HomeMy WebLinkAbout[04c] Development Agreement Amendment
Council Agenda Item 4c
MEETING DATE: April 17, 2017
AGENDA ITEM: Development Agreement Amendment – Requested Action: Authorization
execution of an amendment to the DA between the City of St. Joseph and Bayou
Alley Flats extending the termination date.
SUBMITTED BY: Administration
BOARD/COMMISSION/COMMITTEE RECOMMENDATION: In December 2016 the EDA consider the
request of Jon Petters, Bayou Alley Flats (now 24 North) to extend the completion date of the project identified in
the Development Agreement between the City of St. Joseph and Bayou Flats. The EDA recommended the City
Council approve the amendment requiring completion of the project no later than November 30, 2018.
PREVIOUS COUNCIL ACTION: The City Council accepted the recommendation of the EDA and
approved execution of the amendment to the Development Agreement between the City of St. Joseph and Bayou
Alley Flats extending the completion date to November 30, 2018.
BACKGROUND INFORMATION: In reviewing the TIF Payments and districts, it was noted that while the
completion date of the project for was extended, the termination date for the District was not. If that is not extended
the Developer would potentially lose one year of increment.
BUDGET/FISCAL IMPACT:
ATTACHMENTS: Amendment to the Development Agreement
Development Agreement w/highlighted date changes
REQUESTED COUNCIL ACTION: Authorize execution of the Amendment to the Development Agreement
between the City of St. Joseph and Bayou Alley Flats LLC extending the termination date to February 1, 2037
allowing for full utilization of the approved TIF.
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AMENDMENT TO CITY OF ST. JOSEPH
DEVELOPER AGREEMENT BETWEEN THE CITY OF ST.
JOSEPH and BAYOU ALLEY FLATS,LLC
(For TIF 2-3)
THIS AMENDMENT TO DEVELOPER AGREEMENT (hereinafter "Amendment"), made and
entered into this day of , 2017, by and between Bayou Alley Flats, LLC,
hereinafter called "Developer", and the City of St. Joseph, Minnesota, a municipal corporation,
hereinafter called the"City".
RECITALS:
WHEREAS, on the 10�' day of November, 2014, the City entered into a Development
Agreement, hereinafter called the "Agreement" with the Developer for a business subsidy for a
mixed density development entitled "Bayou Alley Flats", herein after called "Project". In doing
so the City affirmed:
1. The development and construction of the Project is vital and in the best interest of the
City and are in accordance with the public purpose and provisions of the applicable
state and local laws; and
2. The requirements of the Business Subsidy Law, Minnesota Statutes Section 116J.993
through 116J.995 have been applied; and
3. The City has adopted criteria for awarding Business Subsidy Law, including the
conducting of public hearing; and
WHEREAS, the Agreement includes provisions for the completion of the project which included
the following language: The Developer shall commence construction of the Phase One Project
no later than May 1, 201 S, and barring Unavoidable Delays, the Phase One Project will be
substantially completed by December 31, 2016. The Developer shall commence construction of
the Phase II Project upon completion of the presale of three condominium units of the Phase II
Project; and
WHEREAS, the City Council on December 19, 2016 extended the substantial completion date
for Phase I from December 31, 2016 to November 30, 2018; and
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WHEREAS, the Agreement identifies the Termination date of the district to be February 1, 2036
which does not reflect the extension granted for the project completion date amended to
November 30, 2018; and
WHEREAS, the extension of the completion date contemplated extending the timeframe for the
Agreement, including the date on which the TIF District expires.
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:
1. All references within the Agreement shall reflect a District Termination date of February
1, 2037 and the following sections shall be amended:
a. Section 1.1 Definitions:
i. Note Payment Date
ii. Termination Date
b. Exhibit B—Form of TIF Note
2. The Developer and City agree that all other terms, conditions and requirements set forth
in the Developer Agreement, dated November 10, 2014, shall remain in full force and
effect.
4. This Amendment and the Developer Agreement between the Developer and City
constitute the entire agreement between the parties. There are no understandings,
agreements or representations, oral or written, beyond those specified in this Amendment
and the Developer Agreement.
5. This Amendment shall be binding upon the parties,their heirs, successors and/or assigns.
IN WITNESS WHEREOF, the City has caused this Amendment to be duly executed in its name
and behalf and the Developer has caused this Amendment to be duly executed in its name and
behalf on or as of the date first written above.
ATTEST CITY OF ST. JOSEPH
By By
Judy Weyrens Rick Schultz
City Administrator Mayor
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DEVELOPER
BAYOU ALLEY FLATS, LLC.
By
Jon Petters
Chief Manager ,
STATE OF MINNESOTA )
)ss
COUNTY OF STEARNS )
This instrument was acknowledged before me on , 2017 by Rick
Schultz and Judy Weyrens, the Mayor and City Administrator respectively, of the City of St.
Joseph a Minnesota municipal corporation, on behalf of said City.
NOTARIAL STAMP OR SEAL
(OR OTHER TITLE OR RANK)
SIGNATURE OF NOTARY PUBLIC
OR OTHER OFFICIAL
STATE OF MINNESOTA )
� )ss
COUNTY OF )
On this day of , 2017 , before me, a notary public within and for
said County,personally appeared Jon Petters,to me personally known,who,being each by me
duly sworn, did say that he is the Chief Manager of the company named in the foregoing
instrument, and acknowledged said instrument to be the free act and deed of said company.
NOTARIAL STAMP OR SEAL (OR
OTHER TITLE OR RANK)
SIGNATURE OF NOTARY PUBLIC
OR OTHER OFFICIAL
THIS DOCUMENT DRAFTED BY:
City of St. Joseph
75 Callaway St E
St. Joseph MN 56374
Telephone: (320) 363-7201
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DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF ST.JOSEPH,MINNESOTA
AND
BAYOU ALLEY FLATS,LLC
This document drafted by: BRIGGS AND MORGAN(MLn
Professional Association
2200 First National Bank Building
St.Paul,Minnesota.55101
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Table of Contents
Page
ARTICLE 1 DEFINITIONS.......................................................................................................2
Section1.1 Definitions..................................................................................................2
ARTICLE 2 REPRESENTATIONS AND WARRANTIES......................................................4
Section 2.1 Representations and Warranties of the City...............................................4
Section 2.2 Representations and Warranties of the Developer.....................................4
ARTICLE 3 UNDERTAKINGS BY DEVELOPER AND CITY.............................................6
Section 3.1 Project,Development Property and Site Improvements............................6
Section 3.2 Limitations on Undertaking of the City.....................................................6
Section 3.3 Reimbursement: TIF Note.........................................................................6
Section 3.4 Business Subsidies Act..............................................................................7
ARTICLE 4 EVENTS OF DEFAULT.......................................................................................9
Section 4.1 Events of Default Defined.......................:.................................................9
Section 4.2 Remedies on Default..................................................................................9
Section 4.3 No Remedy Exclusive.............................................................................. 10
Section 4.4 No Implied Waiver.................................................................................. 1Q
Section 4.5 Agreement to Pay Attorney's Fees and Expenses.................................... 1Q
Section 4.6 Indemnification of City............................................................................ 10
ARTICLE 5 ADDI'I'IONAL PROVISIONS............................................................................ 12
Section 5.1 Restrictions on Use.................................................................................. 12
Section 5.2 Conflicts of Interest.................................................................................. 12
Section 5.3 Titles of Articles and Sections................................................................. 12
Section 5.4 Notices and Demands.............................................................................. 12
Section 5.5 Counterparts............................................................................................. 13
Section5.6 La.w Governing........................................................................................ 13
Section5.7 Expiration................................................................................................. 13
Section 5.8 Provisions 5urviving Rescission or Expiration........................................ 13
Section 5.9 Assignability of Agreement..................................................................... 13
EXHIBIT A Description of Development Property..................................................................A-1
E3�iIBIT B Form of TIF Note..................................................................................................B-1
EXHIBIT C Site Improvements.................................................................................................C-1
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DEVELOPMENT AGREEMENT
THIS AGREEMENT, made as of the lOth day of November, 2014, by and between the
City of St. Joseph, Minnesota(the "City"), a municipal corporation organized and existing under
the laws of the State of Minnesota and Bayou Alley Flats, LLC (the "Developer"), a Minnesota
limited liability company under the laws of the United States of America.
WiTNESSETH:
WHEREAS, pursuant to Minnesota Statutes, Section 469.124 through 469.133, the City
has heretofore established Development District No. 2 (the "Development District") and has
adopted a development program therefor(the "Development Program");and
WHEREAS, pursuant to the provisions of Minnesota Statutes, Section 469.174 through
469.1794, as amended(hereinafter, the "Tax Increment Act"), the City has heretofore established
within the Development District, Tax Increment Financing District No. 2-3 (the "Tax Increment
District"), and has adopted a tax increment financing plan therefor (the "Tax Increment Plan")
which provides for the use of tax increment financing in connection with certain development
within the Development District; and
WHEREAS, in order to achieve the objectives of the Development Program and
particularly to make the land in the Development District available for development by private
enterprise in conformance with the Development Program, the City has detenmined to assist the
Developer with the financing of certain costs of a Project (as hereinafter defined) to be
constructed within the Tax Increment District as more particularly set forth in this Agreement;
and
WHEREAS, the City believes that the development and construction of the Project, and
fulfillment of this Agreement are vital and are in the best interests of the City, the health, safety,
morals and welfare of residents of the City, and in accordance with the public purpose and
provisions of the applicable state and local laws and requirements under which the Project has
been undertaken and is being assisted; and
WHEREAS, the requirements of the Business Subsidy Law, Mi�esota Statutes, Section
116J.993 through 116J.995,apply to this Agreement; and
WHEREAS, the City has adopted criteria for awarding business subsidies that comply
with the Business Subsidy Law, after a public hearing for which notice was published; and
WHEREAS, the Council has approved this Agreement as a subsidy agreement undcr the
Business Subsidy Law.
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:
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ARTICLE 1
DEFINITIONS
Section 1.1 Definitions. All capitalized terms used and not otherwise defined herein
shall have the following meanings unless a different rneaning clearly appears from the context:
Agreement means this Agreement, as the same may be from time to time modified,
amended or supplemented;
Business Dav means any day except a Saturday, Sunday or a legal holiday or a day on
which banking institutions in the City are authorized by law or executive order to close;
C�means the City of St.Joseph,Minnesota,its successors and assigns;
Coun means Stearns County,Minnesota;
Developer means Bayou Alley Flats,LLC, its successors and assigns;
Develapment District means the real property included in the Development Program for
Development District No. 2 heretofore established;
Development Prog�means the development program approved in connection with the
Development District;
Development Propertv means the real property described in Exhibit A attached to this
Agreement;
Event of Default means any of the events described in Section 4.1 hereof;
Legal and Administrative Exnenses means the fees and expenses incurred by the City in
connection with the adoption and administration of the Ta�c Increment Financing Plan, the
preparation of this Agreement and the issuance of the TIF Note;
Note Pavment Date means August 1, 2017, and each February 1 and August 1 of each
year thereafter to and including February 1, 2036; provided, that if any such Note Payment Date
should not be a Business Day, the Note Payment Date shall be the next succeeding Business
Day;
Phase I Project means the redevelopment of Parcel Identification Numbers (PIN)
84.53867.000 and 84.53733.0152. The Developer will construct and maintain a three story
mixed use structure that will have commercial/retail space on the main floor and 10 one-bedroom
and four two-bedroom traditional apartment dwelling units on the second and third level. Office
space may comprise a portion of the second story. Traditional apartment dwelling units do not
include hotels, motels or extended stay lodging uses. This phase will also involve the
construction of 14 garage stalls and renovation of an existing building for use as an art gallery;
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Phase II Project means the redevelopment of PIN 84.53876.000 and construction of a
housing project consisting of four for sale condominiums units.
Prime Rate means the rate of interest from time to time publicly announced by U.S. Bank
National Association in St. Paul, Minnesota, as its "prime rate" or "reference rate" or any
successor rate,which rate shall change as and when that rate or successor rate changes;
Pr_ oject means collectively the Phase I Project and the Phase II Project;
Site Improvements means the site improvements to be undertaken in connection with the
Phase I Project,more particularly described on E�chibit C attached hereto;
State means the State of Minnesota;
T� Increment Act means Minnesota Statutes, Sections 469.174 through 469.1794, as
amendcd;
Tax Increment District means Tax Increment Financing District No. 2-3, located within
the Development District, a description of which is set forth in the Tax Increment Financing
Plan,which was qualified as a redevelopment district under the Tax Increment Act;
Tax Increment Financin� Plan means the tax increment financing plan approved for the
Ta1c Increment District by the City Council on November 10, 2014, and any future amendments
thereto;
TIF Note means the Tax Increment Revenue Note (Bayou Alley Flats Project) to be
executed by the City and delivered to the Developer pursuant to Article III hereof, a copy of
which is attached hereto as Exhibit B;
T� Increments means 90% of the tax increments derived from the Development
Property which have been received and retained by the City in accordance with the provisions of
Minnesota Statutes,Section 469.177;
Termination Date means the earlier of (i) February 1, 2036, (ii) the date the
Reimbursement Amount is paid in full, (iii) the date on which the Tax Increment District expires
or is otherwise terminated, or (iv) the date this Agreement is terminated or rescinded in
accordance with its terms; and
Unavoidable Delavs means delays, outside the control of the party claiming its
occurrence, which are the direct result of strikes, other labor troubles, unusually severe or
prolonged bad weather, acts of God, fire or other casualty to the Project, litigation commenced
by third parties which, by injunction or other similar judicial action or by the exercise of
reasonable discretion, directly results in delays, or acts of any federal, state or local
governmental unit(other than the City)which directly result in delays.
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES
Section 2.1 Rearesentations and Warranties of the Citv. The Ciry makes the following
representations and warranties:
(1) The City is a municipal corporation and has the power to enter into this
Agreement and carry out its obligations hereunder.
(2) The Tax Increment District is a"redevelopment district"within the meaning of
Minnesota Sta.tutes, Section 469.174,Subdivision 10,and was created, adopted and approved in
accordance with the terms of the Tax Increment Act.
(3) The development contemplated by this Agreement is in conformance with the
development objectives set forth in the Development Pragram.
(4) To finance certain costs within the Tax Increment District,the City proposes,
subject to the further provisions of this Agreement,to apply Tax Increments to reimburse the
Developer for a portion of the costs of acquisition of the Development Property and a portion of
the costs of construction of Site Improvements incurred in connection with the Phase I Project as
further provided in this Agreement.
(5) The City makes no representation or warranty,either express ar implied, as to the
Development Property or its condition or the soil conditions thereon,or that the Development
Property shall be suitable for the Developer's purposes or needs.
Section 2.2 Representations and Warranties of the Developer. The Developer makes
the following representations and warranties:
(1) The Developer is a Minnesota limited liability company and has the power and
authority to enter into this Agreement and to perform its obligations hereunder, and doing so will
not violate its articles of organization,member control agreement or operating agreement,or the
laws of the State and by proper action has authorized the execution and delivery of this
Agreement.
(2) The Developer shall cause the Project to be constructed in accordance with the
terms of this Agreement,the Development Program, and all local,state and federal laws and
regulations(including,but not limited to,environmental,zoning, energy conservation,building
code and public health laws and regulations).
(3) The construction of the Project would not be undertaken by the Developer, and in
the opinion of the Developer would not be economically feasible within the reasonably
foreseeable future,without the assistance and benefit to the Developer provided for in this
Agreement.
(4) The Developer will use its best efforts to obtain, or cause to be obtained, in a
timely manner, all required permits, licenses and approvals,and will meet, in a timely manner,
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all requirements of all applicable local,state, and federal laws and regulations which must be
obtained or met before the Project may be lawfully constructed.
(5) 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 provision of any contractual restriction,evidence 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.
(6) The Developer will cooperate fully with the City with respect to any litigation
commenced with respect to the Project.
(7) The Developer will cooperate fully with the City in resolution of any traffic,
parking,trash removal or public safety problems which may arise in connection with the
construction of the Project.
(8) The Developer shall commence construction of the Phase I Project no later than
May 1,2015,and barring Unavoida.ble Delays,the Phase I Project will be substantially
completed by December 31,2016. The Developer shall commence construction af the Phase II
Project upon the presale of three condominium units of the Phase II Project.
(9) The Developer acknowledges that Tatc Increment projections contained in the Tax
Increment Financing Plan are estimates only and the Developer acknowledges that it shall place
no reliance on the amount of projected Tax Increments and the sufficiency of such Tax
Increments ta reimburse the Developer for a portion of the costs of the acquisition of the
Development Property and a portion of the costs of the Site Improvements as provided in Article
III.
(10) The Developer will not seek a reduction in the market value as determined by the
Stearns County Assessor of the Project or other facilities,if any,that it constructs on the
Development Property,pursuant ta the provisions of this Agreement,for so long as the TIF Note
remains outstanding.
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ARTICLE 3
UNAERTAKINGS BY DEVELOPER AND CITY
Section 3.1 Project Develo�ment Pronertv and Site Improvements.
(1) The parties agree that the acquisition of the Development Property and the
installation of the Site Improvements is essential to the successful completion of the Project. The
costs of the Development Properiy and the Site Improvements shall be paid by the Developer.
The City shall reimburse the Developer for the lesser of$642,000 or the costs of acquisition of
the Development Property and the construction of 5ite Improvements for the Phase I Project
actually incurred and paid by the Developer(the"Reimbursement Amount"),as further provided
in Section 3.3 hereof.
(2) The Developer shall reimburse the City for its actual out of pocket Legal and
Administrative Expenses incurred in connection with the adoption of the Tax Increment
Financing Plan and the preparation of this Agreement.
Section 3.2 Limitations on Undertakin�of the Citv. Notwithstanding the provisions
of Sections 3.1,the City shal�have no obligation to the Developer under this Agreement to
reimburse the Developer for the Reimbursement Amount,if the City,at the time or times such
payment is to be made is entitled under Section 4.2 to exercise any af the remedies set forth
therein as a result of an Event of Default which has not been cured.
Section 3.3 Reimbursement: TIF Note. The City shall reimburse the payments made
by the Developer under Section 3.1 for the Reimbursement Amount through the issuance of the
City's TIF Note in substantiatly the form attached to this Agreement as Exhibit B, subject to the
following conditians:
(1) The TIF Note shall be dated,issued and delivered when the Developer shall have
demonstrated in writing to the reasonable satisfaction of the City that the construction of the Site
Improvements has been completed and that the Developer has incurred and paid the costs of the
acquisition of the Development Properiy and of the construction of Site Improvements for the
Phase I Project and a settlement statement or other evidence of payment of the costs of the
Development Property,as described in and limited by Section 3.1 and shall have submitted paid
invoices for the costs of construction of the Site Improvements and a settlement statement or
other evidence of payment of the costs of the Development Property in an amount not less than
the Reimbursement Amount.
(2) The unpaid principal of the TIF Note shall bear simple,non-compounding interest
from the date of issuance of the TIF Note,at 4.00%per annum. Interest shall be computed on
the basis of a 360 day year consisting of twelve(12)30-day months.
(3) The principal amount of the TIF Note and the interest thereon shall be payable
solely from the Tax Increments.
(4) On each Note Payment Date and subject to the provisions of the TIF Note,the
City shall pay,against the principal and interest outstanding on the TIF Note, any Tax
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Increments received by the City during the preceding 6 months. All such payments shall be
applied first to accrued interest and then to reduce the principal of the TIF Note.
(5) The TIF Note shall be a special and limited obligation of the City and not a
general obligation of the City,and only Tax Increments shall be used to pay the principal and
interest on the TIF Note.If,on any TIF Note Payment Date,the Tax Increments for the payment
of the accrued and unpaid interest on the Tff Note are insufficient for such purposes,the
difference shall be carried forward,without interest accruing thereon,and shall be paid if and to
the extent that on a future TIF Note Payment Date there are Taac Increments in excess of the
amounts needed to pay the accrued interest then due on the TIF Note.
(6) The City's obligation to make payments on the TIF Note on any Note Payment
Date or any date thereafter shall be conditioned upon the requirements that(A)there shall not at
that time be an Event of Default that has occurred and is continuing under this Agreement and
(B)this Agreement shall not have been rescinded pursuant to Section 4.2.
(7) The TIF Note shail be governed by and payable pursuant to the additional terms
thereof,as set forth in Exhibit B. 1n the event of any conflict between the terms of the TIF Note
and the terms of this Section 3.3,the terms of the TIF Note shall govern. The issuance of the
TIF Note pursuant and subject to the terms of this Agreement,and the taking by the City of such
additional actions as bond counsel for the TIF Note may require in connection therewith, are
hereby authorized and approved by the City.
Section 3.4 Business Subsidies Act.
(1) In order to satisfy the provisions of Minnesota Statutes, Sections 116J.993 to
116J.995(the"Business Subsidies Act"),the Developer acknowledges and agrees that the
amount of the"Business Subsidy"granted to the Developer under this Agreement is$642,000
which is the Reimbursement Amount for the acquisition of the Development Property and the
installation of the Site Improvements and that the Business Subsidy is needed because the Phase
I Project is not su�iciently feasible for the Developer to undertake without the Business Subsidy.
The Tax Increment District is an redevelopment district and the public purpose of the Business
Subsidy is to encourage the demolition of substandard structures and the construction of
commercial/retail facilities in the City. The Developer agrees that it will meet the following
gaals(the"Goals")in connection with the development of the Phase I Project. It will create at
least one(1)full time jabs at an hourly wage and benefits totaling of at least$15.83 per hour
within two years from the"Benefit Date",which is the earlier of the date the Developer
completes or occupies the Phase I Project.
(2) If the Goals are not met,the Developer agees to repay all or a part of the
Business Subsidy to the City,plus interest("Interest")set at the implicit price deflator defined in
Minnesota Statutes, Section 275.70,Subdivision 2,accruing from and after the Benefit Date,
compounded semiannually. If the Goa1s are met in part,the Developer will repay a portion of
the Business Subsidy(plus Interest)determined by multiplying the Business Subsidy by a
fraction, the numerator of which is the number of jobs in the Goals which were not created at the
wage level set forth above and the denominator of which is one(1)(i.e.number of jobs set forth
in the Goals).
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(3) The Developer agrees to(i)report its progress on achieving the Goals to the City
until the later of the date the Goals are met or two years from the Benefit Date,or,if the Goa1s
are not met,until the date the Business Subsidy is repaid,(ii)include in the report the
information required in Minnesota Statutes,Section 116J.994, Subdivision 7 on forms developed
by the Minnesota Department of Employment and Economic Development, and(iii) send
completed reports to the City. The Developer agrees to file these reports no later than March 1
of each year commencing March 1,2016,and within 30 days after the deadline for meeting the
Goals. The City agrees that if it does not receive the reports,it will mail the Developer a
warning within one week of the required filing date. If within 14 days of the post marked date of
the warning the reports are not made,the Developer agrees to pay to the City a penalty of$100
for each subsequent day until the report is filed up to a maximum of$1,000.
(4) The Developer agrees to continue operations within the City for at least five(5)
years after the Benefit Date.
(5) There are no other state or local government agencies providing financial
assistance for the Project other than the City and the demolition grants in the amount of$5,000
from the St. Joseph Economic Development Authority.
(6) There is no parent corporation of the Developer.
(7) The Developer certifies that it does not appear on the Minnesota Department of
Employrnent and Economic Development's list of recipients that have failed to meet the terms of
a business subsidy agreement.
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ARTICLE 4
EVENTS OF DEFAULT
Section 4.1 Events of Default Defined. T'he following shall be"Events of Default"
under this Agreement and the term"Event of Default" sha11 mean whenever it is used in this
Agreement any one or more of the following events:
(a) Failure by the Developer to timely pay any ad valorem real property ta�ces
assessed and special assessments or other City charges with respect to the Development
Property while such property is owned by Developer.
(b) Failure of the Developer to observe or perform any covenant,condition,
obligation or agreement on its part to be observed or performed under this Agreement.
(c) The holder of any mortgage on the Development Property or any
improvements thereon,or any portion thereof,commences foreclosure proceedings as a
result of any default under the applicable mortgage documents.
(d) If the Developer shall
(A) file any petition in bankruptcy or for any reorganization,
arrangement, composition,readjustment,liquidation,dissolution,or similar relief
under the United States Bankruptcy Act of 1978,as amended or under any similar
federal or state law;or
(B) rnake an assignment for the benefit of its creditors;or
(C) admit in writing its inability to pay its debts generally as they
becorne due;or
(D) be adjudicated a bankrupt or insolvent;or if a petition or answer
proposing the adjudication of the Developer as bankrupt or its reorganization
under any present or future federal bankruptcy act or any similar federal or state
law shall be filed in any court and such petition or answer shall not be discharged
or denied within sixty(60)days after the filing thereof; or a receiver,liquidator or
trustee of the Developer,or of the Project,or part thereof,shall be appointed in
any proceeding brought against the Developer,and shall not be discharged within
sixty(64)days after such appointment,or if the Developer,sha11 consent to or
acquiesce in such appointment.
Section 4.2 Remedies on Default. Whenever any Event of Default referred to in
Section 4.1 occurs and is conrinuing,the City, as specified below,may take any one or more of
the following actions after the giving of thirty(30)days'written notice to the Developer,but only
if the Event of Default has not been cured within said thirty(30)days:
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(a) The City may suspend its performance under this Agreement and the TIF
Note until it receives assurances from the Developer,deemed adequate by the City,that
the Developer will cure its default and continue its performance under this Agreement.
(b) The City may cancel and rescind the Agreement and the TIF Note.
(c) The City may take any action,including legal or administrative action,in
law or equity,which may appear necessary or desirable to enforce per:formance and
observance of any obligation,agreement,or covenant of the Developer under this
Agreement.
Section 4.3 No Remedv Exclusive. No remedy herein conferred upon or reserved to
the City 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 ri�ht 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.
Section 4.4 No Implied Waiver. In the event any agreement contained in this
Agreement should be breached by any party and thereafter waived hy any other party,such
waiver shall be limited to the particular breach so waived and shall not be deemed to waive any
other concurrent,previous or subsequent breach hereunder.
Section 4.S Agreement to Pav Attomev's Fees and Exnenses. Whenever any Event of
Default occurs and the City shall employ attorneys or incur other expenses for the collection of
payments due or to become due or for the enforcement or performance or observance of any
obligation or agreement on the part of the Developer herein contained,the Developer agrees that
it shall,on demand therefor,pay to the City the reasonable fees of such attorneys and such ather
expenses so incurred by the City.
Section 4.6 Indemnification of Citv.
(1) The Developer(a)releases the City and its governing body members,officers,
agents,including the independent contractors,consultants and legal counsel,servants and
employees(collectively,the"Indemni�ed Parties")from,(b)covenants and agrees that the
Indemnified Parties shall not be liable for,and(c)agrees to indemnify and hold harmless the
Indemnified Parties against,any claim,cause of action,suit or liability for 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 Project or on the Development Property.
(2) Except for any willful misrepresentation or any willful or wanton misconduct of
the Indemni�ed Parties,the Developer agrees to protect and defend the Indemnified Farties,now
and 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 the actions or inactions of the Developer(or if other persons acting on its behalf or
under its direction or control)under this Agreement,or the transactions contemplated hereby or
the acquisition,construction,installation,ownership,and operation of the Project;provided,that
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this indemnification shall not apply to the warranties made or obligations undertaken by the City
in this Agreement or to any actions undertaken by the City which are not contemplated by this
Agreement,but shall,in any event and without regard to any fault on the part of the City, apply
to any pecuniary loss or penalty(including interest thereon from the date the loss is incurred or
penalty is paid by the City at a rate equal to the Prime Rate)as a result of the Project causing the
T�Increment District to not qualify or cease to qualify as a redevelopment district"under
Section 469.174, Subdivision 10,of the Act and Section 469.176, Subdivision 4(j). or to violate
limitations as to the use of Tax Increments as set forth in Section 469.176, Subdivision 4(j).
(3) All covenants,stipulations,promises,agreements and obligations of the City
contained herein shall be deemed to be the covenants, stipulations,promises,agreements and
obligaxions of the City and not of any governing body member,officer,agent,servant or
employee of the City.
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ARTICLE 5
ADDITIONAL PROVISIONS
Section 5.1 Restrictions on Use. Until terxnination of this Agreement,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 operate,or
cause to be operated,the Project as a housing/retaiUcommercial facility and shall devote the
Development Properry to,and in accordance with,the uses specified in this Agreement.
Section 5.2 Conflicts of Interest. No member of the governing body or other offcial
of the City shall have any financial interest,direct or indirect,in this Agreement,the
Development Property or the Froject,or any contract,agreement or other transaction
contemplated to occur or be undertaken thereunder or with respect thereto,nor shall any such
member of the governing body or other official participate in any decision relating to the
Agreement which affects his or her personal interests or the interests of any carporation,
partaership or association in which he or she is directly or indirectly interested. No member,
official or employee of the City shall be personally liable to the City in the event of any default
or breach by the Developer or successor or on any obligatians under the terms of this Agreement.
Section 5.3 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 5.4 Notices and Demands. Except as otherwise expressly provided in this
Agreement,a notice,demand or other communication under this Agreement by any party to any
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 tke case of the Developer is addressed to or delivered personally to:
Bayou Alley Flats,LLC
Attention:Jon Petters
15 East Minnesota Street
Suite 104
St.Joseph,Minnesota 56374
(b) in the case of the City is addressed to or delivered personally to the City
at:
City of St.Joseph,Minnesata
Attention: Administrator
St.Joseph City Hall
25 College Avenue North
P.O.Box 668
St.Joseph,Minnesota 56374-0668
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with a copy to:
Briggs and Morgan,P.A.
Attention: Mary Ippel
W2200 First National Bank Building
332 Minnesota Street
St.Paul,MN 55101
or at such other address with respect to any such party as that party rnay, from time to time,
designate in writing and forward to the other,as provided in this Section.
Section 5.5 Counterparts. This Agreement may be executed in any number of
counterparts,each of which shall constitute one and the same instrument.
Section 5.6 Law Governing. This Agreement will be govemed and construed in
accordance with the laws of the State.
Section 5.7 Expiration. This Agreement shall expire on the Termination Date.
Section 5.8 Provisions Surviving.Rescission or Expiration. Sections 3.3,4.5 and 4.6
shall survive any rescission,termination or expiration of this Agreement with respect to or
arising out of any event,occurrence or circumstance existing prior to the date thereof.
Section 5.9 Assi ability of Asreement. This Agreement may be assigned only with
the consent of the City. The TIF Note may only be assigned pursuant to the terms of the TIF
Note.
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IN WITNESS WHEREOF,the City has caused this Agreement to be duly executed in its
name and on its behalf the Developer has caused this Agreement to be duly executed in its name
and on its behalf,on or as of the date first above written.
CITY OF ST.JOSEPH,MINNESOTA
By �
Its Mayor
S
Its � 'stra r
This is a signature page to the Development Agreement by and between the City of St. Joseph
and Bayou Alley Flats,LLC.
S-1
6658784v4
BAYOU ALLEY FLATS,LLC
By �
Its
This is a signature page to the Development Agreement by and between the City of St. Joseph
and Bayou Alley Flats,LLC.
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EXHIBIT A
Description of Development Property
Property located in the City of St. Joseph, Stearns County, Minnesota with the following Parcel
Identification Numbers:
Phase I Project
84.53867.0000
84.53733.0152
Phase II Project
84.53$76.0000
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EXHIBIT B
Form of TIF Note
No.R-1 $
iJNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF STEARNS
CITY OF ST. JOSEPH
TAX INCREMENT REVENUE NOTE
(BAYOU ALLEY FLATS PROJECT)
The City of St. Joseph,Minnesota(the "City"), hereby acknowledges itself to be indebted
and, for value received, hereby promises to pay the amounts hereinafter described(the "Payment
Ainounts") to Bayou Alley Flats, LLC (the "Developer") or its registered assigns (the
"Registered Owner"), but only in the manner, at the times, from the sources of revenue, and to
the extent hereinafter provided.
The principal amount of this Note shall equal from time to time the principal amount
stated above, as reduced to the extent that such principal installments shall have been paid in
whole or in part pursuant to the terms hereof; provided that the sum of the principal amount
listed above shall in no event exceed $642,000 as provided in that certain Development
Agreement, dated as of November 10, 2014 as the same may be amended from time to time (the
"Development Agreement"), by and between the City and the Developer. The unpaid principal
amount hereof shall bear interest from the date of this Note at the simple non-compounded rate
of four and zero hundredths percent(4.00%) per annum. Interest shall be computed on the basis
of a 360 day year consisting of twelve(12)30-day months.
The amounts due under this Note shall be payable on August 1, 2017, and on each
February 1 and August 1 thereafter to and including February 1, 2036, or, if the first should not
be a Business Day (as defined in the Development Agreement), the next succeeding Business
Day(the "Payment Dates"). On each Payment Date the City shall pay by check or draft mailed
to the person that was the Registered Owner of this Note at the close of the last business day of
the City preceding such Payment Date an amount equal to the sum of the Ta�c increments
(hereinafter defined) received by the City during the six month period preceding such Payment
Date. All payments made by the City under this Note shall first be applied to accrued interest
and then to principal.
The Payment Amounts due hereon shall be payable solely from 90% of ta�c increments
(the "Tax Increments"} from the Development Property (as defined in the Development
Agreement) within the City's Tax Increment Financing District No. 2-3 (the "Tax Increment
District") within its Development District No. 2 which are paid to the City and which the City is
entitled to retain pursuant to the provisions of Minnesota Statutes, Sections 469.174 through
469.1794, as the same may be amended or supplemented from time to time (the "Tax Increment
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Act"). This Note shall terminate and be of no further force and effect following the last Payment
Date defined above, on any date upon which the City shall have terminated the Development
Agreement under Section 4.2(b)thereof or the Developer shall have terminated the Development
Agreement under Article V thereof, on the date the Tax Increment District is terminated, or on
the date that all principal and interest payable hereunder shall have been paid in full, wt►ichever
occurs earliest.
The Tax Increment District includes properties other than the Development Property and
Stearns County remits Tax Increment to the City on the basis of the Captured Tax Capacity of
the entire Tax Increment District. For purposes of this Taac Increment Revenue Note, the City
will determine Tax Increment generated from the Development Property and improvemenls
thereon in its sole discretion.
The City makes no representation or covenant, express or implied, that the Tax
Increments will be sufficient to pay, in whole or in part, the amounts which are or may become
due and payable hereunder.
The City's payment obligations hereunder shall be further conditioned on the fact that no
Event of Default under the Development Agreement shall have occurred and be continuing at the
time payment is otherwise due hereunder, but such unpaid amounts shall become payable if said
Event of Default shall thereafter have been cured; and, further, if pursuant to the occurrence of
an Event of Default under the Development Agreement the City elects to cancel and rescind the
Development Agreement, the City shall have no further debt or obligation under this Note
whatsoever. Reference is hereby made to all of the provisions of the Development Agreement,
including without limitation Section 3.3 thereof, for a fuller statement of the rights and
obligations of the City to pay the principal of this Note, and said provisions are hereby
incorporated into this Note as though set out in full herein.
This Note is a special, limited revenue obligation and not a general obligation of the City
and is payable by the City only from the sources and subject to the qualifications stated or
referenced herein. This Note is not a general obligation of the City and neither the full faith and
credit nor the taxing powers of the City are pledged to the payment of the principal of this Note
and no property or other asset of the City, save and except the above-referenced Tax Increments,
is or shall be a source of payment of the City's obligations hereunder.
This Note is issued by the City in aid of financing a project pursuant to and in full
conformity with the Constitution and laws of the State of Minnesota, including the Taac
Increment Act.
T'his Note may be assigned only with the consent of the City which shall not be
reasonably withheld. In order to assign the Note, the assignee shall surrender the same to the
City either in exchange for a new fully registered note or for transfer of this Note on the
registration records for the Note maintained by the City. Each penmitted assignee shall take this
Note subject to the foregoing conditions and subject to all provisions stated or referenced herein.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things
required by the Consritution and laws of the State of Minnesota to be done, to have happened,
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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 City outstanding on the date
hereof and on the date of its actual issuance and delivery,does not cause the indebtedness of the
City to exceed any constitutional or statutory limitation thereon.
IN WITNESS WHEREOF,City of St.Joseph,Minnesota,by its City Council,has caused
this Note to be executed by the manual signatures of its Mayor and Administrator and has caused
this Note to be da.ted as of
Administrator Mayor
DO NOT EXECUTE UNTIL PAID INVOICES FOR LAND ACQUISITION AND SITE
IMPROVEMENTS ARE GIVEN TO THE CITY-REFER TO SECTION 3.3(1).
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CERTIFiCATION OF REGISTRATION
It is hereby certified that the foregoing Note was registered in the name of Bayou Alley
Flats, LLC, and that, at the request of the Registered Owner of this Note, the undersigned has
this day registered the Note in the name of sucb Registered Owner, as indicated in the
registration blank below,on the books kept by the undersigned for such purposes.
NAME AND ADDRESS OF DATE OF SIGNATURE OF CITY
REGISTERED OWNER REGISTRATION ADMINISTRATOR
Bayou Alley Flats,LLC
15 East Minnesota Street
Suite 104
St.Joseph,Minnesota 56374
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EXHIBIT C
Site Improvements
Landscaping,including irrigation
Grading/earthwork
Demolition
Survey
Environmental Testing
Soil Borings
Site Preparation
Onsite Utilities
Storm Water/Ponding
Outdoor Lighting
Onsite Raatl,Curb,Gutter,Driveway,Sidewalk and Streetscape Improvements
Parking
Renovate Studio Building
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