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Memo-Redevelopment of Supervalu \ Public Warks Departtnent . Memorandum To: Jim Kerrigan, Director of Planning and Economic Development Copy: /1 ~-bl From: Steven J, Stadler, Public Works Director Date: July 20, 2004 S LI bject: Redevelopment of SUPERVALU North Annex Property This \vill serve as a follo\v-up to your hrief overview at the staff meeting of a possihle redevelopment concept that is now being talked about hy SUPERV ALU and Opus Corporation for the NOlih Annex property. It was my understanding that they desire to undertake a phased redevelopml.:'nt nfthis property, vvhieh could result in 320,000 to e 400,000 square feet once the site is completely developed, From what you detailed (I know this is still very cunceptual), I want to address the following: .., It has ahvays been detailed that with the redevetopment of the North Annex that the three-acre parcel north of Second Street N,F, would be deeded to the City for snow storage. 'IT ou stated that the devetnper is now talking about the possibility of using this area jointly for snow storage and sturm water retention. It has always been assumed that storm water retention would take place on the actual North Annex property. The Meuica project actualty incorporakd the retention pond as a landscape feature. It needs to be understood that from a watershed district standpoint they woulu 110t support such a shared use. <;l Apparently the developer is considering an access point on Second Street N.E. Based on your previous discussion. StIch an access point would need to be of a very limited use, The residential neighborhoods that abut this roadway will strongly oppose any project that has the potential of putting any signi fieant amount of traffic onto this street. . Execution Draft . FIRST AMENDMENT TO REDEVELOPMENT AGREEMENT This First Amendment is made and entered into this 18th day of February, 2003, by the Housing and Redevelopment Authority In and For the City of Hopkins, Mirmesota, a public body politic and corporate under the laws of the State of Minnesota (the "Authority") and SUPERV ALU INC., a Delaware corporation (the "Redeveloper") and amends that certain Redevelopment Agreement dated as of July 20, 1998 (the "Agreement"). WHEREAS, pursuant to the Agreement the Authority conveyed certain real property (the "Redevelopment Property") to the Redeveloper and the Redeveloper constructed thereon an office/warehouse development (the "Minimum Improvements"); and WHEREAS, the Agreement also contains provisions granting to the Authority certain rights to purchase other property owned by the Redeveloper (the ''North Annex Property") if the Redeveloper does not redevelop such property on its own; and WHEREAS, the Authority and the Redeveloper desire to amend the Agreement to . modify the rights and responsibilities of the parties with respect to the North Annex Property. NOW, THEREFORE, the parties do hereby agree as follows: Section I, Unless defined in this Amendment all capitalized words used herein shall have the meaning set forth in the Agreement. Section 2. As of the date of this Amendment the Authority and the Redeveloper have executed and recorded against the North Annex Property an Option Agreement and Declaration of Restrictive Covenant, dated October 13, 1998 (the "Option") in accordance with the terms of the Agreement. Therefore, section 3.9 of the Agreement is hereby amended in the following respects: (a) The parties acknowledge that the Option has been executed and recorded against the North Annex Property and that the parties' obligations under Section 3,9(a) of the Agreement have been performed. The Authority and Redeveloper agree that they will within sixty (60) days after the date of this Amendment execute and record an amendment to the' Option extending the Commencement Date as defined in paragraph 7 of the Option to a date two (2) years from the date of this Amendment. If the time within which the Redeveloper may market the North Annex Property is further extended pursuant to subsection (b) below the Commencement Date shall also be further extended for the same . period. Such additional extensions of the Commencement Date shall be 1 --.---- ---- --- evidenced by \vritten recordable amendments to the Option, Upon each extension . of the Commencement Date, the Termination Date, as defined in Section 7 of the Option, shall also be extended to a date 547 days after the Commencement Date. (b) Section 3.9(h) of the Agreement allowed the Redeveloper a period of time to present to the Authority for its consideration proposals for the Redevelopment of the North Atmex Property. The purpose of extending the Commencement Date under the Option is to allow the Redeveloper additional time in which to market the North Annex Property for redevelopment. Therefore, until the date two (2) years after the date of this Amendment, the Redeveloper shall have the right to present to the Authority and the City for their consideration proposals for the redevelopment of the North Annex Property. The Redeveloper and the AuthOlity understand that the City and the Authority currently desire a proposed development which would consist of approximately 450,000 to 600,000 square feet of Class B office space (potentially in phases) and which would orient traffic patterns to the south of the Norih Armex Property. The above are the desired goals of the Authority and the City for the redevelopment of the North Annex Property but arc not prerequisites for the consideration of the proposals by the City and the Authority. The Redeveloper shall have until the Commencement Date to present an acceptable redevelopment proposal to the Authority and City and to meet any other conditions set forth in section 3 .9(b )(i) to (v) that are not inconsistent with . the above uescribed development. The Authority agrees that 1t will further extend the time within which the Redeveloper may market the North Annex Property for an additional one (1) year period if on the date two (2) years after the date of this Amendment the Redeveloper has an active real estate listing in place with a realtor marketing the Redevelopment Property, which listing is then in effect until no less than 90 days after such uate which is two (2) years after the date of this Amendment. Redeveloper shall deliver a copy of such listing agreement to the Authority before the date two (l) years after the date of this Amendment. The Redeveloper agrees that it will give the Authority at least ninety (90) days written notice if it does not intend to have an active real estate listing in place on the date two (2) years after the date of this Amendment. (c) During the period that the Redeveloper is allowed to market the North Almex Property for development, the Redeveloper shall provide to the Authority quarterly written reports in such detail as the Authority may reasonably require describing the Redeveloper's efforts to market the North Annex Property and the progress made in that effort Cd) Within sixty (60) days after the date of this Amendment the City and the Redeveloper shall negotiate the tenTIS of, and execute, a lease under which the City shall be granted exclusive use of an approximately three (3) acre parcel of properiy, which parcel is legally described on Exhibit A to this Amendment, for . snow storage until the North Atmex Properiy is redeveloped. The lease shall 2 --------- . provide for an ammal rent payment by the City of $15,000.00, payable at times to be agreed upon by the City and the Redeveloper, and shall contain such other usual and customary terms as the City and Redeveloper may agree. Notwithstanding the foregoing, neither the Redeveloper nor the City shall be required to enter into such a lease if either (a) the City decides it chooses not to enter into such lease or (b) Redeveloper is not reasonably able to store its snow on the North Annex Property. If the Redeveloper or another party presents a proposal to the Authority for redevelopment of the North Annex Property that is approved by the Authority and the City, the agreement described in section 3.9(b)(v) of the Agreement shall contain provisions requiring the conveyance of the three (3) acre parcel to the City at a price to be determined by the parties. If no agreement under section 3.9(b)(v) of the Agreement is entered into because the Authority enters into a redevelopment agreement with a third party purchaser of the North Annex Property from the Redeveloper, as a part of the process of negotiating the tenus of that redevelopnient agreement, the Redeveloper will negotiate and enter into an agreement with the City providing for the conveyance ofthe three (3) acre parcel to the City at a price to be determined by the parties. (e) The Redeveloper shall be entitled at its option to demolish the improvements currently existing on the North Annex Property. Such demolition shall not occur until the Authority has exhausted reasonable efforts to extend the term of Tax Increment District No. 2-11 and the time for making expenditures in . Tax Increment Financing District No.2-II or to create a new tax increment district encompassing the North Annex Property, all as is described in section 4(a) of this Amendment. The Redeveloper may demolish the improvements if the Authority has been unable by the date ninety (90) days after the end of the Minnesota Legislature's 2003 legislative session to either: (i) extend the time for making expenditures in Tax hlcrement Financing District No.2-II and extend the term of District No.2-II for an additional five (5) years; or (ii) create a new tax increment district. Prior to demolishing such improvements, the Redeveloper shall submit to the Authority for its reasonable approval a plan to be implemented by the Redeveloper to reduce the dust that may be generated from the North Annex Property after demolition of the improvements. The Redeveloper shall obtain at least three (3) competitive bids, from contractors reasonably acceptable to the Authority, before letting contracts for the demolition and related enviromnental remediation work and shall award the contract for such work to the lowest responsible bidder, such determination to be made in the Redeveloper's reasonable discreti Oil. (f) Until the North Annex Property has been redeveloped, the Redeveloper agrees that it will restrict the use of such property as provided in this paragraph. The Redeveloper agrees that it will not permit the use of the North Annex Property in ways that will adversely affect the surrounding neighborhood including, without limitation, uses that generate objectionable noise or odors, uses . that generate substantial vehicular traffic to the north of the North Annex Property and uses for retail sales. The Redeveloper further agrees that it will install 3 - --. - ..- .---- .-.---.------.-- -- -- screening around such uses as appropriate considering the particular use. Prior to . enteling into any agreement or arrangement with a third party to use the North Annex Property, th~ Redeveloper agrees that it will notify the potential user of the restrictions on use contained in this paragraph. Notwithstanding the foregoing, Redeveloper shall be allowed to store snow on the North Annex Property without being required to screen such snow. (g) The Redeveloper and AuthOlity agree that the Option will be amended to specify that the purchase price to be paid by the Authority to acquire the North Annex Property is the sum of (i) $10,739,072.61 (consisting of $9,039,072.61 as the value of the land and building and $1,700,000.00 to reimburse the Redeveloper for certain pubiic improvements financed by the Redeveloper in the course of developing the Minimum Improvements), (ii) the amount of any costs paid by the Redeveloper under Section 4( d) of this Amendment, and (iii) the reasonable documented costs of the demolition of the improvements on the North Annex Property and environmental remediation related thereto, if the Redeveloper has demolished such improvements, less any amounts which may have previously been paid to the Redeveloper pursuant to the Notc (as defined below), As used herein, the term "Note" shall mean the tax incremcnt revenue note to be issued by the Authority to the Redeveloper pursuant to paragraph 4(b )(iv) below. The purchase price to be paid by the Authority will not be reduced on account of the Redeveloper's conveyance of a portion of the e North Annex Propelty to the City pursuant to the Section 3 of this Amendment. In addition, if the Note has been issued, the Note shall be retumed to the Authority and canceled at the closing of the purchase by the Authority of the NOlih Nmex Property. Section 3. The redevelopment of the North Annex Property will necessitate the construction of certain improvements to the intersection at the south comer of the North Annex Property. Therefore, the Agreement is hereby amended in the following respects: In order to facilitate the redevelopment of the North Annex Property the City is in the process of constmcting a new intersection south of the North Annex Property. In order to finance such intersection improvements the City will issue tax increment general obligation bonds payable from tax increment generated from Tax Increment District No.2-II. The Redeveloper will convey to the City at no cost to the City its land included in the North Annex Property necessary to construct the intersection improvements. The City will accept conveyance of such property subject to the interests in the North Annex Property that the Authority accepted pursuant Section 3.3(g) of the Agreement. In addition, the City will purchase for the price of $71,500.00 Redeveloper's land located south of Excelsior Boulevard necessary for the intersection improvements. The land south of Excelsior Boulevard shall be conveyed to the City free and clear of all defects and encumbrances other than those approved in writing by the City. To the extent . that the City has to incur costs to cle~u' any title matter on the land south of Excelsior Boulevard the purchase price will be reduced by the amount of such 4 . costs. The City will also pay the cost of making modifications to the Redeveloper's remaining land located south of Excelsior Boulevard which are made necessary as a result of the Redeveloper's conveyance of such land to the City. The specific modifications that the City will pay for are described on the attached Exhibit C. The properties to be conveyed to the City are described on Exhibit A to this Amendment. The City and the Redeveloper will use their best efforts to enter into a purchase agreement on or before December 31, 2002 detailing the terms of the Redeveloper' sconveyance of such properties to the City and will enter into such an agreement no later than January 31, 2003. Section 4. Article V of the Agreement states that the Authority and City will consider creating a new tax increment district and using tax increment generated from the district to reimburse the Redeveloper for certain costs incurred by it. Subsequent to the date of the Agreement, the Authority and City created Tax Increment Financing District No.2-II (the '"Tax Increment District"), a redevelopment district. The Tax Increment District encompasses the Redevelopment Property, the North Annex Property and certain other parcels of property. The Authority and Redeveloper have reached the following understandings concerning the Tax Increment District, the use of tax increment from the Tax Increment District and the payment of the Authority's costs, which understandings replace the understandings of the parties contained in Article V ofthe Agreement as they relate to those subject matters: (a) Under Minnesota Statutes, section 469.1763, tax increment from a . tax increment district may generally be used to only pay for or reimburse costs incurred within five (5) years from the date of certification of the tax increment district. This limitation and the limited remaining term of the Tax Increment District has the effect of making infeasible the implementation of any proposal for the redevelopment of the North Annex Property that might be submitted by the Redeveloper and approved by the Authority. Therefore, the Authority agrees that it will in good faith attempt to secure special legislation from the Minnesota Legislature extending the five (5) year limitation on expenditures for the Tax Increment District and extending the term of the Tax Increment District for an additional five (5) years. The Authority makes no representations or warranties that it will be successful in such effort. If the Authority is unable to secure such special legislation it will take steps to create a new tax increment district encompassing only the North Annex Property. The creation of such a tax increment district is, however, subject to the public hearing and notice provisions of State law and therefore, the Authority cannot commit to create such a district unless and until the City holds a public hearing on the matter and considers all infonnation and comments on the creation ofthe district. (b) For purposes of this Amendment, subject to subsection (c) below, "Tax Increment" shall mean that portion of the real property taxes generated from the properties located in the Authority's Tax Increment District No.2-II and any new district that may be created by the Authority pursuant to (a) above that is paid . to the Authority as tax increment after the date hereof under the Minnesota tax increment financing laws. However, "Tax Increment" shall only include tax 5 increment generated based on improvemEnts that have been made in Tax . Increment District No. 2-11, and/or a new district that may be created by the Authority pursuant to (a) above, as of the date of this Amendment and any improvements made pursuant to an agreement entered into pursuant to Section 3.9(b )(v) of the Agreement or pursuant to a redevelopment agreement between the Authority and a third party developer concerning the redevelopment ofthe North Annex Property. Tax increment generated as a result of improvements made after the date hereof in Tax hlcrement District No. 2-11, or a new district that may be created by the Authority pursuant to (a) above, that are not covered by an agreement entered into pursuant to Section 3.9(b)(v) of the Agreement or by a redevelopment agreement between the Authority and a third party developer concerning the redevelopment of the North Annex Property shall not be considered "Tax Increment" tmder this Amendment. Tax Increment will be used by the Authority, to the extent legally permissible, in accordance with the following: (i) First, ten percent (10%) of aU Tax Increment will be retained by the Authority to pay its administrative costs. At the time that the Redeveloper or another party presents to the Authority a redevelopment proposal for the North Annex Propelty that is approved by the Authority and the Authority and Redeveloper enter into an agreement pursuant to Section 3.9(b)(v) of the Agreement, or the Authority and such other e party enter into a redevelopment agreement relating to the North Annex Property, the Authority will consider reducing the amount of Tax Increment being withheld for administrative costs, If on. the tennination of the Tax Increment District the Authority has not spent all of the Tax Increment so withheld for administrative costs any amounts not spent will be applied to items (ii) through (v) in the order below, (ii) Second, Tax Increment will be used to pay the costs of the intersection improvements described in Section 3 of tins Amendment and to pay current debt service on the City's bonds issued to finance the intersection improvements described in Section 3 of tlns Amendment and to pay the cost of any other off-site improvements made by the Authority or the City within the Tax Increment District or any new tax increment district created under (a) above. (iii) Third, Tax Increment in the amount of one year's average de1.ot service due on the City's bonds described in (ii) above issued to finance thc intersection improvements described in Section 3 of this Amendment will be retained by the . Authority, If said amount so retained, or any portion thereof, 6 . has not been used to pay costs described in (ii) above on the date that all of the bonds described in (ii) above are no longer outstanding, the unused amount shall be treated as Tax Increment and used for the items in (i)-(v) of this subsection (b) in that order. (iv) Fourth, Tax Increment will be used to pay a tax increment revenue note issued by the Authority to the Redeveloper if the Redeveloper has demolished the improvements on the North Annex Property. The amount of the tax increment revenue note shall be the amount of Redeveloper's documented costs of demolition and enviromnental remediation. The note shall be issued at such time as the Redeveloper provides to the Authority documentation, in such fonn as the Authority may reasonably require, showing that the improvements on the North Annex Property have been demolished and removed and all related enviromnental remediation completed and that the cost of the demolition and remediation has been paid by the Redeveloper. The note shall be substantially in the form of the note attached to this Amendment as Exhibit B, with all blanks completed. No . interest will accrue on the principal amount of the note until the Redeveloper, or a purchaser of the North Annex Property, submits to the Authority a proposal for the redevelopment of the North Annex Property that is approved by the Authority and the Authority and Redeveloper, or a purchaser of the North Annex Property from the Redeveloper, enter into the agreement described in Section 3.9(b)(v) of the Agreement or a similar redevelopment agreement. During the process of negotiating such an agreement, the parties will analyze whether it will be feasible to pay interest on the outstanding principal amount of the note, considering the cost of the redevelopment, the estimated amount of tax increment to be generated and other relevant factors. If the parties determine that it will be possible to pay interest on the note and agree on the amount thereof, the Redeveloper will surrender the note and the Authority will issue a new note in an agreed-upon form. (v) Fifth, Tax increment will be used to pay the qualified costs of redeveloping the North Annex Property which are incurred by the Authority, or which are incurred by the Redeveloper and are reimbursable pursuant to an agreement e entered into pursuant to Section 3.9(b)(v) of the Agreement, or which are incurred by a third party developer and are 7 reimbursable pursuant to a redevelopment contract entered . into with the Authority. (c) Tax increment that has been received by the Authority prior to the date of this Agreement and not yet spent by the Authority will not be treated as Tax Increment as defined in subsection (b) above. Instead, such tax increment will be retained by the Authority and may be spent by the Authority on the costs identified in paragraph (b )(ii) above. If said amount so retained, or any portion thereof, has not been used to pay costs described in paragraph (b )(ii) above on the date that all of the bonds described in paragraph (b )(ii) above are no longer outstanding, the unused amount shall at such point be deemed to be "Tax Increment" as defined in subsection (b) above and will be used to pay the items in paragraphs (i)-(v) of subsection (b) above in that order. (d) All reasonable costs incurred by the Authority, whether incurred before or after the date o f thi s Amendment, In connection with the implementation of the provisions of the Agreement, as amended by this Amendment, including, without limitation, the costs of securing special legislation or creating the new tax increment district described in section 4(a) above, the costs of reviewing and analyzing Redeveloper's development proposals, the cost of negotiating and preparing this Amendment, and the costs of negotiating and preparing any other agreement or agreements contemplated by the . Agreement as amended by this Amendment, and all costs related to the foregoing shall be paid by the Redeveloper upon demand by the Authority. With the exception of the Authority's attorneys and financial advisors, prior to retaining consultants, contractors or other parties for whose reasonable fees the . Redeveloper will be responsible under this section, the Authority will notify the Redeveloper of its intent to do so. If the Authority and the Redeveloper enter into an agreement pursuant to Section 3.9(b )(v) of the Agreement at that time the principal amount of the note issued by the Authority under (b)(iv) above will be increased by the amount of the costs paid by the Redeveloper under this paragraph, Section 5. In consideration of the Authority's undertakings and agreements in this Amendment, the Redeveloper agrees that during the term of the extension of the Commencement Date under the Option pursuant to Section 2(a) and, if applicable Section 2(b), of this Amendment it will not pursue a request that the City approve a tax abatement for the Redeveloper's perishable warehouse facility located adjacent to the Tax Increment District. Section 6. The Redeveloper shall have the right to terminate the extension of the Commencement Date under the Option on the date 18 months after the date of this e Amendment by giving written notice of its intent to terminate at least 120 days plior to 8 . such date. I[the Redeveloper fails to give such notice of termination, the Commencement Date shall continue to be extended as provided in Section 2 of this Amendment. If the Redeveloper does give notice of termination, the Commencement Date will be the date 18 months after the date of this Amendment, and after the Commencement Date the Redeveloper will no longer have any rights to present redevelopment proposals to the Authority and City pursuant to Section 2(b) of this Amendment. All other provisions of this Amendment will remain in force. Section 7. If requested by the Redeveloper, the Authority will discuss assisting the Redeveloper in its acquisition of the real property located immediately northeast of the North Annex Property if it is necessary for the redevelopment of the North Armex Property pursuant to a redevelopment proposal approved by the Authority. Nothing in this Amendment is intended to obligate the Authority to take any action or incur any cost incOIll1ection with such an acquisition. Section 8. Except as they may be inconsistent with the terms of this . Amendment, all other provisions of the Agreement shall remain in full force and effect. . 9 IN WITNESS WHEREOF, the Authority has caused this Agreement to. be duly . executed in its name and behalf and its seal to. be hereunto. duly affixed and the Redevelaper has caused this Agreement to be duly executed in its name and behalf all ar as the date first abave written. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF HOPKINS, MINNESOTA By ~/p~ ~irma~ By ~~ ~ Its Executive Director SUPERVALU INC. By Mf STATE OF MINNESOTA) . )ss. COUNTY OF Hennepin ) The faregaing instrument was acknowledged before me this ~day af ~ ,200Z, by Eugene J. Maxv.Tell and Steven C. Nielke , the Chairman and Executive Die.- of the Housing and Redevelopment Authority In and For the City afHapkins, Minnesata, a public bady politic and corporate, an behalf of the Autharity_ ~ ~ -' ~" C'HA~Jr~O e~~ ~u ',r-JC SMITH ~ Notary Public: ~ " ~' Minnesota Notary Public My CommISSion 8qlires JaIl, 31,2005 ST A TE OF MINNESOTA) )ss. COUNTY OF HENNEPIN) ,~ The foregoing inst.rumev was ac~nowledged before me this & day of drutJory , 200Nb~ .. - K:(!gn+\- , the ViCE RESI E T ' of SUPERV ALU INC., a Delaware corporatian, on behalf of the corporation. _~l;ml.~ ~ .^,,^,:!:"':~M".MI</l,/WWt/'^Ml\MN""'J\NI. e , <":;0..:." LISA L LINDQUIST ~ If,"_ ;:4 "(;:.-, ,Of_, . ~'''''''''''':i) "O"RY PUBLIC- M"'NEOOTA . ,~~r'---: ','....._ '-'"', .. ~'.cF"' < \.. _"' Notary Public ~.t.~~'1'~:,~'/ f,', CQC',mi,,;c;] Expiles Jan, 3\, 2005 ~ "'....".J ~ !~!F_'r ~ .~VX;:jV'...A,l\I'-j"'V'N\f'.A.~"t-,,,..^/'v'\N\IV\fv\NV ... . . EXHIBIT A Legal Description of Property Three Acre Parcel: Lot 1, Block 1, Valu Addition, City of Hopkins, Hennepin County, Minnesota PID No. 19-117-21-23-01-01 Property South of Excelsior to be deeded to City: Lots 30A and 30B as shown on the attached proposed Right of Way Plat map_ Portion of North Annex Property to be deeded to City: Lots 29A, 29B, 29C, 29D, 29E, 29F, 29G, 29H, 34A, 34B, and 34C as shown on the attached proposed right of way plat map. . . --- ------- ----- . EXHIBIT B . Form of Tax Increment Revenue Note $ UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN HOUSING AND REDEVELOPMENT IN AND FOR THE CITY OF HOPKINS LIMITED REVENUE TA,-,X INCREMENT NOTE (SUPERVALU NORTH ANNEX DEMOLITION PROJECT) The Housing and Redevelopment Authority In and For the City of Hopkins, Minnesota (the "Authority"), hereby acknowledges itself to be indebted and, for value received, promises to pay to lhe order of SUPERV ALU INC., a Delaware corporation, or its pemlitted assigns (the "Owner"), solely from the source, to the extent and in the marmer hereinafter provided, the principal amount of this Note, being Dollars ($ ) (the "Principal Amount"). No interest shall accrue with respect to the Principal Amount. The Principal Amount shall be payable solely from Available Tax Increment, as defined below. Payments on the Principal Amount (the "Scheduled Payments") shall be made C0I1U11encmg on 1, 200 , and continuing on each February 1 and August 1 . thereafter (the "Scheduled Payment Dates") up to and including February 1 (the "Final Scheduled Payment Date"), This Note is issued pursuant to that certain Redevelopment Agreement between the Authority and the Owner dated as of July 20, 1998, which Redevelopment Agreement has been amended by a First Amendment to Redevelopment Agreement between the Authority and the Owner dated , 2002 (the "First Amendment to Redevelopment Agreement")(which Redevelopment Agreement as amended by the First Amendment to Redevelopment Agreement is referred to herein as the "Redevelopment Agreement"). Each payment on this Note is payable in any coin or currency of the United States of America which on the date of such payment is legal tender for public and private debts and shall be made by check or draft made payable to the Owner and mailed to the Owner at its postal address within the United States which shall be designated from time to time by the Owner. The Note is a special and limited obligation and not a general obligation of the Authority, which has been issued by the Authority pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes. Section 469.178, subdivision 4, to aid in financing a "project", as therein defined, of the Authority consisting generally of defi-aying certain public redevelopment costs incurred and to be incurred by the Authority within and for the benefit of its Redevelopment Project No, 1 (the "Project"). THIS NOTE IS NOT A DEBT OF THE CITY OF HOPKINS OR THE STATE OF . MINNESOTA (THE "STATE"), AND NEITHER THE CITY, THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON THIS NOTE, NOR . . SHALL TillS NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN AVAILABLE TAX INCREMENT, AS DEFINED BELOW. The Scheduled Payment of this Note due on any Scheduled Payment Date is payable solely from and only to the extent of "Available Tax Increment". "Available Tax Increment" means that portion ofthe Tax Increment, as such term is defined in Sections 4(b) and (c) of the First Amendment to Redevelopment Agreement, that is available for the payment of this Note pursuant to Section 4(b )(iv) of the First Amendment to Redevelopment Agreement. The Authority shall not be in default under this Note for failure to make a Scheduled Payment using Available Tax Increment until a date thirty (30) days after the Authority receives written demand for such payment from the Owner; provided, that the Authority shall endeavor to make Scheduled Payments when due or as soon as possible after receipt of the Owner's written demand. The Authority shall pay on each Scheduled Payment Date to the Owner the Available Tax Increment. If on the Final Scheduled Payment Date, after payment to the Owner of all of the Available Tax Increment, the Authority has not paid all of the Principal Amount, then the amount not paid shall be no longer due and owing and the Authority's obligations under this Note shall be discharged. . The Authority's obligations herein are subject to the terms and conditions of the Redevelopment Agreement. Subject to Section 9.2 of the Redevelopment Agreement, the Authority's payment obligations hereunder shall be suspended and this Note may be terminated by the Authority upon the occurrence of an Event of Default as provided in Section 9.1 of the Redevelopment Agreement, which Redevelopment Agreement is incorporated herein and made a part hereof by reference.. Upon such termination, the Authority's obligations to make further payments hereunder shall be discharged. Such termination may be accomplished by the Authority's giving of written notice to the then registered owner of this Note, as shown on the books of the Authority. This Note shall not be payable from or constitute a charge upon any funds of the Authority other than Available Tax Increment, and the Authority shall not be subject to any liability hereon or be deemed to have obligated itself to pay hereon from any funds except the Available Tax Increment, and then only to the extent and in the manner herein specified. The Owner shall never have or be deemed to have the right to compel any exercise of any taxing power of the Authority or of any other public body, and neither the Authority nor any director, commissioner, council member, board member, officer, employee or agent of the Authority, nor any person executing or registering this Note shall be liable personally hereon by reason of the issuance or registration hereof or otherwise. This Note shall not be transferable or assignable, in whole or in part, by the Owner . without the prior written consent of the Authority, which consent shall not be unreasonably withheld or delayed. . IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things . required by the Constitution and la\vs of the State of Minnesota to be done, to have happened, and to be perfomled precedent to and in the issuance of this Note have been done, have happened, and have been perfonned in regular and due form, time, and manner as required by law; and that this Note, together with all other indebtedness of the Authority outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the Authority to exceed any constitutional or statutory limitation thereon. IN \VITNESS WHEREOF, the Housing and Redevelopment Authority In and For the City of Hopkins, by its Commissioners, has caused this Note to be executed by the manual signatures of the Chaimlan and the Executive Director of the Authority and has caused this Note to be dated ,200 . . -- - -------- . . CERTIFICATE OF REGISTRATION It is hereby certified that the foregoing Note was as of the latest date listed below registered in the name of name of the last Registered Owner noted below and that as of said applicable date the undersigned has registered this Note as to principal and interest on the Note in the name of such Registered Owner on the books kept by the undersigned for such purposes. DATE OF SIGNATURE OF NAME OF REGISTERED OWNER REGISTRATION REGISTRAR . . ------ _.n_ " ~ OPUS --=e' I 1- North Annex Redevelopment Summary Hopkins, MN August 11, 2004 General Background Opus Not1hwest, L.L.c. and 5upervalu have partnered together on the master-planning and redevelopment of Supervalu's 30+ acre North Annex property located at the northeast quadrant of 169 and Excelsior Boulevard ("Property"). Through this partnership, the Team has been actively engaged in the development of il wide variety of master-plans for the Property. Various densities were tested. phasing was analyzed and multiple product types \vcre considered, all in an effort to alTive at a framework for redevelopment that bnlances the practicnl realities of the marketplace and the City of Hopkins' ("City") gOills for the Property. These efforts resulted in a master-plan that nuw consists of an office orienlated "campus" totaling between 350,00 - 425,000 sq. ft. Although this product type represents the highest and best use for the site, it also is the one with thc least growth potential over the next 24 - 36 months. Other related uses such as medical office or R&D should also be cunsidered as possible options, Additiona]]y, a hotel use and anciHary retail have been tcsted and m3Y be appropriate when viewed within the context of the entire redevelopment. . Three master-plan schemes are included with this summary. It is Opus' and Supervalu's desire to partner with the City to arrive at a plan and redevelopment Jgreement that achieves our collective goal.s. Plannin2: J}rocess The Team recognizes the importance of a collaborative approach to any site planning process. This includes not only the involvement of the City but effected property owners as well. To that end, we anticip3te holding infOlmational meeting(s) to introduce our plan and redevelopment to the neighborhood in order to address any concelTls or objections early-on in the entitlement process. Tax Increment Financing It is the intent of Opus and Supervalu to seek approval for tax increment financing that would be available as development occurs on the Property. This concept is essential in order to meet the density objectives of the City and still be able to deliver a market-based economic structure to prospective users. The preliminary framework for the TIF structure is as outlined on the attached summary prepared by Ehlers & Associates. Schedule Subject to an acceptable TIP structure and redevelopment framework being in place, it is Supervalu's intent to demolish the existing North Annex building and prepare the site for redevelopment yet this year. This step, combined with the recently completed roadway ilnd infrastructure improvements at . Excelsior Boulevard and Jackson A venue will significantly enhance the Property's marketability and potential for redevelopment. Additionally, by removing the building now, the Team will be in a better position to respond to those users desiring a fast-track delivery schedule. - . r~ --- =e-- ,- -'---j Masterplan Overview The current vision for the site calls for a variety of Class A office buildings with a range of architectural styles and exterior materials. A summary of the three plans has been provided below. Additionally, various building images have been provided as part of this summary in an attempt to illustrate the quality of architecture and exterior matelials envisioned by the Team. Obviously the final configuration and number of buildings shown on the schematic plans are preliminary and subject to change based on specific L1ser requirements. Also, as suggested earlier, other related uses such as medical office, R&D, hotel, and ancillary retail should be considered, OJJtion 1 Lot A - 8.1 Acres Building: 3 Firs @ 36,500 = 109,500 SF Parking: 550 Cars ( 140 Supported) Lot B - 9.5 Acres Building: 4 FIrs @ 37,000 = 148,000 SF Parking: 740 Cars (160 Supported) . Lot C ~ 8.3 Acres Building: 3 FIrs @ 41,500 = 124,500 SF Parking: 625 Cars (160 Supp0l1ed) Lot D - 3.8 Acres (Outlot) TOTAL 382,000 SF Option 2 Lot A - 8.1 Acres Building: 3 FIrs @ 41,500 = 124,500 SF Parking: 620 Cars (190 Supported) Lot B - 9.5 Acres Building: 4 FIrs @ 37,000 = 148,000 SF Parking: 740 Cars (160 Supported) Lot C -7.9 Acres Building: 4 Firs @ 36,500 = 146,000 SF Parking: 730 Cars (265 Supported) . Lot 0 - 4.2 Acres (Outlot) TOTAL 418,500 SF - =e i _.c__ '" I I OIJtion 3 Lot A - 5 Acres Hotel: 3 FIrs @ 34 Rooms = 102 Parking: 290 Cars on Grade Lot B - 9.5 Acres Building: 4. FIrs @ 37,000 = 148,000 SF Parking: 670 Cars ( 150 Supported) Lot C - 7.9 Acres Building: 3 Firs @ 41,500 = 124,500 SF Parking: 560 Cars (125 Supported) Lot D - 3.1 Acres Building: I FIr @ 5,000 SF Parking: 125 Cars on Grade . Outlot - 4.2 Acres TOTAL 332,000 SF Pri mary access to the site occurs at the southeast corner along Jackson A venue North. A second access is proposed at Second Street N0I1heast. The Team understands the sensitivity to this second access and will commit to working with City and the neighhorhood to determine whether an access at this location can be achieved in a manner acceptable to those eOllcemed. St0l111 water detention is proposed to occur both onsite and on the approximate .3 acres of property across Second Street Northeast. The Team understands the City's desire to continue to utilize this area for its snow storage needs amI will workjoint1y with Staff to determine whether ajoint use of this propeI1y is feasible. . ,- - - 'c~~~ . -CCC",~"C,.: o ~';g.~;li4'f;.n . ~!Il;i-- -~i~i~~~li~~~~:H; ~~ 'i[~ - ;;:iir?~~_ --'i,"; , . _~Hi~.g. · 'c"~__~.~ I' -;-~C~--- ~ 'en. ...'l~ ~<,,:;< -,.' ~ . ..l1I ''-'i:'''W,:.'L .c'; ...;_. -c, _' -'. "": -,. u, .. . _,', ., IfjC;"-M< ',; C'.c" uu-;c.;~", _:: _ .>_~-c.~.............._ ~.,. ___ > ... u. ..; . _. -.'-'c':".. . 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