Recorded Contract for Development EDA and Roers HarlowDocument Number: A781277
Filed and/or Recorded on
Jan 2, 2025 4:07 PM
Office of the County Recorder/Registrar of Titles
Carver County, Minnesota
Kaaren Lewis, County Recorder
Deputy TH
Document Recording Fees $ 46.00
Document Total $ 46.00
Requesting Party: Guaranty Commercial Title Inc
Pages: 58
This cover page has been added to this document by Carver County Land Records
and is now an official part of this recorded document
Execution Copy
CONTRACT
FOR
PRIVATE DEVELOPMENT
By and Between
THE CHANHASSEN ECONOMIC DEVELOPMENT AUTHORITY
and
ROERS CHANHASSEN HARLOW APARTMENTS OWNER LLC
This document drafted by:
KENNEDY & GRAVEN, CHARTERED (RHB)
150 South Fifth Street
Suite 700
Minneapolis, MN 55402
(612) 337-9300
Return to:
Guaranty Commercial Title, Inc.
465 Nicollet Mall, Suite 230
Minneapolis, MN 55401
CH135-65-956439.v3
TABLE OF CONTENTS
PAGE
PREAMBLE....................................................................................................................................1
ARTICLE I
Definitions
Section1.1. Definitions................................................................................................................2
Section1.2. Exhibits...................................................................................................................5
Section 1.3. Rules of Interpretation............................................................................................5
ARTICLE H
Representations and Warranties
Section 2.1. Representations by the EDA....................................................................................6
Section 2.2. Representations and Warranties by the Developer..................................................6
ARTICLE III
Acquisition of Development Property; Public Assistance
Section 3.1. Acquisition of Development Property.....................................................................8
Section 3.2. Issuance of Pay -As -You -Go Note...........................................................................8
Section 3.3. Conditions Precedent to Issuance of the Note.........................................................8
Section3.4. Records....................................................................................................................9
Section 3.5. Lookback Provisions and Reduction of Note..........................................................9
Section3.6. Business Subsidy...................................................................................................12
ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Minimum Improvements.............................................................12
Section 4.2. Preliminary Plans and Construction Plans.............................................................12
Section 4.3. Commencement and Completion of Construction.................................................13
Section 4.4. Certificate of Completion......................................................................................13
Section 4.5. Compliance with Labor Laws................................................................................14
Section 4.6. Completion of Second Building.............................................................................15
ARTICLE V
Insurance
Section 5.1. Insurance ....................
Section 5.2. Evidence of Insurance
.........15
.........15
1
CH135-65-956439.v3
ARTICLE VI
Payment of Taxes; Assessment Agreement; Use of Tax Increment
Section6.1. Taxes......................................................................................................................16
Section 6.2. Assessment Agreement..........................................................................................17
Section 6.3. Suspension or Reduction of Payment on Note......................................................17
Section 6.4. Right to Collect Delinquent Taxes and Special Assessments................................18
Section 6.5. Use of Tax Increment.............................................................................................18
ARTICLE VII
Restrictions on Sale of Minimum Improvements; Termination of Agreement
Section 7.1. Prohibition Against Sale of Minimum Improvements...........................................18
Section 7.2. Termination of Agreement.....................................................................................19
ARTICLE VIII
Events of Default
Section 8.1. Events of Default Defined.....................................................................................19
Section 8.2. Remedies on Default..............................................................................................20
Section 8.3. Remedies after Certificate of Completion.............................................................20
Section 8.4. No Remedy Exclusive............................................................................................21
Section 8.5. No Additional Waiver Implied by One Waiver.....................................................21
Section 8.6. Acceptance of Third -Party Cure............................................................................21
ARTICLE IX
Additional Provisions
Section 9.1.
Conflict of Interests; Representatives Not Individually Liable .............................21
Section 9.2.
Equal Employment Opportunity............................................................................21
Section 9.3.
Restrictions on Use................................................................................................22
Section 9.4.
Notices and Demands............................................................................................22
Section9.5.
Counterparts...........................................................................................................22
Section 9.6.
Disclaimer of Relationships...................................................................................22
Section9.7.
Amendment............................................................................................................23
Section 9.8.
Recording; Agreement Runs with the Land...........................................................23
Section 9.9.
Release and Indemnification Covenants................................................................23
Section 9.10.
Titles of Articles and Sections...............................................................................23
Section 9.11.
Governing Law; Venue..........................................................................................23
Section 9.12.
Fees and Charges...................................................................................................23
TESTlMONIUM............................................................................................................................24
SIGNATURES......................................................................................................................... 24-25
EXHIBIT A LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY
EXHIBIT B LIST OF PRELIMINARY PLANS
EXHIBIT C FORM OF CERTIFICATE OF COMPLETION
EXHIBIT D FORM OF AUTHORIZING RESOLUTION WITH NOTE
ii
CH135-65-956439.v3
EXHIBIT E FORM OF INVESTMENT LETTER
EXHIBIT F PROFORMA, LOOKBACK AND TOTAL DEVELOPMENT COSTS
EXHIBIT G FORM OF ASSESSMENT AGREEMENT
iii
CH135-65-956439A
CONTRACT FOR PRIVATE DEVELOPMENT
This Contract for Private Development (the "Agreement") is made this Z V day of
Vl , 2024, by and between the Chanhassen Economic Development Authority, a
public body corporate and politic under the laws of Minnesota, having its principal office at 7700
Market Boulevard, Chanhassen, Minnesota 55317 (the "Chanhassen Economic Development
Authority" or the "EDA"), and Roers Chanhassen Harlow Apartments Owner LLC, a Delaware
limited liability company, having its principal office at Two Carlson Parkway North, Suite 400,
Plymouth, Minnesota 55447 (the "Developer").
WITNESSETH:
WHEREAS, the City of Chanhassen (the "City") and the EDA previously established the
Downtown Chanhassen Redevelopment Project Area and adopted a Redevelopment Plan to
encourage development and redevelopment in a portion of the community; and
WHEREAS, the EDA finds that it is in the public interest, helpful for the tax base and
beneficial for the health, safety and welfare of the community as a whole to promote mixed use
development in the community in locations where it is compatible with surrounding land uses; and
WHEREAS, the EDA finds that, due to market conditions which exist today and are likely
to persist for the foreseeable future, the private sector alone is not able to accomplish construction
of mixed use developments and, therefore, such will not occur without public intervention; and
WHEREAS, in order to foster the redevelopment described above, the EDA and the City
intend to modify the Redevelopment Plan for the Downtown Chanhassen Redevelopment Project
Area to more fully implement the goals and objectives thereof, all pursuant to Minnesota Statutes,
sections 469.001 through 469.047; and
WHEREAS, the EDA and the City also intend to establish Tax Increment Financing
District No. 13, a renewal and renovation district, within the Downtown Chanhassen
Redevelopment Project Area and adopt a tax increment financing plan related thereto, all pursuant
to Minnesota Statutes, sections 469.174 through 469.1799; and
WHEREAS, the Developer has proposed to develop the property located at or
approximately at 575 West 78th Street, Chanhassen, Minnesota 55317 with one five story building
including approximately 126 multifamily rental housing units, 3,029 gross square feet of
commercial space, 68 structured parking stalls, and 63 surface parking stalls, all as more fully
described herein; and
WHEREAS, the EDA and the City believe is in the vital and best interests of Chanhassen
and the health, safety and welfare of its residents, and in accord with the public purposes and
provisions of the applicable state and local laws and requirements for which the Downtown
Chanhassen Redevelopment Project Area and Tax Increment Financing District No. 13 were or
will be established.
1
CH135-65-956439.0
l
NOW, THEREFORE, in consideration of the covenants and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the other as follows:
ARTICLE I
Definitions
Section 1.1. Definitions. In this Agreement the following terms shall have the meanings
given below unless a different meaning clearly appears from the context:
"Administrative Costs" means the administrative expenses incurred by the EDA regarding
the TIF District as defined in section 469.174, subd. 14 of the TIF Act.
"Affiliate" means a corporation, partnership, joint venture, association, business trust or
similar entity organized under the laws of the United States of America or a state thereof which is
directly controlled by or under common control with the Developer or any other Affiliate. For
purposes of this definition, control means the power to direct management and policies through
the ownership of at least a majority of its voting securities or the right to designate or elect at least
a majority of the members of its governing body by contract or otherwise.
"Agreement" means this Agreement, as the same may be from time to time modified,
amended, or supplemented.
"Assessment Agreement" means an agreement in the general form attached hereto as
Exhibit G establishing a Minimum Market Value for the Development Property and Minimum
Improvements.
"Assessor" means the Carver County assessor.
"Authorizing Resolution" means the resolution, in substantially the form attached hereto
as Exhibit D, which authorizes the issuance of the Note by the EDA Executive Director upon
satisfaction of the conditions precedent specified in Section 3.3 of this Agreement.
"Available Tax Increment" means 95 percent of the Tax Increment paid to the EDA by the
County with respect to the Development Property and the Minimum Improvements, subject to
adjustment as provided in section 4.6 of this Agreement.
"Business Subsidy Act" means Minnesota Statutes, sections 116J.993 through 116J.995,
as amended.
"Certificate of Completion" means the certificate, in substantially the form attached hereto
as Exhibit C, which will be provided to the Developer pursuant to Article IV of this Agreement.
"City" means the city of Chanhassen, a municipal corporation under the laws of Minnesota.
CH135-65-956439.0
2
"City Approvals" means, collectively, the Development Contract and any other land use
approvals required by the City prior to constructing the Minimum Improvements.
"Construction Plans" means the final plans for construction of the Minimum Improvements
which shall be submitted by the Developer pursuant to section 4.2 of this Agreement.
"County" means Carver County, Minnesota.
"Developer" means Roers Chanhassen Harlow Apartments Owner LLC, a Delaware
limited liability company.
"Development Contract" means the Chanhassen Market Street Addition Development
Contract between the City and the Developer and the developer of the Second Building which
entitles the Minimum Improvements and the Second Building.
"Development Property" means the property generally located at 575 West 781h Street,
Chanhassen, Minnesota 55317 and is legally described in Exhibit A attached hereto.
"Economic Development Authorities Act" or "EDA Act" means Minnesota Statutes,
sections 469.090 through 469.108, as amended.
"Economic Development Authority" or "EDA" means the Chanhassen Economic
Development Authority, a public body corporate and politic under the laws of Minnesota.
"Event of Default" means an action by the Developer or the EDA listed in Article VIII of
this Agreement.
"Final Payment Date" means the earliest of (i) February 1, 2042; (ii) the date the principal
of the Note has been paid in full; or (iii) the date this Agreement or the Note is terminated or
cancelled in accordance with the terms of this Agreement.
"Housing and Redevelopment Authorities Act" or "HRA Act" means Minnesota Statutes,
sections 469.001 through 469.047, as amended.
"Material Change" means a change in the Construction Plans which would reasonably be
expected to adversely affect the generation of tax increment attributable to the Minimum
Improvements.
"Maturity Date" means the date the Note has been paid in full or terminated, whichever is
earlier.
"Minimum Improvements" means a mixed use development of one five story building
including approximately 126 multifamily rental housing units, 3,029 gross square feet of
commercial space, 68 structured parking stalls, and 63 surface parking stalls. After completion of
the Minimum Improvements, the term shall mean the Development Property as improved by the
Minimum Improvements.
3
CH135-65-956439A
"Minimum Market Value" means a minimum market value of the Development Property
and Minimum Improvements of $36,971,000 as of January 2, 2026 for taxes payable beginning in
2027.
"Note" means the Tax Increment Revenue Note, in substantially the form set forth in the
Authorizing Resolution, to be delivered by the EDA to the Developer to reimburse the Developer
for the Qualifying Costs pursuant to Article III of this Agreement.
"Payment Date" means August 1, 2026 and each February 1 and August 1 through
February 1, 2042. (If the Note is issued after August 1, 2026, the initial payment date shall be the
next subsequent February 1 or August 1 after the issuance date.)
"Preliminary Plans" means the plans of the Minimum Improvements referenced in
Exhibit B attached hereto.
"Public Assistance" means the financial assistance to be offered by the EDA to the
Developer through issuance of the Note.
"Qualifying Costs" means the cost of demolition of existing improvements, earthwork,
grading, foundations and footings, site preparation, landscaping and site improvements, utility
costs, structured and surface parking improvements and other qualifying expenditures made by the
Developer related to completion of the Minimum Improvements which the EDA intends to
partially reimburse through the Note.
"Redevelopment Plan" means the Redevelopment Plan for the Downtown Chanhassen
Redevelopment Project Area, which was modified most recently on March 15, 2024.
"Redevelopment Project" or "Project" means the Downtown Chanhassen Redevelopment
Project.
"Sale" means any conveyance of fee simple title in and to the Minimum Improvements or
the Development Property, as more fully defined in Article VII of this Agreement.
"Second Building" means the building to be constructed by a related developer on the
property located at 591 West 78th Street, Chanhassen, Minnesota 55317 but which is not part of
the Minimum Improvements.
"State" means the state of Minnesota.
"Substantial Completion" means completion of the Minimum Improvements to a degree
allowing the issuance of a certificate of occupancy by the City's building official.
"Tax Increment" means the tax increment, as that term is defined in Minnesota Statutes,
section 469.174, subd. 25, which is paid to the EDA by the County with respect to the Minimum
Improvements and the Development Property.
4
CH135-65-956439A
"Tax Increment Financing Act" or "TIF Act" means Minnesota Statutes, sections 469.174
through 469.1799, as amended.
"Tax Increment Financing District" or "TIF District" means Tax Increment Financing
District No. 13, a renewal and renovation district.
"Tax Increment Financing Plan" or "TIF Plan" means the tax increment plan for Tax
Increment Financing District No. 13 which was approved by the EDA and the City on March 11,
2024.
"Tax Official" means the Assessor, County auditor, County or state board of equalization,
the commissioners 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 date Tax Increment Financing District No. 13 terminates,
which date is the earliest of. (i) the date all of the EDA's financial obligations with regard to the
TIF District have been satisfied; (ii) the date that this Agreement and the Note are terminated by
the EDA for any reason; or (iii) payment of all amounts owed under the Note.
"Unavoidable Delays" means delays which are the direct result of adverse weather
conditions; strikes or other labor troubles; fire or other casualty to the Minimum Improvements;
litigation commenced by third parties which, by injunction or other similar judicial action, directly
results in delays; or, except those of the EDA or the City reasonably contemplated by this
Agreement, any acts or omissions of any federal, State or local governmental unit which directly
result in delays in construction of the Minimum Improvements; default or unanticipated delay by
the EDA or the City under this Agreement; or any other cause beyond the reasonable control of a
party.
Section 1.2. Exhibits. The following exhibits are attached to and by reference made a part
of this Agreement:
Exhibit A.
Legal Description of Development Property
Exhibit B.
List of Preliminary Plans
Exhibit C.
Form of Certificate of Completion
Exhibit D.
Form of Authorizing Resolution with Note
Exhibit E.
Form of Investment Letter
Exhibit F.
Proforma, Lookback and Total Development Costs
Exhibit G.
Form of Assessment Agreement
Section 1.3. Rules of Interpretation. (a) This Agreement shall be interpreted in accordance
with and governed by the laws of Minnesota.
(b) The words "herein" and "hereof' and words of similar import, without reference to
any particular section or subdivision, refer to this Agreement as a whole rather than any particular
section or subdivision hereof.
5
CH135-65-956439A
(c) References herein to any particular section or subdivision hereof are to the section
or subdivision of this Agreement as originally executed.
(d) Any titles of the several parts, articles and sections of this Agreement are inserted
for convenience and reference only and shall be disregarded in construing or interpreting any of
its provisions.
ARTICLE II
Representations and Warranties
Section 2.1. Representations by the EDA. The EDA makes the following representations
as the basis for the undertaking on its part herein contained:
(a) The EDA is an economic development authority duly organized and existing under
the EDA Act and also having the powers of a housing and redevelopment authority under the HRA
Act. The EDA has the authority to enter into this Agreement and carry out its obligations
hereunder.
(b) The EDA has approved execution of this Agreement. The individuals executing
this Agreement and related agreements and documents on behalf of the EDA have the authority to
do so and to bind the EDA by their actions.
(c) The Downtown Chanhassen Redevelopment Project is a redevelopment project
within the meaning of the HRA Act and was created, adopted and approved in accordance with
the HRA Act.
(d) TIF District No. 13 is a renewal and renovation district within the meaning of the
TIF Act and was created, adopted and approved in accordance with the TIF Act.
(e) There are no previous agreements to which the EDA is a party pertaining to the
Development Property which would preclude the parties from entering into this Agreement or
which would impede the fulfillment of the terms and conditions of this Agreement.
(f) The activities of the EDA pursuant to this Agreement are undertaken pursuant to
the modified Redevelopment Plan and the TIF Plan and are for the purpose of redevelopment of
the Development Property with a housing and commercial mixed -use project.
(g) The EDA will act in a timely manner to consider all approvals required under this
Agreement and will cooperate with the Developer in seeking consideration of approvals which
must be granted by the City or other public entities.
Section 2.2. Representations and Warranties by the Develo er. The Developer makes the
following representations and warranties as the basis for the undertaking on its part herein
contained:
6
CH135-65-956439.0
(a) The Developer is a limited liability company validly existing under the laws of the
state of Delaware. The Developer has the authority to enter into this Agreement and carry out its
obligations hereunder.
(b) The persons executing this Agreement and related agreements and documents on
behalf of the Developer have the authority to do so and to bind the Developer by their actions.
(c) The Developer has entered into a purchase agreement to acquire the Development
Property(or has been assigned the interest of Roers Acquisitions LLC, a Minnesota limited liability
company and an affiliate under common ownership and control with the Developer, a purchaser
with respect to a purchase agreement to acquire the Development Property) and anticipates closing
on the acquisition of the Development Property by December 31, 2024.
(d) The Developer will construct the Minimum Improvements in substantial
accordance with the terms of this Agreement, the Redevelopment Plan, the TIF Plan, the
Construction Plans and all local, State and federal laws and regulations, including, but not limited
to, environmental, zoning, building code and public health laws and regulations.
(e) The Developer will apply for and use all reasonable efforts to obtain, in a timely
manner, all required permits, licenses and approvals from the City, and will meet, in a timely
manner, the 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 or used for
their intended purpose.
(f) The Developer has analyzed the economics of the cost of demolition of existing
improvements, earthwork, grading, foundations and footings, site preparation, landscaping and site
improvements, utility costs, structured and surface parking improvements and construction of the
Minimum Improvements and concluded that, absent the Public Assistance to be offered under this
Agreement, it would not undertake this project.
(g) 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 corporate organizational documents or any 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.
7
CH135-65-956439A
ARTICLE III
Acquisition of Development Property, Public Assistance
Section 3.1. Acquisition of Development Property.. Subject to Unavoidable Delays, the
Developer agrees to acquire the Development Property in fee by December 31, 2024. The EDA
makes no representations to the Developer regarding the suitability of the Development Property for
the use and purpose intended by the Developer.
Section 3.2. Issuance of PE -As -You -Go Note. (a) In consideration of the Developer
incurring the Qualifying Costs while constructing the Minimum Improvements, the EDA will issue
to the Developer the Note in an aggregate principal amount not to exceed $2,911,000 in substantially
the form set forth in the Authorizing Resolution attached hereto as Exhibit D. The EDA and the
Developer agree that the consideration from the Developer for the purchase of the Note will consist
of the Developer's payment of the Qualifying Costs which are eligible for reimbursement with Tax
Increment and which are incurred by the Developer in at least the principal amount of the Note. The
Authorizing Resolution will authorize delivery of the Note by the EDA Executive Director upon
satisfaction by the Developer of all the conditions precedent specified in section 3.3 of this
Agreement.
(b) The Developer understands and acknowledges that the EDA makes no
representations or warranties regarding the amount of Available Tax Increment, or that revenues
pledged to the Note will be sufficient to pay the Note. Any estimates of Tax Increment prepared
by the EDA or its financial advisors in connection with the TIF District or this Agreement are for
the benefit of the EDA and are not intended as representations on which the Developer may rely.
Section 3.3. Conditions Precedent to Issuance of the Note. Notwithstanding anything in
this Agreement to the contrary, the EDA Executive Director is authorized to issue the Note to the
Developer only after all of the following conditions precedent have been satisfied:
(a) The Developer has acquired the Development Property in fee;
(b) The Developer has executed this Agreement and it has been recorded against the
Development Property;
(c) The Assessment Agreement has been fully executed and recorded against the
Development Property;
(d) The Developer has completed the Minimum Improvements and the EDA has issued
the Certificate of Completion;
(e) The Developer has submitted evidence, including paid receipts and lien waivers, it
has incurred and paid for the Qualifying Costs in an amount not less than the principal amount of
the Note;
CH135-65-956439.v3
(f) The Developer has submitted the Investment Letter in the general form attached hereto
as Exhibit E;
(g) The Developer has submitted evidence satisfactory to the EDA to comply with section
3.5(c);
(h) The Developer has made the certification required by Section 4.5 regarding proper
payments having been made to all contractors, subcontractors and project laborers;
(i) Construction of the Second Building has begun as required by Section 4.7 of this
Agreement;
0) The EDA has adopted the Authorizing Resolution; and
(k) There has been no Event of Default on the part of the Developer which has not been
cured.
Section 3.4. Records. The EDA and its representatives will have the right at all reasonable
times after reasonable notice to inspect, examine and copy invoices paid by the Developer and/or
its general contractor relating to the Minimum Improvements and the Qualifying Costs for which
the Developer will be reimbursed under the Note.
Section 3.5. Lookback Provisions and Reduction of Note.
(a) The Public Assistance offered by the EDA to the Developer under this Agreement
is based on certain assumptions regarding likely performance of the Minimum Improvements
including operating revenues, expenses and development costs of construction. The EDA and the
Developer agree that the actual financial performance of the Minimum Improvements will be
reviewed at the times described in this section 3.5, and that the Note may be adjusted accordingly.
The Developer shall provide the EDA and its municipal advisor (the "Consultant") with the Pro
Forma Financial Statements showing a target Yield on Cost Average Annual Return of 7.0%.
(b) For the purposes of this section 3.5, the following terms have the following
meanings:
1. "Calculation Date" means either (A) 90 days after the date of Stabilization or (B)
at least 30 days prior to refinancing or Sale of the Minimum Improvements.
2. "Yield on Cost" means NOI divided by the Total Development Costs less any
grants, calculated as set forth in the sample lookback calculation attached hereto as
Exhibit F.
3. "Yield on Cost Average Annual Return" means the average of each annual Yield
on Cost beginning at the time that the Certificate of Occupancy is issued and ending on the
Termination Date, as set forth in the sample lookback calculation attached hereto as Exhibit
F.
9
CH135-65-956439.0
4. "Net Operating Income" or "NOI" means total annual income and other project -
derived annual revenue, including payments under the Note, less Operating Expenses,
which exclude debt service payments. For purposes of the Yield on Cost Average Annual
Return calculation on the Calculation Date, (1) revenue for periods prior to the Calculation
Date shall be based upon actual occupancy; (ii) revenue for periods after the Calculation
Date shall be based on 95% occupancy and inflated by 3.0% annually, and (iii) Operating
Expenses for periods after the Calculation Date, shall be inflated by 3.0% annually.
5. "Operating Expenses" means reasonable and customary expenses actually incurred
in operating the Minimum Improvements and any other expenses actually incurred by the
Developer pursuant to its obligations under this Agreement, determined in the same manner
as shown in the Pro Forma Financial Statement, which excludes expenses after debt
service, and includes administrative, payroll, marketing, insurance, property management
fees, utilities, maintenance, deposits to commercially reasonable capital replacement
reserves and payment of real estate taxes, but subject to final review and acceptance by the
Consultant.
6. "Pro Forma Financial Statement" means the cash flow pro forma model financial
statement projecting future returns, a summary of which is attached to this Agreement as
Exhibit F.
7. "Stabilization" means the date corresponding to two years after the date of
completion, as evidenced by the EDA's issuance of a Certificate of Completion.
8. "Total Development Costs" means the total expenditures to complete the Minimum
Improvements inclusive of land acquisition, hard construction costs, soft costs and
financing costs as approved by Developer's senior construction debt lender.
9. "Cash Flow" means NOI less debt service (principal and interest) with respect to
the loans encumbering the Minimum Improvements.
10. "IRR" means the internal rate of return for the Minimum Improvements, where the
IRR is calculated as the annualized return of the annual Cash Flow and net Sale proceeds
over the applicable period on Developer's actual utilization of equity for Total
Development Costs.
(c) Lookback at Completion of Construction: After completion of the Minimum
Improvements but prior to issuance of the Note, the Developer agrees to submit evidence of its
actual Total Development Costs to the EDA for comparison with the estimated Total Development
Costs listed on Exhibit F. If the actual Total Development Costs are less than the estimated Total
Development Costs, the Note will be reduced such that projected NOI over the term of the Note
does not exceed a 7.0% Yield on Cost Average Annual Return. The Note will not be issued until
the EDA has compared actual with estimated Total Development Costs as described herein and
adjusted the principal amount of the Note, if necessary
(d) Lookback on Stabilization: Upon Stabilization, the Developer shall deliver to the
EDA and Consultant, at a minimum: (i) the Developer's actual financial statement, in the same
10
CH135-65-956439.0
form as the Pro Forma Financial Statement submitted to the EDA pursuant to clause (b) 6 above
and showing NOI, and such other financial information as the Consultant shall reasonably require,
and (11) evidence, satisfactory to the EDA, of its actual Total Development Costs.
1. The Yield on Cost Average Annual Return shall be calculated by the
Consultant based on the financial statement submitted to the EDA pursuant to clause (d)
above (in the manner the Consultant determines is consistent with the sample lookback
calculation attached as Exhibit F, as approved by the EDA).
2. If the Yield on Cost Average Annual Return does not exceed 7.0% over the
term of the Note, the Note will not be revised for Lookback on Stabilization.
3. If the Consultant determines, based on such review, that the Yield on Cost
Average Annual Return over the term of the Note exceeds 7.0% (to be calculated in a
manner comparable to the sample attached as Exhibit F), then the principal balance of the
Note will be reduced as determined by the Consultant below:
(A) First, by determining the period over which the Note needs to be
outstanding to achieve a 7.0% Yield on Cost Average Annual Return over the term
of the Note based on the Consultant's calculation of the Yield on Cost Average
Annual Return.
(B) Second, by determining the present value of actual or projected
(with respect to future payments) bi-annual Note payments over the life of the Note
through the year determined in clause (A) using the interest rate on the Note as the
present value discount rate.
(C) Third, by determining the amount equal to 50% of the difference
between the original principal amount of the Note and the present value number
calculated in clause (B).
(D) Finally, the new principal amount of the Note will then be
determined by adding the amounts in clauses (B) and (C) and rounding to the
nearest $1,000 (the "Revised Note Principal Amount").
(E) Such Revised Note Principal Amount will be effective upon
delivery to the Developer of a written notice stating the Revised Note Principal
Amount as determined by the Consultant in accordance with this section 3.5,
accompanied by the Consultant's report. The Developer shall, thereupon, deliver
the Note in exchange for a new Note in the Revised Note Principal Amount.
(e) Lookback Upon Sale or Refinancing: Regardless of whether Stabilization has
occurred, if the Developer sells to an entity which is not an Affiliate or refinances the Minimum
Improvements (provided, however, the placement of permanent debt on the Minimum
Improvements will not constitute a refinance giving rise to the review as described in this
subsection (e)) during the term of the Note, the Developer agrees to provide to the Consultant the
Pro Forma Financial Statements for the period from the date of the Certificate of Occupancy
11
CH135-65-956439.0
through such anticipated Sale or refinance date (provided that the Developer and the EDA agree
that the calculation will occur prior to the actual refinancing).
1. For a refinancing, if the Consultant determines, based on such review, that the
NOI exceeds a Yield on Cost Average Annual Return of 7.0% after adjusting the Total
Development Costs for the receipt of any net refinancing proceeds, then the Note shall be
reduced by 50% of the excess amount of such returns, including a reduction to $0.00, if
applicable. Such reduction will be effective upon delivery to Developer of a written notice
stating the amount of such excess amount as determined by the EDA in accordance with
this subsection (e), accompanied by the Consultant's report.
2. For a Sale, if the Consultant determines, based on such review, that the actual
Cash Flows and net Sale proceeds realized by the Developer upon Sale will exceed a IRR
of 16.0%, then the Note shall be reduced by 50% of the excess amount of such returns,
including a reduction to $0.00, if applicable. Such reduction will be effective upon delivery
to Developer of a written notice stating the amount of such excess amount as determined
by the EDA in accordance with this subsection (e), accompanied by the Consultant's report.
Section 3.6. Business Subsidy. The Public Assistance offered to the Developer under this
Agreement is not a business subsidy under the Business Subsidy Act because it qualifies for the
exceptions under section 1161993, subd. 3(7) for housing and subd. 3(17) regarding
redevelopment.
ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Minimum Iml?rovements. The Developer agrees that it will
construct the Minimum Improvements on the Development Property in accordance with the
Preliminary Plans and the Construction Plans. The Developer acknowledges that, in addition to
the requirements of this Agreement, construction of the Minimum Improvements will necessitate
compliance with the City Approvals and possibly approvals by other governmental agencies. To
the extent such approvals have not already been obtained, the Developer agrees to submit in a
timely manner all applications for and pursue to their conclusion all other approvals needed prior
to constructing the Minimum Improvements.
Section 4.2. Preliminary Plans and Construction Plans. (a) The Developer has submitted
and the EDA has approved the Preliminary Plans listed in Exhibit B attached hereto. Prior to
beginning construction on the Minimum Improvements, the Developer shall submit dated
Construction Plans to the EDA. The Construction Plans shall provide for the construction of the
Minimum Improvements and shall be in substantial conformity with the Preliminary Plans and this
Agreement. The EDA will approve the Construction Plans if they (1) are consistent with the
Preliminary Plans; (2) conform to all applicable federal, State and local laws, ordinances, rules and
regulations; (3) are adequate to provide for the construction of the Minimum Improvements; (4)
conform to the State building code; and (5) if there has occurred no uncured Event of Default on
the part of the Developer. Except as otherwise set forth herein, no approval by the EDA shall
12
CH135-65-956439.v3
relieve the Developer of the obligation to comply with the terms of this Agreement and the terms
of all applicable federal, State and local laws, ordinances, rules and regulations in the construction
of the Minimum Improvements. Except as otherwise set forth herein, no approval by the EDA
shall constitute a waiver of an Event of Default. The EDA shall use good faith efforts to review
the Construction Plans and either approve or reject them in writing within 15 business days after
receipt. Any rejection, in whole or in part, shall set forth in detail the reasons for rejection.
(b) If the Developer desires to make any Material Change in the Construction Plans
after approval, the Developer shall submit the proposed change to the EDA for its approval. If the
proposed change is consistent with the Preliminary Plans or is otherwise acceptable to the EDA
and meets all other requirements of section 4.2(a) above, the EDA shall approve the proposed
change. Such change in the Construction Plans shall be deemed approved by the EDA unless
rejected within the required 15 business day period, in whole or in part, by written notice by the
EDA to the Developer, setting forth in detail the reasons for rejection.
(c) Through the Termination Date, all sewer access charges ("SAC") and water access
charges ("WAC") made by the City regarding the Minimum Improvements or commercial tenant
improvements shall be paid by the Developer.
Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable
Delays, the Developer shall commence construction of the Minimum Improvements by no later
than December 31, 2024. 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. The Developer shall make such reports to the EDA regarding construction of
the Minimum Improvements as the EDA deems necessary or helpful in order to monitor progress
on construction of the Minimum Improvements. Subject to Unavoidable Delays, the Developer
shall have achieved Substantial Completion of all of the Minimum Improvements by no later than
December 31, 2026.
Section 4.4. Certificate of Completion. (a) After Substantial Completion of the Minimum
Improvements in accordance with the Construction Plans and at the written request of the
Developer, the EDA will, within 20 days thereafter, furnish the Developer with an appropriate
Certificate of Completion so certifying in the form of Exhibit C attached hereto. Such Certificate
of Completion by the EDA 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
to construct the Minimum Improvements and the dates for the beginning and completion thereof.
If requested by the Developer, the EDA will issue a separate Certificate of Completion for each of
the two buildings constituting the Minimum Improvements.
(b) The Certificate of Completion shall be in such form set forth in Exhibit C and as
will enable it to be recorded in the proper County office for the recordation of deeds and other
instruments pertaining to the Development Property. If the EDA shall refuse to provide a
Certificate of Completion in accordance with the provisions of this section 4.4, the EDA shall
promptly notify Developer within the same 20 day period following receipt of request by the
Developer for the Certificate of Completion, and such notification from the EDA shall include a
written statement, indicating in adequate detail in what respects the Developer has failed to
13
CH135-65-956439.0
complete the relevant portion of the Minimum Improvements in accordance with the Construction
Plans and what measures or acts will be necessary, in the opinion of the EDA, for the Developer
to take or perform in order to obtain such certification. If the EDA fails to issue such a written
statement within such 20-day period, the EDA shall be deemed to have waived its right to do so
and shall be deemed to have issued a Certificate of Completion to the Developer. The Developer
shall have 60 days following receipt of the EDA's written response to cure or agree to terms with
the EDA regarding issues to be resolved prior to the Developer obtaining a Certification of
Completion from the EDA.
Section 4.5. Compliance with Labor Laws. (a) The Developer shall not use any
disqualified contractors or permit the use of any disqualified subcontractors listed on the
Minnesota State "Suspended/Debarred Vendor Detailed Information" website. The Developer
shall and shall require all contractors and subcontractors to comply with all applicable federal,
state, and local labor laws.
(b) The Developer shall and shall require all contractors and subcontractors to fully
and completely comply with all otherwise applicable federal, state and local labor and employment
laws, including, without limitation, those relating to wage and hour requirements, if any such laws
are applicable. The Developer shall maintain or ensure access to all documentation necessary to
establish compliance with the foregoing applicable laws, if any, and shall allow the EDA or its
designee reasonable access to such data.
(c) The Developer shall require its prime contractor to report any wage claims that are
filed with the Minnesota Department of Labor and Industry (the "DLI") or adverse determinations
of wage theft or payroll fraud against such prime contractor arising from the Minimum
Improvements, and shall require that its prime contractor require its subcontractors to report any
wage claims that are filed with the DLI or adverse determinations of wage theft or payroll fraud
against such subcontractors arising from the Minimum Improvements. The Developer shall
promptly notify the EDA of any wage claims filed with DLI or adverse determinations of wage
theft or payroll fraud against the prime contractor or subcontractor arising from the Minimum
Improvements, to the extent that the Developer obtains actual knowledge of such claims or adverse
determinations. The Developer shall require its prime contractor to provide a list to the Developer
and the EDA of all entities contracted by the prime contractor performing work on the Minimum
Improvements that are required to register through the DLI's Contractor Registration Program (the
"Contractor List"). The Contractor List shall be provided to the Developer and EDA within 90
days after the commencement of construction of the Minimum Improvements and updated and
shared every 90 days until the completion of the Minimum Improvements.
(d) If a third party files a claim with the DLI involving wage theft or payroll fraud
regarding any contractor or subcontractor doing work on the Minimum Improvements, the
Developer shall fully cooperate with DLI.
(e) The Developer shall certify to the EDA that, to the best of the Developer's
knowledge , proper payments to all contractors, subcontractors and project laborers have been
made prior to the issuance of a Certificate of Completion and as a condition precedent to issuance
of the TIF Note, provided, however, that in the event the Developer disputes a lien, the Developer
14
CH135-65-956439A
may bond over or establish an escrow account to protect against the lien on terms reasonably
acceptable to the EDA.
(f) The Developer acknowledges that failure to substantially comply with this Section
4.5 will, after the expiration of all applicable notice and cure periods, be an Event of Default and
could result in non -issuance of the TIF Note, or, if the TIF Note has already been issued, delaying,
reducing and/or terminating TIF Note payments.
Section 4.6 Completion of Second Building. The Second Building is intended to be
constructed by a related developer on a site adjacent to the Development Property. While not part
of the Minimum Improvements required by this Agreement, the Second Building is an integral
part of the EDA's plan for redevelopment of the area and its completion is important for fulfilling
the EDA's goals and objectives in establishing the TIF District. The Note will not be issued until
after construction of the Second Building has begun. Construction of the Second Building will be
deemed to have begun only after physical work has been initiated on construction of the foundation
of the building.
ARTICLE V
Insurance
Section 5.1. Insurance. The Developer or its general contractor will provide and maintain
at all times during the process of constructing the Minimum Improvements a Special Form Basis
Insurance Policy and, from time to time during that period, at the request of the EDA no more
frequently than once annually, furnish the EDA with proof of payment of premiums on policies
covering the following:
(1) Builder's risk insurance, written on the so-called "Builder's Risk —
Completed Value Basis," in an amount equal to one hundred percent (100%) of the
insurable value of the applicable portion of the Minimum Improvements at the date of
completion, and with coverage available in reporting form on the so-called "special" form
of policy;
(2) Commercial general liability insurance (including operations, contingent
liability, operations of subcontractors, completed operations and contractual liability
insurance) with limits against bodily injury and property damage of not less than
$2,000,000 for each occurrence (to accomplish the above -required limits, an umbrella
excess liability policy may be used); and
(3) Workers' compensation insurance, with statutory coverage.
Section 5.2. Evidence of Insurance. All insurance required in this Article V of this
Agreement must be taken out and maintained in responsible insurance companies selected by the
Developer which are authorized under the laws of Minnesota to assume the risks covered thereby.
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. Upon written request by
the EDA, the Developer agrees to deposit with the EDA a certificate or certificates or binders of
the respective insurers stating that such insurance is in force and effect.
15
CH135-65-956439A
ARTICLE VI
Payment of Taxes; Assessment Agreement: Use of Tax Increment
Section 6.1. Taxes. The Developer agrees that prior to the Termination Date: (i) it will
not seek administrative or judicial review of the applicability of any tax statute determined by any
Tax Official to be applicable to the Minimum Improvements or the Development Property or raise
the inapplicability of any such tax statute as a defense in any proceedings, including delinquent
tax proceedings; (ii) it will not seek administrative or judicial review of the constitutionality of any
tax statute determined by any Tax Official to be applicable to the Minimum Improvements or the
Development Property or raise the unconstitutionality of any such tax statute as a defense in any
proceedings, including delinquent tax proceedings; and (iii) it will not cause a reduction in the
assessed value of the Minimum Improvements or the Development Property below the Minimum
Market Value described in section 6.2(a) of this Agreement through:
(a) willful destruction of the Minimum Improvements or any part thereof;
(b) failure to reconstruct damaged or destroyed property;
(c) a request to the Assessor to reduce the assessed value of all or any portion of the
Minimum Improvements or the Development Property below the Minimum Market Value;
(d) a petition to the board of equalization of the County to reduce the assessed value of
all or any portion of the Minimum Improvements or the Development Property below the
Minimum Market Value;
(e) a petition to the board of equalization of the State or the commissioner of revenue
of the State to reduce the assessed value of all or any portion of the Minimum Improvements or
the Development Property below the Minimum Market Value;
(f) an action in a district court of the State or the tax court of the State seeking a
reduction in the assessed value of the Minimum Improvements or the Development Property below
the Minimum Market Value;
(g) an application to the commissioner of revenue of the State or to any local taxing
jurisdiction requesting an abatement or deferral of real estate taxes on the Minimum Improvements
or the Development Property;
(h) a transfer of the Minimum Improvements or the Development Property, or any part
thereof, to an entity exempt from the payment of real estate taxes under State law and that entity
applies for tax exemption; or
(i) any other proceedings, whether administrative, legal or equitable, with any
administrative body within the County or the State or with any court of the State or the federal
government.
16
CH135-65-956439.v3
Section 6.2. Assessment Agreement. (a) At the time of execution of this Agreement, the
EDA and the Developer shall execute an Assessment Agreement for the Development Property
and Minimum Improvements. The Assessment Agreement shall specify an aggregate Minimum
Market Value of $36,971,000 as of January 2, 2026 for taxes payable beginning in 2027 through
the Termination Date, notwithstanding any failure to start or complete the Minimum
Improvements by said date or any failure to reconstruct the Minimum Improvements after damage
or destruction before the Termination Date.
(b) The Assessment Agreement shall be substantially in the form attached hereto as
Exhibit G. Nothing in the Assessment Agreement shall limit the discretion of the Assessor to
assign a market value to the Minimum Improvements or the Development Property in excess of
the Minimum Market Value nor prohibit the Developer from seeking through the exercise of legal
or administrative remedies a reduction in any increase in the market value established pursuant to
section 6.2(a) of this Agreement; provided, however, that the Developer shall not seek a reduction
of such market value below the Minimum Market Value set forth in the Assessment Agreement in
any year so long as such Assessment Agreement shall remain in effect. The Assessment
Agreement shall remain in effect until the Termination Date; provided that if at any time before
the Termination Date the Assessment Agreement is found to be terminated or unenforceable by
any Tax Official or court of competent jurisdiction, the Minimum Market Value described in this
section 6.2 shall remain an obligation of the Developer or its successors and assigns (whether or
not such value is binding on the Assessor), it being the intent of the parties that the obligation of
the Developer to maintain, and not seek reduction of, the Minimum Market Value specified in this
Section 6.2 is an obligation under this Agreement as well as under the Assessment Agreement, and
is enforceable by the EDA against the Developer, its successors and assigns, in accordance with
the terms of this Agreement and the Assessment Agreement. Notwithstanding anything contained
in this Agreement to the contrary, the Developer shall not be precluded from contesting the market
value of the Minimum Improvements or the Development Property, or any substantial portion
thereof, if the Minimum Improvements or the Development Property is acquired by a public entity
through eminent domain prior to the Termination Date.
Section 6.3. Suspension or Reduction of Payment on Note. (a) The Developer may, at any
time following the issuance of the Certificate of Completion, seek through petition or other means
to have the Assessor's estimated market value for the Minimum Improvements or Development
Property reduced to not less than the Minimum Market Value. Such activity must be preceded by
written notice from the Developer to the EDA indicating its intention to do so.
(b) Upon receiving notice that the Developer seeks a reduction in the Assessor's
estimated market value of all or any portion of the Minimum Improvements or Development
Property, or otherwise learning of the Developer's intentions, the EDA may suspend or reduce
payments due under the Note except for the portion of such payments from Available Tax
Increment, based on the Minimum Market Value, or the Assessor's estimated market value for the
year in which the Minimum Improvements have been completed, if less than Minimum Market
Value, until the actual amount of the reduction in market value is determined, whereupon the EDA
will make the suspended payments less any amount that the EDA is required to repay the County
as a result any retroactive reduction in market value of the Minimum Improvements or
17
CH135-65-956439.v3
Development Property. During the period that the payments are subject to suspension, the EDA
may make partial payments on the Note, from the amounts subject to suspension, if it determines,
in its sole and absolute discretion, that the amount retained will be sufficient to cover any
repayment which the County may require. The EDA's suspension or reduction of payments of the
Note pursuant to this Section 6.3 shall not be considered a default under section 8.1 hereof.
Section 6.4. Right to Collect Delinquent Taxes and Special Assessments. The Developer
acknowledges that at all times prior to the Termination Date the EDA shall have the right to sue
the Developer or its successors and assigns to collect delinquent real estate taxes and any penalty
or interest thereon and special assessments due on the Development Property or the Minimum
Improvements and to pay over the same as a tax payment to the County auditor. In any such suit
in which the EDA prevails, the EDA shall also be entitled to recover its reasonable out-of-pocket
costs and expenses, including attorney fees.
Section 6.5. Use of Tax Increment. The TIF District is a renewal and renovation district
within the meaning of section 469.174, subd. 10a of the TIF Act. Except for payments to the
Developer as provided for in this Agreement and the Note, the EDA shall be free to use any Tax
Increment it receives from the County with respect to the TIF District for any purpose for which
such increment may lawfully be used under the TIF Act and the EDA shall have no obligations to
the Developer with respect to the use of such Tax Increment.
ARTICLE VII
Restrictions on Sale of Minimum Improvements; Termination of Agreement
Section 7.1. Prohibition Against Sale of Minimum Improvements.
(a) The Developer represents and agrees that its use of the Development Property and
its other undertakings pursuant to the Agreement, are, and will be, used for the purpose of
construction of the Minimum Improvements on the Development Property and not for speculation
in land holding. The Developer represents and agrees that, prior to the issuance of a Certificate of
Completion regarding the Minimum Improvements, there shall be no Sale of the Development
Property or the Minimum Improvements constructed thereon nor shall the Developer suffer any
such Sale to be made, without the prior written approval of the EDA; provided however,
notwithstanding the foregoing, the Developer shall be entitled to lease housing units and
commercial space within the Minimum Improvements to third parties without the prior written
approval of the EDA. As a condition of approval of any such sale, the EDA shall require, at a
minimum, that the proposed transferee shall have entered into an agreement whereby the transferee
expressly assumes all of the Developer's obligations under this Agreement. Any such agreement
shall include the EDA as a party and otherwise be in form and substance reasonably acceptable to
the EDA.
(b) Notwithstanding anything in this Agreement to the contrary, Developer is
authorized, without the approval of EDA, to obtain construction and permanent financing for the
Minimum Improvements and to mortgage the Development Property to provide security for the
construction and permanent financing, and the EDA is authorized to subordinate this Agreement
18
CH135-65-956439.0
to such mortgage. In the event of foreclosure, deed -in -lieu of foreclosure or other transfer of the
Minimum Improvements or the Development Property as a result of default under such mortgage,
such transfer shall require the prior written approval of the EDA, which shall not be unreasonably
withheld. As a condition of approval of any such transfer, the EDA shall require, at a minimum,
that the proposed transferee shall have entered into an agreement whereby the transferee expressly
assumes all of the Developer's obligations under this Agreement.
(c) After a Certificate of Completion has been issued, Developer may, without the
approval of the EDA but with 30 days prior written notice to the EDA, sell or transfer all or any
portion of the Minimum Improvements or the Development Property to another party except that
in the event that the Developer sells or transfers the Minimum Improvements or the Development
Property or any portion to any entity which is not an Affiliate of the Developer, the sale shall be
subject to the lookback on Sale provisions of Section 3.5 of this Agreement.
Section 7.2. Termination of Agreement. Upon the occurrence of the Termination Date,
the parties agree to execute and record a document terminating this Agreement.
ARTICLE VIII
Events of Default
Section 8.1. Events of Default Defined. Each and every one of the following shall be an
Event of Default under this Agreement:
(a) Failure by the Developer to seek approval from the EDA, the City and other entities
necessary in order to construct the Minimum Improvements diligently and in good faith; provided
that if a Certificate of Completion is issued by the EDA, such failure shall no longer be an Event
of Default;
(b) Failure of the Developer to pay real estate taxes or special assessments on the
Minimum Improvements or the Development Property as they become due;
(c) Failure by the Developer to commence and completion construction of the
Minimum Improvements pursuant to the terms, conditions and limitations of Article IV of this
Agreement, including the timing thereof, unless such failure is caused by an Unavoidable Delay
or waived by the Developer and the EDA;
(d) If there is an Event of Default by the Developer regarding any requirement under
the Development Contract of the Developer or related to the Development Property.
(e) There is a challenge to the Minimum Market Value in violation of Article VI of this
Agreement or the Assessment Agreement;
(f) If the Developer shall file a petition in bankruptcy, or shall make an assignment for
the benefit of its creditors (provided, however, that the parent of the Developer pledging its interest
in the Developer to a lender as security for a loan financing the construction of Minimum
19
CH135-65-956439.0
Improvements, and an exercise of such pledge, shall not constitute an Event of Default), or shall
consent to the appointment of a receiver;
(g) Sale of the Minimum Improvements or the Development Property, or any portion
thereof, by the Developer in violation of Article VII of this Agreement; or
(h) Failure by either party to observe or perform any material covenant, condition,
obligation or agreement on its part to be observed or performed under this Agreement, including
but not limited to any action necessary for the establishment of the TIF District.
Section 8.2. Remedies on Default. Whenever any Event of Default referred to in
section 8.1 of this Agreement occurs, the non -defaulting party may take any one or more of the
following actions after providing 30 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 30 days from the receipt
of Notice or, if the Event of Default is by its nature incurable within 30 days, the defaulting party
does not provide assurances to the non -defaulting party 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 from the
defaulting parry, deemed adequate by the non -defaulting party, that the defaulting party will cure
its default and continue its performance under this Agreement;
(b) The EDA may enforce the Assessment Agreement;
(c) Prior to issuance of the Certificate of Completion, cancel and rescind or terminate
this Agreement;
(d) If there is a Sale in violation of Article VII of this Agreement, cancel or terminate
the Note;
(e) If the default occurs after issuance of the Certificate of Completion, the EDA may
suspend payments under the Note; and
(f) Take whatever action, including legal or administrative action, which may appear
necessary or desirable to the non -defaulting party to collect any payments due under this
Agreement or to enforce performance and observance of any obligation, agreement, or covenant
of the defaulting party under this Agreement.
Section 8.3. Remedies after Certificate of Completion. The EDA may exercise its rights
under Section 8.2(e) only for the following Events of Default:
(a) the Developer fails to pay real estate taxes or special assessments on the Minimum
Improvements or the Development Property or any part thereof when due and the taxes or special
assessments have not been paid, or provision satisfactory to the EDA made for their payment,
within 45 days after written demand by the EDA to do so; or
20
CH135-65-956439.0
(b) the Developer takes or permits an action prohibited by section 6.1 of this
Agreement; or
(c) the Developer transfers the Minimum Improvements or the Development Property,
or any part thereof, to an entity exempt from the payment of real estate taxes under State law; or
(d) the Developer fails to comply with the lookback provisions of section 3.5(d)
through (f) of this Agreement.
Section 8.4. No Remedy Exclusive. No remedy conferred herein or reserved to the parties
is intended to be exclusive of any other available remedy or remedies, but each and every 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. 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 EDA or the Developer to exercise any remedy reserved
to it, it shall not be necessary to give notice, other than such notice as may be required under this
Agreement.
Section 8.5. No Additional Waiver Implied by One Waiver. In the event any covenant or
agreement contained in this Agreement should be breached by either party and thereafter waived
by the other party, such waiver shall be limited to the particular breach so waived and shall not be
deemed to waive any other concurrent, previous or subsequent breach hereunder.
Section 8.6. Acceptance of Third -Party Cure. In the event that an Event of Default, or
potential Event of Default, is cured by a third -party lender which has loan to the Developer or an
affiliate thereof for the purposes of financing the construction of the Minimum Improvements, the
EDA shall accept such proffered cure on the same basis as if such cure had been effected by the
Developer.
ARTICLE IX
Additional Provisions
Section 9.L Conflict of Interests; Representatives Not Individually Liable. No member,
official, or employee of the EDA shall have any personal financial interest, direct or indirect, in
the Agreement, nor shall any such member, official, or employee participate in any decision
relating to the Agreement which affects his or her personal financial interests or the interests of
any corporation, partnership, or association in which he or she is, directly or indirectly, interested.
No member, official, or employee of the EDA shall be personally liable to the Developer, or any
successor in interest, in the event of any default or breach or for any amount which may become
due or on any obligations under the terms of this Agreement.
Section 9.2. Equal Employment Opportunity. The Developer, for itself and its successors
and assigns, agrees that during the construction of the Minimum Improvements provided for in
21
CH135-65-956439.0
this Agreement, it will comply with all applicable equal employment and nondiscrimination laws
and regulations.
Section 9.3. Restrictions on Use. The Developer agrees that through the Termination
Date it will use the Minimum Improvements for only such uses as permitted under the City's land
use regulations and in compliance with the City Approvals. In addition, through the Termination
Date, a standalone liquor store, tobacco business or cannabis business is not permitted in the
Minimum Improvements.
Section 9.4. Notices and Demands. Except as otherwise expressly provided in this
Agreement, any notice, demand, or other communication under the Agreement or any related
document by either party to the other shall be sufficiently given or delivered if it is dispatched by
registered or certified United States mail, postage prepaid, return receipt requested, or delivered
personally to:
(a) in the case of the Developer:
and with a copy to:
(b) in the.case of the EDA:
and with a copy to:
Roers Chanhassen Harlow Apartments
Owner LLC
c/o Roers Companies
Two Carlson Parkway North, Suite 400
Plymouth, MN 55447
Attn: General Counsel
Winthrop & Weinstine, P.A.
225 South Sixth Street, Suite 3500
Minneapolis, MN 55402
Attn: Kevin M. McLain
Chanhassen Economic
Development Authority
7700 Market Boulevard
Chanhassen, MN 55317
Attn: Executive Director
Kennedy & Graven, Chartered
150 South Fifth Street, Suite 700
Minneapolis, MN 55402
Attn: Ronald H. Batty
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 9.4.
Section 9.5. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section 9.6. Disclaimer of Relationships. The Developer acknowledges that nothing
contained in this Agreement nor any act by the EDA or the Developer shall be deemed or construed
22
CH135-65-956439.0
by the Developer or by any third person to create any relationship of third -parry beneficiary,
principal and agent, limited or general partner, or joint venture between the EDA and the
Developer.
Section 9.7. Amendment. This Agreement may be amended only by the written agreement
of the parties.
Section 9.8. Recording, Agreement Runs with the Land. This Agreement shall be
recorded among the County land records and the Developer agrees to pay for the cost of recording
same. This Agreement runs with the Development Property and shall bind the successors and
assigns of the EDA and the Developer.
Section 9.9. Release and Indemnification Covenants. a) Except for any negligent act of
the following named parties, the Developer hereby releases from and covenants and agrees that
the EDA, and its governing body members, officers, agents, servants, and employees (the
"Indemnified Parties") shall not be liable for, and hereby agrees to indemnify and hold harmless
the Indemnified Parties against any loss or damage to property or any injury to or death of any
person occurring at or about or resulting from any defect in the Minimum Improvements.
b) The aforesaid indemnification shall not apply to willful misrepresentation or any
willful or wanton misconduct or negligence of the EDA.
c) Except for any negligent or willful act of the EDA, the Indemnified Parties shall
not be liable for any damage or injury to the persons or property of the Developer or its partners,
officers, agents, servants or employees or any other person who may be about the Minimum
Improvements or the Minimum Improvements due to any act of negligence of any person.
Section 9.10. 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 9.11. Governing Law, Venue. This Agreement shall be construed in accordance
with the laws of Minnesota. Any dispute arising from this Agreement shall be heard in the State
or federal courts of Minnesota, and all parties waive any objection to the jurisdiction thereof,
whether based on convenience or otherwise.
Section 9.12. Fees and Charges. The Developer agrees to pay the EDA for all fees or costs
for legal, financial advisory, engineering, planning or other staff time for preparation of the TIF
Plan and related documents and analysis, drafting or negotiating this Agreement and for reviewing
any plans regarding the Minimum Improvements submitted in satisfaction of this Agreement.
23
CH135-65-956439.0
IN WITNESS WHEREOF, the EDA and the Developer have caused this Agreement to be
duly executed in their names and behalves on or as of the date first above written.
THE CHANHASSEN ECONOMIC
DEVELOPMENT AUTHORITY
s: 4}
AIA
By.
Its resident
By:
Its Executive Director
STATE OF MINNESOTA )
ss.
COUNTY OFF )
The foregoing instrument as acknowledged before me this 2(o day of J*I-c ,
2024, by I'!;, t I -A , the President of the Chanhassen Economic Development
Authority, a public h6dy corporate and politic under the laws of Minnesota, on behalf of the
Economic Development Authority.
Notary F�Plic
STATE OF MINNESOTA ) JENNIFER ANN POTTER
ss. Notary Public -Minnesota
COUNTY OF v�,t� ) My Commission Expires Jan 31, 2ox7'
The foregoing instrument as acknowledged before me this � day of-7Gvt„- ,
2024, by Ca uy1t NA & kAXjja , the Executive Director of the Chanhassen Economic
Development Authority, a public body corporate and politic under the laws of Minnesota, on
behalf of the Economic Development Authority.
JENNIFER ANN POTTER
Notary Public -Minnesota
My Commission Expires Jan 31. 2027
- Q(VXE-�'
Notary Public
CH135-65-956439.0
24
ROERS CHANHASS RLOW
APARTMENTS NER LIX
M.
STATE OF Mylyit So-4-A )
) ss.
COUNTY OF tvjvjCptiv>, )
Tom Cronin, Authorized Signatory
The foregoing instrument was executed before me this 7-(0+h day of Jv vt'e, ,
2024, by Tom Cronin, the Authorized Signatory of Roers Chanhassen Harlow Apartments Owner
LLC, a Delaware limited liability company, on behalf of the company.
-------------
'`"•' ' PAIGE CATHERINE WEBSTER
NOTARY PUBLIC-NNNNESOTA
HENNEPIN COUNTY
L My Commission Expires Jan. 31.2025
25
CH135-65-956439.v3
I �ct� ��
Notary Publ c
EXHIBIT A TO
CONTRACT FOR PRIVATE DEVELOPMENT
LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY
Lot 1, Block 2, Chanhassen Market Street Addition, Carver County, Minnesota.
A-1
Error! Unknown document property name.
EXHIBIT B TO
CONTRACT FOR PRIVATE DEVELOPMENT
LIST OF PRELIMINARY PLANS
The following constitute the Preliminary Plans of the Minimum Improvements:
[to be included]
B-1
CH135-65-956439.v3
LIST OF PRELIMINARY PLANS
The following constitute the Preliminary Plans of the Minimum Improvements:
• Plan A: Final plat approved July 22, 2024, prepared by Egan, Field & Nowak, Inc.
• Plan B: Grading, Drainage and Erosion Control Plans associated with the Watermain
Improvement Plans for W 78th St and Market Blvd dated June 20, 2024, prepared by
Kimley-Horn and Associates, Inc., and Grading, Drainage and Erosion Control Plans
associated with the Site Development Plans for Chanhassen Apartments dated June 20,
2024, prepared by Kimley-Horn and Associates, Inc.
• Plan C: Plans and Specifications for Improvements associated with the Watermain
Improvement Plans for W 78th St and Market Blvd dated June 20, 2024, prepared by
Kimley-Horn and Associates, Inc., and, Public Improvements in the Plans and
Specifications for Improvements associated with the Site Development Plans for
Chanhassen Apartments dated June 20, 2024, prepared by Kimley-Horn and Associates,
Inc.
• Plan D: Site Development Plans for Chanhassen Apartments dated June 5, 2024, prepared
by Kimley-Horn and Associates, Inc.
IM
Error! Unknown document property name.
......... . 0
— --- — --- — ---- >
<
78TH STREET
— — — — — — — — — — — — — —
AI
--------- ------ ---------
------------G
'NOTES
-- ------------- ---------------
L
4.
---------------------
PROPEIMMMRY
namanrm
SMDATA
E.:Z
- L �=.
F �� I ,, ��� i wnrcv:,
DATA
r-------------------
PWINGSUMRY rm
--------------------
PJ
----------------
--------------- FTE
1 I II II
- - ---------------- ---
7-
MWTE LEGEM
---------------
C
C".
Cd
IM
Error! Unknown document property name.
MARKET BLVD
& W 78TH ST
eS G
[F
I
s)
I
I
H t
i
I
I
1�
0 i
1 jI
D
Error? Unknown document property name.
LOTI,BLOCKI
WEST BUILDING-SEEARCH
PLANS )184 HOUSING
UNITS)
srrE mANHDTEs a
KEYNOTE IEOEND
t, Crxa.�wx .eexrE,e,r�+
C.
C C.
nu[sxmvaxax„bsn>Ea
wens arsw�wn3,>a<narw
! ,Vmxx.
N-- ---��� yyydNpppK YuuuII[M ID
NvnnAfihEION,
CaOcsnp�cy
MARKET BLVD
& W 78TH ST
eSG
�IR'��/�HINR
la ROERS
O:fJMl6Al[
l4ffi,awrt
ISN90Mt
Na [eWrn
vNunu
macrw�
i a[aNunx a;ie;>wo
rtunrsn um,.awa
r lS11VL6
I0.NP11KN,
nnx� w�:iaoia
rturt�n
s v.�viNmx ce:wawr
MARKET BLVD
& W 78TH ST
SUE PLAN
ENWtGEMENTS
C401
-A ------------ ------ -
--------------- ------------
- ----
--------- ---
0
-- ---
-----
-
----
----- - ----
I
II
---------------
- — ------ --
I AI
B-4
Error! Unknown document property name.
MARKET BLVD
& W 78TH ST
0%-S G
`d
MARKET BLVD
o
&W78THST
SITE PLM
EMMGEMENTS
C402
MARKEr BLVD
W 78TH ST
-- ------- - 7 -- --------
r
-f- -17-1 ir
o",
T"
I
II
I$
IrJ
B-5
Error! Unknown document property name.
Mill
0
wpm
3 MZ %;M4
Z u.acZM7.
0
0
0 MARKET ILVI
W 78TH ST
1&
A SITE PLM
DMGEMENTS
It
EXHIBIT C TO
CONTRACT FOR PRIVATE DEVELOPMENT
FORM OF
CERTIFICATE OF COMPLETION
WHEREAS, the Chanhassen Economic Development Authority, a public body corporate
and politic under the laws of Minnesota (the ` EDA"), and Roers Chanhassen Harlow Apartments
Owner LLC, a Delaware limited liability company (the "Developer"), have entered into a certain
Contract for Private Development (the "Agreement") dated the day of , 2024,
and recorded in the office of the County Recorder in Carver County, Minnesota, as Document No.
, which Agreement contained certain covenants and restrictions regarding completion
of the Minimum Improvements, as defined in the Agreement; and
WHEREAS, the Developer has performed said covenants and conditions in a manner
deemed sufficient by the EDA to permit the execution and recording of this certification.
NOW, THEREFORE, this is to certify that all construction of the Minimum Improvements
specified to be done and made by the Developer has been completed and the County Recorder in
Carver County, Minnesota, is hereby authorized to accept for recording and to record the filing of
this instrument, to be a conclusive determination of the satisfactory termination of the covenants
and conditions relating to completion of the Minimum Improvements.
Dated:
CHANHASSEN ECONOMIC
DEVELOPMENT AUTHORITY
By:
Its President
By:
Its Executive Director
STATE OF MINNESOTA
ss.
COUNTY OF )
The foregoing instrument as acknowledged before me this day of ,
202_, by , the President of the Chanhassen Economic Development
Authority, a public body corporate and politic under the laws of Minnesota, on behalf of the
Economic Development Authority.
Notary Public
C-1
CH135-65-956439.0
STATE OF MINNESOTA )
ss.
COUNTY OF )
The foregoing instrument as acknowledged before me this day of ,
202_, by , the Executive Director of the Chanhassen Economic
Development Authority, a public body corporate and politic under the laws of Minnesota, on
behalf of the Economic Development Authority.
Notary Public
This Instrument Drafted By:
KENNEDY & GRAVEN, CHARTERED (RHB)
150 South Fifth Street
Suite 700
Minneapolis, MN 55402
(612) 337-9300
C-2
CH135-65-956439A
EXHIBIT D TO
CONTRACT FOR PRIVATE DEVELOPMENT
FORM OF AUTHORIZING RESOLUTION WITH NOTE
CHANHASSEN ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO.
RESOLUTION APPROVING THE ISSUANCE OF, AND
PROVIDING THE FORM, TERMS, COVENANTS AND
DIRECTIONS FOR THE ISSUANCE OF ITS TAXABLE TAX
INCREMENT REVENUE NOTE, SERIES 202 IN AN
AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED
$2,911,000
BE IT RESOLVED BY the Chanhassen Economic Development Authority (the "EDA"), as
follows:
Section 1. Authorization; Award of Sale.
1.01. Authorization. The EDA has heretofore approved the establishment of Tax
Increment Financing District No. 13 (the "TIF District"), located in the Downtown Chanhassen
Redevelopment Project (the "Redevelopment Project"), and has adopted a tax increment financing
plan for the purpose of financing certain improvements within the Redevelopment Project.
Pursuant to Minnesota Statutes, Section 469.178, the EDA is authorized to issue and sell
its bonds for the purpose of financing a portion of the public development costs of the Minimum
Improvements and Development Property in the Redevelopment Project. The bonds are payable
from all or any portion of revenues derived from the Minimum Improvements and the
Development Property (each as defined in the Agreement (defined below)) in the TIF District and
pledged to the payment of the bonds. The EDA hereby finds and determines that it is in the best
interests of Chanhassen that it issue and sell its taxable Tax Increment Revenue Note, Series 202_
(the "Note"), in the aggregate principal amount up to $2,911,000, for the purpose of financing
certain public costs of the Redevelopment Project.
1.02. Agreement Approved; Issuance, Sale and Terms of the Note. The EDA has
previously approved the Contract for Private Development (the "Agreement") between the EDA
and Roers Chanhassen Harlow Apartments Owner LLC, a limited liability company under the laws
of Delaware (the "Owner"), and authorized the President and Executive Director to execute the
Agreement. Pursuant to the Agreement, the Note will be issued to the Owner. The Note will be
dated as of the date of delivery and will bear interest at the rate of [the lesser of (1) 6.0% per annum;
(ii) the actual rate of interest paid if the Developer finances the Note separately from the
construction loan or first mortgage; or (iii) the actual rate of interest paid by the Developer on the
construction financing for the Minimum Improvements.] In exchange for the EDA's issuance of
D-1
CH135-65-956439.0
the Note to the Owner, the Owner will pay certain costs related to the Minimum Improvements
(the Qualifying Costs, as defined in the Agreement) pursuant to Section 3.2 of the Agreement. The
Note will be delivered in the principal amount up to $2,911,000 for reimbursement of the Owner's
costs in accordance with the terms of Sections 3.2 and 3.3 of the Agreement.
Section 2. Form of Note. The Note will be in substantially the following form, with
the blanks to be properly filled in and the principal amount and payment schedule adjusted as of
the date of issue:
UNITED STATE OF AMERICA
STATE OF MINNESOTA
CARVER COUNTY
CHANHASSEN ECONOMIC DEVELOPMENT AUTHORITY
No. R-1 $
TAXABLE TAX INCREMENT REVENUE NOTE
SERIES 202
Date
Rate of Original Issue
[lesser of (i) 6.0% per annum; (ii) the actual rate of interest paid if the Developer finances the Note
separately from the construction loan or first mortgage; or (iii) the actual rate of interest paid by
the Developer on the construction financing for the Minimum Improvements]
The Chanhassen Economic Development Authority (the "EDA"), for value received,
certifies that it is indebted and hereby promises to pay to Roers Chanhassen Harlow Apartments
Owner LLC, a Delaware limited liability company, or registered assigns (the "Owner"), the
principal sum of $ with interest thereon at the rate specified below, as and to the extent
set forth herein.
1. Payments. Principal and interest payments ("Payments") will be paid on August 1,
2026, and each February 1 and August 1 thereafter until the earlier of payment in full or February 1,
2042 ("Payment Dates"), in the amounts and from the sources set forth in Section 3 herein.
Payments are payable by mail to the address of the Owner or any other address as the
Owner may designate upon 30 days written notice to the EDA. Payments on this Note are payable
in any coin or currency of the United States of America which, on the Payment Date, is legal tender
for the payment of public and private debts.
2. Interest. Interest shall be simple, non -compounding interest at % per annum
which is [the lesser of (i) 6.0% per annum; (ii) the actual rate of interest paid if the Developer
finances the Note separately from the construction loan or first mortgage; or (iii) the actual rate of
interest paid by the Developer on the construction financing for the Minimum Improvements.]
Interest shall be computed on the basis of a 360-day year consisting of 12 30-day months.
D-2
CH135-65-956439.0
3. Available Tax Increment. Payments on this Note are payable on each Payment
Date in the amount of and solely payable from "Available Tax Increment," which will mean, on
each Payment Date, 95 percent of the Tax Increment attributable to the Development Property and
Minimum Improvements (as defined in the Agreement) and paid to the EDA by Carver County,
Minnesota in the six months preceding the Payment Date, all as the terms are defined in the
Contract for Private Development between the EDA and Owner dated as of ,
2024 (the "Agreement"). Available Tax Increment will not include any Tax Increment if, as of
any Payment Date, there is an uncured Event of Default by the Owner under the Agreement.
The EDA will have no obligation to pay principal or interest on this Note on each Payment
Date from any source other than Available Tax Increment, and the failure of the EDA to pay the
entire amount of principal and interest on this Note on any Payment Date will not constitute a
default hereunder as long as the EDA pays principal and interest to the extent of Available Tax
Increment. If on any Payment Date there is insufficient Available Tax Increment to pay accrued
and unpaid interest on this Note on such date, the amount of such deficiency shall be deferred and
paid, without interest thereon, on the next Payment Date on which the EDA has Available Tax
Increment in excess of the amount necessary to pay the accrued and unpaid interest on this Note
on such subsequent Payment Date. The EDA will have no obligation to pay any unpaid balance
of principal or interest that may remain after the Final Payment Date of February 1, 2042.
4. Optional Prepayment. The principal sum and accrued interest payable under this
Note is pre -payable in whole or in part at any time by the EDA without premium or penalty. No
partial prepayment will affect the amount or timing of any other regular payment otherwise
required to be made under this Note.
5. Suspension of Payment. At the EDA's option, the EDA's obligation to make any
payments under this Note will be suspended upon the occurrence of an Event of Default on the
part of the Developer as defined in Section 8.1 of the Agreement, but only if the Event of Default
has not been cured in accordance with Section 8.2 of the Agreement. The EDA may also suspend
payments under this Note in accordance with Section 6.3 of the Agreement.
6. Nature of Obligation. This Note is a single note in the total principal amount of
$ issued to aid in financing certain public costs of a Redevelopment Project
undertaken by the EDA pursuant to Minnesota Statutes, Sections 469.090 through 469.108, as
amended, and is issued pursuant to an authorizing resolution (the "Resolution") duly adopted by
the EDA on , 202_, pursuant to and in full conformity with the Constitution and
laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.1794, as
amended. This Note is a limited obligation of the EDA which is payable solely from Available
Tax Increment pledged to the payment hereof under the Resolution. This Note will not be deemed
to constitute a general obligation of the State of Minnesota or any political subdivision thereof,
including, without limitation, the Chanhassen Economic Development Authority or the City of
Chanhassen. Neither the State of Minnesota, nor any political subdivision thereof will be obligated
to pay the principal of or interest on this Note or other costs incident hereto except out of Available
Tax Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota
D-3
CH135-65-956439A
or any political subdivision thereof is pledged to the payment of the principal of and interest on
this Note or other costs incident hereto.
7. Estimated Tax Increment Payments. Any estimates of Tax Increment prepared by
the EDA or its municipal advisors in connection with the TIF District or the Agreement are for the
benefit of the EDA, and are not intended as representations on which the Owner may rely.
THE EDA MAKES NO REPRESENTATION OR WARRANTY THAT THE
AVAILABLE TAX INCREMENT WILL BE SUFFICIENT TO PAY THE PRINCIPAL OF OR
INTEREST ON THIS NOTE.
8. Registration and Transfer; Assigning . As provided in the Resolution, and subject
to certain limitations set forth herein, this Note is issuable only as a fully registered note without
coupons. This Note is transferable upon the books of the EDA kept for that purpose at the principal
office of the EDA's Executive Director as Registrar, by the Owner hereof in person or by the
Owner's attorney duly authorized in writing, upon surrender of this Note together with a written
instrument of transfer satisfactory to the EDA, duly executed by the Owner. Upon the transfer or
exchange and the payment by the Owner of any tax, fee, or governmental charge required to be
paid by the EDA with respect to the transfer or exchange, there will be issued in the name of the
transferee a new Note of the same aggregate principal amount and interest rate and maturing on
the same dates.
This Note may be transferred without the approval of the EDA; provided that this Note will
not be transferred to any person other than an Affiliate, or other related entity, of the Owner unless
the EDA has been provided with an investment letter in a form substantially similar to the
investment letter submitted by the Owner or a certificate of the transferor, in a form satisfactory to
the EDA, that the transfer is exempt from registration and prospectus delivery requirements of
federal and applicable state securities laws. This Note may be assigned with the consent of the
EDA, which will not be unreasonably withheld or delayed. Notwithstanding anything to the
contrary in this Note, in no event will a lender providing funds to the Developer and taking an
assignment of the Note as security for such funds be required to sign an investment letter at either
the time of execution of an assignment or transfer of the Note as a result of the assignment.
This Note is subject to the Lookback provisions of section 3.5 of the Agreement.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required
by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be
performed in order to make this Note a valid and binding limited obligation of the EDA according
to its terms, have been done, do exist, have happened, and have been performed in due form, time
and manner as so required.
D-4
CH135-65-956439.0
IN WITNESS WHEREOF, the board of commissioners of the Chanhassen Economic
Development Authority, has caused this Note to be executed with the manual signatures of its
President and Executive Director, all as of the Date of Original Issue specified above.
President
CHANHASSEN ECONOMIC
DEVELOPMENT AUTHORITY
Executive Director
D-5
CH135-65-956439A
REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond register
of the EDA's Executive Director, in the name of the person last listed below.
Date of Registration Registered Owner Signatureof Executive Director
Roers Chanhassen Harlow
Apartments Owner LLC
c/o Roers Companies
Two Carlson Parkway North
Suite 400
Plymouth, MN 55447
Attn: General Counsel
Federal Tax ID #
[End of Form of Note]
Section 3. Terms, Execution and Delivery.
3.01. Denomination, Payment. The Note will be issued as a single typewritten note
numbered R-1.
The Note will be issuable only in fully registered form. Principal and interest of the Note
will be payable by check or draft issued by the Registrar described herein.
3.02. Dates. Principal and interest of the Note will be payable by mail to the owner of
record thereof as of the close of business on the fifteenth day of the month preceding the Payment
Date, whether or not the day is a business day.
3.03. Registration. The EDA hereby appoints the Executive Director to perform the
functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration
and the rights and duties of the EDA and the Registrar with respect thereto will be as follows:
(a) Re inter. The Registrar will keep at his office a bond register in which the Registrar
will provide for the registration of ownership of the Note and the registration of transfers and
exchanges of the Note.
(b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the
registered owner thereof or accompanied by a written instrument of transfer, in form reasonably
satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly
authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the
name of the designated transferee or transferees, a new Note of a like aggregate principal amount,
interest rate and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note
will not be transferred to any person other than an Affiliate, or other related entity, of the Owner
D-6
CH135-65-956439.0
unless the EDA has been provided with an investment letter in a form substantially similar to the
investment letter submitted by the Owner or a certificate of the transferor, in a form satisfactory to
the EDA, that the transfer is exempt from registration and prospectus delivery requirements of
federal and applicable state securities laws. The Registrar may close the books for registration of
any transfer after the fifteenth day of the month preceding each Payment Date and until the
Payment Date.
(c) Cancellation. The Note surrendered upon any transfer will be promptly cancelled
by the Registrar and thereafter disposed of as directed by the EDA.
(d) Improper or Unauthorized Transfer. When the Note is presented to the Registrar
for transfer, the Registrar may refuse to transfer the same until he is satisfied that the endorsement
on the Note or separate instrument of transfer is legally authorized. The Registrar will incur no
liability for his refusal, in good faith, to make transfers which he, in his judgment, deems improper
or unauthorized.
(e) Persons Deemed Owners. The EDA and the Registrar may treat the person in
whose name the Note is at any time registered in the bond register as the absolute owner of the
Note, whether the Note is overdue or not, for the purpose of receiving payment of, or on account
of, the principal of and interest on the Note and for all other purposes, and all the payments so
made to any registered owner or upon the owner's order will be valid and effectual to satisfy and
discharge the liability of the EDA upon the Note to the extent of the sum or sums so paid.
(f) Taxes Fees and Charges. For every transfer or exchange of the Note, the Registrar
may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee,
or other governmental charge required to be paid with respect to the transfer or exchange.
(g) Mutilated, Lost, Stolen or Destroyed Note. In case the Note becomes mutilated or
is lost, stolen, or destroyed, the Registrar will deliver a new Note of like amount, interest rate,
maturity dates and tenor in exchange and substitution for and upon cancellation of the mutilated
Note or in lieu of and in substitution for the Note lost, stolen, or destroyed, upon the payment of
the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the
Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that the
Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the
Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in
which both the EDA and the Registrar will be named as obligees. The Note so surrendered to the
Registrar will be cancelled by him and evidence of the cancellation will be given to the EDA. If
the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in
accordance with its terms, it will not be necessary to issue a new Note prior to payment.
3.04. Preparation and Delivery. The Note will be prepared under the direction of the
Executive Director and will be executed on behalf of the EDA by the signatures of its Chair and
Executive Director. In case any officer whose signature appears on the Note ceases to be the
officer before the delivery of the Note, the signature will nevertheless be valid and sufficient for
all purposes, the same as if the officer had remained in office until delivery. When the Note has
D-7
CH135-65-956439.v3
been so executed, it will be delivered by the EDA to the Owner following the delivery of the
necessary items delineated in Section 3.3 of the Agreement.
Section 4. Security Provisions.
4.01. Pledge. The EDA hereby pledges to the payment of the principal and interest of
the Note all Available Tax Increment as defined in the Note. Available Tax Increment will be
applied to payment of accrued interest first, then the principal of the Note in accordance with the
terms of the form of Note set forth in Section 2 of this resolution.
4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal
thereof or interest thereon (to the extent required to be paid pursuant to this resolution) remains
unpaid, the EDA will maintain a separate and special "Bond Fund" to be used for no purpose other
than the payment of the principal of and interest on the Note. The EDA irrevocably agrees to
appropriate to the Bond Fund in each year Available Tax Increment. Any Available Tax Increment
remaining in the Bond Fund will be transferred to the EDA's account for the TIF District upon the
payment of all principal and interest to be paid with respect to the Note.
Section 5. Certification of Proceedings.
5.01. Certification of Proceedings. The officers of the EDA are hereby authorized and
directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and
records of the EDA, and the other affidavits, certificates, and information as may be required to
show the facts relating to the legality and marketability of the Note as the same appear from the
books and records under their custody and control or as otherwise known to them, and all the
certified copies, certificates, and affidavits, including any heretofore furnished, will be deemed
representations of the City as to the facts recited therein.
Section 6. Effective Date. This resolution will be effective upon execution by the President
and Executive Director following authorization by the board of commissioners of the Chanhassen
Economic Development Authority.
Adopted by the Chanhassen Economic Development Authority, this day of ,
202
President
Executive Director
D-8
CH135-65-956439.v3
EXHIBIT E TO
CONTRACT FOR PRIVATE DEVELOPMENT
FORM OF INVESTMENT LETTER
To the Chanhassen Economic Development Authority (the "EDA")
Attention: Executive Director
Dated: .202
Re:
Owner Project)
Tax Increment Revenue Note (Roers Chanhassen Harlow Apartments
The undersigned, as Purchaser of $ in principal amount of the above -
captioned Tax Increment Revenue Note (Roers Chanhassen Harlow Apartments Owner Project)
(the "Note"), approved by the Board of Commissioners of the Chanhassen Economic Development
Authority on , 202_, hereby represents to you and to Kennedy & Graven,
Chartered, Minneapolis, Minnesota, as legal counsel to the EDA, as follows:
1. We understand and acknowledge that the Note is delivered to the Purchaser on this
date pursuant to the Contract for Private Development by and between the EDA and the Purchaser
dated , 2024 (the "Agreement").
2. The Note is payable solely from Available Tax Increment pledged to the Note, as
defined therein.
3. We have sufficient knowledge and experience in financial and business matters,
including purchase and ownership of municipal obligations, to be able to evaluate the risks and
merits of the investment represented by the purchase of the above -stated principal amount of the
Note.
4. We acknowledge that no offering statement, prospectus, offering circular or other
comprehensive offering document or disclosure containing material information with respect to
the EDA and the Note has been issued or prepared by the EDA, and that, in due diligence, we have
made our own inquiry and analysis with respect to the EDA, the Note and the security therefor,
and other material factors affecting the security and payment of the Note.
5. We acknowledge that we have either been supplied with or have access to
information, including financial statements and other financial information, to which a reasonable
investor would attach significance in making investment decisions, and we have had the
opportunity to ask questions and receive answers from knowledgeable individuals concerning the
EDA, the Note and the security therefor, and that as reasonable investors we have been able to
make our decision to purchase the above -stated principal amount of the Note.
E-1
CH135-65-956439A
6. We have been informed that the Note (i) is not being registered or otherwise
qualified for sale under the "Blue Sky" laws and regulations of any state, or under federal securities
laws or regulations, (ii) will not be listed on any stock or other securities exchange, and (iii) will
carry no rating from any rating service.
7. We acknowledge that the EDA and Kennedy & Graven, Chartered, as legal counsel
to the EDA, have not made any representations or warranties as to the status of payments on the
Note for the purpose of federal or state income taxation.
8. We represent to you that we are purchasing the Note for our own account and not
for resale or other distribution thereof, except to the extent otherwise provided in the Note or as
otherwise approved in writing by the EDA.
9. All capitalized terms used herein have the meaning provided in the Agreement
unless the context clearly requires otherwise.
10. The Purchaser's federal tax identification number is
11. We acknowledge receipt of the Note on the date hereof.
IN WITNESS WHEREOF, the undersigned has executed this Investment Letter as of the
date and year first written above.
ROERS CHANHASSEN HARLOW APARTMENTS OWNER LLC
I'
STATE OF )
ss.
COUNTY OF 1
The foregoing instrument was executed before me this day of ,
202_, by , the of Roers Chanhassen Harlow Apartments
Owner LLC, a Delaware limited liability company, on behalf of the company.
Notary Public
E-2
CH 135-65-956439.0
EXHIBIT F TO
CONTRACT FOR PRIVATE DEVELOPMENT
PROFORMA, LOOKBACK AND TOTAL DEVELOPMENT COSTS
[to be completed]
F-1
CH135-65-956439.v3
EXHIBIT G TO
CONTRACT FOR PRIVATE DEVELOPMENT
FORM OF
ASSESSMENT AGREEMENT
and
ASSESSOR'S CERTIFICATION
By and among
THE CHANHASSEN ECONOMIC
DEVELOPMENT AUTHORITY
and
ROERS CHANHASSEN HARLOW APARTMENTS OWNER LLC
and
COUNTY ASSESSOR FOR CARVER COUNTY, MINNESOTA
This Document was drafted by:
KENNEDY & GRAVEN, Chartered (RHB)
150 South Fifth Street Suite 700
Minneapolis, MN 55402
(612)337-9300
G-1
CH135-65-956439.v3
THIS ASSESSMENT AGREEMENT, dated as of this day of , 2024, by and
between the Chanhassen Economic Development Authority, a public body corporate and politic
under the laws of Minnesota (the "EDA"), and Roers Chanhassen Harlow Apartments Owner LLC,
a limited liability company under the laws of Delaware (the "Owner").
WITNESSETH:
WHEREAS, on or before the date hereof, the EDA and the Owner have entered into a
Contract for Private Development (the "Agreement") concerning the property legally described on
Exhibit A hereto, (the "Development Property"); and
WHEREAS, pursuant to the Agreement, the Owner will construct a project consisting of
two buildings, including approximately 126 multifamily rental housing units, 3,029 sq. ft. of
commercial space and 68 structured parking stalls (the "Minimum Improvements"); and
WHEREAS, the EDA and the Owner desires to establish a minimum market value for the
Development Property and the Minimum Improvements to be constructed thereon, pursuant to
Minnesota Statutes, section 469.177, Subd. 8; and
WHEREAS, the EDA and the County Assessor for Carver County, Minnesota have
reviewed the Plans for the Minimum Improvements which the Owner has agreed to construct on
the Development Property pursuant to the Agreement.
NOW, THEREFORE, the parties to this Assessment Agreement, in consideration of the
promises, covenants and agreements made herein and in the Agreement by each to the other, do
hereby agree as follows:
1. The Minimum Market Value for the Development Property with the Minimum
Improvements shall be $36,971,000. The parties agree that this Minimum Market Value shall be
placed against the Development Property as of January 2, 2026, for taxes payable beginning in
2027 notwithstanding any failure to start or complete construction of such Minimum
Improvements by that date.
2. The Minimum Market Value herein established shall be of no further force and
effect and this Assessment Agreement shall terminate on the Termination Date. The Termination
Date has the meaning given to it under the Agreement.
3. This Assessment Agreement shall be promptly recorded by the Owner with a copy
of Minnesota Statutes, section 469.177, Subd. 8 set forth in Exhibit B hereto. The Owner shall
pay all costs of recording this Assessment Agreement.
4. Neither the preambles nor the provisions of this Assessment Agreement are
intended to, nor shall they be construed as, modifying the terms of the Agreement. Unless the
context indicates clearly to the contrary, the terms used in this Assessment Agreement shall have
the same meaning as the terms used in the Agreement.
G-2
CH135-65-956439.0
5. This Assessment Agreement shall inure to the benefit of and be binding upon the
parties and their successors and assigns.
6. Each of the parties has authority to enter into this Assessment Agreement and to
take all actions required of it and has taken all actions necessary to authorize the execution and
delivery of this Assessment Agreement.
7. In the event any provision of this Assessment Agreement shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
8. The parties hereto agree that they will, from time to time, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, such supplements, amendments
and modifications hereto, and such further instruments as may reasonably be required for
correcting any inadequate, or incorrect, or amended description of the Development Property, or
for carrying out the expressed intention of this Assessment Agreement.
9. Except as provided in Section 8 hereof, this Assessment Agreement may not be
amended nor any of its terms modified except by a writing authorized and executed by all parties
hereto.
10. This Assessment Agreement may be simultaneously executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the
same instrument.
11. This Assessment Agreement shall be governed by and construed in accordance with
the laws of Minnesota.
G-3
CH135-65-956439.0
CHANHASSEN ECONOMIC
DEVELOPMENT AUTHORITY
I0
And by:
STATE OF MINNESOTA )
ss.
COUNTY OF )
President
Executive Director
The foregoing instrument as acknowledged before me this day of ,
2024, by , the President of the Chanhassen Economic Development Authority, a
public body corporate and politic under the laws of Minnesota, on behalf of the Economic
Development Authority.
Notary Public
STATE OF MINNESOTA )
ss.
COUNTY OF )
The foregoing instrument as acknowledged before me this day of ,
2024, by , the Executive Director of the Chanhassen Economic Development
Authority, a public body corporate and politic under the laws of Minnesota, on behalf of the
Economic Development Authority.
Notary Public
G-4
CH135-65-956439A
ROERS CHANHASSEN HARLOW
APARTMENTS OWNER LLC
Tom Cronin, Authorized Signatory
STATE OF )
SS.
COUNTY OF )
The foregoing instrument was executed before me this day of ,
2024, by Tom Cronin, the Authorized Signatory of Roers Chanhassen Harlow Apartments Owner
LLC, a Delaware limited liability company, on behalf of the company,
Notary Public
G-5
CH135-65-956439.v3
CERTIFICATION BY ASSESSOR
The undersigned, having reviewed the plans and specifications for the improvements to be
constructed and the market value assigned to the land upon which the improvements are to be
constructed, and being of the opinion that the minimum market value contained in the foregoing
Agreement appears reasonable, hereby certify as follows: The undersigned Assessor being legally
responsible for the assessment of the described property, hereby certifies that the market value
assigned to such land and improvements at the property, legally described on Exhibit A attached
hereto, shall be not less than Thirty -Six Million Nine Hundred Seventy -One Thousand Dollars
($36,971,000) as of January 2°d, 2026, for taxes payable beginning in 2027, until termination of
this Agreement.
County Assessor for
Carver County, Minnesota
STATE OF MINNESOTA )
ss.
COUNTY OF CARVER )
The foregoing instrument was acknowledged before me this day of ,
2024, by , the County Assessor, Carver County, Minnesota.
Notary Public
G-6
CH135-65-956439.0
EXHIBIT A
TO ASSESSMENT AGREEMENT
The Development Property is legally described as follows:
PIDS: 25-11-80-010 (east building)
25-44-60-011 (east building)
25-28-30-010 (east building)
[legal descriptions to be added]
G-7
CH135-65-956439.v3
EXHIBIT B
TO ASSESSMENT AGREEMENT
Section 469.177, subd. 8. Assessment Agreements. An authority may enter into a written
assessment agreement with any person establishing a minimum market value of land, existing
improvements, or improvements to be constructed in a district, if the property is owned or will be
owned by the person. The minimum market value established by an assessment agreement may
be fixed, or increase or decrease in later years from the initial minimum market value. If an
agreement is fully executed before July 1 of an assessment year, the market value as provided
under the agreement must be used by the county or local assessor as the taxable market value of
the property for that assessment. Agreements executed on or after July 1 of an assessment year
become effective for assessment purposes in the following assessment year. An assessment
agreement terminates on the earliest of the date on which conditions in the assessment agreement
for termination are satisfied, the termination date specified in the agreement, or the date when tax
increment is no longer paid to the authority under section 469.176, subdivision 1. The assessment
agreement shall be presented to the county assessor, or city assessor having the powers of the
county assessor, of the jurisdiction in which the tax increment financing district and the property
that is the subject of the agreement is located. The assessor shall review the plans and
specifications for the improvements to be constructed, review the market value previously assigned
to the land upon which the improvements are to be constructed and, so long as the minimum market
value contained in the assessment agreement appears, in the judgment of the assessor, to be a
reasonable estimate, shall execute the following certification upon the agreement:
The undersigned assessor, being legally responsible for the assessment of the above
described property, certifies that the market values assigned to the land and
improvements are reasonable.
The assessment agreement shall be filed for record and recorded in the office of the county
recorder or the registrar of titles of each county where the real estate or any part thereof is situated.
After the agreement becomes effective for assessment purposes, the assessor shall value the
property under section 273.11, except that the market value assigned shall not be less than the
minimum market value established by the assessment agreement. The assessor may assign a
market value to the property in excess of the minimum market value established by the assessment
agreement. The owner of the property may seek, through the exercise of administrative and legal
remedies, a reduction in market value for property tax purposes, but no city assessor, county
assessor, county auditor, board of review, board of equalization, commissioner of revenue, or court
of this state shall grant a reduction of the market value below the minimum market value
established by the assessment agreement during the term of the agreement filed of record
regardless of actual market values which may result from incomplete construction of
improvements, destruction, or diminution by any cause, insured or uninsured, except in the case
of acquisition or reacquisition of the property by a public entity. Recording an assessment
agreement constitutes notice of the agreement to anyone who acquires any interest in the land or
improvements that is subject to the assessment agreement, and the agreement is binding upon
them.
W. .
CH135-65-956439A