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HomeMy WebLinkAbout2015-10-11 PACKET 05.02.A. CONTRACT For PRIVATE DEVELOPMENT By and Between COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY GROVE-RAINBOW, L.P. And THE CITY OF COTTAGE GROVE This document drafted by: LeVander, Gillen & Miller, P.A. 633 South Concord St. Suite 400 South St. Paul, MN 55075 651-451-1831 CONTRACT FOR PRIVATE DEVELOPMENT THIS AGREEMENT, made this _____ day of , 2015, by and between the Cottage Grove Economic Development Authority, a public body corporate and politic, having its principal office at 12800 Ravine Parkway South, Cottage Grove, Minnesota 55016, Grove-Rainbow, L.P., a Minnesota limited partnership, having its principal office c/o EBL&S Property Management, Inc., 200 South Broad Street, The Bellevue, Suite 415, Philadelphia, PA 19102, and the City of Cottage Grove, a municipal corporation, having its principal office at 12800 Ravine Parkway South, Cottage Grove, Minnesota 55016. WITNESSETH: WHEREAS, the Developer entered into a Purchase Agreement with the EDA for the purchase of Development Property within the City; and WHEREAS, the EDA and the City believe that the redevelopment of the Development Property pursuant to and in general fulfillment of this Agreement is in the vital and best interests of the City, will promote the health, safety, morals, and welfare of its residents, and will be in accord with the public purposes and provisions of the applicable State and local laws and requirements. NOW, THEREFORE, in consideration of the covenants and the mutual obligations contained herein, the EDA, the Developer and the City hereby covenant and agree as follows: ARTICLE I Definitions Section 1.1.Definitions. In this Agreement the following terms shall have the meanings given unless a different meaning clearly appears from the context: amended, or supplemented. ttage Grove, a municipal corporation under the laws of Minnesota. amended from time to time. at least fifty percent (50%) of the net square footage of the Home Depot Building is leased, or available for lease, to any person or entity, for use in its private trade or business, or occupied by Developer for use in its trade or business. means a compilation of policy statements, goals, standards, and maps for guiding the physical, social and economic development, both private and public, of the City and its environs, and may include, but is not limited to, the following: statements of policies, goals, standards, a land use plan, including proposed densities for development, a 1 community facilities plan, a transportation plan, and recommendations for plan execution. A comprehensive plan represents the pls recommendations for the future development of the community. The current Comprehensive Plan existing as of the Effective Date any final plans required to be submitted by the Developer to the City and approved by the City for construction of the Minimum Improvements. Grove-Rainbow, L.P., a Minnesota limited partnership, its successors and assigns. means the real property upon which the Home Exhibit A Depot Building is located. The Property is described in attached hereto. mic Development Authority, a public body corporate and politic under the laws of the State of Minnesota. the City, Developer and the EDA each receive a fully executed copy of this Agreement with all Exhibits attached hereto (except Exhibit E), which Agreement may be in original or electronic format. The Final Plat (Exhibit E) shall be added following approval by the City. The addition of Exhibit E to this Agreement does not change the original Effective Date of this Agreement. EDA listed in Article IX of this Agreement. Development Property. The Final Plat shall identify all public drainage and utility easements within the TIF District, and all points of access across the Rainbow Property or other property) from Development Property to East Point Douglas Road South. The Final Plat shall be attached hereto as Exhibit E upon approval by the City. building on the Development Property. --Vee, Inc., an Iowa corporation, its successors and assigns. the EDA and Home Depot dated June 12, 2002, document number 3243181, which is recorded in Exhibit B the Washington County Recorderand attached hereto as . Home Depot Building, or any part thereof, is available and being actively marketed for commercial uses consistent with the B-2 zoning 2 district. This shall be evidenced by the use of leasing signs, preparing marketing materials, hiring commercial leasing agents or other reasonable efforts to market the Home Depot Building. planning agency or the planning department of the City, as defined in City Code Title 11 Chapter 1 Section 3. Exhibit C EDA for the sale of the Development Property, attached hereto as . property located at 7300 East Point Douglas Road South, Cottage Grove, Minnesota, currently owned by Developer. Independent School District #833. EDA intends to acquire from the School District and subsequently sell to Hy-Vee. School District Property shall not be incorporated or included on the Final Plat until the TIF District expires, which is no later than December 31, 2028, unless extended by law. The School District Property is not currently included in the TIF District and is not anticipated to be added to the TIF District. and 00/100 Dollars ($300,000.00). The Subsidy Amount represents the difference between the price the EDA is paying for the Development Property to acquire the Development Property from Home Depot ($2,250,000) and the price that Developer is paying for the Development Property (if Developer purchases the Development Property) to acquire the Development Property from the EDA ($1,950,000). Tax Increment Financing District 1-12, which includes the Development Property. conditions; strikes or other labor troubles; unavailability of materials; fire or other casualty to the Development Property, the Home Depot Building (interior or exterior) and/or any other Developer improvements (interior or exterior) on the Development Property; litigation commenced by third parties or litigation commenced by City, Developer, EDA or Hy-Vee under that certain Development Agreement dated October 29, 2015, by and among City, EDA and Hy- Vee with respect to the redevelopment of the Rainbow Property and certain adjacent property Hy-Vee Development Agreement and the reconfiguration by Hy-Vee of the storm water retention/detention pond on the Rainbow Property into an underground pipe system for the benefit of Hy-Vee, Developer, the Development Property and others, which by injunction or other action directly or indirectly results in delays; or, except those of the EDA reasonably contemplated by this Agreement, any acts or omissions of any federal, State or local governmental unit which result in delays in marketing the Home Depot Building for commercial uses or reconstruction of the Home Depot Building (interior or exterior) or any other Developer improvements (interior or exterior) on the Development Property following a fire or other casualty, or any other delays caused by reasons outside of the reasonable control of Developer. 3 Grove City Code, as it may be amended from time to time. Section 1.2.Exhibits. The following exhibits are attached to and by reference made a part of this Agreement: Exhibit A. Legal description of the Development Property Exhibit B. Minimum Assessment Agreement Exhibit C. Purchase Agreement by and between the EDA and Grove-Rainbow Exhibit D. Business Subsidy Policy Exhibit E. Final Plat Section 1.3.Rules of Interpretation. (a)This Agreement shall be interpreted in accordance with and governed by the laws of Minnesota. (b), ,, import, without reference to any particular section or subdivision of this Agreement, refer to this Agreement as a whole rather than to any particular section or subdivision hereof. (c)References herein to any particular section or subdivision hereof are to the section or subdivision of this Agreement as originally executed, or subsequently modified or amended. (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 the provisions of this Agreement. ARTICLE II Representations and Warranties Section 2.1.Representations by the EDA. The EDA makes the following representations as the basis for the undertakings on its part herein contained: (a)This Agreement has been duly executed and delivered and constitutes the legal, valid and binding obligation of the EDA enforceable in accordance with its terms. The EDA has been duly formed under the laws of the State of Minnesota and is in good standing under the laws of the jurisdiction in which the Property is located, is duly qualified to transact business in the jurisdiction in which the Property is located, and has the requisite power and authority to enter into and perform this Agreement and the documents and instruments required to be executed, including the Indemnity Agreement, and delivered by the EDA pursuant hereto. This Agreement and the documents and instruments required to be executed and delivered by the EDA pursuant hereto have each been duly authorized by all 4 necessary action on the part of the EDA and such execution, delivery and performance does and will not conflict with or result in a violation of organizational agreement or any judgment or order. (b)The execution, delivery and performance by the EDA of this Agreement will not (i) violate any provision of any law, statute, rule or regulation or any order, writ, judgment, injunction, decree, determination or award of any court, governmental agency or arbitrator presently in effect having applicability to the EDA, or (ii) result in a breach of or constitute a default under any indenture, loan or credit agreement or any other agreement, lease or instrument to which the EDA is a party or by which it or any of its properties (including the Property) may be bound. (c)No order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by, any governmental or public body or authority, or any other entity, is required on the part of the EDA to authorize, or is required by the EDA in connection with, the execution, delivery and performance of, or the legality, validity, binding effect or enforceability of, this Agreement. (d)To s knowledge, there are no actions, suits or proceedings pending or threatened against or affecting the EDA or any of its properties (including the Property), before any court or arbitrator, or any governmental department, board, agency or other instrumentality which in any of the foregoing (i) challenges the legality, validity or enforceability of this Agreement, or (ii) if determined adversely to the EDA, would have a material adverse effect on the ability of the EDA to perform its obligations under this Agreement or create any judgements, liens or other encumbrances on the Development Property. (e)The EDA is not a foreign person foreign corporation foreign trust foreign estate or disregarded entity as those terms are defined in Section 1445 of the Internal Revenue Code and the regulations promulgated thereunder. (f)Provided that Developer purchases the Development Property, the EDA shall use good faith efforts to initiate the termination of the Minimum Assessment Agreement on or about February 1, 2017. However, the Minimum Assessment Agreement shall, in any event, terminate no later than December 31, 2017. Upon termination of the Minimum Assessment Agreement, the EDA shall execute and deliver to Developer a notice of the termination of the Minimum Assessment Agreement, in recordable form and in substance reasonably acceptable to Developer, and Developer may record the termination of record. This provision shall survive the termination or earlier expiration of this Agreement. Section 2.2.Representations and Warranties by the Developer. The Developer makes the following representations as the basis for the undertakings on its part herein contained: 5 (a)The Developer is a Minnesota limited partnership, duly organized and in good standing under the laws of Minnesota and is not in violation of any provisions of its organizational documents. The Developer has the power to enter into this Agreement and carry out its obligations hereunder. The persons executing this Agreement and related agreements and documents on behalf of the Developer have the power and authority to do so and to bind the Developer by their actions. (b)In the event the Development Property is conveyed to the Developer, the Developer will market the Home Depot Building for commercial uses, and operate and maintain the Home Depot Building on the Development Property (or cause the Home Depot Building on the Development Property to be operated and maintained), and reconstruct the Home Depot Building on the Development Property following any fire or other casualty (or cause the reconstruction of the Home Depot Building) in substantial accordance with the terms of this Agreement, 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. (c)The Developer will apply for and use its best efforts to obtain, in a timely manner, all required permits, licenses and approvals, and will use its best efforts to 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 Home Depot Building, or any part thereof, may be lawfully used and/or built-out for their intended purpose. (d)Until the Minimum Assessment Agreement is terminated, as provided in Section Minimum Market Value 2.1(f) of this Agreement, the Minimum Assessment Agreement) of the Development Property will continue to be the Minimum Market Value stated in the Minimum Assessment Agreement. Section 2.3.Representations and Warranties by the City. The City makes the following representations as the basis for the undertakings on its part herein contained: (a)This Agreement has been duly executed and delivered and constitutes the legal, valid and binding obligation of the City enforceable in accordance with its terms. The City has been duly formed under the laws of the State of Minnesota and is in good standing under the laws of the jurisdiction in which the Property is located, is duly qualified to transact business in the jurisdiction in which the Property is located, and has the requisite power and authority to enter into and perform this Agreement and the documents and instruments required to be executed, including the Indemnity Agreement, and delivered by the City pursuant hereto. This Agreement and the documents and instruments required to be executed and delivered by the City pursuant hereto have each been duly authorized by all necessary action on the part of the City and such execution, delivery and performance does and will not conflict with or result in a violation of organizational agreement or any judgment or order. 6 (b)The execution, delivery and performance by the City of this Agreement will not (i) violate any provision of any law, statute, rule or regulation or any order, writ, judgment, injunction, decree, determination or award of any court, governmental agency or arbitrator presently in effect having applicability to the City, or (ii) result in a breach of or constitute a default under any indenture, loan or credit agreement or any other agreement, lease or instrument to which the City is a party or by which it or any of its properties (including the Property) may be bound. (c)No order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by, any governmental or public body or authority, or any other entity, is required on the part of the City to authorize, or is required by the City in connection with, the execution, delivery and performance of, or the legality, validity, binding effect or enforceability of, this Agreement. (d)To knowledge, there are no actions, suits or proceedings pending or threatened against or affecting the City or any of its properties (including the Property), before any court or arbitrator, or any governmental department, board, agency or other instrumentality which in any of the foregoing (i) challenges the legality, validity or enforceability of this Agreement, or (ii) if determined adversely to the City, would have a material adverse effect on the ability of the City to perform its obligations under this Agreement or create any judgments, liens or other encumbrances against the Development Property. (e)The City is not a foreign person foreign corporation foreign trust foreign estate or disregarded entity as those terms are defined in Section 1445 of the Internal Revenue Code and the regulations promulgated thereunder. (f)Provided that Developer purchases the Development Property, the City shall use good faith efforts to initiate the termination of the Minimum Assessment Agreement on or about February 1, 2017. However, the Minimum Assessment Agreement shall, in any event, terminate no later than December 31, 2017. Upon termination of the Minimum Assessment Agreement, the City shall cause the EDA to execute and deliver to Developer a notice of the termination of the Minimum Assessment Agreement, in recordable form and in substance reasonably acceptable to Developer, and Developer shall have the right to place the termination of the Minimum Assessment Agreement of record. This provision shall survive the termination or earlier expiration of this Agreement. ARTICLE III Contingencies Section 3.1 The effectiveness of this Agreement and 7 (a)quisition of Development Property from the EDA and the satisfaction of the contingencies in favor of the Developer contained in the Purchase Agreement or the waiver of the contingencies contained in the Purchase Agreement. (b)Developerregional storm water management agreement with the City and other relevant parties, if required, if form and substance (including the requirement for the payment by the Developer of any costs or expenses of any kind or nature whatsoever) satisfactory to Developer in its sole discretion.; (c)Execution and delivery to Developer of an indemnity agreement by the EDA and the City in favor of the Developer, its successors, assigns and tenants (the Indemnity Agreement l jointly and severally indemnify, defend with counsel reasonably acceptable to Developer, its successors and assigns, and hold Developer and its successors, assigns and tenants, harmless from and against any and all claims, demands, debts, actions, causes of action, suits, judgments, obligations, damages, losses, costs, expenses , disbursements and court costs) and liabilities of any kind or character whatsoever, known or unknown, suspected or unsuspected, foreseeable or unforeseeable, present or future, liquidated or unliquidated, matured or unmatured, direct, indirect or derivative, fixed or contingent, including without limitation, such claims as economic loss, investment loss, loss of business opportunity, breach of contract, professional fees, exemplary, punitive, consequential or other damages, that Home Depot, its affiliates, successors or assigns, may allege, suffer or sustain as the result of an alleged breach of clause RCA 1(b)(iii)(A) and/or 1(b)(iii)(B) of the Restrictive which the EDA and Home Depot will execute and record against the Property. Developer acknowledges that the RCA will be recorded against the Property. The Indemnity Agreement shall be in form and content acceptable to Developer in its sole discretion. Notwithstanding the foregoing provisions of this Section, the direct affirmative action Developer, its successors, assigns or tenants, in connection with the prohibitions in clause 1(b) means the actual execution by Developer, its successors or assigns, of any instrument specifically agreeing to, allowing, providing or taking any action with respect to, or waiving, any of the prohibitions in items (1) and/or (2) of clause 1(b)(iii)(A) of the RCA. The failure of Developer, its successors or assigns, to take any action, directly or indirectly, to contest, object to, prohibit, enjoin or otherwise prevent the violation of any of the restrictions in items (1) and/or (2) of clause 1(b)(iii)(A) of the RCA, shall not constitute (a) a violation of the RCA, (b) a waiver or consent to, or with respect to, the REA under item (2) of clause 1(b)(iii)(A) of the RCA, or (c) a direct affirmative action. (d)Execution and delivery to Developer by the City and the EDA of certificates of insurance, in form, substance and amounts as shall be determined by Developer, Developer and its designees and any mortgagee of the Development Property as 8 additional insureds, covering the obligations of the City and the EDA under the Indemnity Agreement. (e)encies described in Section 3.2 of this Agreement. (f)Receipt by Developer of a fully executed copy of the Hy-Vee Development Agreement, which must obligate Hy-Vee to reconfigure the storm water retention/detention pond on the Rainbow Property into an underground pipe system for the benefit of the Rainbow Property, the Development Property and others, at no cost or expense to Developer. (g)Approval by Developer of the Final Plat. Section 3.2. Agreement are contingent upon the following: (a)sale of Development Property to Developer; (b) and subsequent sale of School District Property to Hy-Vee; (c)-Vee; (d) a regional storm water management agreement with the City and other relevant parties, if required. (e)Recording of the Final Plat. ARTICLE IV Construction of Improvements Section 4.1.Construction of Improvements . All Developer improvements and any build-out of the interior of the Home Depot Building, or any part thereof, and any revisions or remodeling to the exterior of the Home Depot Building, or any part thereof, constructed on the Development Property shall be constructed, operated and maintained in accordance with the terms of the City Code, the Zoning Code, this Agreement, the Comprehensive Plan, all zoning approvals and conditions imposed, and all local, Minnesota and federal laws and regulations (including, but not limited to, Environmental Controls and Land Use Regulations). Developer will use commercially reasonable efforts to obtain, or cause to be obtained, in a timely manner, all required permits, licenses and approvals, and will use commercially reasonable efforts to meet, in a timely manner, the requirements of applicable Environmental Controls and Land Use Regulations which must be met before and Developer improvements may be lawfully constructed. 9 Section 4.2.Intentionally Blank. Section 4.3.Intentionally Blank. Section 4.4.Intentionally Blank. Section 4.5.Zoning; Other Approvals. The City and EDA agree to exercise reasonable efforts to grant or obtain such land use planning review and approvals as may be required in connection with the development of the Development Property and/or the Home Depot Building by applicable Land Use Regulations. The City, Developer and EDA agree that the development of the Development Property and/or the Home Depot Building is in the public interest, will provide significant and important benefits to the City and its residents, and is a desirable and appropriate use of the Development Property. Developer acknowledges and agrees that neither the EDA nor the City can, and do not undertake in this Development Agreement, to bind itself to grant or obtain any approvals, permits, variances, zoning or rezoning applications or other matters within the legislative or quasi-judicial discretion of the EDA, the City or the governing body of any other political subdivision or public agency. The City and EDA nevertheless agree that upon request of Developer, they will each cooperate with Developer to seek and secure approvals, permits, variances, and other matters as may be required prior to or after the acquisition by Developer of all portions of the Development Property affected thereby, to cause such matters to be timely considered by the EDA, City and the Planning Commission or the governing body of other political subdivisions or public agencies with jurisdiction, and to otherwise cooperate with Developer to facilitate implementation of any Developer improvements on the Development Property and/or the Home Depot Building. Section 4.6.Commencement and Completion of Construction. Subject to Unavoidable Delays, the Developer shall commence the Minimum Improvements no later than three hundred sixty-five (365) days following the commencement of construction by Hy-Vee on the Rainbow Property, unless written permission is granted by the EDA to delay commencement of the Minimum Improvements, which consent shall not be unreasonably withheld. The Developer shall make such reports as reasonably requested by the EDA regarding the Minimum Improvements as the EDA deems necessary or helpful in order to monitor progress of the Minimum Improvements. Subject to Unavoidable Delays, the Developer shall continue the Minimum Improvements until at least the grand opening to the public of a fully stocked and staffed Hy-Vee supermarket on the Rainbow Property and the substantial completion by Hy-Vee, the City and/or the EDA, as applicable, of any improvements required to be constructed pursuant to the Hy-Vee Development Agreement, including without limitation, the reconfiguration of the storm water retention/detention pond on the Rainbow Property into an underground pipe system benefitting the Development Property. Section 4.7.Intentionally Blank. Section 4.8.Reconstruction of Improvements. If the Home Depot Building or any other improvements constructed by Developer on the Development Property are damaged or destroyed before completion thereof, then subject to the terms of any lease or leases with tenants at the Development Property with respect to restoration of any Developer improvements and/or the Home Depot Building that the Developer is required to construct pursuant to such lease or 10 leases, the Developer agrees, for itself and its successors and assigns, to reconstruct any such Developer improvements and/or the portion or portions of the Home Depot Building or any tenant build-out of the Home Depot Building, or any part or parts thereof (collectively, a Tenant Build-Out within eighteen (18) months of the date of the damage or destruction, subject to Unavoidable Delays. Any such Developer improvements, any portion of the Home Depot Building, and any Tenant Build-Out required to be reconstructed by Developer shall be reconstructed in accordance with the approved Construction Plans, if required, or such modifications thereto as may be requested by the Developer and approved by the EDA in accordance with Section 4.1 of this Agreement, which approval will not be unreasonably or arbitrarily withheld, conditioned or delayed. ARTICLE V Other Obligations of Developer Intentionally Blank. ARTICLE VI Insurance Intentionally Blank ARTICLE VII Business Subsidy Section 7.1.Business Subsidy Act. The assistance provided to the Developer under the Development Agreement is subject to Minnesota Statutes, Sections 116J.993 to 116J.995 (the Business Subsidy Act -138, attached Exhibit D hereto as for the purposes of the Business Subsidy Act. Section 7.2.Findings. The EDA hereby finds that the subsidy is needed because (i) the cost of acquisition of the Development Property, (ii) the anticipated costs of - out of the Home Depot Building,, (iii) the anticipated costs of Developer improvements to the Development Property, (iv) the anticipated costs to Developer of Tenant Build-Out, and (v) the Minimum Assessment Agreement, made redevelopment of the Development Property financially infeasible without public assistance and the Developer cannot proceed without the subsidy. In addition, the EDA hereby finds thatthe cost to Developer of its probable renovation of portions of the Development Property other than the Home Depot Building and the probable cost to Developer of Tenant Build-Out, and recording of the Final Plat: (a)Are consistent with the Comprehensive Plan. 11 (b)Will contribute to the establishment of a critical mass of commercial development within the area. (c)Will increase the range of goods and services available or encourage fast-growing or other desirable businesses to locate or expand within the community. (d)Will promote additional or spin-off development within the community. (e)Will encourage full utilization of existing or planned public infrastructure improvements. Section 7.3.Public Purpose. The public purposes of the subsidy are to redevelop an area that was occupied by a in the Comprehensive Plan, and increase the tax base. Section 7.4.General Terms. The City, the Developer and the EDA agree and represent to each other that the Business Subsidy provided to the Developer consists of the conveyance to the Developer of the Development Property for less than the amount that the EDA paid for the Development Property. Section 7.5.Business Subsidy Goals. The goals for the subsidy are: (a)To secure the timely marketing of the Home Depot Building on the Development Property for lease to third-party tenants; and (b)To maintain the Home Depot Building as a commercial facility for at least five (5) years after the Completion Date. For the purpose of this section, the Home Depot Building will be considered to be maintained in operation if at least 50 percent of the net square footage of the Home Depot Building is continuously or available for lease leased, , to any person or entity, for use in its trade or business, or occupied by Developer for use in its trade or business. If the goals described in this Section 7.5 are not met, the remedies are as described in Section 7.8 below. Section 7.6.The Developer does not have a parent company. Section 7.7.The Developer has not received, and does not expect to receive for the Development Property Subsidy Act. Section 7.8.Remedies. If the Developer fails to meet the goals described in Section 7.5 of this Agreement, and subject to the notice and cure provisions of this Agreement, the Developer shall comply with the remedies described in Section 7.9 and 7.10 of this Agreement, as the case may be. Those provisions include (among other things) repayment to the EDA of up to the Subsidy Amount, all under the terms and conditions described in those paragraphs. 12 Section 7.9.If the Minimum Improvements are timely completed but Developer fails to meet the five-year operation goal, the total Subsidy Amount will be prorated by the portion of the five-year period lapsed as of the date of default. In that event, exclusive remedy for the failure of Developer to meet the goals described in Section 7.5 herein, as liquidated damages and not a penalty, and in lieu of all other remedies at law or in equity, Developer must pay to the EDA a prorated portion of the Subsidy Amount (allocated to the time remaining in the five-year operation period), together with an interest rate that is set at no less than the implicit price deflator for government consumption expenditures and gross investment for state and local governments prepared by the Bureau of Economic Analysis of the United States Department of Commerce for the 12-month period ending March 31 of the previous year on the prorated amount the rate described in the Business Subsidy Act, accrued from the date of Liquidated Damages violation through the date of payment . Section 7.10.The Developer agrees and understands that it may not receive a business subsidy from the EDA or from any other grantor for the Development Property for a period of five (5) years from the date of the failure of Developer to meet the five-year operation goal or until the Developer satisfies its repayment obligation under Section 7.9, whichever occurs first. Notwithstanding the foregoing, nothing contained in Section 7.10 or any other provision of this Agreement shall prevent Developer from mortgaging the Development Property, or any part thereof, at any time and for any purpose, notwithstanding the failure of Developer to meet the five-year operation goal or any other business subsidy goals contained in this Agreement and/or the Business Subsidy Act, or otherwise. Section 7.11.Reports. The Developer must submit to the EDA a written report regarding business subsidy goals and results by no later than March 1 of each year, commencing in March in the year following the Completion Date (for example, if the Completion Date is May 1, 2017, then the first business subsidy report would be due March 1, 2018) and continuing until the later of: (a)The date the goals stated Section 7.5 are met; (b)30 days after expiration of the five-year period described in Section 7.5; or (c)If the goals stated in Section 7.5 are not met, the date the Subsidy Amount is repaid in accordance with Section 7.9 of this Agreement. The report must comply with Section 116J.994, subdivision 7, of the Business Subsidy Act. Section 7.12.The EDA will provide information to the Developer regarding the required forms. If the Developer fails to timely file any report required under Section 7.11 of this Agreement, the EDA will mail the Developer a warning, by certified mail, return receipt requested, prepaid, within one week after the required filing date. If, after 14 days following of the warning, the Developer fails to provide a report, the Developer must pay to the EDA a penalty of $100 for each subsequent day until the report is filed. The maximum aggregate penalty payable under this Section is $1,000. Any warning sent by the EDA in the manner required by this Section 7.12 shall be deemed to have been received by the Developer on the date of receipt or rejection as evidenced by the return receipt card from the United States Postal Service. 13 Section 7.13.This Agreement shall terminate upon satisfaction of the reporting requirements or repayment of the Subsidy Amount, as more fully described in Section 7.11. ARTICLE VIII Sale of Development Property Section 8.1.Sale of Development Property. The Developer represents and agrees that its use of the Development Property and its other undertakings pursuant to this Agreement, are, and will be, for the purpose of development of the Development Property and not for speculation in land holding. The Developer further recognizes that in view of the importance of the Minimum Improvements on the Development Property to the general welfare of the City and the substantial assistance that has been made available by the EDA for the purpose of making such development possible, the fact that any act or transaction involving or resulting in a significant change in the identity of the Developer is of particular concern to the EDA. The Developer further recognizes that it is because of such qualifications and identity that the EDA is entering into this Agreement with the Developer, and, in so doing, the EDA is further willing to accept and rely on the obligations of the Developer for the faithful performance of all undertakings and covenants to be performed by the Developer under this Agreement. For the foregoing reasons, the City, the EDA and Developer agree that Developer may sell and/or transfer the Development Property to (A) an entity created by and wholly owned by Developer for the holding of the Development Property, or (B) any unaffiliated third party, only if that party accepts the responsibilities and obligations of the Developer contained in this Agreement. Upon the sale and/or transfer of the Development Property and the acceptance by the transferee of the responsibilities and obligations of the Developer contained in this Agreement, the Developer shall automatically (without the execution of any other documents by the City, Developer or the EDA) be released from any responsibilities and obligations under this Agreement. Notwithstanding the foregoing, upon any sale and/or transfer of the Development Property pursuant to which the transferee accepts the responsibilities and obligations of Developer contained in this Agreement, the City and the EDA shall execute and deliver to Developer, in form and substance acceptable to Developer, a written release of Developer, in recordable form, from all of the responsibilities and obligations of the Developer under this Agreement. Section 8.2. Mortgage/Estoppel Certificate. Notwithstanding the foregoing provisions of this Section 8.1 or any other provisions of this Agreement to the contrary, the prohibition against a sale and/or transfer of the Development Property shall not be deemed or construed to prevent Developer from (a) mortgaging the Development Property, or any part thereof, or (b) ground leasing the Development Property, or any part thereof, at any time and for any purpose. At the request of the Developer, the City and the EDA shall execute and deliver to any mortgagee or prospective mortgagee of the Development Property, and to any prospective purchaser or tenant of the Development Property, or any part thereof, an estoppel certificate, in form and substance satisfactory to the Developer, the mortgagee and/or the tenant, as applicable, certifying as to such matters concerning this Agreement as may be requested by any such party, provided that the matters requested to be certified are true and correct. 14 ARTICLE IX Events of Default Section 9.1.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 commence and complete 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 a breach of any representation, warranty, covenant or agreement by the City or the EDA under this Agreement; (b)Failure by the Developer to pay (or cause to be paid) real estate taxes or special assessments on the Development Property and the Home Depot Building or any other Developer improvements as they become due; (c)Use by the Developer, its successors or assigns, of the Development Property, the Home Depot Building or any other Developer improvements on the Development Property, for purposes other than those contemplated and permitted by this Agreement, including failure to comply with Section 10.3 of this Agreement. (d)Transfer or sale of the Development Property, or any part thereof, by the Developer in violation of Section 8.1 of this Agreement; (e)Failure by the Developer, the City and/or the EDA to observe or perform any material covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement following the expiration of any applicable cure period; (f)Failure by Developer to comply with the Business Subsidy requirements in Article VII. Section 9.2.Remedies on Default. The City, Developer and the EDA agree that monetary damages will not be an adequate remedy at law for an Event of Default hereunder. Whenever any Event of Default referred to in Section 9.1 of this Agreement occurs, the non- defaulting party may take any one or more of the following actions after providing thirty (30) days written notice (in the manner provided in Section 7.12 of this Agreement) to the defaulting party of the Event of Default, but only if the Event of Default has not been cured within said thirty days or, if the Event of Default is by its nature incurable within thirty (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 party, deemed adequate by the non-defaulting party, that the defaulting party will cure its default and continue its performance under this Agreement; 15 (b)Terminate or rescind this Agreement; (c)Take whatever action, including legal or administrative action, with the exception of withholding a certificate of occupancy, 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 9.3.Intentionally blank. Section 9.4.No Remedy Exclusive. limited remedy of the right to Liquidated Damages set forth in Section 7.9 herein for a failure of the goals set forth in Section 7.5, no remedy herein conferred upon or reserved to the parties is intended to be exclusive of any other available remedy or remedies (except that neither the City or the EDA shall be entitled to withhold any certificate of occupancy for the Home Depot Building, or any part thereof, or for any other Developer improvement on the Development Property), but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any Event of 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. Section 9.5.No Additional Waiver Implied by One Waiver. In the event any covenant or agreement contained in this Agreement should be breached by the City, Developer or the EDA and thereafter waived by the non-breaching party or parties, unless otherwise set forth in the terms of such waiver, 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. ARTICLE X Additional Provisions Section 10.1.Conflict of Interests; Representatives Not Individually Liable. No officer, official, or employee of the EDA or City shall have any personal financial interest, direct or indirect, in this Agreement, nor shall any such officer, official, or employee participate in any decision relating to this Agreement which affects his or her personal financial interests, directly or indirectly. No officer, official, or employee of the EDA or City shall be personally liable to the Developer, or any successor in interest, in the event of any Event of Default or breach or for any amount which may become due or on any obligation under the terms of this Agreement. Section 10.2.Equal Employment Opportunity. The Developer, for itself and its successors and assigns, agrees that during the performance of the Minimum Improvements provided for in this Agreement, Developer will comply (or cause compliance) with all applicable equal employment and nondiscrimination laws and regulations. Section 10.3.Restrictions on Use. The Developer, for itself and its successors and assigns, agrees to devote the Development Property, the Home Depot Building and any other 16 Developer improvements on the Development Property only to such land use or uses as may be ns. Section 10.4.Notices and Demands. Except as otherwise expressly provided in this Agreement, any notice, request, demand, consent or other communication (collectively, Notices under this Agreement or any related document by the City, the Developer or the EDA to any other party shall be sent by registered or certified United States mail, postage prepaid, return receipt requested, or delivered personally to: (a)in the case of the EDA: 12800 Ravine Parkway South Cottage Grove MN 55016 Attn: EDA Executive Director (b)in the case of the Developer: Grove-Rainbow, L.P. c/o EBL&S Property Management, Inc. 200 South Broad Street The Bellevue, Suite 415 Philadelphia, PA 19102 With a copy to: Alan Wallen, General Counsel EBL&S Property Management, Inc. 200 South Broad Street The Bellevue, Suite 415 Philadelphia, PA 19102 (c)in the case of the City: 12800 Ravine Parkway South Cottage Grove MN 55016 Attn: City Administrator or at such other address with respect to any such party as that party may, from time to time, designate in writing and forward to the other parties as provided in this Section 10.4. Notices sent by registered or certified mail, postage prepaid, return receipt requested, shall be deemed received on the date of receipt or rejection, as evidenced by the return receipt from the United States Postal Service. Notices sent by personal delivery shall be deemed received on the date on the receipt from the person making the delivery, signed by the addressee. Notices may be given by legal counsel for any party. Section 10.5.Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 10.6.Disclaimer of Relationships. The City, the EDA and Developer acknowledge that neither this Agreement nor any act by the City, the EDA or the Developer shall be deemed or construed by the City, the EDA, the Developer or by any third person or entity to 17 create any relationship of third-party beneficiary, principal and agent, limited or general partner, or joint venturer between the City, the EDA and the Developer. Section 10.7.Approvals. Approvals by the EDA and City shall not be unreasonably or arbitrarily withheld, conditioned or delayed. (The remainder of this page has been intentionally left blank.) 18 IN WITNESS WHEREOF, the EDA, the Developer and the City have caused this Agreement to be duly executed in their names and behalves on or as of the date first above written. COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY By Myron Bailey Its President By Charlene R. Stevens Its Executive Director STATE OF MINNESOTA ) ) SS COUNTY OF WASHINGTON ) The foregoing instrument as acknowledged before me this _____ day of _________, 2015, by Myron Bailey and Charlene R. Stevens, 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 19 GROVE-RAINBOW, L.P. , a Minnesota limited partnership, By: EBL&S Holding Company II, Inc., a Pennsylvania corporation, its sole General Partner By: ____________________ Edward B. Lipkin President COMMONWEALTH OF PENNSYLVANIA ) ) SS COUNTY OF PHILADELPHIA ) On this ____ day of _______________, 2015, before me, the undersigned, a Notary Public in and for the commonwealth and county aforesaid,= personally appeared Edward B. Lipkin, to me personally known, who being by me duly sworn did say that he is the President of EBL&S Holding Company II, Inc., a Pennsylvania corporation, the sole General Partner of Grove-Rainbow, L.P., a Minnesota limited partnership, that the instrument to which this is attached was signed on behalf of EBL&S Holding Company II, Inc., as sole General Partner of said limited partnership on behalf of said limited partnership; and that the said officer acknowledged the execution of said instrument to be the voluntary act and deed of said limited partnership, by it and by him voluntarily executed. ________________________________ Notary Public 20 CITY OF COTTAGE GROVE By Myron Bailey Its Mayor By Joseph Fischbach Its City Clerk STATE OF MINNESOTA ) ) SS COUNTY OF WASHINGTON ) The foregoing instrument as acknowledged before me this _____ day of _________, 2015, by Myron Bailey and Joseph Fischbach, Mayor and City Clerk, respectively, of the City of Cottage Grove, a municipal corporation under the laws of Minnesota, on behalf of the City. Notary Public 21 EXHIBIT A LEGAL DESCRIPTION nd Lot 2, Block 1, Grove Plaza 2 Addition according to the plat thereof recorded in the Office of the County Recorder for Washington County, Minnesota on June 12, 2002 as Document No. 3243175. A-1 EXHIBIT B TO DEVELOPMENT AGREEMENT EXHIBIT C TO DEVELOPMENT AGREEMENT EXHIBIT D TO DEVELOPMENT AGREEMENT EXHIBIT E FINAL PLAT (to be attached) E-1