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CR 99-147 Sub-Grant Agreement-Stiele & Bakken Investments, LLC CITY OF ~ August 11, 1999 HOPKINS Council Report 99-147 SUB-GRANT AGREEMENT--STIELE & BAKKEN INVESTMENTS. LLC Proposed Action Staff recommends approval of the following motion: Authorize mayor and city manager to execute a sub-grant agreement with Stiele & Bakken Investments. LLC. Overview As the Council is aware, Stiele & Bakken Investments, LLC, (the redeveloper) has received approval to undertake construction of an office/warehouse project. To proceed with this project, soil contamination issues need to be addressed. The City was successful in securing grants from both the Department of Trade and Economic Development and the Metropolitan Council to assist the development in this effort. Prior to the City disbursing any of the contamination clean-up money, an agreement needs to be executed with the redeveloper detailing his responsibilities. The agreement that is before the Council for consideration was prepared by Bob Deike of Bradley & Deike and has been reviewed by the redeveloper and the redeveloper's legal counsel. SUDPortinf! Documents o Sub-grant Agreement Alternatives The City Council has the following alternatives regarding this action: 1. Approve the action as recommended by staff With this action, the sub-grant agreement will be executed. 2. Continue the item for additional information. The Council needs to be aware that the redeveloper has begun work on this project and will be requesting a draw on the grant funds in the near future. Staff will not disburse any funds until there is approval and exe7r of the sub-grant agreement. / /,;-' ~ --. .Ie ;// 'yL /L-;" Jim ~rrigan Planning & Economic evelopment Director SUBGRANT AGREEMENT THIS AGREEMENT, made on or as of the day of , 1999, by and between, the City of Hopkins, a home rule charter city under the laws of the State of Minnesota (hereinafter referred to as the "City"), having its principal office at 1010 First Street South, Hopkins, MiIUlesota 55343, and Stiele and Bakken Investments, LLC, a Minnesota limited liability company (hereinafter referred to as the "Redeveloper"), having its principal office at 1304 Excelsior Boulevard, County Road 3, Hopkins, Minnesota 55343. WITNESSETH: WHEREAS, the Redeveloper and the Housing and Redevelopment Authority In and For the City of Hopkins, a public body politic and corporate (the "Authority") have entered into a Contract for Private Redevelopment (the "Redevelopment Agreement") pursuant to which the Redeveloper has agreed to undertake the redevelopment of certain real property located within the City of Hopkins (which real property is referred to herein and in the Redevelopment Agreement as the "Redevelopment Property"); and WHEREAS, the Redevelopment Property was formerly used as municipal solid waste disposal site and there remains on the Redevelopment Property subsurface contaminants that exceed guidelines established by the Minnesota Pollution Control Agency (the "MPCA"); and WHEREAS, at the request ofllie Redeveloper, the City applied for grant funds under the Minnesota Department of Trade and Economic Development's (UDTED") Contamination Cleanup Grant Program (the "DTED ProgramH), authorized pursuant to Minnesota Statute~, Sections 1161.551 et seq., to provide funding to remediate the contamination contained on the Redevelopment Property (which remediation activities are refen-ed to herein as the "Work") and WHEREAS, also at the request of the Redeveloper, the City applied for grant funds under the Metropolitan Council's (the "Council") Tax Base Revitalization Program (the "Council Program") authorized pursuant to Minnesota Statutes, sections 473.251 and 473.252 (the DTED Program and the Council Program being herein collectively referred to as the "Programs"); and WHEREAS, pursuant to an application to DTED (the ''DTED Application"), the City was awarded DTED Program funds (the uDTED Grant") in the amount of $765,053.00 (but not to exceed 75% of the actual cost of the Work), which DTED Grant will be disbursed by DTED to the City pursuant to the tenns and conditions of the Contamination Cleanup Program Grant Agreement attached hereto as Exhibit A (the "DTED Grant Agreement"); and WHEREAS. pursuant to an application to the Council (the "Council Application"), the City was awarded Council Program funds (the "Council Grant") in the amount of $168,371.00. which Council Grant will be disbursed by the Council to the City pursuant to the terms and conditions of the Metropolitan Livable Communities Act Tax Base Revitalization Account Grant Agreement attached hereto as Exhibit B (the "Council Grant Agreement"); and Rjd/agreementlhopkinli stic1c pm agreement 1 WHEREAS, the Redeveloper has agreed to pay any amount by which the cost of the Work exceeds the Grants; and WHEREAS, the parties desire to set forth. in writing their agreement as to the disbursement of the Grants from the City to Redeveloper. NOW, THEREFORE, in consideration of the foregoing premises and the mutual representations, warranties, covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows; 1. Accuracy ofRecitaJs. The parties agree that the recitals are true and accurate. 2. Disbursement of Grant Funds. If and to the extent that the City receives funds pursuant to the Grants, the City shall disburse them to Redeveloper or any contractor performing the Work, as designated by Redeveloper, subject to the terms and conditions of this Agreement and the Grant Agreements. The City makes no representation or warranty concerning the availability or sufficiency of the Grants. 3. Use of Funds Redeveloper shall use any and all funds disbursed to it hereunder solely to pay, or to reimburse itself for paying, the costs and expenses incurred by Redeveloper in connection with the Work and otherwise in accordance with and subject to thc conditions imposed upon the City in the Grant Agreements. Redeveloper shall take all steps necessary to assure such use of funds through its contracts with its contractors. 4. RedeveJo.per ObJiptions. Redeveloper does hereby assume and agree to perform and observe all of the covenants, obligations, agreements and conditions to be performed or observed by the City under the Grant Agreements. Without limiting the generality of the foregoing, the Redeveloper specifically agrees as follows: A. Redeveloper is the owner of the Redevelopment Property and has the legal right to perfonn the Work on the Redevelopment Property. The Redeveloper shall expeditiously and diligently commence and. pursue the Work so iliat the Work is completed in accordance with the budget approved by DTED and the Council (the "Budget") and within the timeframes specified in the applications and Grant Agreements. Redeveloper shall immediately notify the City in the event of any change in the prospects for the timely and satisfactory completion of the Work within the Budget. B. Redeveloper shall perform the Work, and shall include in any contract for performance of any part of the Work provisions requiring the contractor to perform such part of the Work in a good and workmanlike manner and in accordance with applicable state and federal laws and regulations, including, without limitation, MPCA guidelines and requirements and applicable OSHA regulations including the federal Hazardous Waste Operations and Emergency Response Standards (29 CFR 1910.120 and 29 CFR 1926.65). 2 C. In the event that DTED or the Council, pursuant to the "Termination Clausen in the Grant Agreements, demands return of Grant funds already disbursed, Redeveloper forthwith shall within thirty (30) days of demand by the City pay the City the amount demanded by DTED and/or the Council. D. Redeveloper shall maintain accurate and complete books, accounts and records pertaining to the Work (including without limitation any independent audits of Redeveloper required by the GTant Agreements) and permit City. DTED and Council representatives and other parties designated in the GTant Agreements to have free access to and to inspect and copy all books, accounts, records and contracts relating to the Work and to discuss the same, as well as the progress and findings of the Work, with Redeveloper's project managers at reasonable times and intervals. E. Redeveloper shall prepare and timely submit to the City, DTED and the Council the annual reports on grant fund distribution and Work progress as required by the Grant Agreements. F. The City's authorization of the submission of the applications under the DTED and Council Programs was predicated on the understanding that the City would not incur any financial obligations and that the Redeveloper would be responsible for the payment of aU cost of the Work in excess of the Grants, including, without limitation, any required local contribution or local match required under the Programs. If the City is required to actually pay any amount in cOIUlection with the Grants, the Redeveloper shall within ten (10) days after request by the City, payor reimburse the City for such amounts. G. The Redeveloper shall provide all certifications at the times the same are required to be provided under the Grant Agreements. 5. Disbursement Procedures. A. Redeveloper shall prepare and submit to the City periodic payment requests for the costs and expenses of the Work in the form required by DTED, the Council and the City, and the City shall forward the same to DTED and the Council. At a minimum, each payment request shall state the cleanup activity for which payment is requested, the contractor(s)/vendor(s) to be paid, the time period within which the subject activity was performed, the current balance remaining to be paid for each construction line item and the remaining balance of such line item after the requested payment is made. Each payment request shall be signed by a representative of the Redeveloper, the Redeveloper's construction manager and the Redeveloper's inspecting architect. Each payment request shall be accompanied by invoices from contractors and, if the payment is requested for reimbursement of costs paid by the Redeveloper, cancelled checks showing payments made. During the course of constructing the W rirk and the Minimum Improvements, as defined in the Redevelopment Agreement, the Redeveloper shall maintain and submit with each payment request a docwnent showing the sources and uses of construction funds updated as of each payment request. The Redeveloper shall submit such other documentation as the City may require relative to costs of the Work. 3 B. Payment requests may be submitted no more than monthly and shall be submitted on or before the first day of the month. C. Redeveloper acknowledges that it may be DTED's and the Council's practice to disburse the percentages set forth in the Grant Agreements of each payment request (up to the maximum amount of the respective Grants). Upon the City's receipt of funds from DTED, the CITY shall forward the same to the disbursing agent for the Redeveloper's construction financing for further disbursement to the Redeveloper or the contractor designated by Redeveloper, provided (i) Redeveloper is not in default herennder and (ii) there has not occurred any change which, in the reasonable judgment of the City, materially adversely affects the prospects for the timely and satisfactory completion of the Work within the Budget. 6. Indemnity: Ret)ayment to City Redeveloper hereby releases and agrees to indemnify, defend and hold hannless the City, tlle Authority, their directors, officers, employees and agents, and their respective heirs, successors and assigns (collectively, the "Indemnified Parties") from and against any and all claims, demands, judgments, penalties, liabilities, costs, damages and expenses ('tLiabilities"), directly or indirectly incurred by any of the Indemnified Parties. arising from the subject matter of this Agreement, Redeveloper's default under this Agreement and/or the performance or nonperformance of the Work. Redeveloper specifically agrees that the Indemnified Parties shall have no responsibility for, and the foregoing indemnity shall cover, Liabilities arising under environmental laws and regulations. 7. Costs and Expenses Redeveloper agrees to reimburse the City within fourteen (14) days of demand by the City for all reasonable out-of-pocket expenses paid or/incurred by the City (including costs and fees and expenses of attorneys for the City) in connection with the negotiation, preparation, approval, review, execution, delivery, amendment, modification, interpretation, collection and enforcement of this Agreement. The obligation of Redeveloper under this paragraph shall surVive any termination of this Agreement. 8. Default Remedies. If Redeveloper should default under this Agreement, then in addition to any and all other rights and remedies available to the City under law, the City may suspend or terminate its obligation to forward funds received pursuant to the Grant Agreements to Redeveloper. 9. Notices All notices, requests and other communications hereunder shall be in writing and sha.ll be sent by manual delivery, tele8I'am, telex, facsimile transmission, overnight courier or United State's mail (postage prepaid) addressed to the recipient at the below address, or at such other address as such party shall have specified to the other party hereto in writing. All periods of notice shall be measured from the date of delivery thereof if manually delivered, from the day of sending thereof if sent by telegram, telex or facsimile transmission, from the first business day after the date of sending if sent by overnight courier, or from four days after the date of mailing if mailed If to the City: City of Hopkins 4 1010 First Street South Hopkins, Minnesota 55343 Jfto Redeveloper: Stiele and Bakken Investments, LLC 1304 Excelsior Boulevard Hopkins, Minnesota 55343 10. Miscellaneous. A. Govemin~ Law. All matters relating to the interpretation, construction, validity and enforcement of this Agreement shall be governed by the laws of the State of Minnesota. B. Entire AlVeement. This Agreement contains the entire agreement of the parties relating to the subject matter hereof arid supersedes all prior agreements and understandings with respect to such subject matter, and the parties hereto have made no agreements, representations or warranties relating to the subject matter of this Agreement which are not set forth herein or in such other Agreements. C. Amendments. No amendment or modification of this Agreement shall be deemed effective unless made in writing and signed by the panics hereto. D. No Waiver, No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel to enforce any provisions of this Agreement, except by a statement in writing signed by the party against whom enforcement of the waiver or estoppel is sought. Any written waiver shall not be deemed a continuing waiver unless specifically stated, shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived. E. Assignment This Agreement shall not be assignable, in whole or in part, by either party without the prior written consent of the other party. F. Countet:parts.. This Agreement may be simultaneously executed in any number of counterparts, and such counterparts executed and delivered, each as an original, shall constitute but one and the same instrument. G. Severability. To the extent any provision of this Agreement shall be invalid or unenforceable, it shall be considered deleted herefrom and the remainder of such provision and of this Agreement shall be unaffected and shall continue in full force and effect. 5 H, Exhibits; Captions and Headlines: Inte:cpretation. Exhibits A and B hereto are incorporated herein by reference. The captions and paragraph headings herein are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. Should any provision of this Agreement require judicial interpretation, it is agreed that the court interpreting or construing the same shall not apply a presumption that the terms hereof shall be more strictly construed against one party by reason of the rule of construction that a document is to be construed more strictly against thc party who itself or through its agent prepared the same, it being agreed that the agents of both parties have participated in the preparation hereof. 1. Binding Effect. This Agreement shall be binding on and inure to the benefit of the parties hereto and their respective successors and permitted assigns. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. CITY OF HOPKINS, MINNESOTA By: By: STIELE AND BAKKEN INVESTMENTS, LLC By: By: 6 . EXHIBIT A DTED Grant Agreement 612l'd ll:llOl EXHIBIT B Council Grant Agreement