3.2. EDSR 02-02-1998 DRAB'
CONTRACT
FOR
PRIVATE REDEVELOPMENT
By and Between
THE ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR THE
CITY OF ELK RIVER
and
MORRELL & MORRELL, INC.
•
411
Dated: January 13, 1998
This document was drafted by:
CITY OF ELK RIVER
13065 Orono Parkway
Elk River, MN 55330
Telephone: (612) 441-7420
With final review by:
DOHERTY, RUMBLE & BUTLER
3500 Fifth Street Towers
150 South Fifth Street
Minneapolis, MN 55402-4235
•
•
PREAMBLE 1
ARTICLE I
•
Definitions
ARTICLE II
Representations
Section 1.1. Definitions 3
Section 2.1. Representations by the TABLE AuthorityOF CONTENTS
6
Section 2.2. Representations by the Redeveloper 6
Status of Property: Public Redevelopment Costs
Section 3.1. Status of Property 8
Section 3.2. Public Redevelopment Costs 8
Section 3.3. Issuance of Note ARTICLE III
8
Section 3.4. City Note 8
Section 3.5. Conditions Precedent to Issuance of Note 9
ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Minimum Improvements 11
Section 4.2. Construction Plans Page
11
Section 4.3. Commencement and Completion of Construction 12
•
Insurance and Condemnation
Section 5.1. Insurance 13
Section 5.2. Condemnation 15
ARTICLE VI
Taxes: Tax Increment
Section 6.1. Real Property Taxes 16
Section 6.2. Tax Increment ARTICLE V
16
ARTICLE VII
Mortgage Financing
Section 7.1. Mortgage Financing 17
Section 7.2. Limitation on Encumbrance of Property 17
• ARTICLE VIII
Prohibitions Against Assignment and Transfer: Indemnification
Section 8.1. Prohibition Against Transfer of Property and
Assignment of Agreement 18
Section 8.2. Approvals 19
Section 8.3 Release and Indemnification Covenants 19
Events of Default
Section 9.1. Events of Default Defined 20
Section 9.2. Authority's Remedies on Default 20
Section 9.3. No Remedy 20
Section 9.4. No Additional Waiver Implied by ARTICLE IX
One Waiver 20
ARTICLE X
i• Additional Provisions
Section 10.1.Representatives Not Individually Liable 21
41)
Section 10.2.Equal Employment Opportunity 21
Section 10.3.Restrictions on Use 21
Section 10.4.Titles of Articles and Sections 21
Section 10.5.Notices and Demands 21
Section 10.6.Disclaimer of Relationships 21
Section 10.7.Modifications 21
Section 10.8.Counterparts 22
Section 10.9. Judicial Interpretation 22
SCHEDULE A Description of Development Property
SCHEDULE B Note
SCHEDULE C Job Performance Agreement
SCHEDULE D Description of Uses by Tenant
CONTRACT FOR PRIVATE REDEVELOPMENT
i
THIS AGREEMENT, made on or as of the day of , 1998, by and
between the Economic Development Authority in and for the City of Elk River, 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, 469.090 - 469.108, and
having its principal office at 13065 Orono Parkway, Elk River, Minnesota 55330, and
(collectively hereinafter referred to as the
"Redeveloper"), having their principal office at 809 Jackson Avenue NW, Elk River, Minnesota
55330.
WITNESSETH:
WHEREAS, the Authority was created and authorized to transact business and exercise its
powers by Resolution 87-63 of the City Council of the City of Elk River; and
WHEREAS, in furtherance of the objectives of Resolution 87-63, 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 within Development
District No. 1 (hereinafter referred to as the "Project") in an area which includes the entire City of
Elk River (hereinafter referred to as the "Project Area"); 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 (which Plan is
hereinafter referred to as the "Redevelopment Plan"); and
WHEREAS, the Authority has created within the Project Area its Economic Development
Tax Increment Financing District No. 18 (the "Tax Increment District") pursuant to Minnesota
Statutes, Sections 469.174-.179, in order to create a funding source to finance the public
redevelopment costs of the Project; and
WHEREAS, the Redeveloper will relocate its business operations (trucking facility) from
its current location (which current location is referred to herein as the "Current Site") to certain
real property located within the Project Area (which real property is referred to herein as the
"Development Property"); and
WHEREAS, there is present on the Current Site certain site conditions that must be
remedied prior to the Authority's provision of tax increment to reimburse the Redeveloper for
certain costs of preparing the Development Property for development and prior to the
development of the Current Site for other uses; and
WHEREAS, the Redeveloper has presented to the Authority a proposal for the
development of the Development Property through the construction of an at least 45,000 square
foot office\warehouse\trucking facility, which proposal involves the Authority's use of tax
• increment pursuant to this Agreement to reimburse the Redeveloper for certain costs of preparing
1.411)
the Development Property for development; and
WHEREAS, the Authority believes that the development of the Project Area pursuant to
the Redeveloper's proposal and the 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, and is, therefor, willing to
provide the financial assistance outlined herein.
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 1.1. Definitions. In this Agreement, unless a different meaning clearly appears
from the context:
"Agreement" means this Agreement, as the same may be from time to time modified,
amended, or supplemented.
"Authority" means the Economic Development Authority In and For the City of Elk River,
or any successor or assign.
"City" means the City of Elk River.
"Construction Plans" means the plans, specifications, drawings and related documents for
the construction work to be performed by the Redeveloper on the Development Property which
shall be as detailed as the documents to be submitted to the City in connection with conditional
use permit approval for the development of the Minimum Improvements.
"County" means the County of Sherburne.
"Current Site" means the real property containing the location of Redevelopers business
operations as of the date of this agreement (809 Jackson Avenue, Elk River, Minnesota 55330)
as described in Schedule A of this Agreement.
"Development Property" means the real property described in Schedule A of this
Agreement on which Redeveloper will construct the Minimum Improvements.
"Event of Default" means an action by the Redeveloper listed in Article IX of this
Agreement.
"Holder" means the owner of a Mortgage.
"Job Performance Agreement" means the agreement in the form of Schedule C attached
hereto to be entered into between the Authority and the Redeveloper pursuant to Section 4.1(b)
of this Agreement.
"Maturity Date" means the date that the Authority's payment obligations under the Note
terminate.
"Minimum Improvements" means the construction by the Redeveloper of an
office\warehouse\trucking facility of at least 45,000 square feet in size in accordance with the
Construction Plans.
•
3
"Mortgage" means any mortgage obtained by the Redeveloper which is secured, in whole or
• in part, by the Development Property and which is a permitted encumbrance pursuant to the
°al
provisions of Article VIII of this Agreement.
"Net Proceeds" means any proceeds paid by an insurer to the Redeveloper under a policy or
policies of insurance required to be provided and maintained by the 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.
"Note" means the Authority's limited revenue tax increment note to be issued by the
Authority to the Redeveloper pursuant to Article III of this Agreement to reimburse the
Redeveloper for its payment of the Public Development Costs.
"Project" means the activities of the Authority and the Redeveloper within the Project Area
within Development District No. 1.
"Project Area" means the real property located within the boundaries of the Project.
"Public Development Costs" means the costs to be paid by the Authority, through the
issuance of the Note, pursuant to Article III of this Agreement.
"Redeveloper" means Morrell & Morrell, Inc., or their executors, representatives and
assigns, or any future owners of the Redevelopment Property.
"Redevelopment Plan" means the Authority's Redevelopment Plan for the Project, as
amended as of the date of this Agreement.
"State" means the State of Minnesota.
"Tax Increment" means that portion of the real property taxes paid with respect to the
Redevelopment Property and Minimum Improvements which is remitted to the Authority as tax
increment pursuant to the Tax Increment Act.
"Tax Increment Act" means Minnesota Statutes, Section 469.174-469.179, as the same may
be amended from time to time.
"Tax Increment District" means the Authority's Tax Increment District No. 18 within the
Project.
"Tax Official" means any City or county assessor, County auditor, City, County or State
board of equalization, the commissioner of revenue of the State, or any State or federal district
court, the tax court of the State, or the State Supreme Court.
"Unavoidable Delays" means delays which are the result of acts of God, adverse weather
conditions, strikes, other labor troubles, delays in obtaining construction materials, machinery
4
and/or equipment, fire or other casualty to the Minimum Improvements, litigation commenced by
third parties which, by injunction or other similar judicial action, results in delays, or acts of any
• federal, state or local governmental unit (other than the Authority in enforcing its rights under this
Agreement) which result in delays. Delays in obtaining financing and delays caused by general
market conditions shall not constitute Unavoidable Delays. Upon the occurrence of an
Unavoidable Delay, the party seeking to be excused as a result thereof shall be excused for the
period of the delay if such party gives the other party written notice of the cause of the delay or
interruption within thirty (30) days after its occurrence.
i
•
5
ARTICLE II
• 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:
.41)
(a) The Authority is an economic development authority organized and existing under
the Laws of Minnesota. Under the laws of the State, the Authority has the power to enter into
this Agreement and to perform its obligations hereunder.
(b) The Project is a "redevelopment project" and was created, adopted and approved in
accordance with the laws of the State.
(c) The Development Property is in a "tax increment financing district", which was
created, adopted, certified and approved pursuant to the Tax Increment Act.
(d) The Authority will, at no cost to the Authority, cooperate with the Redeveloper
with respect to any litigation commenced with respect to the Plan, Project, or Minimum
Improvements.
(e) The Authority 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 or any other local, state or federal
laws or regulations. The Authority 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.
Section 2.2. Representations by the Redeveloper. The Redeveloper represents that:
(a) The Redeveloper consists of Morrell & Morrell, Inc., all of whom have the legal
capacity to enter into this Agreement and perform their obligations set forth herein.
(b) The Redeveloper will construct the Minimum Improvements in accordance with the
terms of this Agreement 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, to the best of its
knowledge, 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.
6
(d) The Redeveloper will, at no cost to Redeveloper, cooperate with the Authority with
•
S• respect to any litigation commenced with respect to the Redevelopment Plan, Project, or
Minimum Improvements.
(e) Whenever any Event of Default occurs and the Authority shall employ attorneys or
incur other expenses for the collection of payments due or to become due or for the enforcement
of performance or observance of any obligation or agreement on the part of the Redeveloper
under this Agreement and the Authority prevails in such action or effort, the Redeveloper agrees
that it shall, within thirty (30) days of written demand by the Authority pay to the Authority the
reasonable fees of such attorneys and such other expenses so incurred by the Authority.
ARTICLE III
Status of Property; Public Redevelopment Costs
Section 3.1. Status of Property. The Development Property and Current Site are owned by
Larry and Arlyce Morrell and Morrell & Morrell, Inc., respectively. The Redeveloper and
Authority have entered into this agreement in order to encourage the timely improvement of the
marketability of the Current Site and to assist the Redeveloper's development on the
Development Property hereunder, by issuing the Note to the Redeveloper, and by reimbursing the
Redeveloper for certain costs of preparing the Development Property for development of the
Minimum Improvements, all as is more specifically provided in this Agreement.
Section 3.2 Public Redevelopment Costs. The Authority agrees that it will through the
issuance and payment of the Note reimburse the Redeveloper for the costs of soil correction and
site preparation and other building costs related to soil conditions on the property (the "Public
Redevelopment Costs"), incurred by the Redeveloper in preparing the Development Property for
development of the Minimum Improvements. The Authority agrees it will reimburse the
Redeveloper for its payment of the Public Redevelopment Costs in the principal amount of up to
$300,000.00, pursuant to the terms of the Note, which shall be in the form attached hereto as
Schedule B.
(b) The Redeveloper shall be solely responsible for all construction included in the
Public Redevelopment Costs and for the initial payment of the cost thereof. The Authority agrees
• that it will issue the Note at such time as the Redeveloper presents to the Authority evidence in
such form as the Authority may reasonably require, demonstrating that the construction portions
of the Public Redevelopment Costs have been completed, that the Redeveloper has paid the costs
thereof and that the total costs paid by the Redeveloper toward the Public Redevelopment Costs
equals or exceeds $300,000. If the total amount of the Public Redevelopment Costs is less than
$300,000 the principal amount of the Note shall be adjusted accordingly. The Authority shall
have no obligation to increase its assistance, it being agreed that the maximum amount that the
Authority is obligated to provide, through the issuance of the Note, is $300,000.
Section 3.3. Issuance of Note. The Authority's reimbursement of the Redeveloper for its
payment of the Public Redevelopment Costs shall be through the issuance of the Note which shall
occur at the time stated in Section 3.2 of this Agreement. The Note shall be in the form of the
Note attached to this Agreement as Schedule B, with all blanks properly filled in and with the
payment schedule attached thereto adjusted to take into account the actual date of issuance. The
Note shall be dated as of January 1, 1999.
Section 3.4. Conditions Precedent to Issuance of Note. The Authority's obligation to
issue the Note shall be subject to satisfaction of all of the following conditions precedent:
(a) No Event of Default shall have occurred and be continuing under this Agreement;
•
8
(b) The Redeveloper shall have obtained all governmental approvals that must be
obtained in order to permit the construction and operation of the Minimum Improvements;
(c) The Redeveloper shall have closed on financing sufficient for construction of the
Minimum Improvements;
(d) The Redeveloper shall have provided to the Authority evidence that it has paid the
Public Redevelopment Costs as described in Section 3.2 of this Agreement.
In the event that all of the above conditions precedent have not been satisfied, or waived in
writing by the Authority, by December 31, 1998, either party hereto may terminate this
Agreement upon the giving of 10 days written notice to the other party of its intention to do.
Upon such termination, neither the Authority nor the Redeveloper shall have any obligation or
liability to the other hereunder; provided, that the Authority and the Redeveloper shall execute a
recordable instrument canceling this Agreement.
Section 3.5. Conditions Precedent to Reimbursement Under the Note. The Authority's
obligation to reimburse the Redeveloper under the Note for its payment of the Public
Redevelopment Costs described in Section 3.2. shall be subject to satisfaction of all of the
following conditions precedent:
Issue Date of Completion of Activity
(a) Complete demolition and removal of
existing buildings on Current Site
(b) Discontinuation of all activities
associated with trucking on the
Current Site
(c) Discontinuation of all secondary
business uses on the Current Site, i.e.
wood sales, recycling activities, etc.
(d) Minnesota Pollution Control Agency
to issue a letter of compliance
indicating their satisfaction as to the
environmental state of the Current
Site
9
Issue111111*
Date of Completion of Activity
41).
(g) Minimum Improvements are to
completed in accordance with the
construction plans as submitted and
approved by the city
(h) Development Property will be
inspected annually prior to a
Scheduled Payment being made under
the Note, to assure Development
Property is in a condition acceptable
to current zoning and landscaping
standards and that construction of the
Minimum Improvements have been
maintained in a manner acceptable to
City Engineer and Building Official
In the event that all of the above conditions precedent have not been satisfied by the Date of
Completion of Activity, either party hereto may terminate this Agreement upon the giving of 10
days written notice to the other party of its intention to do so. Upon such termination, neither the
Authority nor the Redeveloper shall have any obligation or liability to the other hereunder;
provided, that the Authority and the Redeveloper shall execute a recordable instrument canceling
this Agreement.
10
ARTICLE IV
• Construction of Minimum Improvements
•
Section 4.1. Construction and Operation of Minimum Improvements. (a) The
Redeveloper agrees that it will construct the Minimum Improvements on the Development
Property in accordance with the approved Construction Plans, together with any changes
approved by the Authority and any changes not requiring the Authority's approval, and at all
times prior to the Maturity Date will operate and maintain, preserve and keep the Minimum
Improvements or cause the Minimum Improvements to be maintained, preserved and kept with
the appurtenances and every part and parcel thereof, in good repair and condition.
(b) At the time of execution of this Agreement, the Redeveloper and the Authority
entered into the Job Performance Agreement as required pursuant to Minnesota Statutes, section
1167.991, the terms of which are incorporated herein and made a part hereof by reference.
Section 4.2. Construction Plans. (a) The Redeveloper has obtained conditional use permit
approval relative to the development of the Minimum Improvements. Within ninety.(90) days
from the date hereof, the Redeveloper shall submit to the Authority Construction Plans for the
Minimum Improvements. The Construction Plans shall provide for the construction of the
Minimum Improvements and shall be in conformity with the Redevelopment Plan, this Agreement,
and all applicable state and local laws and regulations. The Authority shall approve the
Construction Plans in writing if, in the reasonable discretion of the Authority: (a) the Construction
Plans conform to the terms and conditions of this Agreement; (b) the Construction Plans conform
to the terms and conditions of the Redevelopment Plan; (c) the Construction Plans conform to all
applicable federal, State and local law, ordinances, rules and regulations; (d) the Construction
Plans are adequate to provide for the construction of the subject Minimum Improvements; (e) the
Construction Plans do not provide for expenditures in excess of the funds which will be available
to the Redeveloper for the construction of the Minimum Improvements; (0 the Construction
Plans are consistent with the approvals granted in connection with the conditional use permit
application; and (g) no Event of Default has occurred. 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, the terms of the Redevelopment Plan, applicable federal, state and local laws,
ordinances, rules and regulations, or to construct the Minimum Improvements. 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 fourteen (14) days after the date of their receipt by the Authority. If the
Authority rejects the Construction Plans in whole or in part, the Authority shall state in writing
the reasons for the rejection and the Redeveloper shall submit new or corrected Construction
Plans within thirty (30) days after written notification to the Redeveloper of the rejection. The
provisions of this Section relating to approval, rejection and resubmission of corrected
Construction Plans shall continue to apply until the Construction Plans have been approved by the
Authority or until this Agreement is terminated. Said approval shall constitute a conclusive
determination that the Construction Plans (and the Minimum Improvements, if constructed in
accordance with said plans, together with any changes approved by the Authority and any changes
11
not requiring the Authority's approval) comply to the Authority's satisfaction with the provisions
• of this Agreement relating thereto.
41)
•
(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) Nothing in this Agreement shall be deemed to modify the City's normal
construction permitting process as it applies to the Redeveloper's plans for development and the
Redeveloper shall in all respects be required to comply with such process.
Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable
Delays, the Redeveloper shall commence construction of the Minimum Improvements within sixty
(60) days after approval of a building permit by the City. Subject to Unavoidable Delays, the
Redeveloper shall complete the construction of the Minimum Improvements within five (5)
months after commencement of construction. All work with respect to the Minimum
Improvements to be constructed or provided by the Redeveloper on the Redevelopment Property
shall be in conformity with the Construction Plans, together with any changes approved by the
Authority and any changes not requiring the Authority's approval, as submitted by the
Redeveloper and approved by the Authority.
The Redeveloper agrees for itself, its successors and assigns, and every successor in interest
to the Development Property, or any part thereof, that the Redeveloper, and its successors and
assigns, shall promptly begin and diligently prosecute to completion the development of the
Development Property through the construction of the Minimum Improvements thereon, and that
such construction shall in any event be commenced and completed within the period specified in
this Section 4.3 of this Agreement and subject to Unavoidable Delays and/or mutual agreement of
the parties hereto. 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, but not more than once a month, as to the actual progress of the
Redeveloper with respect to such construction. Upon substantial completion of the Minimum
Improvements and upon request by the Redeveloper, the Authority shall provide to the
Redeveloper a certificate in recordable form stating that the obligations of the Redeveloper with
respect to the construction of the Minimum Improvements under this Agreement have been
satisfied. The Minimum Improvements shall be deemed to be completed when a certificate of
occupancy has been issued by the City for the Minimum Improvements and the Redeveloper has
provided security or other assurances reasonably satisfactory to the Authority assuring that any
remaining items, including without limitation, landscaping, will be completed.
12
•
Section 5.1. Insurance. ARTICLE V
Insurance and Condemnation
(a) The Redeveloper will provide and maintain at all times during the process of
constructing the Minimum Improvements and, from time to time at the request of the Authority,
furnish the Authority with 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%) of the insurable value of the
Minimum Improvements at the date of completion, and with coverage available in
nonreporting form on the so called "all risk" form of policy. The interest of the Authority
shall be protected in accordance with a clause in form and content satisfactory to the
Authority;
(ii) Comprehensive general liability insurance (including operations, contingent liability,
operations of subcontractors, completed operations, Broadening Endorsement including
contractual liability insurance) together with an Owner's Contractor's Policy with limits
against bodily injury and property damage of not less than $1,000,000.00 for each
occurrence (to accomplish the above-required limits, an umbrella excess liability policy may
be used); and
• (iii) Worker's compensation insurance, with statutory coverage and employer's liability
protection.
The policies of insurance required pursuant to clauses (i) and (ii) above shall be in form and
content reasonably 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 policy of insurance delivered pursuant to clause (i) 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 policy or change affecting the coverage
thereunder.
(b) Upon completion of construction of the Minimum Improvements and prior to the
Maturity Date, 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 follows:
(i) Insurance against loss and/or damage to the Minimum Improvements 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
13
Minimum Improvements, but any such policy may have a deductible amount of not more
41/ 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 Minimum Improvements (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.
(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.
(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
that the Redeveloper may be self-insured with respect to all or any part of its liability for
worker's compensation.
(c) 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.
(d) The Redeveloper agrees to notify the Authority immediately in the case of damage
exceeding $25,000 in amount to, or destruction of, the Minimum Improvements or any portion
thereof resulting from fire or other casualty. In the event of any such damage, the Redeveloper
will forthwith repair, reconstruct and restore the Minimum Improvements to substantially the
same or an improved condition or value as existed prior to the event causing such damage and, to
the extent necessary to accomplish such repair, reconstruction and restoration, the Redeveloper
will apply the Net Proceeds of any insurance relating to such damage received by the Redeveloper
to the payment or reimbursement of the costs thereof.
The Redeveloper shall complete the repair, reconstruction and restoration of the Minimum
Improvements, whether or not the Net Proceeds of insurance received by the Redeveloper for
such purposes are sufficient to pay for the same. Any Net Proceeds remaining after completion of
*II
such repairs, construction and restoration shall be remitted to the Redeveloper.
In the event of substantial or total destruction of the Minimum Improvements, the Redeveloper
may elect to not repair or reconstruct the Minimum Improvements, in which case the Authority
may, as its sole remedy, terminate its obligations under the Note.
14
•
(e) The Authority agrees that its rights under this Section relative to the application of
Net Proceeds of insurance provided under Section 5.l(a)(i) and (b)(i) and as provided in Section
411
1111
5.1(d) shall be subordinate to the rights of a Holder of a Mortgage approved by the Authority;
provided, that the Authority's right to terminate the Note for a violation of the Redeveloper's
obligations under this Section shall not be subordinated to the rights of a Holder.
Section 5.2. Condemnation. In the event that title to and possession of the Minimum
Improvements or any material part thereof shall be taken in condemnation or by the exercise of
the power of eminent domain by any governmental body or other person (except the Authority)
prior to the Maturity Date, the Redeveloper shall, with reasonable promptness after such taking,
notify the Authority as to the nature and extent of such taking. Upon receipt of any
Condemnation Award, the Redeveloper shall elect to either: (a) use the entire Condemnation
Award to reconstruct the Minimum Improvements (or, in the event only a part of Minimum
Improvements have been taken, then to reconstruct such part) within the Project Area; or (b)
retain the Condemnation Award whereupon in the event that a substantial portion of the
Redevelopment Property and Minimum Improvements have been taken, the Authority's
obligations under this Agreement and the Note shall terminate as of the date of the taking.
15
•
ARTICLE VI
Taxes; Tax Increment
•
Section 6.1. Real Property Taxes. The Redeveloper shall pay or cause to be paid when due
and prior to the imposition of penalty all real property taxes and installments of special
assessments payable with respect to the Development Property.
Section 6.2. Tax Increment. Subject to the limitations contained in the Note, the Authority
hereby pledges to the payment of the Note a portion of the Tax Increment generated from the
Development Property and completed Minimum Improvements. The Redeveloper acknowledges
that the Authority has made no warranties or representations to the Redeveloper as to the
amounts of Tax Increment that will be generated or that the "Available Tax Increment", as
defined in the Note, will be sufficient to pay the Note in whole or in part. Nor is the Authority
warranting that it will have throughout the term of this Agreement and the Note the continuing
legal ability under State law to apply Tax Increment to the payment of the Note, which continued
legal ability is a condition precedent to the Authority's obligations under the Note. To the extent
that in any year or years the Authority receives Tax Increment in excess of the amounts necessary
to pay amounts due under the Note, the Authority shall be free to use such excess Tax Increment
for any purpose for which such Tax Increment may used under the Tax Increment Act. Likewise,
amounts deducted from Tax Increment in determining "Available Tax Increment" under the Note
shall be the Authority's property and the Authority shall be free to use such funds for any purpose
it determines.
0
16
ARTICLE VII
Mortgage Financing
•
Section 7.1. Mortgage Financing. Before the Redeveloper commences construction of the
Minimum Improvements, the Redeveloper shall submit to the Authority evidence of a
commitment for financing sufficient for construction of the Minimum Improvements. If the
Authority finds that the financing is sufficiently committed, adequate in an amount to provide for
the construction of the Minimum Improvements, and subject only to such conditions as the
Authority approves then the Authority shall notify the Redeveloper in writing of its approval.
Such approval shall not be unreasonably withheld and either approval or rejection shall be given
within ten (10) days from the date when the Authority is provided the evidence of financing, or
the financing shall be deemed approved. If the Authority rejects the evidence of financing as
inadequate, it shall do so in writing specifying the basis for the rejection. In any event the
Redeveloper shall submit adequate evidence of financing within thirty (30) days after such
rejection.
Section 7.2. Limitation Upon Encumbrance of Property. Prior to the completion of the
Minimum Improvements, as certified by the Authority, neither the Redeveloper nor any successor
in interest to the Development Property, or any part thereof, shall engage in any financing or any
other transaction creating any mortgage or other encumbrance or lien upon the Development
Property, whether by express agreement or operation of law, or suffer any encumbrances or lien
to be made on or attach to the Development Property, except: (a) for the purposes of obtaining
• funds only to the extent necessary for constructing the Minimum Improvements (including, but
not limited to, land and building acquisition, including the purchase price paid, labor and
materials, professional fees, real estate taxes, construction interest, organizational and other
indirect costs of development, costs of constructing the Minimum Improvements, and an
allowance for contingencies); and (b) only upon the prior written approval of the Authority, which
approval shall not be unreasonably withheld or delayed. For the purposes of such mortgage
financing as may be made pursuant to the Agreement, the Development Property may, at the
option of the Redeveloper (or successor in interest), be divided into several parts or parcels,
provided that such subdivision, in the reasonable opinion of the Authority, is not inconsistent with
the purposes of this Agreement and is approved in writing by the Authority.
17
ARTICLE VIII
111 Prohibitions Against Assignment and Transfer, Indemnification
Section 8.1. Prohibition Against Transfer of Property and Assignment of Agreement. The
Redeveloper represents and agrees that prior to the Maturity Date:
Except by way of security for the purpose of obtaining financing necessary to enable the
Redeveloper or any successor in interest to the Development Property, or any part thereof, to
perform its obligations with respect to making the Minimum Improvements under the Agreement,
and any other purpose authorized by the 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, or any trust or power, or transfer in any other mode
or form of or with respect to this Agreement or the Development 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 approval shall not be unreasonably withheld or
delayed . The Redeveloper shall, however, be entitled to transfer the Development Property and
assign its rights and obligations under this Agreement to a third party or entity affiliated with the
Redeveloper if such third party or entity assumes the obligations of the Redeveloper and the Job
Performance Agreement under transfer documents reasonably acceptable to the Authority and if
the proposed use of the Development Property and employment levels to be maintained are
substantially similar to those contemplated with respect to the Redeveloper's use of the
Development Property. For purposes of this Agreement, a party or entity shall be deemed
• affiliated with the Redeveloper if such party or entity is owned or controlled by the Redeveloper.
In no event shall a transfer occur that results in the Note being owned by an entity different than
the owner of the Development Property and Minimum Improvements, without the Authority's
prior written approval. Without limiting the Authority's right to disapprove a transfer of the
Note, no transfer shall be permitted unless the Redeveloper provides to the Authority evidence,
satisfactory to the Authority, that all security registration laws have been complied with in
connection with such transfer.
No such transfer or approval by the Authority thereof shall be deemed to relieve the
Redeveloper, or any other party bound in any way by this Agreement or otherwise with respect to
the construction of the Minimum Improvements, from any of its obligations with respect thereto,
nor shall Redeveloper or any other party bound by this Agreement be released from any
obligations hereunder without the written release by the Authority.
Notwithstanding the foregoing, the Authority's participation in the Redeveloper's
development hereunder is predicated upon the new employment that the development will make
possible and its understanding that the Minimum Improvements will be occupied for a term of not
less than the term of the Note, or any successor in interest, for use as an
office\warehouse\trucking facility undertaking the types of activities set forth on Schedule D to
this Agreement.
18
Section 8.2. Approvals. Any approval required to be given by the Authority under this
• Article VIII of this 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 8.3. 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, other than caused by the willful
misconduct or negligence of the Authority or its governing body members, officers, agents,
servants and employees.
(b) Except for any willful misrepresentation, any willful or wanton misconduct, or any
negligent actions of the following named parties, the Redeveloper agrees to protect and defend
the Authority 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 Minimum Improvements.
(c) The Authority and the governing body members, officers, agents, servants and
• employees thereof shall not be liable for any damage or injury to the persons or property of the
company or its officers, agents, servants or employees or any other person who may be about the
Development Property or Minimum Improvements due to any act of negligence of any person
other than the Authority or its governing body members, officers, agents, servants and employees.
(d) All covenants, stipulations, promises, agreements and obligations of the Authority
contained herein shall be deemed to be the covenants, stipulations, promises, agreements and
obligations of the Authority and not of any governing body member, officer, agent, servant or
employee of the Authority in the individual capacity thereof.
19
ARTICLE IX
• Events of Default
Section 9.1. Events of Default Defined. The term "Event of Default" shall mean, whenever
it is used in this Agreement (unless the context otherwise provides), subject to Unavoidable
Delays, any failure by Redeveloper to substantially observe or perform any covenant, condition,
obligation or agreement on its part to be observed or performed hereunder or under the Job
Performance Agreement.
Section 9.2. Authority's Remedies on Default. Whenever any Event of Default by
Redeveloper referred to in Section 9.1 of this Agreement occurs, the Authority may suspend its
performance under the Agreement and the Note until it receives assurances from the Redeveloper,
deemed reasonably adequate by the Authority, that the Redeveloper will cure its default and
continue its performance under the Agreement and the Job Performance 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) Terminate the Agreement and/or the Note.
(b) Take whatever action, including legal, equitable or administrative action, which may
appear necessary or desirable to the Authority to collect any payments due under this Agreement
• or the Job Performance Agreement, or to enforce performance and observance of any obligation,
agreement, or covenant of the Redeveloper under this Agreement or the Job Performance
Agreement.
Section 9.3. 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 statute. No
delay or omission to exercise any right or power accruing upon any default shall impair any such
right or power or shall be construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient. In 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 9.4. No Additional Waiver Implied 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.
20
ARTICLE X
•
.111
Additional Provisions
Section 10.1. Representatives Not Individually Liable. No member, official, or employee of
the Authority shall be personally liable to the Redeveloper, or any successor in interest, in the
event of any default or breach or for any amount which may become due to the Redeveloper or
successor on account of any obligations under the terms of the Agreement.
Section 10.2. Equal Employment Opportunity. The Redeveloper, for itself and its
successors and assigns, agrees that during the construction of the Minimum Improvements
provided for in the Agreement it will comply with all applicable federal, state and local equal
employment and non-discrimination laws and regulations.
Section 10.3. Restrictions on Use. The Redeveloper agrees for itself, and its successors and
assigns, and every successor in interest to the Development Property, or any part thereof, that the
Redeveloper, and such successors and assigns, shall until the Maturity Date devote the
Development Property to, and only to and in accordance with, the uses specified in the
Redevelopment Plan and this Agreement.
Section 10.4. Titles of Articles and Sections. Any titles of the several parts, Articles, and
Sections of the Agreement are inserted for convenience of reference only and shall be disregarded
in construing or interpreting any of its provisions.
Section 10.5. Notices and Demands. Except as otherwise expressly provided 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 the Redeveloper, is addressed to or delivered personally to the
Redeveloper at Morrell& Morrell, Inc., 809 Jackson Avenue, Elk River, Minnesota 55330; and
(b) in the case of the Authority, is addressed to or delivered personally to the Authority
at 13065 Orono Parkway, Elk River, Minnesota 55330, 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 10.6. Disclaimer of Relationships. 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 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.
21
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.
IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in
its name and behalf 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.
ECONOMIC DEVELOPMENT
AUTHORITY IN AND FOR THE
CITY OF ELK RIVER
By
Henry A. Duitsman, President
By
. Patrick Dwyer, Vice President
MORRELL & MORELL, INC.
Its:
Its:
Its:
22
STATE OF MINNESOTA )
SS.
• COUNTY OF SHERBURNE)
The foregoing instrument was acknowledged before me this _ day of , 1998, by
and , the
and of the Economic
Development Authority In and For the City of Elk River, 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 acknowledged before me this_ day of , 1998, by
Notary Public
•
STATE OF MINNESOTA )
) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this_ day of , 1998, by
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this _ day of , 1998, by
Notary Public
23
SCHEDULE A
Description of Development Property and Current Site
Development Property
Current Site
A-1
•
SCHEDULE B
$300,000
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF SHERBURNE
ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR
THE CITY OF ELK RIVER
LIMITED REVENUE TAX INCREMENT NOTE
The Economic Development Authority In and For the City of Elk River, Minnesota (the
"Authority"), hereby acknowledges itself to be indebted and, for value received, promises to pay
to the order of Morrell & Morrell, Inc. a Minnesota Corporation, or their permitted assigns
(collectively, the "Owner"), solely from the source, to the extent and in the manner hereinafter
provided, the principal amount of this Note, being Three Hundred Thousand Dollars
($300,000.00) (the "Principal Amount"), together with interest thereon beginning on
1111111 at a rate of 6 percent (6%) per annum (the "Rate") on the dates (the "Scheduled Payment
Dates") and in the amounts (the"Scheduled Payment") set forth set forth as"Developer Payment"
on the payment schedule attached hereto as Exhibit B.
Each payment on this Note is payable in any coin or currency of the United States of
America which on the date of such payment is legal tender for public and private debts and shall
be made by check or draft made payable to the Owner and mailed to the Owner at its postal
address within the United States which shall be designated from time to time by the Owner.
The Note is a special and limited obligation and not a general obligation of the Authority,
ll
which has been issued by the Authority pursuant to and in full conformity with the Constitution
and laws of the State of Minnesota, including Minnesota Statutes, Section 469.178, subdivision 4,
to aid in financing a "project", as therein defined, of the Authority consisting generally of
defraying certain public redevelopment costs incurred and to be incurred by the Authority within
and for the benefit of its Development District No. 1 (the "Project").
THIS NOTE IS NOT A DEBT OF THE CITY OF ELK RIVER OR THE STATE
OF MINNESOTA (THE "STATE"), AND NEITHER THE CITY, THE STATE NOR
ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON THE NOTE,
NOR SHALL THIS NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES
OTHER THAN AVAILABLE TAX INCREMENT,AS DEFINED BELOW.
The Scheduled Payment of this Note due on any Scheduled Payment Date is payable
solely from and only to the extent that the Authority shall have received in the calendar year
preceding such Scheduled Payment Date "Available Tax Increment". For purposes of this Note,
Available Tax Increment with respect to any Scheduled Payment Date is defined as the Tax
•
Increment, as defined in that certain Contract for Private Redevelopment between the Authority
and the Owner dated as of , 1998 (the "Contract"), generated in the six
111.
(6) month period immediately preceding the Scheduled Payment with respect to that certain real
property described on the attached Exhibit A (hereinafter referred to as the "Development
Property"), after deducting ten percent (10%) of the Tax Increment generated in each year and
after further deducting from the remainder the amount shown for such year as "City Payment" on
the payment schedule attached hereto. The Authority shall not be in default under this Note for
failure to make a Scheduled Payment using Available Tax Increment and no interest shall accrue
with respect to the Scheduled Payment not made; provided, that the Authority shall endeavor to
make Scheduled Payments when due.
The Authority shall pay to the Owner on each Scheduled Payment Date the lesser of: (i)
the Available Tax Increment received by the Authority in the six (6) month period preceding such
Scheduled Payment Date; or (ii) the amount of the Scheduled Payment due on the Scheduled
Payment Date. To the extent that on any Scheduled Payment Date under this Note, the Authority
has not received sufficient Available Tax Increment to make the full Scheduled Payment, the
Authority shall make so much of the Scheduled Payment as it is able using Available Tax
Increment, the remainder of the Scheduled Payment shall be added to the next years Scheduled..
Payment, and for purposes of calculating the remaining amounts due under this Note, the total of
all Scheduled Payments made under this Note shall never exceed the Principal Amount
The Authority's obligations herein are subject to the terms and conditions of the Contract
and specifically to Section 3.4. & 3.5. of the Contract. Subject to Section 9.2 of the Contract, the
Authority's payment obligations hereunder shall be suspended and this Note may be terminated by
the Authority upon the occurrence of an Event of Default as provided in Section 9.1 of the
Contract, which Contract is incorporated herein and made a part hereof by reference. Upon such
termination, the Authority's obligations to make further payments hereunder shall be discharged.
Such termination may be accomplished by the Authority's giving of written notice to the then
registered owner of this Note, as shown on the books of the Authority.
This Note shall not be payable from or constitute a charge upon any funds of the
Authority, and the Authority shall not be subject to any liability hereon or be deemed to have
obligated itself to pay hereon from any funds except Available Tax Increment, and then only to
the extent and in the manner herein specified.
The Owner shall never have or be deemed to have the right to compel any exercise of any
taxing power of the Authority or of any other public body, and neither the Authority nor any
director, commissioner, council member, board member, officer, employee or agent of the
Authority, nor any person executing or registering this Note shall be liable personally hereon by
reason of the issuance or registration hereof or otherwise.
B-2
This Note shall not be transferable or assignable, in whole or in part, by the Owner
without the prior written consent of the Authority.
This Note is issued pursuant to Resolution of the Authority and is entitled to the
benefits thereof, which resolution is incorporated herein by reference.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things
required by the Constitution and laws of the State of Minnesota to be done, to have happened,
and to be performed precedent to and in the issuance of this Note have been done, have
happened, and have been performed in regular and due form, time, and manner as required by law;
and that this Note, together with all other indebtedness of the Authority outstanding on the date
hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the
Authority to exceed any constitutional or statutory limitation thereon.
IN WITNESS WHEREOF, the Economic Development Authority In and For the City of
Elk River, by its Commissioners, has caused this Note to be executed by the manual signatures of
the President and the Vice President of the Authority and has caused this Note to be dated
, 199_.
Henry A. Duitsman, President Patrick Dwyer, Vice President
•
B-3
•
EXHIBIT A TO NOTE
Description of Development Property
1.4111
B-4
EXHIBIT B TO NOTE
• Payment Schedule
9.
B-5
SCHEDULE C
40
JOB PERFORMANCE AGREEMENT
By and Between
THE ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF
ELK RIVER
and
MORRELL & MORELL, INC.
Dated: , 1998
This document was drafted by:
CITY OF ELK RIVER
13065 Orono Parkway
Elk River, MN 55330
Telephone: (612) 441-7420
With final review by:
DOHERTY, RUMBLE & BUTLER
3500 Fifth Street Towers
150 South Fifth Street
Minneapolis, MN 55402-4235
C-1
•
•
JOB PERFORMANCE AGREEMENT
THIS AGREEMENT, made on or as of the day of , 1998, by and
between the Economic Development Authority In and For the City of Elk River, 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. 469.090-469.108, and
having its principal office at 13065 Orono Parkway, Elk River, Minnesota 55330, and Morrell &
Morrell, Inc. (hereinafter collectively referred to as the "Redeveloper"), having its principal office
at 809 Jackson Avenue, Elk River, Minnesota 55330.
WITNESSETH:
WHEREAS, the Redeveloper and the Authority have entered into a Contract for Private
Redevelopment dated as of , 1998, (the "Contract") pursuant to which the
Redeveloper has agreed to construct an office\warehouse\trucking facility of at least 45,000
square feet within the City of Elk River, Minnesota; and
WHEREAS, in order to induce the Redeveloper to undertake such development, the
Authority has agreed in the Contract to provide certain financial assistance to the Redeveloper
through its payment of certain costs of development relative to soil's correction and site
preparation of the property on which the development will occur; and
WHEREAS, Minnesota Statutes, section 116J.991, provides that a government agency
that provides financial assistance for economic development job growth purposes must establish
job and wage goals to be met by the businesses receiving the assistance; and
WHEREAS, the Authority and the Redeveloper agreed in the Contract that they would
enter into a Job Performance Agreement to document their understandings as to the job and wage
goals to be met by the Redeveloper with respect to its development; and
WHEREAS, the Authority and the Redeveloper desire that this Agreement serve as the
agreement referenced in the Contract.
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:
C-2
•
ARTICLE I
Definitions
Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears
from the context:
"Act" means Minnesota Statutes. Sections 116J.991.
"Agreement" means this Agreement, as the same may be from time to time modified,
amended, or supplemented.
"Authority" means the Economic Development Authority In and For the City of Elk River,
or any successor or assign.
"City" means the City of Elk River.
"Contract" means the Contract for Private Redevelopment between the Authority and the
Redeveloper dated as of , 1998.
"Development Property" means the real property described as such in the Contract
"Improvements" means the construction by the Redeveloper of an
office\warehouse\trucking facility of at least 45,000 square feet pursuant to the Contract.
"Permanent Full-Time Employment Position" means the employment of a person who is
eligible to receive any health, pension or other benefits provided according to the personnel or
employment policies of the his/her employer, or through a collective bargaining agreement with
the Redeveloper or its tenants, and whose wages as the term is defined are based upon the
employee working approximately thirty (30) hours a week.
"Redeveloper" means, collectively, Morrell & Morrell, Inc., or their representatives,
executors and assigns, or any future owners of the Development Property.
"State" means the State of Minnesota.
ARTICLE II
Job and Wage Goals
Section 2.1. Employment Requirements. The Redeveloper agrees that it will employ at
least persons in Permanent Full-Time Employment Positions in the Improvements and
that it will cause to be created by itself or its tenants with respect to the Development Property
C-3
and the Improvements at least new (as opposed to transfers of existing positions)
Permanent Full-Time Employment Positions. Such new positions shall be created, through the
• actual employment of individuals, no later than two (2) years after the substantial completion of
the Improvements pursuant to the terms of the Contract.
Section 2.2. Wage Requirements. The new Permanent Full-Time Employment
Positions required to be created pursuant to Section 2.1 shall be paid an average wage of no less
an hour.
Section 2.3. Monitoring. The Redeveloper agrees that it will provide upon request by
the Authority documentation, reasonably required by the Authority, to document Redeveloper's
compliance with the provisions of this Agreement.
Section 2.4. Continuing Obligation. The Redeveloper's obligations under this
Agreement shall be continuing and the Redeveloper shall cause the employment and wage levels
to be maintained for a period of at least one (1) year from the date that the Redeveloper is first
obligated to achieve the employment and wage levels.
ARTICLE III
Default
Section 3.1. Defaults Defined. It shall be a default under this Agreement if the
III Redeveloper fails to comply with any term or provision of this Agreement, and fails to cure such
failure within sixty (60) days written notice to the Redeveloper of the default, but only if the
default has not been cured within said sixty (60) days, or the Redeveloper does not provide to the
Authority assurances, satisfactory to the Authority in its reasonable discretion, that the default will
be cured and will be cured as soon as reasonably possible.
Section 3.2. Remedies on Default. Upon the occurrence of a default under this
Agreement the Authority may declare immediately due and payable the entire amount of principal
and interest paid by the Authority under the Note, as defined in the Contract, together with
interest on such amount at the rate of eight and one-half percent (8.5%) from the date that the
Authority makes such declaration. Within ten (10) days after the date that the Authority makes
such declaration the Redeveloper shall be liable for and shall repay the amount of the assistance
plus interest.
Section 3.3. Costs of Enforcement. Whenever any default occurs under this Agreement
and the Authority shall employ attorneys or incur other expenses for the collection of payments
due or for the enforcement of performance or observance of any obligation or agreement on the
part of the Redeveloper under this Agreement, the Redeveloper shall be liable to the Authority for
the reasonable fees of such attorneys and such other expenses so incurred by the Authority;
provided, that the Redeveloper shall only be obligated to make such reimbursement if the
C-4
IP
Authority prevails in such collection or enforcement action.
•
Section 3.4. Force Majeure. In the event that the Redeveloper's compliance with the terms
of this Agreement is delayed or interrupted due to strikes, acts of God, acts of any federal, state
of local governmental unit, the Redeveloper's non-compliance shall be excused for the period of
delay or interruption if the Redeveloper gives the Authority written notice of the cause of the
delay or interruption within thirty (30) days after its occurrence. General economic or market
conditions shall not constitute cause for excusing Redeveloper's performance.
ARTICLE IV
Miscellaneous
Section 4.1. Provisions of Agreement Not Affected. With the exception of the provisions
of the Contract relative to the Redeveloper's employment and wage requirements, this Agreement
is not intended to modify or limit in any way the terms of the Contract.
Section 4.2. Titles of Articles and Sections. Any titles of the several parts, Articles, and
Sections of the Agreement are inserted for convenience of reference only and shall be disregarded
in construing or interpreting any of its provisions.
Section 4.3. Modifications. This Agreement may be modified solely through written
• amendments hereto executed by the Redeveloper and the Authority.
Section 4.4. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section 4.5. 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.
C-5
IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed
in its name and behalf 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.
ECONOMIC DEVELOPMENT
AUTHORITY IN AND FOR THE
CITY OF ELK RIVER
By
Henry A. Duitsman, President
By
Patrick Dwyer, Vice President
MORRELL & MORELL, INC.
Its:
Its:
Its:
.111
STATE OF MINNESOTA )
SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of , 1998, by
and , the
and of the Economic
Development Authority In and For the City of Elk River, a public body politic and corporate
under the laws of the state of Minnesota.
Notary Public
C-6
STATE OF MINNESOTA )
• ) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this _ day of , 1998, by
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this_ day of , 1998, by
Notary Public
0 STATE OF MINNESOTA )
) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this _ day of , 1998, by
Notary Public
C-7
•
SCHEDULE D
. Description of Uses by Tenant
•
D-1