events of Default" under this
Agreement and the term "Event of Defau�t" shal� mean, whenever it is used in this Agreement (unless the
cantext otherwise provides), any failure by any party to observe or perform any eo�enant, condition,
obligatiQn or agreement on its part to be observed or peF-formed under this Agreeme�t or the Land
De�elopment Agreement, except a failure resulting from an Unavoidable Delay.
Section 92. Remedies on Default. Whenever any E�ent af Default referred to in Sectio» 9.1 of
this Agreement occurs, the non-defaulting party rnay exercise its rights under tllis Section 92 a�ter
providing thirty days written notice to the defaulting party of the Event of Default, but only if the Event of
Default has not been cured withi� said thirty ciays or, if the Event of Default is by its nature �ncurable
within thirty days, the defa�Jting party does not provide assurances reasonably satisfactary to tl�e non-
defaulting party that the E�ent af Default wiIl be cured a�d wil� be cured as soon as reasonabty possible:
(a) S�sper�d its performance �nc�er the Agreement, inciuding withholding o�payments on ihe
Note, until it receives assurances that the defaulting party will cure its default anc� continue its
performance under the Agreement.
{b) Upon a default by the Developer, and after failure to cure within 360 days after notice
fro�n the City (notwithstanding any contrary cure period descri�ed in this Section} the City may tenninate
this Agreement, the Note and t�e TIF District.
{c) Take whatever action, including Iega�, equitable ar administrative aetion, which may
appear necessary or desirable to callect a�y payrrEents dae under this Agreement, or to enfarce
perforrnance and observance of any obligation, agreement, or covenant under this Agreement.
Section 9.3. No Remed ExcIusi�e_ No remedy herEin conferred upon or reserved to tl�e Crty or
Deve}oper is intended to be exctusive of any ather availa6le remedy ar remedies, but each anci every such
remedy shall be cumulative and sha�l be in addition to every ot�ter remedy given under this Agreement or
now or hereafter existing at �aw or in eq�ity or by statt�te. No delay or omission to exereise any ri�ht or
power accruir�g upon any default shall impair a�y such right or power or shali 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. �n arder to entitle the City to exercise any remedy reserved to it, it sha11 not be necessary #o
give notice, o#her than s�ch notice as may be required in this Article IX.
Section 9.4. Na Additional Waiver Implied by One Waiver. In the event any agreement
containec� in this Agreement should be breached by eitl�er party and thereafter waived by the other party,
such waiver shall be Iimited to the �ar�icular breach so waivec� and sha�l r�ot be deemed to waive any
atl�er concurrent, previous or subsequent breach hereunder.
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378990v10 S3B AR2(}0-i0 2�
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ARTICLE X
Additional Provisions
Section I O.l . Conflict of Interests; City Representatives Not Individually_Liable_ The City and
the Deve�oper, to the best of their respective knowledge, represen� and agree that no member, of�cial, or
employee of the City shall have any personal interest, direct or indirect, in the Agreernent, nor shall any
such member, official, or employee participate in any decision relating to the Agreement which affects his
persona] interests ar t�e interests of any corporation, Iiability company, or association in which he is;
direct�y or indirectly, interested. No member, officia�, or employee of the City shall be persanaily liable
to the Developer, or any successor in interest, in the event of any default or breach by the City or County
ar for any amount which inay become due to the Developer or successar or on any o�libations under tl�e
terms of the Agreement.
Section 10.2. Equa1 Employment Op�a�-tunity. The Developer, for itself and its suceessors and
assigns, agrees that during the construction of the Minimum lmprovements provided for in the Agreement
it will comply with a1] applicable federal, state and locai equal employrnent and non-discrimination Eaws
and regu9ations.
Section ] 0.3. Restrictions on Use. The Deveioper agrees that, prior to the Maturity Date, the
Developer, and sucl� suceessors and assigns, shall use the Deveiopment Aroperty solely for tize
development of commercial impravements in aceordance with the terms of this Agreeinent_ and shall not
diseriminate upo� the basis of race, color, creed, sex or national origin in the sale, iease, or rental or in the
use or occUpancy of the Developmer�t Property, the Minimum lmprovements; or any improvements
erected or to be erected thereon, or any part thereof.
Section I Q.4. Provisions Not Merged With Deed. None of the provisions af this Agreement are
inte�►ded io or shall be merged by reasan of a�y deed transferring any interest ir� the Development
Property and any suc� deed shaIl not be deemed to affect or impair the �ro�isions and co�enants o� this
Agreement.
Section 10.5. Titles of Articles and Sections. Any titles of the severa} parts, Artic3es, and
Seetions of the Agreement are inserted for convenience of reference only and shall be disregarded in
construing or interpreting any of its provisions.
Section l0.fi. Notices aztd Demands. Except as otherwise expressly provided in this Agreement,
a notice, demand, or other cammunicatio� under the Agreer�-�er�t by eit�er party to the other shal] be
sufficientty give� or delivered if it is dispaiched by registered or certified r�ail, postage prepaid, return
receipt requested, or delivered personally; and
(a} in the case of the Developer, is addressed to or delivered personally to the De�eloper c/a
Presbyterian Homes and Ser��ces, 2$45 Hamline Ave. North, Roseville, MN: Att��: Chief Financiai
Oificer.
{b} in the case of the City, is ac�dressed to or delivered personally to the City at City Hall,
1245 Highway 96 W, Arden [-�i11s, MN 55] I2-5743; Attn: City Administratar
or at such other address with respect to either s�zch paMy as #hat party rnay, from time to time, designate ir�
writing and forward to the other as provided in this Section.
378990vE0 SJB AR200-10 25
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Section 10.7. Counterparts. This Agreement r�-iay be executed in any number of counterparts,
each of which shall constitute one and the same instrument.
Section 10.8. Recardin�. The City may record this Agreement and any amendments thereto with
tlte Ramsey County recorder. The Developer shalI pay all costs for recording.
Section � 0.9. Termination. This Agreement terminates on the Maturity Date or any ear�ier date
of termination under Section 92(b}. Section 8.3 hereof survives termination of the Agreement.
{The remainder of this page is intentianally �e� blank.)
378990v10 SJS AR2�0-10 2�
IN W�TNESS WHEREOF, the City has caused this Agreement to be d�zly executed in its name
and behalf and its seal to be hereunto du3y affixed and the Developer has caused this Agreement to be
duly executed in its name ar�d behalf as of the date first above wri�ten.
CITY OF ARDEN H�LLS, MINNESOTA
By
Its Mayor
By
Its City Admtnistrator
STATE OF MTNNESOTA )
) SS.
COUNTY OF RAMSEY )
T�ae foregoing instrument was acknowledged before me this , 20I Q by
and , the Mayor and City Administrator of the City af
Arden Hills, Minneso#a, on behal�' of the City.
Notary PubIic
37899�v 1 Q 3JB AR260-10 �_ 1
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____ _
PRESBYTERiAN HQMES OF ARDEN HILLS,
INC.
:
Its Chief Financia] Offcer
STATE OF MINNESOTA }
) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this , 2010 by Mark
Meyer, the Chief Financial �fficer of Presbyterian Homes of Arden Hills, Inc., on behalf of the
corporatian.
Notary Public
37S99Dv10 SJB AR200-10 �-2
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SCHEDULE A
DEVELOPMENT PROPERTY
TR�ANGLE PARCEL
3�s99a� � o s�s .vz2oa-� o A- �
SCHEDULE B
CERTIFICATE OF COMPLETION
The undersigned hereby certifies that PRESBYTERlAN HOME5 OF ARDEN HILLS, TNC. (the
"Developer") has fvlly compIied with its obligations under ArticIes ]II and IV of that docume�t titled
"Contraet for Pri�ate Devetopment," dated , 20] 0 between the CiEy of Arden Hi1Fs,
Minnesota and the Developer {"Agreement"), with respeet to construction of the Minimum lmprovements
in accordance with Article IV of #he Agreement, and that the Developer is released and forever
discharged fram its ob3igations with respect to construction ofthe Minimum Improvements under Artictes
]Il and IV of the Agreement.
Dated: , 20
I��
CITY OF ARDEN HILLS, MINNESOTA
City Representa#ive
37&990v10 S.IR AR200-t0 B_2
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SCHEDULE C
AUTHORiZ�NG RESOLUTION
CITY OF ARDEN HILLS, MINNESOTA
RESOLUTION NO.
RESOLUTION APPROVING CONTRACT FOR PR�VATE
DEVELOPMENT AND AWARDING THE SALE �F, AND
PROVIDING THE FQRM, TERMS, COVENANTS AND
DIRECT�ONS FOR THE ISSUANCE OF ITS $1,115,fl00 TAX
INCREMENT REVENUE NOTE
BE IT RESOi,VED BY the City Council {"Council") of the City of Arden Hills, Minnesota (the
"City"} as follows:
Section 1. Authorization: Award of Sale.
I.O1. A�tharization. The Ciry has heretofore approved ihe esta6lishment of Tax Increment
Financing D�strict No. 4{the "TIF District") within amended Development District No. 1("Project"), and
has adopted a tax increment fnancing plan for the purpase of financing certain impra�ements within the
Aroject.
Pursuant to Minnesota Statutes, Section 469.178, the Ci#y is autharized to issue and seli its bon�s
for the purpose of financing a portion o�the publie developrnent costs of the Development District. Such
bonds are payable from all or any partion of revenues tlerived from the TIF District and pledged to the
payrr�ent of the bonds. The City hereby finds and deterrr�ines that it is in the best interes#s of the City that
it issue and selt its $],115,400 Tax lncrement Revenue Nate {the "Note") for the purpose of financing
certain public costs of the Project.
l.02. A�reement Approved; Issuance, Sale, and Terms of the.Note. The City hereby approves
the Contract for Private Development between the City and the Owner (the "Agreement"), and autharizes
the Mayor and City Administrator to execute such Agreement in substantialiy the form on file with City,
suhjec# to modi�ications that do not alter the substance of the iransaction and are approved by such
officials, provided that executior� of the Agreernent by such officials is conclusive evidence of their
approvai. Fursuant to the Agreement, the Note shall be sotd to PRESBYTERIAN HOMES OF ARDEN
HILLS, TNC. (the "Owner") and delivered at the time and subject ta the conditions of Seetion 3.3 of the
Agreement. The Note shall be date[� as of the date of delivery a�d shall bear interest from the date of
arigina� issue to the earlier of maturi#y or prepayment, at the rate that is the lesser of 6.25 percent per
annum, or the true iflierest cost on the first series of Housing Reve�ue Boncis issued to finance the
Minimum Improvements in accordance with Article VTI of the Agreement. The consideration for �he sate
of the Note is the payment by the Owner of the Aublic Development Costs as de��ted in the Agreement.
Section 2. Form of Note. The Note shall be in substantially the following form, witl� the blanks
to be properly filled in and tl�e principal amaunt and payment schedule adjusted as of the date of issue.
378990�10 S.1B AR200-]0 C_�
UNITED STATE OF AMERICA
STATE OF MINNESOTA
COUNTY OF RAMSEY
CITY OF ARDEN HILLS
Na. R-1
$1, I I S,Q00
TAX iNCREMENT REV ENUE NOTE
SERIES 20_
Rate
Date of Qriginal Issue
% , 20
The City of Arden H�lls, Minnesota (the "City"), for value received, certifies that it is indebted
and hereby promises to pay to PRESBYTER�AN HOMES OF ARD�N HILLS, 1NC. or registered
assigns (#he "Owner"), ihe principal st�m of $ and to pay interest thereon at the rate of
percent per annum, as and to the extent set forth herein. Unless the context clearly requires
otherwise, capitalized terms in this Note have the meaning provided ii� the Contract far I'rivate
Development between the City and Owner dated as of December I3, 2U1 D(the "Agree�ent").
i. Payments. Principal and interest ("Payments") shaIt be paid on At�gust l, 201� and each
February 1 and August l thereafter ("Payrr�ent Dates") to and including February l, 2028, or such earlier
Payment Date when pri�cipal and accrued interest have been paid in full, and s�all be made i� the
anr�ounts and soiely frorn the sources sEt forth in Section 3 hereon. Payments shall be applied first to
accrued in#erest, and then to unpaid principai.
Payments are. payable by mail to Ihe address of the Owner or such other address as the Ow�ier
may designate upon thirty {30) days written notice to ti�e City. Payments on this Note are payabte in any
coin or currency of the United States of America which, on the Payment Date, is Iegal tender for the
payment of public and private debts.
2. interest_ I�tterest at the rate stated herein sha11 accrue on the unpaid principa� from and
after the date of issue of this Note. [nierest accruing from the date of iss�e thro�gh February 1, 20I4 will
iae compounded semiannually on eacl� August I and February 1 and added to principal. Interest sliall be
computed on the basis af a 360-day year consisting of twelve 30-day months.
3. Available Tax ]ncrerr�ent_ Aayments an this Note on each Payment Date are payabie
solely from and in the amount of Available Tax Increrrzent. The ter�r� "Avai}able Tax Incremer�t" �neans
(a} on Payment Dates frort� August I, 2014 through February 1, 2019, 90 perce�# of the Tax Increment
attributable to the Minirrium Improvements and Develop�nent Property t�tat ar� �aid to the City by
Ramsey Cour�Ty in the six {6) months preceding the Payment Date, and (b) an Paymer�t Dates from
August 1, 2019 to February 1, 2Q28, 75 percent of the Tax Increment attributable to the Minimum
lmproverraents and Development Property that are paid to the City by Ramsey County in the six (6)
months preceding the Payment Daie.
Available Tax Increment shall not inciude any Tax inerement if, as of any Payment Date, there is
an uncured Event of De�ault under tF�e Agreement or the Land Development Agreement; any amount of
Availabte Tax Inerement so withheld sha11 be paid, without interest on the w'rthheld amount, on ihe next
378990v10 53B AfZ200-10 C-4
Payment Date aft�r the defauit is cured, unless the No#e has been tertninated in accardance wich Section
9.2(b} of the AgreEment. Available Tax lncrement shall also not include any Tax lncrement if, as of any
Payment Date, there is an outstanding petition or clairn to reduce tl�e :market value of the Development
Property as described in Section 6.2(b} o�' the Agreemen#; any amount of AvaiIable Tax Increment so
withheld shall be paid, withaut interest on the withheld arr�ount, on ihe next Payment Date after resolutian
of the tax petition or claim in accorda��ce with Section 6.2{h} of the Agreement.
The City shall have no abligation to pay principal of and interest on this No�e on each Payment
Date fram any source other than AvaiIable Tax Increment, and shal� have no obIigation to pay unpaid
baIance of principaI or accrued interest that may remain after the Payment on the fnai Payment Date
described in Section 1 hereof.
4. Prepavment. The principal sum ancE all accrued anierest payable u�der this Note is
prepayable in who}e or in part at any time by the City without premiurr� or penalty, and is subject to
deemed prepayment in accordance wit3� Section 3.8 of the Agreement.
5. Nature of Obli ation. This Note is one of an issue in the total principa] amount of
$l,l �5,000 issued to aid in financing certain public development costs and adminisirative costs of a
Project unde�#aken by the City pursuant ta Minnesota Statutes, Sectio�s 469.125 through 469.134, and is
issued pursuant to the Agreement and an authorizing resolution (the "Resolution") duly adopted by the
City on Decernber 13, 20] 0, and pursuant to and in full conformi#y with the Canstit�#ion and laws af the
State of Minnesata, including Minnesota Staiutes, Sections 469.174 to 469.179, and the Special Laws.
This Note is a]irr�ited obligation af the City which is payable solely from Available Tax Increment
pledged to the payment hereof under the Resolution. This Note and the interest hereon shai} not be
dee�ned to constitute a general obligation of the State of Minnesota or any political subdir�ision thereof,
including, without limitation, the City. Neiiher the State of Minnesota, nor any political subdivision
thereof shall be obligated to pay the principa} of or interest on this Note or other costs incide�at �ere#o
except out of Available Tax Increment, and neither the full faith and credit nor the taxing power of the
State of Minnesota or any po3itical subdivision thereof is pledge[� to the payment of the principal of or
interest on this No#e or other costs incident hereto.
6. Registration and Tra�tsfer. This Note is issuable only as a fully registered note without
coupons. As pro�ided in the Resolution, and subject to certain limitations set forth iherein, this Note is
transferable upon the boaks af the City kept for that p�rpase at the principa] office of the City
Administrator, by the Owner hereaf in person or by such Owner's attorney duly authorized in writing,
upon surrender of this Note together with a written instru�tent of transfer satisiactory to the City, duly
executed by the Owner. llpon s�ch transfer or exchange anc� the payment by the Owner of any tax, fee,
or gavernmenta� charge required by law to be paid by the City with respect to such transfer or exchange,
there wi�l be issued in the name af ihe transferee a r�ew Note of the same aggregate principal amount,
bea�-ing interest at the same rate and maturing on the same daies.
This Note shall not be transferred to a�y person other than a� affiliate, or other relatee� e��tity, of
the Owner unless the City has been provided vvith an opinion of counsel or a certificate of the transferor,
in a form satisfactory t� the City, that such transfer is exempt from registration and prospectus delivery
requirements of federal and applicable state securities Iaws.
1T IS H�R�BY CERTIFIED AND RECITED that al] acts, conditions, and things required by the
Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in
order to make this Note a valid and bindi�g iirYtited obligation of the City according to its terms, have
been done, do exist, have happened, and have been performe� in due form, time and manner as so
required.
378496v1fl SJE3 AR20D-10 C_s
]N WITNESS WHEREOF, the City Counci} af the City of Arden HilIs, Minnesota has caused
this Note to be executed with ihe manuat signatures of its Mayor and City Administrator, all as of the
Date of Or�gina� Tssue specified above.
CITY OF ARDEN HILLS, MINNESOTA
Mayor
City Adrninistrator
REGISTRATION PROVISIONS
The ownership of the unpaid balance af tlae within Note is registered in the bond register of the
City Administrator, in the nanne of the person last listed beiow.
Date of
Aegistration
, Za
Registered Owner
Presbyterian Homes of Arden
Hills, Inc.
Signature of
Ci�v Ad�ninistrator
Section 3. Terms, Execution and Deliverv.
3.41. Denomination Pa ment. Tne Note shall be issued as a si�gle typewritten note numbered
R-3 .
The Note sha�] be iss�able only in fuliy registered farm. Principal of and interest on the Note
sha11 be payable by check or draft issued by the Registrar described herein.
3A2. Dates; Interest Payment Dates. Principa] of and interest on the Note shal] be payable by
mai] to the owner of record thereof as of the elose of bt�siness on the �fteenth day of the month preceding
the Pay�nent Date, whetl-�er or not such day is a business day.
3.03. Re�istration. The City hereby appoints the City Administrator to perform the functions
of registrar, transfer agent and paying agent (the "Registrar"). The effect of registra�ion and the rights and
duties of the City and the Registrar with respeci thereto shall be as follows:
(a) Register. The Registrar shall keep at its office a bond register in which the Registrar
sha�l provide for the registration of ownership of the Note and the registration of trans�ers and exchanges
of the Note.
(b} Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the registered
owner thereof or accompa�ied by a written instr�ment of transfer, in form reasonably satisfactory to the
37S990v]0 SJB AR20D-10 C_�
Registrar, duly executed by the registered owner #hEreof or by an attorney duly autho�ized by the
registered owner i� writing, the Registrar shall authenticate and deliver, in the name of the designated
transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by
the transferor, Notwithstanding the foregaing, the Note shall nat be transferred to any person other than
an affiliate, or other related entity, of the Owner unless the City has been provided with a�t opinion of
counsel or a certificate of the transferor, in a form satisfactory to the City, that s�ch transfer is exempt
from registration and praspec#us delivery reqtz�rements af federaI and applicable state securities laws.
The Registrar rnay close the baoks for regis#ration of any transfer after the fifteenth day of the month
preceding each Payment Date and until such Pay�ent Date.
(c) Cancellation_ The Note surrendered upon any transfer shall be promptly cancelled by the
Registrar and thereafter disposed of as directed by the City.
{d} Im ro er or Unat�thorized Transfer. When the Note rs presented to the Registrar for
trar�sfer, the Registrar �ay refuse to transfer the same unti] it is satisfied that the endorsement on such
Note or separate instrument of transfer is legalfy authorized. The Registrar shalI incur no IiabiIity far its
refusal, an good faith, to �nake trat�sfers which it, in its judgment, deems improper or unauthorized.
(e} Persans Deemed Owners. The City and the Registrar may #reat the person in whose
narr�e the Note is at any tirne registered i� the bond register as the absolute owner of the Note, whether t1�e
Note shall be overdeae or not, for tlae pu►pose of receiving payment of, or on account of, the principal of
and interest on such Npte and %r all ather purposes, and all such payments sa made to any such registered
owner or upon ihe owner's order shall be �alid and effectual to satisfy and discharge the liability of the
City upon such Note to the extent af the suFn or sums so paid.
( fl Taxes Fees and C1aar es. �'or every transfer or exchange of the No#e, the Registrar may
impose a charge upon the owner thereaf sufficient to reimburse the Registrar for any tax, fee, or otl�er
governmental charge required by taw to be paid wiih respect to s�ch transfer or exchange_
(g) Mutiiated, Lost, Stolen„or.Destra,veci Note. in case any Note s��aI� become mutilated or
be lost, stalen, or destroyed, the Registrar shal] detiver a new Note af ]ike a�nount, maturity dates and
tenor i� exchange and substitution for and upon canceIlation of such mutilated Note or in l�eu of ar�d in
substitution for such Note lost, stoten, or destroyec3, t�pon the payment of the reasonable expenses and
charges of the Registrar in connection therewith; and, in the case the Note is Iost, sto�en, or destroyed,
npon �ling with the Registrar of e�idence satisfactory to it that such Noie was 1ost, stolen, or destroyed,
and of the ownershi� thereof, and upon furnishing to the Registrar of an appropria#e bond or indemnity in
forEn, substance, and amo�nt satisfactory to it, in which both ti�e City and the Registrar shal] be named as
abligees. The Note sa surrendered ta the Registrar shal] be cancelted by it and evidence of such
cance�lation shall be given to the City. If the mutrlated, lost, stolen, or destroyed Note has already
matured ar been cal�ed for redemption in accordance with its #er�ns, it sha]I not be necessary to issue a
new Note prior to payment.
3.04. Preparadon ancf Deliverx. The Note shall be prepared under the directian of the County
Auditor and shalI be executed on behalf af the City by the signatures of its Mayor and City Administrator.
In case any officer whase signature sha11 appear on the Note sf�ail cease to be sucn officer befare the
delivery of the Note, such signature shall nevertheless be vatid and suffcient for al] purposes, the same as
if s�ch officer had rerr�ained in office until delivery. When the Note has been sa executed, it shail be
deiivered by the City Administrator to the Owner thereo� upan closing on acquisit�on of the Development
Praperty in accordance with the Agreement.
Section 4. Securi Provisions.
��sg�o,r�o sas Axzoo-3o C-7
4.01. PIed�e. (a) The City hereby pledges to the payment of the principat of and interest on
the Note aIl Available Tax I�tcrement as defined in the Note, Availab�e Tax Incremen� shall be applied to
pay�ent of the principal ofand interest on the Note in aecordance with the #erms of the Note.
4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereof or
interest thereor� (to the extent required to be paid purs�ant to this resolution) remains unpaid, the C�ty
shal} maintain a separate and specia} "Bond Fund" to be used far �o purpose other than the payment of
the princ�pa� of an� inte�'est on the Noie. The C�ty irrevocably agrees to appropriate to the Bond Fund
upon or before each payment da#e all Avai�ab3e Tax Incrernent. Any Available Tax Incr�ment rernaining
i� the Bond Fund shal] be transferred ta the City's account for TIF District No. 4 upon the payment of al]
principal and interest to be paid with respect to the Note.
4.03. Adt�itional Qbli ations. While the No�e is outstanding, the City shall not pledge or permit
the pledge of all or any portion of the AvaiIable Tax Incre�nent to the payr�ent of principal of or interest
an any obligations of the City unless and to the extent such pledge is subordinate to the pledge to the
Note.
Section 5. Certification of Proceedin�s.
5.01. Certiftcation of Proceedin�s. The of�cers of the Ciiy are hereby authorized and directed to
prepare and itz�-nish to the Owner of the Note certified copies of alI proceedings and records of the City,
and such ot�er affidavits, certifcates, and information as may be req�ired #o show th� facts relating to the
legality and �narketabiiity of the Note as the same appear from the books and records under t3�eir custody
and eontral or as o#herwise known to the�, and all s�.�ch certified copies, eerti�cates, and af�davits,
including any hereto�ore fur�ished, shalI be t�eemed representations af the City as to the facts recited
therein.
Section 6. Effective Date. This resolutian shall be effecti�e vpon full exeeution of the
Agreement.
Adopted this 20`�' day of December, 2010.
Mayor
City Administrator
37899Dv10 57B AR200-EO C_g
Attachm�nt
Rev�sed Appendices F and G to the
Tax Increment Finance Plan for
District No. 4
Crty ofArden Hrll.s
Cir�j Council Meeting for Deeentber 20, 2070
_ .... _
_ _ _ _ _ __ _ __ __ _.
Appendix F
RedeveloPment Qualifications for the District
�
Appendix �-�
��oxT oF
INSPECTION FROCEDURES AND RESULTS
FOR
DETERNIINING QUALrFXCATIONS OF A
TAX INCREMENT TINANCING DISTRICT
AS A RENEWAL AND RENOVATION DISTRICT
Presby#erian Homes
TIF District
Arden Hills, Minnesota
LHB Praject No. 100537
November 19, 2010
Prepared For The
City of Arcien Hills
Prepared by
LHB, Inc.
250 Third A�enue Norfh, Suite 450
Minneapolis, Muuiesota 55401
_ __
TABLE OF CONTENTS
Pa�e
PART 1 Execufiive Summary ..........................................................:....................3
1'urpose of Eval�atian ................................................................3
Scopeof Work ...........................................................................4
Conclusion.................................................................................4
PART 2 Minnesoia StaEute 469.174, Subdivision l0a Requirements .................4
PART 3 Procedures Fallowed ..............................................................................6
PART4 Findings ..................................................................................................�
A. Coverage Test ..........................................•--...............................7
B. Condition of BuiIding Test ........................................................8
1. Building Inspectian ..............................................................8
2. Replacement Cost ................................................................5
3. Code De�ciencies ................................................................5
4. System Condition Deficiencies ...........................................9
C. Distribution oi Substandard Structures .................................... ] 1
PART 5 Team Credentials .................................................................................12
APPENDIX A Property Condition Assessment Summary Sheet
APPENDIX B Building Code and Conditian Deficiencies Reports
APPENDIX C Property Condition Assessment
Building Replacement Cost Reports
Code Deficiency Cast Reports
Photographs
Page 2
PART 1— EXECUTIVE SUIVIMARY
PURPOSE OF EVALUAT�ON
LHB was hired by the City of Arden HiIis to inspect and evaluate the properties within a T�
Increment Financing Renewal and Renovation District ("TIF District") propased to be
estabIished by the City. The proposed TIF District is located in the City of Arden Hills,
bounded by Lake Johanna Bou�evard on the West, Sandeen Road on the North, Cour�ty Raad D
on the South and Lake Johanna on the East {Diagram 1) The purpose of LHB's work was to
deiermine whether the proposed TIF District meets the stahatory requirements for caverage, and
r�vhether buildings on two parcels, Iocated wit�in the proposed TIF District, meet the
qualifications r�quired %r a Renewal and Renovation District.
Diagram 1— Proposed TIF Disfrict
Page 3
SCOPE OF WORK
The propased TIF District consists of two {2) parcels, with three (3) Senior Residential
buildings.
Twa buildings in the proposed TrF District received an on-site interior and exterior inspection.
One af the buildings (McKnight Building) was not inspected thoraughly after a ctarsory review
determined it would not iikeIy be found substandard. Building code and Condition De�ciency
reports for each buiiding inspected by LHB are locat�d in Appendix B.
CONCLUSION
After inspecting and evaluating the properties within the proposed T7F District and applying
current statutory criteria for a Renewal and Renavation District under Minnesota Statutes,
Section 469.174, Subdivision IOa, it is our professiona� opinion ihat ihe praposed TIF District
quali�es as a Renewal and Renovation District because:
+ The proposed T1F Districfi has a coverage calculation of 100 percent which is above the
70 percent requirement.
� 33 percent of the buiIdings are structuraIly substandard which is above the 20 percent
requirement.
• 50 percent of th� other buildings require substantial renovation or clearance which is
above the 30 percent requirement.
� The substandard buildings are reasonably distributed throughout the geographic area of
the proposed TTP District.
The re�nainder of t�is report describes our process and findings in detail.
PART 2- MINNESOTA STATUTE 469.174, SUBDIVISION IOa REQiTII2EMENTS
The properties were inspected in accordance with the following requirements under Minnesota
Statutes, Section 469.174, Subdivision 10(c), which states:
Interior Inspection
"The municipality may not make such determination [that the building is structuralIy
substar�dard] without at; interior inspection of the property..."
Exterior Inspection and Other Means
"An interior inspectian of the property is not required, if the municipality �nds that
(1} the municipaiity or authority is unable to gain access to the property a$er using its best
effarts to obtain permission from the party that owns or controIs the properly; and
(2) the e�idence otherwise supparts a reasonable concIusion that the building is struct�arally
substanciard."
Page 4
Documenfatio�n
"Written dacumentation of the findings and reasons why an interior inspection was not
conc3ucted must be made and retained under section 469.175, sUbdivision 3{1}."
QuaIification Requiremen�ts
Minnesota Statutes, Section 4b9.174, Subdivision IO (a) (1) z-equires two tests for occupied
parceis:
A. Coverage Test
..."parcels consisting of 70 percent of the area of the district are occupied by buildings,
streets, utilities, or paved or gra�el parking lots"
The coverage required by the parcel to be considered occupied is defined under
Minnesota Statutes, Section 469.174, Subdivision 10(e), which states: "For purposes of
this subdivision, a parceI is not occupied by buildings, streets, utilities, or paved or gravel
parkir�g lots unless 15 percent of the area of the parcel contains building, streets, utiIities,
or paved or graveI parking lots."
B. Condition of Buildings Test
..."and 20 percent of the buildings are stz-ucturally substandard; and 30 percent of the
other buildings reqUire substantial renavation or clearance to remo�e existing conditions
such as: inadequate sireet Iayout, incompatible uses or land use relationships,
overcrowding of buildings on the land, excessive dwelling unit density, obsolete
buildings not suitable for impro�ement or conversion, or other identifiec� hazards to tne
health, sa%ty, and general well-being of the community."
StructuralIy substandard is defined under Minnesota Statutes, Section 469.174,
Suhdivision 10(b), which states: "For purposes af this subdiviszon, `structurally
substandard' shall rnean containing defects in structuraI elernents or a cornbination of
defciencies in essential utilities and facilities, Iight and ventilation, fire pratection
including adequate egress, layout and condition of interiar partitions, or similar
factors, which defects ar deficiencies are of sufficient total significance to justify
substantial renavation or clearance."
a. We do not count energy code deficiencies toward fihe thresholds required by
Minnesota Statutes, Section 4d9.I74, Subdivision 10(1�)) defined as "structurally
substandard", due to concerns expressed by the Siate oi Minnesota Court of
Appeais in the Walser Auto Sales, Inc. vs. Ciry of Richfield case filed November
13, 2001.
2. Buildings are not eligible to be considered structurally substandard unless they meet
certain additional criteria, as set farth in Subdivision 10{c} which states:
"A building is nat structuralIy sut�standard ii it is in compIiance with the building
code applicable ta new buiIdings or could be modified to satisfy ihe building code at a
Page 5
__ _ ___. _..........._...
cost of less than 15 percent of the cost of canstructing a new structure of the sanne
sqUare footage and type on the site. The municipality may �nd that a building is not
disq�aalified as structura�ly substandard under the preceding sentence on the basis of
reasonably available evidence, such as the size, type, and age af the building, the
average cost of plumbing, electrical, or structural repairs, or other similar reliable
evidence."
"Items of evidence that sUpport such a conclusiot� [that the building is not
disqualified] include recent fire or police inspections, on-site property appraisals or
hoUsing inspections, exterior e�idence of deterioration, or other similar reliable
evidence."
LHB counts energ� code deficiencies toward the 15 percent code threshold required
by Minnesota Statutes, Section 469..174, Subdivision 10(c)) for the following reasons:
• The Minnesota energy code is one of ter� buildzng code areas highlighted by
the Minnesota Department of Labor and Tndustxy website where minimum
construction standards are required by law.
• The index page of the 2007 Minnesota Building Code lists the Minnesota
Energy Cade as a"Required Enforcement" area campared to an additional
list of "Optional Enforcement" chapters.
• The Senior Building Code Repres�ntative for the Construction Cades and
Licensing Division of the Minnesota Department of Labor and Industry
confirmed that the Minnesota Energy Code is being enforced throughout the
State of Minnesota.
In a January 2002 repor� to the Minnesota Legislatnre, the Management
Analysis Division of the Minnesota Department of Administration confir�ned
that the construction cost of new buildings complying wi�h the Minnesota
Energy Code is higher than buildings built prior to the enactment of the code.
Proper TIF analysis requires a comparison between the replacement value of
a new building built under current code standards with the repairs that would
be necessary to bring the existing building up to current code standards. In
order for an equal comparison to be made, a]I applicable code chapters shouId
be applied to bath scenarias. Since current constructian estimating software
automatically applies the construction cost of comp�ying with the Minnesota
Energy Code, energy code deficiencies should also be identified in the
existing structures.
PART 3 — PROCEDUR,ES FOLLOWED
A. LHB was able to schedule interior and exterzar inspections %r three buildings in the
proposed TrF District on October 29, 20IQ. After a cursory review o� all three
buildings, it was determined that the McKnight building would not be found
substandard, so no further inspections were conducted in that building.
Page 6
PART 4 — FINDINGS
A. Coverage Test
]. The total square foot area of each parcel in the proposed T1F District was o3�tained
from City records, GIS mapping and site verif cation.
2. The total square foot area of buildings and site improvements on the parcels in the
proposed TIF District vvas obtained from City records, GIS mapping and site
verification.
3. The percentage of coverage for each parcel in the proposed TIF District was
computed to deterrnine if the 15 percent minimurn requirement was met. The toial
square footage of parcels meeting the 15 percent requirement was divided into the
total square footage of the entire disirict to determine if the 70 percent requirement
vvas met.
Finding:
The proposed TIF District met the coverage test �nder Minnesota Statutes, Section
459.174, Subdivision 10(e), which resulted in parceIs cansisting of I00 percent of the
area of the proposed TI�' District being accupied by buildings, streets, utiIities or
paved drives ar parking lots {Diagram 2). This exceeds the 70 percent area co�erage
requiret�aent for the proposed TIF District under Mznnesota Statutes, Section 4G9.174,
Suhdivision IOa (a) (1}.
Diagram 2
Shaded area denot�s parcels more than 15 percent occupiecE by
buildings, streets, utilities or paved drives or parking lots
Page 7
_ . _ _ _
B. Cond'etion of Building Test
1. Building Inspection
The first step in the evaluation process is the building inspection. After an initial
walk-thru, the inspector makes a judgement whether or not a building "appears" to
have enough defects or deficiencies of sufficient total significance ta justify
substantial renovation ar clearance. If it daes, the inspector documents with notes and
photographs code and non-code def ciencies in the building.
2. Replaceme�t Cost
The second step in evalua.ting a building to determine if it is substandard to a degree
requiring substantial renovation or clearance is to determine i#s replacement cosi.
This is the cost of constructing a new structure of the same square footage and type on
site. Replacement costs were researched using R.S. _Means Cost Works square foot
models for 20l 0.
A replacement cost was calculated by first establishing buaIding use (office, retail,
residential, etc.), building construction type (wood, concrete, masonry, etc.), and
building size to abtain the appropriate median replacement cast, which factors in the
costs oi constructian in Arden Hills, Minnesota.
Replacement cost inc�Udes labor, materials, anc� the contractor's overhead and profit.
Replacement costs do not include architectural fees, iegal fees or other "soft" costs
noi directly related to construction activities. Replacement cost for each building is
tabulated in Appendix A.
3. Code Deficiencies
The next step in evaluating a building is to determine w�at code deficiencies exist
with respect io such building. Code deficiencies are those conditions for a buiIding
which are not in complian.ce with current building codes applicable to new buildings
in the State oi Minnesota.
Minnesota Statutes, Section 469.174, Suhdivisron 10{c), specifically provides that a
building cannot be considered str�cturally substandard if its code deficiencies are not
at least 15 percent of the repIacement cost of the buildit�g. As a result, it was
necessary to determine the extent of code de�ciencies far each bui�ding in the
proposed TIF District.
The e�aluatian was made by re�ie�wing all aeailable information wiih respect to s�ach
buiidings contained in City Building Ir�spection records and making interior anci
exteriar inspections of the buildings. LHB utilizes the 2007 Minnesota State Building
Code as tl�e official code for our evaluations. The Minnesota State Building Cade is
actually a series of provisional codes written speci�ca�ly for Minnesota only
Page 8
requirernents, adoption of several internatianaI codes, and annendments to the adopted
international codes.
After identifying the code deficiencies in each building, we used R.S. Means Cost
Warks 2010; Unit and„ Assemblv Costs to determine the cost of correcting the
identified deficiencies. We were than able to compare the co�-�-ection costs with the
replacement cost of each building io de�ermine if the costs for correcting code
deficiencies exceed the required 15 percent threshold.
Finding:
Two (2) out of three (3) bUildings {67 percent} in the proposed TIF` District contained
code deficiencies exceeding the 15 percent threshold required by Minnesota Statutes,
Section 469.174, Subdivision 10(c). A complete Building Code and Condition
Deficiency repart for each building in the proposed TIF District can be found in
Appendix B of this repart.
4. System Condition De�ciencies
Tf a bu�lding meeis the minimum cade deiiciency threshold under Minnesota Statutes,
Section 469.174, Subdivision 10(c}, then in order for such building to be "structurally
substandard" under Minnesota Statutes, Section �69.174, Subdivzsion 10(h), the
building's defects or deficiencies should be of sufficient total signi�cance to j�stify
"substantial renovation ar clearance." Based an this definition, LHB re-e�valuat�d
each of the buildings that me# the code deficiency threshold under Minnesota Statutes,
Section 469.174, Subdivisian IO(c), ta determine if the #otaI deficiencies warranted
"substantial renovation ar clearance" based on the criteria we outIined above.
System condition deficiencies are a measurement of defects or substantial
deteriaration in site elements, structure, exteriar envelope, rnechanical and electricai
components, fire protectian and emergency systems, interior partitions, ceiiings,
floors and doors.
The evaluatian af system condition deficiencies was made by reviewing all available
information contained ir� City records, and makzng interior and exterior inspections of
the buildings. LHB only identified system condition deficiencies that were visible
upon our inspectio� of the building or contained in City records. We did not consider
the amount of "service life" used vp for a particular component unless it was an
obvious part of that component's deficiencies.
After identifying the system condition deficiencies in each bui�ding, we used our
pro%ssional judgment to d�termine if the list of defects or deficiencies are of
sufficient tatal signiftcance to justify "substantial z-enavation or cIearance."
Page 9
Finding:
In our professional opinion, one (1) of ihe three (3} buitdings (33 percent} in the
proposed Tu` District is structuraliy substandard to a degree requirYng substan#iai
rer�ovation or clearance, because of defects in structural elernents or a combination af
deficiencies in essential uiilities and facilities, light and ventilation, fire protection
including adequate egress, layout and condition of interior partitions, or sirr�ilar
factors which defects or deficiencies are of sufficient totaI signif cance to justify
substantial renovation ar clearance. This exceeds the 20 percent requirement of
Subdivision 10a. (a) (1) (ii).
Subdivision IOa. (a) (1) (iii)
Subdi�isian 1Qa. (a} (1) (iii} requires that at least 30 percent of the other buildings
(i.e., all buildings excluding the 20 percent minimum standard) meet the Subdivision
I Oa (1}, c(ause (iii) test in which the "other" buildings Nequire substantiai renovation
or clearance to remove existing conditions such as: inadequate street layaut,
inco�npatible uses or land use relationships, overcrowdrng of buildings on the land,
excessive dwellzng unit density, obsolete buildings not suitable for improvement or
conversion, or athe� identified hazards to the health, safety, and general well-bezng of
the community.
Finding:
One out of the two remaining buildings (50 percent) in the proposed Renewal and
Renovation Districti exhibit existing conditions warranting renovation or clearance as
defined by Minnesota �tatutes Subd. i0a. (1) {iii}, described as follows:
TIF Parcel2 — The Suttan Place Senior Apartment building was remodeled in
1980 from a school building originally built in I939. While the buiiding has
served its clientele welI over the years, it is no longer a desirable lacation for
senior housing for several reasons. First oi alI, its remote locatian in relation
to the main Presbyterian Hozx�es Campus creates a sense of iso�ation for the
residents. This sense of isolation is compounded by the orientation of the
building, the topography ofthe site, and fihe lack of critical rnass in a building
with only 2Q apartments. Current tr�nds in senior housing focus on
cotnmunity amenities such as a"Main Street" concept where residents can
rningle with their friends and neighbars in a variety of settings. Sutton Place
has none of these feataz-es with the exception af one dining roorri.
The Sutton Place building is well-maintained, which is vvhy it was not found
to be substandard under Minnesota Statutes, Section 469.174, Subdiviszon
10(b). However, it does ha�e signi�cant code de�icie�cies (23 percent of the
bUilding replacement value) including ADA issues at the prime enirances and
at every apartrnent bathroorn. In addition, the building lacks a fire su�pression
system and has a substandard fire alarm systezx�. These issues are especially
significant in a senior housing building as many of the residents have impaired
Fage IO
mobility. In our judgment, this parcel rneets the �ubdivision l0a (l ), clause -
(iii) test as an obsolete building not suitabie for impro�ement or conversion.
C. Distribution of substandard structures
Much of this report has focused on the conditian of indi�idual buiidings as they relate
to reqUirements identified by Minnesota Statutes, Section 469.174, Subdivision 10
and 1 Da. It is alsa i�nportant to look at the distribution of substandard buiidings
throughout the geographic area of the proposed T�F District.
Finding:
Buildings meeting the requirements of Minnesota Statutes, Section 469.174,
Subdivision 1 D and IOa are reasonably distributed thro�ghout t�e geographic area of
the pro�osed TIF District (Diagram 3).
Diagram 3— Distribution of 5n6srandard Structures
Yellotiv Shadi�tg—Structurally Su6standard Buildittg
B1ue Shading— Other Cohditions warranting rertovatian or cleararrce (Subd. 10a. (1) (iii)
Page 11
PART 5 - TEAM CREDENTYALS
Michael A. Fischer, AIA LEED AP - Project Principal/TIFAnaCyst
Michael has twenty-four� years of architectural experience as project principal, project manager,
project designer and proj�ct architect on municipal pianning, educational, cornmercial and
governrnental projects. He is a Senior Vice President at LHB and c�arrentIy leads the
Minneapalis office. Michael completed a twa-year Bush Fellowship at the Massachusetts
Institute of Technology in. 1999, earning Masters Degrees in City Planning and Real Estate
DeveIopment. Michael has served on over 35 connmittees, boards and communi�ty task forces,
including a term as City Council President and Chair of the Duluth/Superior Metropolitan
Planning organization. He is currently Chair of the Planning Commission in Edina, Minnesota.
He was one of four architects in the country to receive the National "Young Architects Citation"
from the American Institute of Architects in 1997.
Ben Trousdale, AIA - Project Manager/Inspector
Ben is a praject architect in LHB's Minneapolis office with 20 years of experier�ce working on a
variety of muiti-family housing and coanmercial pro�ects. He has extensive skills in creating
quality cansiructian docuznents that convey a building's fundamentals and unique design
detaiIs. His responsibilities include project management, code analysis, and overseeing
docunnent production. Ben is a licensed architect ir� Minnesota and is involeed with AIA
activities including Search for Shelter charrettes.
Lydia Major, MLA, ASLA — GIS/Mapping
Lydia brings a passion for design that benefits the client, ihe community, and the environment.
Her experience includes design�ng and c�rafting commercial and residential praperties at a
variety of scales. Lydia integrates her skills with AutoCAD, ArcGIS, and the Adobe Creafiive
Suite fo produce plans, color renderings, bookleis, and other presentatian materials.
Communication is a critical carnponent in all projects, and Lydia's uses her education as a
writer to create cornpeiling praject dacuments, including praposals, reyuests for �ariance, and
oiher public-relations materials.
M;V OProj11 0 0 5 3 714D0 Design1406 ReportslTlFlFinal ReportlRenovation and Renewal TIF Final Report ll-19-]O.doc
APPENDICES
Appendix A— Property Condition Assessment Summary Sheet
Appendix B— Building Code and Condition Deficiencies Reports
Appendix C- Property Condition Assessment
Buildir�g Replacement Cost Reparts
Code Def ciency Cost Reports
Photographs
Page 12
__ _ ..
_ _ __ _
APPENDIX A
Praperty Condition Assess�nent SuEnmary Sheet
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APPENDIX B
Building Code and Condition Deficiencies Reports
ARDEN HILLS, MYNNESOTA
RENEWAL AND RENOVATION TIF DISTRICT
CODEICONDITION DEFICIENCY REPORT
November 19, 2fl10
Map Na. & Bnilding Narne: Map No. lA — Lal�eView Bai[ding
Inspectian Date(s) & Time(s): October 29, 2414; 1:OOpm
Inspection Type: Interior/ExYerior
Summary of Deirciencies: It is our professzonal opinion that this building is Substandard because:
- Building Code deficiencies total more than 15°/a of repiacement cost.
- Substar�tial renovation is required to correct Conditians found.
Estimated Replacemer�t Cost: $20,$37,5$6
Esiimated Cost to Correct Building Code Deficiencies: $6,310,029
Percentage of Replacement Cost: 30°/a
Description af Conditior� Deficiencies
Minnesata Statutes, Section 469.174, Subdivision 10, states that a buiIding is Structurally Substandard if it
contains "defects in structural elements or a combinatian of deficiencies in essential utiliiies and facilities, iight
and ventilation, iire protection incl�tding adequate egress, layout and condition af interior partitions, or similar
factors, which defects or deficiencies are of suffcient total significance ta justify substantial renovation or
clearar►ce."
A. Defects in Structural ElemenEs
1. The existing shingle and membrane roofs should be replaced.
2. The building is experiencing water intrusion in multiple locations causing darnage to walls, floors and
ceilings.
B. Combination of Defsciencies
1. Essential Utilities and Facilities
a. Domestic water suppIy system is inadequate.
b. Mechanical sysYem is inadequate.
c. The existing ba#hrooms in each unit are too small to �neet ADA requirements.
d. Repair �in-tube radiation in corridors (20 percer�t).
e. Asbestos wrap to be removed in. mechanical rooms.
2. L ight and Ventilation
a. Install a new ventilation system.
h. Upgrade electrical panels.
c. Wa#er inside light fixture in rear exit corridor.
d. R�place T-8light tixiures.
e. Window and doar glazing in corridors have braken seals. Glass fogging up.
3. Fire Protection/Adequate E�
a. Remove unit heater in rear exit stairwell. Currently blocking egress.
b. Replace four eIevators to meet current elevator code.
c. Wheel chairs stared in corridors due to lack of space in rooms.
4. Layout and Condition of Interior Partitions/Materials
a. Paint required on 5 percent of wall surfaces.
b. Carpet damage in 5 percent of building.
c. Carpet base damage in corridors.
d. Mold damage on carpet in a few locations.
e. VCT tile damage in I4 percent of buiIding.
f. Ceiling tile in corridors damaged from water intrusion.
g. Significant water damage on lake side of building.
h. Mold visible in one office space and several basement (tunnel) spaces.
i. Repair tile base.
j. Re-caulk tub/floor edge.
k. Remove exposed security cable in corridors.
Bxteriar Construction
a. �'ascia and soffits in need of repair, paint.
b. Gutters are darr►aged arid need replacement.
c. Missing window sills.
d. Brick requires tuck-pointing.
e. Paint all exterior waod surfaces.
f. Hollow metal door frames rusting away.
g. Re-grade courtyards to prevent water intrusion,
Overview of Candition Deficiencies
The Lake View building has defects in structura� elements including most of the exterior envelope, allowing
water intrusion into the building. In addition, the building has deficiencies in all f ve cat�gories Iisted above,
incl�zding serious deficiencies in the mechanical system, domestic water supply and accessibility.
The building is currently functioning as a viab�e senior assisted living facility due to the heroic efforts of a
caring maintenance staf£ They are continually applying "band aides" to building systems because permanent
fixes are impractical from a financial and physical perspective. Currently, the heating, cooling and domestic
water is routed through a complex, antiquated tunnel system that is pa�-tially inaccessible to maintenance staff,
making repairs castly and unsafe, if not impossible.
Almost every bathroom in the buiiding requires a complete remodel, including new door openings, to alIow
enough space for wheeIchair movements. This is especially critical in an assisted living facility where the
inobility of the residents is a challenge. If there were enough space in each unit to expand the bathroom (and
that is daubtful), the cost of the remodeling would exceed the practical limits in a building of this vintage,
especially when combined with the other signiiicant remodeling required throughout the facility.
In total, the defects and deficiencies in tlus building are of sufficient tatal significance ta justify substantial
renovation or clearance.
Descri tian of Code Deficiencies
i. Install a new ventilation system to provide code required ventilation to current ASHRAE standards {IBC
1203.1).
2. The roof is at ihe end of its service tife al3owing water intrusion in building. Tear-off and replace roof,
flashings and copings (IBC 1503.1).
3. Bathroorns do not meet accessibility requirements (IBC Chapter 29). Replace existing batk�rooms with
new accessible bathrooms.
4. Replace four elevators to meet current elevator code (MN RuIe 1307)
5. Replace Domestic water supply system, eliminating all piping in concealed spaces.
6. Waterproof foundation walls and floors ta eliminate water intrusion into building.
7. Mechanical system is not adequate. I.,ack of working controls, failing circulation pumps, plugged reheat
coils, lack o� cooling supply and control to memory care.
8. Inadequate generator back-up power.
9. Insulate pipes under bathroom sinks.
ARDEN HILLS, NIINNESOTA
RENEWAL AND RENOVATION TYF DYSTRICT
CODE/CONDITION DEFICIENCY REPORT
November 19, 2010
Map No. & Building Name: Map No. 2— 5utton Place
Inspection Date(s} & Time{s): October 29, 2d10; 3:OOpm
Inspection Type: InteriorlExterior
Summary of Deficiencies: It is our professional opinion that this building is not Suhstandard because:
- Building Code deficiencies total more than 15% of replacement cost_
- However,
- Condition deficiencies do not rise to the level of "structt�raIly substandard"
as defined in Minnesota Statutes, Section 469.174, subd. 10(b).
- NOTE: While we do nat find ihe building to be structurally substandard,
we do concIude t�at the buiIding requires substa�tial renovation or
clearance because it is obsolete and not suitable far conversion. See page
10 of the full report.
Estimated Replacement Cost:
Estimated Cost to Correct Bailding Code Deficiencies:
Percentage of Replacement Cost:
$3,350,776
$774,7$5
23%
Description of Condition Deficiencies
Mirinesota Statutes, Section 469.174, Subdivision 10, states ihat a building is Structurally Substandard if it
contains "defects in structural elements or a combination of deficiencies in essential �tilities and faciiities, light
and ventilation, fire pro�ection including adequate egress, layout and conditian of interior parti#ions, or similar
factors, which defects or deficiencies are of sufficient total significance to jus�ify substantial renovation or
CI earance."
A. Defects in Structural Elements
1. Half af the membrane roof requires replacement.
B. Comhination of De�ciencies
1. Esser�tial Utilities and Facilities
a. The existing bathrooms in each unit are too small to meet ADA requirements.
2. Li ht and Ventilatian
a. Upgrade from window air conditioning anits.
3. Fire Protection/Adequate Egress
a. Replace one eievator to meet current elevator code.
b. Wheel chairs stored in corridors due to lack of space in rooms.
c. Remodel front entrance and at least one rear entrar�ce for accessibility.
d. Install new fire alarm system.
e. Tnstall new sprinkler system.
4. Lavout and Condition of Interior Partitions/Materials
a. Paint required on 5 percent of wall surfaces.
b. Carpet base damage in corritEors.
c. Mold darnage on carpet in a few locations.
d. Ceiling tile in corridors damaged from water intrusion.
5. Exterior Construction
a. Fascia and sof�ts in need of paint in a few locations.
b. Paint all exterior wood surfaces.
c. Hollow metal doar frames rusting at rear exit.
d. Re-pave parking lot near sidewalk, H.C. parking spots.
Overview of Condition Deficiencies
The Sutton PIace building is mostly challenged with accessibility issues including the primary entrances and
remodeling that would be required in the bathrooms of most units. However, the units are gen�rally a bit Iarger
in Su�ton Place making the remodeIing of the bathrooms more viable than the Lake View building.
In general, the mechanical and domestic water systezn in Sutton Place is more accessible For continuing
maintenance, and the overall condition of the building is better than the Lake View building. However, Sutton
Place will require the installation of a sprinkler system.
Overall, Sutton Place is a weil-matntained building that does not have a]ot of "visible" deficiencies. While the
building clearly exceeds 15 percent of the replacement cast in code deficiencies, we would not consider the
overall condition deficienci�s alone af sufficient total significance to justify substan#ial renovation or clearance.
D_escription of Code De�iCieneies
1. Install a new ventilation system to provide code required ventilation to current ASHRA� standards {IBC
1203.1}.
2. The roof is at ihe end of its service life alIowing water intrusion in b�ilding. Tear-off and repIace roof,
flashings and copings (haIf of roaf} {18C 1503.1).
3. Bathrooms do not meet accessibility requirements (IBC Chapter 29}. Replace existing bathrooms with
new accessible bathrooms.
4. Replace one elevator to meet current elevator eode (MN Rule 1307)
5. Insulate pipes under bathroom sinks.
6. Remode] the front entrance for accessibility.
'1. Remodel one rear entrance for accessibility.
8. Install a new fire alarm system.
9. Install a new spr�nkler system in building.
APPENDIX C
Property Condi#ion Assessments
Building Replacement Cost Reports
Code Deficiency Cost Reports
Photographs
rvot �ost ksumate
6ui[d'€ng Type:
Location:���
Story Count:
Stary Height (L.F.):
Floor Area (S.F.}:
Laboriype:
Basement Ineluded:
Data Re3ease:
Cost Per 5quare Fppt:
Building Cost:
Nssiscep - �eniar uving
Wood Frame
MWNEAPOLIS, MN
1
12
1484U0
Unian
Yes
Year 2Q1U Quarter 3
�sao.az
�za,837,586
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�r¢ derived from a huifding modrl with basic componenu.
diftereaces and markee canditions can cause costs to vary signilicantly.
ieeers aoe not wifh�n the ranges recommended 6y PSMenns.
A1�10 Standard Foundations $1.58 $234,472
KSF, 12" deep x 24" wide
4' - 6" square x 15" deep
A1030 51ab on Grade $5.72 $8A8,848
51ah an grade, 4" ihick, non indusCrial, reinforced
A2D1U 6asement Excavation $4.47 $663,348
storage
A2020 Basement Watfs $219 $339,836
thick
R • A
B1U10 Flvor Construction $18.7b $2,783,984
height, 142 Ibs/LF, 4000PSI
15'x15' bay, 75 PSF superimposed load, 153 PSF #otal load
B1Q20 Roof Construction $8.24 $1,222,816
Wood roof, truss, 4/12 slope, Z4" p.C., 44' to 6�' span
62010 Exterior Walls $1.19 $176,596
bevel siding
62020 Exterior Windows $0.86 $127,G24
Windows, wood, double hung, insulated glass, 3'-0" x 5'-6"
B�030 Exterior poors $7..54 $228,536
hardware, 6'-0" x 7'-0" opening
0" opening
83010 Roof Coverings $2.58 $382,872
Asphalt raofing, strip shingies, inorganic, Class A, 4" slope, 21D-2351bs/SQ
Flashing, aluminum, na backing sides, .019"
Gutters, box, a3uminum, A27" thic[c, 5", enameled finish
khick
- • �F' :1
CT01q Partitions $7.13 $i,058,092
OC framing,same opposite face, 0 insul
5/S" gypsum board, taped & finished, paimed an 2 x 4 studs 16" �.C.
C1U20 Interior poors $7.50 $1,113,000
Door, single leaf, wood frame, 3'-0" x 7'-0" x 1-3/8", birch, solid core
C3010 Wall Finishes $2.53 $375,452
primer & 2 coats
C302U Floor Finishes $10.29 $1,527,636
Carpet, tufted, nylon, roll goods, 1Z' wide, 36 oz
Carpet, padding, add to above, minimurn
Tile, pprcelain type, minimum
C3030 Ceiling Finishes $9.00 $1,335,6Q0
finish,l" x 3" wood, 16" OC furring, wood support
9 � f
A2030 Plumbing Fixtures $9.81 $1,455,8D4
Water cioset, vitreous china, tank type, 2 piece close coupled
La�atory w/trim, wall hung, PE on CI, 19" x 17"
iCitchen sink w/trim, countertap, PE on CI, 42" x 21" double 6owl
Laundry sink w/trim, molded stone, on wall, 22" x 21" singie campartment
Service sink w/trim, PE on Cl,wall hung w/rim guard, 24" x 20"
Bathtuh, recessed, PE on CI, mat bottom, 5' lang
Water cooler, electric, wall h�ang, dual heigh#, 14.3 GPH
d3450 Terminal & Package Units $3.31 $491,204
A/C pac[caged, DX, air coofed, hot water heat, constant voEume, 15 #on
D4010 Sprinklers $i.84 $273,456
Wet pipe sprinkler systems, steel, �ight f�azard, 1 floar, 1Q,000 SF
D501U Electrical5ervice/dis#ribution $3.90 $578,76U
phase, 4 wire. 120/208 V, 600 A
Feeder installation 600 V, including RG5 conduit and XHHW wire, 600 A
BrancE� installation 600 V, including EMT condui# and THW wire, 65 A
Switchgear installation, incl switchboard, panels & circuit breaker, 600 A
D5020 Lighting and Branch Wiring $11.64 $1,727,37&
Receptacles incl plate, box, conduit, wire, 20 per 100Q SF,2.4 watts per SF
Wall switches, 2.5 per �000 SF
Miscellaneous power, #o .5 watts
Central air conditioning power, 4 watts
Motor installation, three phase, 200 V, 15 HP motor size
V40HP,S75V54HP
Safety switch, 200 A fused, 3 phase, 50 HP 2fl0 V or fid �IP 230 V
�ixtures @40 watts per 1004 SF
fixtures per 1000 5F
D5030 Communications and Security $7.71 $1,144,164
detectors, includes outlets, hoxes, conduit and wire
wire, intercam sys#ems, 25 staYions
wire, masterN antenna systems, 12 ou#lets
�5090 Other Electrical Systems $0.21 $31,164
gas/gasoline operated, 3 phase, 4 wire, 277/480 V, 7.5 kW
� � - � �i�, � rE E
E1010 Commercial Equipmen# $O.Ufl $0
16 Ib capacity
Architectural equipment, laundry equipmenf, washers, residential, 4 cycle
E1D9Q Other Equipment Sa.ao $0
economy
ecanomy
SubTotaf ].00�o $122.30 $18,il9,64U
Contractor Fees {General Conditions,D�erf�ead,Profitj 1S.Q0% $18.32 $2,717,946
Architectural Fees O.Ofl% $0.00 $0
User Fees D.00% $0.00 $0
. �� r
Presbyterian Homes-Arden Hills
Cost Worksheet
Lake View Cade Deficiency Costs
item Description Cost Unit Quantity Total
Flat Roof Removal $ 0.70 SF 7,327 $ 4,989
insuEation - R-30 $ 3.60 SF 7,127 $ 25,657
iVlembrane Adi�ered w/ Flashings $ 3.75 SF 7,127 $ 26,7Zfi
Pitched Roof Tear-off $ 0.90 SF 92,264 $ 83,fl38
Insu[ation - Blown R-38 $ 2.20 5F 42,2fi4 $ 242,981
Shingfes / Felts/ Accessories $ 4.50 SF 92,264 $ 415,1&S
Mechanicaf Demolition $ 5,00 SF 148,402 $ 742,41D
Heating - Boiler / Fin Tu6e $ 8.00 5F 148,402 $ 1,187,216
Air Conditioning $ 7.00 SF 148,402 $ 1,038,814
�omesYicWaterSupply Demolition $ 2.00 SF 148,402 $ 296,&04
New PipingThroughout building $ 3.00 5F 148,402 $ 445,206
Elevator #3000 - Z stops
#3000 - 3 stops
Demolition
Basement Waterproofing - 8' height
Expose footings
Drain Piping
Waterproofing
Backfil[ - 5eiect Granular
Remodel Toi[et Rooms per A�A Requirements
Private rooms-major remodel
Private rooms-minor remodel
Public restrooms
$ 75,0OO.OD
$ 85,000.00
$ 1Q,000.00
$ 90.00
$ 25.00
$ 32.00
$ 40.00
$ 10,000.00
$ 4,000.00
$ 8,000.00
Ea 3 $ 225,aaa
Ea 1 $ 85,000
Ea 4 $ 4Q,000
LF 325 $ 29,250
LF 750 $ 18,750
LF 325 $ 10,400
LF 325 $ 13,000
EA 130 $ 1,300,000
fA 24 $ 96,000
EA 3 $ 24,000
Fotal Casts $ 6,310,029
__ _ _ _........ ._ ....... ......._......_ ..
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Building Type:
Loca#ion: _.__��.,_..._
Story Count:
Stary Neight (L.F.}:
��oarArea (S.F.}:
LaborType:
Basement Inciuded:
Data Release:
Co5t I'er Square Foot:
&uildin� Cost:
5quare �oat Cost Estimate Report
Apartment, 1-3 5tor
Frame
MIIVNEAPOLfS, MN
x
ia
274U0
Union
No
Year 2010 Quarter 3
$122.29
$3.350.776
� � � .. = �::r 't�' ��
� ; �
� � ; �"�; u � �$ � a
�. '�� F r
,� �v;,,,�. �. �.. ..� . �� _� _...._
are derived fram a 6�ilding model with 6asic components.
diHerances and mark=E mndRions wn wuse costs [o vary significantly.
A1010 Standard Foundations $0.97 $26,578
KSF, 12" deep x 32" wide
KSF, 12" deep x 40" wide
A1036 51ab on Grade $3.5a $97,000
Slab on grade, 4" thicfc, light industrial, reinforced
A2010 6asement Excavation $0.11 $3,OU0
site storage
A2020 Basement Waiis $1.50 $a1,1D0
thick
thick
� k �i` 11
61010 Flaor Construction $2.2$ $62,500
Floor, wood joist, 2 x 12 @12" O.C., 1/2" CDX subfloor
81020 Roof Construction $3J8 $143,500
Wood roo#, truss, 4/12 slope, 24" O.C., 30' to 43' span
82010 Exterior Walls $3.98 $109,OQ0
bevel siding
62020 Exterior Windpws $2,4g $fig,OpO
Windows, aEuminum, sGding, standard glass, 5' x 3'
B2U30 Exterior poors $Q.36 $10,000
0" opening
63010 Raof Coverings $Z.U3 $55,500
4" slope, 260-300 Ibs/SQ
Flashing, aluminum, no backing sides, .019"
Gravel s#ap, aluminum, extrucied, 4", mill finish, .05Q" thiek
� �i�
C1010 Partitions $7.50 $205,500
gypsum board, 2-1/2" @ 24", same oppbsite face, no insufation
1/2° fire ratedgypsum board, taped & finisF�ed, �ainted on metal furring
C1020 [nterior poors $7.24 $195,5U0
Door, single leaf, wood frame, 3'-0" x 7'-d" x 1-3/8", birch, solid core
Door, single leaf, wood frame, 3'-0" x 7'-0" x 1-3/8", birch, hollaw core
C1Q30 Fittings $2.86 $78,500
Cabinets, residential, wall, two daors x 48" wide
C2010 5tair Construction $0.59 $19,000
5tairs, wood, prefab box type, oak treads, wood rails 3'-fi" wide, 14 risers
C3010 Watl Finishes $2.88 $79,000
primer & 2 coats
Vinyl wall covering, fabrit back, medium weight
Ceramic tile, thin set, 4-1/4" x 4-1/4"
C3020 Floor Finishes $5.40 $148,000
Carpet tile, nylon, #usion bonded, 18" x 18" or 24" x 24", 24 oz
Carpet tile, nylon, fusion bonded, �S" x 18" or 24" x 24", 35 oz
Carpet, padding, add to above, minimum
Carpet, padding, add tv above, maximum
Vinyl, composition tile, minimum
Vinyl, composition ti�e, maximum
Tile, ceramic natural clay
C3Q30 Ceifing Finishes $4.84 $132,500
textured finish, 7/8"resilient channel furring, 24" OC support
p 1 � 1 i + 1
D1Qlp E�evatars ancf Lifts $5.09 $I39,500
Hydraulic passenger elevator, 35Q0 Ib., 3 floors, 10' story height, 125 FPM
D201D Plumbing Fixtures $12.76 $349,500
KitcF�en sink w/trim, countertop, gE on Ci, 24" x 21°, single 6owl
Laundry sink w/trim, PE on CI, black iron frame, 24" x 20", single campt
5ervice sink w/trim, PE on CI, cornerfloor, 28" x 28", w/rim guard
8athroom, fa�atory & water �loset, 2 waEl plumbing, stand alone
bathtu6, star�d a[one
D202U �omestic Water Distributian $3.67 $10Q,5U0
Gas fired water heater, residential, 100� F rise, 30 gal tank, 32 GPFE
�2040 Rain Water Drainage $0.36 $10,U00
Roof drain, DWV PVC, 4" diam, diam, 10' high
Roof drain, DWV PVC, 4" diam, for each additional foot add
D3010 Energy SuppEy $8.83 $242,aoa
20,OOfl 5F area,2aQ,00Q CF vol
d343U Coaling Generating Systems $8.25 $226,050
46.66 ton
D4010 5prinkfers $3.fi3 $99,50U
Wet pipe sprinkfer systems, steef, IigF�t hazard, 1 floor, 5000 SF
SF
d5010 Electrical Service/Distribution $Z.23 $61,000
phase, 4 wire, E24/2aS V, 5a0 A
Feeder instailation 600 V, including RGS tonduit and XHHW wire, fi00 A
5witchgear installatipn, incl switchboard, panels & circuit breakEr, b00 A
a5020 LigF�ting and Branch Wiring $7.63 $209,000
Recep#acles incl plate, box, conduit, wire, 10 per 1000 5F, �..2 wafts per SF
Wali switches, 2.5 per 1004 SF
Miscellaneous power, 2 waYCs
Central air conditioning power, 3 watts
MpCor installation, �hree phase, 200 V, 15 HP motor size
fixtures per 10005F
pS�3D Communications and Security $1.35 $36,990
detectors, includes outfets, boxes, conduit and wire
Interne# wiring, 2 data/voice outlets per 1000 S.F.
�5090 �ther Electrical Systems $0.2U $5,500
gas/gasoline operated, 3 phase, 4 wire, 277/480 V, 7.5 kW
- i i:�, � i� �
E1090 4ther Equipment $Q.flO $U
SubTotaf 100% $1D6.34 $2,913,72$
Contractor Fees {General Canditions,O�erhead,Profitj 15.00% $15.95 $437,058
Arci�itectural Fees U.OU% $O.QB $0
User Fees O.OQ�o $O.OQ $0
. . . . �
Presbyterian Homes - Arden Hills
Cost Worksheet
Sutton Place Code Deficiency Costs
Item Description Cast Unit Quantity Total
Flat ftoof Removal $ 4.70 SF 137Q0 $ 9,590
Insulation - R-3d $ 3,60 SF 13700 $ 49,320
Membrane Adhered w/ flashings $ 3.75 SF 13700 $ 51,375
Mechanical Upgrades Demofition
Heating - Boiler / Fin Tube upgrades
Air Conditioning a�d ventilation upgrades
Elevator #30a0 - 3 stops
DemRlitiOn
Remodel Tailet Roams perADA Requirements
Major modifications w/pemolition
Minor modifications w/�emolition
Sprinkler System - Retrofit {expased pipingj
Fire Alarm System - Retrofit
Reconfigure the Front Entrance per AOA standards
Reconfigure one rear entrance from parking lot per ADA standards
$ 1.00
$ 2.OQ
$ 4.04
$ 85,000.00
$ IO,Q00.00
$ 10,000.00
$ 4,OOOAO
$ 3.25
$ 2.25
$ 4D,aao.oa
$ 15,Q00.00
5F 27400 $ 27,400
5F 27400 $ 54,80Q
SF 27400 $ 104,604
E2 1 $ 85,000
Ea 1 $ 10,000
EA 16 $ 160,000
EA 3 $ 12,�00
SF 27400 $ 89,050
SF 27400 $ 61,650
EA 1 $ 40,D0{}
EA 1 $ 15,�00
Total Costs $ 774,785
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Appendix G
Findings Including Bui/For Qualifications
The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan (TIF
Plan} far Tax Increment Financing District No. 4(District), pursuant to Minneso#a Statutes, Sections 469.17�
t�rough 469.1799, all inclusive, as amended (the "Act"}, as r�c�uiz-�d by Section 469.175, Subdivision 3 of
the Act are as follows:
1. Findtng that Tax Increment Financang Distract No. 4 is a renewal and renovation disirict as defined in
M.�S., Section 469.174, Subd. 10 a.
The District consists of two parcels and three buildings, with plans to redevelop the area for senior
housing �urposes. At least 70 percent of the area of the parcels in the Districi are accupied by buildings,
streets, utilities, paved or gravel parking lots ar other similar structures. One building (more than 20
percent ofthe buildings in the District) is structurally substandard as defined in the Act, and one building
(more than 30 percent of the buildings in the DisYrict) requires substantial renovation or clearance to
remove existing conditions, such as those existing condiiions defined in the Act. (See Appendix F of the
TIF Plan.}
2. Finding that the proposed development, in the opinion af the City Council, would not reasonably be
expected to occur solely through private invest�nent within the reasanably foreseeable future and that the
increased market value of the site that could reasonably be expected to occur wzthout the use of tax
increment financing would be less than the inerease in the market value estimated to result frorn the
proposed developrnent after subtracting the present value of the projected tax increnzents for the
maximum duration of the District permttted by the TIFPlan.
The proposed development, tn the opinion of the Ciry, would not reasonably be expected to occur solely
through private investment wzthin the reasonablyforeseeable future: This finding is supported by the fact
that the redevelopment proposed in the TIF Plan meets the City's objectives for redevelopment. There
are higher costs associated with redeveloping the site du� to; accommodating existing residents in their
current units untiI the new facility is constructed; relocating existing residents to the new facility; and
site constrain#s related to topagraphy, grading, demolition and utilities for constructing the new facility
adjacent to the existing facili#y. In addition, increased landscaping wil] be required to provide at�
adequaie buffer and screening from the adjacent single-family homes. Due to these higher costs of
redevelopment on the parcels this project is feasible only through assistance, in part, from tax increment
financing.
The increased market value of the site that could reasonably be expected to occur without the use of tax
inerementfinancing would be less than the increase in market value estimated to resultfrom the proposed
development after subtt'acting thepresent value of the proj ected tax incrernents for the maximum duration
of the Districtpermitted by the TIFPIan: The abave fnding explained why the proposed redevelopment
wouId not iikely occur without ta� inerement assistance. It is possible that some redevelopment of the
existing senior housing complex would go forward without assistance, but the unique costs of this effort
(described above} mean that wit�iout assistance, any alternati�e redevelopment would necessarily be
carried out at a smaller scale, and most likely over a�onger period of time. It is impossible to predict
what an alternative market value would be if no tax increment assistance were provided, but it is certain
that the alterriative redevelapment would produce significantIy iess value than the comprehensive, high
quaiity de�elopment that is proposed under the TIF Plan. There is no reasonable likelihood that an
a�ternate, unassisted development would add as much as $9,972,625 in market value (which is the
alternate threshold noted below).
Appendix G-1
Therefare, the City concludes as follows:
4.
a. The City's estimate of the amoun� by which the market value of the entire District will
increase without the �se of tax increinent financing is an amount iess than the amount
described in clause d below.
b. Ifthe proposed development occurs, the total increase in market value will be $i2,623,600
(see Appendices D and G oithe TI� Plan)
c. 'I'he present value of t� increments from the District for the maximum duration of the
District permitted 6y the TIF Plan is estimated ta be $2,650,975 (see Appendices D and G
of the TIF Plan}.
d. Even if some development other than the praposed de�elopment were to occur, tne Council
finds that no alternative wauld occur ihat would produce a market value increase greater #han
$4,972,625 {the amount in clause b less the arnount in clause c) without tax increment
assistance.
Current Market Value
New Market Value - Estimate
Difference
Present Value of Tax Increment
Difference
Value Likel_y to Occur Without TIF is Less Than:
3 8,238,800
50,862,400
12,623,600
2,650,975
9,972,625
9,972,625
Finding that the TIF Plan for the District conforms to the general plan for the development or
redevelopment of the municrpality as a whole.
The Planning Commission reviewed the TIF Plan and found that the TIF Plan conforms to the
generaI development plan of the City.
Finding that the TIFPlan for the District will afford maximum oppartunity, consistent with the sound
needs of the Ciry as a whole, for the development or redevelopment of Development Distj-ict Na. 1
hy private enterprise.
The project to be assisted by the District will result in the redevelopment of substandard properties,
increase the availability of safe and decent life-cycle housing in the Ci�y, increase the tax base of the
State and add a high quality development to the City.
Appendix G_2
Attachment
Resolut�on 2010-081
City of,4rden Hills
City Council Meeting for December 20, Zaro
_
__ _
C�TY OF ARDEN HILLS, MINNE�OTA
RESQLUTIQN NQ. 2010-081
RESOLUTION APPRQVING CONTRACT FOR PRIVATE
DEVEL�PMENT AND AWA1tllTNG THE SALE OF, ANU
PROVIDING THE FORM, TERMS, COVENANTS AND
DIItECTIONS FOR THE TSSUANCE OF TTS $1,115,000 TAX
INCREMENT REVENUE NOTE
BE IT RESOLVED BY the City Council {"Council") of the City of Arden Hzlls, Minnesota (the
"City") as foliows:
Section 1. Authorization; Award of Sale.
1.01. Authorization. The City has heretofore approved the establishment of T� Increment
Financing District No. 4{t�e "TIF District") within amended Development District No. 1{"Project"), and
laas adopted a t� increment financing plan for the purpose of finatzcing certain improvements within the
Project.
Pursuant to Mi�nesota Statutes, Section 469.178, the City is autharized to issue and sell its bonds
for tlie purpose af financing a portion of the public deveiopment costs of the Development District. Such
bonds are payable from all or any partian of reven�es derived from the TIF District and pledged to the
payment of the bonds. The Cifiy hereby finds and determines that it is in the best ir�terests of the City that
it issue and sell its $1,ll5,000 T� �ncrement Revenue Note (the "Note") for the purpose of financing
certain public costs of the Project.
1.02. A reemezat A raved� Issuance Sale and Terms of the Note. The City hereby approves
the Contract for Private Development between the City and the Owner (the "Agreemer�t"), and authorizes
the Mayor and City Administrator to execute such Agreement in substantially the form on file with City,
subject to modifcations that do not alter the substance of the transaction and are approved by such
ofFiciais, provided that execution of ihe Agreeinent by such officials is conclusive evidence of their
approval. Pursuant to ihe Agreement, the Note shall be sold to PRESBYTERIAN HOMES OF ARDEN
HTLLS, INC. (the "Owner"} and delivered at the time and subject to the condittons of Section 3.3 of the
Agreement. The Note shall be dated as af the date of deiivery and shall bear interest from the date of
original issue to the earlier of maturity or prepaym�nt, at the rate that is the lesser af 6.25 perc�nt per
annum, or the true interest cost on the first series of Housing Revenue Bands issued to finance the
Minimvm Improvernents in accordance with Arficle VII of the Agreement. The consideration far the sale
af the Note is the payment by the Owner of the Public Development Costs as de�ned in the Agreement.
Section 2. Form of Note. The Note shall be in substantially the follawing form, with the blanks
to be properly filIed in and the principal amount and payment schedule adjusted as of the date of issue.
379276v1 AR200-i0
UNITED STATE OF AMERICA
STATE O�' MINNESOTA
COUNTY OF RAMSEY
CITY OF ARDEN HILLS
No. R-1
$1,115,000
TAX INCREMENT REVENUE NOTE
SERIES 20_
Rate
Date oi Original Issue
% , 20
The City of Arden Hills, Minnesata (the "City"), for value received, certi�es that it is indebted
and hereby promises to pay to PRESBYTERIAN HOMES O� ARDEN HILLS, INC. or registered
assigns (tha "Owner"), the principal sum of $ and to pay interest thereon at the rate of
percent per annum, as and to the extent set farth herein. Unless the context clearIy reqUires
otherwise, capitalized terms in tk�is Note have the meaning provided in the Contract for Private
Development between the City artd Owner dated as of December 20, 2010 {the "Agreement").
1. Payments. Principal and interest {"1'ayments") shall be paid on August 1, 2014 and each
February 1 and August 1 ti�ereafter ("Payment Dates") to and including February 1, 2U28, or such eariier
Payment Date when principal and accrued interest have bcen paid in full, and shall be made in the
amour�ts and solely from the sources set forth in Section 3 hereon. Paymen#s shail be applied first to
accrued interest, and then ta unpaid principal.
Payments are payable by mail ta the address of the Owner or such other address as ihe Owner
may designate upon thirty (3U) days writt�n notice to t�e City. Payments on this Nate are payable in any
coin or currency of the United 5�ates of America wh�ch, on the Payment Date, is legal tender for the
payment of p�blic and private debts.
2. Interest. Interest a� the rate stated herein shall accrue on the �npaid principal from and
after the date of issue of this Note. Interest accruing from the date of issue through February 1, 2014 wil�
be compounded semiannually on each August 1 and February 1 and added to principaI. Interest shall be
computed on the basis of a 360-day year consisting of t�vvelve 30-day months.
3. A�ailable TaY Increment. �ayments on this Note on each Payment Date are payable
solely from and in the amount of Avaiiable Tax Incrernent. The term "A�ailable Tax Yncrement" means
(a) on Payment Dates from August 1, 2014 through Febntary 1, 2019, 90 percent of the Tax Increment
attributable to the Minimurz� IznprovemEnts and Development Property that are paid to the City by
Ramsey County in the six (6) montt�s preceding the Payment Da#e, and (b} on Payment Dates from
At�gust 1, 2019 ta February 1, 2028, 75 percent of the Tax Increment attributable to the Minimum
T�nprovements and Development Property that are paid to the City by Ramsey County in the six (6)
months preceding t�ae Paytt�ent Date.
Available Tax Increment shall not include any Tax Increment if, as of any Payment Date, there is
a� uncured Event of Default under the Agreement or tlie Land Development Agreement Any amount of
Available TaY Increment so wi#hheld shall be paid, without interest on the withhetd amount, on the next
379276v1 AR200-10 2
Scheduled Payment Date after the default is cured, unIess the Note has been terminated in accardance
with Section 9.2(b) af the Agreement.
The City shall have no obligation to pay principaI of and interest on this Note on each Fayment
Date from any source other than Available Tax Increment, and s�all have na obligation to pay unpaid
balance of principal or accrued interest that may remain after the Payment on the finaI Payment Date
described in Section 1 hereof.
4. Prepaymen�. The principal sum and all accrued interest payable under this Note is
prepayable in whole or in part at any time by the City without premium or penaliy.
5. Naiure oi Obli_a� tion. This Note is one of an issue in the total principal amount of
$l,i 15,OOQ issued to aid in ��ancing cartain public deve�opment costs and administrative costs of a
Project undertaken by the City pursuant to Minnesota Statutes, Sections 469.125 through 469.134, and is
issued pursuant to the Agreement and an authorizing resolution {the "Resolution") duly adopted by the
City on December 20, 2010, and pursuant to and in fuil conformity with the Canstitution and laws of the
State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.179, and tlie Special Laws.
This Nate is a limited obligation af the City which is payable sole�y from Available Tax Increment
pledged to the payment hereof under the Resolution. This Note and the interest hereon shall not be
deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof,
including, without limitation, the Ci€y. Neither the State of Minnesota, nor any politicai subdivision
#hereof shall be obligated to pay the principal of or interest on this Note or other costs incident hereta
except out of Available Taac Increment, and neither #1ie full faith and credit nor the taxing power of the
State of Minnesota or any political sUbdivision thereof is pledged to the payment of the principal oi or
interest on this Note or other costs incident hereto.
6. Registration and Transfer. This Note is issuable only as a fully registered note without
coupons. As pravided in the Resolution, and subject to certain limitations set forth therein, this No#e is
transferable upon the books of the City kept for that purpose ai the principal off'ice of the City
Adminis#rator, by the Owner hereof in person or by such Owner's attorney duly autharized in writing,
upon surrender of this Note together with a writ�en instrument of transfer satisfactary fio the City, duly
executed by the Owner. Upon such transfer or exclaange and the payment by the Qwner of any tax, fee,
or governmental charge required by Iaw to be paid by the City with respect to such transfer or exchange,
there will be issued in the name of the transferee a new Note of the same aggregate principal arnount,
bearing interest at the same rate and zz�aturing on the same dates.
This Note shall not be transferred to any person other than an affiliate, ar other related en�ity, of
the Owner unless the City has been provided wi#h an opinion of counsel or a certificate of the transferor,
in a form satisfactory to the City, that such transfer is exempt from registration and prospectus delivery
requirements of federal and applicable state securities laws.
IT IS HEREBY CERTIFIED AND RECITED that aIl acts, conditions, and things required by the
Constitution and laws of the State of Minnesota to be done, to exist, to happen, and ta be performed in
order to malce tl�is Note a valid and binding Iimited ob�igation of the City according to its ierms, have
been done, do exist, have happened, and have been perfor�ned in due form, time and manner as so
required.
379276v1 AR2U0-10 3
IN WITNESS �Vf-�REOF, the City Council of the City of Arden Hitls, Minnesota has caused
this Note to be executed with the manual signatures of its Mayor and City Administrator, all as of the
Date of Original Issue specified abova.
CITY OF ARDEN HILLS, MINNESOTA
Mayor
City Administrator
REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond register of the
City Administrator, in the name of the person last listed below.
Date of
Registration
Re istered Owner
Signaiure of
City Administrator
, 24
Presbyterian Homes of Arden
Hiils, Inc.
(End of Bond Form)
379276v1 AR200-]0
0
__
Section 3. Terms, Execution and Deliverv.
3.01. Denomination, Pa,yment. The Note shall be issued as a single typewritten note numbered
R-1.
The Nate shall be issuable only in fiilly registered form. Principal of and ittterest on the Note
shall be payable by check or draft issued by the Registrar described herein.
3.02. Dates� Interest Pa ent Dates. Principal of and interest on the Note shall be payabie by
mail to the owner of r�card thereof as of the close of business on the fifteent;h day of the month preceding
the Payment Date, whethar or not such day is a business day.
3.03. Re�istration. The Ciiy hereby appoints the City Adnninistrator to perform the f�mctians
of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration and the rights and
duties of the City and the Registrar with respect thereto shalI be as fallows:
(a} Re�ister. The Registrar shall keep at its office a bond register in which the Registrar
shall provide for #he registration of ownership of the Note and the registration of transfers and exchanges
af the Note.
{b) Transfer of Note. Upon surrender for transfer of the Note duiy endorsed by the registered
owner thereof or accompanied by a written instrument of transfer, in %rm reasonably satisfactory to the
Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the
registereci owner in writing, the Registrar shall authenticate and deliver, in the name of the designated
transferee or transferees, a new Note of a like aggregate principai amount and mahtrity, as requested by
the transferor. Noiwithstanding the foregaing, the Note sha�l not be i:ransferred to any persan other thatz
an affiliate, or other related entity, of the Owner unless the City has been providad with an opinion of
counse� or a certificate af the transferor, in a%rm satisfactory to the City, that such transfer is exempt
from regis#ration and prospectus deIivery requirements af federal and applicable state securities laws.
The Registrar may close the bo�ks for registration of any transfer after the fifteenth day of the month
preceding each Payment Date and until such Payment Date.
(c) Cancellation. The Note surrendered upon any transfer shall b� promptty cancelled by the
Registrar and thereafter disposed of as directed by the City.
(d) Im ro er or Unauthorized Transfer. When the Note is presented to the Registrar for
transfer, the Registrar �nay refuse to transfer the same until it is satisfied that the endorsement an such
Note or separate instru�nent of transfer is legally anthorized. The Regis#rar shall incur no liabiIity for its
refusaI, in good faith, to make transfers which it, in its judgment, deems improper or unau�horized.
{e) Persons Deemed Owners. The City and the Registrar may treat the person in whose
name the Note is at any time registercd in fihe bond register as the absolute owner of the Note, whether the
Note shall be overdue or not, for the purpose of receiving payment of, or on account o�, the principal of
and interest on such Note and for all other purposes, and all such payments so made to any such registered
owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the
City upon such Note to ihe extent of the surn or sums so paid.
{ fl Taxes, Fees and Char�es. For every transfer or exchange of the Note, the Registrar may
impose a charge upon the owner �ereof sufFicient to reimburse #he Registrar for any tax, fee, or other
govemmental charge required by law t� be paid with respect to such transfer ar exchange.
��gz�6Vi �zzoa-io 5
(g) Mutilated Lost 5tolen or Destro ed Note. In case any Note shall become mutilated or
be lost, stoten, or destroyed, the Registrar shall detiver a new Note of Iike amount, maturity dates and
tenor in exchange and substitutian %r and upon cancellation of such mntilated Note or in lieu of and in
substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and
charges af the Registrar in connection therewith; and, in the case the Note is lost, stolen, or destroyed,
upon filing wath the Regisirar of evidence satisfactory ia it that such Note was lost, stoIen, or destroyed,
and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity iri
form, substance, and amount satisfactory to it, in which both the Ciiy and the Registrar shall be named as
obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such
cance�lation shall be given to the City. If the mutilated, lost, stolen, or destroyed Note has already
matured or been called for redemption in accordance with its terms, it shail not be necessary to issue a
new Note prior to payment.
3.04. Pre�aration and De�ivery. The Nate shaIl be prepared under the dir�ction of the County
Audi#or and shall be executed on behalf of the City by the signatures of its Mayor and City Administrator.
In case any ofircer whose signature shail appear on the Note shal� cease ta be such officer before the
delivery of the Note, such signature shall nevertheless be valid and sufficient for atl purposes, the same as
if such officer had remained in office until deIivery. When the Note has been so executed, it shall be
delivered by the City Administrator to the Owner thereof upon closing on acquzsition of the Developrnent
Property in accordance with the Agreement.
Sectron 4. Securi Provisions.
4�.01. Pled�e. {a} The Ciiy hereby pledges to the payment of the principaI of and inierest on
the Note all Available Tax Increment as defined in the Note. Available Tax Increment shall be applied to
payrr�eiit of the principal of and interest on the Note in accordance with the terms of the Note.
4.02. Bond Fund. UntiI the date the Note is no longer outstanding and no principal ther�oi or
interast thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the City
shail maintair� a separate and special "Bond Fund" to be used for no purpose other than the payment of
the principai of and interest on the Note. The City irrevocably agrees to appropriate to ihe Bond Fund
upan or before each payment date all Avaiiable Tax Increment. Any Available Tax Increment remaining
in the Band Fund shall be transferred to the City's account for TIF District Na. 4 upon the payment of a�l
principal and interest to be paid with respect to the Note.
4.03. Adc�itional ObIigations, While the Note is outstanding, the City shall not pledge or permit
the pledge of all or any portion of the Available TaY Increment to the payment oi principal of or interest
on any obligations of the Ci�ty unless and to the extent such pledge is subordinate to the pledge ta the
Note,
Section 5. Cartification of Proceedin s.
5.01. Certification of Proceedin s. The of�cers of the City are hereby authorized and directed to
prepare aiid furnish to the Owner of the Note certi��d copies of ail proceedings and records of the City,
and such other affidavits, certificates, and information as may be required to show the facts relating to t�e
legality and marketability of the Note as the same appear from the books and records under their custody
and control or as otherwise known io thern, and all such certi�ed copies, certificates, and affidavits,
incIuding any heretofore furnished, sl�all be deemed representations of the City as to the facts recited
therein.
37427bvI AR204-10 6
Section 6. Effective Date. This resolution shalt be effective upon full execution of the
Agreement.
Adopted this 20�' day of Decerz�ber, 2010.
Mayor
City Administrator
3�s2�6vi Axzoo-10 �
Attachment
Resolut�on 2010W082
City af,4rden Hills
City Council Meeting for December 20, 2010
CITY OF ARDEN HILLS
RAMSEY COUNTY
STATE OF M�NIVESOTA
Council member introdUced the following resolution and moved its adoption:
RESOLUTION NO. 2U10-082
RESOLUTION ADOPTING A MODII+ICATION TO THE DEVELOPMENT
PROGRAM FOR DEVELOPMENT DISTRICT NO. 1; AND ESTABL�SHING
TAX INCREMENT FINANCING DISTRICT NO. 4 THEREIN AND ADOPTING
A TAX INCREMENT FINANCING PLAN THEREFOR.
BE IT RESOLVED by the City Council {the "Council") af the C�ty of Arden HilIs, Minnesota
(the "City"), as foliows:
Section 1. Reciiais
1.01. The Council has heretofore established Development District No. 1 and adopteci the
Development Prograzn therefor. It has been praposed by tha City that the City adopt a Modification to the
DeveIopment Program for Development District No. 1(the "Development Program Modifiication") and
establish Tax Increment Financing District No. 4(the "District") therein and adopt a T� Increment
Financing Plan (the "TIF` Plan") therefar {the Development Program Madification and the TIF Plan are
referred to collectively herein as the "Program and PIan"); all pursuant to and in conformity with
applicable law, including Minnesota Statutes, Seciions 469.124 to 469.134 and Sections �69.174 to
469.1799, ail inclusive, as amended, (the "Act") all as reflected in fhe Program and Plan, and presented
for the Cauncil's cansideration.
1.02. The City has investigated the facts relating to the Program and Plan and has caused the
Program and Plan ta be prepared.
1.03. The City has performed all actions required by law to be per%rmed prior to the
establishment of the District and the adoption and approval of the proposed Program and Plan, including,
bnt not limited to, notification of Ratnsey County and independent School District No. 521 having taxing
jurisdiction over the property to be included in the District, a review of and written comment on the
Program and T'lan by the City Planning Commission on December 8, 2010, and the holding of a public
hearing upon published notice as required by law.
1.04. Certain written reparts (the "Reports") relating to the Program and Plan at�d to the
activities cantemplated therein have heretofore been �repared by sfiaff and co�sultants and submitted to
the Council and/Qr made a part of the City files and proceedings on the Program and Plan. The Reparts,
including the redevelopment qualifications reports and planning documents, include data, information
and/or substantia#ion constituting or relating ta the basrs for the other findings a�ad determinations rr�ade in
this resolution. The Council hereby con�rms, ratifies and adopts the Reports, which are hereby
incorporated into and made as fully a part of this resolution to ihe same extent as if set forth in full herein.
1.OS The City is additionally modifying the boundaries oiDevelapment District No. 1.
_ ... .. ... ........ ..... . ... .... .. ..
Seciion 2. Findin s for the Ado tion and A raval of the Devela ment Pro am Modif cation.
2A 1. The Council approves the Development Program Mociification, and specifically finds
that: (a) the land within the Project area as expanded would not be available for redevelopment without
the financial aid to be sought under this Development Program; (b) the Development Program, as
modified, will afFard rnaximum opportunity, consistent with the needs of the City as a whole, for the
development of the Pro�ect by private enterprise; and (c} that the DeveIopment Pragram, as modified,
conforms to the general plan for the development of the City as a whole.
Section 3. Findings for the Establishment of T� Increment Financing Districi No. 4
3.01. The Council hereby finds that #he District is in the public interest and is a"renewal and
renovation district" under Minnesota Statutes, Section 4b9.174, Subd. 10a of ihe Acf.
3.42. The Councii further finds that the propas�d redevelopment would not occur sotely
through privatie investment within the reasonably foreseeable future and that the increased naarket value of
the site that could reasonably be expected to occur without the use of tax increment financing would be
iess than the increase in the marke� value estirnated to result fronn the proposed development after
subtracting the present value of the projec#ed tax increments for the maximum duration of the District
permitted by the TIF' Plan, that the Program and Plan conform to the general plan %r the development or
redeveIopment of the City as a whole; and that the Program and P1an will afford maxitz�um opportunity,
consistent with the sound needs of the City as a whole, for the development or redevelopment of
Development District Na 1 by pri�ate enterprise.
3.03. The Council further finds, declares and deterrriines that the Cify made the above findings
stated in this Section and has set forth the reasons and supporting facts for each determination in writing,
attached hereto as E�ibit A.
3.04. The City elects to calculate fiscal disparities for the District in accordance with Section
469.T77, Subd. 3, paragraph b af the Act, which means the fiscal disparities contribution would be talcen
from inside the District.
Section 4. Public Purpose
4.01. The adoption of the Program and Plan conforms in all respects to the requirernents af the
Act and will help ful�ll a need to develop an area of the City which is already built up, to provide
einployment opportunities, to improve the tax base and #o improve the general ecanomy of the State and
thereby serves a public purpose. For the reasons described in E�ibit A, the City believes these benefits
directly derive from the tax increment assistance provided under the TIF Plan. A private developer wil�
receive only the assistance ne�ded to make this development fnancially feasible. As such, any private
benefits received by a developer are incidental and do not outweigh the primary public benefits.
Section 5. Ap�ro�aI and Adoption of the Pro�ram and Plan
5.01. The Program and Plan, as presented to the Council on this date, including withaut
limitation the �ndings and statements of ab}ectives contained therein, are hereby approved, ratified,
estabIished, and adopted and shail be placed on file in the office of the City Administrator.
5.02. The staff of the City, the City's advisors and iegal counsel are authorized and directed to
proceed with the implementation of the Program and Plan and to negatiate, draft, prepare and present to
this Council for its consideration al] further plans, resolutions, documents and contracts necessary for this
purgose.
5.03 The Auditor of Rams�y Cour�ty is requested ta certify the original net tax capacity af the
District, as described in the Program and Plan, and to certify in each year therEafter the amount by which
the original net tax capacity has increased or decreased; and the City is autharized and directed to
forthwith transmit this request to the County Auditor in such form and content as the Auditor may
specify, together with a list of all properties within the District for which building permits have been
issued during the 18 months immediately preceding the adoption of this resolution.
5.04. The City Administrator is further authorized and directed to file a capy of the Program
and Plan with the Commissioner of the Minnesota Depart�nent of Reven�e and the �ffice of the State
Auditor pursuant to Section 469.175, Subd. 4a of the Act.
The mation for the adoption of the faregoing resolution was duly secanded by Council member
, and upon a vote being taken thereon, the following voted in favor thereof:
and the follawing voted against the same:
Dated: December 20, 2010
Mayor
ATTEST:
City Administratar
(Seal)
EXHIBIT A
RESOLUTION NO. 2010-082
The reasons and facts supporting the findings for the adoption of the Tax �ncrement Financing Plan (TIF Plan)
%r Tax Increment Financing Districi No. 4(Disfrict), pursuant to Minnesota Statutes, Sections 469.174 through
469.1799, all inclusive, as amended {Act), as required by Section 469.175, Subdiviszon 3 of the Act, are as
follows:
Finding that Tax Increment Financing District No. 4 is a renewal and renavation district as defined in
Section 469.174, Subdivision 1 Da of the Act.
The District consists of two parcels and three buildings, with plans to redevelop the area for senior housing
purposes. At least 70 percent of t�e area of the parceis in the District are occupied by buildings, streets,
utilities, paved or gravel parking lots or other similar struciures. One buildir�g (mare than 20 percent of the
buildings in the District), is structurally substandard as de�ned in the Act, and one building {more than 30
percent of the buildings in the District} requires substantial renovatior� or clearance to remove existing
conditions, such as those existing conditions defined in the Act. (See Appendix F of the TIF Plan.)
2. Finding that the proposed developinent, in the opinion of the City Council, would not reasonably be
expected to occur solely through prrvate investment within the reasonably foreseeable future and that the
inereased market value of the site that could reasonably be expected to occur without the use of tax
increment financing would be less than the increase rn the market value estimated to Nesult from the
propased developrnent after subtracting the present value of the projected tcrx increments far ihe maximum
duration of the District permrtted by the TIF Plan.
The proposed development, in the opinion of the City, would not reasonably be expected to occur solely
through private invest�nent within the reasonably fareseeable future: This �nding is supported by the fact
that the redevelopment proposed in the TIF Plan meets the City's objectives for redevelopment. There are
higher costs associated with redeveloping the site due to acconntnodating existing residents in their current
units until the new facility is constrUcted; reiocating existing residents to the new facility; and sit�
constraints related to topography, grading, demolition at�d utilities for constructing the new facility adjacent
to the existfng facility. In addition, increased landscaping will he required to provide an adequate buffer
and screening from tl�e adjacent singte-famiIy homes. Due to th�se higher costs of redevelapment on the
parceis this project is feasible only through assistance, in part, fro;m tax increment �nancing. The
develaper was asked for and provided a letter and a proforma as justification that the developer would not
have gone forward without tax increment assistance. (See attachment in Appendix G of the TIF Plan.)
The increased market value of the site that could reasonably be expected to occur without the use of tax
increment financing would be less than the inerease zn market value estimated to result from the proposed
development after subtractirag the present value of the projected tax increments foY the nzc�imum duration
of the District permitted by the TIF Plan: The above finding explait�ed why the proposed redevelopment
would not likely occur without tax increment assistance. It is possible that some redevelopment of the
existing senior housing cornplex would go forward without assistance, but the unique costs of this effort
(described above} mean �hat without assistance, any alternative redeveloprnent would necessarily be carried
out at a smaller scale, and most likely over a longer period of time. I� is impossible to predict what an
alternative market valtze would be if no tax increment assisiance were provided, but it is certain that the
alternative redevelopment would produce significantly less value than the camprehensive, high quality
development that is proposed under the TIF Plan. There is no reasonable likelihood that an alternate,
unassisted developznent would add as much as $9,972,625 in market value (which is the alternate threshold
_ _ _ .. ... .. . .. ..... ...... ... .. ..
noted below).
Therefore, the City concludes as follows:
a. The City's estimate of the amount by which the market value of the entire District will increase
without the use of tax increment financing is an amount less ihan the amaunt described in ciause d
below.
b. If the proposed development occurs, the total increase in rriarket vaIue will be $12,523,6U0 (see
Appendices D and G of the TIF 1'lan)
c. The present value of tax increments from #he District for the maximum dura#ion of the District
permitted by the TIF Pian is estimated to be $2,650,975 {sea Appendices D and G of the TI�' Plan).
d. Even if some development other t,han the proposed development were to occur, the CounciI finds that
no alternative would occur that wouId produce a market value increase greater than $9,972,625 (the
amount in clause b less tha amount in clause c without tax increznent assistance.
3. Finding that the TIF Plan for the District coraforms to the general plan far the development or
redevelopment af the municipality as a whole.
The Plan:ning Commissian reviewed the TIF 1'lan and found that the TIF Plan conforms ta the genez'al
development plau of the City.
4. Finding that the TIF Plan for the District will afford maximurn opportunity, consistent with the sound needs
af the City as a whole, for� the development or redevelopment of Development District No. 1 by private
enterprise.
The project to be assisted by the District wiIl result in the redeveloprnent of substandard properties,
increase the availability of safe and decent Iife-cycle housing in the City, increase the t� base of #he 5tate
and add a high quality development to the City.
Attachment
Resolut�on 2010-OS3
City of Arden Hills
City Councal Meeting for December 20, 2010
CITY OF ARDEN HILLS
RAMSEY COUNTY
�TATE OF MINNESOTA
Council metnber introduced ihe following resolution and moved ats adoption:
RESOLUTION NO. 2010-083
RE�OLUTION AUTHORTZING AN INTERFUND LOAN �OR ADVANCE OF
CERTAIN COSTS IN CQNNECTION WITH TAX INCREMENT FINANCING
DISTRICT N0. 4.
BE IT RESOLVED by the Cfty Council (the "Council") of the City af Arden Hills, Minnesota
(the "Ciiy"}, as follows:
Section 1. Back our�d.
LOl. The City has heretofore approved the establishrnent of Tax increment Financing District
No. 4(the "TIF District") within Development District Na. 1(the "Project"), and has adopted a T�
Tncrement Financing Plan (the "TIF Plan") far the purpose of financing certain improvetxients within the
Project.
1.02. The City has determined to pay for certain costs identified in the TI�' Plan consisting of
land/building acquisition, site improvements/preparation, public utilities, streets and sidewalks, other
housing improvements, interest and administrative costs {coIlectively, the "Qualified Costs"), which costs
may be financed on a temporary basis fram City funds available for such purposes.
1.U3. Under Minn�sata Statutes, Section 469.178, Subd. 7, the City is authorized to advance or
loan money from the City's general fund or any other fund from which such advances may be legally
authorized, in arder to finance the Qualified Costs.
1.04. The City iniends to reimburse itself for the Qualified Costs from tax increments derived
from the TIF District in accordance with the terms of this resolution (which terms are referred to
collective]y as the "Interfund Loan").
Section 2. Terms of Interfund Loan.
2.0 i. The City hereby authorizes the advance of up to $415,000 from the PIR fund or sa much
thereof as may be paid as Quaiified Costs. The City shall reimburse itself for such advances together with,
interest at the rate stated below. Interest accrues on the principal amount from the date of each ad�ance.
The maxirnurna rat� ot' interest perrnitted to be charged is limited to the greater af the rates specified u:nder
Minnesota Siatutes, Section 270C.40 ar Section 549.09 as of the date the loan or advance is au�thorized,
unless the writ�en agreement states that the maximurr� interest rate will fluc#uate as the interest rates
specified under Minnesoia Statutes, Section 270G40 ox' Section 549.09 are from tinrxe to time adjusted.
The interest rate shaIl be 4% and will not fluctuate.
2.02. PrincipaI and interest ("Payments") on the Interfund Loan shall be paid semi-annually on
each August 1 and February 1(eac� a"Payment Date"}, com2nencing on the first Payment Date on which
the Authority has Available Taac Increment (defined below}, or on any ather dates determined by the City
_ _ _ _ _ __ ... . ...
Administrator, �hrough the date of last receipt of taac increment from the TIF Disirict.
2.03. Payments on this In#erfund Loan are payable solely from "Available Tax Increment,"
which shali mean, on each Payment Date, ta�c increment available after other ob�igations have been paid,
or as determined by fi11e City Administrator, generated in the preceding six {6) months with respect to the
property within the TIF District a�d remi�ted to the City by Ramsey County, al� in accordance with
Minnesota Statutes, Sections 469.174 to 4b9.1799, all inclusive, as amended. Payments on this Interfund
Loan may be subordinated to any outstanding or future bonds, notes or contracts sect�red in whole or in
part wi� Available Tax Increment, and are on parity with any other outstanding ar future interfund loans
secured in whoIe or in par� with Available Ta� Increment.
2.04. The principal sum and all accrued itaterest payable under this InterFund Loan are pre-
payable in whole or in part at any time by the City without premium or penalty. No partial prepay�ment
s1tall affect the axnount or timing of any other regular paynnent o�he:rwis� r�quired t� be made under this
Interfurid Loan.
2.05. This Interfund Loan is evide�ce of an internal borrowing by �he City in accordance wi�h
Minnesota Statutes, Section 469.178, Subd. 7, and is a l�mited obfigation payable solely firo�a Available
Tax Increment pledged to the payment hereof under this resolution. This Interfund Loan and the interest
hexeon shall not be deemed to constitute a general obligation of the State of Minnesota or any political
subdivision thereof, including, without iitnitation, the City. Neither the State of Minnesota, nor any
politicaI subdivision thereof sha1I be obligated to pay t�e principal of or interest on this Intierfund Loan or
other costs incident hereto except ont of Available Tax Inerement, and neither the full faitk� and credit nor
the ta��ing power af the State of Minnesota or any political subdivision thereof is pledged to the payment
o��e principal of or interest on #his Interfund Loan or other costs incident hereto. The City shall have no
obligation to pay any principal amount of the Untex�fund Loan or accrued interest tl�ereon, which may
rexx�.ain unpaid after the final Payment Date.
2.06. The City may amend the terms of this Interfund Loan at any time by resolution o� the City
Council, including a determination to forgive the outstanding pri�cipal a�nount a�d accrued interest to tlae
extent permissible under law.
5ec#ion 3. Effective Date. This resolution is effective upon the date of its approval.
The motion far the adoption of the foregoing resolufiian was duly seconded by Council member
, and upon a vote being taken therean, the following voted in favor thereaf:
and the foIlowing voted against the same:
Dated: Dacember 20. 2010
Stan Harpstead, Mayor
ATTEST:
Patrick Klaers, City Administrator
(Seal)