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1997-12-30 Contract for Private Development . . , �. t �, , , Execution Copy CONTRACT FOR PRIVATE DEVELOPMENT By and Between CITY OF ALBERTVILLE, MINNESOTA and DAVID VETSCH, DB/A VETSCH CUSTOM CABINETS Dated as of: �2 -3v-�'�7 This document was drafted by: KENNEDY & GRAVEN, Chartered 470 Pillsbury Center Minneapolis, Minnesota 55402 Telephone: 337-9300 DJG128008 AL141-23 � , ,. TABLE OF CONTENTS Pa�e ARTICLE I Definitions Section 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 ARTICLE II Representations and Warranties Section 2.1. Representations by the City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Section 2.2. Representations and Warranties by the Developer . . . . . . . . . . . . . . . . . . . . 4 ARTICLE III Acquisition and Conveyance of Property; Assessments and Land Acquisition Section 3.1. Acquisition and Conveyance of the Development Property . . . . . . . . . . . . . 6 Section 3.2. Site Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Section 3.3. Financing of Site Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Section 3.4. Payment of Administrative Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Section 3.5. Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Section 3.6. Soil Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Section 3.7. Job and Wage Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Section 3.8. Incorporation of and Effect on Purchase Agreement . . . . . . . . . . . . . . . . . . 8 ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Minimum Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Section 4.2. Construction Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Section 4.3. Commencement and Completion of Construction . . . . . . . . . . . . . . . . . . . 10 Section 4.4. Certificate of Completion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 ARTICLE V Insurance and Condemnation Section 5.1. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 ARTICLE VI Tax Increment; Taxes Section 6.1. Right to Collect Delinquent Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Section 6.2. Use of Tax Increments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 DJG128008 AL141-23 1 � � . , ARTICLE VII Mortgage Financing Section 7.1. Mortgage Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Section 7.2. City's Option to Cure Default on Mortgage . . . . . . . . . . . . . . . . . . . . . . 14 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Section 8.1. Representation as to Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Section 8.2. Prohibition Against Developer's Transfer of Property and Assignment of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Section 8.3. Release and Indemnification Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 16 ARTICLE IX Events of Default Section 9.1. Events of Default Defined . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Section 9.2. Remedies on Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Section 9.3. No Remedy Exclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Section 9.4. No Additional Waiver Implied by One Waiver . . . . . . . . . . . . . . . . . . . . 18 ARTICLE X Additional Provisions Section 10.1. Conflict of Interests; City Representatives Not Individually Liable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Section 10.2. Equal Employment Opportunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Section 10.3. Restrictions on Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Section 10.4. Provisions Not Merged With Deed . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Section 10.5. Titles of Articles and Sections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Section 10.6. Notices and Demands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Section 10.7. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Section 10.8. Recording . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Section 10.9. Choice of Law & Venue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 ARTICLE XI Termination of Agreement Section 1 l.l. Options to Terminate, Automatic Termination . . . . . . . . . . . . . . . . . . . . 21 Section 11.2. Action to Terminate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Section 11.3. Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 EXHIBIT A Description of Property EXHIBIT B Certificate of Completion EXHIBIT C Purchase Agreement for Development Property DJG128008 AL141-23 11 CONTRACT FOR PRIVATE DEVELOPMENT THIS AGREEMENT, made on or as of the _ day of , 1997, by and between THE CITY OF Albertville, MINNESOTA, a municipal corporation, under the laws of Minnesota (the "City") and DAVID VETSCH, DB/A VETSCH CUSTOM CABINETS (the "Developer"). WITNESSETH: WHEREAS, pursuant Minnesota Statutes, Sections 469.124 through 469.134 (the "Act"), the City has undertaken a program to promote economic development and job opportunities and to promote the development of land which is underutilized within the City, and in this connection created the Development District No. 1 (hereinafter referred to as the "Project") in an area (hereinafter referred to as the "Project Area") located in the City and a Tax Increment Financing District No. 8 (the "TIF District") within the Project Area, all pursuant to the Act and Minnesota Statutes, Sections 469.174 to 469.179; and WHEREAS, the City is authorized to undertake certain activities to prepare such real property for development by private enterprise; and WHEREAS, in order to achieve the objectives of the Project Plan the City is prepared to reimburse certain land acquisition and development costs of the Project, in order to bring about development in accordance with the Development Plan and this Agreement; and WHEREAS, the City believes that the development of the Project Area pursuant to this Agreement, and fulfillment generally of this Agreement, are in the vital and best interests of the City and the health, safety, morals, and welfare of its residents, and in accord with the public purposes and provisions of the applicable State and local laws and requirements under which the Project has been undertaken and is being assisted. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: DJG128008 t AL141-23 1 . t � 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. "City" means the City of Albertville, Minnesota. "Certificate of Completion" means the certification provided to the Developer pursuant to Section 4.4 of this Agreement. "City Development District Act" or "Act" means Minnesota Statutes, Sections 469.124 through 469.134, as amended. "Construction Plans" means the plans, specifications, drawings and related documents on the construction work to be performed on the Development Property which (a) shall be as detailed as the plans, specifications, drawings and related documents which are submitted to the appropriate building officials of the City, and (b) shall include at least the following: (1) site plan; (2) landscape plan; and (3) such other plans or supplements to the foregoing plans as the City may reasonably request to allow it to ascertain the nature and quality of the proposed construction work. The Construction Plans for any building to be constructed on the Development Property shall additionally include the following: (1) foundation plan; (2)basement plans; (3) floor plan for each floor; (4) cross sections of each (length and width); and (6) elevations (all sides); "County" means the County of Wright, Minnesota. "Developer" means David Vetsch, d/b/a Vetsch Custom Cabinets, or its permitted successors and assigns. "Development Property" means the real property described as such in Exhibit A of this Agreement. After construction of the Minimum Improvements, the term means the Development Property as improved. "Development Plan" means the City's Project Plan for Development District No. 1, as amended, and as it may be further amended. "Event of Default" means an action by the Developer listed in Article IX of this Agreement. "Holder" means the owner of a Mortgage. DJG128006 � AL141-23 "Minimum Improvements" means construction of an approximately 8,400 square foot cabinet manufacturing facility. "Mortgage" means any mortgage made by the Developer which is secured, in whole or in part, with the Development Property and which is a permitted encumbrance pursuant to the provisions of Article VIII of this Agreement. "Project" means the City's Development District No. 1. "Project Area" means the real property located within the boundaries of the Project. "State" means the State of Minnesota. "Tax Increment" means that portion of the real property taxes which is paid with respect to the Development Property and which is remitted to the City as tax increment pursuant to the Tax Increment Act. "Tax Increment Act" means the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 to 469.179, as amended. "Tax Increment District" or "TIF District" means the City's Tax Increment Financing District No. 8. "Tax Increment Plan" or "TIF Plan" means the City's Tax Increment Financing Plan for Tax Increment Financing District No. 8, as approved May 20, 1997 and as may amended. "Tax Official" means any County assessor, County auditor, 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. "Termination Date" means the earlier of February l, 2008, or the date on which the Developer has been fully reimbursed for the Site Improvement Costs (as defined in Section 3.2 of this Agreement) in accordance with the terms and conditions of this Agreement. "Unavoidable Delays" means delays beyond the reasonable control of the party seeking to be excused as a result thereof which are the direct result of strikes, other labor troubles, prolonged adverse weather or acts of God, 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 governmental unit (other than the City in exercising its rights under this Agreement) which directly result in delays. Unavoidable Delays shall not include delays in the Developer's obtaining of permits or governmental approvals necessary to enable construction of the Minimum Improvements by the dates such construction is required under Section 4.3 of this Agreement. DJG128008 � AL141-23 ARTICLE II Representations and Warranties Section 2.1. Representations bv the Citv. The City makes the following representations as the basis for the undertaking on its part herein contained: (a) The City has the power to enter into this Agreement and carry out its obligations hereunder. (b) The activities of the City are undertaken for the purpose of fostering the development of certain real property which for a variety of reasons is presently unutilized and underutilized, and for the purpose of promoting economic development and the creation of employment opportunities. Section 2.2. Representations and Warranties by the Developer. The Developer represents and warrants that: (a) The Developer has power to enter into this Agreement. (b) The Developer will cause to be constructed, operated, and maintained the Minimum Improvements in accordance with the terms of this Agreement, the Development Plan, and all local, state, and federal laws and regulations (including, but not limited to, environmental, zoning, building code, and public health laws and regulations). (c) The Developer has received no notice or communication from any local, state, or federal official that the activities of the Developer or the City in the Project Area may be or will be in violation of any environmental law or regulation (other than those notices or communications of which the City is aware). The Developer is aware of no facts the existence of which would cause it to be in violation of or give any person a valid claim under any local, state, or federal environmental law, regulation or review procedure. (d) The Developer will cause the Minimum Improvements to be constructed in accordance with all local, state, or federal energy-conservation laws or regulations. (e) The Developer will obtain or cause to be obtained, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable local, state, and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. (fl Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by, or conflicts with or results in a breach of the terms, conditions, or provisions of any restriction or any evidences of indebtedness, agreement, or instrument of whatever nature to which the Developer is now a party or by which it is bound, or constitutes a default under any of the foregoing. DJG128006 ^ AL141-23 `� (g) Whenever any Event of Default occurs and if the City 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 Developer under this Agreement, the Developer agrees that it shall, within ten days of written demand by the City, pay to the City the reasonable fees of such attorneys and such other expenses so incurred by the City. (h) The proposed development by the Developer hereunder would not occur but for the tax increment financing assistance being provided by the City hereunder. DJG128008 ` AL141-23 •� ARTICLE III Acquisition and Convevance of Propertv; Assessments and Land Acquisition Section 3.1. Acquisition and Convevance of the Development Property. As of the date of this Agreement, the City owns the Development Property, which is valued at $13,000 for the purposes of establishing a base value for the TIF Plan. In accordance with the terms and conditions of the purchase agreement set forth at Exhibit C (the "Purchase Agreement"), the City will convey the Development Property to the Developer at a reduced price of$1,394. This write- down is intended to satisfy the local contribution requirement set forth in Minnesota Statutes, Section 273.1399, subd. 6(d)(1)(A). Section 3.2. Site Improvements. (a) In order to make development of the Minimum Improvements economically feasible, the City will reimburse the Developer, in the manner set forth herein, for up to $75,000 of the Site Improvement Costs, hereby defined as the costs of grading, excavation, landscaping, soil corrections, installation of sanitary sewer, water, and storm sewer utilities, and construction of footings and parking facilities (the "Site Improvements"); provided that all such costs are incurred by the Developer and designed to serve the Minimum Improvements. In no case shall the City reimburse the Developer for more than $75,000 of the Site Improvement Costs incurred by the Developer, in the individual amounts shown. Any Site Improvement Costs in excess of this amount shall be the responsibility of the Developer. The City shall have no obligation to the Developer or to any third party with respect to any defects in the construction of improvements financed or reimbursed by the City pursuant to this Agreement. (b) The City will reimburse the Developer for the Site Improvements Costs in accordance with the terms and conditions set forth in Section 3.3. Section 3.3. Financing of Site Improvements. (a) The Site Improvement Costs will be paid, with simple interest thereon at 8.00% per annum, by the City to the Developer in semi- annual installments payable on each February 1 and August 1 ("Payment Dates") commencing August 1, 1999 and concluding no later than the Termination Date. These payments will be made from Available Tax Increment as defined in this Section 3.3 and from no other source. (b) The term "Available Tax Increment" means 89.90 percent of the Tax Increment with respect to the Development Property as calculated by the County and paid to the City during the six months preceding any Payment Date. (c) If on any Payment Date there is available to the City insufficient Available Tax Increment to pay the amounts due on such date, the amount of such deficiency shall be deferred and shall be paid, without interest thereon, on the next Payment Date on which the City has available to it Available Tax Increment in excess of the amount necessary to pay the amount due on such Payment Date. DJG128008 ` AL141-23 U (d) The City shall have no obligation to pay any portion of the Site Improvement Costs that remains unpaid after the Termination Date. The City may prepay the Site Improvement Costs at any time. (e) The City shall not be obligated to make any payment under this Section if: (i) there is an Event of Default on the Developer's part under this Agreement that has not been cured as of the Payment Date; or (ii) the Developer has failed to comply with the payment procedures described in paragraph (� herein. (� At least 30 days before the first Payment Date, the Developer must submit to the City a payment request certificate signed by its duly authorized representative stating that the Developer has paid Site Improvement Costs in an amount that equals at least $75,000, and that no Event of Default has occurred and is continuing under this Agreement. The first payment request certificate must be accompanied by a certificate of a project engineer or other project supervisor showing in adequate detail that the Site Improvement Costs have been incurred and paid by the Developer. (g) The City makes no warranties or representations that Available Tax Increment will be sufficient to pay the Site Improvement Costs. The Developer agrees and understands that Available Tax Increment is subject to calculation by the County and change in State law, and that a significant portion of Site Improvement Costs may remain unpaid after the Termination Date. The Developer further agrees and understands that TIF estimates provided by the City, and its agents, officers, or employees are estimates only and not intended for the Developer's reliance. (h) The Developer agrees and acknowledges that its right to any Available Tax Increment pursuant to this Agreement is subordinate to the City's rights to reimbursement of Administrative Costs set forth in Section 3.4, and that the City shall have no obligation to make any payment of Available Tax Increment to the Developer if the City has not been fully reimbursed pursuant to that Section 3.4. Section 3.4. Payment of Administrative Costs. (a) In order to reimburse itself for Administrative Costs it incurs, the City shall on every Payment Date retain out of Available Tax Increment an amount equal to the amount of Administrative Costs incurred and not previously reimbursed as of that Payment Date. For the purposes of this Agreement, the term "Administrative Costs" means costs and expenses,including without limitation legal fees, incurred by the City and attributable to or incurred in connection with the negotiation and preparation of this Agreement and other documents and agreements in connection with the development contemplated hereunder, the creation and administration of the TIF District, and any other "Administrative expenses" as defined in Minnesota Statutes, Section 469.174, subd. 14. (b) If on any Payment Date there is available to the City insufficient Available Tax Increment to fully reimburse itself for Administrative Costs incurred and not previously reimbursed, the amount of such deficiency shall be deferred and shall be paid, without interest thereon, on the next Payment Date or Payment Dates on which the City has available to it sufficient Available Tax Increment to recover such deficiency. DJG128008 �7 AL141-23 � (c) The terms of this Section 3.4 are for the sole benefit of the City, and nothing in this Section 3.4 shall be construed to limit the City's ability to lawfully recover Administrative Costs from Tax Increment during or after the termination of this Agreement. Section 3.5. Records. The City may at all reasonable times, after reasonable notice, inspect, examine and copy all books and records of the Developer relating to the Minimum Improvements. The Developer shall use its best efforts to cause the contractor or contractors, all subcontractors, and their agents and lenders to make their books and records relating to the Site Improvements available to the City upon reasonable notice, for inspection, examination and audit. These records shall be kept and maintained by the Developer for a period of four years following completion of construction of the Site Improvements. Section 3.6. Soil Conditions. Except as set forth in the Purchase Agreement, the Developer acknowledges that the City makes no representations or warranties as to the condition of the soils on the Development Property or its fitness for construction of the Minimum Improvements or any other purpose for which the Developer may make use of the Development Property, provided further that in any event the Developer further agrees that it will indemnify, defend, and hold harmless the City, and its governing body members, officers, agents, and employees, from any claims or actions arising out of the presence, if any, of hazardous wastes or pollutants on the property. Section 3.7. Job and Wage Covenants. (a) By no later than two years after the first date on which the Developer receives any tax increment payment under Article III hereof, the Developer shall cause to be created on the Development Property at least 1 new full-time equivalent job with wages of at least $8.00 per hour. The Developer shall submit to the City a written report by April 1 of each year after completion of the Minimum Improvements describing employment and wages in sufficient detail to enable the City to determine compliance with this Section. (b) If the Developer fails to comply with any of the terms of Section 3.7(a), the Developer shall repay to the City upon written demand from the City any tax increment payments disbursed to the Developer under this Agreement, and shall further pay to the City the amount of $11,606 as reimbursement for the value of the land write-down described in Section 3.1. Nothing in this Section shall be construed to limit the City's remedies under Article IX hereof. Section 3.8. Incorporation of and Effect on Purchase A�reement. The terms and conditions of the Purchase Agreement are hereby incorporated in this Agreement as fully as set forth in full herein. Nothing in this Agreement shall be construed to waive or limit any remedy or right available to the City, or any obligation of the Developer, as set forth in the Purchase Agreement. DJciasooa g AL141-23 ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Minimum Improvements. The Developer agrees that it will cause to be constructed the Minimum Improvements on the Development Property in accordance with the approved Construction Plans, and at all times prior to the Termination 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. Section 4.2. Construction Plans. (a) Before beginning construction of the Minimum Improvements, the Developer shall submit to the City Construction Plans. The Construction Plans shall provide for the construction of the Minimum Improvements and shall be in conformity with the Development Plan, this Agreement, and all applicable State and local laws and regulations. The City will approve the Construction Plans in writing if: (i) the Construction Plans conform to the terms and conditions of this Agreement; (ii) the Construction Plans conform to the goals and objectives of the Development Plan; (iii) the Construction Plans conform to all applicable federal, state and local laws, ordinances, rules and regulations; (iv) the Construction Plans are adequate to provide for construction of the Minimum Improvements; (v) the Construction Plans do not provide for expenditures in excess of the funds available to the Developer for construction of the Minimum Improvements; and (vi) no Event of Default has occurred. Approval may be based upon a review by the City's Building Official of the Construction Plans. No approval by the City shall relieve the Developer of the obligation to comply with the terms of this Agreement or of the Development Plan, applicable federal, state and local laws, ordinances, rules and regulations, or to construct the Minimum Improvements in accordance therewith. No approval by the City shall constitute a waiver of an Event of Default. If approval of the Construction Plans is requested by the Developer in writing at the time of submission, such Construction Plans shall be deemed approved unless rejected in writing by the City, in whole or in part. Such rejections shall set forth in detail the reasons therefore, and shall be made within 30 days after the date of their receipt by the City. If the City rejects any Construction Plans in whole or in part, the Developer shall submit new or corrected Construction Plans within 30 days after written notification to the Developer 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 City. The City's approval shall not be unreasonably withheld. Said approval shall constitute a conclusive determination that the Construction Plans (and the Minimum Improvements constructed in accordance with said plans) comply to the City's satisfaction with the provisions of this Agreement relating thereto. (b) If the Developer desires to make any material change in the Construction Plans after their approval by the City, the Developer shall submit the proposed change to the City for its approval. If the Construction Plans, as modified by the proposed change, conform to the requirements of this Section 42 of this Agreement with respect to such previously approved Construction Plans, the City shall approve the proposed change and notify the Developer in writing of its approval. Such change in the Construction Plans shall, in any event, be deemed DJG126008 n AL141-23 7 approved by the City unless rejected, in whole or in part, by written notice by the City to the Developer, setting forth in detail the reasons therefor. Such rejection shall be made within ten (10) days after receipt of the notice of such change. The City's approval of any such change in the Construction Plans will not be unreasonably withheld. Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable Delays, the Developer shall complete the construction of the of Minimum Improvements by December 31, 1997. All work with respect to the Minimum Improvements to be constructed or provided by the Developer on the Development Property shall be in conformity with the Construction Plans as submitted by the Developer and approved by the City. The Developer agrees for itself, its successors and assigns, and every successor in interest to the Development Property, or any part thereof, that the Developer, and such successors and assigns, shall promptly 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. Subsequent to the Developer's acquisition of title to the Development Property, or any part thereof, and until construction of the Minimum Improvements has been completed, the Developer shall make reports, in such detail and at such times as may reasonably be requested by the City, as to the actual progress of the Developer with respect to such construction. Section 4.4. Certificate of Completion. (a) Promptly after substantial completion of each the Minimum Improvements in accordance with those provisions of this Agreement relating solely to the obligations of the Developer to construct the Minimum Improvements (including the dates for beginning and completion thereo fl, the City will furnish the Developer with the Certificate shown as E�ibit C. Such certification by the City shall be a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement with respect to the obligations of the Developer, and its successors and assigns, to construct the Minimum Improvements and the dates for the beginning and completion thereof. Such certification and such determination shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any Holder of a Mortgage, or any insurer of a Mortgage, securing money loaned to finance the Minimum Improvements, or any part thereof. (b) If the City shall refuse or fail to provide any certification in accordance with the provisions of this Section 4.4 of this Agreement, the City shall, within thirty (30) days after written request by the Developer, provide the Developer with a written statement, indicating in adequate detail in what respects the Developer has failed to complete the Minimum Improvements in accordance with the provisions of this Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the City, for the Developer to take or perform in order to obtain such certification. (c) The construction of the Minimum Improvements shall be deemed to be substantially completed when the Developer has received an occupying permit from the responsible inspecting authority. DJG128006 �O AL141-23 under the laws of the State to assume the risks covered thereby. Upon request, the Developer will deposit annually with the City policies evidencing all such insurance, or a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article V of this Agreement, each policy shall contain a provision that the insurer shall not cancel nor modify it in such a way as to reduce the coverage provided below the amounts required herein without giving written notice to the Developer and the City at least thirty (30) days before the cancellation or modification becomes effective. In lieu of separate policies, the Developer may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Developer shall deposit with the City a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. (d) The Developer agrees to notify the City immediately in the case of damage exceeding $100,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. In such event the Developer either will forthwith repair, reconstruct, and restore the Minimum Improvements to substantially the same or an improved condition or value as it existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction, and restoration, the Developer will apply the Net Proceeds of any insurance relating to such damage received by the Developer to the payment or reimbursement of the costs thereof. The Developer shall complete the repair, reconstruction, and restoration of the Minimum Improvements, whether or not the Net Proceeds of insurance received by the Developer for such purposes are sufficient to pay for the same. Any Net Proceeds remaining after completion of such repairs, construction and restoration shall be the property of the Developer. (e) The Developer and the City agree that all of the insurance provisions set forth in this Article V shall terminate upon the Termination Date. DJG128008 �� AL141-23 ARTICLE VI Tax Increment; Taxes Section 6.1. Ri�ht to Collect Delinquent Taxes. The Developer acknowledges that the City is providing substantial aid and assistance in furtherance of the development. The Developer understands that the tax increment intended to pay expenses of the City and the Developer are derived from real estate taxes on the Development Property, which taxes must be promptly and timely paid. To that end, the Developer agrees for itself, its successors and assigns, in addition to the obligation pursuant to statute to pay real estate taxes, that it is also obligated by reason of this Agreement to pay before delinquency all real estate taxes assessed against the Development Property and the Minimum Improvements. The Developer acknowledges that this obligation creates a contractual right on behalf of the City to sue the Developer or its successors and assigns to collect delinquent real estate taxes and any penalty or interest thereon and to pay over the same as a tax payment to the county auditor. In any such suit, the City shall also be entitled to recover its costs, expenses and reasonable attorney fees. Section 6.2. Use of Tax Increments. Except for its obligations under this Agreement regarding Available Tax Increment, the City shall be free to use any tax increment received from the Property for any purpose for which such increment may lawfully be used, pursuant to the provisions of Minnesota law, and the City shall have no obligations to the Developer with respect to the use of such increment. DJG128008 �� AL141-23 . r , ARTICLE VII Mortgage Financing Section 7.1. Mort�a�e Financing. (a) Before commencement of construction of the Minimum Improvements, the Developer shall submit to the City evidence of one or more commitments for mortgage financing which, together with committed equity for such construction, is sufficient for the acquisition of the Development Property, platting, construction of the public improvements in connection with the plat, and undertaking the Minimum Improvements. Such commitments may be submitted as short term financing, long term mortgage financing, a bridge loan with a long term take-out financing commitment, or any combination of the foregoing. Such commitment or commitments for short term or long term mortgage financing shall be subject only to such conditions as are normal and customary in the mortgage banking industry. (b) If the City finds that the mortgage financing is sufficiently committed and adequate in amount to provide for the construction of the Minimum Improvements then the City shall notify the Developer in writing of its approval. Such approval shall not be unreasonably withheld and either approval or rejection shall be given within thirty (30) days from the date when the City is provided the evidence of mortgage financing. A failure by the City to respond to such evidence of mortgage financing shall be deemed to constitute an approval hereunder. If the City rejects the evidence of mortgage financing as inadequate, it shall do so in writing specifying the basis for the rejection. In any event the Developer shall submit adequate evidence of mortgage financing within thirty (30) days after such rejection. Section 7.2. Citv's Option to Cure Default on Mort�a�e. In the event that there occurs a default under any Mortgage authorized pursuant to this Agreement, the Developer shall cause the City to receive copies of any notice of default received by the Developer from the holder of such Mortgage. Thereafter, the City shall have the right, but not the obligation, to cure any such default on behalf of the Developer within such cure periods as are available to the Developer under the Mortgage documents. DJG128008 14 AL141-23 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Section 8.1. Representation as to Development. The Developer represents and agrees that its undertakings pursuant to this Agreement are for the purpose of development of the Development Property and not for speculation in land. Section 8.2. Prohibition Against Developer's Transfer of Property and Assi�nment of A�reement. The Developer represents and agrees that prior to issuance of the Certificate of Completion for the Minimum Improvements: (a) Except only by way of security for, and only for, the purpose of obtaining financing necessary to enable the Developer or any successor in interest to the Development Property, or any part thereof, to perform its obligations with respect to constructing the Minimum Improvements, and any other purpose authorized by this Agreement, the Developer 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 therein, or any contract or agreement to do any of the same, except for any part or portion of the Development Property for which the Developer has received a Certificate of Completion, without the prior written approval of the City unless the Developer remains liable and bound by this Agreement in which event the City's approval is not required. Any such transfer shall be subject to the provisions of this Agreement. (b) In the event the Developer, upon transfer or assignment of the Development Property or any portion thereof, seeks to be released from its obligations under this Agreement as to the portion of the Development Property that is transferred or assigned, the City shall be entitled to require, except as otherwise provided in this Agreement, as conditions to any such release that: (i) Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the City, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Developer as to the portion of the Development Property to be transferred. (ii) Any proposed transferee, by instrument in writing satisfactory to the City and in form recordable among the land records, shall, for itself and its successors and assigns, and expressly for the benefit of the City, have expressly assumed all of the obligations of the Developer under this Agreement as to the portion of the Development Property to be transferred and agreed to be subject to all the conditions and restrictions to which the Developer is subject as to such portion; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Development Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by the City) deprive the City of any DJG128008 �S AL141-23 rights or remedies or controls with respect to the Development Property or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Development Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally or practically, to deprive or limit the City of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Minimum Improvements that the City would have had, had there been no such transfer or change. In the absence of specific written agreement by the City to the contrary, no such transfer or approval by the City thereof shall be deemed to relieve the Developer, 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. (iii) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Development Property governed by this Article VIII, shall be in a form reasonably satisfactory to the City. In the event the foregoing conditions are satisfied then the Developer shall be released from its obligation under this Agreement, as to the portion of the Development Property that is transferred, assigned or otherwise conveyed. After issuance of the Certificate of Completion for the Minimum Improvements, the Developer may transfer or assign the part or portion of the Development Property for which the Certificate of Completion has been issued without the prior written consent of the City, provided that the transferee or assignee is bound by all the Developer's obligations hereunder. The Developer shall submit to the City written evidence of any such transfer or assignment, including the transferee or assignee's express assumption of the Developer's obligations under this Agreement. If the Developer fails to provide such evidence of transfer and assumption, the Developer shall remain bound by all it obligations under this Agreement. Section 8.3. Release and Indemnification Covenants. (a) The Developer releases from and covenants and agrees that the City and the governing body members, officers, agents, servants, and employees thereof shall not be liable for, and agrees to defend, indemnify and hold harmless the City 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 or the Development Property. (b) Except for any willful misrepresentation or any willful or wanton misconduct of the following named parties, the Developer agrees to protect and defend the 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 Minimum Improvements and the Development DJG128008 16 AL141-23 Property. Without limitation of the foregoing, the Developer agrees to protect and defend the 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 the State, its agencies, the County, or any other governmental entity seeking recoupment from or repayment by the City of any Tax Increment paid to or expended by the City pursuant to this Agreement or the existence of the TIF District, and to reimburse the City, to the fullest extent permitted by law, for any Tax Increment recouped by or repaid to any of the foregoing entities. (c) The City 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 Developer or its officers, agents, servants or employees or any other person who may be about the Development Property, the Minimum Improvements due to any act of negligence of any person. (d) All covenants, stipulations, promises, agreements, and obligations of the City contained herein shall be deemed to be the covenants, stipulations, promises, agreements, and obligations of the City and not of any governing body member, officer, agent, servant, or employee of the City in the individual capacity thereof. DJG128008 7�7 AL141-23 1 � ARTICLE IX Events of Default Section 9.1. Events of Default Defined. The following shall be "Events of Default" under this Agreement and the term "Event of Default" shall mean, whenever it is used in this Agreement (unless the context otherwise provides), any failure by any party to observe or perform any other covenant, condition, obligation or agreement on its part to be observed or performed hereunder, or under the terms of the Purchase Agreement. Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.1 of this Agreement occurs, the non-defaulting party may exercise its rights under this Section 9.2 after providing thirty days written notice to the defaulting party of the Event of Default, but only if the Event of Default has not been cured within said thirty days or, if the Event of Default is by its nature incurable within thirty days, the defaulting party does not provide assurances reasonably satisfactory to the non-defaulting party that the Event of Default will be cured and will be cured as soon as reasonably possible: (a) Suspend its performance under this Agreement until it receives assurances that the defaulting party will cure its default and continue its performance under this Agreement. (b) Cancel and rescind or terminate this Agreement. (c) Take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant under this Agreement. In addition, the City may withhold issuance of a Certificate of Completion upon a default by the Developer. Section 9.3. No Remedv Exclusive. No remedy herein conferred upon or reserved to the City or Developer in this Agreement or the Option Agreement 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 City 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. DJG128008 7p AL141-23 10 ARTICLE X Additional Provisions Section 10.1. Conflict of Interests; Cit�Representatives Not Individuallv Liable. The City and the Developer, to the best of their respective knowledge, represent and agree that no member, official, or employee of the City shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official, or employee participate in any decision relating to this Agreement which affects his personal interests or the interests of any corporation, partnership, or association in which he is, directly or indirectly, interested. No member, official, or employee of the City shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the City or County or for any amount which may become due to the Developer or successor or on any obligations under the terms of this Agreement. Section 10.2. Equal Employment Opportunitv. The Developer, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements provided for in this 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 Developer agrees that the Developer, and its successors and assigns, shall not discriminate upon the basis of race, color, creed, sex, or national origin in the sale, lease, or rental, or in the use or occupancy of the Development Property or any improvements erected or to be erected thereon, or any part thereof. Section 10.4. Provisions Not Mer�ed With Deed. None of the provisions of this Agreement are intended to or shall be merged by reason of any deed transferring any interest in the Development Property and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 10.5. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 10.6. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under this 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 Developer, is addressed to or delivered personally to the Developer at 5850 Barthel Industrial Boulevard, P.O. Box 98, Albertville, MN 55301; and (b) in the case of the City, is addressed to or delivered personally to the City at City Hall, 5975 Main Avenue NE, P.O. Box 9, Albertville, MN 55301, Attn: City Administrator; DJG128008 ln AL141-23 7 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 10.7. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 10.8. Recordin�. The City may record this Agreement and any amendments thereto with the Wright County recorder. The Developer shall pay all costs for recording. Section 10.9. Choice of Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the state of Minnesota. Any disputes, controversies, or claims arising out of this Agreement shall be heard in the state or federal courts of Minnesota, and all parties to this Agreement waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise. DJG128008 �O AL141-23 ARTICLE XI Termination of Agreement Section 11.1. Options to Terminate, Automatic Termination. This Agreement may be terminated by either the City or the Developer if commencement of construction of the Minimum Improvements does not occur by December 31, 1997. Section 11.2. Action to Terminate. Termination of this Agreement pursuant to the first sentence of Section 1 l.l must be accomplished by the giving of ten (10) days written notification of a party's intent to terminate. Section 11.3. Effect of Termination. Following the termination or expiration of this Agreement no action, claim, or demand may be based on any term or provision of this Agreement. DJG128008 �7 AL141-23 1 IN WITNESS WHEREOF, the City has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed and the Developer has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. CITY OF ALBERTVILLE, MINNESOTA By � Its Mayor By Its City Administrator STATE OF MINNESOTA ) ) SS. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me this 3�� day of � �� , 1997 by �/�,,� �,2,�,,, and (�� , the Mayor and City Administrator of the City of Albertville, Minnesota, on behalf of the City. �� MICNAEL C.COI�RI Notary Public ',o_�: NOTARYPUBUC-MINNESOTA -�°.,�--`�'' HcNNEPIN COUNiY My Commis�res Jan 31,2000 `v-a-�--�-�-�"' _ DJG128008 �� AL141-23 DAVID VETSCH, DB/A VETSCH CUSTOM CABINETS gy �cz�.�.�- v�t�Al� David Vetsch STATE OF � . .� ) ) ss. COUNTY OF�� ) The foregoing instrument was acknowledged before me this 3� day of �,,�.� , 1997 by David Vetsch. � :,� � �Cy L�c�C�— • t y Public �AM����r��I����1r���Ir���r���►r��r��A/��/��r��1 � .•••-•�••. JUDITH A. MAUE � a /'�:�":•;+t 1�,.••:: �!.= NOTARY PUBLIC-PdINNESOTA t �'�� HENNEPIN COUNTY j '`�:;�..: `� 1 t ••.,.,,...: My Comm. Expires Jan. 31, 2000 ' .�..�..�...�....�...w..�..+...r..�r...�....rw DJG128008 23 AL141-23 EXHIBIT A DEVELOPMENT PROPERTY That real property in the Wright County, state of Minnesota, legally described as follows: Lot 1, Block 1, Vetsch Commercial Park DJG128008 AL141-23 A-1 EXHIBIT B CERTIFICATE OF COMPLETION The undersigned hereby certifies that Vetsch Cabinets, Inc. (the "Developer") has fully complied with its obligations under Articles III and IV of that document titled "Contract for Private Development" dated , 199 by and between the City of Albertville and the Developer, with respect to construction of the Minimum Improvements in accordance with the Construction Plans, and that the Developer is released and forever discharged from its obligations to construct the Minimum Improvements under Articles III and IV. CITY OF ALBERTVILLE, MINNESOTA By Its Mayor By Its Administrator STATE OF MINNESOTA ) ) SS. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me this day of , 1997 by and , the Mayor and Administrator of the City of Albertville, Minnesota, on behalf of the City. Notary Public This document was drafted by: KENNEDY & GRAVEN, Chartered 470 Pillsbury Center Minneapolis, Minnesota 55402 Telephone: 337-9300 DJG128008 1 AL141-23 B'1 . s EXHIBIT B CERTIFICATE OF COMPLETION The undersigned hereby certifies that David Vetsch, d/b/a Vetsch Custom Cabinets (the "Developer") has fully complied with its obligations under Articles III and IV of that document titled "Contract for Private Development" dated , 199 by and between the City of Albertville and the Developer, with respect to construction of the Minimum Improvements in accordance with the Construction Plans, and that the Developer is released and forever discharged from its obligations to construct the Minimum Improvements under Articles III and IV. CITY OF ALBERTVILLE, MINNESOTA ; , � ; By Z!<C Its Mayor By Its Administrator STATE OF MINNESOTA ) ) SS. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me this day of , 1997 by and , the Mayor and Administrator of the City of Albertville, Minnesota, on behalf of the City. Notary Public This document was drafted by: KENNEDY & GRAVEN, Chartered 470 Pillsbury Center Minneapolis, Minnesota 55402 Telephone: 337-9300 DJG128008 B_� AL141-23 a r EXHIBIT C INSERT PURCHASE AGREEMENT HERE DJG126008 AL141-23 �-�