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HRA Report 2012-06 (Purchase and Development Agreement - Klodt DevelopmentCITY OF Cap,. May 30, 2012 H O P K I N S HRA Report 2012-06 PURCHASE AND DEVELOPMENT AGREEMENT — KLODT DEVELOPMENT Proposed Action Staff recommends adoption of the following motion upon closing the public hearing: Move to approve the Purchase and Development Agreement between the Hopkins Housing & Redevelopment Authority and Klodt Development, LLC, contingent upon the City of Hopkins transferring ownership to the Hopkins Housing & Redevelopment Authority. With this motion it is understood that the Executive Director and Chair have the authority to execute the agreement and that it is contingent upon the City of Hopkins transferring ownership and an assignment of the Hennepin County TOD grant requirements. Overview As planning for the SW LRT progressed, the vision of 8th Avenue as the connector from the SW LRT station on Excelsior Boulevard to Mainstreet solidified. In order for 8th Avenue to be a gateway, the uses along and design of 8th Avenue must be transformed in to an inviting pedestrian, bike, and automobile corridor. A key site along this corridor, the Park Nicollet clinic, became available when the clinic was closed in August of 2009. The HRA entered into an option to purchase the property. A request for proposals went out in June of 2010 and in March 2011 Klodt Development was selected as the developer for the site. The City of Hopkins secured a portion of the funds necessary to purchase the property through grant funds, and the City exercised the option and purchased the property. Redevelopment projects are typically undertaken under the powers of the Housing & Redevelopment Authority. Because the City of Hopkins acquired the property, a transfer of ownership from the City to the HRA must take place before the property can be sold by the HRA to the developer. Staff has been in contact with Hennepin County, who provided grant funds for the acquisition, and they have indicated they will support the transfer to the HRA for purposes of fulfilling the intent of the grant agreement. Primary Issues to Consider ■ What are the specifics of the proposed agreement? Supporting Documents ■ Summary of Purchase and Development Agreement ■ Purcghase_rtd Development Agreement with Klodt Development, LLC Kersto Elverum Director of Planning & Development Financial Impact: $ 0 Budgeted: Y/N Source: Related Documents (CIP, ERP, etc.): Notes: HRA Rpt. 2012-06 Page 2 Analysis of Issues: The Purchase and Development Agreement outlines the terms under which the property will be sold to the developer. Some of those terms include receiving City land use approvals, including a site plan review and rezoning, that will be brought before the City Council this summer. A summary of other key elements, prepared by the HRA's Attorney, is attached to this report. Alternatives: The Hopkins City Council has the following options regarding this item: ■ Approve the Purchase and Development Agreement as presented. ■ Recommend minor modifications to the Agreement that do not change its intent. ■ Continue this item for more information or discussion. SUMMARY OF CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN HOPKINS HOUSING AND REDEVELOPMENT AUTHORITY AND KLODT DEVELOPMENT, LLC The following is a brief summary of the major terms of the above referenced development agreement: 1. Redeveloper. The Redeveloper is Klodt Development, LLC, a Minnesota limited liability company. 2. Minimum Improvements. The Redeveloper proposes to acquire the former Park Nicollet site from the Authority and construct in 2 phases a 105 to 120 unit housing development with approximately 4,500 square feet of space designed to be used for studios, galleries, or live/work space (the "Flexible Space"). Phase I will abut on 8th Avenue and will consist of approximately 72 units of rental housing and the 6 units of Flexible Space. Phase II will abut on 9th Avenue and will consist of approximately 39 units of rental housing. All improvements constructed must conform to construction plans to be submitted to and approved by the Authority. 3. Purchase Price. The Redeveloper will pay as a purchase price for the property $10,000 multiplied by the number of residential units to be constructed by the Redeveloper on the property. The Redeveloper will also attempt to acquire the Lutheran Digest property (the "Acquisition Property"). If the Redeveloper acquires the Acquisition Property the purchase price is capped at $1,120,000. 4. Timing of Construction. Demolition of the existing improvements will start in March, 2013. Subject to excused delays, construction of Phase I will start in April, 2013, and be substantially completed in May, 2014, and construction of Phase II will start in May, 2013, and be substantially completed in October, 2014. 5. Compliance with Grant Agreement. The City has received a grant from the Hennepin County Housing and Redevelopment Authority to finance a portion of the cost of acquiring the Park Nicollet site. The Redeveloper has agreed to comply with all terms of the grant agreement under which the grant was made. 6. Authority Costs. The Redeveloper will pay all of the Authority's and City's out- of-pocket costs incurred in connection with the transactions contemplated by the agreement, up to a maximum of $25,000. If the Redeveloper defaults under the agreement, there is no limit on the Redeveloper's liability for costs. 7. Leasing of Flexible Space. The agreement provides that the leasing of the Flexible Space units will be subject to market conditions. The Redeveloper will initially lease those units to residential tenants. Commencing on the earlier of (i) January 1, 2021 or (ii) the date on which the Southwest Light Rail Transit Line commences operation within the City limits, as residential tenants vacate portions of the Flexible Space, such portions shall be listed with a commercial broker, reasonably acceptable to the Authority, for at least two hundred seventy (270) days, at an initial rent of $18.00 per square foot (as of 2012, subject to market rate adjustments in future years), with an improvement allowance of $20.00 per foot. If the Flexible Space cannot be leased for Flexible Space uses the Redeveloper may lease the space to residential tenants. However, if the City receives a grant from the Metropolitan Council under its Livable Communities Demonstration Account Transit Oriented Development Grant Program and any portion of the grant is made available to the Redeveloper for Phase I, the Redeveloper will have to repay 1/2 of the amounts made available prorated bases on how much of the Flexible Space is leased for Flexible Space uses, as opposed to residential uses. 5-31-12 PURCHASE AND DEVELOPMENT AGREEMENT By and Between HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF HOPKINS and KLODT DEVELOPMENT, LLC Dated: .2012 This document was drafted by: BRADLEY & DEIKE, P. A. 4018 West 65t' Street, Suite 100 Edina, MN 55435 Telephone: (952) 926-5337 TABLE OF CONTENTS Palle PREAMBLE 1 Section I.I. Definitions ARTICLE I Definitions ARTICLE II Representations Section 2.1. Representations by the Authority 5 Section 2.2. Representations by the Redeveloper 6 ARTICLE III Convevance of Propert-N, Section 3.1. Status of Property 7 Section 3.2. Agreement to Sell 7 Section 3.3. Conditions Precedent to Conveyance 7 Section 3.4. Title 8 Section 3.5. Demolition_ Environmental Matters 10 Section 3.6. Closing; Taxes 10 Section 3.7. Access to Property 10 Section 3.8. Copies of Reports 11 Section 3.9. Authority Costs 11 Section 3.10. Acquisition Property 12 ARTICLE IN7 Construction of Improvements Section 4.1. Construction of Minimum hnproyemernts 13 Section 4.2. Construction Plans 13 Section 4.3. Commencement and Completion of Construction 14 (i ) Section 4.4 Compliance with Grant Agreement 14 ARTICLE V Insurance Section 5.1. Insurance 16 ARTICLE VI Leasing Minimum Improvements Section 6.1. Prohibited Uses 17 ARTICLE VII Financing Section 7.1. Financing 18 Section 7.2. Limitation on Encumbrance of Property 18 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Section 8.1. Prohibition Against Transfer of Property and Assignment of Agreement 19 Section 8.2. Release and Indemnification Covenants 19 ARTICLE IX Events of Default Section 9.1. Events of Default Defined 20 Section 9.2. Remedies on Default 20 Section 9.3. Revesting Title in Authority ,20 Section 9.4. No Remedy Exclusive 20 Section 9.5. No Additional Waiv er Implied bo, One 'W"aiVer 21 Section 9.6. Effect of Termination of Agreement 21 Section 9.7. Costs of Enforcement 21 ARTICLE X Additional Provisions Section 10.1. RepresentatiN cs Not Individually Liable Section 10.2. Restrictions on L', so Section 10.3. Provisions Not MerL ed With Deed Section 10.4. Titles of Articles and Sections Section 10.5. Notices and Demands Section 10.6. Disclaimer of Relationships Section 10.7. Modifications Section 10.8. Counterparts Section 10.9. Judicial Interpretation Section 10.10. No Business Subside SCHEDULE A Description of Redevelopment Property and Acquisition Property SCHEDULE B Grant Agreement SCHEDULE C lntentionalj}T Omitted SCHEDULE D Intentional]y- Omitted SCHEDULE E Demolition and Construction Schedule 22 22 22 22 2; 23 2; 23 PURCHASE AND DEVELOPMENT AGREEMENT THIS AGREEMENT, made on or as of the day of , 2012, 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 Minnesota Statutes, 469.001-469.047 (hereinafter referred to as the "Act"), and having its principal office at 1010 First Street South, Hopkins, Minnesota 55343, and Klodt Development, LLC, a Minnesota limited liability company (hereinafter referred to as the "Redeveloper"), having its principal office at 50 Groveland Terrace, Suite A, Minneapolis, Minnesota 55403. IAIJ I1 ►1 I.Y.' 9TI1661 WHEREAS, the Authority was created pursuant to Minnesota Statutes, sections 469.001- 469.047 (the "Act") and was authorized to transact business and exercise its powers by a resolution of the City Council of the City of Hopkins (the "City") pursuant to the Act; and WHEREAS, the Authority has established within the City its Redevelopment Project No. 1, a "redevelopment project" as defined in the Act, providing for the development and redevelopment of certain areas located within the City (which redevelopment project is hereinafter referred to as the "Project"); and WHEREAS, the Authority has acquired certain real property within the Project (which real property is referred to herein as the "Redevelopment Property"); and WHEREAS, the Redeveloper has presented to the Authority a proposal pursuant to which the Redeveloper would redevelop the Redevelopment Property through the construction of a residential rental/mixed use development and explore the possibility of acquiring certain other real property in the area of the Redevelopment Property to be redeveloped into a development complementary to the development proposed on the Redevelopment Property; and WHEREAS, pursuant to the Act the Authority is authorized to make its property available for development by private parties but must take measures to ensure that development approved by the Authority in connection with such transfer of property actually occurs; and WHEREAS, the Authority and the Redeveloper desire to enter into this Agreement to set forth the terms under which the Authority will sell the Redevelopment Property to the Redeveloper and the Redeveloper's obligations to develop such property through the construction of improvements thereon and under which the Redeveloper would explore the feasibility of acquiring additional property in the vicinity of the Redevelopment Property for redevelopment purposes. NOW, THEREFORE, in consideration of the mutual covenants and obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: ARTICLE 1 Definitions Section 1.1. Definitions. In this agreement. unless a different meaning clearly appears from the context: "Acquisition Propelty.. means the property described as such on the attached Schedule A. "Act" means Mitulesota Statutes. Sections 469.001-469.047. as amended. "Agreement" means this Agreement. as the same may be from time to time modified. amended, or supplemented. "Authority" means the Housing and Redc�-elopment Authority In and For the Cite of Hopkins, or any successor or assign. "City" means the City of Hopkins. "County" means Hennepin County. '0innesota. "Demolition and Construction Schedule" means the schedule set forth on Exhibit E to this Agreement for the demolition of the improvements located on the Redevelopment Property and the construction of the N41nimum ImproN7ements. "Development Plans` means those plans including site. grading. storm water management. utility, landscape, building floor plan and building exterior elevations for the Minimum Improvements for Phase I and Phase II that are required for municipal land use and watershed district approvals that may include planned unit de�-elopment agreement. conditional use permits7 rezoning, platting, and �-ariances. "Environmental Assessment" means the phase one em-ironinental assessment obtained by the Authority concerning the Redevelopment Property and described in Section 3.5 of this Agreement. "Event of Default" means an action listed in Section 9.1 of this Agreement. "Flexible Space" means approximateL7 4.00 square feet of space fronting on 8th A� enue in the Phase I building that will be designed so it can be used for studios. galleries. or 11N-e/work space. The use of this space «ill be determined by demand. "Grant Agreement" means the agreement for 8"' AN'enue Redevelopment" bet«-een the Citi- and the HCHRA dated November 9. 2010. a copy of which is attached hereto as Schedule B. "HCHRA" means the Hennepin Count} Housing and RedeN-elopment :yuthority. "Holder" means the owner of a Mortgage. "Hazardous Substances" means asbestos, urea formaldehyde, polychlorinated biphenyls, nuclear fuel or materials, chemical waste, radioactive materials, explosives, known carcinogens, petroleum products and also all dangerous, toxic or hazardous pollutants, contaminates, chemicals, materials or substances defined as hazardous or as a pollutant or contaminant in, or the release or disposal of which is regulated by, any Laws or Regulations, as hereafter defined. Laws or Regulations mean and include the Comprehensive Environmental Response and Liability Act ("CERCLA" or the Federal Superfund Act) as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA") 42 U.S.C. 9601-9675; The Federal Resource Conservation and Recovery Act of 1986 ("RCRA"); the Clean Water Act, 33 U.S.C. 1321, et seq.; the Clean Air Act 42 U.S.C. 7401, et seq., all as the same may be from time to time amended, and any other federal, state, county, municipal, local or other statute, law ordinance or regulation which may relate to or deal with human health or the environment including, without limitation, all regulations promulgated by a regulatory body pursuant to any such statute, law or ordinance. "Minimum Improvements" means the construction by the Redeveloper of a 105 to 120 unit rental housing development which includes, subject to the terms of this Agreement, approximately 4,500 square feet of Flexible Space, on the Redevelopment Property together with related and incidental improvements all in accordance with the Development Plans. "Mortgage" means any mortgage made by the Redeveloper which is secured, in whole or in part, by the Redevelopment Property and which is a permitted encumbrance pursuant to the provisions of Article VIII of this Agreement. "Permitted Encumbrances" means reservations of minerals or mineral rights to the State of Minnesota; public utility, roadway and other easements which will not adversely affect the development and use of the Redevelopment Property pursuant to the Redeveloper's Development Plans; applicable building laws, regulations and ordinances; real estate taxes that Redeveloper agrees to pay or assume pursuant to this Agreement; restrictions, covenants and easements of record that do not adversely affect the development and use of the Minimum Improvements; encroachments of any buildings or improvements located on the Redevelopment Property that are to be demolished in order to construct the Minimum Improvements; exceptions to title to the Redevelopment Property which are not found objectionable by Redeveloper upon examination of the abstract of title or the title insurance commitment to be delivered to the Redeveloper pursuant to Section 3.4 of this Agreement; the reversionary clause described in Section 9.3 of this Agreement and the use restrictions contained in Section 6.1 of this Agreement, and the terms and provisions of this Agreement. "Phase" means Phase I or Phase II. "Phase I" means a portion of the Minimum Improvements to be constructed on the Redevelopment Property abutting on 81' Avenue, consisting of approximately 73 units of rental 3 housing which includes subject to the terms of this Agreement approximately 4.300 square feet (or 6 units) of Flexible Space. "Phase II" means a portion of the Minimum Improvements to be constructed on the Redevelopment Property abutting on 9�'' .A� enue. consisting of approximately - units of rental housing. "Phase I Parcel' means that poiiion of the Redevelopment Property on which Phase I will be constructed. "Phase II Parcel means that portion of the Redev elopment Property on which Phase II will be constructed. "Project" means the Authority's Redevelopment Project No. 1. "Project Area" means the real property located within the boundaries of the Project. "Purchase Price- means the amount to be paid by the Redeveloper to acquire the Redevelopment Property from the Authority as described in Section 3.2 of this Agreement. "Redeveloper" means Klodt Development. LLC.. a Minnesota limited liability company. its successors and assigns. "Redevelopment Property" means the real property described in Schedule A of this Agreement. "Site Plan" means the preliminary Site Plan which has been provided to the City and Authority, which shows the proposed location of theNlinimum Improvements. "State" means the State of Minnesota. "Unavoidable Delays" means delays v,-hich are the direct result of acts of God. unforeseen adverse weather conditions. strikes. other labor troubles. fire or other casualty to the Minimum Improvements, litigation commenced by third parties which. by injunction or other similar judicial action, directly results in delays. or acts of any federal state or local goy°ernmental unit (other than the Authority in enforcing its rights under this Agreement) which directly result in delays. 4 ARTICLE Il Representations Section 2.1. Representations by the Authority. The Authority makes the following representations as the basis for the undertaking on its part herein contained: (a) The Authority is a municipal housing and redevelopment authority organized and existing under the Act. Under the laws of the State, the Authority has the power to enter into this Agreement and to perform its obligations hereunder. (b) The Redevelopment Property is directly accessible to city sanitary sewer, storm sewer, and water of adequate capacity for the construction of the Minimum Improvements plus other anticipated improvements on adjacent properties. (c) To the best of the Authority's knowledge and belief, at the time of execution by the Authority of this Agreement, there are no environmental proceedings, applications, ordinances, petitions, court pleadings, resolutions, investigations by public or private agencies, or other matter pending which could prohibit, impede, delay or adversely affect the use of the Redevelopment Property for the construction and use of the Minimum Improvements. (d) To the best of the Authority's knowledge and belief, no investigation, administrative order, consent order or agreement, litigation, or settlement with respect to Hazardous Substances is proposed, threatened, anticipated or in existence with respect to the Redevelopment Property. (e) There is not pending, nor to the best of the Authority's knowledge is there threatened, any suit, action or proceeding against the Authority before any court, arbitrator, administrative agency or other governmental authority that materially and adversely affects the validity of any of the transactions contemplated hereby, the ability of the Authority to perform its obligations hereunder, or as contemplated hereby or thereby, or the validity or enforceability of this Agreement. (f) To the Authority's best knowledge, except as disclosed in the Environmental Assessments defined in Section 3.5(a), there are no underground tanks located on the Redevelopment Property. (g) Except for a parking lease with the Elk's Club covering a portion of the Redevelopment Property, which shall be terminated by the Authority prior to closing, there are no purchase agreements, leases or other permanent occupancy agreements affecting the Redevelopment Property, other than leases which shall be terminated prior to conveyance of the Redevelopment Property to the Redeveloper, with any person other than the Redeveloper, and the Authority will not enter into any such agreements. 5 (h) Except as disclosed in the Environmental _assessments defined in Section 3.5(a) or as may be implied froth past uses of the Redevelopment Property disclosed in the Environmental Assessments, the Authority has no actual kno\� ledge of the use of any Hazardous Substances on. under, or in the Redevelopnient Property. (i) To the best ofthe Authority's kno�Nled,,e. the AuthoritN_' and the Cite are in compliance with the terms of the Grant Agreement. Section 2.2. Representations b% the RedeN eloper. The Redc�-eloper represents that: (a) The Redeveloper is a limited liability company duly organized and in good standing under the la« -s of the State. is not in �-iolation of any proN-isions of its articles of organization, member control agreement. or the laN�-s of the State. has the po«er to enter into this Agreement and has duly authorized the execution. delIN-ery and performance of this Agreement by proper action of its members. (b) The RedeN-eloper «-ill construct the Minimum Improvements in accordance «-ith the terms of this Agreement and all local. state and federal laN� s and regulations (including. but not limited to, environmental. engineering. zoning. building code and public health laws and regulations), except for variances necessarN- to construct the improvements contemplated in the Development Plans approved by the Authority. (c) Neither the execution and delivery of this Agreement. the consummation of the transactions contemplated hereby. nor the fulfillment of or compliance N\-ith the terms and conditions of this Agreement is pre�-ented. limited bN or conflicts «ith or results in a breach of. the terms, conditions or pro�-isions of anN restriction or any evidences of indebtedness, agreement or instrument of «-hatc�-er nature to 1vhich the RedeN-cloper is no«N a party or by «-hick it is bound, or constitutes a default under any of the foregoiilg. All representations set forth in Section 2.1 and 2.2. of this agreement shall be true and correct in all material respects as of the date of closin<a on coni e�-ance of the Redevelopment Property to the Redeveloper. ARTICLE III Conveyance of Property Section 3.1. Status of Property. (a) The Authority has acquired the Redevelopment Property, for the purpose of selling it to a private developer for redevelopment. The Authority is willing to sell the Redevelopment Property to the Redeveloper on the terms and conditions contained in this Agreement for the purpose of constructing the Minimum Improvements. (b) The Authority and the Redeveloper have indentified certain other real property located in the vicinity of the Redevelopment Property that, if acquired, would enable a more comprehensive development consistent with the City's and Authority's goals and objectives for the development of that area. Such additional real property is referred to in this Agreement as the "Acquisition Property" and is owned by a separate third party. The Authority and Redeveloper have agreed that the Redeveloper will initiate negotiations with said owner to deterinine if the Authority and/or the Redeveloper will be able to acquire the Acquisition Property on terms and conditions acceptable to the parties. Notwithstanding the foregoing, this provision does not require Redeveloper to acquire the Acquisition Property. 3.2 Agreement to Sell. (a) In consideration of the covenants hereinafter set forth and other valuable consideration, the sufficiency of which is hereby acknowledged, the Authority agrees to sell and the Redeveloper agrees to buy the Redevelopment Property. (b) The Purchase Price to be paid by the Redeveloper to acquire the Redevelopment Property shall be $10,000 multiplied by the number of residential units to be constructed by the Redeveloper on the Redevelopment Property pursuant to the approved Development Plans. Notwithstanding the foregoing, if the Redeveloper acquires the Acquisition Property then the maximum total Purchase Price shall not exceed $1,120,000. The Purchase Price shall be payable in cash, by wire transfer or by certified check at the time of the conveyance of the Redevelopment Property to the Redeveloper. Section 3.3. Conditions Precedent to Conveyance. The Authority's obligation to convey the Redevelopment Property to the Redeveloper and the Redeveloper's obligation to purchase the Redevelopment Property shall be subject to satisfaction of all of the following conditions precedent: (a) The Redeveloper having obtained the requisite approval of the Authority hereunder and all applicable governmental agencies and instrumentalities, municipal, county, state and federal, to the development of the Redevelopment Property through the construction of Phase I in accordance with the Redeveloper's Development Plans, including, without limitation, city approval of stone water, sanitary sewer and water utilities. (b) The Redeveloper having obtained the following to the extent required: (i) amendments, revisions, exceptions or changes as may be necessary to applicable zoning codes and ordinances; (ii) plamied unit development or other necessary land use approvals from the 7 City for Phase I and Phase II. (iii) watershed district approval: (iy) roads�-ay access rights and permits; (iv) environmental consents. if necessary (y) approval of the replatting of the Redevelopment Property: and (vi) all other governmental approvals that are necessary in order to allow the construction and operation of Phase I and Phase II in accordance with the Redeveloper's Development Plans. (c) The Redeveloper haying revle�� ed and approved. or �N aired an- objections to. title to the Redevelopment Property pursuant to Section 3.4 of this Agreement. (d) The Redeycloper ha -Ing provided to the Authority evidence that the Redeveloper has a firm commitment for the financing or has available funds sufficient to finance the acquisition of the Redevelopment Property and construction of Phase I. (e) The Redeeloper haying satisfied itself that the soil conditions on the Redevelopment Property are acceptable for its purposes. The Redeveloper agrees that it take all conuzlercially reasonable actions necessary to satisfy the above conditions on or before December 15. 2012. At its sole option. Redeveloper may waive, in writing, the requirement of obtaining a building permit for Phase I and any condition regarding Phase II, other than the condition that Redeveloper's Development Plans include plans for Phase II, in which case such condition(s) shall cease to be effective. In the e crit that all of the above conditions precedent have not been satisfied_. or waived in writing by both the Authority and Redeveloper, on or before December 15. 2012. either the Authority or Redeveloper may terminate this Agreement by giving written notice of terinination to the other party, whereupon this Agreement shall be null and N old and the Redeveloper and Authority shall execute an instrument in recordable form canceling this Agreernent. Approval by the Authority or City of any documents submitted to it by the Redeveloper to satisfy the conditions precedent stated in this Agreement shall be in the reasonable discretion of the City and the Authority. respectively. 3.4 Title. The Authority shall. within a reasonable time after the date hereof. furnish to the Redeveloper an updated abstract of title or. at the Authority's option_. a commitment for an Owner's Policy of Title Insurance with copies of all documents constituting liens or encumbrances referred to therein. If a commitment is issued such commitment shall be issued by Old Republic National Title Insurance Company. or such other title company as is acceptable to the Redeveloper, in the _full amount of the purchase price to be paid by the Redeveloper hereunder and shall: (a) set forth the state of title to the Rede elopment Property together with all exceptions and conditions to title. including without limitation. all easements. restrictions. rights of way, coN enants. reservations. consents and all other encumbrances affecting the Redevelopment Property which would appear in the American Land Title Association ("ALTA`) Ov,-ner's 1992 Standard Form title insurance policy to be issued at the time of conye-ance of the Redcyelopment Propert} S (b) include searches covering bankruptcy and state and federal judgments and liens; and (c) commit to waive or insure against facts which would be disclosed by a comprehensive survey of the Redevelopment Property, rights and claims of parties in possession, and mechanic's and materialmen's liens and lien claims subject to compliance with customary conditions of closing. The Redeveloper shall be allowed thirty (30) days after receipt thereof and the survey infonnation referenced below, whichever is later, for examination of said title and the making of any objections thereto. The Redeveloper may not object to any of the Permitted Encumbrances or to any matter that does not make title unmarketable so long as the existence of such matter will not interfere with, prevent or make more expensive the construction and operation of the Minimum Improvements. Such objections shall be made in writing or shall be deemed waived. If any objections are so made, the Authority shall undertake all commercially reasonable actions to cure such objection within ninety (90) days from notice thereof to cure, or cause to be cured by the City the title defect or exception, either by the removal thereof or by the procurement of title insurance endorsements satisfactory to Redeveloper providing coverage against loss or damage as a result of such defect or exception. During any period where the Authority is undertaking to cure an objection, the time provide for in paragraph 3.3 (e) hereof shall be extended for a like period. If the Authority does not cure or cause to be cured such title defect or exception to Redeveloper's satisfaction within said ninety (90) days, the Redeveloper may, at its option, either (i) terminate the Agreement upon written notice to the Authority upon which this Agreement shall be null and void and the Redeveloper and the Authority shall execute an instrument in recordable form canceling this Agreement; or (ii) in the event a title defect is reasonably determined by the title company to be curable, proceed with the closing on the purchase of the Redevelopment Property, in which case a portion of the Purchase Price estimated by the title company issuing the above referenced title insurance commitment as necessary to cure the title defect shall be held in escrow by the title company to pay the cost of curing the defect. If the Redeveloper proceeds to acquire the Redevelopment Property, the Authority shall have no further obligations with respect to any such defects or exceptions. If the Authority has furnished the Redeveloper with a title commitment, ten (10) days prior to closing on the conveyance of the Redevelopment Property to the Redeveloper the Authority shall cause an updated title commitment to be furnished to the Redeveloper. The Authority has furnished to the Redeveloper all surveys that the Authority has in its possession concerning the Redevelopment Property. To the extent that the Redeveloper desires an additional survey it will be responsible for obtaining it. The Authority shall, at closing, release the Redevelopment Property from the covenants, conditions, restrictions and provisions contained in the Quit Claim Deed from the Authority to the City of Hopkins dated January 18, 1978 and recorded January 20, 1978 as document number 4350679 and the use restrictions and obligations set forth in the Quit Claim Deed from the Authority to the City of Hopkins dated November 14th, 1977 and recorded April 3, 1978 as document number 466681. 0 Section 3.5 Demolition: Em irorunental 'Matters. (a) The Redeveloper agrees that it will undertake the demolition of the improvements currently located on the Redevelopment Property within the time period specified in Section 4.3. The Authority has secured and has provided to the Redeveloper a phase one environmental assessment (the "Environmental Assessment'`) covering the Redevelopinent Propelly. The Enyirorunental Assessment is dated as of October 22, 2010, and was prepared b, Javelin Group. (b) The Redeveloper agrees that it will be responsible for the demolition of all structures and improvements located on the Redeycloprnent and any necessary remediation of adverse environmental conditions on the Redeyelopnhent Propert, Section 3.6 Closing: Taxes. (a) Closing on the conveyance of the Redeyelopnhent Property to the Redeveloper shall occur on or before one hundred and eighth (180) days after satisfaction. or waiver, of the conditions precedent set forth in Sections 3.3(a) and 3.3(b) of this Agreement but in no event later than February 28. 2013. (b) At closing on conveyance of the PedQn clopment Property. the Authority shall deliver to the Redeveloper: (i) a quit claim deed duly_ executed and acknowledged. in recordable form, conveying to the Redeveloper marketable title to the Redevelopment Property, subject only to Permitted Encumbrances: (ii) the abstract or title insurance policy described in Section 3.4 (the premium for which shall be paid by Redeveloper. the costs of obtaining the conunitinent for which shall be paid by the Authority): and (iii) a Seller's Affidavit. in customary form. relative to judgments, federal tax liens. mechanic's liens and outstanding interests in the Redevelopment Property. (c) At the time of conveyance of the Redevelopment Property, the Redeveloper shall deliver to the Authority the Purchase Price in the manner set forth in Section 3.2 of this Agreement. (d) Real estate taxes due and payable in the year of closing shall be apportioned between the Redeveloper and the Authority as of the date of closing on the conveyance of the Redevelopment Property. vyith the result that the Authority shall pay that portion of such taxes attributable to the period of the year prior to the conveyance and the Redeveloper shall pay that portion of the taxes attributable to the period of time commencing with the date of conveyance. Real estate taxes and assessments due and payable in the year 2011 and all prior years and deferred real estate taxes (i.e. Green Acres). if any, shall be paid by the Authority. All levied and pending unpaid special assessments shall be paid by the Authority. Section 3.7. Access to Property. During the term of this Agreement, the Redeveloper and its authorized representatives shall. upon reasonable prior notice to the Authority. be permitted access to the Redevelopment Property at reasonable times for the purpose of architectural inspection and design studies_. the preparation of a survey. and the taking of such soil borings and environmental assessments as are deemed reasonably necessary by Redeveloper. The Redeveloper hereby agrees to indeinnif . defend. and hold harmless the Authority. its Of agents, employees and commissioners from and aL,,ainst any- and all damage to property or injury 10 to person arising out of the Redeveloper's exercise of its right of access to the Redevelopment Property under this Section. The Redeveloper shall be entitled to actual possession of the Redevelopment Property on the date of closing on conveyance of the Redevelopment Property to the Redeveloper. Except as expressly stated herein, the Authority makes no representations whatsoever as to the condition of the Redevelopment Property or the soils thereon or that the same is suitable for the Redeveloper's proposed development. If the Redeveloper determines to proceed with its acquisition of the Redevelopment Property it will buy such property "as is", and the Authority shall have no liability to the Redeveloper on account of any defects with respect thereto. Section 3.8. Copies of Reports. In the event that there occurs an Event of Default by the Redeveloper or if the Redeveloper fails to complete the construction of either Phase of the Minimum Improvements, the Redeveloper shall furnish to the Authority, at no cost to the Authority, copies of all reports, assessments, studies, surveys and other documentation prepared on behalf of the Redeveloper in connection with its proposed acquisition of the Redevelopment Property. Section 3.9. Authority Costs. In consideration for the Authority's covenants and undertakings under this Agreement, the Redeveloper agrees that it will pay all out-of-pocket costs incurred by the Authority or City, including, without limitation, all fees owed to the Authority's or City's traffic, engineering, development, fiscal, environmental and other consultants, and all attorneys' fees incurred by the Authority or City in connection with the negotiation and preparation of this Agreement, any planning documents required by the City, and all related documents, or in enforcing the Redeveloper's obligations to pay costs which it is obligated to pay under this Agreement. The Redeveloper shall not be responsible to pay the Authority's costs incurred in connection with the Authority's acquisition of the Redevelopment Property. All of the Authority's and City's attorneys and consultants shall be under contract with the Authority or City, unless the Authority or City otherwise agree in writing. The Authority will provide to the Redeveloper requests for payment of the costs incurred by the Authority or the City from time to time accompanied by statements or invoices documenting such costs. Such costs shall be payable by the Redeveloper to the Authority within thirty days after request by the Authority. The sum of $25,000 is the maximum amount of such costs that the Redeveloper will be required to pay under this Section unless there occurs an Event of Default by Redeveloper, in which case there shall be no limit on Redeveloper's reimbursement obligations. The Redeveloper's obligations under this Section shall survive tennination of this Agreement to the extent costs were incurred prior to the date of termination or to the extent that costs are incurred to enforce the Redeveloper's obligations under this Section. Prior to incurring costs subject to payment or reimbursement by the Redeveloper under this Section, the Authority will use its best efforts to obtain proposals from its consultants and attorneys describing the hourly rate or other basis on which the costs will be incurred and an estimate of the costs to be incurred. A failure to obtain such proposals or the exceeding of the cost estimates shall not relieve the Redeveloper of its obligation to pay the costs incurred. The Redeveloper has deposited $10,000.00 with the Authority as of the date of this Agreement. The Authority shall have the right to draw upon amounts on deposit with it to pay the fees and 11 costs described in this Section. The Rede eloper agrees to maintain a deposit with the Authority in the amount of $10.000.00. If the amount on deposit becomes depleted belov,- S5.000.00. the Authority shall have the richt to request in «ritingr. accompanied by itemized invoices which have been paid from the deposit. that the Redeveloper replenish such funds upon which the Redeveloper shall, within 1 - daN s of request by tl-e Authority. remit to the Authority additional funds to be held on deposit so that the amount on deposit NN -111 equal S10.000.00. If upon termination of this Agreement. the amounts held by the Authority are insufficient to pay the Authority's costs, the Redeveloper shall be liable for any deficicne . subject to the 525.000 limitation on the Rede elopers liability for such costs. If this Agreement is terminated in accordance with the teens hereof. anv- sums remaiining on deposit with the Authority. atter the Authority pays or reimburses itself for costs incurred to the date of termination. shall be returned to the Redeveloper. Section 3.10. Acquisition Property. The RedeN eloper «-ill engage in discussions with the owner of the Acquisition Property concerning its possible purchase of all or portions of the Acquisition Property. If the Redeveloper is able to negotiate a purchase agreement to acquire the Acquisition Property. or a portion thereof. the Authority agrees that it will meet NNith the Redeveloper to discuss the inteC3ration of such property into the development contemplated by this Agreement and the Authoritti 's participation in such development. If the Redeveloper completes the acquisition of the acquisition Property and the Redevelopment Property. the parties contemplate and agree that the combined development Neill include approximately 162 residential units. ARTICLE IV Construction of Improvements Section 4.1. Construction of Minimum Improvements. The Redeveloper agrees that it will construct the Minimum Improvements on the Redevelopment Property in accordance with the approved Development Plans. Additionally, Redeveloper and its successors or assigns will operate and maintain, preserve and keep the Minimum Improvements or cause the Minimum Iinprovements to be maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good repair and condition. Section 4.2. Development Plans. (a) The Authority's willingness to convey the Redevelopment Property to the Redeveloper is predicated upon and subject to the Redeveloper's agreement that it will construct the Minimum Improvements and that the Minimum Improvements will be of such quality and nature as will satisfy the Authority's and City's goals for the redevelopment of the Redevelopment Property. Attached to this Agreement is the Site Plan that has been submitted to the City and the Authority showing the general nature and location of the Minimum Improvements. The Site Plan has not been finally approved by the City or the Authority and is subject to change. On or before the date set forth in the Demolition and Construction Schedule, the Redeveloper shall submit to the City and the Authority applications, together with =supporting documentation, for planned unit development and/or variance approvals, site plan and concept review, and a preliminary and final plat of the Redevelopment Property as required to accommodate construction of the Minimum Improvements. (b) The Redeveloper understands that as a part of the City's planned unit development approval process the Redeveloper may be required to enter into a planned unit development agreement detailing the manner in which the Redeveloper will carry out certain aspects of the construction of the Minimum Improvements. In the event that any term contained in this Agreement is inconsistent with any term contained in the planned unit development agreement, the terms of the planned unit development agreement shall govern. (c) Within a period of time that will allow the Redeveloper to satisfy the condition contained in Section 3.3(a), taking into account the time necessary for review by the Authority, the Redeveloper shall provide to the Authority and the City for their review and approval Development Plans for the Minimum Improvements and documentation necessary to obtain all other land use approvals that must be obtained prior to the construction and operation of the Minimum Improvements. The Development Plans and other documentation shall provide for the construction of the Minimum Improvements and shall be in confonnity with this Agreement, and all applicable state and local laws and regulations. The Authority shall approve the Development Plans and other documentation in writing if, in the sole discretion of the Authority, the proposed Minimum Improvements, including the building materials proposed to be used, are of such a nature and quality as to justify the Authority's conveyance of the Redevelopment Property and if they are consistent with the provisions of this Agreement. Such Development Plans and other documentation shall, in any event, be deemed approved by the Authority, but not the City, unless rejected in writing by the Authority, in whole or in part within thirty (30) days after the date of their receipt by the Authority. 13 (d) Nothing in this Agreement shall be deemed to rclieve the Redeveloper of its obligation to comply «ith the requirements of the City's normal land use approN al process. (e) If the Redeveloper desires to make any material change in any DeN clopment Plans after their approval by the Authority- the Redev eloper shall submit the proposed change to the Authority for its approval. If the DeN elopment Plans. as modified by the proposed change. conform to the requirements of this Agreement and such changes do not materially alter The nature, quality or exterior appearance of the 'Minimum Improvements. the Authority shall approve the proposed change and notify- the Redeveloper in NN citing of its approval. Anv requested change in the Deyelopmcrnt Plans shall. in any event. be deemed approved by the Authority unless rejected. in whole or in part. b- «ritten notice by the Authority to the Redeveloper, setting forth in detail the reasons therefor. Such rejection shall be made Ns-ithin ten (10) days after receipt of the notice of such change. (f) The Redeveloper agrees that it �N-ill exercise diligent efforts to incorporate Flexible Space in the portion of Phase I fronting, on Eighth Avenue. The Authority understands that the incorporation of Flexible Space in Phase I «-111 be subject to market conditions and demand. Immediately after the Flexible Space is constructed. Redeveloper plans to lease the Flexible Space for residential use. Corninencing on the earlier of (i) January 1. 2021 or (ii) the date on which the Southwest Light Rail Transit Line commences operation within the City limits, as residential tenants vacate portions of the Flexible Space. such portions shall be listed with a commercial broker. reasonably acceptable to the Authority. for at least m -o hundred seventy (270) days, at an initial rent of 518.00 per square foot (as of 2012. subject to market rate adjustments in future y -cars). «-ith an improNement alloNyance of 520.00 per foot. The Redeveloper agrees that the residential leases entered into during that period Nyill not preclude the tenants from engaging in Flex Uses. as defined below. The City has applied to the Metropolitan Council for a Livable Communities Demonstration Account Transit Oriented Development Grant dated April. 2012. If the grant is aNN-arded to the Cit}; and any portion of the grant funds are paid to the RedeN eloper to offset its costs of constructing Phase 1. the Redeveloper agrees that it NN III reduce the average rent that it NN -111 charge for the Flexible Space, if the Flexible Space is used for commercial purposes and the purposes identified in the definition of "Flexible Space" (collectively the ''Flex Uses"). The amount by «-hich the average rent will be reduced Nyill equal one-half of the amount of such grant funds received by the Redeveloper, divided by the square footage of the entire Flexible Space. evenly spread over the first ten (10) years of the lease tern for any Flex Cases. Any Flexible Space that is (i) not leased initially for Flex Uses during this two hundred seventy (270) day listing period. or (ii) subsequent to any initial lease for Flex Uses which tern-iinates. cannot be released for Flex uses despite a similar t« -o hundred seventy (270) day, listing period. may. at the option of the Redeveloper, revert to residential use. If any of the Flexible Space is not leased for Flex Uses after the initial two hundred seventy (270) day listing, period. the Redeveloper shall be obligated to repay a portion of the grant funds that have been paid to the Redeveloper. The amount to be repaid shall equal one-half of the grant funds receiycd by the Redeveloper. multiplied by a fraction the numerator of v hich is the square footage of the Flexible Space not leased for Flex Uses, and the denominator of which is the total square footage of the Flexible Space,, which is 14 currently estimated to be 4,500 square feet. The Parties shall cooperate to request and obtain from the HCHRA confirmation that the provisions of this Section 4.2(f), combined with the Phase I Improvements as designed by Redeveloper, satisfy the requirements of the Grant Agreement and the Declaration of Covenants and Restriction for "active uses" on the Project. Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable Delays, the Redeveloper shall commence and complete the demolition activities described in Section 3.5 of this Agreement, shall commence and complete construction of Phase I of the Minimum Improvements, and shall commence and complete construction of Phase II of the Minimum Improvements all in accordance with the Demolition and Construction Schedule. The Redeveloper agrees that it shall promptly begin and diligently prosecute to completion construction of the Minimum Improvements within the periods specified in the Demolition and Construction Schedule. Until construction of the Minimum Improvements has been completed, the Redeveloper shall make construction progress reports, at such times as may reasonably be requested by the Authority as to the actual progress of the Redeveloper with respect to such construction. Section 4.4. Compliance with Grant Agreement. A portion of the purchase price paid by the Authority to acquire the Redevelopment Property was paid using grant funds received by the City from the HCHRA pursuant to the Grant Agreement. The Redeveloper and its successors or assigns agrees to design, construct and operate the Minimum Improvements in a manner that is consistent with the requirements of the Grant Agreement and to comply with all other applicable terms of the Grant Agreement. Without limiting the foregoing, the Redeveloper and its successors or assigns acknowledges that the Minimum Improvements must comply with the conditions contained in Section 5.c. of the Grant Agreement, including the income affordability requirements for units in the Minimum Improvements. The Authority shall notify the Redeveloper of any alleged violations by the Redeveloper of the Grant Agreement, and provide the Redeveloper with a reasonable opportunity to cure such violations, to the extent permitted by the Grant Agreement. In the event of a failure on the part of the Redeveloper to comply with the terms of the Grant Agreement that results in the City having to repay the grant, in whole or in part, the Redeveloper and its successors or assigns shall be liable to the Authority in the amount of such repayment. The Redeveloper and its successors or assigns shall from time to time, upon request by the Authority, furnish to the Authority documentation demonstrating its compliance with the tennis of the Grant Agreement. 15 :ARTICLE N' IncnranrP Section 5.1. Insurance. (a) The Redeveloper will provide and maintain or cause its contractors and subcontractors and at all times during the process of constructing the 'vMinimum Iinproverrents and. from time to time at the request of the Authority. furnish the .yuthority ,� ith proof of payment of premiums on: (i) Builder's risk insurance. written on the so-called "Builder's Risk -- Completed Value Basis," in an amount equal to one hundred percent (100°'(j) of the insurable value of the Minimum Iinproycments at the date of completion. and NN-ith coverage available in nonreporting forin on the so called "all risk" form of police_ and (ii) Comprehensive general liability insurance (including operations_ contingent liability, operations of subcontractors. completed operations. Broadening Endorsement including contractual liability insurance) together «-ith an Owner's Contractor's Policy with limits against bodily injury and property damage of not less than 52.000.000 for each occurrence (to accomplish the aove-required limits. an umbrella excess liability policy may be used); (iii) Worker's compensation insurance. with statutory coverage and employer's liability protection; and (iv) Such other insurance as the Authoritv tnav reasonably require. The policies of insurance required pursuant to clauses (i) and (ii) above shall be in form and content satisfactory to the Authority and shall be placed with financially sound and reputable insurers licensed to transact business in the State. the liability insurer to be rated A or better in Best's Insurance Guide. The policies of insurance delivered pursuant to clause (i) and (ii) above shall contain an agreement of the insurer to give not less than thirty (30) days' advance written notice to the Authority in the event of cancellation of such police or change affecting the coverage thereunder. Tile Authority- shall be named as an additional insured on the liability policy obtained pursuant to clause (ii) above. (b) Without Iimiting the requirements of this Section. the Redeveloper shall also comply with the insurance requirements set forth in the Grant Agreement. as required b� the HCHRA. ARTICLE VI Prohibited Uses of Minimum Improvements Section 6.1. Prohibited Uses. The Redeveloper agrees that the Redevelopment Property and Minimum Improvements, or any portion thereof, shall not be used for the any of the following uses: adult establishment, adult motion picture theater, adult novelty business or bookstore, amusement devise establishment, auto sales and\or lease, cabinet, electrical, heating, plumbing, air conditioning sales or service shop, open sales lot, pawn shop, drive-thru restaurant, auto repair, warehouse or taxi terminal. This restriction shall run with the title to and permanently encumber the Redevelopment Property for the benefit of the City and shall be enforceable by means of an injunction. If the above terms are defined in the City's zoning ordinances, the terms shall have the meaning contained therein. 17 ARTICLE N-11 Financin6 Section 7.1. Financing. Prior to the Authon-L 's com evance of the RedeN-elopment Property to the Redeveloper. the Rede eloper shall submit to the AuthoritN evidence. satisfactory - to the Authority, that the Rede eloper has obtained financing or has available and committed funds (such as a bank financing commitment) in an amount sufficient to pay the cost of acquiring the Redevelopment Property and constructing Phase 1. Section 7.2. Limitation Upon Encumbrance of PropertNPrior to the completion of the Minimum Improvements. as certified bN- the Authority. neither the Redeveloper nor any successor in interest to the RedeN-clopmcnt Property. or any part thereof. shall engage in any financing or any other transaction creating anti mortgage or other encumbrance or lien upon the Redevelopment Property . whether by express aurecment or operation of law. or suffer any encumbrance or lien to be made on or attach to the Redevelopment Property. except for the purposes of obtaining funds only to the extent necessary for acquiring and constructing the Minimum Improvements without the prior written approval of the Authontv7. Section 7.3. Subordination. h1 order to facilitate the RedeN-eloper's efforts to obtain financing for acquisition of the Redev-elopnlent Property and construction of the Minimum Improvements the Authority v,ill agree to reasonable requests trom RedeN-eloper's lenders to subordinate to the lien of the lenders' mortgages the Authority's rights to reg est title to the Redevelopment Property in the Authority pursuant to Section 9.3 of this Agreement. The Authority agrees that it will provide to the Rede cloper a termination of its reversionary interest in the Redevelopment Property upon the Rede�-eloper's commencement of construction of the Minimum Improvements for Phase I so lona as no Event of Default has occurred and is continuing. Commencement of construction shall be deemed to have occurred at the time that the Redeveloper begins the installation of footings or a foundation for the Minimum Improvements for Phase I. is ARTICLE VIII Prohibitions Aizainst Assignment and Transfer, Indemnification Section 8.1. Prohibition Against Transfer of Property and Assignment of Agreement. The Redeveloper represents and agrees that prior to substantial completion of construction of Phase I of the Minimum Improvements, except only by way of security for, and only for, the purpose of obtaining financing necessary to enable the Redeveloper or any successor in interest to the Redevelopment Property, or any part thereof, to perform its obligations with respect to constructing the Minimum Improvements under this Agreement, and any other purpose authorized by this Agreement, the Redeveloper (except as so authorized) has not made or created, and will not make or create, or suffer to be made or created, any total or partial sale, assignment, conveyance, or lease (other than leases to residential tenants or commercial/retail tenants), or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Redevelopment Property or any part thereof or any interest herein or therein, or any contract or agreement to do any of the same, without the prior written approval of the Authority which shall not be unreasonably withheld or conditioned. The Authority acknowledges that it is aware of Redeveloper's intent to sell the Redevelopment Property upon completion of Phase I and has been advised as to discussions between the Redeveloper and prospective purchasers of the Project and such intent and discussions are deemed approved and authorized under this provision; provided, that such sale is made to the entity regarding which the Redeveloper has informed the Authority and such entity shall have entered into an agreement assuming the Redeveloper's obligations under this Agreement. In the absence of specific written agreement by the Authority to the contrary, no such transfer or approval thereof by the Authority shall be deemed to relieve the Redeveloper, or any other party bound in any way by this Agreement from any of its obligations hereunder. Section 8.2. Release and Indemnification Covenants. (a) The Redeveloper releases from and covenants and agrees that the Authority and the governing body members, officers, agents, servants and employees thereof shall not be liable for and agrees to indemnify and hold harmless the Authority and the governing body members, officers, agents, servants and employees thereof against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Minimum Improvements. (b) Except for any willful misrepresentation or any misconduct of the following named parties, the Redeveloper agrees to protect and defend the Authority and City and the governing body members, officers, agents, servants and employees thereof, now or forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Redevelopment Property and Minimum Improvements. I ARTICLE I1 Events of Default Section 9.1. Events of Default Defined. The term "E= ent of Default" shall mean. whenever it is used in this Agreement (unless the context otherwisc provides): (i) any failure by a parte to observe or perform an}- covenant. condition. obligation or agreement on its part to be observed or performed hereunder or (ii) a material breach of ani representation set forth herein on or prior to the closing on conveyance of the Redevelopment Property. Section 9.2. Remedies on Default. Whenever any Event of Default occurs. the non - defaulting party may immediately suspend its performance under this Agreement and may take any one or more of the follo«-ing actions after providing thirty (30) days z�-ritten notice to the defaulting party of the Event of Default. but only if the Event of Default has not been cured within said thirty (30) days or. if the Event of Default is by its nature incurable «-ithin said thirty (30) days, the defaulting parr has not provided reasonable assurances to the non -defaulting party that the Event of Default will be cured and that it will be cured as soon as reasonably possible: (a) Terminate this .agreement. (b) Take whatever action. including legal. equitable or administrative action; which may appear necessary or desirable to collect any pa%ments due under this Agreement.. or to enforce performance and observance of any obligation. agreement. or covenant under this Agreement. Section 9.3. Revesting of Title in Authority. if the Redeveloper fails to commence or complete construction of the Minimum Improvements. or a Phase thereof. «within the periods specified in Section 4.3 of this Agreement the Authority shall have the right to cancel the sale of the Redevelopment Proper tLy. or parcel thereof on «-hich a Phase has not been constructed. to the Redeveloper, whereupon title to the Redevelopment Property. or parcel. shall revert to the Authority. Upon revesting title to the RedeN elopinhent Property. or a parcel thereof. in the Authority, the Authority will use its best efforts to resell the Redevelopment Property, or parcel thereof, for redevelopment and shall use the proceeds of such a resale to first. reimburse itself for all of its costs incurred in enforcing its rights under this Agreement. in clearini title to the Redevelopment Property. or parcel thereof. and in reselling the Redevelopment Property. or parcel thereof, and second. to reimburse the Redeveloper for the purchase price paid by the Redeveloper to acquire the Redevelopment Property. The deed from the Authority to the Redeveloper shall convey title to the Redevelopment Property subject to a right of re-°ersion reserved to the Authority as described in this Section. The terms of this Section 9.3 are subject to the terms of Section 7.3 hereof. Section 9.4. No Remedy- Exclusive. No remedy herein conferred upon or reserved to the Authority or Redeveloper is intended to be exclusio e of any other available remedy or remedies. but each and every such remedy shall be cumulatlN e and shall be in addition to every other remedy given under this Agreement or rioNv or hereafter existing at lav,- or in equity or by statute. a 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. hi order to entitle the Authority or the 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 this Article IX. Section 9.5. No Additional Waiver hnplied by 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 hereunder. Section 9.6. Effect of Termination of Agreement. In the event that this Agreement is terminated pursuant to Section 9.2, all provisions hereof shall terminate except that Sections 3.9, 9.7, and 8.2 shall survive such termination and any cause of action arising hereunder prior to such termination shall not be affected. Section 9.7. Costs of Enforcement. Whenever any Event of Default occurs and the non - defaulting party shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement of performance or observance of any obligation or agreement on the part of the other party under this Agreement, the defaulting party agrees that it shall, within ten (10) days of written demand by the non -defaulting party pay to the non - defaulting party the reasonable fees of such attorneys and such other expenses so incurred by the non -defaulting party. 21 ARTICLE X .additional Provisions Section 10.1. Relresetntatiyes Not Irndiyidually Liable. No member. official. or employee of the Authority shall be personally liable to the Redeyeloper. or an-,- successor in interest. in the event of any default or breach or on any obligations under the ternis of the Agreement. Section 10.2. Restrictions on ?:se. The Redeveloper agrees for itself. and its successors and assigns, and every successor in interest to the Redeti elopment Property . or any part thereof. that the Redeveloper, and such successors and assigns. shall comply �N ith the restrictions on use contained in Section 6.1 of this agreement and in the Grant _ Lreemcnt. The deed transferring the Redevelopment Property to the Redeyeloper shall contain a coN errant so restricting the use of the Property. Section 10.3. Provisions Not Merged 'With Deed. None of the prov-isions of this Agreement are intended to or shall be merged by reason of any deed transferring any interest in the Redevelopment Property and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 10.4. Titles of Articles and Sections. Ani- 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 10.5. Notices and Demands. Except as otherwise expressly prodded in this Agreement, a notice, demand. or other communication under the Agreement by either party 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 tl_ne Redeveloper. is addressed to or delivered personally to the Redeveloper at 50 Groyeland Terrace. Suite A. Minneapolis, HINT _55403: and (b) in the case of the Authority. is addressed to or deliv ered personally_ to the Authoritv at 1010 First Street South. Hopkins . Minnesota 55343. or at such other address vlfli respect to either such party as that part-\- may. from time to tinge. designate in writing and forward to the other as provided in this Section. Mailed notice shall be deemed to have been delivered two (2) business days after being deposited � ith the U.S. Postal Service. Section 10.6. Disclaimer of Relationships. The Redeveloper ack-noNvIedges 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 -part, beneficiary, principal and agent. limited or general partner. or joint venture beW-een the Authority and the Redeveloper and'or any third party. Section 10.7. Modifications. This Agreement may be modified solely through written amendments hereto executed by the Redeveloper and the Authority. Section 10.8. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 10.9. Judicial Interpretation. 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 who itself or through its agent or attorney prepared the same, it being agreed that the agents and attorneys of both parties have participated in the preparation hereof. Section 10.10. No Business Subsidy. The assistance being provided by the Authority under this Agreement does not constitute a "business subsidy" under the Minnesota Business Subsidy Act, Minnesota Statutes, Sections 116J.993 to 116J.995, because the assistance is being provided for redevelopment purposes and the Redeveloper's investment in the Redevelopment and site preparation will exceed 70% of the County's Assessor's current year's estimated market value for the Redevelopment Property. 23 IN WITNESS NN7HEREOF. the Authority has caused this Agreement to be duly executed in its name and behalf and the Redeveloper has caused this Agreement to be dulyexecuted in its name and behalf on or as of the date first abo�_e «ritten. STATE OF MINNESOTA) )SS. COUNTY OF HENNEPIN) HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF HOPKINS Bv B\ KLODT DEVELOP'�IENT, LLC. Bv By The foregoing instrument was acknowledged before me this dav_ of 2012. bti and _ the and of the Housing and RedeN-elopment Authority- In and For the Citi of Hopkins_ a public body politic and corporate under the laws of the state of Minnesota. Notary Public STATE OF MINNESOTA) )SS. COUNTY OF ) The foregoing instrument was acknowledued before me this day of . 2012, by and the of Klodt Development, LLC, a Minnesota limited liability company. Notary Public 2� SCHEDULE A Description of Redevelopment Property and Acquisition Property Redevelopment Property: (PARK NICOLLET SITE) Acquisition Property: (LUTHERAN DIGEST SITE ONLY) SCHEDULE B Grant agreement SCHEDULE C (This exhibit has been intentionally deleted.) Schedule D (This e hibit 17c7s bee)7 i?7te?7tiO?7611h deleted) EXHIBIT E Demolition and Construction Schedule 008168/897073/1485012 2