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HomeMy WebLinkAbout2016-04-06 PACKET 10.D. CITY OF COTTAGE GROVE ASSESSMENT APPEAL WAIVER AGREEMENT FOR 9015 HADLEY AVE. S., COTTAGE GROVE, MN THIS AGREEMENT FOR AN ASSESSMENT APPEAL WAIVER (“Agreement”) is entered into and effective as of the _____ day of , 2016 (“Agreement Date”), by and between the City of Cottage Grove, a Minnesota municipal corporation (“City”), and Independent School District No. 833, a Minnesota public corporation (“Owner”). WITNESSETH: WHEREAS, the Owner is the fee simple owner of property legally described on the Exhibit 1 attached , having the street address of 9015 Hadley Ave. S., Cottage Grove, Washington County, Minnesota, (“the Property”) that will be benefited by certain public street improvements to th Exhibit 2 Hadley Ave. and 95 Street (“Street Improvements”), depicted on ; and WHEREAS, as part of the Street Improvements, the City will be constructing certain the Exhibit 3 Drainage and Utility Improvements on the Property, depicted on the attached (“Drainage and Utility Improvements”); and WHEREAS, the City desires that the Owner grant it an Easement for Construction and Exhibit 4 Drainage and Utility Purposes over a portion of the Property in the form attached as (“Easement”); and WHEREAS, in consideration for the benefit to the Property that the Street Improvements will provide, the Owner shall grant the City the Easement by April 20, 2016; and WHEREAS, if the Owner fails to grant the Easement to the City by the date listed above, the Owner is willing to agree to the levy of the Street Assessment Waiver Amount against the Property for the Assessment Term with interest accrual at the Assessment Interest Rate; and - 1 - WHEREAS, the Owner is willing to waive its assessment appeal rights up to the Street Assessment Waiver Amount which constitutes an estimated benefit pursuant to Minnesota Statutes, Chapter 429 in the manner authorized by Minnesota Statutes § 462.353. NOW, THEREFORE, in consideration of the mutual promises and covenants of each to the other contained in this Agreement and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto do covenant and agree as follows: ARTICLE I THE AGREEMENT Section 1.01 Purpose. The purpose of this Agreement is to memorialize the covenants and agreements between the Owner and the City with regard to the Property and the Street Improvements including the Owner’s agreement to grant the Easement to the City and that Owner’s waiver of assessment appeal rights up to the Street Assessment Waiver Amount which constitute an estimated benefit pursuant to Minnesota Statutes, Chapter 429 in the manner authorized by Minnesota Statutes § 462.3531 in light of the special benefit provided to the Property by the Street Improvements. Section 1.02 Term. The term of this Agreement shall commence on the Agreement Date and shall terminate upon the expiration of the Assessment Term or repayment of the levied assessments. Section 1.03 Survival. Notwithstanding the termination of this Agreement pursuant to Section 1.02, the Owner’s Covenants and Agreements contained in Section 3.01 and the City’s Covenants and Agreements contained in Section 3.01 shall survive the termination of this Agreement. ARTICLE II DEFINITIONS Section 2.01 Definitions. The following are terms used in this Agreement. Their meanings as used in this Agreement shall be expressly indicated below, unless the context of this Agreement requires otherwise: (a)Agreement: This agreement to memorialize the covenants and agreements between the Owner and the City with regard to the Street Improvements including the assessment appeal waiver provided herein pursuant to Minnesota Statutes, Chapter 429 in the manner authorized by Minnesota Statutes § 462.3531. (b)Agreement Date: The date written in the first paragraph of the Agreement. (c)Assessment Interest Rate: The special assessment levied against the Property shall accrue interest at a rate of seven percent (7%) per year for the Assessment Term. Interest accrual shall begin on April 21, 12016. - 2 - (d)Assessment Term: The term of the special assessment levied against the Property shall be fifteen (15) years. (e)City: The City of Cottage Grove, a Minnesota municipal corporation. (f)Easement. Easement means an Easement Agreement for Construction and Drainage and Exhibit 3 Utility Purposes over that areas depicted on the attached and in the Easement Exhibit 4 form attached as . (g)Owner: Independent School District No. 833, a Minnesota public corporation. Exhibit 1. (h)Property: The real property identified and described on (i)Street Assessment Waiver Amount: The charge imposed by the City for the Street Improvements in the amount of Forty-One Thousand Six Hundred Dollars ($41,600) is to be assessed by Cottage Grove against the Property if the Owner fails to grant the City the Easement by April 20, 2016. The Street Assessment Waiver Amount is commensurate with the estimated special benefit of the Drainage and Utility Improvements to the Property. The Street Assessment Waiver Amount is the value of the Easement. ARTICLE III COVENANTS AND AGREEMENTS Section 3.01 Covenants and Agreements of the Owner. The Owner covenants and agrees with the City that: (a)Street Assessment Appeal Waiver: Owner hereby authorizes the City to certify to the Washington County Auditor/Property Tax Assessor a special assessment against the Property up to the Street Assessment Waiver Amount for Street Improvements, in the event that Owner fails to grant the Easement to City as provided herein. The Owner hereby waives all rights to assessment notices, hearings and appeals, and all other rights pursuant to Minn. Stat. § 429.061, § 429.071 and § 429.081 for the special assessment against the Property up to the Street Assessment Waiver Amount. The Owner hereby waives any and all procedural and substantive objections to the special assessment up to the Street Assessment Waiver Amount against the Property, including, but not limited to, notice and hearing requirements and any claim that any or all of the Street Assessment Waiver Amount against the Property exceeds the benefit to the Property for the Street Improvements. The Owner acknowledges and agrees that the benefit of the Street Improvements to the Property does in fact equal or exceed the Street Assessment Waiver Amount. The Owner also acknowledges and agrees that the Property receives a special benefit equal to or exceeding the Street Assessment Waiver Amount. Furthermore, the Owner acknowledges and agrees that the costs of the Street Improvements may not be equally spread against all benefited property. - 3 - The City and the Owner acknowledge and agree that the Owner’s waiver of assessment appeal rights pursuant to Minnesota Statutes, Chapter 429, is capped at the Street Assessment Waiver Amount by operation of Minn. Stat. § 462.3531. The City and the Owner acknowledge and agree that the Owner may appeal any special assessment above the Street Assessment Waiver Amount. (b)Owner’s Covenant Not to Sue the City: Owner hereby covenants with the City not to appeal or sue the City for a court to set aside, reduce, repeal, or invalidate the levied assessment, or for other relief from the payment of the City’s levy of a special assessment up to the Street Assessment Waiver Amount against the Property. (c)Owner’s Covenant that Owner is the Property Fee Owner: Owner hereby covenants and warrants with the City that Owner is seized in fee of the Property and has good right to enter into this Agreement with the City, and to grant the Easement. Section 3.02 Covenants and Agreements of the City. The City covenants and agrees with the Owner that: (a)Street Assessment Waiver Amount: The City agrees that it will treat the Owner’s grant of the Easement as payment in full of the Street Assessment Waiver Amount and that the City will only certify/levy a special assessment against the Property if the Easement is not granted by Owner by April 20, 2016 and then, only up to the Street Assessment Waiver Amount for the Street Improvement pursuant to this Agreement. (b)City Recording of this Agreement: The City will prepare the Easement and present it to Owner for execution. The City will record this Agreement against the Property. If Owner grants the Easement to the City, the City will record the Easement against the Property. (c)Prepayment of Assessment: The City agrees in the event that the Owner may prepay some or all of the City’s assessment levy against the Property for the Street Improvements with no penalty and only with interest accrual pursuant to Minn. Stat. § 429.061. ARTICLE IV DEFAULT Section 4.01 Default. If a party to this Agreement materially defaults in the due and timely performance of any of its covenants, or agreements hereunder, the other party(s) may give notice of default of this Agreement. The notice shall specify with particularity the default or defaults on which the notice is based. The notice shall specify a ten (10) day cure period within which the specified default or defaults must be cured. If the specified defaults are not cured within the cure period, the other party(s) may pursue all remedies and sanctions available at law and in equity, including specific performance. Section 4.02 Attorneys’ Fees, Costs and Expenses. The Owner agrees that if it does not grant the Easement or if it challenges the validity of the Street Assessment Waiver Amount in any way, then Owner shall pay the City the amount of the City’s assessment levy up to the Street - 4 - Assessment Waiver Amount, with accrued interest together with the City’s attorneys’ fees, costs and expenses to defend the special assessment levy by the City pursuant to this Agreement. The Owner acknowledges and agrees that the Owner would be unjustly enriched if the City’s assessment levy pursuant to this Agreement was set aside, reduced, repealed or invalidated by a court with jurisdiction over the Property. The Owner agrees that the court with jurisdiction over the Property shall award the City the assessment levy up to the Street Assessment Waiver with accrued interest together with the City’s attorneys’ fees, costs and expenses for breach of the Owner’s covenant not to appeal or sue the City pursuant to Article III, Section 3.01(c). ARTICLE V GENERAL PROVISIONS Section 5.01 Notices. All notices, requests, demands or other communications required or permitted by this Agreement shall be in writing and delivery shall be deemed to be sufficient if delivered personally or by registered or certified mail, return receipt accepted, postage prepaid, addressed as follows: If to the City: City of Cottage Grove Attention: City Administrator 12800 Ravine Parkway South Cottage Grove, MN 55016 If to the Owner: Independent School District No. 833 7362 E. Point Douglas Rd. South Cottage Grove, MN 55016 Section 5.02 Non-Assignability. Neither the City nor the Owner shall assign any interest in this Agreement nor shall either party transfer any interest in the same without the prior written consent of the other party. Section 5.03 Binding Effect. This Agreement and the terms, conditions and covenants contained herein and the transaction contemplated hereunder shall be binding upon and inure to the benefit of the parties hereto and their respective successors, heirs, personal representatives, and permitted assigns. This Agreement shall further be binding on subsequent purchasers of the Property and shall run with the Property herein described. Section 5.04 Severability. In the event any provision of this 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. Section 5.05 Amendments, Changes and Modifications. This Agreement may be amended or any of its terms modified or changed only by a written amendment authorized and executed by the City and the Owner. Section 5.06 Counterparts. This 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. - 5 - Section 5.07 Entire Agreement. This Agreement shall constitute the entire agreement between the parties and shall supersede all prior oral or written negotiations. Section 5.08 Notice To Buyers. The Owner agrees to notify and provide any buyer of the Property with an executed copy of this Agreement if the Owner sells any interest in the Property following the execution of this Agreement by both the Owner and the City, but before the recording of this Agreement with Washington County Recorder and/or Registrar of Titles. IN WITNESS WHEREOF, the City and the Owner have caused this Agreement to be executed by their duly authorized representatives. \[remainder of page intentionally blank\] - 6 - CITY OF COTTAGE GROVE By: Myron Bailey Mayor By: Joseph Fischbach City Clerk STATE OF MINNESOTA ) ) ss. COUNTY OF WASHINGTON ) On this _____ day of _______________, 2016, before me a Notary Public within and for said County, personally appeared Myron Bailey and Joseph Fischbach to me personally known, who being each by me duly sworn, each did say that they are respectively the Mayor and the City Clerk of the City of Cottage Grove, the Minnesota municipal corporation named in the foregoing instrument, and that it was signed on behalf of said municipal corporation by authority of its City Council and said Mayor and City Clerk acknowledged said instrument to be the free act and deed of said municipal corporation. Notary Public - 7 - OWNER INDEPENDENT SCHOOL DISTRICT NO. 833 By: Printed Name: Its: STATE OF MINNESOTA ) ) ss. COUNTY OF WASHINGTON) The foregoing instrument was executed this ____ day of __________________, 2016, by , the of Independent School District No. 833, a Minnesota public corporation, on behalf of the corporation. Notary Public This instrument drafted by: After recording, please return to: Korine L. Land Korine L. Land Cottage Grove City Attorney Cottage Grove City Attorney LeVander, Gillen & Miller, P.A. LeVander, Gillen & Miller, P.A. 633 South Concord Street, Suite 400 633 South Concord Street, Suite 400 South St. Paul, Minnesota 55075 South St. Paul, Minnesota 55075 - 8 - EXHIBIT 1 LEGAL DESCRIPTION OF PROPERTY Parcel 1 The North Six Hundred Twenty-eight and Ninety-three Hundredths (628.93) feet of the West Seven Hundred Twenty-five and Sixty Hundredths (725.60) feet of the Northwest quarter (NW¼) of the Northwest quarter (NW¼) of Section Twenty (20), Township Twenty-seven (27) North, Range Twenty-one (21) West, subject to Cherry Avenue on and across the Westerly Thirty-three (33) feet thereof, containing 10.476 acres, more or less. PID: 20.027.21.22.0002 Parcel 2 The South 188.68 feet of the North 817.61 feet of the West 725.60 feet of the Northwest Quarter of the Northwest Quarter (NW¼ of NW¼) of Section Twenty (20), Township Twenty seven (27) North, Range Twenty one West, subject to Cherry Avenue on and across the Westerly 33 feet thereof, containing 3.143 acres, more or less. PID: 20.027.21.22.0001 EXHIBIT 2 STREET IMPROVEMENTS EXHIBIT 3 DRAINAGE AND UTILITY IMPROVEMENTS EXHIBIT 4 FORM OF PERMANENT EASEMENT EASEMENT AGREEMENT FOR CONSTRUCTION AND DRAINAGE AND UTILITY PURPOSES THIS EASEMENT AGREEMENT FOR CONSTRUCTION AND UTILITY PURPOSES (Easement) is made, granted and conveyed this _____ day of _____________, 2016, by and between Independent School District No. 833, a Minnesota public corporation (hereinafter referred to as “Landowner”) and the City of Cottage Grove, a municipal corporation organized under the laws of the State of Minnesota (hereinafter referred to as “City”). The Landowner owns the real property situated within Washington County, Minnesota as Exhibit A (hereinafter “Landowner’s Property”) described on the attached . The Landowner in consideration of the sum of One Dollar and other good and valuable consideration to them in hand paid by the City, the receipt and sufficiency of which is hereby acknowledged, does hereby grant and convey unto the City, its successors and assigns, the following: A permanent easement for drainage utility purposes and all such purposes Permanent Easement ancillary, incident, and related thereto (hereinafter “”) under, over, across, through and upon the real property identified and legally Exhibit BPermanent Easement described and depicted on hereinafter the “ Area ”) attached hereto and incorporated herein by reference. And A temporary construction easement for grading, sloping and construction purposes in accordance with the plans and specifications provided by the the City, and all such purposes ancillary, incident or related thereto (hereinafter Temporary Easement “”) under, over, across, through and upon that real Exhibit B property identified and legally described and depicted on Temporary Easement Area (hereinafter the “”) attached hereto and incorporated herein by reference. The Temporary Easement shall expire on June 30, 2017 and be of no force and effect thereafter. EXEMPT FROM STATE DEED TAX The Permanent Easement rights granted herein are forever and shall include, but not be limited to, the construction, maintenance, repair and replacement of any sanitary sewer, water mains, storm water facilities, drainage facilities and any utilities, underground pipes, culverts, conduits, other utilities and mains, and all facilities and improvements ancillary, incident or related thereto, under, over, across, through and upon the Permanent Easement Area. The Permanent Easement rights further include, but are not limited to, the right of ingress and egress over the Permanent Easement Area to access the Permanent Easement for the purposes of construction, maintenance, repair and replacement of any sanitary sewer, water mains, storm water facilities, drainage facilities any utilities, underground pipes, conduits, culverts, other utilities, mains and all facilities and improvements ancillary, incident or related thereto. The rights of the City also include the right of the City, its contractors, agents and servants: a.) to enter upon the Permanent Easement Area at all reasonable times for the purposes of construction, reconstruction, inspection, repair, replacement, grading, sloping, and restoration relating to the purposes of this Easement; and b.) to maintain the Permanent Easement Area, any City improvements and any underground pipes, conduits, or mains, together with the right to excavate and refill ditches or trenches for the location of such pipes, conduits or mains; and c.) to remove from the Permanent Easement Area trees, brush, herbage, aggregate, undergrowth and other obstructions interfering with the location, construction and maintenance of the pipes, conduits, or mains and to deposit earthen material in and upon the Permanent Easement Area; and d.) to remove or otherwise dispose of all earth or other material excavated from the Permanent Easement Area as the City may deem appropriate. The rights of the City also include the right of City, its contractors, agents and servants: a.) to enter upon the Temporary Easement Area during the term of its existence for the purposes of construction, inspection, grading, sloping, and restoration relating to the purposes of this Easement; and b.) to maintain the Temporary Easement Area during the term of its existence; and c.) to remove from the Temporary Easement Area during the term of its existence trees, brush, herbage, aggregate, undergrowth, curb, concrete, asphalt, and other obstructions interfering with the location, construction and maintenance of the temporary roadway/driving surface within the Temporary Easement Area; and d.) to remove or otherwise dispose of all earth or other material excavated from the Temporary Easement Area during the term of its existence as the City may deem appropriate; and e.) to enter onto the Landowner’s Property as needed in order to construct and maintain the Temporary Easement through the duration of this Easement. The City shall not be responsible for any costs, expenses, damages, demands, obligations, penalties, attorneys' fees and losses resulting from any claims, actions, suits, or proceedings based upon a release or threat of release of any hazardous substances, petroleum, pollutants, and contaminants which may have existed on, or which relate to the Permanent Easement Area or the Landowner’s Property prior to the date hereof. Nothing contained herein shall be deemed a waiver by the City of any governmental immunity defenses, statutory or otherwise. Further, any and all claims brought by Landowner or its successors or assigns shall be subject to any governmental immunity defenses of the City and the maximum liability limits provided by Minnesota Statute, Chapter 466. The Landowner, for itself and its successors and assigns, does hereby warrant to and covenant with the City, its successors and assigns, that it is well seized in fee of the Landowner’s Property described on Exhibit A and the Permanent Easement Area described and depicted on Exhibit B and the Temporary Easement Area described and depicted on Exhibit B and has good right to grant and convey the Permanent Easement and the Temporary Easement herein to the City. The terms and conditions of this instrument shall run with the land and be binding on the Landowner, its successors and assigns. This Easement may be executed in any number of counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument. STATE DEED TAX DUE HEREON: NONE \[The remainder of this page has been intentionally left blank.\] IN TESTIMONY WHEREOF, the Landowner and the City have caused this Easement to be executed as of the day and year first above written. LANDOWNER: INDEPENDENT SCHOOL DISTRICT NO. 833 By: ____________________________________ \[Name\] \[Title\] STATE OF MINNESOTA ) ) ss. COUNTY OF WASHINGTON ) The foregoing instrument was executed this ____ day of __________________, 2016, by , the of Independent School District No. 833, a Minnesota public corporation, on behalf of the corporation. Notary Public CITY: CITY OF COTTAGE GROVE By: Myron Bailey Mayor By: Joseph Fischbach City Clerk STATE OF MINNESOTA ) ) ss. COUNTY OF WASHINGTON ) On this _____ day of _______________, 2016, before me a Notary Public within and for said County, personally appeared Myron Bailey and Joseph Fischbach to me personally known, who being each by me duly sworn, each did say that they are respectively the Mayor and the City Clerk of the City of Cottage Grove, the Minnesota municipal corporation named in the foregoing instrument, and that it was signed on behalf of said municipal corporation by authority of its City Council and said Mayor and City Clerk acknowledged said instrument to be the free act and deed of said municipal corporation. Notary Public This instrument was drafted by: After recording, please return to: Darcy M. Erickson Darcy M. Erickson LeVander, Gillen & Miller, P.A. LeVander, Gillen & Miller 633 South Concord Street, Suite 400 633 South Concord Street, Suite 400 South St. Paul, Minnesota 55075 South St. Paul, Minnesota 55075 (651)451-1831 (651)451-1831 EXHIBIT A LEGAL DESCRIPTION OF LANDOWNER’S PROPERTY Real Property located in the City of Cottage Grove, Washington County, Minnesota, described as follows: Parcel 1 The North Six Hundred Twenty-eight and Ninety-three Hundredths (628.93) feet of the West Seven Hundred Twenty-five and Sixty Hundredths (725.60) feet of the Northwest quarter (NW¼) of the Northwest quarter (NW¼) of Section Twenty (20), Township Twenty-seven (27) North, Range Twenty-one (21) West, subject to Cherry Avenue on and across the Westerly Thirty-three (33) feet thereof, containing 10.476 acres, more or less. PID: 20.027.21.22.0002 Parcel 2 The South 188.68 feet of the North 817.61 feet of the West 725.60 feet of the Northwest Quarter of the Northwest Quarter (NW¼ of NW¼) of Section Twenty (20), Township Twenty seven (27) North, Range Twenty one West, subject to Cherry Avenue on and across the Westerly 33 feet thereof, containing 3.143 acres, more or less. PID: 20.027.21.22.0001 EXHIBIT B LEGAL DESCRIPTION AND DEPICTION OF THE PERMANENT EASEMENT AREA AND TEMPORARY EASEMENT AREA PERMANENT DRAINAGE AND UTILITY EASEMENT A permanent easement for drainage and utility purposes over, under, and across that part of West 725.60 feet of the Northwest Quarter of Section 20, Township 027, Range 21, Washington County, Minnesota, described as follows: Commencing at the northwest corner of said Northwest Quarter of Section 20; thence South 00 degrees 08 minutes 44 seconds East, assumed bearing along the west line of said Northwest Quarter, a distance of 608.37 feet to the point of beginning of the easement to be described; thence continuing South 00 degrees 08 minutes 44 seconds East along said west line, a distance of 30.03 feet; thence North 87 degrees 38 minutes 23 seconds East, 726.29 feet to the east line of said West 725.60 feet of said Northwest Quarter; thence North 00 degrees 08 minutes 44 seconds East along said east line of the West 725.60 feet, a distance of 20.02 feet; thence South 87 degrees 38 minutes 23 seconds West, 254.53 feet; thence North 00 degrees 08 minutes 44 seconds East, 10.41 feet; thence North 46 degrees 00 minutes 51 seconds East, 104.31 feet; thence North 90 degrees 00 minutes 00 seconds East, 123.60 feet; thence North 37 degrees 20 minutes 08 seconds East, 92.35 feet to said east line of the West 725.60 feet of the Northwest Quarter; thence North 00 degrees 08 minutes 44 seconds East along said east line of the West 725.60 feet, a distance of 67.58 feet; thence South 61 degrees 40 minutes 56 seconds West, 238.84 feet; thence South 00 degrees 00 minutes 00 seconds West, 27.72 feet; thence South 46 degrees 05 minutes 50 seconds West, 104.41 feet; thence South 87 degrees 38 minutes 23 seconds West, 441.08 feet to the point of beginning. Said permanent utility easement contains ±7,370 square feet (±0.17 acres). TEMPORARY CONSTRUCTION EASEMENT A temporary easement for construction purposes over, under, and across the East 106.00 feet of the West 436.00 feet of the South 106.00 feet of the North 667.00 feet of the Northwest Quarter of Section 20, Township 027, Range 21, Washington County, Minnesota. Said temporary construction contains ±11,236 square feet (±0.26 acres). This Temporary Easement shall expire on June 30, 2017 and thereafter be of no force and effect. CITY OF COTTAGE GROVE ASSESSMENT APPEAL WAIVER AGREEMENT FOR SUMMERS LANDING OFF-SITE IMPROVEMENTS THIS AGREEMENT FOR AN ASSESSMENT APPEAL WAIVER (“Agreement”) is entered into and effective as of the _____ day of , 2016 (“Agreement Date”), by and between the City of Cottage Grove, a Minnesota municipal corporation (“City”), Swanlunds’, Inc. (“Owner”) and Summergate Development, LLC (“Developer”). WITNESSETH: WHEREAS, the Owner is the fee simple Owner of property legally described on Exhibit A, attached hereto and incorporated herein, (“the Property”) that will be benefited by certain Off-Site Improvements; and WHEREAS, Owner has entered into a purchase agreement with Developer who will develop the Property into a development known as Summers Landing (“the Development Project”), that will be completed in six phases, depicted on the attached Exhibit B, which consists of the Preliminary Plat and Phasing Plan; and WHEREAS, Owner, Developer and the City have entered into a Development Agreement dated April _____, 2016 (the “Development Agreement”); and WHEREAS, the Developer has prepared a Final Plat (“Plat”) for the Development Project, attached hereto as Exhibit C; and WHEREAS, the Owner and Developer have petitioned the City pursuant to Minnesota Statute, Chapter 429 to construct and assess certain Off-Site Improvements of Hadley Avenue and th 95 Street described on the attached Exhibit D (“Off-Site Improvements”) solely due to the Development Project, that will benefit the Property; and - 1 - WHEREAS, the Owner and Developer are willing to agree to the levy of the Assessment Waiver Amount against the portions of the Property legally described and identified on Exhibit E (“Assessed Property”) for the Assessment Term with interest accrual at the Assessment Interest Rate; and WHEREAS, the City is willing to facilitate the Off-Site Improvements as petitioned by the Owner and Developer which are necessary for the Development Project provided that the Off-Site Improvements are funded in part by the Owner and Developer; and WHEREAS, the Owner and Developer are willing to waive their assessment appeal rights up to the Assessment Waiver Amount which constitutes an estimated benefit pursuant to Minnesota Statutes, Chapter 429 in the manner authorized by Minnesota Statutes § 462.3531 in return for the City’s efforts to facilitate the collection of funding for the Off-Site Improvements; and WHEREAS, the City, Owner and Developer have agreed pursuant to the Development Agreement that the assessment of the cost of the Off-Site Improvements shall not exceed the amount of One Million Four Hundred Forty-Seven Thousand, Nine Hundred Two and 00/100ths Dollars ($1,447,902.00). NOW, THEREFORE, in consideration of the mutual promises and covenants of each to the other contained in this Agreement and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto do covenant and agree as follows: ARTICLE I THE AGREEMENT Section 1.01 Purpose. This Agreement is executed and delivered pursuant to the terms and conditions of the Development Agreement and includes the waiver of assessment appeal rights up to the Assessment Waiver Amount which constitutes a benefit pursuant to Minnesota Statutes, Chapter 429 in the manner authorized by Minnesota Statutes § 462.3531 in return for the City’s efforts to facilitate the collection of funding for the Off-Site Improvements. Section 1.02 Term. The term of this Agreement shall commence on the Agreement Date and shall terminate upon the expiration of the Assessment Term (or upon prepayment of the levied assessment). ARTICLE II DEFINITIONS Section 2.01 Definitions. The following are terms used in this Agreement. Their meanings as used in this Agreement shall be expressly indicated below, unless the context of this Agreement requires otherwise: - 2 - (a)Agreement: This agreement to memorialize the covenants and agreements between the Owner, the Developer, and the City with regard to the Property and the Off-Site Improvements, including the assessment appeal waiver provided herein pursuant to Minnesota Statutes, Chapter 429 in the manner authorized by Minnesota Statutes § 462.3531. (b)Agreement Date: The date written in the first paragraph of the Agreement. (c)Assessed Property: The real property that will be assessed for the Off-site Improvements, legally described on Exhibit E. (d)Assessment Interest Rate: The special assessment levied against the Property shall accrue interest at a rate of five percent (5%) per year for the Assessment Term. The first interest accrual shall begin on or about November 2016. (e)Assessment Term: Except as provided in Section 3.02, the Assessment Term for each phase of the Development Project shall be three (3) years, with the initial term beginning on the date of the assessment, which shall be on or about November 2016, and a new 3-year term being initiated on or about November of each year during which a Final Plat for a new phase is approved by the City Council. (f)Assessment Waiver Amount: The total charge imposed by the City for the Off-Site Improvements shall not exceed the amount of One Million Four Hundred Forty-Seventy Thousand, Nine Hundred Two and 00/100ths Dollars ($1,447,902.00), which amount is to be assessed by the City against the Assessed Property on a pro-rata basis against the Phase 1 lots and Outlot G. The costs related to the Off-Site Improvements are described in Exhibit D. The Assessment Waiver Amount is commensurate with the estimated special benefit of the Off-Site Improvements to the Assessed Property. (g)City: The City of Cottage Grove, a Minnesota municipal corporation. (h)Developer: Summergate Development, LLC, a Minnesota limited liability company. (i)Owner: Swanlunds’, Inc., a Minnesota corporation. th (j)Off-Site Improvements: Certain Improvements to Hadley Avenue and 95 Street which are required for the Development Project and detailed on Exhibit D. (k)Property: Real property legally described on Exhibit A. ARTICLE III COVENANTS AND AGREEMENTS Section 3.01 Covenants and Agreements of the Owner and Developer. The Owner and Developer covenant and agree with the City that: - 3 - (a)Assessment Appeal Waiver: Owner and Developer hereby authorize the City to certify to the Washington County Auditor/Property Tax Assessor a special assessment against the Assessed Property up to the Assessment Waiver Amount for Off-Site Improvements. The Owner and Developer hereby waive all rights to assessment notices, hearings and appeals, and all other rights pursuant to Minn. Stat. § 429.061, § 429.071 and § 429.081 for the special assessment against the Assessed Property for Off-Site Improvements up to the Assessment Waiver Amount. The Owner and Developer hereby waive any and all procedural and substantive objections to the special assessment up to the Assessment Waiver Amount against the Assessed Property, including, but not limited to, notice and hearing requirements and any claim that any or all of the Assessment Waiver Amount against the Assessed Property exceeds the benefit to the Property for the Off-Site Improvements. The Owner and Developer acknowledge and agree that the benefit of the Off-Site Improvements to the Assessed Property will equal the Assessment Waiver Amount. The Owner and Developer also acknowledge and agree that the Assessed Property receives a special benefit equal to the Assessment Waiver Amount. Furthermore, the Owner and Developer acknowledge and agree that the Off-Site Improvements costs may not be equally spread against all benefited property. The City, Owner and Developer acknowledge and agree that the waiver of assessment appeal rights pursuant to Minnesota Statutes, Chapter 429, is capped at the Assessment Waiver Amount by operation of Minn. Stat.§462.3531. (b)Owner’s and Developer’s Covenant Not to Sue the City: Owner and Developer hereby covenant with the City not to appeal or sue the City for a court to set aside, reduce, repeal, or invalidate the levied assessment, or for other relief from the payment of the City’s levy of a special assessment up to the Assessment Waiver Amount against the Assessed Property. (c)Owner’s and Developer’s Covenant that Owner and Developer are the Property Fee Owners: Owner and Developer hereby covenant and warrant with the City that Owner and/or Developer are seized in fee of the Property and have good right to enter into this Agreement with the City. (d)Developer Recording of this Agreement: The Developer will record this Agreement against the Assessed Property with the Washington County Recorder and/or Registrar of Titles. Section 3.02 Covenants and Agreements of the City. The City covenants and agrees with the Owner and Developer that: (a)Assessment Waiver Amount: The City agrees that the City will certify/levy a special assessment against the Assessed Property only up to the Assessment Waiver Amount for the Off-Site Improvements pursuant to the Development Agreement and this Agreement, and any costs of the Off-Site Improvements in excess of the Assessment Waiver Amount shall be paid by the City without any right to seek reimbursement or payment from the Owner or - 4 - Developer and without any right to further assess the Assessed Property. The assessment shall be certified/levied as follows: (1)In November 2016, the City shall assess the costs of the Off-Site Improvements on a per lot pro rata basis against the Assessed Property for the Assessment Term. The assessment for the Assessed Property located in Phase 1, as depicted on the Phasing Plan in Exhibit B, shall be levied immediately; however, Outlot G shall reflect a pending or deferred assessment (the “Deferred Assessment”). The Assessment Interest Rate for all Assessed Property, including Outlot G, shall begin to accrue at this time. (2)Thereafter, in November of each year during which a new phase is approved by the City for development, the City shall on a pro rata basis allocate the Deferred Assessment for all lots in each new phase. The Deferred Assessment for Outlot G shall be reduced accordingly by the amount of the levy for each phase. (3) If no final plat of a new phase is approved after a period of six (6) years from the date of the final plat approval by the City Council from the last phase platted by Developer, then in November of the sixth year, Outlot G will be assessed the balance of the Deferred Assessment that is due, for an Assessment Period of ten (10) years. (b)Prepayment of Assessment: The City agrees that the Owner or Developer may prepay some or all of the City’s assessment levy against the Assessed Property for the Off-Site Improvements with no penalty and only with interest accrual pursuant to Minn. Stat. § 429.061. ARTICLE IV DEFAULT Section 4.01 Default. If a party to this Agreement materially defaults in the due and timely performance of any of its covenants or agreements hereunder, the other party(s) may give notice of default of this Agreement. The notice shall specify with particularity the default or defaults on which the notice is based. The notice shall specify a ten (10) day cure period within which the specified default or defaults must be cured. If the specified defaults are not cured within the cure period, the other party(s) may pursue all remedies and sanctions available at law and in equity, including specific performance. Section 4.02 Attorneys’ Fees, Costs and Expenses. The Owner and Developer agree to pay the City the amount of the City’s assessment levy up to the Assessment Waiver Amount with accrued interest together with the City’s attorneys’ fees, costs and expenses to defend the special assessment levy by the City pursuant to this Agreement. The Owner and Developer acknowledge and agree that the Owner and Developer would be unjustly enriched if the City’s assessment levy pursuant to this Agreement was set aside, reduced, repealed or invalidated by a court with jurisdiction over the Assessed Property since the Owner and Developer requested the Off-Site Improvements and this assessment financing for the Off-Site Improvements. The Owner and - 5 - Developer agree that the court with jurisdiction over the Assessed Property shall award the City the assessment levy up to the Assessment Waiver Amount with accrued interest together with the City’s attorneys’ fees, costs and expenses for breach of the Owner’s and Developer’s covenant not to appeal or sue the City pursuant to Article III, Section 3.01(b). Notwithstanding the foregoing, Owner’s obligation to reimburse the City for costs and expenses, including attorney’s fees, in any action regarding the special assessment levy shall only apply if the Owner is the plaintiff in an action to set aside a special assessment equal to or less than the Assessment Waiver Amount. ARTICLE V GENERAL PROVISIONS Section 5.01 Notices. All notices, requests, demands or other communications required or permitted by this Agreement shall be in writing and delivery shall be deemed to be sufficient if delivered personally or by registered or certified mail, return receipt accepted, postage prepaid, addressed as follows: If to the City: City of Cottage Grove Attention: City Administrator 12800 Ravine Parkway South Cottage Grove, MN 55016 If to the Owner: Swanlunds’, Inc. 1437 Dayton Avenue Saint Paul Park, Minnesota 55071 If to the Developer Summergate Development, LLC th 10621 – 165 St. W. Lakeville, MN 55044 Section 5.02 Non-Assignability. Neither the City nor the Owner or Developer shall assign any interest in this Agreement nor shall any party transfer any interest in the same without the prior written consent of the other party. Section 5.03 Binding Effect. This Agreement and the terms, conditions and covenants contained herein and the transaction contemplated hereunder shall be binding upon and inure to the benefit of the parties hereto and their respective successors, heirs, personal representatives, and permitted assigns. This Agreement shall further be binding on subsequent purchasers of the Property and shall run with the Property herein described. Section 5.04 Severability. In the event any provision of this 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. - 6 - Section 5.05 Amendments, Changes and Modifications. This Agreement may be amended or any of its terms modified or changed only by a written amendment authorized and executed by the City, the Owner and the Developer. Section 5.06 Counterparts. This 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. Section 5.07 Entire Agreement. This Agreement shall constitute the entire agreement between the parties and shall supersede all prior oral or written negotiations. Section 5.08 Notice To Buyers. The Owner and Developer agree to notify and provide any buyer of the Property or any portion thereof, with an executed copy of this Agreement if the Owner or Developer sells any interest in the Property following the execution of this Agreement by the Owner, the City, and the Developer but before the recording of this Agreement with Washington County Recorder and/or Registrar of Titles. IN WITNESS WHEREOF, the City, the Owner and Developer have caused this Agreement to be executed by their duly authorized representatives. \[remainder of page intentionally blank\] - 7 - CITY OF COTTAGE GROVE By: Myron Bailey Mayor By: Joseph Fischbach City Clerk STATE OF MINNESOTA ) ) ss. COUNTY OF WASHINGTON ) On this _____ day of _______________, 2016, before me a Notary Public within and for said County, personally appeared Myron Bailey and Joseph Fischbach to me personally known, who being each by me duly sworn, each did say that they are respectively the Mayor and the City Clerk of the City of Cottage Grove, the Minnesota municipal corporation named in the foregoing instrument, and that it was signed on behalf of said municipal corporation by authority of its City Council and said Mayor and City Clerk acknowledged said instrument to be the free act and deed of said municipal corporation. Notary Public - 8 - SWANLUNDS’, INC. Peter Swanlund Vice President STATE OF MINNESOTA ) ) ss. COUNTY OF WASHINGTON ) The foregoing instrument was executed this ____ day of _________, 2016, by Peter Swanlund, the Vice President of Swanlunds’, Inc. a Minnesota corporation, on behalf of the corporation. Notary Public - 9 - SUMMERGATE DEVELOPMENT, LLC Casey Wollschlager Chief Operating Officer STATE OF MINNESOTA ) ) ss. COUNTY OF WASHINGTON ) The foregoing instrument was executed this ____ day of _________, 2016, by Casey Wollschlager the Chief Operating Officer of Summergate Development, LLC a Minnesota limited liability company, on behalf of the company. Notary Public This instrument drafted by: After recording, please return to: Korine L. Land Korine L. Land Cottage Grove City Attorney Cottage Grove City Attorney LeVander, Gillen & Miller, P.A. LeVander, Gillen & Miller, P.A. 633 South Concord Street, Suite 400 633 South Concord Street, Suite 400 South St. Paul, Minnesota 55075 South St. Paul, Minnesota 55075 STDOCS:1309836v2 - 10 - EXHIBIT A LEGAL DESCRIPTION OF PROPERTY Real property situated in the City of Cottage Grove, County of Washington, State of Minnesota, legally described as: Lots 1-21, Block 1, Summers Landing Lots 1-32, Block 2, Summers Landing Lots 1-2, Block 3, Summers Landing Outlots A-G, Summers Landing - 11 - EXHIBIT B PRELIMINARY PLAT AND PHASING PLAN - 12 - EXHIBIT B (CONT.) - 13 - EXHIBIT C – TO BE REPLACED FINAL PLAT - 14 - EXHIBIT C (CONT.) - 15 - EXHIBIT D OFF-SITE IMPROVEMENTS Developer Total Responsibility Developer Assessments Costs (Percent) Cost Hadley Avenue turn lanes adjacent to Summers Landing $46,742 100%$46,742 Hadley Avenue costs: 90 Street th to 95 Street (excludes turn lanes th & trails adjacent to development) $1,242,430 30% $372,729 95 Street costs: Hadley Avenue th to Mississippi Dunes Blvd. (excludes trails adjacent to development) $430,77150%$215,385 Roundabout costs (Intersection of 95 Street & Hadley Avenue) $1,171,430 40% $468,572 th Non-participating (Water main, Hadley Avenue south of 95 th Street & 95 Street east of Hadley th Avenue) $1,538,729 0% $0 Total Construction Costs $4,430,102 $1,103,428 30% Indirect Costs (legal, engineering and administration) $1,329,030 $331,028 Subtotal - Project Costs $5,759,132 $1,434,456 Sanitary Sewer Easement $13,446 100% $13,446 Total Project Costs $5,772,578 $1,447,902 - 16 - EXHIBIT E LEGAL DESCRIPTION OF ASSESSED PROPERTY Real property situated in the City of Cottage Grove, County of Washington, State of Minnesota, legally described as: Lots 1-21, Block 1, Summers Landing Lots 1-32, Block 2, Summers Landing Lots 1-2, Block 3, Summers Landing Outlot G, Summers Landing - 17 -