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<br />PRELIMINARY DEVELOPMENT AGREEMENT
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<br />THIS AGREEMENT, made and entered into as of the Thirteenth day of September, 2006, by and between THE
<br />CITY OF CENTERVILLE, MINNESOTA, as Minnesota public body corporate and politic, the ("City"), whose address is
<br />1880 Main Street, Centerville, Minnesota 55014, and CENTERVILLE MAINSTREET, LLC. a Minnesota limited liability
<br />corporation ("Developer") whose address is 750 Second Street N.E. Suite 100, Hopkins, Minnesota 55343.
<br />
<br />BACKGROUND
<br />
<br />WHEREAS, in the summer of 2005, the City of Centerville commissioned Damon Farber Associates to lead a
<br />community task force to prepare a master plan, a set of design guidelines and zoning amendments for the
<br />redevelopment of Downtown Centerville;
<br />
<br />WHEREAS, on January 11,2006, The Master Plan and Development Guidelines (the "Master Plan"), a copy of
<br />which is to be attached hereto as Exhibit A, were adopted by the City (the "Redevelopment Project"). The Master Plan
<br />was established to provide an appropriate framework for the future redevelopment of Centerville's downtown as a vibrant
<br />mixed-use destination
<br />
<br />WHEREAS, pursuant to Minnesota Statues, Section 469.028 the City is authorized to establish Redevelopment
<br />Projects in order to provide for the redevelopment of the City;
<br />
<br />W HERAS, pursuant to Minnesota Statues, Section 469.176, the City is authorized to finance the capital and
<br />administration costs of a Redevelopment Project with tax increment revenues derived from a tax increment financing
<br />district established within such redevelopment project(s);
<br />
<br />WHEREAS, among the major objectives of the City in establishing the Redevelopment Project and the Tax
<br />Increment District are to: eradicate blight and blighting conditions within the City, enhance the tax base of the City,
<br />provide decent, safe, and sanitary housing opportunities for the residents of the City, promote and secure the prompt
<br />commercial development of certain real property located in the Redevelopment Project, which property is not now in
<br />productive use or in its highest and best use, in a manner consistent with the City's Comprehensive Plan and with a
<br />minimum adverse impact on the environment, and promote and create additional employment opportunities within the
<br />City for residents of the City and the surrounding area, thereby improving living standards and reducing unemployment;
<br />
<br />WHEREAS, as a part of the implementing the Master Plan, within the Redevelopment Project the City has
<br />assem bled various properties owned by the City and acquired the right to obtain other properties within the
<br />Redevelopment Project area; WHEREAS, at the August 9,2006, joint Centerville City Council and Planning Commission
<br />work session, Developer presented its qualifications as developer for the Downtown Centerville Redevelopment Project.
<br />After demonstrating the ability to develop commercial, retail, multifamily housing along with for-sale townhomes,
<br />Developer was instructed to start working on a Development Agreement with the City Attorney and the City
<br />Adm in istrator.
<br />
<br />WHEREAS, the redevelopment of the Redevelopment Property, as provided herein would not be economically
<br />feasible "but-for" the land assemblage achieved and public improvements to be financed by the City;
<br />
<br />WHEREAS, the City believes that the redevelopment of the Redevelopment Project are in the vital and best
<br />interests of the City and the health, safety, morals and welfare of its residents, and in accord with the public purposes
<br />and provisions of applicable federal, state and local Jaws; and
<br />
<br />WHEREAS, the purpose of this Agreement is to set forth the basic understandings between the parties with
<br />respect to the development of portions of the area contained in the Master Plan, which are included in this Agreement
<br />and which are described in Section 2 below, to provide the Developer with an exclusive period of time in which the
<br />Developer and the City will negotiate a Redevelopment Agreement the terms and conditions of which will conform to the
<br />principal outlines above:
<br />
<br />NOW THEREFORE, in consideration of the premises and mutual obligations of the parties hereto, the receipt
<br />and sufficiency of which is hereby acknowledged, each of them do hereby covenant and agree with the other as follows:
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