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2010-04-27 CC Meeting Packet Enclosure
r S ^ L,. Oak Park Heights ' Request for Council Action Meeting Date: Auril 27tr'. 2010 Time Required: io Minutes Agenda Item Title: Nolde Development — NW— NW Corne of Oak green Ave, and �8 stree Anuroval of M ultifa mil sing Rcv_ Bc>nds a nd Tax Increment Development t� reement Agenda Placement: Old Bu, ' . s Originating Department /R 71or ric tTcshnsan, Ci Ad Requester's Signature - Action Requested. _ _ An prn^ lic�th resol L1ti,Qi�s as listed Belo uy, Backgrou nd /justi cation (Please indicate if any previous action has been taken, or if other public bodies have advised)-. BONG! ISSUANCE: The City has received a request for City Financial Assistance from Developer Tim Nolde of Green Twig, L.LC, a Minnesota limited liability company (the "Borrower"), proposing that the City issue revenue bonds in an aggregate principal amount not to exceed $16,000,000, in one or more series at one time or from time to time (the "Bonds"), the proceeds of which will be loaned by the Citv to the Borrower to be applied by the Borrower to the acquisition, construction, and equipping of an approximately 120 -unit assisted living facility with 26 memory care units, 65 assisted care units, and 29 independent care units, located at the Northwest quadrant of the intersection of Oakgreen Avenue and 58th Street in the City (the "Project "). Mr. Nolde is responsible to pay all City associated costs with the preparation and issuance of these bonds. The Citv is not oledaina anv tax levvino authority to reoav these bonds: should these ao into default the Citv is. not leaaliv or ethically obligated to reoav these bonds. The Citv however will be lending its name to the project and will have Iona -term carrvina costs. for examole it will need to be noted on the Citv Financial Statements and. the Citv will be reauired to act as a oavina aaent to the bond holders. The City has engaged the services of Bond Counsel Jennifer Boulton of Kennedy & Graven law Firm as well as Nick Skarich of Northland Securities to assist in the review of this request. I am anticipating that Jennifer Boulton will be present at the meeting to answer any questions. 'SAX INCREMENT DISTRICT: Also, in June of 2009, the City Council did approve the creation of the TAX INCREMENTAL FINANCING DISTRICT to assist Mr. Nolde in land assembly costs and demolition. That TIF approval has been accommodated and translated in the enclosed TIF Agreement. While the fundamental cost structures have not changed since the 2009 approvals, one meaningful change to note is the separation of the two phases of the project, being the 4 -story 120 unit assisted living facility and the 48- unit common building. The initial concept was to allow up to 80% of the TIF revenues to be generated from Phase 1 (120 unit facility) with the balance from Please It. In this fashion, Mr. Nolde has significant incentive for constructing both Phases. Mr. Nolde, did have issues securing funding under this separation and sought to attain all the TIF revenue from Phase I . While this is understandable in today's market, it did leave a reduced incentive to actually construct both project phases. Accordingly, the Agreement now requires that Mr. Nolde provide a $100,000 cash deposit or Letter of Credit that will be utilized as a penalty payment to the City should he not complete both project Phases by 12131115. Mr. Nolde would still however be required to complete all public improvements to the project for both phases, pay all fees, land dedications and convey all lands as required to the City along Oakgreen Ave. The balance of the agreement remains as anticipated. Page 31 of 80 12R ' 1J� U9_`,Uj a At this time, Mr. Tim Nolde's project at the NW corner of 58 Street and ©akgreen Ave. is ready to proceed to the next phase, that being the finalization of the Tax Incremental Financing Dian and the approval of the Bond Issuances. Accordingly, the City Council must approve each independently: Approve the following documents: 1. Bond Approval Resolution 2. Approval TIF Development Agreement Resolution & Agreement Page 32 of 80 RESOLUTION NO, AU'T'HORIZING THE ISSUANCE, SALT, AND DELIVERY OF ITS MULTIFAMILY HOUSING REVENUE BONDS (OAKGREEN COMMONS PROJECT), SERIES 2010; ADOPTING A HOUSING PROGRAM PURSUANT TO MINNESOTA STATUTES, CHAPTER 462C; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE BONDS AND RELATED DOCUMENTS; PROVIDING FOR THE SECURI'T'Y, RIGHTS, AND REMEDIES WITH RESPECT TO THE BONDS; AND GRANTING APPROVAL FOR CERTAIN OTHER ACTIONS WITH RESPECT THERETO Wl if REAS, the City of Oak Park 1leights, Minnesota (the "City'% is a political subdivision of the State of Minnesota and W1 AS, pin'stlanl to Minnesota Statutes, Chapter 4620, as amended (the "Act" ) the City is authorized to carry out the public purposes described in the Act by issuing revenue bonds to finance or refinallCe I11LIltif ll11lly housing developments located within the City, and as a condition to the issuance of such revenue bonds, adopt a housing program providing the information required by Section 462C.03, Subdivision la, of the Act; and W11EIZ AS, in the issuance of the City's revenue bonds and In the Illaking of a loan to finance a nwltifanlily housing development the City may exercise, within its corporate limits, any oi' the Powers that the Minnesota 11otrsill- finance Agency may exercise under Minnesota Statutes, Chapter 462A, as amended, without limitation under the provisions of Minnesota Statutes, Chapter 475, as amended; and W111 Rh,AS, (akgreen Commons, I- LC, a Minnesota limited liability company (the "Borrower "), has requested that the City issue its revenue bonds under the Act and lend the proceeds thereof to the Borrower to finance the following: (i) the acquisition, construction, find equipping of a 120 -111lit assisted living facility with 26 memory care units, 60 assisted care units, and 34 independent living units, to be located at the Northwest quadrant of the intersection of Oakgreen Avenue and 38' Street in the City (the "Project "); (ii) the payment of interest. on the bonds during the construction of the PrOiect; (iii) the funding of required reserves; and (iv) the payment of certain costs related to file issuance of the bonds; and W11EIZEAS, the Project is designed and intended to be used primarily for seniors for rental occupancy but is not restricted to persons age 55 and older; and Wl-IERI: AS, the City has prepared a housing program (the "I- lousing Program" Ol " Program ") to authorize the issuance by the City ol'revenue bonds in the maximum principal amount of $ 16,000,000 to finance the acquisition, construction, and equipping of the Project; and WIJEREAS, a notice of public hearing (the "Public Notice ") was published in the Slilh► (hi elle, the official newspaper and a newspaper of general Circulation in the City, with respect to: (i) the required public hearing under Section 147(4} of the Internal RCVCIILIe Code of 1986, as amended (the "Code"); (ii) the required public hearing under Section 462C.04, subdivision 2, of the Act; (iii) the 1-lousing Program; and (iv) approval of the issuance of the Bonds, as hereinafter defined; and WI-IERCAS, the Public Notice was published at least fifteen (15) clays before the regularly scheduled meeting of the City Council of the City (the "City Council "), and oil March 30, 2010, the City 3087M JS13 AK I4 > -2 Page 33 of 80 Council conducted a public hearing at which a reasonable opportunity was provided for interested individuals to express their views, both orally and in writing; and WHEREAS, tlhe Borrower has requested that the City issue, sell, and deliver its Multifamily Housing Revenue Bonds (Oakgreen Commons, LL.0 Project), Series 2010 (the "Bonds "), In the original aggregate principal amount not to exceed $ 16,000,000; and WHEREAS, on February 23, 2010, the City Council adopted Resolution No. 10- 02 -08, authorizing the submission of an application to the office of Minnesota Management & Budget for an allocation of bonding authority with respect to the Bonds to finance the Project in accordance with the requirements of Minnesota Statutes, Chapter 474A, as amended (the "Allocation Act "); and WHEREAS, the proceeds derived from the sale of the Bonds will be loaned by the City to the Borrower pursuant to the terms of a Loan Agreement, dated on or after May 1, 2010 (the "Loan Agreement "), between the City and the Borrower, whereby the City will apply the proceeds derived from the sale ofthe Bonds to fund a loan to the Borrower; and WI- 1l::Rl;AS, as further security for the repayment of principal and interest on the Bonds, the Borrower will execute a Combination Mortgage, Security Agreement, Assignment of' Leases and Rents and Fixture Financing Statement, dated on or after May 1 2010 (tile "Mortgage ") fir the benefit of the City and assigned to the "Trustee and a Collateral Assignment of Tax Increment Revenue Note, dated on or after May 1, 2010 (tile "Assignment of TIF Note") for the benefit of the Trustee; and Wlll:;RI AS, the Bonds will be issued pursuant to this resolution and an indenture of "]'rust, dated on or after May 1, 2010 (the "Indenture "), between the City and a bond trustee (the "'Trustee "), and the Bonds and the interest on the Bonds: (i) shall be payable solely from file revenues pledged therefor tinder the Loan Agreement; ([r) shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation; (iii) shall not constitute nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers; (iv) shall not constitute it charge, lien, or encumbrance, legal or equitable, upon any property of the City other than the City's interest in the Loan Agreement; and (v) shall not constitute a general or moral obligation of the City; and NOW, "i HLRI FORE, B1; iT RESOLVEL) BY THE CI'T'Y COUNCIL OF THE CITY OF OAK PARK HEIGHTS, MINNESOTA, AS I'OLL,OWS: 1. 7'he City acknowledges, finds, determines, and declares that the issuance of the Bonds is authorized by the Act and is consistent with the purposes of the Act and that the issuance of the Bonds, and the other actions ofthe City under the Indenture, the Loan Agreement, and this resolution constitute a public purpose and are in the interests of the City. in authorizing the issuance of the Bonds for the financing of the Project and the related costs, the City's purpose is and the effect thereof will be to promote the public welfare of the City and its residents by providing multifamily housing developments For low or moderate income senior residents of the City and otherwise furthering file purposes and policies ofthe Act_ 2. The Housing Program is hereby adopted, ratified, and approved in all respects without amendment. The preparation of the Housing Program is hereby ratified, confirmed, and approved. 'The City Administrator is hereby authorized to do all other things and take all other actions as may be necessary or appropriate to carry out the Housing Program in accordance with the Act and any other applicable laws and regulations. 36587M.IS13 AK145 -2 Page 34 of 80 3. For the purposes set forth above, there is hereby authorized the issuance, sale, and delivery of the Bonds in one or more series in the nlaxiilninl aggregate principal amount not to exceed $16,000,000. The Bonds shall beat interest at the rates, shall be designated, shall be numbered, shall be dated, shall mature, shall be in the aggregate principal amount, shall be subject to redemption prior to maturity, shall be in such form, and shall have such other terns, details, and provisions as are prescribed in the Indenture, in the form now on file with the City, with the amendments referenced herein. The City hereby authorizes the Bonds to be issued, in whole or ill part, as "tax - exempt bonds," the Interest oil which is not includable it) gross income for federal and State of Minnesota income tax purposes. All of the provisions of the Bonds, when executed as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Bonds shall be substantially in the form in the Indenture oil file with the City, which form is hereby approved, Nvith such necessary and appropriate variations, omissions, and insertions (including changes to the aggregate principal amount of the Bonds, the stated maturities of the Bonds, the interest rates on the Bonds and the terms of redemption of the Bonds) as the Mayor and the City Administrator, in their discretion, shall determine. The execution of the Bonds with the manual or facsimile signature of the Mayor and the City Administrator and the delivery of the Bonds by the City shall be conclusive evidence Of Such determination. 4. The Bonds shall be special, limited obligations of the City payable solely from the revenues provided by the Borrower pursuant to the Loan Agreement and other funds pledged pursuant to the Indenture, however, the City does not pledge its general credit or taxing powers or any funds of the City to the payment of the Bonds. 'file City Council hereby authorizes and directs the Mayor and the City Administrator to execute the Indenture, and to deliver the indenture to said TRIStee, and hereby authorizes and directs the execution of the Bonds in accordance with the terns of the Indenture, and hereby provides that the indenture shall provide the terms and conditions, covenants, rights, obligations, duties, and agreements of the owners of the I3onds, the City, and the Trustee as set forth therein. All of the provisions of the Indenture, when executed as authorized herein, shall be deemed to be a part of' this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in Full force and effect from the date of execution and delivery thereof. Tlie Indenture shall be substantially in the firm on file with the City, which is hereby approved, with such necessary and appropriate variations, omissions and insertions as do not materially change the substance thereof, and as the Mayor and the City Administrator, in their discretion, shall determine, and the execution thereof by the Mayor and the City Administrator shall be conclusive evidence Of such determination. 5. J'fie Mayor and the City Administrator are hereby authorized and directed to execute and deliver the Loan Agreement, the Consent and Acknowledgement to the Assignment, and the Bond Purchase Agreement, dated o or after May I, 2010 (the "Bond Purchase Ag n reement "), between llotigherty & Company LLC (the "Underwriter "), the City, and the Borrower. All of the provisions of the Loan Agreement, the Assignment, and the Bond Purchase Agreement, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if' incorporated verbatim herein and shall be in full force and effect from the (late of execution and delivery thereof. The Loan Agreement, the Assignment and the Bond Purchase Agreement shall be substantially in the forms on file with the City which are hereby approved, with such omissions and insertions as do not materially change the substance thereof, and as the Mayor and the City Administrator, in their discretion, shall determine, and the execution thereof by the Mayor and the City Administrator shall be conclusive evidence of such determinations. 6. To ensure compliance with certain rental and occupancy restrictions imposed by the Act and Section 142(d) of the Code and to ensure compliance with certain restrictions imposed by the City, 3658790 •ISR AK145 -2 Page 35 of 80 the Mayor and City Administrator are also hereby authorized and directed to execute and deliver a Regulatory Agreement, dated on or after May 1, 2010 (the "Regulatory Agreement "), among the City, the Borrower, and the 'Trustee. All of the provisions of the Regulatory Agreement, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Regulatory Agreement shall be substantially in the form on file with the City which is hereby approved, with such omissions and insertions as do not materially change the substance thereof, or as the Mayor and the City Administrator, in their discretion, shall determine, and the execution thereof by the Mayor and the City Administrator shall be conclusive evidence of such determination. 7. The Bonds shall be special, limited revenue obligations of the City, the proceeds of which shall be disbursed pursuant to the terms of the indenture and the Loan Agreement, and the principal, premium, and interest on the Bonds shall be payable solely from the proceeds of the Bonds, the revenues derived front the Loan Agreemeit, and the other sources set forth in the Indenture. 8. "The TruStec; is hereby appointed as Paying Agent and Bond Registrar for the Bonds. 9. The Mayor and the City Administrator are hereby authorized to execute and deliver, on behalf of the City, such other documents and certificates as are necessary or appropriate in connection with the issuance, sale, and delivery of the Bonds, including an Assignment of Mortgage, dated oil or after May f, 2010 (the "Assignment of Mortgage "), from the City to the "Trustee, various certificates of the City, an Information Return for Tax- l;xempt Private Activity Bond Issues, Dorm 8038, with respect to the Bonds, it certificate its to arbitrage and rebate, and Similar documents, and all other documents and certificates as shall be necessary and appropriate in connection with the issuance, sale, and delivery of the Bonds. 'rhe City hereby approves the execution and delivery by the 'Trustee of the Indenture and all other instruments, certificates, and documents prepared in conjunction with the issuance of the Bonds that require execution by the "Trustee. The City hereby authorizes Kennedy & Graven, Chartered, as bond Counsel, to prepare, execute, and deliver its approving legal opinions with respect to the Bonds. 10. The City has not participated in the preparation of the Official Statement relating to the offer and sale of the Bonds (the "Official Statement "), and has made no independent investigation with respect to the information contained therein, including the appendices thereto, and the City assumes no responsibility for the sufficiency, accuracy, or completeness of Such ini'61'111atiOn. Subiect to the Foregoing, the City hereby consents to the distribution and the use by the Underwriter of the Official Statement in connection with the offer and sale of the Bonds. The Official Statement is the sole material consented to by the City for use in connection with the offer and sale of the Bonds. H. Except as otherwise provided in this resolution, all rights, powers, and privileges conferred and duties and liabilities imposed upon the City or the City Council by the provisions of this resolution or of the aforementioned documents shall be exercised or performed by the City or by such members of the City Council, or such officers, board, body or agency thereof as may be required or authorized by law to exercise such powers and to perform such duties. No covenant, stipulation, obligation or agreement herein contained or contained in the aforementioned documents shall be deemed to be a covenant, stipulation, obligation or agreement of any member of the City Council, or any officer, agent or employee of the City in that person's individual capacity, and neither the City Council nor any officer or employee executing the Bonds shall be personally liable on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. 365879v2.1811 AK 145 -2 4 Page 36 of 80 No provision, covenant or agreement contained in the aforementioned documents, the Bonds, o► in any other document relating to the Bonds, and no obligation therein or herein imposed upon the City or the breach thereof, shall constitute or give rise to a general or moral obligation of the City or any pecuniary liability of the City or any charge upoll its general credit or taxing powers. In making the agreements, provisions, covenants, and representations set forth in such documents, the City has not obligated itself to pay or remit any funds or revenues, other than funds and revenues derived from the Loan Agreement which are to be applied to the payment ofthe Bonds, as provided therein. 12. Except as lierein otherwise expressly provided, nothing in this resolution or in the aforementioned documents expressed or implied, is intended or shall be construed to confer upon any person or firm or corporation, other than the City, any holder of the Bonds issued under the provisions of this resolution, any right, remedy or claim, legal or equitable, under and by reason of this resolution or any provisions hereof, this resolution, the aforementioned documents, and all of their provisions being intended to be and being for the sole and exclusive benefit ofthe City, and any holder front time to tine ofthe Bonds issued under the provisions of this resolution. 13. In case any one or more ofthe provisions of this resolution, other than the provisions contained in the first sentence of Section 4, or of the aforementioned documents, or of the Bonds issued hereunder shall for any reason be held to he illegal or invalid, such illegality or illvalidity shall not affect any other provision of this resolution, or of the aforementioned documents, or of the Bonds, but this resolution, the aforementioned documents, and the Bonds shall be construed and endorsed as if such illegal or invalid provisions had 1101 been contained therein. 14. 'f'he Bonds, when executed and delivered, shall contain a recital that they are issued pursuant to the Act and such recital shall be conclusive evidence of the validity of the Bonds and the regularity ofthe issuance thereof, and that all acts, conditions, and things required by file laws ofthe State of Minnesota relating to the adoption of this resolution, to the Issuance of the Bonds, and to the execution of the aforementioned documents to happen, exist, and be performed precedent to the execution of the aforementioned documents have happened, exist, and have been performed its so required by law. 15. The officers of the City, bond counsel, other attorneys, engineers, and other agents or employees ofthe City are hereby authorized to do all acts and things required of them by or Ill connection with this resolution, the aforementioned dOCU111elltS, and the Bonds, for the full, punctual, and complete performance of all the terms, covenants, and agreements contained in the Bonds, the aforementioned documents, and this resolution. If' for any reason the Mayor or the City Administrator is unable to execute and deliver the documents referred to in this Resolution, such documents may be executed by any member of the City Council or any officer of the City delegated the duties of the Mayor or the City Administrator with the same force and CffeCt £IS If SUCK d0C111llenlS were executed and delivered by the Mayor or the City Administrator. 16. 'i'lie Borrower shall pay the administrative fec ofthe City on the dale of issuance of the Bonds. The Borrower will also pay, or, upon demand, reimburse the City for payment of', ally and all costs incurred by the City in connection with the Project and the Issuance ofthe Bonds, whether or not the Bonds are Issued, including any costs for attorneys' fees. 17. This Resolution shall be in full force and elfect from and after its approval. 3658790.1S13 AK 115 -2 5 Page 37 of 80 Adopted by the City Council of the City of Oak Park Heights, Minnesota, on this 27tll day of April, 2010. CITY OF OAK PARK HEIGHTS, MINNESOTA Mayor Attest: City Administrator 365879%2 .ISI3 AK 145 -2 6 Page 38 of 80 CI'T'Y OF OAK PARK HEIGHTS RESOLUTION NO. RESOI. U'FION APPROVING TAX INCREMI NT DI VI?I.,OPMENT' AGREEMENT BE I'1' RI: SOL,VI: D I3y the City Council ( "Council'') of the City of Oak Park Heights ( "City ") as follows: Section 1. Reci tals. 1.01. 'I'he City has created a development district known as Municipal Development District No. 1 (the "Development District") pursuant to Minnesota Statutes, Sections 469.124 to 469.134, as amended, and Tax Increment Financing District No. 1 -1 (the "TI1 District "), therein, pursuant to Minnesota Statutes, Sections 469.174 to 469.1799, as amended within the Development District. 1.02. Oakgreen Commons, 1..1.,C, (the "Developer ") has requested that the City assist the Developer with the financing of certain costs of the development and construction of an approximately 120 unit assisted living facility and an approximately 80 square I:oot, 48 unit owner occupied housing facility to be located in the 1 District (the "Project') pursuant to a Tax Increment Development Agreement dated as of the date hereof (the "Agreement "). 1.03. The City believes that the development of the Protect pursuant to the Agreement, and fulfillment generally of the Agreement, are in the vital and hest interests of the City and the health, safety, morals, and welfare of its residents, and in accord with the public purposes and provisions of the applicable State and local Paws and requiI'ements under which the development has been undertaken and is being assisted. Section 2. City Approval: Further Proccedim,s. 2.01, The Agreement as presented to the Council is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the City Attorney and the City Administrator; provided that execution of the Agreement by the Mayor and City Administrator shall be conclusive evidence of approval. 2.02. The Mayor and City Administrator are hereby authorized to execute the .Agreement on behall'of the City and to carry out on behalf of the City the City's obligations thereunder. Page 39 of 80 365993v2 JS13 AK W-2 CIS -2 Approved by the City Council of the City of Oak Park Heights this 27th day of April, 2010. Mayor ATTEST: City Administrator Page 40 of 80 TAX INCREMENT' BY AND Br THE CITY OF OAK PARK HEIGHTS, MINNESO AND OAKGREEN COMMONS, LLC This document drafted by: Kennedy & Graven, Chartered 470 U.S. Bank Plaza 200 South 6th Street Minneapolis, MN 55402 364652\ AK 145-2 Page 41 of 80 TABLE OF CONTENTS Page ARTICLEI DEFINITIONS ........................................................................... ............................... 2 Section1.1 Definitions .................................................................. ............................... 2 ARTICLE II REPRESENTATIONS AND WARRANTIES ......................... ............................... 4 Section 2.1 Representations and Warranties of the City ............... ............................... 4 Section 2.2 Representations and Warranties of the Developer ...... ............................... 4 ARTICLE III UNDERTAKINGS BY DEVI: L,OPER AND CITY ............... ............................... 6 Section 3.1 band Acquisition and Legal and Administrative Expenses ....................... 6 Section 3.2 Reimbursement: 'Ill Note .......................................... ............................... 6 Section 3.3 Security for Phase II Project ....................................... ............................... 7 ARTICLEIV EVENTS OF DEFAUI., T ......................................................... ............................... 9 Section 4.1 Events of Default Defined .......................................... ............................... 9 Section 4.2 Remedies on Defaul t ................................................... ............................... 9 Section 4.3 No Remedy I: ?xclusive .............................................. ............................... 10 Section4.4 No Implied Waiver ................................................... ............................... 10 Section 4.5 Agreement to Pay Attorney's lees and Expenses .... ............................... 10 Section 4.6 Indemnification of' City ................... AR'I'ICL,I V ADDITIONAL, PR.OVISIONS ............................................... ............................... 12 Section 5.1 Restrictions on Use ................................................... ............................... 12 Section 5.2 Conflicts of Interest .................................................. ............................... 12 Section 5.3 Titles of Articles and Sections .................................. ............................... 12 Section 5.4 Notices and Demands ............................................... ............................... 12 Section5.5 Counter parts .............................................................. ............................... 13 Section 5.6 Law Governing ............................ Section5.7 Expiration ................................................................. ............................... 13 Section 5.8 Provisions Surviving Rescission or Expiration ........ ............................... 13 Section 5.9 Assignability of Agreement and 7'Ih Note ............... ............................... 13 EXHIBIT A Description of Development Property ..................... EXHIBIT13 Dorm of TIF Note ........................................................................ ............................B -1 EXHIBIT C General Developer's Agreement ................................................. ............................0 -1 EXHIBIT D Settlement Statements ............................................................. ............................... D -1 EXHIBIT E Limitation of Liability ................................................................. ...........................1? -1 3646520 JS13 AK 145 -2 I Page 42 of 80 TAX 1NCREMEN'1' I)EVEI- ,OPMEN`l' AGRIEMIN'I' II IIS AGRI T MI NT, made as of the 27th day of April, 2010, by and between the City of Oak Park heights, Minnesota (the "City "), a municipal corporation organized and existing; under the laws of the State of Minnesota and Oakgreen Commons, I-,I.,C (the "Developer "), a Minnesota limited liability company. WITNI3SSI'TII: WHEREAS, pursuant to Minnesota Statutes, Section 469.124 through 469.134, the City has formed Municipal Development District No. I (the "Development District ") and has adopted a development program therefor (the "Development Program "); and WHEREAS, pursuant to the provisions of Minnesota Statutes, Section 469.174 through 469,1799, as amended (hereinafter, the "Tax Increment Act "), the City has created within the Development District, "Tax Increment financing (Renewal and Renovation) District No. 1 -1 (Oakgreen Project) (the "Tax Increment District "), and has adopted a tax increment financing plan therefor (the "Tax Increment. Plan ") which provides for the use of tax increment financing in connection with certain development within the Development District; and WTIEREAS, in order to achieve the objectives of the Development Program and particularly to make the land in the Development District available for development by private enterprise in conformance with the Development Program, the City has determined to assist the Developer with the financing of certain costs of a Project (as hereinafter defined) to be constructed within the Tax Increment District as more particularly set forth in this Agreement; and WHEREAS, the City believes that the development and construction of the Project, and fulfillment of this Agreement are vital and are in the best interests of the City, the health, safety, morals and welfare of residents of the City, and in accordance with the public purpose and provisions of the applicable state and local laws and requirements Under Which the Project has been undertaken and is being assisted, and WHEREAS, the requirements of the Business Subsidy Law, Minnesota Statutes, Section 1161.993 through 116x.995, do not apply to this Agreement pursuant to an exemption for housing; and WHERE -AS, Exhibit E shall be incorporated herein by reference as if hilly set forth in the body of this Agreement; and NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of their does hereby covenant and agree with the other as follows: 364652N ,IS13 AK 145 -2 Page 43 of 80 ARTICLE: I DEFINITIONS Section 1.1 Definitions. All capitalized terms used and not otherwise defined herein shall have the following meanings unless a different meaning clearly appears from the context: Agreement means this Agreement, as the same may be from time to time modified, amended or supplemented, Business Day means any day except a Saturday, Sunday or a legal holiday or a day on which banking institutions in the City are authorized by law or executive order to close; Qjjy means the City of Oak Park Heights, Minnesota; County means Washington County, Minnesota; Developer means Oakgreen Commons, LLC, its successors and assigns; Development District means the real property described in the Development Program; Development Program means the development program approved in connection with the Development District; Development Property means the real property legally described in Exhibit A attached to this Agreement; Event of Default means any of the events described in Section 4.1 hereof; General Developer's Aareement means the Developer's Agreement, dated as of , 2010, between the City and the Developer and attached as Exhibit C hereto, as the same may be from time to time modified, amended or supplemented; Land Acquisition means the acquisition of the six existing single family homes constituting a portion of the Development Property; Leaal and Administrative Expenses means the fees and expenses incurred by the City in connection with the adoption and administration of the Tax Increment Financing Plan, the preparation of this Tax Increment Development Agreement, and the issuance of the TIF Note; Note Payment Date means each February l and August 1, commencing on the first February I or August 1 following the dated date of the TlF Note and thereafter to and including the Termination Date; provided, that if any such Note Payment Date should not be a Business Day, the Note Payment Date shall be the next succeeding Business Day; Phase I Proiect means an approximately 120 unit assisted living facility to be located on the Development Property, as approved by Resolution # 0906 -24; 364652v8 ,IS}3 AK 145 -2 2 Page 44 of 80 Phase 11 Project means an approximately 80,000 square foot, 48 unit owner occupied housing facility to be located on the Development Property, as approved by Resolution # 0906 - 24; Prime Rate means the rate of interest from time to time publicly announced by U.S. Bank National Association in Minneapolis, Minnesota, as Its "prime rate" or "reference rate" or any successor rate, which rate shall change as and when that rate or successor rate changes; Project means the acquisition, demolition and clearing of six single family homes located on the Development Property and the construction of the Phase I Project and the Phase 11 Project; State means the State of Minnesota; 'fax Increment Act means Minnesota Statutes, Sections 469.174 through 469.1799, as amended; Tax increment District means Tax Increment I "inancing District No. 1 -1, located within the Development District, which was qualified as a renewal and renovation district under the Tax Increment Act; Tax Increment I"inancim Plan means the tax increment financing plan approved for the Tax Increment District by the City Council; Tax increments means 80% of the tax increments derived from the Development Property which have been received and retained by the City in accordance with the provisions of Minnesota Statutes, Section 469.177. "termination Date means the earlier of (i) February 1, 2026, (ii) the date the Reimbursement Amount is paid in full, (iii) the date on which the Tax Increment District expires or is otherwise terminated, or (iv) the date this Agreement is terminated or rescinded in accordance with its terms; TIT' Note means the Tax Increment Revenue Note (Oakgreen Project) to be executed by the City and delivered to the Developer pursuant to Article III hereof, a copy of which is attached hereto as Exhibit B; and Unavoidable Delays means delays, outside the control of the party claiming its occurrence, which are the direct result of strikes, other labor troubles, unusually severe or prolonged bad weather, acts of God, fire or other casualty to the Project, litigation commenced by third parties which, by injunction or other similar judicial action or by the exercise of reasonable discretion, directly results in delays, or acts of any federal, state or local governmental unit (other than the City) which directly result in delays. 364652v8 JSB AK 145 -2 3 Page 45 of 80 AR'T'ICLE; II REPRESENTATIONS AND WARRANTII3S Section 2.1 Representations and Warranties of the Citv. The City makes the following representations and warranties: (1) The City is a municipal corporation and has the power to enter into this Agreement and carry out its obligations hereunder. (2) '.rhe subject Tax Increment District is a "renewal and renovation district" within the meaning of Minnesota Statutes, Section 469.174, Subdivision 10a, and was created, adopted and approved in accordance with the terms of the Tax Increment Act. (3) The development contemplated by this Agreement is in conformance with the development objectives set forth in the Development Program. Land use permits shall be governed by City land use ordinances, specific land use approvals and the General Developer's Agreement separate from this Agreement. (4) To finance certain costs within the 'Tax Increment District, the City proposes, subject to the further provisions of this /Agreement, to apply certain Tax Increments to reimburse the Developer for the costs of the Land Acquisition in connection with the Project as further provided in this Agreement. The City neither pledges nor provides any other financial assistance to the Developer to reimburse for Land Acquisition or other costs. (5) The City makes no representation or warranty, either express or implied, as to the Development Property or its condition or the soil conditions thereon, or that the Development Property shall be suitable for the Developer's purposes or needs. Section 2.2 Representations and Warranties of the Developer. The Developer makes the following representations and warranties: (1) The Developer is a Minnesota limited liability company, has power to enter into this Agreement and to perform its obligations hereunder and, by doing so, is not in violation of any provisions of 4s articles, bylaws or the laws of the State. (2) The Developer will cause the Project to be constructed in compliance with the terms of this Agreement, the General Developer's Agreement, the Development Program, all issued permits for the Project and all Iocal, state and federal laws and regulations (including, but not limited to, environmental, zoning, energy conservation, building code and public health laws and regulations). (3) The construction of tine Project would not have been undertaken by the Developer, and in the opinion of the Developer would not be economically feasible within the reasonably foreseeable future, without the assistance and benefit to the Developer provided for in this Agreement. 364652v8.IS13 AK 145 -2 4 Page 46 of 80 (4) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provision of any contractual restriction, evidence of indebtedness, agreement or instrument of whatever nature to which the Developer is now a party or by which it is bound, or constitutes a default under any of the foregoing. (S) The Developer will cooperate with the City with respect to any litigation commenced with respect to the Project. (6) The Developer will cooperate with the City in resolution of any traffic, parking, trash removal or public safety problems which may arise in connection with the construction of the Project. (7) The acquisition and demolition of the existing six homes has commenced and construction of the Project shall commence by July 1, 2010. (8) The Developer has made its own projections of'rax Increment and revenues to be generated from the Project and of the Developer's return on investment and the Developer has not relied on any assumptions, calculations, determinations or conclusions made by the City, its governing body members, officers or agents, including the independent contractors, consultants and legal counsel, servants and employees thereof. with respect to the foregoing or in determining to proceed with the Project. (9) The Developer reasonably expects to substantially complete the Phase I Project by December 31, 2011 and the improvements set forth in the General Developer's Agreement in accordance with the time frames set forth therein. The Developer's boat is to substantially complete the Phase I1 Project by December 31, 2012; however, the construction of the Phase I1 Project will depend on market conditions and the Developer's ability to secure financing. Therefore, the Developer does not covenant or warrant that the Phase 11 Project will be constructed or that construction will occur within a specific time frame. .1646U0.10 AK145 -2 5 Page 47 of 80 ARTICLE III UNDERTAKINGS BY DEVELOPER AND CITY Section 3.1 Land Acquisition and Lea-al and Administrative Expenses. The Developer has paid the City for Legal and Administrative Expenses accrued to date in an amount equal to $ upon execution of this Agreement. The cost of the Land Acquisition and the Project shall be paid by the Developer. As exclusively provided in Section 3.2 hereof, the City shall reimburse the Developer for the lesser of $1,200,000 or the costs of the Land Acquisition actually paid by the Developer (the "Reimbursement Amount "). Section 3.2 Reimbursement: TIF Note. The City shall reimburse for the costs identified in Section 3.1 exclusively through the issuance of the City's TIF Note in substantially the form attached to this Agreement as Exhibit 13, subject to the following conditions: (1) The TIF Note shall be dated, issued in a principal amount equal to the Reimbursement Amount and delivered to the Developer upon issuance by the City of a building permit for the Project. However, no Tax Increments will be applied to the payment of the TIF Note until the Developer has (a) installed all trails and infrastructure In all public and Common areas for the Project as shown on the plans and specifications therefor attached to the General Developer's Agreement and provided proof of payment for all such elements to required contractors; (b) transferred all required lands along Oakgreen Avenue to the City as provided in Section /Exhibit of the General Developer's Agreement; (c) the Developer has deposited $100,000 in an escrow account to be held by the City or has delivered to the City a letter of credit satisfactory to the City in the amount of $100,000 pursuant to Section 3.3 and (d) paid the cost of the I.,and Acquisition, as described in and limited by Section 3.1. The Developer has submitted signed settlement statements showing the cost of the Land Acquisition in an amount not less than the Reimbursement Amount which are attached as Exhibit D hereto. (2) The unpaid principal amount of the TIF Note shall bear interest fro n the date of issuance of the T1I Note, at a late per annum equal to the lesser of (i) the net effective rate of interest on the Flousing Revenue Bonds, Series 2010 (Oakgreen Commons Project) to be issued by the City In connection with the Phase I Project or (ii) $.00 %. Interest shall be computed on the basis of 360 day year consisting of twelve (12) 30 -day months. (3) The principal amount of the TIF Note and the interest thereon shall be payable solely and exclusively from the Tax Increments, and shall, subject to the limitations set forth in Section 4.2, be conditioned on the Developer being compliant with the terms and provisions of the Developer's Agreement and all issued permits for the Project. (4) On each Note Payment Date and subject to the provisions of the TIF Note, the City shall pay, solely from the Tax Increments (as defined in Section 1.1) received by the City during the preceding 6 months (or, with respect to the first Note Payment Date, in the period commencing on the date of issuance of the TIF Note through the day prior to the first Note Payment Date) to the extent of the outstanding principal and accrued interest on the TIF Note. All such payments shall be applied first to the payment of accrued interest and then to the payment of the principal of the TIF Note. 3 64652v JSl3 AK 145 -2 6 Page 48 of 80 (5) 'Fhe TIP Note shall be a special and limited obligation of the City and not a general obligation of the City, and only 'Fax Increments shall be used to pay the principal and interest on the TIP Note. If; on any Note Payment Date, the 'Fax Increments for the payment of the accrued and unpaid interest on the TIF Note are insufficient for such purposes, the difference shall be carried forward with interest at the rate set forth in the TIJ; Note, and shall be paid if and to the extent that on a fixture Note Payment Date there are "Fax Increments In excess of the amounts needed to pay the accrued interest then due on the TIF Note. (6) T'he City's obligation to make payments on the 'I'll Note on any Note Payment Date or any date thereafter shall, subject to the limitations set forth in Section 4.2, be conditioned upon the requirement that (A) there shall not at that time be an Event of Default that has occurred and is continuing under this Agreement, the General Developer's Agreement or any issued permits for the Project; and (I3) this Agreement shall not have been rescinded pursuant to Section 4.2(b). (7) The 'ill' Note shall be governed by and payable pursuant to the additional terms thereof, as set forth in Exhibit B. In the event of any conflict between the terms of the "FIP Note and the terms of this Section 3 2, the terms of the TIP Note shall govern. The issuance of the TfF Note pursuant and subject to the terms of this Agreement, and the taking by the City of such additional actions as bond counsel for the TIP Note may require in connection therewith, are hereby authorized and approved by the City. Section 3.3 Security for Phase II Proiect. On or prior to the date the City issues the I "lI Note, the Developer shall either (i) deposit $100,000 in an escrow account to be held by the City or (ii) deliver to the City a letter of credit satisfactory to the City in the amount of $ 100,000 subject to the following provisions: (1) If the Developer deposits $100,000 cash with the City, the City shall hold such amount in a City escrow account and, to the extent practicable and authorized by law, invest such account in an interest bearing Certificate of Deposit consistent with the City's current investment policies. To the extent practicable and authorized by law the City shall annually pay to the Developer any interest earnings on such Certificate of Deposit received in the prior 12 -month period, however the City does not guaranty any specific rate of interest or other rate of' return. If the Developer fails to obtain a Certificate of Occupancy for the Phase 11 Project on or prior to December 31, 2015, the City may withdraw and retain the $100,000 as a penalty and terminate the escrow account. Within 30 days of issuing a Certificate of Occupancy to the Developer for the Phase 1I Project, the City shall pay all amounts in the escrow account to the Developer. (2) At least 15 days prior to delivering to the City a letter of credit in the amount of $100,000, the Developer shall provide the City a draft of the letter of credit and related documents for review and approval. The letter of credit must be issued by a financial institution acceptable to the City, with a branch located in the Seven- County Metro Area, for a term of at least one year which automatically renews for one -year periods until the earlier of (a) the date the Developer obtains a Certificate of Occupancy for the Phase Il Project or (b) January 31, 2016. If the City is not satisfied with the form of the proposed letter of credit and related documents or the financial institution proposed to issue the letter of credit, the Developer shall deposit $100,000 cash with the City in accordance with Section 3.3(I). If the City accepts a letter of 364652A J513 AK 145 -2 7 Page 49 of 80 credit, the letter of credit shall provide that if (i) the Developer fails to obtain a Certificate of Occupancy for the Phase 11 Project on or prior to December 31, 2015 or (ii) the Developer fails to renew the letter of credit for at least a one -year period at least 45 days prior to its stated termination date, the City may draw upon the letter of credit in the amount of $100,000 and retain such funds as a penalty. 364652v8 .ISB AK 145 -2 g Page 50 of 80 AR'L'ICL,E IV EVENTS OF DEFAULT Section 4.1 Events of Default Defined. The following shall be "Events of Default" under this Agreement and the term "Event of Default" shall mean whenever it is used in this Agreement any one or more of the following events: (a) Failure by the Developer to timely pay any ad valorem real property taxes assessed with respect to the Development Property. (b) Failure by the Developer to cause the construction of the Project to be completed pursuant to the terms, conditions and limitations of this Agreement, the General Developer's Agreement and /or any issued permits for the Project. (c) Failure of the Developer to observe or perform any other covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement. (d) If the Developer shall: (A) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the United States Bankruptcy Act of 1978, as amended or under any similar federal or state law; or (I3) make an assignment for the benefit of its creditors; or (C) admit in writing its inability to pay its debts generally as they become due; or (D) be adjudicated as bankrupt or insolvent; or if a petition or answer proposing the adjudication of the Developer, as a bankrupt or its reorganization under any present or future federal bankruptcy act or any similar federal or state law shall be filed in any court and such petition or answer shall not be discharged or denied within sixty (60) days after the riling thereof, or a receiver, trustee or liquidator of the Developer, or of the Project, or part thereof; shall be appointed in any proceeding brought against the Developer, and shall not be discharged within sixty (60) days after such appointment, or if the Developer, shall consent to or acquiesce in such appointment. Section 4.2 Remedies on Default. Whenever any Event of Default referred to in Section 4.1 occurs and is continuing, the City, as specified below, may take any one or more of the following actions after the giving of thirty (30) days' written notice to the Developer citing with specificity the item or items of default and notifying the Developer that it has thirty (30) days within which to cure said F,vent of Default. If the Event of Default has not been cured within said thirty (30) days: 36465M JS13 AK 145 -2 9 Page 51 of 80 (a) The City may suspend its performance under this Agreement and the TIF Note until it receives written assurances from the Developer, deemed adequate by the City, that the Developer will cure its default and continue its performance under this Agreement, and no interest shall accrue on the TIF Note for the benefit of the Developer while performance is suspended in accordance with this Section 4.2. (b) The City may cancel and rescind the Agreement and the TIF Note. (c) The City may take any action, including legal or administrative action, in law or equity, which may appear necessary or desirable to enforce performance and observance of any obligation, agreement, or covenant of the Developer under this Agreement. Notwithstanding any provision to the contrary herein, the City agrees that if the Developer completes construction of the Phase 1 Prgject and has assigned the TIF Note to an Assignee in accordance with Section 5.9, the City will not exercise any remedies set forth in this Section 4.2 which would have the effect of reducing, suspending or terminating any payments on the TIF Note. This paragraph shall not limit the City's remedies provided under the General Developer's Agreement for any event of default set forth therein, provided such remedies do not have the effect of reducing, suspending or terminating any payments on the TIF Note. Section 4.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to the City is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall in - ipair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. Section 4.4 No Imt)lied Waiver. In the event any agreement contained in this Agreement should be breached by any party and thereafter waived by any other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. Section 4.5 Agreement to Pay Attorney's Fees and Exuenses. Whenever any Event of Default occurs and the City shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement or performance or observance of any obligation or agreement oil the part of the Developer herein contained, the Developer agrees that it shall, on demand therefor, pay to the City the reasonable fees of such attorneys and such other expenses so incurred by the City. Section 4.6 Indemnification of City. (1) The Developer releases from and covenants and agrees that the City, its governing body members, officers, agents, including the independent contractors, consultants and legal counsel, servants and employees thereof (hereinafter, for purposes of this Section, collectively the "Indemnified Parties ") shall not be liable for and agrees to indemnify aind hold harmless the 364652v8 JSB AK 145 -2 10 Page 52 of 80 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 Project, provided that the foregoing indemnification shall not be effective for any actions of the Indemnified Parties that are not contemplated by this Agreement. (2) Except for any willful misrepresentation or any willful or wanton misconduct of the Indemnified Parties, the Developer agrees to protect and defend the Indemnified Parties, now and forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from the actions or inactions of the Developer (or if other persons acting on its behalf or under its direction or control) under this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Project; provided, that this indemnification shall not apply to the warranties made or obligations undertaken by the City in this Agreement or to any actions undertaken by the City which are not contemplated by this Agreement but shall, in any event and without regard to any fault on the part of the City, apply to any pecuniary loss or penalty (including interest thereon from the date the loss if incurred or penalty is paid by the City at a rate equal to the Prime Rate) as a result of the Project causing the Tax Increment District to not qualify or cease to qualify as a "renewal and renovation district" under Section 469.174, Subdivision I Oa, of the Act or to violate limitations as to the use of Tax Increments as set forth in Section 469.176, Subdivision 41. (3) All covenants, stipulations, promises, agreements and obligations of the City contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the City and not of any governing body member, officer, agent, servant or employee of the City, as the case may be. 164652v8 JSB AK 145-2 ll Page 53 of 80 ARTICLE V ADDITIONAL, PROVISIONS Section 5.1 Restrictions on Use. The Developer agrees for itself, its successors and assigns and every successor in interest to the Development Property, or any part thereof, that the Developer and such successors and assigns shall operate, or cause to be operated, the Project as a multifamily senior housing and assisted living facility and shall devote the Development Property to, and in accordance with, the uses specified in this Agreement. Section 5.2 Conflicts of Interest. No member of the governing body or other official of the City shall have any financial interest, direct or indirect, in this Agreement, the Development Property or the Project, or any contract, agreement or other transaction contemplated to occur or be undertaken thereunder or with respect thereto, nor shall any such member of the governing body or other official participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. No member, official or employee of the City shall be personally liable to the City in the event of any default or breach by the Developer or successor or on any obligations under the terms of this Agreement. Section 5.3 Titles of Articles and Sections. Any titles of the several parts, articles and sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 5.4 Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand or other communication under this Agreement by any party to any other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally, and (a) in the case of the Developer is addressed to or delivered personally to: Oakgreen Commons, LLC P.O. Box 119 775 Green Twig Way Stillwater, MN 55082 -0119 Attn: Tim Nolde With copy to: Winthrop & Weinstine, P.A. 225 South Sixth Street, Suite 3500 Minneapolis, Minnesota 55402 -4629 Attn: John D. Nolde, Esq. (b) in the case of the City is addressed to or delivered personally to the City at: 364652v8 .ISIS AK 14i -2 ]2 Page 54 of 80 City of Oak Park heights, Minnesota 14168 Oak Park Boulevard P.O. Box 2007 Oak Park heights, MN 55082 -3007 Attn: City Administrator With copy to: Eckberg, Lammers, Briggs Wolff & Vierling PLI..P City Attorneys Oak Park Heights 1809 Northwestern Ave Stillwater, MN 55082 or at such other address with respect to any such party as that party may, from time to time, designate in writing and forward to the other, as provided in this Section. Section 5.5 Counterparts. '['his Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 5.6 Law Governiu). This Agreement will be governed and construed in accordance with the laws of the State. Section 5.7 1xxpira '['his Agreement shall expire oil the Termination Date. Section 5.8 Provisions Survivins? Rescission or F'xi)iration. Sections 4.5 and 4.6 shall survive any rescission, termination or expiration of this Agreement with respect to or arising out of any event, occurrence or circumstance existing prior to the date thereof. Section 5.9 Assignability of Agreement and TlF Note. This Agreement and the TIF Note may be assigned only with the written consent of the City which consent shall not be unreasonably withheld. If the City consents to the assignment of the TIF Note to a third party (an "Assignee ") to secure financing for the Project, the Developer may request, at its sole expense, an opinion of the City's Bond Counsel or nationally recognized bond counsel selected by the Developer, to the effect that the "111 Note is a valid obligation of the City enforceable in accordance with its terms. 3646524 JS13 AK 145 -2 13 Page 55 of 80 IN WITNESS WHEREOF, the City has caused this Agreement to be duly executed in its naive and on its behalf and its seal to be hereunto duly affixed, and the Developer has caused this Agreement to be duly executed in its name and on its behalf, on or as of the date first above written. CI'T'Y OF OAK PARK HEIGHTS, MINNESOTA By Its Mayor By _._. Its City Administrator (SEAL) This is a signature page to the Tax Increment Development Agreement by and between the City of Oak Park Heights and Oakgreen Commons, I. LC 364652v8 J.SI3 AK 145 -2 S -1 Page 56 of 80 OAKGRE N COMMONS, I. LC I3y Its This is a signature page to the Tax Increment Development Agreement by and between the City of Oak Park Heights and Oakgreen Commons, LLC 36465M JS13 AK 14 ? -2 S-2. Page 57 of 80 LXI-IIBIT A Description of Development Property The property located in the City of Oak Park 1- -Ieights, Washington County, Minnesota legally described as follow: Parcel 1: OUTLO'T C, OAKGRLLN VILLAGE;, according to the recorded plat thereof, on file and of record in the office of the Registrar of Titles, Washington County, Minnesota, except that part described as follows: Beginning at the southwest corner of said OUI'I,O'T C; thence North 00 degrees 31 minutes 04 seconds East, along the west line of said OU FLO'1' C, a distance of 15.88 feet; thence, continuing along said west line, North 12 degrees 24 minutes 47 seconds Last a distance of 61.42 feet; thence North 05 degrees 16 minutes 25 seconds West a distance of 34.14 feet; thence, leaving said west line, South 89 degrees 14 minutes 53 seconds Last a distance of 34.37 feet; thence South 00 degrees 31 minutes 03 seconds West a distance of 109.81 feet to the south line of said OUTLOT C; thence North 89 degrees 28 minutes 57 seconds West, along said south line of OUTI.,OT C, a distance of 43.59 feet to the point of beginning. Torrens Property Torrens Certificate No. 64057 (includes additional land) Parccl 2: Outlot I -1, Oakgreen Village, Washington County, Minnesota. Torrens Property Torrens Certificate No, 66700 Parcel 3: Outlot 1, Oakgreen Village, Washington County, Minnesota. Torrens Property "Torrens Certificate No. 64174 Parcel 4: Outlot J, Oakgreen Village, Washington County, Minnesota. Torrens Property Torrens Certificate No. 65374 Parcel 5: Outlot K, Oakgreen Village, Washington Comity, Minnesota. 364652v8 JS13 AK 145 -2 A -1 Page 58 of 80 Torrens Property Torrens Certificate No. 66655 Parcel 6: Outlot L, Oakgreen Village, Washington County, Minnesota. Torrens Property Torrens Certificate No. 66699 Parcel 7: Outlot M, Oakgreen Village, Washington County, Minnesota. "Torrens Property Torrens Certificate No. 64175 Parcel 8: 'That part of'the North Half of the Southeast Quarter of the Northeast Quarter of Section 5, Township 29 North, Range 20 West, Washington County, Minnesota, described as f=ollows: Commencing at the Southeast corner of said North Half of the Southeast Quarter of the Northeast Quarter thence North (assumed bearing) along the East line of said North Hall'ofthe Southeast Quarter of the Northeast Quarter a distance of 560.00 feet to the point of beginning; thence Westerly, at a right angle to the last described line, a distance of 200.00 feet; thence North, parallel with said Last line of the North Hall' of the Southeast Quarter of' the Northeast Quarter, a distance of 100.00 feet to the North line of said North I-lalf of'the Southeast Quarter of the Northeast Quarter; thence East, along said North line, a distance of 200.00 feet to the Last line of the North Half of the Southeast Quarter of the Northeast Quarter; thence South along said East line, 100.00 feet to the point of beginning. Washington Count}, Minnesota "Torrens Property "Torrens Certificate No. 66698 Parcel 9: 1111 that part of the Northeast Quarter of the Northeast Quarter of Section 5, 'Township 29 North, Range 20 West, described as follows: Beginning at a point on the East line of said Northeast Quarter of the Northeast Quarter 110 feet North of the Southeast corner thereof, thence West on a line parallel with the South line thereof 150 feet to a point; thence North on a line parallel to the Last line thereof 132 feet to a point; thence Fast on a line parallel with the South line thereof 150 feet to a point on the Last line thereof thence South on the Last line thereof 132 feet to the point of beginning. Washington County, Minnesota 364052v8 JSli Ah14 A-2 Page 59 of 80 Torrens Property 'Torrens Certificate No. 65230 Parcel 10: All that part of the Northeast Quarter of the Northeast Quarter of Section 5, "Township 29 North, Range 20 West described as follows: Beginning at a point on the East line of the said Northeast Quarter of the Northeast Quarter; 357 feet North of the Southeast corner thereof; thence West on a line parallel with the South line thereof 275 feet to a point; thence North on a line parallel to the Fast line thereof 1 ] 5 feet to a point; thence 1:3ast on a line parallel with the South line thereof 275 feet to a point on the lust line thereof; thence South on the East line thereof 115 feet to the point of beginning; subject to the public highway on the Last side of said tract. Washington County, Minnesota Torrens Property "I "orrens Certificate No. 65468 Parcel 11: Outlot A, Goodwill Addition Washington County, Minnesota Torrens Property Torrens Certificate No. 64059 Parcel 12: Lot Four (4), Block Fifteen (15), Oakgreen Village Washington County, Minnesota Torrens Property Torrens Certificate No. 63918 Parcel 13: That part of Outlot 1), OAKGREIEN VILLAGE, according to the recorded plat thereof, on file and of record in the office of the Registrar of Titles, Washington County, Minnesota, lying northeasterly of a line described as follows: Beginning at the southwest corner of Lot 4, Block 15, said OAKGRI I=_;N VILLAGE'; thence South 32 degrees 39 minutes 12 seconds East a distance of 66.80 feet to the northeast corner of Lot 4, Block 12, said OAKGREEN VIL.,LAGE, and said line there terminating. Washington County, Minnesota 'Torrens Property Torrens Certificate No. 63866 (includes additional land) _ 64652vs Jsi3 AK 145 -2 A -3 Page 60 of 80 NOTE?: The above described property will be platted as: I.,ot 2, Block 1, Carriage House Co -Op and Assisted Living Addition " Washington County, Minnesota Totrens Property Torrens Certificate No. 304052v8 JSR AK 145 -2 A -4 Page 61 of 80 EXHIBIT B Form of T IF Note No. R -1 UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF WASHINGTON CTTY OF OAK PARK HEIGI -ITS TAX INCREMENT RISVI:NUE NOTE (OAKGREEN PROJECT) The City of Oak Park I Ieights, Minnesota (the "City "), hereby acknowledges itself to be indebted and, for value received, hereby promises to pay the amounts hereinafter described (the "Payment. Amounts ") to Oakgrcen Commons, I.,1.,C (the "Developer ") or its registered assigns (the "Registered Owner "), but only in the manner, at the times, from the sources of revenue, and to the extent hereinafter provided. The principal amount of this Note shall equal from time to time the principal amount stated above, as reduced to the extent that such principal installments shall have been paid in whole or in part pursuant to the terms hereof; provided that the sum of the principal amount listed above shall in no event exceed $1,200,000 as provided in that certain Tax Increment Development Agreement, dated as of April 27, 2010, as the same may be amended from time to time (the "Tax Increment Development Agreement "), by and between the City and the Developer. The unpaid principal amount hereof shall bear interest from the date of this Note at the rate of and hundredths percent L_%) per annum. Interest shall be computed on the basis of a 360 day year consisting of twelve (12) 30 -day months. The amounts due under this Note shall be payable on each February 1 and August 1, commencing on the first February I or August 1 following the date hereof and thereafter to and including February 1, 2026, or, if the first should not be a Business Day (as defined in the "Tax Increment Development Agreement) the next succeeding Business Day (the "Payment Dates "). On each Payment Date the City shall pay by check or draft mailed to the person that was the Registered Owner of this Note at the close of the last business day of the City preceding such Payment Date an amount equal to the "Tax Increments (hereinafter deigned) received by the City during the six month period preceding such Payment Date (or, with respect to the first Note Payment Date, in the period commencing on the date of issuance of the TIF Note through the day prior to the first Note Payment Date). All payments made by the City under this Note shall first be applied to accrued interest and then to principal. This Note is pre- payable by the City, without penalty, in whole or in part, on any date. The Payment Amounts due hereon shall be payable solely from 80% of tax increments (the "Tax Increments ") from the Development Property within the City's Tax Increment District 3646520 JS13 AK 145 -2 - B -1 Page 62 of 80 No. 1 -1 (the `"Tax Increment District ") within its Municipal Development District No. 1 which are paid to the City and which the City is entitled to retain pursuant to the provisions of Minnesota Statutes, Sections 469.174 through 469.1799, as the same may be amended or supplemented from time to time (the "Tax Increment Act "), This Note shall terminate and be of no further force and effect following the last Payment Date defined above, on any date upon which the City shall ]lave terminated the Tax Increment Development Agreement under Section 4.2(b) thereof, subject to the provisions of 4.2, the date the "Tax Increment District is terminated, or on the date that all principal and interest payable hereunder shall have been paid in frill, whichever occurs earliest. The City makes no representation or covenant, express or implied, that the 'Tax Increments will be sufficient to pay, in whole or in part, the amounts which are or may become due and payable hereunder. In the event Tax Increments are not sufficient, the City is not responsible to further fund or reimburse the Developer (or its assigns or creditors) for any such shortfall. 'Fhe City is not responsible to fund or reimburse any obligation of the Developer (or its assigns or creditors) unless expressly stated in this Agreement. Subject to the terms of the Tax Increment Development Agreement, the City's payment obligations hereunder shall be further conditioned oil the fact that no ];vent of Default under the Tax Increment Development Agreement shall have occurred and be continuing at the time payment is otherwise clue hereunder, but such unpaid amounts shall become payable if said Event of Default shall thereafter have been cored; and further, if pursuant to the occurrence of an fsvent of Default under the "ax Illcremel]t Development Agreement the City elects, subject to the provisions of Section 4.2 of the Development Agreement, to cancel and rescind the Tax Increment Development Agreement, the City shall have no further debt or obligation tinder this Note whatsoever. Reference is hereby made to all of the provisions of the Tax Increment Development Agreement, including without limitation Section 3.2 thereof, for a fuller statement of the rights and obligations of the City to pay the principal of this Note, and said provisions are hereby incorporated into this Note as though set out in full herein. 'Phis Note is a special, limited revenue obligation and not a general obligation of the City and is payable by the City only from the sources and subject to the qualifi cations stated or referenced herein. This Note is not a general obligation of the City, and neither the frill faith and credit nor the taxing powers of the City are pledged to the payment of the principal of this Note and no property or other asset of the City, save and except the above - referenced Tax Increments, is or shall be a source of payment of the City's obligations hereunder. This Note is issued by the City in aid of financing a project pursuant to and in full confoI'mity with the Constitution and laws of the State of Minnesota, including the 'Tax Increment Act. This Note may be assigned only with the consent of the City. In order to assign the Note, the assignee shall surrender the same to the City either in exchange for a new fully registered note or for transfer of this Note on the registration records for the Note maintained by the City. Each permitted assignee shall take this Note subject to the foregoing conditions and subject to all provisions stated or referenced herein. 364652v8 JS13 AK 145 -2 B -2 Page 63 of 80 IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; and that this Note, together with all other indebtedness of the City outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the City to exceed any constitutional or statutory limitation thereon. IN WITNESS WHEREOF, City of Oak Park Heights, Minnesota, by its City Council, has caused this Note to be executed by the manual signatures of its Mayor and City Administrator and has caused this Note to be dated as of City Administrator _ Mayor 364652v8 JS13 AK 145 -2 B -3 Page 64 of 80 CERTIFICATION OF REGISTRATION It is hereby certified that the foregoing Note was registered in the name of Oakgreen Commons, LLC, and that, at the request of the Registered Owner of this Note, the undersigned has this day registered the Note in the name of such Registered Owner, as indicated in the registration blank below, on the books kept by the undersigned for such purposes. NAME AND ADDRESS OF DATE OF SIGNATURE OF CITY REGISTERED OWNER RI;GIS"IRATION, CLE. -RK Oakgreen Commons, LLC 1 Box 119 Stillwater, MN 55082 -0119 364652v8.1SB AK 145 -2 I3 -4 Page 65 of 80 EX1-1IBIT C General Developer's Agreement 3646520 JSB AK I45-2 C -1 Page 66 of 80 EXHIBIT I:) Settlement Statements 364652v8.ISII AK 145 -2 I:) -1 Page 67 of 80 EXHIBIT F: Limitation of Liability No agreements or provisions contained in this Agreement shall give rise to any pecuniary liability of the City or a charge against its general credit or taxing powers, or shall obligate the City financially in any way except with respect to the application of the "Tax Increments as specifically provided in this Agreement and in the TIF Note. The T1F Note, including principal, premium and any other payments however designated, and the interest due thereon do not and shall never constitute a general obligation of the City within the meaning of any state constitutional or statutory provision and do not and shall not constitute or give rise to a pecuniary liability or moral obligation of the City, the State of Minnesota or any of its political subdivisions, or a charge against its general credit or taxing powers, or to the extent permitted by law, any pecuniary liability of any officer, employee or agent orthe City. The provisions of this paragraph are controlling notwithstanding anything in this Agreement to the contrary. 36/40524 JS 13 AK 145-2 I:- l Page 68 of 80