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HomeMy WebLinkAbout06-05 - ADMIN Resolution - Economic Development Authority - 2006/02/21ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 06-05 RESOLUTION APPROVING ERF GRANT DISBURSING AGREEMENT BETWEEN ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY AND HIGHWAY 7 BUSINESS CENTER LLC BE IT RESOLVED By the Board of Commissioners ("Board") of the St. Louis Park Economic Development Authority ("Authority") as follows: Section 1. Recitals. 1.01. The Authority has determined a need to exercise the powers of a housing and redevelopment authority, pursuant to Minnesota Statutes, Sections. 469.090 to 469.108 ("EDA Act"), and is currently administering Redevelopment Project No. 1 ("Redevelopment Project") pursuant to Minnesota Statutes, Sections 469.001 to 469.047 ("HRA Act"). 1.02. The Authority intends to enter into that certain Environmental Response Fund Grant Agreement (the "ERF Grant Agreement") between the Authority and Hennepin County by and through its Department of Environmental Services (the "County"), under which the County has granted to the Authority a sum not to exceed $4,750,000.00 (the "ERF Grant") pursuant to Minnesota Statutes, Section 383B.81 (the "ERF Act"); and 1.03. Pursuant to the ERF Grant Agreement, the Authority proposes to grant proceeds of the ERF Grant to Highway 7 Business Center, LLC (the "Redeveloper") to pay or reimburse a portion of the cost of acquisition of certain property in the Redevelopment Project. 1.04. The Authority and Redeveloper propose to enter into an ERF Grant Disbursing Agreement ("Agreement"), setting forth the terms and conditions for disbursement of the ERF Grant. 1.05. The Board has reviewed the Agreement and finds that the execution thereof and performance of the Authority's obligations thereunder are in the best interest of the City and its residents. Section 2. Authority pproval; Further Proceedings. 2.01. The Agreement as presented to the Board is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the documents by such officials shall be conclusive evidence of approval. 2.02. The President and Executive Director are hereby authorized to execute on behalf of the Authority the Agreement and any documents referenced therein requiring execution by the Authority, and to carry out, on behalf of the Authority its obligations thereunder. EDA Resolution No. 06-05 -2- Approved by the Board of Commissioners of the St. Louis Park Economic Development Authority this 21 st day of February, 2006. President ATTEST: �ll�C�tlk Secretary 0 Second Draft February 16, 2006 EDA Resolution No. 06-05 -3- ERF GRANT DISBURSEMENT AGREEMENT By and Between ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY and HIGHWAY 7 BUSINESS CENTER LLC Dated as of: , 2006 This document was drafted by: KENNEDY & GRAVEN, Chartered 470 U.S. Bank Plaza Minneapolis, Minnesota 55402 (612)337-9300 http://www.kennedy-graven.com EDA Resolution No. 06-05 -4- GRANT DISBURSEMENT AGREEMENT THIS AGREEMENT, made as of the day of 2006, by and between the St. Louis Park Economic Development Authority (the "Authority"), a public body corporate and politic under the laws of Minnesota, and Highway 7 Business Center LLC (the "Redeveloper"), a Minnesota limited liability company. WITNESSETH: WHEREAS, the Authority was created pursuant to Minnesota Statutes Sections 469.090 to 469.1081 (the "Act") and was authorized to transact business and exercise its powers by a resolution of the City Council of the City; and WHEREAS, the Authority has undertaken a program to promote the development and redevelopment of land which is underutilized within the City of St. Louis Park, Minnesota (the "City"), and in this connection created Redevelopment Project No. 1 (hereinafter referred to as the "Project") in an area (hereinafter referred to as the "Project Area") located in the City pursuant to Minnesota Statutes, Sections 469.001 to 469.047 (the "HRA Act"); and WHEREAS, pursuant to the Act, the Authority is authorized to undertake certain activities to prepare such real property for development and redevelopment by private enterprise; and WHEREAS, the Redeveloper intends to acquire the property described in Schedule A (the "Redevelopment Property") located in the Project Area, and proposes to redevelop that property for certain commercial improvements; and WHEREAS, the Authority believes that the development of the Redevelopment Property pursuant to and in general fulfillment of this Agreement, are in the vital and best interests of the City, will promote the health, safety, morals, and welfare of its residents, and will be in accord with the public purposes and provisions of the applicable State and local laws and requirements under which the Project has been undertaken and is being assisted; and WHEREAS, the Authority intends to enter into that certain Environmental Response Fund Grant Agreement (the `ERF Grant Agreement") between the Authority and Hennepin County by and through its Department of Environmental Services (the "County"), under which the County has granted to the Authority a sum not to exceed $4,750,000.00 (the "ERF Grant") pursuant to Minnesota Statutes, Section 38313.81 (the `ERF Act"); and WHEREAS, pursuant to the ERF Grant Agreement, the Authority proposes to grant proceeds of the ERF Grant to Redeveloper to pay or reimburse a portion of the cost of acquisition of the Redevelopment Property; and WHEREAS, the Authority and Redeveloper entered into a Letter of Intent dated October 10, 2005 (the "LOI"), under which the parties agreed to negotiate a definitive development agreement (the "Contract") regarding redevelopment of the Redevelopment Property and the parties' respective responsibilities in that effort; and WHEREAS, in accordance with the LOI, the Authority has initiated the process to create a redevelopment tax increment financing district ("TIF District") that includes the EDA Resolution No. 06-05 -5- Redevelopment Property, but the TIF District has not been approved by the Authority or the City; and WHEREAS, the Redeveloper has entered into a purchase agreement to acquire a portion of the Redevelopment Property identified on Exhibit A hereto as the "Golden Auto Parcel;" and WHEREAS, in order to meet requirements under that purchase agreement, Redeveloper has determined a need to close on acquisition of the Golden Auto Parcel on or before February 28, 2006, and the Authority has agreed to disburse proceeds of the ERF Grant to apply toward the cost of such acquisition prior to finalization of a definitive Contract, subject to the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 1. ERF Grant Disbursement. The Authority will disburse proceeds of the ERF Grant to Redeveloper (or Redeveloper's title company) at closing on Redeveloper's acquisition of the Golden Auto Parcel (the "Closing Date"). The Closing Date is currently expected to be February 28, 2006, but may be extended by mutual agreement of those parties to a date no later than June 30, 2006. Grant funds will be used solely to apply toward the purchase price for acquisition of the Golden Auto Parcel. Prior to and as a condition to such disbursement, Redeveloper shall deliver to the Authority an executed copy of the purchase agreement between Redeveloper and owner of the Golden Auto Parcel and the closing statement for such purchase. 2. Construction of Improvements. Redeveloper shall construct on the Redevelopment Property, including the Golden Auto Parcel, an approximately 78,000 square foot office and showroom building (the "Minimum Improvements"). Construction of the Minimum Improvements must be substantially complete by December 31, 2007. The parties agree and understand that requirements for approval of construction plans and other matters related to the Minimum Improvements will be specified more definitively in the Contract. 3. Business Subsidy Provisions. (a) The parties agree and understand that the assistance provided to Redeveloper in this Agreement does not constitute a "business subsidy" under Minnesota Statutes, Sections I I6J.993 to 116J.995 (the "Business Subsidy Act"), because the ERF Grant represents assistance that is exempt from the Business Subsidy Act under Sections 116J.993, Subdivision 3, clauses (4) and (8). (b) Redeveloper acknowledges that under Section 116J.993, subdivision 7(c) of the Business Subsidy Act, the Redeveloper is nevertheless required to file annual reports containing the information described in Section 4 hereof. The Redeveloper must submit such reports at the times required under Section 4. If the Redeveloper fails to timely file any required report, the Authority will mail the Redeveloper a warning within one week after the required filing date. If, after 14 days of the postmarked date of the warning, the Redeveloper fails to provide a report, the Redeveloper must pay to the Authority a penalty of $100 for each subsequent day until the report is filed. The maximum aggregate penalty payable under this Section $1,000. 4. Reports. (a) The Redeveloper must submit to the Authority a written report by no later than March 1 of each year, commencing March 1, 2007 and continuing until four years after the date of issuance of the Certificate of Completion for the Minimum Improvements. The report must comply with the ERF Grant Agreement, the Met Council Grant Agreement and the County Grant Agreement, and must contain at least the following items as of each reporting date: EDA Resolution No. 06-05 -6- (1) a statement describing all assistance provided to date under this Agreement, including the type and public purpose. (2) progress toward completion of the hazardous waste remediation on the Redevelopment Property, demolition, and construction of the Minimum Improvements during the previous calendar year; (3) evidence of the net tax capacity of the Redevelopment Property and improvements thereon for the current tax -payable year; (4) a statement regarding each owner tenant's location prior to the date of this Agreement; and (5) any other information requested by the Authority or the County. The Authority will provide information to the Redeveloper regarding the required forms. 5. Grant Requirements. (a) Redeveloper shall undertake all work related to the Minimum Improvements in compliance with the ERF Grant Agreement and all applicable federal and state laws, including without limitation all applicable state and federal Occupational Safety and Health Act regulations, especially the federal Hazardous Waste Operations and Emergency Response standards under 29 C.F.R. sections 1910.120 and 1926.65. Any subcontractors retained by Redeveloper shall be subject to the requirements of this Section, which shall be included in any subcontracts between the Redeveloper and subcontractor. (b) Redeveloper shall, at all times during the term of this Agreement, maintain insurance coverage that complies with Section 9 of the ERF Grant Agreement, and shall provide evidence thereof to the Authority prior to commencing any work on the Redevelopment Property. (c) The parties agree and understand that under the definitive Contract, the Authority expects to provide additional grant funds to Redeveloper from the Minnesota Department of Employment ("Deed") and the Metropolitan Council ("Met Council"), primarily for certain environmental remediation costs. Redeveloper acknowledges that the grant agreements between the Authority and Redeveloper will impose additional requirements related to the activities funded by those grants, including without limitation prevailing wage requirements under Minnesota Statutes, Section 1167.871. The precise terms and conditions related to those grants will be specified in the Contract. 6. Negotiation of Contract. (a) The parties will continue to negotiate a Contract under the terms and conditions described in the LOI. Notwithstanding anything to the contrary in the LOI, the term of the LOI continues through September 30, 2006. If a Contract is not approved by the parties as of that date, the Authority shall have no further obligations to Redeveloper, but Redeveloper shall either (a) remain obligated to construct the Minimum Improvements in accordance with Section 2 hereof, or (b) promptly return the ERF Grant funds disbursed hereunder. (b) Nothing in this Agreement will be construed to require the Authority or City to approve a TIF District, and the approval of a TIF District and provision of tax increment assistance to Redeveloper are conditioned upon the Authority and City holding the hearings and making the findings required under Minnesota Statutes, Sections 469.174 to 469.179. EDA Resolution No. 06-05 -7- 7. Payment of Authority Costs. The Redeveloper agrees that it will pay, within 15 days after written notice from the Authority, the reasonable costs of consultants and attorneys retained by the Authority in connection with the creation of the TIF District and the negotiation in preparation of the ERF Grant Agreement, this Agreement and other incidental agreements and documents related to the development contemplated hereunder. The Authority will provide written reports describing the costs accrued under this Section upon request from the Redeveloper, but not more often than intervals of 45 days. Any amount deposited by the Redeveloper upon or in connection with application for tax increment assistance will be credited to the Redeveloper's obligation under this Section. Upon termination of this Agreement in accordance with its terms, the Redeveloper remains obligated under this section for costs incurred through the effective date of termination. 8. Records. The Authority, the County, the Legislative Auditor and the State Auditor's office, through any authorized representatives, shall have the right after reasonable notice to inspect, examine and copy all books and records of Redeveloper relating to the ERF Grant and the Minimum Improvements. Redeveloper shall also use best efforts to cause the contractor or contractors, all sub -contractors and their agents and lenders to make their books and records relating to the Minimum Improvements available to the Authority, upon reasonable notice, for inspection, examination and audit. Redeveloper shall maintain such records and provide such rights of inspection for a period of six years after substantial completion of the Minimum Improvements. 9. Release and Indemnification Covenants. (a) Except for any willful misrepresentation or any willful or wanton misconduct or negligence of the Indemnified Parties as hereinafter defined, and except for any breach by any of the Indemnified Parties of their obligations under this Agreement, the Redeveloper releases from and covenants and agrees that the Authority, the City, and the governing body members, officers, agents, servants, and employees thereof (the "Indemnified Parties") shall not be liable for and agrees to indemnify and hold harmless the Indemnified Parties against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Redevelopment Property or the Minimum Improvements. (b) Except for any willful misrepresentation or any willful or wanton misconduct or negligence of the Indemnified Parties, and except for any breach by any of the Indemnified Parties of their obligations under this Agreement, the Redeveloper agrees to protect and defend the Indemnified Parties, now and forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action, or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, maintenance, and operation of the Redevelopment Property, including without limitation any claim by the County under the Grant Agreement. Without limiting its obligations hereunder, Redeveloper specifically agrees to defend and hold harmless the Authority and City form any claim arising under Section 3 of the ERF Grant Agreement, for repayment to the County of proceeds (or any portion thereof) from any sale of the Golden Auto Parcel. (c) Except for any willful misrepresentation or any willful or wanton misconduct or negligence of the Indemnified Parties as hereinafter defined, and except for any breach by any of the Indemnified Parties of their obligations under this Agreement, the Indemnified Parties shall not be liable for any damage or injury to the persons or property of the Redeveloper or its officers, agents, servants, or employees or any other person who may be about the Redevelopment Property or Minimum Improvements. EDA Resolution No. 06-05 -8- (d) All covenants, stipulations, promises, agreements and obligations of the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements, and obligations of such entity and not of any governing body member, officer, agent, servant, or employee of such entities in the individual capacity thereof. 10. Default. (a) The following shall be "Events of Default' under this Agreement and the term "Event of Default' shall mean, whenever it is used in this Agreement, any one or more of the following events, after the non -defaulting party provides 30 days written notice to the defaulting party of the event, but only if the event has not been cured within said 30 days or, if the event is by its nature incurable within 30 days, the defaulting party does not, within such 30 -day period, provide assurances reasonably satisfactory to the party providing notice of default that the event will be cured and will be cured as soon as reasonably possible: (1) Failure by the Redeveloper or Authority to observe or perform any covenant, condition, obligation, or agreement on its part to be observed or performed under this Agreement. (2) If, before completion of the Minimum Improvements, the Redeveloper shall (i) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the United States Bankruptcy Act or under any similar federal or State law; or (ii) make an assignment for benefit of its creditors; or (iii) admit in writing its inability to pay its debts generally as they become due; or (iv) be adjudicated a bankrupt or insolvent. (b) Whenever any Event of Default occurs, the Authority or Redeveloper may take the following actions: (1) The Authority may suspend its performance under the Agreement until it receives assurances that the defaulting party will cure its default and continue its performance under the Agreement. (2) Upon an Event of Default by the Redeveloper, the Authority may withhold payments under Note in accordance with its terms, or may terminate the Note and this Agreement. (3) The Authority or Redeveloper may take whatever action, including legal, equitable, or administrative action, which may appear necessary or desirable to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant under this Agreement. 11. No Remedy Exclusive; No Waiver. (a) No remedy herein conferred upon or reserved to any party is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. To entitle the Authority to exercise EDA Resolution No. 06-05 -9- any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article IX. (b) In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. 12. Attorney Fees. Whenever any Event of Default occurs and if the Authority shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement of performance or observance of any obligation or agreement on the part of the Redeveloper under this Agreement, the Redeveloper agrees that it shall, within 10 days of written demand by the Authority, pay to the Authority the reasonable fees of such attorneys and such other expenses so incurred by the Authority. 13. Miscellaneous. (a) This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. (b) The Authority may record this Agreement and any amendments thereto with the Hennepin County recorder. The Redeveloper shall pay all costs for recording. (c) This Agreement will be construed in accordance with the laws of the State, and any claim arising from this Agreement will be adjudicated in the State. (d) The Redeveloper acknowledges that nothing contained in this Agreement nor any act by the Authority or the Redeveloper shall be deemed or construed by the Redeveloper or by any third person to create any relationship of third -party beneficiary, principal and agent, limited or general partner, or joint venture between the Authority and the Redeveloper. (e) This Agreement may be modified solely through written amendments hereto executed by the Redeveloper and the Authority. (f) Unless otherwise specified, any approval required by the Authority under this Agreement may be given by the Authority Representative. 14. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under the Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally, to the following addresses (or to such other addresses as either party may notify the other): To Redeveloper: Highway 7 Business Center LLC 90 South 7th St, Suite 4500 Minneapolis, MN 55402 To Authority: St. Louis Park EDA Attn: Executive Director 5005 Minnetonka Boulevard St. Louis Park, Minnesota 55416-2518 EDA Resolution No. 06-05 -10- 15. Assignment. Prior to completion of the Minimum Improvements, Redeveloper may not transfer or assign in any manner its interest in this Agreement or the Golden Auto Parcel without prior written approval of the Authority, except for (a) any transfer or assignment to CPE Exchange 26084, LLC to facilitate a Section 1031 exchange; and (b) any encumbrances or collateral assignments made or granted by way of security for, and only for, the purpose of obtaining construction, interim or permanent financing necessary to enable the Redeveloper or any successor in interest to acquire the Redevelopment Property or to construct the Minimum Improvements. EDA Resolution No. 06-05 -it- IN WITNESS WHEREOF, the Authority and Redeveloper have caused this Agreement to be duly executed by their duly authorized representatives as of the date first above written. ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director STATE OF MINNESOTA ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _ day of 12006 by and the President and Executive Director of the St. Louis Park Economic Development Authority, on behalf of the Authority. Notary Public EDA Resolution No. 06-05 -12- HIGHWAY 7 BUSINESS CENTER LLC Its STATE OF MINNESOTA ) SS. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 2006, by the of Highway 7 Business Center LLC, a Minnesota limited liability company, on behalf of the limited liability company. Notary Public EDA Resolution No. 06-05 -13- SCHEDULE A DESCRIPTION OF REDEVELOPMENT PROPERTY GOLDEN AUTO PARCEL OTHER PARCELS