Loading...
7. Scandia Heritage Alliance without redlines agreementDraft Redevelopment Agreement and Lease Term Sheet Revised V. 2, 12/27/19 (from ES) This Draft, v. 3, contains responses to ES changes and comments. REDEVELOPMENT AGREEMENT BY AND BETWEEN SCANDIA HERITAGE ALLIANCE AND City OF SCANDIA, MINNESOTA DATE: 2020 REDEVELOPMENT AGREEMENT BY AND BETWEEN SCANDIA HERITAGE ALLIANCE AND CITY OF SCANDIA, MINNESOTA THIS REDEVELOPMENT AGREEMENT (the "Redevelopment Agreement") made as of the day of , 2020 (the "Effective Date") by and between the City of Scandia, Minnesota, a Minnesota Statutory City (the "City"), and the Scandia Heritage Alliance, a Minnesota non-profit corporation (" SHA"), as follows: RECITALS: A. SHA is a Minnesota non-profit corporation organized by Scandia residents to enhance the community. SHA has received Federal approval as a 501(c)(3) charity. SHA's purpose is to: "Make Scandia a uniquely interesting and vibrant place to live in and visit by preserving and celebrating our rich history, culture, arts and rural character." SHA Mission Statement. B. SHA has the right to acquire the Scandia Water Tower Barn (the "Barn") and has proposed to the City that SHA will erect and rehabilitate the Barn and operate it as an arts and cultural center on a portion of the Scandia commons shown on the map attached as Exhibit A (the "Property"). The Barn would be used in conjunction with an amphitheater and potentially other buildings on the Property, along with suitable trail and walkway connections to the City's Community Center and the balance of the commons, to provide programming to celebrate the heritage of the City and arts and culture in the City by providing a space for programs, exhibitions and receptions and other compatible uses. C. The Barn is a historical structure important to the history of Scandia and its preservation, rehabilitation, and reuse as proposed by SHA will serve important and desirable governmental and community purposes for the residents of the City. The Barn was formerly used by the community as part of its downtown water system and is one of the few remaining tank houses in the nation. It has been recognized as a structure potentially eligible for recognition on the National Register of Historic Places, if properly re -erected and rehabilitated. The National Register is the nation's designation for structures of historical, cultural and architectural significance under the National Historic Preservation Act. D. SHA has proposed to rehabilitate the Barn in conformity with the Secretary of the Interior's Standards for Rehabilitation of historical structures, and the Property is a site that likely will allow the National Register designation for the Barn following renovation. The Property is owned by the City and the City Council will at a future date consider entry into a 99 -year lease (the "Lease") of the Property to SHA, on the terms and subject to certain conditions set forth herein. SHA acknowledges the Lease will require further approval by the City Council. 3 E. The parties desire to enter into this Redevelopment Agreement to establish the terms and conditions for entry into the Lease and for pre -lease cooperation in advancement of the SHA proposal. NOW THEREFORE, for good and valuable consideration, the receipt of which is acknowledged, the Parties agree as follows: 1. Definitions. The following terms shall have the meaning set forth below, unless the context clearly indicates otherwise: a. Barn means the Scandia water tower barn as described in Recitals B, C and D. b. City means the City of Scandia, Minnesota, a Minnesota statutory city. c. Closing means the date of entry into the Lease. d. Construction Plans means the construction plans for the Minimum Improvements and any other Project elements to be constructed as provided in Section 9.1. e. Effective Date means the date of entry into this Redevelopment Agreement. f. Exclusive Development Periods means the two time periods, as provided in Section 3, for SHA to demonstrate (i) suitability of the Property for the proposed Minimum Improvements (for one (1) year) and (ii) to attain financing for the use as provided in Section 3 (for five (5) years). g. Governmental Program means the use of the Barn and other improvements on the Property for a program of arts, cultural and community programming, in accordance with the Lease, which Governmental Program is intended to be in compliance with the requirements for State Bond Financed Property, pursuant to Minn. Stat. Sec. 16A.695. h. Lease means the Lease to be entered into pursuant to this Redevelopment Agreement by and between SHA and the City upon satisfaction of the conditions precedent as provided herein, which, upon final approval as provided herein, shall be added to this Agreement as Exhibit B and incorporated herein as part of this Agreement. i. Minimum Improvements means the re -erection of the Barn and the construction of a community amphitheater on the Property, along with suitable parking, sanitary facilities and other utilities and other associated improvements. j. Minimum Preliminary Project Plans means the plans prepared by SHA and approved by the City to demonstrate the Minimum Improvements to be constructed as provided in Section 5.2. M k. Preliminary Plans means the plans beyond the Minimum Preliminary Project Plans as provided in Section 9.1 I. Property means the portion of the City commons to be leased as depicted on Exhibit A in Recital B, and will be further defined by survey as provided herein. The Property will be the "leased premises" under the Lease. m. Project means the development of the Minimum Improvements and such other improvements as may be proposed by SHA and approved by the City. n. Redevelopment Agreement means this Redevelopment Agreement. o. Secretary's Standards means the Secretary of the Interior's Standards for Rehabilitation of historical structures codified at 36 CFR 67. p. SHA means the Scandia Heritage Alliance, a Minnesota non-profit corporation. q. State means the State of Minnesota. r. Title Company means SHA's title company as provided in Section 8.1. s. Unavoidable Delay means delays in the performance of obligations under this Agreement due to unforeseeable causes beyond the control of SHA, its lenders, contractors or other agents, including but not limited to, acts of God, riots or acts of a public enemy, acts of the state, federal and local government, strikes, lockouts or other comparable labor troubles, fire, floods, epidemics or other delays due to damage or destruction of the Minimum Improvements by weather or casualty, quarantines or other health and safety restrictions, unavailability of power, unavailability of materials, "economic recession" defined as two consecutive quarters in which there is a drop in the Gross Domestic Product (but not for longer than the recession continues), discovery of hazardous materials or other concealed site conditions or delays of contractors due to such discovery, acts of governmental entities including legislative or administrative actions taken by any such entity, adverse weather or delays of contractors due to such causes, unforeseen environmental issues, and litigation commenced by third parties which by injunction or other similar judicial action directly results in delays and other casualty to the Minimum Improvements. 2. Representations and Warranties of the Parties. Each of the parties hereto makes the following representations and warranties as the basis for the undertakings on its part herein: 5 2.1 By the City: (a) The City is a statutory city of the State, duly organized and existing under the laws of the State, and has the legal authority to enter into this Redevelopment Agreement, and carry out its obligations hereunder, including the entry into the Lease; (b) The City Council of the City has duly authorized the entry into this Redevelopment Agreement, provided the City's obligations are subject to satisfaction of the conditions as provided herein; (c) The actions of the City will not violate any federal or state law or regulation in order to comply with any of the terms or conditions of this Redevelopment Agreement, and will not result in the violation of any agreements to which the City is otherwise bound; (d) There is no pending or threatened legal proceedings of which the City is aware which, if successful, would threaten the validity or enforceability of this Redevelopment Agreement or which would restrain or enjoin the transactions contemplated herein; and (e) The City will use reasonable efforts, in cooperation with SHA, to accomplish the completion of the actions provided for herein. 2.2 By SHA: (a) SHA is a Minnesota non-profit corporation, properly organized and in good standing under the laws of the State of Minnesota, is not in violation of any provisions of its articles of organization, or the laws of the State, has full power to enter into this Redevelopment Agreement and has duly authorized the execution, delivery and performance of this Redevelopment Agreement by proper action of its board of directors; (b) There is no pending or threatened legal proceedings, of which the SHA has notice, contemplating the liquidation or dissolution of SHA or threatening its existence, or seeking to restrain or enjoin the transactions contemplated by this Redevelopment Agreement, or questioning the authority of SHA to execute and deliver this Redevelopment Agreement or its validity; (c) When the Property is leased to SHA, SHA has full power and authority to construct, operate and maintain the Barn and other improvements on the Property in accordance with the terms of this Redevelopment Agreement and the Lease, in conformity with local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations); (d) The delivery of this Redevelopment Agreement, and the consummation of the transactions contemplated hereby is not prevented, limited by or in conflict with or will violate any agreement to which SHA is a party; and (e) SHA will use reasonable efforts, in cooperation with the City, to accomplish the completion of the actions provided for herein. 3. Exclusive Development Periods. The City hereby grants to SHA the Exclusive Development Periods, together up to six (6) years, for the accomplishment of the Minimum Improvements and the establishment of the arts and cultural program as contemplated herein, as follows: One (1) Year from the Effective Date for predevelopment and design purposes and to determine the suitability of the Property for the erection of the Barn and construction of the amphitheater and other improvements; and Five (5) Years, additional, contingent upon the determination of suitability of the Property and approval of the Preliminary Minimum Improvement Plans by the City, to accomplish necessary fundraising and program development to proceed with the Closing and Minimum Improvements. 4. One -Year Predevelopment and Preliminary Design Period, Property Access. 4.1 Property Access, Site Suitability Analysis. The City agrees that SHA may have reasonable access to the Property (and as appropriate, adjacent land owned by the City) for a period of one (1) year from the Effective Date. During this period, the City may continue use of the Property for its current uses, but shall afford SHA reasonable access for the following purposes: (a) To undertake soil borings, surveying, environmental testing and investigations, architectural and engineering analysis and other similar activities incident to the determination of the suitability of the Property for the uses contemplated in this Redevelopment Agreement; and (b) To allow SHA's engineers, architects, and other design or technical professionals to fully examine the Property in connection with the preparation of the Minimum Preliminary Project Plans as contemplated herein. 4.2 Conditions of Access. SHA or its consultants and contractors shall give the City reasonable notice when it will access the Property. For any invasive procedures, such as soil borings, test pits or other physical disturbance, SHA shall advise the City not less than one week in advance and shall accomplish the activity in a manner to minimize the disruption of the current use of the Property and will restore the Property to its prior condition promptly and in a professional manner. SHA shall require its consultants and contractors to carry suitable liability insurance for any invasive activity, the amount and coverage to be as determined by the City Administrator, based on the nature of such work. All such insurance shall name SHA and the City as additional insured parties, and the consultants or contractors shall provide certificates prior to the work being commenced. SHA and the City shall consult on the timing of this work to minimize disruptions of the use of the Property for baseball in calendar year 7 2020. There shall be no charge for the right of access under this section. The City shall cooperate with SHA in these investigations. 4.3 Reports to the City. SHA shall make available to the City final copies of the soil borings, environmental reports and surveys resulting from this work. 5. Site Suitability, Redevelopment Plan and Extended Exclusive Development Period. SHA has proposed the following Minimum Improvements: an arts and cultural center for the community consisting of the reconstruction of the Barn and its rehabilitation in accordance with the Secretary's Guidelines, an amphitheater for performances and events, and suitable sanitary facilities and parking on the Property. As a second phase, SHA will endeavor to develop further facilities for exhibitions and classes on the Property. The second phase is not a part of the Minimum Improvements to allow the project to proceed. 5.1 Demonstration of Property Suitability. SHA, following such work as it deems appropriate under Section 4, shall determine the suitability of the site for the Project purposes. SHA shall provide suitable documentation to the City, not later than one year after the Effective Date, demonstrating this suitability of the Property for the Project contemplated herein. If SHA determines the Property is not suitable, it shall advise the City and this Redevelopment Agreement shall terminate, provided the City and SHA shall cooperate to identify an alternative suitable site for the Project. 5.2 Minimum Preliminary Prosect Plan. Simultaneously with the demonstration of Property suitability, SHA shall submit a site plan, architectural designs and other documentation regarding the proposed use of the Property, including (i) a utility plan or similar demonstration of adequate utilities, (ii) architectural plans including drawings showing at a minimum elevations of all sides of all structures and the foundation plan, and a topographical study of the Property on the survey showing the of location and elevation of the proposed uses, including buildings, parking and trails/driveways, and the amphitheater (the "Minimum Preliminary Project Plans"). The City shall have forty-five (45) days to review and approve or reject the Minimum Preliminary Project Plans, during which review it shall consult with SHA and its architects and consultants on any issues and concerns. SHA shall be given a reasonable time to respond to any concerns. 5.3 Redevelopment Period. Upon approval of the Minimum Preliminary Project Plans, the Exclusive Development Period shall be extended for a period of an additional five (5) years from the plan approval date, for SHA to obtain public and private financial support sufficient to complete the Minimum Improvements. 6. State Bond Financing and Other Project Assistance. 6.1 Grant Cooperation. The City agrees it will reasonably cooperate and assist, consistent with other City priorities, with SHA in seeking State, County, Metropolitan Council and other public and private financial assistance to accomplish the Project. SHA acknowledges and agrees that general City funding for the Project is not contemplated, except as specified in Section 6.2 below. To this end, the City will: (a) Work with SHA to submit a request for State Bond Financing pursuant to Minn. Stat. Section 16A.695 for the Project in accordance with the requirements for such submissions established by Minnesota Management and Budget; (b) Assist SHA in submitting requests for available financial assistance from Washington County, State agencies (such as DNR, DEED, and DOT), and the Metropolitan Council, for grants appropriately identified by SHA or the City, for site improvements, walkways and trails, environmental remediation, streetscaping and similar project specific uses, including open space Legacy funds; (c) Support SHA in seeking support for historic preservation rehabilitation funds from the Historical Society Legacy Funding or other similar funding from the Minnesota Historical Society; and (d) Support, cooperate, and where appropriate join with SHA in seeking such other funding from public and private sources as the parties determine may be reasonably available and supportive of the Project. 6.2 City Public Pedestrian Improvements. Upon demonstration of Project funding, entry into the Lease and commencement of construction, the City will at City expense (i) construct the access sidewalk to the Property along the east side of Olinda Avenue and (ii) make reasonable safety improvements at the pedestrian crossing between the Community Center and the Gammelgarden Museum, both improvements to be done consistent with the timeframe for construction of the Minimum Improvements. 6.3 General City Assistance. General City assistance for the Project is not anticipated, however, certain City expenditures may be provided consistent with other City priorities and normal City functions, in the City's discretion, as follows: (a) The City is currently working through its Parks and Recreation Advisory Committee to consider development of a community amphitheater. To the extent the City in its Capital Budget approves funds for a community amphitheater, the City will commit such funds to the Project for construction of an amphitheater on the Property; and (b) The City will, consistent with other City capital projects, use its reasonable best efforts to coordinate with SHA to contemporaneously construct the walkway/boardwalk linkages around and over the wetland outside the Property at the same time SHA constructs such improvements on the Property; (c) For clarity, it is expressly acknowledged, all construction costs for internal site sidewalks, drives, parking, trails and overlooks on the Property shall be Project costs paid by SHA; and SHA shall be responsible for all costs of utility hook-ups and connections that will serve the Project/Property; and (d) For certain site improvements, SHA and the City may jointly seek assistance from State, Metropolitan or County or other public and private sources as determined efficient and effective. 7. Financing and Construction Conditions Precedent to Entry into Lease. Upon approval of the Minimum Preliminary Project Plans, subject to the following preconditions, attainment or satisfaction of which shall be demonstrated by SHA, the City and SHA shall enter into the Lease. SHA shall, for those approvals and actions to be obtained or accomplished by SHA, provide reasonable evidence of their satisfaction to the City. The City and SHA shall cooperate to promptly seek all such approvals, consents and authorizations enumerated in this Section. Nothing herein is intended to limit or predetermine any governmental regulatory approval by the City. In this Section, without limitation on assignment otherwise herein, any reference to SHA shall include any successor or assign that is created to undertake the Project and that has been approved by the City. (a) The City shall have received proof of insurance for the benefit of the City as required under the Lease, including delivery of the certificates demonstrating the City as an additional insured as required therein; (b) The City shall have received an opinion of SHA's counsel, dated as of the entry into the Lease that, SHA has been duly formed and is in good standing under the laws of the State of Minnesota; has the requisite power and authority to enter into and perform this Redevelopment Agreement and the Lease; this Redevelopment Agreement and the Lease have been duly authorized by all necessary action on the part of SHA and have been duly executed and delivered; the execution, delivery and performance by SHA of this Redevelopment Agreement and the Lease does not conflict or result in a violation of SHA's organizational or operating documents; and this Redevelopment Agreement and the Lease are valid and binding obligations of SHA, enforceable in accordance with their terms; (c) SHA shall have provided evidence of sufficient equity and debt financing commitments, subject only to normal financing contingencies reasonably acceptable to the City, for the construction and permanent financing of the construction of the Project to completion, such amount to provide a reasonable level of contingencies for unknown construction issues. The City shall have reviewed and approved the construction contract for the Project and any financing to be in accordance with the requirements contained in the Lease; (d) The City shall have approved the form of all financing and other documents to be signed and/or delivered at the Closing that would be encumbrances on the Property. In particular and not by way of limitation, SHA shall have provided to the City reasonable evidence that SHA will not cause in connection with the financing of the Project any action that would raise any 10 issue of the priority of the City's ownership of the Property. Without limiting the foregoing, the City shall have approved all Leasehold Mortgages and any Subordination and Non Disturbance Agreements or other documents to be executed or consented to by the City; (e) SHA shall have provided reasonably acceptable guarantees or other assurances against any liens or other encumbrances, not otherwise approved, and for the full funding to complete the Project; (f) SHA shall have submitted, and the City shall have approved the Construction Plans for the Minimum Improvements and any other Project elements to be constructed, as provided in Section 9; (g) SHA shall have obtained any governmental approvals required for the construction of the Minimum Improvements and the Project; (h) SHA will have prepared, executed, and provided all documents reasonably required by the City to carry out the Project as contemplated under this Redevelopment Agreement and the Lease and shall have submitted a preliminary plan for the operation of the arts and cultural center; (i) There shall be no uncured Event of Default or circumstance which, with the passage of time, would result in an Event of Default under this Redevelopment Agreement or that would immediately arise under the Lease; and (j) SHA shall have delivered or demonstrated availability of funds sufficient for payment at Closing of any fee or charge imposed by any closing agent designated by the Title Company, and any other incidental or related closing costs, or any fees or charges of any governmental agency issuing a permit or other approval for the Project. (k) The City and SHA shall have negotiated a mutually agreeable Lease, within the initial year of the Exclusive Development Period, and prior to the final City approval of the Minimum Preliminary Project Plans. The City and SHA agree to negotiate promptly the full terms of the Lease, which upon negotiation shall be added to this Agreement as an Exhibit B and incorporated herein. To facilitate the negotiation, the City and SHA agree the Lease shall contain terms typical of a lease for a commercial/assembly use of Property and include, but not limited to, the following: Term: 99 -years Rent: $1/year, payable in advance iii. Leased Premises: the Property as defined by survey iv. Operating Costs, Taxes and Insurance: payable by SHA, commonly referenced as "Triple Net" 11 V. Insurance: suitable coverages and amounts, City as named insured party, clear reservation of State tort defense rights of City vi. Liability: mutual indemnification satisfactory to both parties vii. State Bond Financed Property (M.S. 16A.695) (SBFP): terms shall comply with statutory requirements during SUP period, including provisions that harmonize the SUP mandated Lease Term with the agreed 99 -year term to the extent permitted viii. Capital Improvement Coordination: agreement on timing and coordination of sidewalk and any other utilities, street work, or similar improvements involving both parties ix. Termination Provisions: providing the Improvements revert to the City upon Lease termination and other normal termination provisions X. Evidence of sufficient equity and debt financing commitments for the construction and permanent financing of the construction of the Project to completion, such amount to provide a reasonable level of contingencies for unknown construction issues. 8. Title to Property and Survey. 8.1 Title Insurance. SHA shall order any title insurance insuring title and the leasehold interest to the Property it deems necessary. Title insurance costs pursuant to this Section shall be paid by SHA. The City agrees it will reasonably cooperate in obtaining said title commitments and insurance, provided there is no cost to the City. City will also reasonably respond to any identified issues regarding title to the Property and take normal steps to demonstrate marketable fee title if required by SHA's title company (the "Title Company"). Copies of all title commitments and title insurance shall be promptly provided to City upon their issuance by the Title Company. 8.2 No Encumbrances by City or SHA. The City and SHA will take no voluntary actions to encumber title to the Property between the date of entry into this Redevelopment Agreement and Closing, and the City will deliver to SHA a leasehold interest in the Property, as the tenant under the Lease, subject only to such claims and encumbrances as existed as of the date of entry into this Redevelopment Agreement and those permitted under the Lease or the Redevelopment Agreement; provided, however, that the City shall have no obligation to resolve any claims, interests, or encumbrances that it did not create. The City agrees to reasonably cooperate with SHA to cure or correct any title defects identified by SHA. 8.3 Survey. SHA, at its own expense, will promptly obtain a current survey of the Property, encroachments, ingress and egress, any other access easements, utilities and any utility easements, all matters of record, establishing a metes and bounds legal description of the proposed Property and certifying as to the 12 number of square feet. The survey shall meet the ALTA standards and shall also be certified to the City and the Title Company. The draft survey shall be provided to the City upon completion (and any revision) and in any event, not less than thirty (30) days prior to the end of the first year of the Exclusive Development Periods. The final survey shall be provided to the City no later than ten (10) days before the Closing. The City and SHA shall agree on the Property/Leased Premises legal description based on the survey as part of the Lease negotiation. 9. Construction of Minimum Improvements. SHA agrees that it will construct, or cause to be constructed, the Minimum Improvements for the Project in accordance with the approved Construction Plans. Thereafter, SHA will maintain, preserve and keep the Minimum Improvements or cause the Minimum Improvements to be maintained, preserved and kept in good repair and condition. 9.1. Construction Plans. (a) At least one -hundred twenty (120) calendar days before the proposed date for Closing, SHA shall submit to the City "Preliminary Plans," consisting of the final site plan, floor plans and elevations of the exterior and interior for all of the proposed Minimum Improvements, which illustrate their general size and character. The Preliminary Plans will be consistent with all applicable state and local laws and regulations, insofar as said consistency may be determined at the preliminary stage. It is understood this is a final review before preparation of final Construction Plans, and SHA may submit these Preliminary Plans earlier to facilitate orderly preparation of the Construction Plans. The Preliminary Plans shall be approved or rejected (in whole or part) in writing by the City within thirty (30) days after the date of their receipt by the City. Any rejection of said plans shall set forth in detail the reasons therefor. If the City rejects the Preliminary Plans, in whole or in part, the parties shall immediately consult on the areas of concern, and SHA shall submit new or corrected Preliminary Plans as promptly as possible after receipt by SHA of the notice of rejection. (b) At least sixty (60) calendar days before Closing SHA will submit Construction Plans to the City with respect to the Minimum Improvements. The Construction Plans will provide for the construction of the Minimum Improvements and will be in conformity with this Redevelopment Agreement, and all applicable state and local laws and regulations. The City will approve the Constructions Plans in writing if: (i) the Construction Plans reasonably conform to the terms and conditions of this Redevelopment Agreement; (ii) the Construction Plans reasonably conform to the Preliminary Plans; (iii) the Construction Plans reasonably conform to all applicable federal, state and local laws, and ordinances, rules and regulations; (iv) the Construction Plans are adequate to provide for the construction of the Minimum Improvements; and (v) no material Event of Default has occurred. No approval by the City will relieve SHA of the obligation to comply with the terms of this Redevelopment Agreement, applicable federal, state and local laws, ordinances, rules and regulations, or to 13 construct the Minimum Improvements to completion. No approval by the City under this section will constitute a waiver of an Event of Default. Any rejections of the Construction Plans will set forth in detail the reasons therefor. If the City rejects the Construction Plans, in whole or in part, SHA will submit new or corrected Construction Plans within thirty (30) days after written notification to SHA of the rejection. If the City fails to respond within twenty (20) days after SHA submits new or corrected Construction Plans, and a further five (5) business days after a written request by SHA, City shall be deemed to have approved the new of corrected Construction Plans. The provisions of this Section relating to approval, rejection and resubmission of corrected Construction Plans will continue to apply until the Construction Plans have been approved by the City. The City's approval will not be unreasonably conditioned, withheld or delayed. City's approval will constitute a conclusive determination that the Construction Plans (and the Minimum Improvements, if constructed in accordance with said Plans) comply to the City's satisfaction with the provisions of this Redevelopment Agreement. (c) If, after approval by the City, SHA desires to make any material changes in the Construction Plans that may substantially and adversely alter or affect the site plan, drainage, vehicular and pedestrian ingress or egress, massing, or exterior appearance of the Minimum Improvements, SHA will submit the proposed changes to the City, which will approve or reject the proposed change using the criteria of subsection (b) and notify SHA in writing within seven (7) business days after receipt of the submission detailing such changes. If the City fails to respond within the seven (7) days, and a further five (5) business days after a written request by the SHA, City shall be deemed to have approved the change. (d) Approval of the Construction Plans by the City is not intended nor shall it be construed to be a warranty or representation by the City of any nature whatsoever, including without limitation as to the structural soundness of the proposed improvements, quality of materials, workmanship or the fitness of the improvements for their proposed use. 9.2 Certificate of Completion. At the Closing, the City shall deliver the Certificate of Completion to SHA, provided, however, it shall not be delivered if there is an uncured material Event of Default. Delivery of the Certificate of Completion by the City does not constitute a representation or warranty by the City that the Minimum Improvements will comply with any applicable building code, health or safety regulation, zoning regulation, or other law or regulation, or that the Minimum Improvements will meet the qualifications for issuance of a certificate of occupancy, or that the Minimum Improvements will meet the requirements of SHA or any other users of the Minimum Improvements. It will be the responsibility of SHA to provide for the recording of the Certificate of Completion and the payment of any costs for such recording. Delivery of the Certificate of Completion is evidence of SHA's compliance with all the terms of the Redevelopment Agreement. 14 9.3 Public Improvements Constructed by Redeveloper. To the extent that SHA constructs, installs or replaces any curbing, sidewalks, streets, trails, sewers, water mains, utility connections or any other capital improvements on the Property or in connection with provision of necessary infrastructure, to the extent within the right-of-way of any public roads, these capital improvements shall become the property of the City or other applicable public jurisdiction. 9.4 Easements. The City shall retain easements relating to the extension of water, storm sewer and sanitary sewer service and the public walkways, which may be evidenced in the Lease or by separate easement agreement, whichever the parties mutually agree is most beneficial. The parties shall enter into any additional instruments or easements required to evidence these easements. Nothing in this section is intended to impose any obligation on the City for maintenance of those facilities during the term of the Lease. 9.5 Construction over Utility Easements. SHA will not construct any building or other structures on, over, or within the boundary lines of any public utility easement unless such construction is provided for in such easement and has been approved by the utility or easement holder involved. 9.6 Installation of Utilities. The City will not be responsible for nor bear any portion of the cost of installing the necessary utility connections between the public utilities and the Minimum Improvements. SHA will be responsible for the payment of all sewer and water charges with respect to the sewer improvements and connection to then existing water line. 9.7 Replacement of Damaged Facilities. The SHA, at its own expense, will replace any public facilities and public utilities damaged by the SHA, its employees, agents consultants, or contractors during the construction of the Minimum Improvements, in accordance with the technical specifications, standards and practices of the City or the owner thereof. 9.8 Relocation of Existing Utilities. SHA will be responsible for the cost of installation or relocation of any existing public or private utilities which may be caused or necessitated by the construction of the Minimum Improvements. 9.9 Signage - Credit Acknowledgments and Publicity. SHA will, within one -hundred twenty (120) days after entry into this Redevelopment Agreement, erect at its own expense, a sign of reasonable size in a prominent position on the Property indicating to the general public the name of the Project and SHA and acknowledging the role and participation of the City. SHA will also give ample notice to the City of groundbreaking, opening ceremonies and like events so that the City may participate in such events. SHA agrees to assist and cooperate in the City's participation. SHA further agrees that the City will also have the right to issue press releases and conduct ceremonial events concerning the Project. The design of the signage shall be subject to the City's approval. SHA may also include the names of other entities, such as the Lender, contractors, architects, etc. on such sign provided the name and logo of the City are clearly readable from Olinda 15 Avenue. The sign shall be well maintained until the completion of construction under the Lease or a suitable replacement sign is erected under the Lease. 9.10 Unavoidable Delays. To the extent SHA experiences Unavoidable Delays, for so long as SHA shall make reasonable efforts to mitigate the effects of the Unavoidable Delay on the progress of the predevelopment activity or the construction of the Minimum Improvements, the City shall agree to reasonable extensions of the deadlines under this Redevelopment Agreement, and shall reasonably consider changes to this Redevelopment Agreement, when proposed by SHA, to allow the construction of the Minimum Improvements to proceed. SHA shall give immediate notice in writing to the City of any Unavoidable Delays. 10. Insurance, General Provisions. SHA will provide and maintain insurance, or cause its agents, consultants, and contractors (collectively "Subcontractors") to maintain insurance covering any construction and use of the Property in amounts agreed to under the Lease, subject to these minimum requirements meeting the following requirements: (a) All policy(ies) shall be primary insurance to any other valid and collectible insurance available to City with respect to any claim arising out of SHA's performance under this Redevelopment Agreement; (b) If SHA receives a cancellation notice from an insurance carrier affording coverage herein, SHA agrees to notify City within five (5) business days with a copy of the cancellation notice, unless SHA's policy(ies) contain a provision that coverage afforded under the policy(ies) will not be cancelled without at least thirty (30) days advance written notice to City; (c) SHA's policy(ies) shall include legal defense fees in addition to its liability policy limits; (d) Insurance companies must either (1) have an AM Best rating of A- (minus) and a Financial Size Category of VII or better, and be authorized to do business in the State or (2) be domiciled in the State have a Certificate of Authority/Compliance from the MN Department of Commerce if they are not rated by AM Best; (e) An Umbrella or Excess Liability insurance policy may be used to supplement the policy limits to satisfy the full policy limits required; (f) SHA shall submit Certificates of Insurance acceptable to City as evidence of the required insurance prior to any invasive predevelopment work on the Property. Not less than fifteen (15) days before the expiration of any policy, SHA will furnish the City with satisfactory evidence that the policy has been renewed or replaced by another policy conforming to the provisions of the Lease; and (g) To facilitate the negotiation of the Lease insurance provision, the following minimum 16 coverages are specified, provided the Lease shall ultimately govern the minimum coverages if in excess of the limits below: 1. Builders Risk and SHA Post Construction Casualty. Full replacement value with inflation adjustment and perils typical of protection of commercial structures; waiver of subrogation by all parties to the policies. 2. Workers' Compensation Insurance. i. Coverage A - Statutory Compensation Coverage: SHA shall provide Workers' Compensation insurance for all its employees and shall require any Subcontractors to provide Workers' Compensation insurance in accordance with the statutory requirements of the State of Minnesota, including: ii. Coverage B — Employer's Liability, at limits of not less than: $100,000 — Bodily Injury by Disease per Employee $500,000 — Bodily Injury by Disease Aggregate $100,000 — Bodily Injury by Accident 3. Commercial General Liability Insurance. SHA shall maintain insurance protecting it from claims for damages for bodily injury, including sickness or disease, and death, as well as from claims for property damage, including loss of use which may arise from operations under this Redevelopment Agreement (including auto or other vehicle liability in connection with such work) whether the operations/work are by SHA or by a subcontractor or by anyone directly or indirectly employed by SHA under the contract. The Minimum Limits of Liability coverage shall be: $1,500,000 - Per Occurrence $1,500,000 - Annual Aggregate 11. Indemnification. In its performance of activities under this Redevelopment Agreement, SHA agrees to indemnify, defend, save and hold harmless the City, and its officers, agents, and employees, from any third party claims, demands, suits, actions, or other proceedings of any kind or nature, including reasonable attorneys' fees and expenses, made or commenced by any third person, to the extent arising from or purportedly arising from the following and occurring during the predevelopment period: (a) Any willful, intentional or negligent acts or omissions; (b) Actions that give rise to strict liability; or (c) Breach of contract or warranty. 17 The foregoing agreement to indemnify shall not apply to any event, occurrence or circumstance occurring prior to the date of execution of this Redevelopment Agreement or to the extent due to the sole negligence or misconduct of the City, its employees, contractors or agents. This indemnification obligation of SHA shall survive the termination of this Redevelopment Agreement, the Closing, the entry into the Lease. This clause shall not be construed to bar any legal remedies SHA may have for the City's failure to fulfill its obligations under this Redevelopment Agreement. Nothing in this section is intended to and shall not be construed as waiving the City's tort claim liability limitations and caps provided in Minnesota Statutes. 12. Hazardous Materials. SHA in connection with its activities under this Redevelopment Agreement during the period prior to Closing, covenants to the City, its successors and assigns, (i) that except as permitted by law, including all applicable statutes, regulations, and rulings, it will not use or permit the Property to be used, whether directly or through its agents, consultants, or contractors, for the generating, transporting, treating, storage, manufacture, emission of, or disposal of any dangerous, toxic or hazardous pollutants, chemical wastes or substances as defined in the Federal Comprehensive Environmental Response Compensation and Liability Act of 1980 ("CERCLA"), or the Federal Resource Conservation and Recovery Act of 1976 ("FRCRA"), or the Minnesota Environmental Response Liability Act, Minnesota Statutes, Chapter 115A ("MERLA"), or any other federal, state or local environmental laws, statutes, regulations, requirements, and ordinances ("Hazardous Materials"); and (ii) represents to City that there have been no investigations or reports citing SHA or its operations as violating the foregoing by any governmental authority which in any way pertain to Hazardous Materials. SHA will not undertake its activities under this Redevelopment Agreement on the Property in a manner that violates any federal, state or local law, regulation, ordinance, or requirement governing Hazardous Materials. 13. Representation as to Redevelopment, Prohibitions against Assignment and Transfer. 13.1 Redevelopment Purpose. SHA represents and agrees that the Lease of the Property, and its other undertakings pursuant to this Redevelopment Agreement, are, and will be used, for the purpose of redevelopment and not for speculation in land holding. SHA further recognizes that, in view of the importance of the redevelopment of the Property to the general welfare of the City and the substantial public assistance and the Lease terms that have been made available by the City for the purpose of making such redevelopment possible, the qualifications and identity of the SHA, and its members, are of particular concern to the City. SHA further recognizes that it is because of such qualifications and identity that the City is entering into this Redevelopment Agreement with the SHA. 13.2 Limitations on Transfer of a Parcel and Assignment of Redevelopment Agreement. Before receiving the Certificate of Completion and entering into the Lease, SHA will not sell, assign, convey, or transfer in any other mode or manner this Redevelopment Agreement, without the express written approval of the City, which approval may not be unreasonably withheld. The City's approval under this subsection may be subject, in the City's reasonable discretion, to any or all of the following conditions: (a) Any proposed transferee must have the qualifications and financial wherewithal necessary to fulfill the obligations of SHA under this Redevelopment Agreement; (b) Any proposed transferee must expressly assume the obligations of the SHA, and be subject to the same restrictions, limitations, and conditions as SHA under this Redevelopment Agreement, in a written assumption of the Redevelopment Agreement acceptable to the City; and (c) Except as otherwise provided, no transfer of any interest in the Project Area, however consummated or occurring, and whether voluntary or involuntary, will operate, legally or practically, to deprive or limit the City of any rights, remedies, or controls provided in or resulting from this Redevelopment Agreement with respect to the Property or the Minimum Improvements that the City would have had if there had been no transfer. Except as provided herein, in the absence of an express written approval by the City to the contrary, no transfer of the Project Area, or any interest therein, will relieve SHA of any of its obligations under this Redevelopment Agreement. 14. Deadlines for SHA Performance. It shall be a default under this Redevelopment Agreement if SHA has not accomplished, subject to unavoidable delays and extension with the City's approval, the Closing and entry into the Lease by the end of the Exclusive Development Period. City agrees it will consider extending the performance deadline for the Closing and entry into the Lease, provided SHA demonstrates it is making continuing and reasonable progress toward accomplishment of the requirements for the Closing. The determination of continuing and reasonable progress shall be made by submitting a written application to the City, not later than ninety (90) days before the applicable performance date, along with supporting evidence of continuing reasonable progress. The City may extend the performance date by such time as the City determines is reasonable in its discretion. 15. Events of Default. 15.1 Events of Default Defined. The following will be "Events of Default" by SHA under this Redevelopment Agreement: (a) Failure by SHA to submit satisfactory evidence of sufficient equity, construction financing or other terms of any equity or loan commitment to the City in a timely manner to allow satisfaction of the preconditions to Closing, pursuant to the terms and conditions of this Redevelopment Agreement; (b) Failure by SHA to demonstrate satisfaction (or continuous and reasonable progress toward satisfaction) of the preconditions to Closing in accordance with 19 the timeframes in this Redevelopment Agreement; or (c) Failure by SHA to substantially observe or perform any covenant, condition, obligation or agreement in this Redevelopment Agreement on its part to be observed or performed hereunder. 15.2 Citv Remedies on Default. (a) Whenever any Event of Default under Section 11.1 of this Redevelopment Agreement occurs, the City may take any one or more of the following actions after providing thirty (30) days written notice to SHA of the Event of Default, but only if the Event of Default has not been cured within said thirty (30) days or, except in the case of failure to accomplish the Closing, if the Event of Default cannot be cured within thirty (30) days, then only if SHA does not provide assurances to the City reasonably satisfactory to the City that SHA has taken immediate steps to accomplish the cure or assurances that SHA is making reasonable progress and the Event of Default will be cured within an applicable extension time; (b) Suspend its performance under this Redevelopment Agreement until the Event of Default is cured, or until the City receives satisfactory assurances of performance; (c) Cancel, rescind or terminate this Redevelopment Agreement; (d) Withhold the Certificate of Completion and entry into the Lease until the Event of Default is cured; or (e) Take whatever action, including legal or administrative action, which may appear necessary or desirable to the City to collect any payments due under this Redevelopment Agreement or to enforce performance and observance of any obligation or covenant of SHA under this Redevelopment Agreement. Any performance obligation under this Redevelopment Agreement is limited to any indemnification or payment obligation hereunder and shall not require SHA to enter into the Lease or construct the Minimum Improvements or any other similar obligation herein. 15.3 Notice of Default. Until the City gives the notice described in Section 15.2(a) of this Redevelopment Agreement, notwithstanding an occurrence of an Event of Default, SHA will not be deemed to be in default under the provisions of this Redevelopment Agreement. 15.4 Events of Default by the City Defined. The following will be "Events of Default" by the City under this Redevelopment Agreement: Failure by the City to substantially observe or perform any material covenant, condition, obligation or agreement on its part 20 to be observed or performed hereunder. 15.5 SHA Remedies on Default. Whenever any Event of Default referred to in Section 15.3 of this Redevelopment Agreement occurs, SHA may after providing thirty (30) days written notice to the City of the Event of Default, but only if the Event of Default has not been cured within said thirty (30) days, or if the Event of Default cannot be cured within thirty (30) days, and only if the City does not provide assurances to SHA reasonably satisfactory to SHA that the Event of Default would be cured and would be cured as soon as reasonably possible: (a) Suspend its performance under this Redevelopment Agreement until the Event of Default is cured, or until SHA receives assurances of performance; (b) Cancel, rescind or terminate this Redevelopment Agreement; (c) Seek specific performance or other injunctive remedy, provided any suit for specific performance or in equity shall be filed no more than six (6) months after the right of action arises; or (d) Recover its actual out of pocket damages, provided damages shall be limited to the amount of lost out of pocket investment by SHA, in furtherance of the Project, not including SHA's costs for employees or overhead, and shall not include consequential damages, lost profits, loss of goodwill or punitive damages. 15.6 Remedies, Effect of Limitation or Delay. Unless specifically stated herein, no limitation on or delay or omission to exercise any right or power accruing upon any default will impair any such right or power or will 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 City or SHA to exercise any remedy reserved to it. 15.7 No Additional Waiver Implied by One Waiver. In the event any covenant, condition or agreement contained in this Redevelopment Agreement should be breached by either party and thereafter waived by the other party, such waiver will be limited to the particular breach so waived and will not be deemed to waive any other concurrent, previous or subsequent breach hereunder. 15.8 Governmental Action. With respect to obtaining any governmental approval contemplated herein, the parties acknowledge the City cannot contractually obligate the State or any agency or political subdivision thereof to take any subsequent governmental action. 16. Additional Provisions. 16.1 Titles of Articles and Sections. Any titles of the several parts and sections of this 21 Redevelopment Agreement are inserted for convenience of reference only and will be disregarded in construing or interpreting any of its provisions. 16.2 Notices and Demands. Notices or demands under this Redevelopment Agreement by either party to the other will be sufficiently given or delivered if it is either dispatched by registered or certified US Mail, postage prepaid, return receipt requested; dispatched with a nationally recognized overnight mail or delivery service providing confirmation of delivery, postage prepaid; or delivered personally; and (a) in the case of the SHA, notices or demands will be addressed to or delivered personally to: Scandia Heritage Alliance 21450 Pomroy Avenue North. Scandia MN 55073 Attention: Board Chair With a copy to: :M (b) in the case of the City, notices or demands will be addressed to or delivered personally to: City of Scandia City Hall 14727 209th St. N Scandia, MN 55073 Attention: City Administrator With a copy to: Eric Sherburne, City Attorney Eckberg & Lammers 430 2nd St. Hudson, WI 54016 or, at such other address with respect to either such party as that party may, from time to time designate in writing and forward to the other as provided in this Section. The parties may also agree to alternative forms of communication with respect to notices or demands, provided they also provide a suitable acknowledgement of service. 16.3 Counterparts. This Redevelopment Agreement may be executed in any number of counterparts, each of which will constitute one and the same instrument. 16.4 Modification. Any amendments or modifications of this Redevelopment Agreement 22 shall be in writing. 16.5 Approvals. Wherever in this Redevelopment Agreement the consent, satisfaction or approval of SHA or City is required, necessary or requested, such consent, satisfaction, or approval will not be unreasonably withheld or conditioned or unduly delayed. 16.6 Successors, Assigns. Without modifying any provision requiring consent to assignment, this Redevelopment Agreement shall be binding on the successors and assigns of any party. [The remainder of this page is intentionally blank; signatures on the following pages.] 23 IN WITNESS WHEREOF, the parties have executed this Redevelopment Agreement, effective as of the date first set forth above. CITY OF SCANDIA, MINNESOTA Print Name Its STATE OF MINNESOTA ) ) SS COUNTY OF WASHINGTON ) The foregoing instrument was acknowledged before me this day of '2020, by_ , the _, on behalf of the City of Scandia, Minnesota. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial Stamp or Seal. Notary Public My commission expires: STAMP OR SEAL [Signatures continue on next page.] 24 SCANDIA HERITAGE ALLIANCE, a Minnesota non-profit corporation Print Name Its STATE OF MINNESOTA ) ) SS COUNTY OF WASHINGTON ) The foregoing instrument was acknowledged before me this day of 2020, by Susan Rodsjo,theChair of the Board of Directors of Scandia Heritage Alliance, a non-profit corporation under the laws of the State of Minnesota, on behalf of the corporation. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial Stamp or Seal. Notary Public My commission expires: This instrument was drafted by: [City] and John H. Herman Herman Real Estate Advisors 23355 Quentin Ave. N. Scandia, MN 55073 612-718-3616 25