HomeMy WebLinkAbout1989-09-06 Lined Copy (Revised) Development Agreement Document (Unsigned) 'r
Lined copy
503C MLI: 9 6 89
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE HOUSING AND REDEVELOPMENT AUTHORITY
OF THE CITY OF OAK PARK HEIGHTS
AND
OAK PARK PARTNERS
This document drafted by: BRIGGS AND MORGAN
Professional Association
2200 First National Bank
Building
St. Paul, Minnesota 55101
DEVELOPMENT AGREEMENT TABLE
Page
Introduction ........ ............................... 1
Article I Definitions .............................. 2
Section 1.1. Definitions ..................... 2
Article II Representations and Warranties.......... 4
Section 2.1. Representations and
Warranties of the Authority..... 4
Section 2.2. Representations and
Warranties of the Developer..... 4
Article III Undertakings by Developer and Authority 7
Section 3.1. Reimbursement of Costs of
Acquiring the Development
Property ........................ 7
Section 3.2. Limitations on Undertaking of
the Authority ................... 7
Section 3.3. Limitation of Costs; Methods
ofPayment ...................... 7
Section 3.4. Sale, Lease, Transfer or
Assignment of Project........... 8
Section 3.5. Developer Equity ................ 9
Article IV Events of Default 10
Section 4.1. Events of Default Defined....... 10
Section 4.2. Remedies on Default ............. 11
Section 4.3. No Remedy Exclusive ............. 11
Section 4.4. No Implied Waiver ............... 12
Section 4.5. Agreement to Pay Attorney's
Feesand Expenses ............... 12
Section 4.6. Developer's Remedies............ 12
Article V Additional Provisions .................... 13
Section 5.1. Restrictions on Use ............. 13
Section 5.2. Conflicts of Interest........... 13
Section 5.3. Titles of Articles and Sections. 13
Section 5.4. Notices and Demands ............. 13
Section 5.5. Counterparts .................... 14
Section 5.6. Law Governing ................... 14
Section 5.7. Legal Opinions .................. 14
Page
Article VI Developer's Option to Terminate
Agreement .............................. 15
Section 6.1. The Developer's Option to
Terminate ....................... 15
Section 6.2. Action to Terminate ............. 15
Section 6.3. Effect of Termination........... 15
Signatures .......... ............................... 16,17
Acknowledgements .... ............................... 18,19
Exhibit A: Legal Description of Tax Increment District
Exhibit B: Legal Description of Development Property
DEVELOPMENT AGREEMENT
THIS AGREEMENT, made as of the 28th day of August, 1989,
by and between The Housing and Redevelopment Authority of the
City of Oak Park Heights, Minnesota (the "Authority "), a
public body politic and corporate and Oak Park Partners, a
Minnesota partnership (the "Developer "),
WITNESSETH:
WHEREAS, pursuant to Minnesota Statutes, the Authority
has formed a redevelopment area (the "Redevelopment Area ");
and
WHEREAS, pursuant to the provisions of Minnesota
Statutes, Section 469.174 through 469.179 as amended,
(hereinafter the "Tax Increment Act ") the Authority has
created a tax increment financing district (the "Tax Increment
District "), the legal description of which is attached hereto
as Exhibit A and has adopted a tax increment financing plan
(the "Tax Increment Plan ") and redevelopment plan (the
"Redevelopment Plan ") therefor which provides for the use of
tax increment financing in connection with development within
the Redevelopment Area; and
WHEREAS, in order to achieve the objectives of the
Redevelopment Plan and particularly to make the land in the
Redevelopment Area available for development by private
enterprise in conformance with the Redevelopment Plan, the
Authority has determined to assist the Developer with the
financing of the Development Property (as defined herein) on
the Development Property as more particularly set forth in
this Agreement; and
WHEREAS, the Authority believes that the development of a
certain Project (as defined herein) and the construction of
the Project, and fulfillment of this Agreement are vital and
are in the best interests of the City of Oak Park Heights (the
"City ") and 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.
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:
ARTICLE 1
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:
Aqreement means this Agreement, as the same may be from
time to time modified, amended or supplemented;
Authority means The Housing and Redevelopment Authority
of the City of Oak Park Heights;
City means the City of Oak Park Heights, Minnesota;
County means Washington County, Minnesota;
Developer means Oak Park Partners, a Minnesota partner-
ship, its successors and assigns;
Redevelopment Area means the real property described in
the Redevelopment Plan;
Redevelopment Plan means the redevelopment plan approved
in connection with the Redevelopment Area;
Development Property means the real property legally
described in Exhibit B of this Agreement;
Event of Default means any of the events described in
Section 4.1;
Project means the approximately 220,000 square foot
shopping center facility;
State means the State of Minnesota;
Tax Increments means the tax increments derived from the
Tax Increment District and received and retained by the
Authority and computed in accordance with the provisions of
Minnesota Statutes, Section 469.177;
Tax Increment Act means the Tax Increment Financing Act,
Minnesota Statutes, Sections 469.174 through 469.179, as
amended;
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Tax Increment District means the Tax Increment Financing
District described in Exhibit A and qualified as an economic
development district under the Tax Increment Act;
Tax Increment Financinq Plan means the plan approved for
the Tax Increment District;
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 Authority or the City) which directly result in delays.
3
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the
Authority. The Authority makes the following representations
and warranties:
(1) The Authority is a body politic and corporate and
has the power to enter into this Agreement and carry out its
obligations hereunder.
(2) The Tax Increment District is an "economic develop-
ment district" within the meaning of Minnesota Statutes,
Section 469.174, Subdivision 12 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
Redevelopment Area.
(4) To finance the costs of the activities to be
undertaken by the Authority, the Authority proposes, subject
to the further provisions of this Agreement, to apply Tax
Increments generated by the Tax Increment District and this
Agreement, to reimburse the Developer for certain costs
incurred in the acquisition of the Development Property as
further provided in this Agreement.
(5) The Authority 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 has power to enter into this Agreement
and to perform its obligations hereunder and is not in
violation of the laws of the State.
(2) The Developer will cause the Project to be installed
in accordance with the terms of this Agreement, the
Redevelopment Plan and all local, state and federal laws and
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regulations (including, but not limited to, environmental,
zoning, energy conservation, building code and public health
laws and regulations).
(3) The Developer will use its best efforts to obtain,
or cause to be obtained, in a timely manner, all required
permits, licenses and approvals, and will meet, in a timely
manner, all requirements of all applicable local, state, and
federal laws and regulations which must be obtained or met
before the Project may be lawfully installed.
(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.
(5) The Developer will cooperate fully with the
Authority with respect to any litigation commenced with
respect to the Project.
(6) The Developer will cooperate fully with the
Authority in resolution of any traffic, parking, trash removal
or public safety problems which may arise in connection with
the construction and operation of the Project.
(7) Barring Unavoidable Delays, the Project will be
substantially installed by December 31, 1990.
(8) The Developer shall not use or lease the Project so
that more than 25% of the buildings and ancillary facilities
(determined on the basis of square footage) are used for the
purposes listed in section 144(a)(8) of the Internal Revenue
Code (determined without regard to the 25% restriction in
subparagraph (A)).
(9) Any improvements to County State Aid Highway No. 67
(Osgood Avenue) desired to be implemented by the City of Oak
Park Heights shall be at the sole expense of the City of Oak
Park Heights. Developer shall cooperate to the extent
requested or desired by the City Engineer to dedicate right -
of -way on property owned by the Developer to implement any
street alignment or access reconfiguration desired by the City
of Oak Park Heights to be implemented in the area; provided
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that such street realignment or access reconfiguration shall
be substantially as approved by the City Council of the City
and the Planned Unit Development permit to be granted by the
City Council on this Project. The City of Oak Park Heights
shall not be required to make any street alignments or
improvements, but will notify the Developer at the time of
final approval of the Planned Unit Development as applied for
as to the City's decision as to whether or not to implement
street reconfiguration, redesign, or improvements on County
State Aid Highway No. 67.
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• •
ARTICLE III
UNDERTAKINGS BY DEVELOPER AND AUTHORITY
Section 3.1. Reimbursement of Costs of Acquiring the
Development Property. As consideration for the execution of
this Agreement and the construction of the Project by the
Developer, subject to the further provisions of this
Agreement, including but not limited to the limitations on
source of reimbursement and amount set forth in Section 3.3
hereof, the Authority agrees to reimburse the Developer for
the costs of acquiring the Development Property.
Section 3.2. Limitations on Undertaking of the
Authority.
Notwithstanding the provisions of Sections 3.1, the
Authority shall have no obligation to the Developer under this
Agreement to reimburse the Developer for the cost of the
acquisition of the Development Property, if the Authority, at
the time or times such payment is to be made is entitled under
Section 4.1 to exercise any of the remedies set forth therein
as a result of an Event of Default which has not been cured.
If the Authority has not exercised its remedies under Section
4.2(b) and if a payment is withheld due to an Event of Default
which is later cured, such payment shall be made after such
Event of Default has been cured.
Section 3.3. Limitation of Costs; Methods of Payment.
(1) The sole source of funds from which the Authority is
obligated to reimburse the Developer for the cost of the
acquisition of the Development Property is limited to Tax
Increments, and nothing herein shall be construed to obligate
the Authority to use any of its general funds or other
municipal funds to reimburse the Developer for such costs.
(2) The Authority shall reimburse the Developer up to
$960,000 for the costs of the acquisition of the Development
Property from Tax Increments received as determined in the
following formula:
Total FMV - Base FMV x Adjusted Total Annual x 60%
Total FMV Real Estate Taxes Paid
(a) Total FMV shall equal the annual estimated fair
market value of the Development Property as determined
annually by the City Assessor.
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(b) Base FMV shall equal the existing fair market
value of $3,480,900 subject to annual increases
(beginning with the 1989/1990 value) by the greater of:
(i) annual economic factor of 1.91 %, or
(ii) actual percentage ( %) increase in total
(completed project) estimated market value of the
Development Property as determined annually by City
Assessor.
(c) Total Adjusted Annual Real Estate Taxes Paid
shall be determined from actual real estate tax
statements for the Development Property for the tax years
1991/1992 through 1998/1999.
(d) Adjusted Total Annual Real Estate Taxes Paid
shall mean the real estate taxes paid by the Developer
less the amount of Tax Increments required under the Tax
Increment Act to be paid to the County and the
Independent School District No. 834 or other taxing
jurisdictions.
(3) The payments to be paid to the Developer in
accordance with paragraph (2) above shall be made within 30
days of the receipt of the Tax Increments by the Authority.
Section 3.4. Sale, Lease, Transfer or Assiqnment of
Project.
(1) In the event that the Developer voluntarily sells,
transfers, assigns its interest in the Project or leases the
Project, except for shoppinc7 center retail leases in the
normal course of business, the installment payments to be paid
by the Authority to the Developer pursuant to this Article III
shall terminate.
(2) Upon execution of this Agreement the Developer shall
deliver to the City Clerk a certificate indicating the general
partners of the Developer and a listing of the ownership
interest in the Developer of each partner.
(3) Annually on or before August 1 of each year until
the earlier of the termination of the Tax Increment District
or the Developer has been paid $960,000 in accordance with
Section 3.2, the Developer shall deliver to the City Clerk a
certificate indicating the general partners of the Developer
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and a listing of the ownership interest in the Developer of
each partner.
(4) Any transfer of 50% or more of the partnership
interests in the Developer during a calendar year or any
number of years, other than an involuntary transfer due to
death or incompetency, shall constitute a sale, transfer or
assignment under this section.
(5) The provisions of this paragraph shall not prohibit
the Developer from petitioning the City to consent to a sale,
lease, transfer, or assignment; however, any decision to
consent or to withhold consent to such sale, transfer, or
assignment shall remain in the discretion of the City.
(6) The Developer is financing a significant portion of
its interest in and to the premises with Northwestern Mutual
Life Insurance Company, who will be issuing a mortgage upon
the premises. In the event of mortgage defaultAtransfer of
the Developer's interest in and to the Project to Northwestern
Mutual Life Insurance Company by way of mortgage foreclosure
shall not be deemed to be a sale, lease, transfer, or
assignment of the Project pursuant to the terms of this
Section.
Section 3.5. Developer Equity. The Developer shall
certify and provide to the City sufficient reasonable
documentation to verify that at the date of closing, the
Developer shall have directly invested funds into the Project
in excess of $960,000. Such verification, once confirmed by
the City, shall satisfy the Developer equity requirement set
forth within the City policy adopted March 13, 1989.
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ARTICLE 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
pursuant to Article VI all ad valorem real
property taxes assessed with respect to the
Development Property.
(b) Failure by the Developer to cause the
installation of the Project to be completed
pursuant to the terms, conditions and limitations
of this Agreement.
(c) Except as provided in Section 3.4(6),
the holder of any mortgage on the Development
Property or any improvements thereon, or any
portion thereof, commences foreclosure
proceedings as a result of any default under the
applicable mortgage documents.
(d) Failure by the Developer to
substantially observe or perform any other
covenant, condition, obligation or agreement on
its part to be observed or performed under this
Agreement.
(e) 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
(B) 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
10
(D) be adjudicated a bankrupt or
insolvent; or if a petition or answer
proposing the adjucation 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 ninety (90) days after the filing
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 ninety (90) 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 Authority, 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, but only if the Event of
Default has not been cured within said thirty (30) days.
(a) The Authority may suspend its
performance under this Agreement until it
receives assurances from the Developer, deemed
adequate by the Authority, that the Developer
will cure its default and continue its
performance under this Agreement.
(b) The Authority may cancel and rescind
the Agreement.
(c) The Authority may take any action,
including legal or administrative action, which
may appear necessary or desirable to enforce
performance and observance of any obligation,
agreement, or covenant of the Developer under
this Agreement.
Section 4.3. No Remedy Exclusive. No remedy herein
conferred upon or reserved to the Authority 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
11
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.
Section 4.4. No Implied 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. Aqreement to Pav Attorney's Fees and
Expenses. Whenever any Event of Default occurs and the
Authority 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 on the part of the Developer herein contained, the
Developer agrees that it shall, on demand therefor, pay to the
Authority the reasonable fees of such attorneys and such other
expenses so incurred by the Authority.
Section 4.6. Developer's Remedies. In the event the
Authority is in violation of its obligations, agreements or
covenants under this Agreement the Developer may take any
action, including legal or administrative, which may appear
necessary or desirable to enforce performance and observance
of any obligation, agreement, or covenant of the Developer
under this Agreement.
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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
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 Authority or 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 Authority or the City shall be personally
liable to the Authority or 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:
Oak Park Partners
252 South Plaza Bldg.
1433 Utica Avenue South
St. Louis Park, MN 55416
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(b) in the case of the Authority is
addressed to or delivered personally to the
Authority at:
City of Oak Park Heights
Housing and Redevelopment Authority
14168 57th Street N.
Oak Park Heights, Minnesota 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. This Agreement may be
executed in any number of counterparts, each of which shall
constitute one and the same instrument.
Section 5.6. Law Governinq. This Agreement will be
governed and construed in accordance with the laws of the
State.
Section 5.7. Leqal Opinions. Upon execution of this
Agreement, each party shall, upon request of the other
parties, supply the other parties with an opinion of its legal
counsel to the effect that this Agreement is legally issued or
executed by, and valid and binding upon, such party, and
enforceable in accordance with its terms.
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ARTICLE VI
DEVELOPER'S OPTION TO TERMINATE AGREEMENT
Section 6.1 The Developer's Option to Terminate.
Without limiting other remedies otherwise available to
Developer_, this Agreement may be terminated by Developer, if
(i) the Developer is in compliance with all material terms of
this Agreement and no Event of Default has occurred; and (ii)
the Authority fails to comply with any material term of this
Agreement, and, after written notice by the Developer of such
failure, the Authority has failed to cure such noncompliance
within ninety (90) days of receipt of such notice, or, if such
noncompliance cannot reasonably be cured by the Authority
within ninety (90) days, of receipt of such notice, the
Authority has not provided assurances, reasonably satisfactory
to the Developer, that such noncompliance will be cured as
soon as reasonably possible.
Section 6.2 Action to Terminate. Termination of this
Agreement pursuant to Section 6.1 must be accomplished by
written notification by the Developer to the Authority within
thirty (30) days after the date when such option to terminate
may first be exercised. A failure by the Developer to
terminate this Agreement within such period constitutes a
waiver by the Developer of its rights to terminate this
Agreement due to such occurrence or event.
Section 6.3 Effect of Termination. If this Agreement is
terminated pursuant to this Article VI, this Agreement shall
be from such date forward null and void and of no further
effect; provided, however, the termination of this Agreement
shall not affect the rights of either party to institute any
action, claim or demand for damages suffered as a result of
breach or default of the terms of this Agreement by the other
party, or to recover amounts which had accrued and become due
and payable as of the date of such termination. Upon
termination of this Agreement pursuant to this Article VI, and
the Developer shall be free to proceed with the Project at its
own expense and without regard to the provisions of this
Agreement; provided, however, that the Authority shall have
no further obligations to the Developer with respect to
reimbursement of the expenses set forth in Section 3.3
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0 0
IN WITNESS WHEREOF, the Authority has caused this
Agreement to be duly executed in its name 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.
THE HOUSING AND REDEVELOPMENT
AUTHORITY OF THE CITY OF OAK PARK
HEIGHTS
By
Its Chairman
By
Its Secretary
This is a signature page to the Development Agreement
August 28, 1989, by and between The Housing and Redevelopment
Authority of the City of Oak Park Heights and Oak Park
Partners.
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OAK PARK PARTNERS
By
Its Managing General Partner
This is a signature page to the Development Agreement
August 28, 1989, by and between The Housing and Redevelopment
Authority of the City of Oak Park Heights and Oak Park
Partners.
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STATE OF MINNESOTA )
): ss
COUNTY OF )
The foregoing instrument was acknowledged before me this
day of , 1989, by
and the Chairman and the Secretary,
respectively, of The Housing and Redevelopment Authority of
the City of Oak Park Heights, Minnesota, a body politic and
corporate, on behalf of the Authority.
Notary Public
18
STATE OF MINNESOTA )
): ss
COUNTY OF )
The foregoing instrument was acknowledged before me this
day of , 198_, by the
Managing General Partner of Oak Park Partners, a Minnesota
partnership on behalf of the partnership.
Notary Public
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EXHIBIT A
Legal Description of Tax Increment District
EXHIBIT B
Legal Description of Development Property