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Memo Tait's SuperValu Improvement Project � , k � CITY OF HOPKOIVS MEMORANDUM DATB: September 4, 1996 TO: Honorable Mayor and City Council FROM. /� Jim Kerrigan, Director, Planning & Economic Development - SIIBJ$CT: Tait's SuperValu Improvement Project At the September 17, 1996, Council meeting, time has been = scheduled for Mike Tait to provide an overview concerning this project. Mr. Tait, in his most recent discussions with staff, has stated that construction plans are being completed and that he is anticipating starting work on the project in the very near - future . ° In conjunction with this discussion, enclosed is the followinga _ � • September 19 HRA minutes approving the commercial rehab loan - s Development agreement with T& H Market, Ince = The commercial rehab loan as approved does not require any additional action; however, the HRA probably could reconsider its - approval if so desiredo = Section 4.ic of the development agreement requires that Mr. Tait = commence construction on the subject project by March 1, 1996e - Finally, Mr. Tait has now submitted construction plans to the = City for review. � - GEN/CCMEMO r MINIITES OF THS HRA 6PECIAL ME$TING = September 19, 1995 - � - A Special Meeting of the Hopkins Housing and Redevelopment - Authority was held September 19, 1995, in the Council Chambers at = City Hall. Present were Chairman Charles Redepenning, Commissioners Robert Anderson, Charles Krit2ler, Fran Hesch, and Eugene Maxwell. Also present were HRA Executive Director Steven = Mielke, Mr. James Kerrigan, director of Planning and Economic = Development, and Mr. Paul Steinman, Community Development Specialist. = I. C L TO ORDffit Chairman Redepenning called the HRA Special Meeting to order ° at 6:30 p.m. TT. NEW BIISINFSS � i) Item 95-36: Commercial Rehab Loan--Tait's SuperValu. Mr. Paul Steinman provided an overview of the project and � the request by the applicant. Mr. Steinman stated that _ � approval by the HRA would be contingent upon approval of _ private financing and sufficient security on the property. = Mr. Mike Tait detailed the improvements that are proposed to = be undertaken. He stated that the sales area would be = increased by approximately 3,000 square feet. = Commissioner Anderson moved and Commissioner Maxwell = seconded a motion to approve the Commercial Rehab Loan. The - motion was approved unanimously. = 2) Discussion of Theater/Restaurant Project--Beard Group. Nir. _ Kerrigan provided a brief overview of the changes that have = occurred with regard to this project over the past several = weeks, including the following: - • Wallace Theaters' lease has been canceled. - • Mann Theaters' lease is being negotiated. = • Mann Theaters' lease should be executed ir� ��� �e�k�� = • One fewer screen with Mann Theaters (six sc�e�ns)o = � • Overall project remains basically the same. - Mr. Bill Beard presented a brief synopsis of his proae�t and = the potential new tenant. ' d Further discussion was held regarding the timing �f tY�� � project. Mr. Beard still anticipates construc�ion starta.ng ; in November. � , ' hra/v+orlanins � � _ � -' � 3) Mr. Steinman stated that there would be discussion about the proposed facility at the Hopkins Activity Center on � September 20 at 12:30 p.m. He further stated there would be discussion of the final concept plan as prepared by Art • Space at the October 3 HRA work session. 4) Commissioner Hesch moved and Commissioner Anderson seconded a motion to schedule an HRA work session for October 3 at 5:30 p.m. The motion was approved unanimously. III. ADJOIIRNMEN� Com�aissioner Anderson moved and Commissioner Hesch seconded a motion to adjourn the meeting. The motion was approved unanimously. The meeting was adjourned at 7:30 p.m. St�even C. Mielke, Executive Director � Charles D. Redepenni Cha' an � • hra/wor3m�ina � ---__ _ . _ _ - Q __ DEVELOPMENT AGREEMENT - By and Between = _ THE HOUSING AND REDEVELOPMENT AUTHORITY - IN AND FOR THE CITY OF = HOPKINS = and _ � _ T & H MARKETS, INC. = Dated as of : August 31, 1994 - This document was drafted by: � = BRADLEY & DEIKE, P. A. = 5100 Eden Avenue, Suite 306 � Edina, MN 55436 � Telephone: (612) 927-4333 � � � � � � � / � � � � TABLE OF CONTENTS � P � age PREAMBLE 1 AItTICLE I Definitions Section 1.1. Definitions 3 ARTICLE II Representations Section 2.1. Representations by the Authority 5 Section 2.2. Representations by the Redeveloper 5 ARTICLE III Acc�isition of PropertX; Parkin$ Im�rovements + Section 3.1. Acquisition of Acquisition Property 6 Section 3.2. Conditions Precedent to Acquisition of Property 6 Section 3.3. Construction and Dedication of Parking Improvements 6 ARTICLE IV C'onstruction of Minimum Im»rovements Section 4.1. Construction of Minimum Improvements g Section 4.2. Construction Plans g Section 4.3. Redeveloper Indebtedness 9 Section 4.4. Relocation of Grocery Store 10 ARTICLE V Insurance Section 5.1. Insurance 11 • 4 ARTICLE VI Taxes Section 6.1. Rea1 Property Taxes; Special Assessments 13 ARTICLE VII �rohibitions Against Assignment and Transfer, Indemnification Section 7.1. Prohibition Against Transfer of Property and Assigninent of Agreement 14 Section 7.2. Approvals 14 Section 7.3. Release and Indemnification Covenants 14 _ ARTICLE VIII = Events of Defauit = Section 8.1. Events of Default Defined 15 _ p Section 8.2. Authority's Remedies on Default j 5 = Section 8.3. No Remedy Exclusive 16 - Section 8.4. No Additional Waiver Implied by One Waiver 16 - Section 8.5. Attorney's Fees 16 � ARTICLE IX = Additional Provi ions = Section 9.1. Representatives Not Individually Liable 1 � ° Section 9.2. Titles of Articles and Sections 1 � Section 9.3. Notices and Demands 1 � Section 9.4. Disclaimer of Relationships 1 � Section 9.5. Modifications 1 � Section 9.6. Counterparts 1 � Section 9.7. Judicial Interpretation 1 � TESTIMONIUM � l g SIGNATURES 1 g SCHEDULE A Description of Redevelopment Property � SCHEDULE B Description of Acquisition Property SCHEDULE C Construction Guidelines SCHEDULE D Equipment and Fixture List DEVELOPMENT AGREEMENT � THIS AGREEMENT, made on or as of the 31 st day of August, 1994, by and between The Housing and Redevelopment Authority In and For the City of Hopkins, a public body corporate and politic (hereinafter referred to as the "Authority"), established pursuant to Laws of Minnesota 1947, Chapter 487, as amended, being Minnesota Statutes, 469.001-469.047 (formerly Sections 462.411-462.711) (hereinafter referred to as the "Act"), and having its principal office at 1010 First Street South, Hopkins, Minnesota 55343, and T& H Mazkets, Inc., a Minnesota corporation (hereinafter referred to as the "Redeveloper"), having its principal office at 25 l lth Avenue North, Hopkins, Minnesota 55343. WITNESSETH: WHEREAS, the Authority was created pursuant to the Act and was authorized to transact business and exercise its powers by a resolution of the Common Council of the City of Hopkins (the City of Hopkins is hereinafter referred to as the "City") adopted on September 9, 1965, pursuant to Section 469.003 (formerly Section 462.425) of the Act; and , WHEREAS, in furtherance of the objectives of the Act, the Authority has undertaken a program for the clearance and reconstruction or rehabilitation of blighted, deteriorated, deteriorating, vacant, unused, under used or inappropriately used, areas of the City, and in this • connection is engaged in carrying out a redevelopment project known as the Hopkins CBD Redevelopment Project (hereinafter referred to as the "Project") in an area (hereinafter referred to as the "Project Area") located in the City; and WHEREAS, as of the date of this Agreement there has been prepared and approved by the Authority and the City Council of the City a redevelopment plan for the Project entitled "Central Business District Redevelopment Plan" (which Plan is hereinafter referred to as the "Redevelopment Plan"); and WHEREAS, a major objective of the Redevelopment Plan is to stimulate and revitalize the Hopkins Central Business District commercial area into a strong, community level, retail center by rehabilitation and redevelopment of certain business property; and WHEREAS, the Redeveloper is the supermarket tenant in a building located on certain real property within the Project (which real property, together with the building located thereon is herein referred to as the "Redevelopment Property); and WHEREAS, the Authority and the Redeveloper desire that the Redeveloper undertake certain improvements to the Redevelopment Property; and WHEREAS, in consideration for the Redeveloper's commitment to undertake the improvement of the Redevelopment Property, the Authority is willing to acquire certain other . real property located within the Project (the "Acquisition Property"), cause the demolition of the building located thereon and construcf public pazking improvements on such property, which � pazking improvements will benefit the Redevelopment Property; and WHEREAS, the Redeveloper has agreed that if it does not construct the above mentioned improvements to the Redevelopment Property it will reimburse the Authority for a portion of its cost of acquiring the Acquisition Property and constructing the parking improvements thereon; and � WHEREAS, the Authority believes that the redevelopment of the Project Area pursuant to this Agreement, and fulfillment generally of this Agreement, are in the vital and best 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 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: _ � � � ; � � � � ; : � � 2 ARTICLE I � Definitions Section l.l. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Acquisition Property" means the real property described on Schedule B attached hereto to be acquired by the Authority pursuant to Article III of this Agreement. "Act" means Minnesota Statutes, Sections 469.001-469.047 (formerly the Municipal Housing and Redevelopment Act, Minnesota tatute , Sections 462.411-462.711), as amended. "Agreement" means this Agreement, as the same may be from time to time modified, amended, or supplemented. "Authority" means the Housing and Redevelopment Authority In and For the City of Hopkins, or any successor or assign. "Authority Funds" means the funds to be expended by the Authority to pay the cost of acquisition of the Acquisition Property, including the cost of demolition of the building located thereon, the cost of constructing the Parking Improvements and all costs related to the foregoing, � together with all of its other costs incurred in connection with the planning, preparation, and implementation of this Agreement. "City" means the City of Hopkins. "Construction Plans" means the plans, specifications, drawings and related documents on the construction work to be performed by the Redeveloper on the Redevelopment Property which are to be submitted to the building inspector of the City. "County" means the County of Hennepin. "Event of Default" means an action by the Redeveloper listed in Article VIII of this Agreement. "Minimum Improvements" means the renovation of the existing improvements located on the Redevelopment Property, which shall involve the expenditure of at least $525,000.00 by the Redeveloper, in accordance with the construction guidelines set forth on �chedule C to this Agreement. "Net Proceeds" means any proceeds paid by an insurer to the Redeveloper or the Authority under a policy or policies of insurance required to be provided and maintained by the � 3 � Redeveloper pursuant to Article V of this Agreement and remaining after deducting all expenses (including fees and disbursements of counsel) incurred in the collection of such proceeds. "Parking Improvements" means the improvement of the Acquisition Property by the Authority for use as a public parking lot. "Project" means the Hopkins Central Business District Redevelopment Project. "Project Area" means the real property located within the boundaries of the Project. "Purchase Agreement" means the Purchase Agreement between the Authority and Donald H. Perkl and Rosemary F. Perkl, the awners of the Acquisition Property, dated as of August 31, 1994. - "Redeveloper" means T& H Markets, Inc., a Minnesota corporation, or its successors and _ assigns. _ "Redeveloper Indebtedness" means the indebtedness by the Redeveloper to the Autharity = described in Section 4.3 of this Agreement. _ "Redevelopment Property" means the real property described on the attached Schedule A _ � to this Agreement. _ "Redevelopment Plan" means the Hopkins Central Business District Redevelopment = Project Plan, as amended as of the date of this Agreement. = "Security Documents" means the documents to be furnished by the Redeveloper to the _ Authority pursuant to Section 4.3 of this Agreement securing the Redeveloper Indebtedness. = "State" means the State of Minnesota. "Unavoidable Delays" means delays which are the direct result of acts of God, unforeseen _ adverse weather conditions, strikes, other labor troubles, fire or other casualty to the Minimum - Improvements or Parking Improvements, litigation commenced by third parties which, by ' injunction or other similaz judicial action, directly results in delays, or acts of any federal, state or � locat governmental unit (other than the Authority in enforcing its rights under this Agreement) � which directly result in delays. � � 4 ARTICLE II . Re�resentations Section 2.1. Re�resentations by the Authority. The Authority makes the following representations as the basis for the undertaking on its part herein conta.ined: (a) The Authority is a housing and redevelopment authority duly organized and existing under the laws of the State. Under the provisions of the Act, the Authority has the power to enter into this Agreement and to perform its obligations hereunder. (b) The Project is a"redevelopment project" within the meaning of the Act and was created, adopted and approved in accordance with the terms of the Act. Section 2.2. Representa.tions by the Redevelo�er. The Redeveloper represents that: (a) The Redeveloper is a Minnesota. corporation duly organized and in good standing under the laws of the State, is not in violation of any provisions of its articles of incorporation or bylaws or the laws of the State, has power to enter into this Agreement and has duly authorized the execution, delivery and performance of this Agreement by proper action of its directors. (b) The Redeveloper will construct the Minimum Improvements in accordance with the terms of this Agreement, the Redevelopment Plan and all local, state and federal laws and � regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations), except for variances necessary to construct the improvements contemplated in the Construction Plans approved by the Authority. (c) The Redeveloper has received no notice or communication from any local, state or federal official that the activities of the Redeveloper or the Authority in the Project Area may be or will be in violation of any environmental law or regulation. The Redeveloper is aware of no facts the existence of which would cause it to be in violation of any local, state or federal environmental law, regulation or review procedure. In the event that the Authority is required to take any action to obtain any necessary permits or approvals with respect to the Redevelopment Property under any local, state or federal environmental law or regulation, the Redeveloper will cooperate with the Authority in connection with such action. (d) 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 confiicts with or results in a breach of, the terms, conditions or provisions of any corporate restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which the Redeveloper is now a party or by which it is bound, or constitutes a default under any of the foregoing. � 5 � ARTICLE III ��uisition of PrQpp�r y; Parking Im�rovements Section 3.1. Ac���isition of Ac�uisition Pro�er : The Acquisition Property is owned by a third party with whom the Authority has negotiated and entered into the Purchase Agreement under which the Authority is entitled to purchase the Acquisition Property. The Authority agrees that it will, subject to tlie terms and conditions set forth in this Agreement and in the Purchase Agreement, acquire the Acquisition Property. Section 3.2. C'�nditic�ns Precedent to Acauisition of Pro�erty. (a) T'he Authority's obligation to acquire the Acquisition Property shall be subject to satisfaction, or waiver in writing by the Authority, of all of the following conditions precedent: (i) the Redeveloper shall not be in default under the terms of this Agreement; (ii) the Authority sha11 have confirmed, to its satisfaction, the suitability of the Acquisition Property for its intended use by the Authority; (iii) the Authority shall have confirmed, to its satisfaction, the absence of any hazardous substances, pollutants, or other unsatisfactory environmental conditions on the � Acquisition Property; (iv) the Redeveloper shall have delivered to the Authority the fully executed Security Documents; and _ (v) the seller under the Purchase Agreement shall have performed all of such seller's - obligations under the Purchase Agreement that must be performed prior to the - Authority's acquisition of the Acquisition Property. (b) In the event that all of the above conditions precedent have not be�n satisfied, or waived in writing by the Authority, by October 20, 1994, the Authority may terminate this - Agreement upon the giving of 10 days written notice to the Redeveloper of its intention to do so. = Upon such termination, except as specifically provided herein, neither the Authority nor the Redeveloper shall have any obligations or liability to the other hereunder. - Section 3.3. ('nncm�cr;nn and Dedication of Parking Im�rovements. (a) By September 1, � 1995, assuming that the Authority has acquired the Acquisition Property and assuming that a - determination has been made pursuant to Section 4.1 to proceed with the renovation rather than - expansion of the building on the Redevelopment Property, the Authority will, subject to � Unavoidable Delays, commence the construction of the Parking Improvements. The Authority - will, subject to Unavoidable Delays, complete such construction within ninety (90) days after ' commencement of construction. The Parking Improvements will consist of the development of - � approximately twenty (20) parking spaces for use by members of the general public. = Notwithstanding the foregoing, the Authority agrees that it will use its best efforts to commence = 6 : � and complete the Parking Improvements as soon as reasonably practical given the time `� constraints contained in the Purchase Agreement relative to the demolition of improvements located on the Acquisition Property. (b) In order to provide the Redeveloper with assurances that the Parking Improvements will be available to serve the patrons of the Minimum Improvements, the Authority agrees that it will record against the Ac uisition Pro ert a declaration o trictive covenants obligating t e' owner of e cquisition Property to use such propert onl or the purpose of owning ancl' maintainin u lic parking spaces in a manner consistent with the City's ownership and maintenance of pu ic par mg areas throughout the City. Such declaration shall be in a form � negotiated between the Authority and the Redeveloper and shall be recorded in the property office of the County for the recording of documents affecting the Acquisition Property on the later of (i) the Redeveloper's completion of the Minimum Improvements; or (ii) the Redeveloper's payment to the Authority of the Redeveloper Indebtedness. The covenants and restrictions of the declaration shall terminate at such time as the Redevelopment Property and Minimum Improvements are no longer used as a grocery store of at least 21,000 squaxe feet. In addition, the Authority, or future owner of the Acquisition Property, shall at any time be free to use the Acquisition Property for any other purpose if it replaces the Parking Improvements with a comparable number of public parking spaces located not more than 400 feet from the front entrance of the grocery store located on the Redevelopment Property; provided, that the replacement parking spaces may not be separated from the Redevelopment Property by any � public street. , � 7 ; ARTICLE IV � [''�nct.���t�nn of Minimum Im�rovements Section 4.1 �nrntrnctinn of Minimum Improvements (a) The Authority's undertakings under this Agreement are predicated in part upon the desire to cause the Redeveloper to invest in improving the condition of the Redevelopment Properiy through the making of the Minimum Improvements. The Authority believes that such improvements will further the objectives of the Authority and the City under the Redevelopment Plan. Subject to (b) of this Section, the Minimum Improvements will consist of the renovation of the building located on the Redevelopment Property. The Minunum Improvements must involve the expenditure by the - Redeveloper of at least $525,000.00 in actual construction or equipment costs as detailed in Schedule C of this Agreement. Soft costs, including, without limitation, architectural and - engineering fees, legal fees, financing costs, development f:,es,_ and any other costs that are not either purchase priees paid for equipment or materials or amounts paid under construction - contracts, shall not exceed 20% of the $525,000.00 required to be spent. No amount of the $525,000.00 may be spent for the payment of legal and other costs related to the Redeveloper's = purchase of the building on the Redevelopment Property; construction period interest, taxes or = insurance; or developer fees or other payments to Redeveloper or its officers, owners or related entities. - (b) In the weeks and months following the execution of this Agreement, the - � Redeveloper shall work with the City and the Authority to determine whether plans and financial - arrangements relative to the expansion, rather than renovation, of the building on the ` Redevelopment Property can be agreed upon by the parties. If such agreements can be reached, = the Redeveloper and the Authority will enter into a development agreement outlining the rights = and responsibilities of the parties in connection with such expansion, which agreement will by its � terms supersede and replace this Agreement and from the date of execution of such a = development agreement, this Agreement shall be null and void. If the Authority and the � Redeveloper have not entered into such a development agreement relative to the expansion of the � building on the Redevelopment Property within six (6) months from the date of this Agreement, ' the terms of this Agreement shall remain in effect and the Redeveloper shall be obligated to � proceed with the construction of the Minimum Improvements. � � � (c) If the agreement described in (b) above has not been executed by the Authority � and the Redeveloper, the Redeveloper shall, subject to Unavoidable Delays, within one and one- � half (1 1\2) years from the date of this Agreement, commence construction of the Minimum Improvements. In addition, the Redeveloper shall within such time period provide to the Authority evidence, satisfactory to the Authority, that the Redeveloper has entered into binding obligations to spend, as provided in Section 4.1(a), at least $525,000.00 toward construction of the Minimum Improvements. Subject to Unavoidable Delays, after commencement of the Minimum Improvements, the Redeveloper shall diligently pursue the construction of the Minimuxn Improvements to completion. � 8 Section 4.2. �onstruction Plans. (a) Within one (1) year from the date that the Authority � acquires title to the Acquisition Property, the Redeveloper shall submit to the Authority for its approval Construction Plans. The Construction Plans shall provide for the construction of the Minimum Improvements and shall be approved by the Authority if they are in conformity with this Agreement, the construction guidelines contained in Schedule C to this Agreement, and applicable federal, state and local laws and regulations. However, no approval by the Authority under this Section 4.2 shall relieve the Redeveloper of the obligation to comply with the terms of this Agreement or applicable federal, state and local laws, ordinances, rules and regulations. No approval by the Authority shall constitute a waiver of an Event of Default. Such Construction Plans shall, in any event, be deemed approved unless rejected in writing by the Authority, in whole or in part. Such rejection shall set forth in detail the reasons therefor, and shall be made within two (2) months after the date of their receipt by the Authority. If the Authority rejects the Construction Plans in whole or in part, the Redeveloper shall submit new or corrected Construction Plans within thirty (30) days after written notification to the Redeveloper of the rejection. Such new or corrected Construction Plans shall be deemed approved by the Authority unless rejected within thirty (30) days after the Authority's receipt of such plans. The Authority's approval shall not be unreasonably withheld. Said approval shall constitute a conclusive determination that the Construction Plans (and the Minimum Improvements, if constructed in accordance with said plans) eomply to the Authority's satisfaction with the provisions of this Agreement relating thereto. (b) If the Redeveloper desires to make any material change in any Construction Plans after • their approval by the Authority, the Redeveloper shall submit the proposed change to the Authority for its approval. If the Construction Plans, as modified by the proposed change, conform to the requirements of this Section 4.2 of this Agreement with respect to such previously approved Construction Plans, the Authority shall approve the proposed change and notify the Redeveloper in writing of its approval. Any requested change in the Construction Plans shall, in any event, be deemed approved by the Authority unless rejected, in whole or in part, by written notice by the Authority to the Redeveloper, setting forth in detail the reasons therefor. Such rejection shall be made within ten (10) days after receipt of the notice of such change. (c) In addition to the plan review procedures described in this Agreement, the permitting and approval of the Redeveloper's construction of the Minimum Improvements shall also be in accordance with the City's normal construction permitting process. Notwithstanding anything to the contrary contained in this Agreement, if the Redeveloper is unable to secure the approval of its plans for the Minimum Improvements by the Authority under this Agreement or by the City under the City's permitting process, such inability shall not relieve or delay the Redeveloper's obligation to either construct the Minimum Improvements or to repay the Redeveloper Indebtedness; provided, that the City and the Authority have acted in good faith in considering the Redeveloper's requests for plan approval. Section 4.3. Redevelo�er Indebtedness. (a) The Redeveloper acknowledges that the Authority's acquisition of the Acquisition Property and the construction of the Parking � Improvements will benefit the Redeveloper and other adjacent downtown business owners and 9 � that the Authority is undertaking such expenditures based upon the Redeveloper's covenant that it will construct the Minimum Improvements. Therefore, the Redeveloper agrees that if it fails to construct the Minimum Improvements at the time and in the manner prescribed in this Agreement, the Redeveloper shall be obligated to reimburse the Authority for a portion of the Authority funds expended in acquiring the Acquisition Property and constructing the Parking Improvements. Such obligation is referred to herein as the "Redeveloper Indebtedness". (b) T'he amount of the Redeveloper Indebtedness shall be $100,000.00. No interest sha11 accrue with respect to the Redeveloper Indebtedness. The Redeveloper Indebtedness shall be payable in five annuai payments of $20,000.00 each payable on the anniversary date of the date that the Authority acquires title to the Acquisition Property, commencing on the date two (2) years from the date that the Authority acquires title to the Acquisition Property. (c) The Redeveloper Indebtedness shatl be evidenced and secured by the following (the "Security Documents) to be executed and delivered to the Authority prior to the Authority's acquisition of the Acquisition Property: _ (i) A Promissory Note; and - (ii) A Security Agreement, financing statement, landlord's consent and such other ° instruments as the Authority may require granting to the Authority a perfected f rst _ � security interest in the items of equipment and fixtures listed on Scheduie D to this = Agreement. � The form of the Security Documents shall be as prescribed by the Authority. The Redeveloper _ warrants that it is the owner of the collateral described on Schedule D, that such collateral is = located on the Redevelopment Property and that Redeveloper's title to such collateral is ' unencumbered. Prior to and as a condition to the Authority's obligation to acquire the = Acquisition Property, the Redeveloper shall provide to the Authority UCC searches showing : no other security interests granted in such collateral. i ! (d) If the Redeveloper complies with its obligations to construct the Minimum � Improvements in accordance with this Agreement the Authority shall release or terminate the � Security Documents with appropriate instruments. In addition, the Authority will either release : or subordinate its interest under the security agreement, financing statement and other documents described in subsection (c)(ii) of this Section to a security interest granted by the Redeveloper to secure financing obtained to construct the Minimum Improvements. Section 4.4. Relocation of Grocery Store. If, prior to the Redeveloper's payment of the Redeveloper Indebtedness, the Authority and the Redeveloper reach agreement that the Redeveloper's grocery store shoutd be relocated to a new site within the City and enter into agreements relative to such relocation, such agreements shall provide for the forgiveness of any � unpaid portion of the Redeveloper Indebtedness. 10 ARTICLE V • Insurance Section 5.1. Insurance. (a) Until the Redeveloper Indebtedness has been released or paid in full, the Redeveloper shall maintain, or cause to be maintained, at its cost and expense, and from time to time at the request of the Authority shall furnish proof of the payment of premiums on, insurance as follcws: (i) Insurance against loss and/or damage to the Redevelopment Property under a policy or policies covering such risks as are ordinarily insured against by similar businesses, including (without limiting the generality of the foregoing) fire, extended coverage, all risk vandalism and malicious mischief, boiler explosion, water damage, demolition cost, debris removal, and collapse in an amount not less than the full insurable replacement value of the improvements, including fixtures and equipment, on the Redevelopment Property, but any such policy may have a deductible amount of not more than $25,000.00. No policy of insurance shall be so written that the proceeds thereof will produce less than the minimum coverage required by the preceding sentence, by reason of co-insurance provisions or otherwise, without the prior consent thereto in writing by the Authority. The term "full insurable replacement value" shall mean the actual replacement cost of the improvements located on the Redevelopment Property (excluding foundation � and excavation costs and costs of underground flues, pipes, drains and other uninsurable items) and equipment, and shall be determined from time to time at the request of the Authority, but not more frequently than once every three years, by an insurance consultant or insurer, selected and paid for by the Redeveloper and approved by the Authority. All policies evidencing insurance required by this subparagraph (i) with respect to the Redevelopment Property shall be carried in the names of the Redeveioper and the Authority as their respective interests may appear and shall contain standard clauses which provide for Net Proceeds of insurance resulting from claims per casualty thereunder to the Redevelopment Property to be made payable jointly to the Authority and Redeveloper. The Authority and the Redeveloper shall jointly agree on the amount of settlement. (ii) Comprehensive general public liability insurance, including personal injury liability (with employee exclusion deleted), and automobile insurance, including owned, non-owned and hired automobiles, against liability for injuries to persons and/or property, in the minimum amount for each occurrence and for each year of $1,000,000.00, for public liability and sha11 be endorsed to show the Authority as additional insured so long as the Authority can be named as an additional insured at no additional expense to the Redeveloper. (iii) Such other insurance, including worker's compensation insurance respecting all employees of the Redeveloper, in such amount as is customarily carried by like organizations engaged in like activities of comparable size and liability exposure; provided • 11 Q that the Redeveloper may be self=msured with respect to all or any part of its liability for worker's compensation. (b) All insurance required in Article V of this Agreement shall be taken out and maintained in responsible insurance companies selected by the Redeveloper which are authorized under the laws of the State to assume the risks covered thereby. The Redeveloper will deposit annually with the Authority binders evidencing all such insurance, or a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article V of this Agreement each policy shall contain a provision that the insurer shall not cancel nor modify it without giving written notice to the Redeveloper and the Authority at least thirty (30) days before the cancellation or modification becomes effective. Not less than fifteen (15) days prior to the expiration of any policy, the Redeveloper shall furnish the Authority evidence satisfactory to the Authority that the policy has bk en renewed or replaced by another = policy conforming to the provisions of this Article V of chis Agreement, or that there is no necessity therefor under the terms hereof. In lieu of separate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the = coverage required herein, in which event the Redeveloper sha11 deposit with the Authority a - certificate or certificates of the respective insurers as to the amount of coverage in force upon the = Redevelopment Property. _ (c) The Redeveloper agrees to notify the Authority immediately in the case of damage to, _ � or destruction of, the Redevelopment Property or any portion thereof resulting from fire or other = casualty. In the event of any such damage or destruction, the Redeveloper will forthwith repair, _ reconstruct and restore the Redevelopment Property to substantiaily the same or an improved _ condition or value as it existed prior to the event causing such damage and, to the e�ctent ' necessary to accomplish such repair, reconstruction and restoration, the Redeveloper will appiy � the Net Proceeds of any insurance relating to such damage received by the Redeveloper to the � � payment or reimbursement of the costs thereof. In lieu of repairing or reconstructing the � Redevelopment Property the Redeveloper shall have the right to pay to the Authority the unpaid � amount of the Redeveloper Indebtedness and if the Redeveloper makes such payment, a failure to : � repair or reconstruct shall not constitute an Event of Default hereunder. If the Redeveloper is not in default under the terms of this Agreement and the Security Documents the Redeveloper shall be entitled to utilized the Net Proceeds to repair, reconstruct or restore the improvements on the Redevelopment Property. � 12 I � _ - -- - - - - - ARTICLE VI � Taxes Section 6.1. Real Progerty Taxes• S�ecial Assessments. The Redeveloper shall pay or caused to be paid when due all real property taxes and special assessments payable with respect to the Redevelopment Property. � � 13 � ARTICLE VII Prohibitions Againc A ignment and Tran fer, IndQmnification Section 7.1. Prohibition Against Transfer of Pro�ertv and Assig�ment of Agr�ement The Redeveloper represents and agrees that prior to payment in fiull or release of the Redeveloper Indebtedness, the Redeveloper has not made or created, and that it will not, make or create, or suffer to be made or created, any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to the Agreement or the Redevelopment Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the Authority. Section 7.2. r v. Any approval required to be given by the Authority under this Article VII of tlus Agreement may be denied only in the event that the Authority reasonably = determines that the ability of the Redeveloper to perform its obligations under this Agreement will be materially impaired by the action for which approval is sought. Section 7.3. �elease a_nd InderrLn1fication Covenants _ (a) The Redeveloper and the Authority shall each indemnify, defend and hold the other = harmless from and against all claims, actions, damages, liability and expense arising or _ � purportedly arising from the actions of such party, its officers, employees and agents in carrying out the transactions contemplated by this Agreement. = (b) T'he Authority and the governing body members, officers, agents, servants and � employees thereof, shali not be Iiabie for any damage or injury to the persons or property of the = company or its officers, agents, servants or empioyees or any other person who may be about the � Redevelopment Property or Minimum Improvements due to any act of negligence of any person ' other than the Authority or the governing body members, officers, agents, servants or empioyees ; thereof. � , � 14 ARTICLE VIII • Events of Default Section 8.1. 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 (unless the context otherwise provides), any one or more of the following events: (a} Failure by the Redeveloper to pay when due any payments required to be paid under this Agreement or the Security Documents. (b) After commencement of construction of the Minimum Improvements, failure by the Redeveloper to complete such construction pursuant to the approved Construction Plans and the terms of this Agreement. (c) Failure by Redeveloper to observe ar perform any other covenant, condition, obligation or agreement on its part to be observed or performed hereunder or under the Security Documents. (d) There occurs a default by the Redeveloper under the terms of any mortgage on the Redevelopment Property or security agreement encumbering the Redeveloper's assets, and the mortgage holder or security interest holder exercises any remedy provided by the mortgage or � security documents or exercises any remedy provided by law or equity in the event of such a default. (e) The Redeveloper does any of the following :(i) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under United States Bankruptcy Laws or any similar Federal or State Laws; or (ii) make an assignment for the benefit of its creditors; or (iii) admit, in writing, it inability to pay its debts generally as they become due; or (iv) be adjudicated, bankrupt or insolvent. Section 8.2. Authoritv's Remedies on Default. Whenever any Event of Default by Redeveloper referred to in Section 8.1 of this Agreement occurs, the Authority may suspend its performance under this Agreement until it receives assurances from the Redeveloper, deemed adequate by the Authority, that the Redeveloper will cure its default and continue its performance under the Agreement and may take any one or more of the following actions after providing thirty (30) days written notice to the Redeveloper of the Event of Default, but only if the Event of Default has not been cured within said thirty (30) days: (a) Declare the entire Redeveloper Indebtedness immediately due ana payable. (b) Terminate this Agreement. (c) Exercise its remedies under the Security Documents. � 15 � (d) Take whatever action, includ'irig� legal, equitable or administrative action, which may appear necessary or desirable to the Authority to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant of the Redeveloper under this Agreement. Section 8.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority or Redeveloper 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 sta.tute. 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. In order to entitle the Authority or ttie Redeveloper to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in t��is Article VIII. _ Section 8.4. �To Additional Waiver Im�lied �iy One Waiver In the event any agreement = contained in this Agreement should be breached by either party and thereafter waived by the = other party, such waiver shall be limited to the particular breach so waived and shall not be = deemed to waive any other concurrent, previous or subsequent breach herei.uider. = Section 8.5. Attorney's Fees. A defaulting party under this Agreement sha�l be liable to _ � the other party for reasonable costs, including reasonable attorney's fees, incurred in connection = with the enforcement of the provisions of this Agreement or the Security Documents. i . : � : � I I � � I I � 16 ARTICLE IX Additional Provisions � Section 9.1. Re�resentatives Not Individuallv Liable. No member, official, or employee of either party hereto shall be personally liable to the other party, or any successor in interest, in the event of any default or breach or for any amount which may become due to such other party or successor or on any obligations under the terms of this Agreement. Section 9.2. Titles of Articies 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 9.3. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under the Agreement by either pariy to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally; and (a) in the case of the Redeveloper, is addressed to or delivered personally to the Redeveloper at 25 1 lth Avenue North, Hopkins, Minnesota 55343; and (b) in the case of the Authority, is addressed to or delivered personally to the Authority at 1010 First Street South, Hopkins, Minnesota 55343. � or at such other address with respect to either such party as that party may, from time to time, designate in writing and forward to the other as provided in this Section. Section 9.4. Disclaimer of Relationshi�s. The Redeveloper acknowledges that nothing contained in this Agreement nor any act by the Authority or the Redeveloper shall be deemed or construed by the Redeveloper or by any third person to create any relationship of third-party beneficiary, principal and agent, limited or general partner, or joint venture between the Authority and the Redeveloper. Section 9.5. Modifications. This Agreement may be modified solely through written amendments hereto executed by the Redeveloper and the Authority. Section 9.6. Counter�arts• This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 9.7. Judicial Internretation. Should any provision of this Agreement require judicial interpretation, 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 the party • 17 who itself or through its agent or att�rney prepared the same, it being agreed that the agents Q and attorneys of both parties have participated in the preparation hereof. IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and its and the Redeveloper has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF HOPKINS � B _ � �"�'�--� � ��,- By . .�►-r --� ���-�—°°--�— . � � T & H MARKETS, NC _ ��� - BY = � � = By �� ; � STATE OF MINNESOTA) � )SS. = COUNTY OF � � � � ) � � The foregoing instrument was acknowledged before me this-���day of �, 19,�`,f�by � C� „ - ,' _ and :�a r .�- , the �����m��ti and �x� . !).:- . of the Housing and � Redevelop ent uthority in and for the City of Hopkins, a public body politic and corporate, on , behalf of the Authority. _ ..,.....,....,.....,, %',, � �� P. CENFLLIE °� ' NOTAP.Y-PUBLIC MINNESOiA �~� � � �� NENNEPIN COUNTY PUbI1C ; My commission expires 12 04 94 / STATE OF MINNESOTA) � ' )SS. COUNTY OF f ✓�r,�� , ) The foregoing instrument was acknowledged before me this �fs day of �.���=�� , 19�� b T �-an , the D:�� �-�t t'"a�l--- of T&�� Markets, Inc., a Minnesota corporation, on behalf of the corporation. •� � �/ //� , 0. / / ���. ^�MAA� . � (�� •;_ a�� 1AMES A. fENELLIE t Public � • '•` NDTARI' -PUBLIC MINNESOiA � - ••�(EPfN COUNTY � My,�oatsn{�Sfon expires 12 04 94 . � � 18 SCHEDULE A � Description of Redevelopment Property �he Southerly 24 feet of Lot 3, the Westerly 69.84 feet of Lots 4 and 5, the Westerly 69.84 feet of the Northerly 33 feet of Lot 6, the Northerly 33 feet of Lot 19, all of Lots 20 and 21, and the Southerly 24 feet of Lot 22, all in Block 69, West Minneapolis Second Division, together with that part of the vaca�ed North-South alley in said Block 69 abutting upon said Lots or parts thereof. � A-1 � Q SCHEDULE B Description of Acquisition Property The Real Property shall consist of the northerly 70 feet (approximately) of the following described land (said land is herein referred to as the "Existing Parcel") located in Hennepin County, Minnesota: Lots 13, 14 and 15, Block 69, West Minneapolis, Second Division, according to the recorded plat thereof. _ The Real Property shall contain approxirlately 9,300 square feet with a north-south dimension of approximitely 70 feet. -- i l 3 � Q � 1 � � � � B-1 SCHEDULE C • Construction Guidelines It is the goal and objective of the Authority and the Redeveloper that the construction of the Minimum Improvements will result in a significant improvement and upgrading of the interior and exterior appearance of the existing grocery store. It is also intended that there be accomplished a general updating of the store's equipment and functional elements. Expenditures by the Redeveloper shall be allocated among all of the following items so as to achieve such upgrading and updating of the store: I. Upgrading of the exterior appearance of the building. 2. Upgrading of interior and exterior signage. 3. Replacement or renovation of ceilings and floors. � 4. Expansion of the store's perishable department and administrative offices. 5. Upgrading, through replacement or refurbishing, of grocery shelving, sales cases, checkstands, and registers. The Authority shall have no obligation to approve Construction Plans that do not address all of the above items, and such failure to approve shall not constitute an Unavoidable Delay under the Agreement. In addition, the Redeveloper will spend relative to items 1-4, exclusive of soft costs as defined in the Agreement, at least $150,000 on the construction of actual improvements to the grocery store building, as opposed to the purchase and installation of � fixtures, equipment and furnishings. , • G1 Q SCHEDULE D Equipment and Fixtures to be Subject to Security Interest See the attached pages _ � ; � = D-1 ; � - . PROMISSORY NOTE • $100,000.00 Minneapolis, Minnesota November 2, 1994 FOR VALUE RECEIVED The undersigned, T& H Markets, Inc., a Minnesota corporation (the "Undersigned'), agrees and promises to pay to the order of the Housing and Redevelopment Authority In and For the City of Hopkins, Minnesota, a public body politic and corporate, its endorsees, successors and assigns (the "Holder"), in lawful money of the United States at its principal office at 1010 First Street South, Hopkins, Minnesota 55343, or such other place as the Holder may from time to time designate, the principal sum of One Hundred Thousand Dollars ($100,000.00} without interest thereon. The entire principal amount together with all accrued interest, shall be due and payable in five (5) equal annual installments of $20,000.00 each commencing on November 2, 1996, and continuing to and including November 2, 2000. This Note may be prepaid in whole or in part at any time. At the option of the Holder this Note is subject to mandatory prepayment, upon certain events all as more fully set forth in the Development Agreement and Security Agreement hereinafter referred to. 'This Note is also subject to forgiveness upon the happening of certain events as are more fully set forth in the Development Agreement hereinafter referred to. • This Note is made pursuant to the laws of the State of Minnesota and is the Note referred to in and secured by: (i) a Development Agreement ("Development Agreement") dated as of August 31, 1994 between the Undersigned and the Holder; and (ii) a Security Agreement and Fixture Financing Statement of even date herewith given by the Undersigned to the Holder ("Security Agreement"). If (i) default is made in any payment of any sums due in accordance with the terms and conditions of this Note, or (ii) a default occurs under any other provision of this Note, or an Event of Default occurs under the Redevelopment Agreement or Security Agreement (singularly and collectively herein an "Event of Default"), the entire unpaid principal balance together with all accrued interest thereon shall become immediately due and payable at the option of the Holder hereof.' Time is of the essence. No delay or omission on the part of the Holder in exercising any right hereunder shall operate as a waiver of such right or of any other remedy under this Note. A waiver of any one occasion shall not be construed as a bar to or waiver of any such right or remedy on a future occasion. • . - • 1 . _ . . _....., ... . � Presentment for payment, protest and notice of non-payment aze waived. Consent is given to any extension or alteration of the time or terms of payment hereof, any renewal, any release of all or any part of the security given for the payment hereof, any acceptance of additional security of any kind, and any releases of, or resort to any party liable for payment hereof. Executed as of the date first above written. T & H MARKETS, INC. BY Its By Its STATE OF MINNESOTA ) ) COUNTY OF � The foregoing instrument was acknowledged befare me this � day of �/,�--L��. � � 1994, bY �� i L' f�fi �'�,/ �r _%�; t---- and , the and of T& H Markets, Inc., a Minnesota corporation. , / � �'.L�ciM.e.� .L��� tary bI1C � ■N�N4'�/�.nn/�^'... � n �.�.. . . . ..:�.r,�r -d , . � . �.�_. , . . . � v_.r . .., .r _ . .- . , ? < P�;y ���fil(iid���t� L" :r:� _.. ,,,. _... .,,...: j � a x Wvvwvw p