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Home My WebLink About2012-11-07 PACKET 04.B.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA MEETING ITEM # 4V DATE 11/7/2012 PREPARED BY Administ ORIGINATING DEPARTMENT Ryan Schroeder STAFF AUTHOR COUNCIL ACTION REQUEST Consider approving the second amendment to the development agreement with Stonehenge Development LLC. STAFF RECOMMENDATION Approve the amendment. ADVISORY COMMISSION ACTION DATE REVIEWED APPROVED DENIED ❑ PLANNING ❑ ❑ ❑ ❑ PUBLIC SAFETY ❑ ❑ ❑ ❑ PUBLIC WORKS ❑ ❑ ❑ ❑ PARKS AND RECREATION ❑ ❑ ❑ ❑ HUMAN SERVICES /RIGHTS ❑ ❑ ❑ ® ECONOMIC DEV. AUTHORITY 10/31/12 ❑ ® ❑ ❑ ❑ ❑ ❑ SUPPORTING DOCUMENTS ® MEMO /LETTER: Memo from Ryan Schroeder. ❑ RESOLUTION: ❑ ORDINANCE: ❑ ENGINEERING RECOMMENDATION: ❑ LEGAL RECOMMENDATION: ® OTHER: Attachments. ADMINISTRATORS COMMENTS r iz? 4 - �`% �� City Administrator Date COUNCIL ACTION TAKEN: ❑ APPROVED ❑ DENIED ❑ OTHER C:\Documents and Settings \nbelscamper \Local Settings \Temporary Internet Files\ Content.Outlook \7M17XZQ6\Action Form- 1012CC -Home Depot.doc City of Cotta Grove Minnesota To: Honorable Mayor and City Council Members From: Ryan R. Schroeder, City Administrator Date: November 1, 2012 Subject: Stonehenge Development Agreement As the Council is aware, the agreement between the EDA and Stonehenge LLC toward the repurposing of the Home Depot property was to expire on October 31, 2012. In anticipation of that, a special meeting of the EDA was held on October 31, 2012, where the EDA approved an extension of the development agreement to their next regular meeting on November 13, 2012 (memo attached, dated October 29, 2012). In addition, the EDA recommended approval of a second amendment to the development contract (attached). CC Action: By motion approve the second amendment to the development agreement with Stonehenge Development LLC M City of Cotta Grove Minnesota To: Honorable Mayor and City Council Members From: Ryan R. Schroeder, City Administrator Date: October 29, 2012 Subject: Stonehenge Development Agreement The EDA has in place an agreement, as amended, with Stonehenge LLC toward repurposing of the Home Depot property. That agreement expires on October 31, 2012. We have called a special meeting of the EDA to receive direction relative to development options. The current agreement provides that a closing on the real estate between Home Depot and the developer must occur on or before October 31. It is anticipated that said closing date will lapse. Of late, the development team working on this project has changed. The primary parties with whom City staff has been working have left Stonehenge as of October 12, 2012 (or before). Those individuals have formed a new development company, Venture Pass, LLC. With the exodus of development staff Stonehenge has created a new development team which is interested in pursuing the development. The City development staff believes it appropriate to facilitate the opportunity for the new development team to pursue the project within a schedule that out of necessity has become significantly constrained. Proposed is that the EDA grant an extension of the development agreement to the next regular meeting of the EDA, November 13. It is suggested that at that or any earlier time that Stonehenge provide evidence of the following: 1. Property interest in the Home Depot property (purchase agreement with a closing date in November) 2. Evidence of financing 3. Evidence of leases with tenants sufficient to fulfill the commitments of the existing development agreement 4. Signature upon a subsequent amendment to the development agreement that would provide for closing during November (but after the termination of the current proposed extension date) and construction and surety commitments to meet state law requirements for use of Jobs Bill tax increment. Action on the proposed agreement extension would be taken to the City Council for proposed ratification at their next meeting. EDA Action: By motion approve the second amendment to the development agreement with Stonehenge upon City attorney review and approval SECOND AMENDMENT TO CONTRACT FOR PRIVATE DEVELOPMENT By and Between COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY and STONEHENGE DEVELOPMENT, LLC This document drafted by: KENNEDY & GRAVEN, CHARTERED 470 U.S. Ban1c Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337 -9300 413444 RHB CT165 -45 SECOND AMENDMENT TO CONTRACT FOR PRIVATE DEVELOPMENT This Second Amendment to Contract for Private Development (the "Second Amendment "), is made this 31st day of October, 2012, by and between the Cottage Grove Economic Development Authority, a public body corporate and politic under the laws of Minnesota (the "Authority ") and Stonehenge Development, LLC, a Minnesota limited liability company (the "Developer "). WITNESSETH: WHEREAS, the Authority and the Developer entered into that certain Contract for Private Development dated , 2012, regarding the land legally described in Exhibit A attached hereto (the "Development Property ") and which was recorded as document no. on , 2012, in the Office of the County Recorder, Washington County, Minnesota; and WHEREAS, the Authority and the Developer entered into that certain First Amendment to Contract for Private Development regarding the Development Property dated , 2012, and recorded as document no. on , 2012, in the Office of the County Recorder,Washington County, Minnesota; and WHEREAS, the Contract for Private Development and the First Amendment to Contract for Private Development are collectively referred to herein as the "Contract "; and WHEREAS, the Authority and the Developer again wish to amend the terms of the Contract as specified herein. NOW, THEREFORE, in consideration of the covenants and the obligations contained herein, the Authority and the Developer hereby agree as follows: 1. Section 3.1 of the Contract is amended by deleting the date October 31, 2012, and inserting the date November 13, 2012, in the first sentence. 2. Section 9.2 of the Contract is amended by deleting the last paragraph thereof in its entirety and by inserting the following paragraph in its place: Notwithstanding anything herein to the contrary, i) failure to commence work on the Minimum Improvements before July 1, 2012 is an Event of Default not subject to the 30 -day cure period above and renders this Agreement null and void, ii) failure by the Developer to acquire the Development Property in fee by November 13, 2012, renders this Agreement null and void unless the Developer has received any Spending Plan Increment, and iii) the Authority shall have no obligation to expend any Spending Plan Increment on assistance to the Developer after December 31, 2012 unless, prior to said date, the Authority's legal authorization to do so is extended by state law and subject to the Authority's 413444 RHB CT165 -45 option to utilize Pooled Increment after that date to satisfy its obligation to the Developer as noted in section 3.2(f) of this Agreement. 3. Except as specifically noted in this Second Amendment, the Contract shall remain in full force and effect. IN WITNESS WHEREOF, the Authority and the Developer have caused this Second Amendment to be executed in their names and on their behalves as of the date first above written. COTTAGE GROVE 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 , 2012, by and , president and executive director, respectively, of the Cottage Grove Economic Development Authority, a public body corporate and politic under the laws of Minnesota, on behalf of the Economic Development Authority. Notary Public 413444 RHB CT165 -45 STONEHENGE DEVELOPMENT, LLC, A MINNESOTA LIMITED LIABILITY COMPANY Its: STATE OF MINNESOTA ) ss. COUNTY OF ) The foregoing instrument was executed this of day , 2012, by the of Stonehenge Development, LLC, a Minnesota limited liability company, on behalf of the limited liability company. Notary Public 413444 RHB CT165 -45 EXHIBIT A LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY The Development Property is located in Washington County, Minnesota and is legally described as follows: Lot 2, Block 1, Grove Plaza 2 nd Addition 413444 RHB CT165 -45 A -1