HomeMy WebLinkAbout2016-12-13 PACKET 04.02.
DRAFT
FOURTH AMENDED AND RESTATED
CONTRACT
FOR
PRIVATE DEVELOPMENT
By and Between
COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY
and
PHS/COTTAGE GROVE, INC.
This document drafted by:
KENNEDY & GRAVEN, CHARTERED
470 US Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612) 337-9300
491118v4 RHB CT165-21
TABLE OF CONTENTS
PAGE
PREAMBLE ....................................................................................................................................1
ARTICLE I
Definitions; Exhibits; 2006 Agreement Superseded
Section 1.1. Definitions................................................................................................................2
Section 1.2. Exhibits ...................................................................................................................4
Section 1.3. Rules of Interpretation ............................................................................................5
Section 1.4. Previous Agreements Superseded ............................................................................5
ARTICLE II
Representations and Warranties
Section 2.1. Representations by the Authority.............................................................................5
Section 2.2. Representations and Warranties by the Developer ..................................................6
ARTICLE III
Acquisition of Development Property; Public Improvements
Section 3.1. Acquisition of Development Property .....................................................................6
Section 3.2. No Representations Regarding Condition of Development Property ......................6
Section 3.3. Public Improvements ...............................................................................................7
Section 3.4. Subdivision and Land Use .......................................................................................7
Section 3.5. Summary of Land Transfers ....................................................................................7
ARTICLE IV
Construction of Minimum Improvements; Public Assistance
Section 4.1. Preliminary Plans .....................................................................................................7
Section 4.2. Construction Plans ...................................................................................................7
Section 4.3. Commencement and Completion of Construction ...................................................8
Section 4.4. Certificate of Completion ........................................................................................8
Section 4.5. Reconstruction of Improvements .............................................................................9
Section 4.6. Issuance of Amended Note ......................................................................................9
Section 4.7. Records ..................................................................................................................10
Section 4.8. Investment Letter ...................................................................................................10
Section 4.9. No Representation Regarding Available Tax Increment .......................................10
Section 4.10. Continued Use for Senior Housing; Local Priority................................................10
Section 4.11. Previous Additional Assistance .............................................................................11
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ARTICLE V
Business Subsidy Act Requirements
Section 5.1. Application of Business Subsidy Act ....................................................................11
ARTICLE VI
Insurance
Section 6.1. Required Insurance ................................................................................................11
Section 6.2 Evidence of Insurance ............................................................................................12
ARTICLE VII
Collection of Taxes; Assessment Agreements;
Reimbursement of Increment
Section 7.1. Taxes ......................................................................................................................13
Section 7.2. Assessment Agreement ..........................................................................................14
Section 7.3 Right to Collect Delinquent Taxes .........................................................................14
Section 7.4 Use of Tax Increment.............................................................................................14
ARTICLE VIII
Prohibition Against Sale or Assignment
Section 8.1 Prohibition Against Sale or Assignment ...............................................................15
ARTICLE IX
Events of Default
Section 9.1. Events of Default Defined .....................................................................................16
Section 9.2. Remedies on Default ..............................................................................................17
Section 9.3. No Remedy Exclusive............................................................................................18
Section 9.4. No Additional Waiver Implied by One Waiver .....................................................18
ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests; Release and Indemnification ................................................18
Section 10.2. Equal Employment Opportunity ............................................................................19
Section 10.3. Restrictions on Use ................................................................................................19
Section 10.4. Notices and Demands ............................................................................................19
Section 10.5. Counterparts ...........................................................................................................20
Section 10.6. Disclaimer of Relationships ...................................................................................20
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TESTIMONIUM............................................................................................................................20
SIGNATURES ......................................................................................................................... 20-21
EXHIBIT A LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY
EXHIBIT A-1 LIST OF TAX INCREMENT PROPERTIES
EXHIBIT B LIST OF PRELIMINARY PLANS
EXHIBIT C FORM OF CERTIFICATE OF COMPLETION
EXHIBIT D FORM OF FOURTH AMENDED ASSESSMENT AGREEMENT
EXHIBIT E LIST OF QUALIFIED COSTS
EXHIBIT F FORM OF AUTHORIZING RESOLUTION
EXHIBIT G FORM OF INVESTMENT LETTER
EXHIBIT H SUMMARY OF LAND TRANSFERS
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iii
FOURTH AMENDED AND RESTATED
CONTRACT FOR PRIVATE DEVELOPMENT
This Fourth Amended and Restated Fourth
Amended , made this ____ day of December, 2016, by and
between the Cottage Grove Economic Development Authority, a public body corporate and
politic under the laws of Minnesota, having its principal office at 12800 Ravine Parkway South,
Cottage Grove, Minneso PHS/Cottage Grove, Inc., formerly
known as PHM/Cottage Grove, Inc., a Minnesota non-profit corporation, having its principal
offices at 2845 Hamline Avenue North, Suite 100, Roseville, Minnesota 55113 (the
.
WITNESSETH:
WHEREAS, in 1985 the Authority created Development District No. 1 (the
which Program has been
modified periodically thereafter, all in conformance with Minnesota Statutes, sections 469.124
through 469.134, the City Development Districts Act (
WHEREAS, in 2001 the Authority established tax increment financing district No. 1-12
District No. 1-12
(the , which TIF Plan was modified on October 4, 2006; and
WHEREAS, in order to achieve the objectives of the Program and the TIF Plan, as
modified, the Authority has previously offered certain assistance to the Developer in order to
bring about redevelopment of the Development Property, as hereinafter defined, in accordance
with the Program, the TIF Plan and this Agreement; and
WHEREAS, the Authority believes that the redevelopment of land within TIF District
No. 1-12 pursuant to this Agreement and the fulfillment generally of this Agreement are in the
vital and best interests of Cottage Grove and the health, safety, morals, and welfare of its
residents, and in accord with the public purposes and provisions of the applicable state and local
laws and requirements under which the Development District has been undertaken; and
WHEREAS, the Authority, the Developer and PHS/CG Center, LLC, a Minnesota
limited liability company, on December 14, 2006, entered into that certain Amended and
2006 A; and
WHEREAS, on April 12, 2011, the parties entered into that certain Second Amended and
; and
WHEREAS, on December 10, 2013, the parties entered into that certain third
Amen
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WHEREAS, the parties now wish to enter into this Fourth Amended Agreement as an
amendment and restatement of the 2006 Agreement, Second Amendment and Third Amendment.
NOW, THEREFORE, in consideration of the covenants and the mutual obligations
contained herein, the Authority and the Developer hereby covenant and agree with each other as
follows:
ARTICLE I
Definitions; Exhibits; 2006 Agreement Superseded
Section 1.1. Definitions. In this Agreement the following terms shall have the meanings
given unless a different meaning clearly appears from the context:
Minnesota Statutes, sections 469.124
through 469.134, as amended.
as reimbursement of the Qualified Costs. Administrative Expenses include out of pocket
expenses and amounts paid by the Authority for legal counsel, financial consultants and for the
intends to retain 10 percent of the Tax Increment to reimburse itself for the Administrative
Expenses.
Fourth Amended and Restated Contract for Private
Development, as the same may be from time to time modified, amended, or supplemented.
the amended agreement attached hereto as Exhibit D,
among the Authority, the Developer and the Assessor and entered into pursuant to Article VII of
this Agreement, which establish Minimum Market Values for the Development Property and the
Minimum Improvements.
onomic Development Authority, a public body
corporate and politic under the laws of Minnesota.
execution of
the Agreement and issuance of the Note in the form attached hereto as Exhibit F.
72 percent of the Tax Increment paid within the
previous six months to the Authority by the County.
Minnesota Statutes, sections 116J.993 through 116J.995,
as amended.
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attached hereto as Exhibit
C, which will be provided to the Developer upon completion of the Minimum Improvements.
Minnesota.
ion of the Minimum
Improvements to be submitted by the Developer and approved by the Authority pursuant to
section 4.2 of this Agreement.
, PHS/Cottage Grove, Inc., a Minnesota non-profit corporation, its
successors and assigns.
Improvements will be constructed, which property is legally described in Exhibit A attached
hereto.
Minnesota Statutes,
sections 469.090 through 469.1081, as amended.
of this Agreement.
the 64-unit independent senior living facility and the
nursing care facility to be constructed on the Development Property in accordance with the
Construction Plans submitted to and approved by the Authority. After completion of the
Minimum Improvements, the term shall mean the Development Property as improved by the
Minimum Improvements.
the minimum market values established for the
Minimum Improvements in the amended Assessment Agreement attached hereto as Exhibit D.
able Tax Increment Revenue Note, Series 2016A to be
issued by the Authority, substantially in the form contained in the Authorizing Resolution.
the plans, drawings and specifications for the construction of
the Minimum Improvements which have been submitted by the Developer and are listed on
Exhibit B attached hereto.
by the City for the benefit of the Development Property and other land, as more fully specified in
section 3.3 of this Agreement.
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which were incurred by the Developer within five
years of the date of certification of the TIF District and which are to be reimbursed to the
Developer through Available Tax Increment. They are listed on Exhibit E attached hereto.
the
s interest in the Minimum Improvements or the Development Property, whether
voluntary or involuntary, as more fully described in section 8.1 of this Agreement.
that portion of the real property taxes actually paid by the County
to the Authority prior to the Termination Date with respect to the land and all improvements
located on the parcels described in Exhibit A-1 attached hereto.
Minnesota Statutes, sections
469.174 through 469.179, as amended.
No. 1-12.
District No. 1-12, as amended.
ans the Assessor, County auditor, County or State board of
equalization, the commissioner of revenue of the State, or any State or federal district court, the
tax court of the State, or the State Supreme Court.
i) the date of the last payment of Available Tax Increment to
the Developer under the Note; ii) the date the TIF District terminates by law; or iii) the date the
Authority has received sufficient Tax Increment with respect to the Minimum Improvements to
reimburse itself for the Administrative Expenses and the cost of the Public Improvements,
whichever occurs last.
weather conditions; strikes or other labor troubles; fire or other casualty to the Minimum
Improvements; litigation commenced by third parties which, by injunction or other similar
judicial action, directly results in delays; or, except those of the Authority reasonably
contemplated by this Agreement, any acts or omissions of any federal, State or local
governmental unit which directly result in delays in construction of the Minimum Improvements.
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 A-1. List of Tax Increment Properties
Exhibit B. List of Preliminary Plans
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Exhibit C. Form of Certificate of Completion
Exhibit D. Form of Fourth Amended Assessment Agreement
Exhibit E. List of Qualified Costs
Exhibit F. Form of Authorizing Resolution
Exhibit G. Form of Investment Letter
Exhibit H Summary of Land Transfers
Section 1.3. Rules of Interpretation. (a) This Agreement shall be interpreted in
accordance with and governed by the laws of Minnesota.
(b)
to any particular section or subdivision, refer to this Agreement as a whole rather than 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.
(d) Any titles of the several parts, articles and sections of this Agreement are inserted
for convenience and reference only and shall be disregarded in construing or interpreting any of
its provisions.
Section 1.4. Previous Agreements Superseded. This Agreement supersedes and is
substituted for the 2006 Agreement, the Second Amendment and the Third Amendment, which
shall have no further force and effect upon the execution and recording of this Agreement.
ARTICLE II
Representations and Warranties
Section 2.1. Representations by the Authority. The Authority makes the following
representations as the basis for the undertakings on its part herein contained:
(a) The Authority is a public body corporate and politic under the laws of Minnesota.
The Authority has the authority to enter into this Agreement and carry out its obligations
hereunder.
(b) The persons executing this Agreement and related agreements and documents on
behalf of the Authority have the authority to do so and to bind the Authority by their actions.
(c) Development District No. 1 is a development district within the meaning of the
Act and was created, adopted and approved in accordance with the terms of the Act.
(d) TIF District No. 1-12, as originally established and as expanded on October 4,
2006, is a redevelopment tax increment financing district within the meaning of the TIF Act.
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(e) The Authority has received no notice or communication from any local, State or
federal official that the activities of the Developer or the Authority in the Development District
may be or will be in violation of any environmental law or regulation. The Authority is aware of
no facts the existence of which would cause it to be in violation of any local, State or federal
environmental law, regulation or review procedure.
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:
(a) The Developer is a Minnesota non-profit corporation duly organized and in good
standing under the laws of Minnesota. The Developer is not in violation of any provisions of its
organizational documents and has the authority 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 authority to do so and to bind the Developer by
their actions.
(b) Neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of,
the terms, conditions or provisions or any restriction or any evidence of indebtedness, agreement
or instrument of whatever nature to which the Developer is now a party or by which it is bound,
or constitutes a default under any of the foregoing.
(c) Due to the high cost of land acquisition, leasehold termination and demolition of
existing structures in the Development District, the Developer would not have been willing to
undertake its previous activities or proposed improvements but for the commitment by the
Authority to grant the financial and other assistance outlined in this Agreement. The
use of Tax Increment for such assistance is essential to the Developer's ability to carry out its
obligations under this Agreement.
ARTICLE III
Acquisition of Development Property; Public Improvements
Section 3.1. Acquisition of Development Property. The Developer is the fee owner of
the Development Property.
Section 3.2. No Representations Regarding Conditions of Development Property.
Before acquiring the Development Property, the Developer conducted its due diligence with
regard to the suitability of the Development Property for its intended purpose. The Authority
had no knowledge of and made no representations to the Developer regarding the soil conditions
on the Development Property or the suitability of the Development Property for construction of
the Minimum Improvements or for any other purpose intended by the Developer. Likewise, the
Authority had no knowledge of and made no representations to the Developer regarding the
presence or absence of pollution, contamination or hazardous substances on the Development
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Property. The Authority shall have no obligation or liability to the Developer for any defect or
unsuitability with respect to the soil conditions or the presence of any pollution, contamination or
hazardous substances on the Development Property.
Section 3.3. Public Improvements. The City previously constructed public infrastructure
improvements for the benefit of the Development Property and
other land. The Public Improvements include certain infrastructure improvements, including but
not limited to lighting, signage, banners, sidewalks and district storm water improvements. The
Authority intends to use Tax Increment to reimburse the City for a portion of the cost of the
Public Improvements.
Section 3.4. Subdivision and Land Use. The Developer has applied to the City for
rd
approval of a plat to be known as PHS Cottage Grove Inc. 3 Addition and which includes the
Development Property. The Developer acknowledges that if it proceeds to construct the
Minimum Improvements, it may be required to enter into a subdivision or other agreements with
the City regarding development of the Minimum Improvements. The Developer will be
responsible for applying for and obtaining the building permit and all other permits or approvals
necessary to allow construction of the Minimum Improvements.
Section 3.5. Summary of Land Transfers. The Developer and the City have agreed to
convey deeds and easements to one another over various parcels within the plat of PHS Cottage
rd
Grove Inc. 3 Addition. Those transactions are summarized on Exhibit H attached hereto. For
ARTICLE IV
Construction of Minimum Improvements; Public Assistance
Section 4.1. Preliminary Plans. The Authority has approved the Preliminary Plans for
the Minimum Improvements. The Preliminary Plans are listed on Exhibit B attached hereto.
Section 4.2. Construction Plans. (a) When ready to proceed with construction of the
Minimum Improvements, the Developer shall submit Construction Plans to the Authority for the
Minimum Improvements. The Construction Plans shall provide for the construction of the
Minimum Improvements and shall be in substantial conformity with the Preliminary Plans and
this Agreement. The Authority will approve the Construction Plans if they (1) conform to the
Preliminary Plans; (2) conform to all applicable federal, State and local laws, ordinances, rules
adequate to provide for the construction of the Minimum Improvements; (4) are consistent with
to the State
building code; and (6) conform to any zoning, subdivision or other land use granted by the City
concerning the Development Property. No approval by the Authority shall relieve the Developer
of the obligation to comply with the terms of this Agreement, or the terms of any applicable
federal, State and local laws, ordinances, rules and regulations in the construction of the
Minimum Improvements. No approval by the Authority shall relieve the Developer of the
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obligation to apply for a building permit or other approvals concerning the Minimum
Improvements. No approval by the Authority shall constitute a waiver of an Event of Default.
The Developer shall also submit the Construction Plans to the City for final planning and
building review. After submission and approval of the Construction Plans, the Developer agrees
that it will construct the Minimum Improvements on the Development Property in accordance
with the Construction Plans.
(b) If the Developer desires to make any material change in the Construction Plans
after their approval by the Authority, including any change to the design or materials of the
Minimum Improvements or any other change which would also require review or reapproval
under any applicable code, ordinance or regulation, the Developer shall submit the proposed
change to the Authority for its approval. If the proposed change conforms to the requirements of
this section 4.2 with respect to the original Construction Plans or is otherwise acceptable to the
Authority, the Authority shall approve the proposed change. Such change in the Construction
Plans shall be deemed approved by the Authority unless rejected, in whole or in part, by written
notice by the Authority to the Developer, setting forth in detail the reasons therefor within 15
days after receipt of the written notice of such change from the Developer.
(c) At all times prior to the Termination Date, the Developer will maintain, preserve
and keep the Minimum Improvements or cause the same to be maintained, preserved and kept in
good repair and condition. The Developer acknowledges that, in addition to the requirements of
this Agreement, construction of the Minimum Improvements will necessitate compliance with
other reviews and approvals by the City and possibly other governmental agencies and agrees to
submit all applications for and pursue to their conclusion all other approvals needed prior to
constructing the Minimum Improvements.
Section 4.3. Commencement and Completion of Construction. All work with respect to
the Minimum Improvements to be constructed or provided by the Developer on the Development
Property shall be in conformity with the Construction Plans. The Developer shall make such
reports to the Authority regarding construction of the Minimum Improvements as the Authority
deems necessary or helpful in order to monitor progress on construction of the Minimum
Improvements. The Developer shall pay all fees and charges due to the City associated with
development of the Development Property and construction of the Minimum Improvements,
which may include but are not limited to storm water, sanitary sewer and water area charges,
park dedication fees, sanitary sewer and water connection fees, MCES SAC charges, and
building permit, plan check state surcharge and associated fees. The Developer shall commence
construction of the Minimum Improvements by no later than June 30, 2017 and shall complete
construction by no later than December 31, 2018.
Section 4.4. Certificate of Completion. (a) After substantial completion of the
Minimum Improvements in accordance with the applicable Construction Plans and all terms of
this Agreement, the Authority will furnish the Developer with a Certificate of Completion in the
form of Exhibit C attached hereto. Such certification by the Authority shall be a conclusive
determination of satisfaction and termination of the agreements and covenants in this Agreement
with respect to the obligations of the Developer to construct the Minimum Improvements. The
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Certificate of Completion shall only be issued after issuance of a certificate of occupancy by the
City for the second building of the Minimum Improvements.
(b) The Certificate of Completion provided for in this section 4.4 shall be in such
form as will enable it to be recorded in the proper County office for the recordation of deeds and
other instruments pertaining to the Development Property. If the Authority shall refuse or fail to
provide such certification in accordance with the provisions of this section 4.4, the Authority
shall, within 30 days after written request by the Developer, provide the Developer with a written
statement, indicating in adequate detail in what respects the Developer has failed to complete the
Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in
default of a material term of this Agreement, and what measures or acts will be necessary, in the
opinion of the Authority, for the Developer to take or perform in order to obtain such
certification.
Section 4.5. Reconstruction of Improvements. If the Minimum Improvements are
damaged or destroyed before or after completion thereof and issuance of a Certificate of
Completion, but prior to the Termination Date, the Developer agrees, for itself and its successors
and assigns, to reconstruct the Minimum Improvements to a value at least equal to the Minimum
Market Value established in the Assessment Agreement then in effect within one year of the date
of the damage or destruction. No delay or failure by the Developer or any successor or assign to
reconstruct the Minimum Improvements as required by this section 4.5 shall alter or limit the
he Assessment Agreement, which shall remain in full force and
effect until the Termination Date. The Minimum Improvements shall be reconstructed in
accordance with the construction plans approved by the Authority in accordance with this
Agreement. The De Improvements pursuant to
this section 4.5 shall end on the Termination Date.
Section 4.6. Issuance of Amended Note. In 2006, the Authority issued its Limited
Taxable Tax Increment Revenue Note in the principal amount of $2,400,000 and bearing annual
he Authority issued its Limited
Taxable Tax Increment Revenue Note, Series 2011A in the principal amount of $2,229,292 (the
. The 2011 Note pays no interest and is payable beginning on August 1, 2011 and
continuing through August 1, 2018 in accordance with the payment schedule attached thereto.
The 2011 Note replaced the 2006 Note. The Authority issued the Notes to reimburse the
Developer for Qualified Costs incurred by the Developer for previous improvements in the TIF
District. The Authority intends to issue a new Note principal
amount of $2,400,000 bearing interest at the annual rate of five percent payable beginning
February 1, 2017 and continuing through February 1, 2029. All of the Qualifying Costs
reimbursed under the previous Notes and under the 2016 Note were incurred by the Developer
within five years of the date of certification of the TIF District. The 2016 Note will be issued in
replacement of the 2011 Note upon satisfaction of the following conditions precedent:
(a) The Developer has executed the amended Assessment Agreement in the form
attached hereto as Exhibit D;
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(b) To the extent not previously done, the Developer will provide documentation for
the Authority that the Developer has incurred and paid Qualified Costs at least equal to the
principal amount of the Note;
(c) The Developer has executed the Investment Letter in the form attached hereto as
Exhibit G; and
(d) There is no uncured Event of Default by the Developer.
Section 4.7. Records. The Authority may at all reasonable times, after reasonable notice,
inspect, examine and copy all books and records of the Developer relating to the Minimum
Improvements. These records shall be kept and maintained by the Developer until four years
after the Termination Date.
Section 4.8. Investment Letter. As a condition precedent to the Authority
obligation under this Agreement, the Developer shall deliver to the Authority, on or before the
date of issuance of the Note, an investment letter executed by the Developer as purchaser of the
Note and in substantially the form set forth at Exhibit G.
Section 4.9. No Representation Regarding Available Tax Increment
financial commitment for reimbursement of that portion of the Qualified Costs payable under the
Note is a revenue obligation only and will be paid by the Authority only out of Available Tax
Increment. The Authority makes no representations or warranties that the Available Tax
Increment will be sufficient to reimburse the Developer for the specified portion of the Qualified
Costs or to make payments under the Note. The Developer acknowledges that Available Tax
Increment is subject to calculation by the County and changes in State law and that some or all of
the specified portion of the Qualified Costs may not be reimbursed prior to the Termination Date.
The Developer acknowledges that the estimates of Available Tax Increment which may have
been made by the Authority or its agents, officers or employees are estimates only, are made for
The
Developer further understands and acknowledges that no assistance is being provided by the
Authority or the City hereunder except through issuance of the Note and that the Developer shall
have no claim against any funds of the Authority or the City except as set forth in this
Agreement, the Authorizing Resolution or the Note.
Section 4.10. Continued Use for Senior Housing; Local Priority. (a) The Minimum
Improvements are intended for use by seniors. The Developer agrees to restrict the use of the
Minimum Improvements to seniors until the Termination Date. For purposes of this section
4.10, senior housing shall mean that every residential unit shall be occupied by at least one
person age 55 or older and that no persons less than 18 years of age shall reside therein.
(b) Subject to the Developer
Developer agrees that, to the extent permitted by law, the Developer will give current residents
of Cottage Grove priority preference on any waiting list or leasing order created, maintained or
utilized in renting units of the Minimum Improvements until the Termination Date.
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Section 4.11. Previous Additional Assistance. In the 2006 Agreement, the Authority
agreed to reimburse the Developer for $433,000 of the Qualifying Costs in addition to the 2006
the Developer the Additional Assistance between 2010 and 2013 in accordance with the terms of
the 2006 Agreement. The 2006 Agreement and the 2011 Agreement provide that the Authority
intends to reimburse itself for the Additional Assistance through Tax Increment although such
hereby reiterates said intention and priority of payment.
ARTICLE V
Business Subsidy Act Requirements
Section 5.1. Application of Business Subsidy Act. All assistance being offered by the
Authority under this Agreement and previous agreements is in support of residential
development. Pursuant to section 116J.993, subd. 3 (7) of the Business Subsidy Act, assistance
for housing is exempt from the requirements of the Business Subsidy Act.
ARTICLE VI
Insurance
Section 6.1. Required Insurance. (a) The Developer agrees to provide and maintain at
all times during the process of constructing the Minimum Improvements and, from time to time
at the request of the Authority, furnish the Authority with proof of payment of premiums on:
(i) s risk insurance, written on the so-s Risk --
insurable value of the Minimum Improvements at the date of completion, and with
coverage available in non-
(ii) Comprehensive general liability insurance (including operations,
contingent liability, operations of subcontractors, completed operations and contractual
liability ins Policy with limits against
bodily injury and property damage of not less than $1,000,000 for each occurrence (to
accomplish the above required limits, an umbrella excess liability policy may be used);
and
(iii) compensation insurance, with statutory coverage.
The policies of insurance required pursuant to clauses (i) and (ii) above shall be placed with
financially sound and reputable insurers licensed to transact business in Minnesota. The policy
of insurance delivered pursuant to clause (i) above shall contain an agreement of the insurer to
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advance written notice to the Authority in the event of cancellation of
such policy or change affecting the coverage thereunder.
(b) Upon completion of construction of the Minimum Improvements, and prior to the
Termination Date, the Developer shall maintain, or cause to be maintained, at its cost and
expense, and from time to time at the request of the Authority shall furnish proof of the payment
of premiums on, insurance as follows:
(i) Insurance against loss and/or damage to the Minimum Improvements
under a policy or policies covering such risks as are ordinarily insured against by similar
businesses, including (without limiting the generality of the foregoing) fire, extended
coverage, vandalism and malicious mischief, heating system explosion, water damage,
demolition cost, debris removal, collapse and flood, in an amount not less than the full
insurable replacement value of the Minimum Improvements or the Minimum Market
Value, whichever is greater. No policy of insurance shall be so written that the proceeds
thereof will produce less than the minimum coverage required by the preceding sentence,
by reason of coinsurance provisions or otherwise, without the prior consent thereto in
writing b
actual replacement cost of the Minimum Improvements and shall be determined from
time to time at the request of the Authority, but not more frequently than once every three
years, by an insurance consultant or insurer, selected and paid for by the Developer and
approved by the Authority; and
(ii) Such other insurance, including worker's compensation insurance
respecting all employees of the Developer, in such amount as is customarily carried by
like organizations engaged in like activities of comparable size and liability exposure;
provided that the Developer may be self-insured with respect to all or any part of its
liability for worker's compensation.
Section 6.2. Evidence of Insurance. All insurance required in this Article VI shall be
taken out and maintained in responsible insurance companies selected by the Developer which
are authorized under the laws of Minnesota to assume the risks covered thereby. The Developer
agrees to deposit with the Authority copies of policies evidencing all such insurance, or a
certificate or certificates or binders of the respective insurers stating that such insurance is in
force and effect. Unless otherwise provided in this Article VI, each policy shall contain a
provision that the insurer shall not cancel nor materially modify it without giving written notice
to the Developer and the Authority at least 30 days before the cancellation or modification
becomes effective. In lieu of separate policies, the Developer may maintain a single policy,
blanket or umbrella policies, or a combination thereof, having the coverage required herein, in
which event the Developer shall deposit with the Authority a certificate or certificates of the
respective insurers as to the amount of coverage in force upon the Minimum Improvements.
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Section 7.1. Taxes. The Developer agrees that until the Termination Date: (1) it will not
seek administrative or judicial review of the applicability of any tax statute determined by any
Tax Official to be applicable to the independent living portion of the Minimum Improvements or
Lot 1 of the Development Property or raise the inapplicability of any such tax statute as a
defense in any proceedings, including delinquent tax proceedings; (2) it will not seek
administrative or judicial review of the constitutionality of any tax statute determined by any Tax
Official to be applicable to said portion of the Minimum Improvements or the Development
Property or raise the unconstitutionality of any such tax statute as a defense in any proceedings,
including delinquent tax proceedings; and (3) it will not cause a reduction below the Minimum
Market Value paid in respect of said portion of the Minimum Improvements or Development
Property through:
(a) willful destruction of the Minimum Improvements or any part thereof;
(b) willful refusal to reconstruct damaged or destroyed property pursuant to section
4.5 of this Agreement;
(c) a request to the County assessor to reduce the assessed value of the Minimum
Improvements below the Minimum Market Value;
(d) a petition to the board of equalization of the County to reduce the assessed value
of the Minimum Improvements below the Minimum Market Value;
(e) a petition to the board of equalization of the State or the commissioner of revenue
of the State to reduce the assessed value of the Minimum Improvements below the Minimum
Market Value;
(f) an action in a district court of the State or the tax court of the State seeking a
reduction in the assessed value of the Minimum Improvements below the Minimum Market
Value;
(g) an application to the commissioner of revenue of the State or to any local taxing
jurisdiction requesting an abatement of real property taxes regarding the Development Property
or Minimum Improvements;
(h) any other proceedings, whether administrative, legal or equitable, with any
administrative body within the County or the State or with any court of the State or the federal
government regarding the Development Property or Minimum Improvements; or
(i) a transfer of the Development Property or Minimum Improvements, or any part
thereof, to an entity exempt from the payment of real property taxes under State law.
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491118v4 RHB CT165-21
The Developer shall not, until the Termination Date, apply to any taxing jurisdiction for a
deferral or abatement of property tax on the Development Property or Minimum Improvements.
Section 7.2. Assessment Agreement. The Developer and the Authority have previously
executed an Assessment Agreement pursuant to Minnesota Statutes, section 469.177, subd. 8,
specifying the Minimum Market Values for the Development Property together with the
respective Minimum Improvements. The Authority and the Developer agree to execute an
amended Assessment Agreement in the form attached hereto as Exhibit D. Nothing in the
Assessment Agreement shall limit the discretion of the Assessor to assign an assessed value to
the Development Property and Min
Market Values nor prohibit the Developer from seeking through the exercise of legal or
administrative remedies a reduction in such market values for property tax purposes; provided,
however, that the Developer shall not seek a reduction of such assessed values below the
rth in the Assessment Agreement in any year so long
as such Assessment Agreement shall remain in effect. The Assessment Agreement shall remain
in effect until the Termination Date; provided, that if at any time before the Termination Date the
Assessment Agreement is found to be terminated or unenforceable by any Tax Official or court
of competent jurisdiction, the Minimum Market Value described in the Assessment Agreement
shall remain an obligation of the Developer or its successors and assigns (whether or not such
value is binding on the Assessor), it being the intent of the parties that the obligation of the
Developer to maintain, and not seek reduction of, the Minimum Market Values specified in the
Assessment Agreement is an obligation under this Agreement as well as under the Assessment
Agreement, and is enforceable by the Authority against the Developer, its successors and assigns
in accordance with the terms of this Agreement.
Section 7.3. Right to Collect Delinquent Taxes. The Developer acknowledges that the
Authority is providing substantial aid and assistance to the Developer. The Developer
understands that the real estate taxes on the Development Property and the Minimum
Improvements must be promptly and timely paid. To that end, the Developer agrees for itself, its
successors and assigns, in addition to the obligation pursuant to statute to pay real estate taxes,
that the Developer is also obligated at all times prior to the Termination Date by reason of this
Agreement to pay before delinquency all real estate taxes assessed against the Development
Property and the Minimum Improvements. The Developer acknowledges that at all times prior
to the Termination Date this obligation creates a contractual right on behalf of the Authority to
sue the Developer or its successors and assigns to collect delinquent real estate taxes and any
penalty or interest thereon and to pay over the same as a tax payment to the County auditor. In
any such suit, the Authority shall also be entitled to recover its reasonable out-of-pocket costs,
expenses and attorney fees.
Section 7.4. Use of Tax Increment. Except with respect to its obligations to the
Developer under this Agreement in connection with Available Tax Increment, the Authority
shall be free to use any Tax Increment it receives with respect to the Minimum Improvements for
any purpose for which such Tax Increment may lawfully be used under the TIF Plan and
pursuant to the provisions of State law, including payment to the City for the Public
Improvements and reimbursement of the Administrative Expenses and Additional
14
491118v4 RHB CT165-21
Expenses, and the Authority shall have no obligations to the Developer with respect to the use of
such Tax Increment.
ARTICLE VIII
Prohibition Against Sale or Assignment
Section 8.1. Prohibition Against Sale or Assignment. The Developer represents and
agrees that its purchase of the Development Property and its other undertakings pursuant to this
Agreement, are, and will be used, for the purpose of redevelopment of the Development Property
and not for speculation in land holding. The Developer represents and agrees that:
(a) Prior to issuance of the Certificate of Completion for the Minimum
Improvements, except by way of security for, and only for, the purpose of obtaining financing
necessary to enable the Developer or any successor in interest to the Development Property, or
any part thereof, to perform its obligations with respect to the Minimum Improvements under
this Agreement, and any other purpose authorized by this Agreement, the Developer has not
made or created and will not make or create or suffer to be made or created any total or partial
Sale in any mode or form of or with respect to the Minimum Improvement or the Development
Property or any part thereof or any interest therein, or any contract or agreement to do the same,
without the prior written approval of the Authority unless the Developer remains liable and
shall be subject to the provisions of this Agreement.
(b) In the event the Developer, upon Sale of the Development Property or any portion
thereof, seeks to be released from its obligations under this Agreement as to the portions of the
Minimum Improvements or Development Property that is subject to the Sale, the Authority shall
be entitled to require, except as otherwise provided in the Agreement, as conditions to any such
Sale that:
(i) Any proposed transferee shall have the qualifications and financial
responsibility, in the reasonable judgment of the Authority, necessary and adequate to
fulfill the obligations undertaken in this Agreement by the Developer as to the portion of
the Minimum Improvements or Development Property subject to the Sale.
(ii) Any proposed transferee, by instrument in writing satisfactory to the
Authority and in form recordable among the County land records, shall, for itself and its
successors and assigns, and expressly for the benefit of the Authority, have expressly
assumed all of the obligations of the Developer under this Agreement as to the portion of
the Minimum Improvements or Development Property subject to the Sale and agreed to
be subject to all the conditions and restrictions to which the Developer is subject as to
such portion; provided, however, that the fact that any transferee to, or any other
successor in interest whatsoever of, the Minimum Improvements or Development
Property, or any part thereof, shall not, for whatever reason, have assumed such
obligations or so agreed, and shall not (unless and only to the extent otherwise
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specifically provided in this Agreement or agreed to in writing by the Authority) deprive
the Authority of any rights or remedies or controls with respect to the Development
Property or any part thereof or the construction of the Minimum Improvements; it being
the intent of the parties as expressed in this Agreement that (to the fullest extent
permitted at law and in equity and excepting only in the manner and to the extent
specifically provided otherwise in this Agreement) no Sale of, or change with respect to,
ownership in the Minimum Improvements or Development Property or any part thereof,
or any interest therein, however consummated or occurring, and whether voluntary or
involuntary, shall operate, legally or practically, to deprive or limit the Authority of or
with respect to any rights or remedies or controls provided in or resulting from this
Agreement with respect to the Minimum Improvements or Development Property that the
Authority would have had, had there been no such Sale. In the absence of specific
written agreement by the Authority to the contrary, no Sale or approval by the Authority
thereof shall be deemed to relieve the Developer, or any other party bound in any way by
this Agreement or otherwise with respect to the construction of the Minimum
Improvements, from any of its obligations with respect thereto.
(iii) Any and all instruments and other legal documents involved in effecting
the Sale of any interest in this Agreement or the Minimum Improvements or
Development Property governed by this Article VIII, shall be in a form reasonably
satisfactory to the Authority.
(c) Any notice of rejection shall contain detailed reasons for the rejection. The
conditions are satisfied, the Developer shall be released from its obligation under this Agreement
as to the portion of the Minimum Improvements or Development Property that is subject to the
Sale.
(d) After issuance of the Certificate of Completion for the Minimum Improvements,
the Developer may transfer or assign any portion of the Development Property or the
for which a Certificate of Completion has been issued,
without the prior written consent of the Authority, provided that the transferee or assignee is
ions hereunder. The Developer shall submit to the
Authority written evidence of any such transfer or assignment, including the transferee or
Developer fails to provide such evidence of transfer and assumption, the Developer shall remain
bound by all it obligations under this Agreement.
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:
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491118v4 RHB CT165-21
(a) Failure by the Developer to commence and complete construction of the
Minimum Improvements pursuant to the terms, conditions and limitations of Article IV of this
Agreement, including the timing thereof, unless such failure is caused by an Unavoidable Delay;
(b) Failure by the Developer to pay real estate taxes or special assessments on the
independent living portion of the Development Property or Minimum Improvements as they
become due;
(c) Appeal or challenge by the Developer or any party on its behalf of the Minimum
Market Value or the Assessment Agreement until the Termination Date, except as permitted
under section 7.2 of this Agreement;
(d) If the independent living portion of the Development Property or Minimum
Improvements become exempt from payment of real estate taxes prior to the Termination Date;
(e) Transfer or Sale of the Development Property or the Minimum Improvements or
any part thereof by the Developer in violation of section 8.1 of this Agreement and without the
prior written permission by the Authority;
(f) If the Minimum Improvements shall no longer be maintained as senior housing;
(g) If the Developer shall file a petition in bankruptcy, or shall make an assignment
for the benefit of its creditors or shall consent to the appointment of a receiver; or
(h) Failure by either party to observe or perform any material covenant, condition,
obligation or agreement on its part to be observed or performed under this Agreement or the
Assessment Agreement.
Section 9.2. Remedies on Default. 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 30 days written notice to the defaulting party of the Event of
Default, but only if the Event of Default has not been cured within said 30 days. If the Event of
Default is by its nature incurable within 30 days, the non-defaulting party may take one or more
of the following actions after provi
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 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;
(b) Terminate or rescind this Agreement;
(c) If the default occurs prior to completion of any portion of the Minimum
Improvements, the Authority may withhold the Certificate of Completion;
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491118v4 RHB CT165-21
(d) Suspend or terminate payments under the Note;
(e) Enforce the Assessment Agreement; and
(f) Take whatever action, including legal or administrative action, which may appear
necessary or desirable to the non-defaulting party to collect any payments due under this
Agreement, or to enforce performance and observance of any obligation, agreement, or covenant
of the defaulting party under this Agreement or the Assessment Agreement.
Section 9.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the
parties is intended to be exclusive of any other available remedy or remedies, but each and every
such remedy shall be cumulative and shall be in addition to every other remedy given under this
Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to
exercise any right or power accruing upon any default shall impair any such right or power or
shall be construed to be a waiver thereof, but any such right and power may be exercised from
time to time and as often as may be deemed expedient. In order to entitle the Authority or the
Developer to exercise any remedy reserved to it, it shall not be necessary to give notice, other
than such notice as may be prescribed in section 10.4 of this Agreement.
Section 9.4. No Additional Waiver Implied by One Waiver. In the event any covenant
or agreement contained in this Agreement should be breached by either party and thereafter
waived by the other party, such waiver shall be limited to the particular breach so waived and
shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder.
ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests; Release and Indemnification. (a) No officer, official,
or employee of the Authority 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 the Agreement which affects his or her personal financial interests, directly or indirectly. No
officer, official, or employee of the Authority shall be personally liable to the Developer, or any
successor in interest, in the event of any default or breach or for any amount which may become
due or on any obligation under the terms of this Agreement.
(b) Except for any negligent act or omission of the following named parties, the
Developer releases from and covenants and agrees that the Authority and the City and the
governing body members, officers, agents, servants and employees thereof shall not be liable for
and agrees to defend, indemnify and hold harmless the Authority and the City and the governing
body members, officers, agents, servants and employees thereof against any loss or damage to
property or any injury to or death of any person occurring at or about or resulting from any
defect in the Minimum Improvements.
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491118v4 RHB CT165-21
(c) Except for any willful misrepresentation or any willful or wanton misconduct or
unlawful or fraudulent acts of the following named parties (including any Event of Default by
the Authority under this Agreement), the Developer agrees to defend the Authority and the City
and the governing body members, officers, agents, servants and employees thereof, now or
forever, and further agrees to indemnify and to hold the aforesaid harmless from any claim,
demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising
or purportedly arising from this Agreement, or the transactions contemplated hereby or the
acquisition, construction, installation, ownership, and operation of the Minimum Improvements.
(d) The Authority and the City and the governing body members, officers, agents,
servants and employees thereof shall not be liable for any damage or injury to the persons or
property of the Developer or its officers, agents, servants or employees or any other person who
may be about the Development Property or Minimum Improvements due to any act of
negligence of any person, other than the governing body members, officers, agents, servants and
employees of the Authority or City.
Section 10.2. Equal Employment Opportunity. The Developer, for itself and its
successors and assigns, agrees that during the construction of the Minimum Improvements
provided for in this Agreement it will comply 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 and Minimum Improvements only to such
se regulations.
Section 10.4. Notices and Demands. Except as otherwise expressly provided in this
Agreement, any notice, demand, or other communication under the Agreement or any related
document by either party to the other shall be sufficiently given or delivered if it is dispatched by
registered or certified United States mail, postage prepaid, return receipt requested, overnight
courier or delivered personally to:
(a) in the case of the Authority: Cottage Grove Economic
Development Authority
12800 Ravine Parkway
Cottage Grove MN 55016
Attn: EDA Executive Director
(b) in the case of the Developer: PHS/Cottage Grove, Inc.
2845 Hamline Avenue North, Suite 100
Roseville, Minnesota 55113
Attn: Chief Financial Officer
or at such other address with respect to such party as that party may, from time to time, designate
in writing and forward to the other as provided in this section 10.4.
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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 Developer acknowledges that nothing
contained in this Agreement nor any act by the Authority, the City or the Developer shall be
deemed or construed by the Developer or by any third person to create any relationship of
third-party beneficiary, principal and agent, limited or general partner, or joint venture between
or among the Authority, the City, or the Developer.
IN WITNESS WHEREOF, the Authority and the Developer have caused this Agreement
to be duly executed in their names and behalves on or as of the date first above written.
COTTAGE GROVE ECONOMIC
DEVELOPMENT AUTHORITY
By_________________________________
Myron Bailey, President
By_________________________________
Charlene Stevens, Executive Director
STATE OF MINNESOTA )
) ss.
COUNTY OF WASHINGTON )
The foregoing instrument was acknowledged before me this ______ day of December,
2016, by Myron Bailey and Charlene Stevens, the 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
20
491118v4 RHB CT165-21
PHS/COTTAGE GROVE, INC.
By
Its
STATE OF MINNESOTA )
) ss.
COUNTY OF ____________ )
The foregoing instrument was executed this ____ day of ________________, 2016, by
___________________, the ___________________ of PHS/Cottage Grove, Inc., a Minnesota
corporation, on behalf of the corporation.
_________________________________________
Notary Public
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491118v4 RHB CT165-21
EXHIBIT A TO
DEVELOPMENT AGREEMENT
LEGAL DESCRIPTION OF THE DEVELOPMENT PROPERTY
The Development Property is legally described as follows:
rd
Lots 1 and 2, Block 1, PHS Cottage Grove Inc. 3 Addition, Washington County,
Minnesota
491118v4 RHB CT165-21
A
EXHIBIT A-1 TO
DEVELOPMENT AGREEMENT
The following are the properties from which Tax Increment will be paid by the County to the
Authority under the Agreement:
Lot 1, Block One, PHS/Cottage Grove, Inc.;
nd
Lot 1, Block 1, PHS Cottage Grove Inc. 2 Addition; and
rd
Lots 1 and 2, Block 1, PHS Cottage Grove Inc. 3 Addition,
All according to the respective plats on file in Washington County, Minnesota
491118v4 RHB CT165-21
A-1
EXHIBIT B TO
DEVELOPMENT AGREEMENT
LIST OF PRELIMINARY PLAN DOCUMENTS
\[to be completed\]
491118v4 RHB CT165-21
B-1
EXHIBIT C TO
DEVELOPMENT AGREEMENT
FORM OF
CERTIFICATE OF COMPLETION
WHEREAS, the Cottage Grove Economic Development Authority, a public body
and PHS/Cottage Grove,
Inc., a Minnesota non-profit corporation have entered into a certain Fourth
Amended and Restated Contract for Private Development dated the ____ day of
December, 2016, and recorded in the office of the County Recorder in Washington County,
Minnesota, as Document No. __________, which Contract contained certain covenants and
restrictions regarding completion of the Minimum Improvements, as defined in the Contract; and
WHEREAS, the Developer has performed said covenants and conditions in a manner
deemed sufficient by the Authority to permit the execution and recording of this certification.
NOW, THEREFORE, this is to certify that all construction of the Minimum
Improvements specified to be done and made by the Developer has been completed and the
covenants and conditions in the Contract have been performed by the Developer, and the County
Recorder in Washington County, Minnesota, is hereby authorized to accept for recording and to
record the filing of this instrument, to be a conclusive determination of the satisfactory
termination of the covenants and conditions relating to completion of the Minimum
Improvements.
COTTAGE GROVE ECONOMIC
Dated: _______________.
DEVELOPMENT AUTHORITY
By
______________________, President
By ______________________________
__________________, Executive Director
STATE OF MINNESOTA )
) ss.
COUNTY OF WASHINGTON )
The foregoing instrument as acknowledged before me this _____ day of _________,
201_, by ________________ and ________________, the 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
491118v4 RHB CT165-21
C-1
EXHIBIT D TO
DEVELOPMENT AGREEMENT
FORM OF
FOURTH AMENDED ASSESSMENT AGREEMENT
and
TION
by and between
THE COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY
and
PHS/COTTAGE GROVE, INC.
This document drafted by:
Kennedy & Graven, Chartered (RHB)
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
612-337-9300
D-1
491118v4 RHB CT165-21
THIS FOURTH AMENDED ASSESSMENT AGREEMENT dated as of this _____ day
of December, 2016, by and between the Cottage Grove Economic Development Authority, a
public body corporate and politic under the laws of Minn
PHS/Cottage Grove, Inc., a Minnesota non-
WITNESSETH:
WHEREAS, on December 10, 2013 the Authority and the Developer entered into that
certain Third Amended Assessment Agreement with regard to the land legally described as Lot
nd
2, Block 1, PHS Cottage Grove Inc. 2 Addition which established Minimum Market Values for
the property as of January 2, 2014 for taxes payable beginning in 2015 through the Termination
Date; and
nd
WHEREAS, Lot 2, Block 1 PHS Cottage Grove Inc. 2 Addition has now been replatted
rd
as Lots 1 and 2, Block 1, PHS Cottage Grove Inc. 3 Addition; and
WHEREAS, the taxable Minimum Improvements will be constructed on Lot 1, Block 1,
rd
PHS Cottage Grove Inc. 3
WHEREAS, the Authority and the Developer now wish to adopt this Fourth Amendment
Assessment Agreement to establish revised Minimum Market Values of the Property; and
WHEREAS, the Assessor for Washington County, Minnesota has reviewed the revised
values proposed for the Property as provided herein.
NOW, THEREFORE, the parties to this Fourth Amended Assessment Agreement, in
consideration of the promises, covenants and agreement made herein by each and to the other, do
hereby agree as follows:
1. The Minimum Market Values established in the Third Amended Assessment
Agreement for the property legally described as Lot 2, Block 1, PHS Cottage
nd
Grove Inc. 2 Addition are deleted and replaced with the values specified below
in this Fourth Amended Assessment Agreement with regard to the Property.
2. The Minimum Market Value of the Property as of January 2, 2016 for taxes
payable in 2017 shall be $1,624,900.
3. The Minimum Market Value of the Property as of January 2, 2017 for taxes
payable in 2018 and 2019 shall be $3,355,200.
4. The Minimum Market Value of the Property as of January 2, 2019 for taxes
payable beginning in 2020 through the Termination Date shall be $7,456,000.
D-2
491118v4 RHB CT165-21
5. Except as explicitly modified by this Fourth Amended Assessment Agreement, all
terms and conditions of the Third Amended Assessment Agreement shall remain
in full force and effect.
COTTAGE GROVE ECONOMIC
DEVELOPMENT AUTHORITY
By
Myron Bailey, President
By
Charlene Stevens, Executive Director
STATE OF MINNESOTA )
) ss.
COUNTY OF WASHINGTON )
The foregoing instrument as acknowledged before me this ____ of December, 2016, by
Myron Bailey and Charlene Stevens, the 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
D-3
491118v4 RHB CT165-21
PHS/COTTAGE GROVE, INC.
By:
Its: ________________________________
STATE OF MINNESOTA )
) SS
COUNTY OF ___________ )
The foregoing instrument was executed this ____ of _______________, 2016, by
____________________________, the Chief Financial Manager of PHS/Cottage Grove, Inc., a
Minnesota non-profit corporation, on behalf of the corporation.
Notary Public
D-4
491118v4 RHB CT165-21
CERTIFICATION BY ASSESSOR
The undersigned, having reviewed the minimum market value proposed for the Property
and being of the opinion of minimum market values contained in the foregoing Fourth Amended
Assessment Agreement are reasonable, hereby certifies as follows: The undersigned Assessor,
being legally responsible for the assessment of the described property as Washington County
Assessor, hereby certifies that the market value assigned to the Property shall be $1,624,900 as
of January 2, 2016 for taxes payable in 2017; $3,355,200 as of January 2, 2017 for taxes payable
in 2018 and 2019; and $7,456,000 as of January 2, 2019 for taxes payable beginning in 2020
through the Termination Date.
Assessor for Washington County, Minnesota
STATE OF MINNESOTA )
) ss.
COUNTY OF WASHINGTON )
The foregoing instrument was acknowledged before me this ____ of _______________,
2016, by ________________________, the Assessor for Washington County, Minnesota.
Notary Public
D-5
491118v4 RHB CT165-21
EXHIBIT A TO
ASSESSMENT AGREEMENT
LEGAL DESCRIPTION
The Property to which this Fourth Amended Assessment Agreement applies is legally described
as follows:
rd
Lot 1, Block 1, PHS Cottage Grove Inc. 3 Addition, Washington County,
Minnesota.
D-6
491118v4 RHB CT165-21
EXHIBIT B TO
ASSESSMENT AGREEMENT
Assessment Agreements.
Section 469.177, subd. 8. An authority may enter into
a written assessment agreement with any person establishing a minimum market value of land,
existing improvements, or improvements to be constructed in a district, if the property is owned
or will be owned by the person. The minimum market value established by an assessment
agreement may be fixed, or increase or decrease in later years from the initial minimum market
value. If an agreement is fully executed before July 1 of an assessment year, the market value as
provided under the agreement must be used by the county or local assessor as the taxable market
value of the property for that assessment. Agreements executed on or after July 1 of an
assessment year become effective for assessment purposes in the following assessment year. An
assessment agreement terminates on the earliest of the date on which conditions in the
assessment agreement for termination are satisfied, the termination date specified in the
agreement, or the date when tax increment is no longer paid to the authority under section
469.176, subdivision 1. The assessment agreement shall be presented to the county assessor, or
city assessor having the powers of the county assessor, of the jurisdiction in which the tax
increment financing district and the property that is the subject of the agreement is located. The
assessor shall review the plans and specifications for the improvements to be constructed, review
the market value previously assigned to the land upon which the improvements are to be
constructed and, so long as the minimum market value contained in the assessment agreement
appears, in the judgment of the assessor, to be a reasonable estimate, shall execute the following
certification upon the agreement:
The undersigned assessor, being legally responsible for the assessment of the above
described property, certifies that the market values assigned to the land and improvements are
reasonable.
The assessment agreement shall be filed for record and recorded in the office of the county
recorder or the registrar of titles of each county where the real estate or any part thereof is
situated. After the agreement becomes effective for assessment purposes, the assessor shall
value the property under section 273.11, except that the market value assigned shall not be less
than the minimum market value established by the assessment agreement. The assessor may
assign a market value to the property in excess of the minimum market value established by the
assessment agreement. The owner of the property may seek, through the exercise of
administrative and legal remedies, a reduction in market value for property tax purposes, but no
city assessor, county assessor, county auditor, board of review, board of equalization,
commissioner of revenue, or court of this state shall grant a reduction of the market value below
the minimum market value established by the assessment agreement during the term of the
agreement filed of record regardless of actual market values which may result from incomplete
construction of improvements, destruction, or diminution by any cause, insured or uninsured,
except in the case of acquisition or reacquisition of the property by a public entity. Recording an
assessment agreement constitutes notice of the agreement to anyone who acquires any interest in
the land or improvements that is subject to the assessment agreement, and the agreement is
binding upon them.
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491118v4 RHB CT165-21
EXHIBIT E TO
DEVELOPMENT AGREEMENT
LIST OF QUALIFIED COSTS
The Qualifying Costs for which the Authority has agreed to reimburse the Developer from
Available Tax Increment include the following:
Land Acquisition $1,282,390
Demolition $ 287,000
Relocation $ 623,000
Termination of Leaseholds $ 640,610
TOTAL: $2,833,000
All of the Qualifying Costs were incurred by the Developer within five years of the date of
-12.
491118v4 RHB CT165-21
E-1
EXHIBIT F TO
DEVELOPMENT AGREEMENT
FORM OF
AUTHORIZING RESOLUTION
COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. _______________
RESOLUTION APPROVING FOURTH AMENDED AND RETSTATED CONTRACT
FOR PRIVATE DEVELOPMENT AND AWARDING THE SALE OF, AND
PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE
ISSUANCE OF ITS $2,400,000 LIMITED TAXABLE TAX INCREMENT REVENUE
NOTE, SERIES 2016A
BE IT RESOLVED BY the Cottage Grove Economic Development Authority (the
Authority
Section 1. Authorization; Award of Sale.
1.01. Authorization. The Authority has heretofore approved the establishment of Tax
Increment Financing District No. 1-12 Development District No. 1
Development District
financing certain improvements within the Development District. Pursuant to Minnesota
Statutes, Section 469.178, the Authority is authorized to issue and sell its bonds for the purpose
of financing a portion of the public development costs of the Development District. Such bonds
are payable from Available Tax Increment derived from the TIF District and pledged to the
payment of the bonds. In 2006, the Authority issued its Limited Taxable Tax Increment
issued its Limited Taxable Tax Increment Revenue Note in the principal amount of $2,229,292
) in replacement of the 2006 Note. The Authority hereby finds and determines
that it is in the best interests of the Authority that it issue and sell its $2,400,000 Limited Taxable
Tax Increment Revenue Note, Series 2016A (the
financing certain previously incurred Qualifying Costs of the Development District. The Note
replaces the 2011 Note.
1.02. Agreement Approved; Issuance, Sale, and Terms of the Note. The Authority
hereby approves the Fourth Amended and Restated Contract for Private Development (the
Authority and PHS/Cottage Grove, Inc., a Minnesota non-profit
corporation (the President and Executive Director to execute
such Agreement in substantially the form on file with the Authority, subject to modifications that
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do not alter the substance of the transaction and are approved by such officials, provided that
execution of the Agreement by such officials is conclusive evidence of their approval.
The Authority hereby authorizes issuance of the Note in accordance with terms set forth
in this resolution to the Purchaser, at a price of par. The Note shall be dated as of the date of
delivery and shall bear interest at an annual rate of five percent.
1.03. Optional Redemption. The Authority may prepay the Note in whole or in part,
without premium or penalty, on any date.
Section 2. Form of Note. The Note shall be in substantially the following form, with
the blanks to be properly filled in and the principal amount and payment schedule adjusted as of
the date of issue:
UNITED STATE OF AMERICA
STATE OF MINNESOTA
COUNTY OF WASHINGTON
COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY
No. R-1 $2,400,000
LIMITED TAXABLE TAX INCREMENT REVENUE NOTE, SERIES 2016A
Date
Rate of Original Issue
5% __________, 2016
Principal Amount: $2,400,000
Registered Owner: PHS/Cottage Grove, Inc.
The Cottage Grove Economic Development Authority (the ), for value
received, certifies that it is indebted and hereby promises to pay to the registered owner specified
above, or registered assigns (the "Owner"), but solely from the sources, to the extent and in the
manner hereinafter identified, the principal amount specified above, with interest thereon at an
annual rate of five percent. This Note is issued pursuant to the Fourth Amended and Restated
Capitalized terms not otherwise defined herein have the meanings provided in the Agreement.
Payments of principal and interest shall be payable on each February 1 and August 1 ("Payment
Dates"), commencing February 1, 2017, and continuing through February 1, 2029. Payments
shall be applied first to accrued interest and then to unpaid principal.
Payments are payable by mail to the address of the Owner or such other address as the
Owner may designate upon 30 days written notice to the Authority. Payments on this Note are
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491118v4 RHB CT165-21
payable in any coin or currency of the United Sates of America which, on the Payment Date, is
legal tender for the payment of public and private debts.
This Note is subject to prepayment in whole or in part at the option of the Authority on
any date.
Interest at the rate stated herein will accrue on the unpaid principal, commencing on the
date of original issue. Interest will be simple, non-compounding interest and will be computed
on the basis of a year of 360 days and twelve-30-day months and charged for actual days
principal is unpaid.
This Note is a single note in the total original principal amount of $2,400,000 to aid in
financing a portion of the Qualified Costs of a Development Program undertaken by the
Authority pursuant to Minnesota Statutes, Sections 469.124 through 469.134, and is issued
pursuant to an authorizing resolution (the "Resolution") duly adopted by the Authority on
December 13, 2016, and pursuant to and in full conformity with the Constitution and laws of the
State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.179. This Note is a
limited obligation of the Authority which is payable solely from Available Tax Increment as
defined in the Agreement, pledged to the payment hereof under the Resolution, the terms of
which are hereby incorporated by reference. This Note shall not be deemed to constitute a
general obligation of the State of Minnesota or any political subdivision thereof, including,
without limitation, the Authority. Neither the State of Minnesota, nor any political subdivision
thereof shall be obligated to pay this Note or other costs incident hereto except out of moneys
pledged thereto under the Resolution, and neither the full faith and credit nor the taxing power of
the State of Minnesota or any political subdivision thereof is pledged to the payment of this Note
or other costs incident hereto.
The Authority shall make payments
commencing on February 1, 2017 and continuing through February 1, 2029. If any amount
payable under this Note has not been paid by February 1, 2029, after any payment is made on
such date, any amount not paid shall be forgiven and the Authority shall have no further liability
with respect thereto.
THE AUTHORITY MAKES NO REPRESENTATION OR WARRANTY THAT
AVAILABLE TAX INCREMENT WILL BE SUFFICIENT TO PAY PRINCIPAL AND
INTEREST ON THIS NOTE.
If as of any Payment Date there is an uncured Event of Default under the Amended and
Restated Contract for Private Development between the Authority and the Agreement, the
Authority may withhold Available Tax Increment otherwise payable on such Payment Date. If
the default is cured in accordance with the Agreement, the Available Tax Increment withheld
shall be deferred and paid, without additional interest thereon, on the next Payment Date after the
default is cured.
This Note is issuable only as a fully registered note without coupons. As provided in the
Resolution, and subject to certain limitations set forth therein, this Note is transferable upon the
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491118v4 RHB CT165-21
books of the Authority kept for that purpose at the principal office of the
director, by the Owner hereof in person or by the Owner's attorney duly authorized in writing,
upon surrender of this Note together with a written instrument of transfer satisfactory to the
Authority, duly executed by the Owner. Upon such transfer or exchange and the payment by the
Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect
to such transfer or exchange, there will be issued in the name of the transferee a new Note of the
same aggregate principal amount and maturing on the same dates.
This Note is issued in substitution for the 2011 Note. This Note shall be issued only upon
return to the Authority of the 2011 Note by the Owner thereof.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things
required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen,
and to be performed in order to make this Note a valid and binding limited obligation of the
Authority according to its terms, have been done, do exist, have happened, and have been
performed in due form, time and manner as so required.
This Note shall not be valid or become obligatory for any purpose until the Certificate of
Authentication hereon shall have been manually signed by the Registrar.
IN WITNESS WHEREOF, the Cottage Grove Economic Development Authority has
caused this Note to be executed with the manual signatures of its president and executive
director, all as of the Date of Original Issue specified above.
COTTAGE GROVE ECONOMIC
DEVELOPMENT AUTHORITY
Executive Director President
REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond register
of the , in the name of the person last listed below.
Date of Signature of
Registration Registered Owner Executive Director
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491118v4 RHB CT165-21
Section 3. Terms, Execution and Delivery.
3.01. Denomination, Payment. The Note shall be issued as a single typewritten note
numbered R-1.
The Note shall be issuable only in fully registered form. Payments on the Note shall be
payable by check or draft issued by the Registrar described herein.
3.02. Payment Dates. Payments on the Note shall be payable by mail to the owner of
record thereof as of the close of business on the fifteenth day of the month preceding the
Payment Date, whether or not such day is a business day.
3.03. Registration. The Authority hereby appoints its executive director to perform the
registration and the rights and duties of the Authority and the Registrar with respect thereto shall
be as follows:
(a) Register. The Registrar shall keep at her office a bond register in which the
Registrar shall provide for the registration of ownership of the Note and the registration of
transfers and exchanges of the Note.
(b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the
registered owner thereof or accompanied by a written instrument of transfer, in form reasonably
satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly
authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the
name of the designated transferee or transferees, a new Note of a like aggregate principal amount
and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not
be transferred to any person (other than an affiliate, or other related entity, of the Owner or the
Developer) unless the Authority has been provided with an opinion of counsel or a certificate of
the transferor, in a form satisfactory to the Authority, that such transfer is exempt from
registration and prospectus delivery requirements of federal and applicable state securities laws.
The Registrar may close the books for registration of any transfer after the fifteenth day of the
month preceding each Payment Date and until such Payment Date.
(c) Cancellation. The Note surrendered upon any transfer shall be promptly
cancelled by the Registrar and thereafter disposed of as directed by the Authority.
(d) Improper or Unauthorized Transfer. When the Note is presented to the Registrar
for transfer, the Registrar may refuse to transfer the same until she is satisfied that the
endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar
shall incur no liability for her refusal, in good faith, to make transfers which it, in her judgment,
deems improper or unauthorized.
(e) Persons Deemed Owners. The Authority and the Registrar may treat the person in
whose name the Note is at any time registered in the bond register as the absolute owner of the
Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on
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491118v4 RHB CT165-21
account of, the principal of, and interest on, if any, such Note and for all other purposes, and all
s
and effectual to satisfy and discharge the liability of the Authority upon such Note to the extent
of the sum or sums so paid.
(f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the
Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for
any tax, fee, or other governmental charge required to be paid with respect to such transfer or
exchange.
(g) Mutilated, Lost, Stolen or Destroyed Note. In case any Note shall become
mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount,
maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated
Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment
of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case
the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it
that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing
to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory
to it, in which both the Authority and the Registrar shall be named as obligees. The Note so
surrendered to the Registrar shall be cancelled by her and evidence of such cancellation shall be
given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or
been called for redemption in accordance with its terms, it shall not be necessary to issue a new
Note prior to payment.
(h) Prepayment. In the event the Note is prepaid, notice thereof will be given by the
Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) not
more than 60 and not less than 30 days prior to the date fixed for prepayment to the registered
owner of the Note to be prepaid at the address shown on the registration books kept by the
Registrar and by publishing the notice if required by law. Failure to give notice by publication or
by mail to any registered owner, or any defect therein, will not affect the validity of the
proceedings for the prepayment of the Note.
3.04. Preparation and Delivery. The Note shall be prepared under the direction of the
executive director and shall be executed on behalf of the Authority by the signatures of its
president and executive director. In case any officer whose signature shall appear on the Note
shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be
valid and sufficient for all purposes, the same as if such officer had remained in office until
delivery. When the Note has been so executed, it shall be delivered by the executive director to
the Owner or Owners thereof upon payment of purchase price and satisfaction of the conditions
of delivery under section 4.6 of the Agreement, and the purchaser shall not be obligated to see to
the application of the purchase price.
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491118v4 RHB CT165-21
Section 4. Security Provisions.
4.01. Pledge. The Authority hereby pledges to the payment of the Note of Available
Tax Increment, as that term is defined in the Agreement, that is received by the Authority in the
six-month period immediately before each Payment Date.
4.02. Debt Service Fund. Until the date the Note is no longer outstanding has been paid
in full (to the extent required to be paid pursuant to this resolution), the Authority shall maintain
a separate and spncrement
the Note. The Authority irrevocably agrees to appropriate to the Tax Increment Fund Available
Tax Increment as is necessary to pay amounts due on the Note on each Payment Date. Interest
earnings on funds in the Tax Increment Fund will be credited to that fund.
Section 5. Certification of Proceedings.
5.01. Certification of Proceedings. The officers of the Authority are hereby authorized
and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings
and records of the Authority, and such other affidavits, certificates, and information as may be
required to show the facts relating to the legality and marketability of the Note as the same
appear from the books and records under their custody and control or as otherwise known to
them, and all such certified copies, certificates, and affidavits, including any heretofore
furnished, shall be deemed representations of the Authority as to the facts recited therein.
Section 6. Effective Date. This resolution shall be effective upon full execution of the
Agreement.
th
Adopted this 13 day of December, 2016.
By:
Myron Bailey, President
And by:
Charlene Stevens, Executive Director
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491118v4 RHB CT165-21
EXHIBIT G TO
DEVELOPMENT AGREEMENT
FORM OF
INVESTMENT LETTER
To: The Cottage Grove Economic Development Authority
Attention: Executive Director
Re: $2,400,000 Limited Taxable Tax Increment Revenue Note, Series 2016A
The undersigned, with regard to $2,400,000 in principal amount of the above captioned
Note (Note) pursuant to a resolution of the Cottage Grove Economic Development
Authority (Resolution), hereby represents to you, to Ehlers and Associates and to Kennedy
& Graven, Chartered, Minneapolis, Minnesota, Bond Counsel, as follows:
1. We have sufficient knowledge and experience in financial and business matters,
including purchase and ownership of municipal and other obligations, to be able to evaluate the
risks and merits of the investment represented by the above Note.
2. We understand that the Note is payable from and only from Available Tax
Increments resulting from increases in the taxable value of certain real property in Tax Increment
Financing District No. 1-12 operated by the Authority.
3. We acknowledge that no offering statement, prospectus, offering circular or other
comprehensive offering statement containing material information with respect to the Authority
and the Note has been issued or prepared by the Authority, and that, in due diligence, we have
made our own inquiry and analysis with respect to the Authority, the Note and the security
therefor, and other material factors affecting the security and payment of the Note.
4. We acknowledge that we have either been supplied with or have access to
information, including financial statements and other financial information, to which reasonable
investor would attach significance in making investment decisions, and we have had the
opportunity to ask questions and receive answers from knowledgeable individuals concerning the
Authority, the Note and the security therefore, and that as a reasonable investor we have been
able to make our decision to purchase the above Note.
5. We represent to you that we are purchasing the Note for our own account and not
for resale or other distribution thereof.
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491118v4 RHB CT165-21
6. We acknowledge receipt of the Note on the date hereof.
7. Our Federal Employer ID No. is ______________.
PHS/COTTAGE GROVE, INC.
By: _______________________________________
Its: _______________________________________
By: _______________________________________
Its: _______________________________________
Dated: _____________, 2016
This document was drafted by:
KENNEDY & GRAVEN, Chartered
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612) 337-9300
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491118v4 RHB CT165-21
EXHIBIT H TO
DEVELOPMENT AGREEMENT
SUMMARY OF LAND TRANSFERS
1.PHS will apply for an administrative lot split for the following legally described parcel:
Parcel 10 (PID: 18.027.21.11.0059)
That part of Tracts A and B, REGISTERED LAND SURVEY NO. 36, shown as
Parcel 42N on MINNESOTA DEPARTMENT OF TRANSPORTATION RIGHT OF
WAY PLAT NO. 82-21 as the same is on file and of record in the office of the
Registrar of Titles in and for Washington County, Minnesota;
EXCEPTING THEREFROM that part of said Parcel 42N as shown on said Plat No.
82-21 lying within the following described tract:
All that part of Tract B of REGISTERED LAND SURVEY NO. 36 on file and of
record in the office of the Registrar of Titles in and for said Washington County,
described as follows: Commencing at the most westerly corner of said Tract B;
thence northeasterly along the northwesterly line of said Tract B on a bearing of
North 53 degrees 26 minutes 11 seconds East for 147 feet to the point of beginning of
the tract to be described; thence South 36 degrees 33 minutes 49 seconds East for 155
feet; thence North 53 degrees 26 minutes 11 seconds East for 206.19 feet to an
intersection with the northeasterly line of said Tract B; thence along said
northeasterly line of Tract B on a curve concave to the northeast, central angle of 07
degrees 17 minutes 27 seconds, radius of 953.45 feet for 121.32 feet; thence along
said northeasterly line of Tract B, North 36 degrees 33 minutes 49 seconds West for
34 feet to the most northerly corner of said Tract B; thence southwesterly along said
northwesterly line of Tract B, South 53 degrees 26 minutes 11 seconds West for
198.48 feet to the point of beginning.
rd
2.PHS will record the Final Plat entitled PHS COTTAGE GROVE INC 3 ADDITION
3.City will convey the following legally described parcels to PHS:
rd
a.Lot 3, Block 1, PHS COTTAGE GROVE INC 3 ADDITION
b. * Part of Parcel 10 along Hadley to be revised upon preparation of new legal
Parcel 10 (PID: 18.027.21.11.0059)
That part of Tracts A and B, REGISTERED LAND SURVEY NO. 36, shown as
Parcel 42N on MINNESOTA DEPARTMENT OF TRANSPORTATION RIGHT OF
WAY PLAT NO. 82-21 as the same is on file and of record in the office of the
Registrar of Titles in and for Washington County, Minnesota;
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491118v4 RHB CT165-21
EXCEPTING THEREFROM that part of said Parcel 42N as shown on said Plat No.
82-21 lying within the following described tract:
All that part of Tract B of REGISTERED LAND SURVEY NO. 36 on file and of
record in the office of the Registrar of Titles in and for said Washington County,
described as follows: Commencing at the most westerly corner of said Tract B;
thence northeasterly along the northwesterly line of said Tract B on a bearing of
North 53 degrees 26 minutes 11 seconds East for 147 feet to the point of beginning of
the tract to be described; thence South 36 degrees 33 minutes 49 seconds East for 155
feet; thence North 53 degrees 26 minutes 11 seconds East for 206.19 feet to an
intersection with the northeasterly line of said Tract B; thence along said
northeasterly line of Tract B on a curve concave to the northeast, central angle of 07
degrees 17 minutes 27 seconds, radius of 953.45 feet for 121.32 feet; thence along
said northeasterly line of Tract B, North 36 degrees 33 minutes 49 seconds West for
34 feet to the most northerly corner of said Tract B; thence southwesterly along said
northwesterly line of Tract B, South 53 degrees 26 minutes 11 seconds West for
198.48 feet to the point of beginning.
nd
4.PHS will convey Outlot A, PHS COTTAGE GROVE INC 2 ADDITION to City.
5.City shall utilize the escrow funds from PHS on file with the City of $38,000 for the
administrative costs of preparing this Development Agreement.
6.PHS will cooperate with the City to amend an access easement, recorded as document
nd
number 122469 over Lot 1, Block 1, PHS COTTAGE GROVE INC 2 ADDITION to
assist the City in becoming a party to the agreement for access rights and adding a utility
easement in favor of the City.
7.PHS will grant a license to the City over Lot 2, Block 1, PHS COTTAGE GROVE INC
rd
3 ADDITION to allow the City to perform maintenance on its water tower located on
rd
Lot 5, Block 1, PHS COTTAGE GROVE INC 3 ADDITION.
8.PHS will enter into a lease agreement with the City for Lot 3, Block 1, PHS COTTAGE
rd
GROVE INC 3 ADDITION to allow the City to continue to operate its public safety
facility until June 30, 2018.
9.PHS will grant a new utility easement over Lot 1, Block 1, PHS COTTAGE GROVE
INC to preserve utility easements contained in a document recorded as document number
1173363, the entirety of which is being vacated and terminated.
10.PHS agrees to pay park dedication fees at the time of building permit approval in the
amount of $308,000.
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491118v4 RHB CT165-21
EXHIBIT
LAND TRANSFERS
1.PHS will apply for an administrative lot split for the following legally described parcel:
Parcel 10 (PID: 18.027.21.11.0059)
That part of Tracts A and B, REGISTERED LAND SURVEY NO. 36, shown as
Parcel 42N on MINNESOTA DEPARTMENT OF TRANSPORTATION RIGHT OF
WAY PLAT NO. 82-21 as the same is on file and of record in the office of the
Registrar of Titles in and for Washington County, Minnesota;
EXCEPTING THEREFROM that part of said Parcel 42N as shown on said Plat No.
82-21 lying within the following described tract:
All that part of Tract B of REGISTERED LAND SURVEY NO. 36 on file and of
record in the office of the Registrar of Titles in and for said Washington County,
described as follows: Commencing at the most westerly corner of said Tract B;
thence northeasterly along the northwesterly line of said Tract B on a bearing of
North 53 degrees 26 minutes 11 seconds East for 147 feet to the point of beginning of
the tract to be described; thence South 36 degrees 33 minutes 49 seconds East for 155
feet; thence North 53 degrees 26 minutes 11 seconds East for 206.19 feet to an
intersection with the northeasterly line of said Tract B; thence along said
northeasterly line of Tract B on a curve concave to the northeast, central angle of 07
degrees 17 minutes 27 seconds, radius of 953.45 feet for 121.32 feet; thence along
said northeasterly line of Tract B, North 36 degrees 33 minutes 49 seconds West for
34 feet to the most northerly corner of said Tract B; thence southwesterly along said
northwesterly line of Tract B, South 53 degrees 26 minutes 11 seconds West for
198.48 feet to the point of beginning.
rd
2.PHS will record the Final Plat entitled PHS COTTAGE GROVE INC 3 ADDITION
ice
3.City will convey the following legally described parcels to PHS:
rd
a.Lot 3, Block 1, PHS COTTAGE GROVE INC 3 ADDITION
b. * Part of Parcel 10 along Hadley to be revised upon preparation of new legal
Parcel 10 (PID: 18.027.21.11.0059)
That part of Tracts A and B, REGISTERED LAND SURVEY NO. 36, shown as
Parcel 42N on MINNESOTA DEPARTMENT OF TRANSPORTATION RIGHT OF
WAY PLAT NO. 82-21 as the same is on file and of record in the office of the
Registrar of Titles in and for Washington County, Minnesota;
EXCEPTING THEREFROM that part of said Parcel 42N as shown on said Plat No.
82-21 lying within the following described tract:
All that part of Tract B of REGISTERED LAND SURVEY NO. 36 on file and of
record in the office of the Registrar of Titles in and for said Washington County,
described as follows: Commencing at the most westerly corner of said Tract B;
thence northeasterly along the northwesterly line of said Tract B on a bearing of
North 53 degrees 26 minutes 11 seconds East for 147 feet to the point of beginning of
the tract to be described; thence South 36 degrees 33 minutes 49 seconds East for 155
feet; thence North 53 degrees 26 minutes 11 seconds East for 206.19 feet to an
intersection with the northeasterly line of said Tract B; thence along said
northeasterly line of Tract B on a curve concave to the northeast, central angle of 07
degrees 17 minutes 27 seconds, radius of 953.45 feet for 121.32 feet; thence along
said northeasterly line of Tract B, North 36 degrees 33 minutes 49 seconds West for
34 feet to the most northerly corner of said Tract B; thence southwesterly along said
northwesterly line of Tract B, South 53 degrees 26 minutes 11 seconds West for
198.48 feet to the point of beginning.
nd
4.PHS will convey Outlot A, PHS COTTAGE GROVE INC 2 ADDITION to City.
5.City shall utilize the escrow funds from PHS on file with the City of $38,000 for the
administrative costs of preparing this Development Agreement.
6.PHS will cooperate with the City to amend an access easement, recorded as document
nd
number 122469 over Lot 1, Block 1, PHS COTTAGE GROVE INC 2 ADDITION to
assist the City in becoming a party to the agreement for access rights and adding a utility
easement in favor of the City.
7.PHS will grant a license to the City over Lot 2, Block 1, PHS COTTAGE GROVE INC
rd
3 ADDITION to allow the City to perform maintenance on its water tower located on
rd
Lot 5, Block 1, PHS COTTAGE GROVE INC 3 ADDITION.
8.PHS will enter into a lease agreement with the City for Lot 3, Block 1, PHS COTTAGE
rd
GROVE INC 3 ADDITION to allow the City to continue to operate its public safety
facility until June 30, 2018.
9.PHS will grant a new utility easement over Lot 1, Block 1, PHS COTTAGE GROVE
INC to preserve utility easements contained in a document recorded as document number
1173363, the entirety of which is being vacated and terminated.
10.PHS agrees to pay park dedication fees at the time of building permit approval in the
amount of $308,000.
COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. _______________
RESOLUTION APPROVING FOURTH AMENDED AND RESTATED CONTRACT
FOR PRIVATE DEVELOPMENT AND AWARDING THE SALE OF, AND
PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE
ISSUANCE OF ITS $2,400,000 LIMITED TAXABLE TAX INCREMENT REVENUE
NOTE, SERIES 2016A
BE IT RESOLVED BY the Cottage Grove Economic Development Authority (the
Authority) as follows:
Section 1. Authorization; Award of Sale.
1.01. Authorization. The Authority has heretofore approved the establishment of Tax
Increment Financing District No. 1-12 Development District No. 1 (the
Development District
financing certain improvements within the Development District. Pursuant to Minnesota Statutes,
Section 469.178, the Authority is authorized to issue and sell its bonds for the purpose of financing
a portion of the public development costs of the Development District. Such bonds are payable
from Available Tax Increment derived from the TIF District and pledged to the payment of the
bonds. In 2006, the Authority issued its Limited Taxable Tax Increment Revenue Note in the
replacement of the 2006 Note. The Authority hereby finds and determines that it is in the best
interests of the Authority that it issue and sell its $2,400,000 Limited Taxable Tax Increment
Revenue Note, Series 2016A (the nancing certain
previously incurred Qualifying Costs of the Development District. The Note replaces the 2011
Note.
1.02. Agreement Approved; Issuance, Sale, and Terms of the Note. The Authority
hereby approves the Fourth Amended and Restated Contract for Private Development (the
Authority and PHS/Cottage Grove, Inc., a Minnesota non-profit
corporation (the President and Executive Director to execute such
Agreement in substantially the form on file with the Authority, subject to modifications that do
not alter the substance of the transaction and are approved by such officials, provided that
execution of the Agreement by such officials is conclusive evidence of their approval.
The Authority hereby authorizes issuance of the Note in accordance with terms set forth in
this resolution to the Purchaser, at a price of par. The Note shall be dated as of the date of delivery
and shall bear interest at an annual rate of five percent.
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491527v1 CT165-21
1.03. Optional Redemption. The Authority may prepay the Note in whole or in part,
without premium or penalty, on any date.
Section 2. Form of Note. The Note shall be in substantially the following form, with
the blanks to be properly filled in and the principal amount and payment schedule adjusted as of
the date of issue:
UNITED STATE OF AMERICA
STATE OF MINNESOTA
COUNTY OF WASHINGTON
COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY
No. R-1 $2,400,000
LIMITED TAXABLE TAX INCREMENT REVENUE NOTE, SERIES 2016A
Date
Rate of Original Issue
5% __________, 2016
Principal Amount: $2,400,000
Registered Owner: PHS/Cottage Grove, Inc.
The Cottage Grove Economic Development Authority (the ), for value
received, certifies that it is indebted and hereby promises to pay to the registered owner specified
above, or registered assigns (the "Owner"), but solely from the sources, to the extent and in the
manner hereinafter identified, the principal amount specified above, with interest thereon at an
annual rate of five percent. This Note is issued pursuant to the Fourth Amended and Restated
Capitalized terms not otherwise defined herein have the meanings provided in the Agreement.
Payments of principal and interest shall be payable on each February 1 and August 1 ("Payment
Dates"), commencing February 1, 2017, and continuing through February 1, 2029. Payments shall
be applied first to accrued interest and then to unpaid principal.
Payments are payable by mail to the address of the Owner or such other address as the
Owner may designate upon 30 days written notice to the Authority. Payments on this Note are
payable in any coin or currency of the United States of America which, on the Payment Date, is
legal tender for the payment of public and private debts.
This Note is subject to prepayment in whole or in part at the option of the Authority on any
date.
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Interest at the rate stated herein will accrue on the unpaid principal, commencing on the
date of original issue. Interest will be simple, non-compounding interest and will be computed on
the basis of a year of 360 days and twelve-30-day months and charged for actual days principal is
unpaid.
This Note is a single note in the total original principal amount of $2,400,000 to aid in
financing a portion of the Qualified Costs of a Development Program undertaken by the Authority
pursuant to Minnesota Statutes, Sections 469.124 through 469.134, and is issued pursuant to an
authorizing resolution (the "Resolution") duly adopted by the Authority on December 13, 2016,
and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota,
including Minnesota Statutes, Sections 469.174 to 469.179. This Note is a limited obligation of
the Authority which is payable solely from Available Tax Increment as defined in the Agreement,
pledged to the payment hereof under the Resolution, the terms of which are hereby incorporated
by reference. This Note shall not be deemed to constitute a general obligation of the State of
Minnesota or any political subdivision thereof, including, without limitation, the Authority.
Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay this
Note or other costs incident hereto except out of moneys pledged thereto under the Resolution,
and neither the full faith and credit nor the taxing power of the State of Minnesota or any political
subdivision thereof is pledged to the payment of this Note or other costs incident hereto.
The Authority shall
commencing on February 1, 2017 and continuing through February 1, 2029. If any amount payable
under this Note has not been paid by February 1, 2029, after any payment is made on such date,
any amount not paid shall be forgiven and the Authority shall have no further liability with respect
thereto.
THE AUTHORITY MAKES NO REPRESENTATION OR WARRANTY THAT
AVAILABLE TAX INCREMENT WILL BE SUFFICIENT TO PAY PRINCIPAL AND
INTEREST ON THIS NOTE.
If as of any Payment Date there is an uncured Event of Default under the Amended and
Restated Contract for Private Development between the Authority and the Agreement, the
Authority may withhold Available Tax Increment otherwise payable on such Payment Date. If
the default is cured in accordance with the Agreement, the Available Tax Increment withheld shall
be deferred and paid, without additional interest thereon, on the next Payment Date after the default
is cured.
This Note is issuable only as a fully registered note without coupons. As provided in the
Resolution, and subject to certain limitations set forth therein, this Note is transferable upon the
books of the Authority kept for that purpose at the principal office of the
director, by the Owner hereof in person or by the Owner's attorney duly authorized in writing,
upon surrender of this Note together with a written instrument of transfer satisfactory to the
Authority, duly executed by the Owner. Upon such transfer or exchange and the payment by the
Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect
to such transfer or exchange, there will be issued in the name of the transferee a new Note of the
same aggregate principal amount and maturing on the same dates.
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This Note is issued in substitution for the 2011 Note. This Note shall be issued only upon
return to the Authority of the 2011 Note by the Owner thereof.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required
by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be
performed in order to make this Note a valid and binding limited obligation of the Authority
according to its terms, have been done, do exist, have happened, and have been performed in due
form, time and manner as so required.
This Note shall not be valid or become obligatory for any purpose until the Certificate of
Authentication hereon shall have been manually signed by the Registrar.
IN WITNESS WHEREOF, the Cottage Grove Economic Development Authority has
caused this Note to be executed with the manual signatures of its president and executive director,
all as of the Date of Original Issue specified above.
COTTAGE GROVE ECONOMIC
DEVELOPMENT AUTHORITY
Executive Director President
REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond register
of the , in the name of the person last listed below.
Date of Signature of
Registration Registered Owner Executive Director
Section 3. Terms, Execution and Delivery.
3.01. Denomination, Payment. The Note shall be issued as a single typewritten note
numbered R-1.
The Note shall be issuable only in fully registered form. Payments on the Note shall be
payable by check or draft issued by the Registrar described herein.
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3.02. Payment Dates. Payments on the Note shall be payable by mail to the owner of
record thereof as of the close of business on the fifteenth day of the month preceding the Payment
Date, whether or not such day is a business day.
3.03. Registration. The Authority hereby appoints its executive director to perform the
and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows:
(a) Register. The Registrar shall keep at her office a bond register in which the
Registrar shall provide for the registration of ownership of the Note and the registration of transfers
and exchanges of the Note.
(b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the
registered owner thereof or accompanied by a written instrument of transfer, in form reasonably
satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly
authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the
name of the designated transferee or transferees, a new Note of a like aggregate principal amount
and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not be
transferred to any person (other than an affiliate, or other related entity, of the Owner or the
Developer) unless the Authority has been provided with an opinion of counsel or a certificate of
the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration
and prospectus delivery requirements of federal and applicable state securities laws. The Registrar
may close the books for registration of any transfer after the fifteenth day of the month preceding
each Payment Date and until such Payment Date.
(c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled
by the Registrar and thereafter disposed of as directed by the Authority.
(d) Improper or Unauthorized Transfer. When the Note is presented to the Registrar
for transfer, the Registrar may refuse to transfer the same until she is satisfied that the endorsement
on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no
liability for her refusal, in good faith, to make transfers which it, in her judgment, deems improper
or unauthorized.
(e) Persons Deemed Owners. The Authority and the Registrar may treat the person in
whose name the Note is at any time registered in the bond register as the absolute owner of the
Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on
account of, the principal of, and interest on, if any, such Note and for all other purposes, and all
effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the
sum or sums so paid.
(f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the Registrar
may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee,
or other governmental charge required to be paid with respect to such transfer or exchange.
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(g) Mutilated, Lost, Stolen or Destroyed Note. In case any Note shall become
mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount,
maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated
Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of
the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the
Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that
such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the
Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in
which both the Authority and the Registrar shall be named as obligees. The Note so surrendered
to the Registrar shall be cancelled by her and evidence of such cancellation shall be given to the
Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for
redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to
payment.
(h) Prepayment. In the event the Note is prepaid, notice thereof will be given by the
Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) not more
than 60 and not less than 30 days prior to the date fixed for prepayment to the registered owner of
the Note to be prepaid at the address shown on the registration books kept by the Registrar and by
publishing the notice if required by law. Failure to give notice by publication or by mail to any
registered owner, or any defect therein, will not affect the validity of the proceedings for the
prepayment of the Note.
3.04. Preparation and Delivery. The Note shall be prepared under the direction of the
executive director and shall be executed on behalf of the Authority by the signatures of its president
and executive director. In case any officer whose signature shall appear on the Note shall cease to
be such officer before the delivery of the Note, such signature shall nevertheless be valid and
sufficient for all purposes, the same as if such officer had remained in office until delivery. When
the Note has been so executed, it shall be delivered by the executive director to the Owner or
Owners thereof upon payment of purchase price and satisfaction of the conditions of delivery
under section 4.6 of the Agreement, and the purchaser shall not be obligated to see to the
application of the purchase price.
Section 4. Security Provisions.
4.01. Pledge. The Authority hereby pledges to the payment of the Note of Available Tax
Increment, as that term is defined in the Agreement, that is received by the Authority in the six-
month period immediately before each Payment Date.
4.02. Debt Service Fund. Until the date the Note is no longer outstanding has been paid
in full (to the extent required to be paid pursuant to this resolution), the Authority shall maintain a
separate and sp
the Note. The Authority irrevocably agrees to appropriate to the Tax Increment Fund Available
Tax Increment as is necessary to pay amounts due on the Note on each Payment Date. Interest
earnings on funds in the Tax Increment Fund will be credited to that fund.
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Section 5. Certification of Proceedings.
5.01. Certification of Proceedings. The officers of the Authority are hereby authorized
and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings
and records of the Authority, and such other affidavits, certificates, and information as may be
required to show the facts relating to the legality and marketability of the Note as the same appear
from the books and records under their custody and control or as otherwise known to them, and
all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be
deemed representations of the Authority as to the facts recited therein.
Section 6. Effective Date. This resolution shall be effective upon full execution of the
Agreement.
th
Adopted this 13 day of December, 2016.
By:
Myron Bailey, President
And by:
Charlene Stevens, Executive Director
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