90-060
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.
. RESOLUTION NO. 60-90
RESOLUTION APPROVING ASSESSMENT AGREEMENT
AND ASSESSOR'S CERTIFICATION
BY AND BETWEEN THE CITY OF SHOREWOOD, MINNESOTA
AND SHERMAN-BOOSALIS INTERESTS, INC.
WHEREAS, the City Council of the City of Shorewood passed
Resolution No. 36-90 on 23 April 1990, Designating and Establishing
Development District No.1; Establishing Tax Increment Financing District
No. 1 Located Within Development District No.1; and Approving and
Adopting the Development District Program for Development District No. 1
Including Tax Increment Financing Plan for Tax Increment Financing
District No.1; and
WHEREAS, Subsection 2.07 of such Development Program provides for
the City to enter into an Assessment Agreement for the property included
in the Development District.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the
City of Shorewood as follmV's:
. 1.
Assessment
Shorewood,
approved.
That the Contract attached hereto entitled "Contract for
Agreement and Assessor's Certiication by and Between City of
Minnesota and Sherman-Boosalls Interests, Inc.", is hereby
2. That the Mayor and City Clerk are hereby authorized to
execute said Contract on behalf of the City Council.
ADOPTED BY THE CITY COUNCIL of the City of Shorewood this
25th day of June, 1990.
~. lD0x(~
urence E. vlhittaker
City Administrator/Clerk
Roll Call Vote:
Ayes - Haugen, Brancel, Gagne, Stover, Watten
Nays - 0
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ASSESSMENT AGREEMENT
AND
ASSESSOR'S CERTIFICATION
By and Between
CITY OF SHOREWOOD, MINNESOTA
AND
SHERMAN-BOOSALIS INTERESTS, INC.
May 18, 1990
4
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06
THIS AGREEMENT, made on and entered into as of the _ day
of , 1990, by and between the City of Shorewood,
Minnesota, a municipal corporation organized and existing under the laws
of the State of Minnesota (the City), and Sherman-Boosalis Interests,
Inc., a corporation licensed to do business in the State of Minnesota (the
Developer) :
WHEREAS, on or before the date hereof the City and the Developer
have entered into a Contract for Tax Increment Finance Development dated
as of , 1990 (the TIF Development Contract),
regarding certain real property located in City of Shorewood Development
District No. 1 in the City of Shorewood, Minnesota; and
WHEREAS, it is contemplated that pursuant to a said TIF
Development Agreement the Developer will undertake a project called
Waterford Phase Three; and
WHEREAS, the City and Developer desire to establish a m1n1mum
market value for the Development Property and the improvements and
buildings to be constructed thereon (the Facilities) pursuant to the TIF
Development Contract, (cumulatively, the assessed property) for the
calculation of real property taxes, or taxes in lieu thereof pursuant to
Minn. Stat. Section 272.01 or any successor statute pursuant to the
provisions of Minn. Stat. Section 469.177, Subd. 8; and
WHEREAS, the City and the Assessor for the County have reviewed
the preliminary plans and specifications for the Project which it is
contemplated will be erected;
NOW, THEREFORE, the parties to this Agreement in consideration of
the promises, covenants and agreements made by each to the other, do
hereby agree as follows:
(1) Upon substantial completion of construction of the Project by
the Developer but in no event later than January 2, 1992, the minimum
market value which shall be assessed with respect to the Assessed Property
on January 2, 1991 shall be $2,598,750 for Parcel A and $2,160,000 for
Parcel B; and on January 2, 1992, shall be $3,712,500 for Parcel A and
$2,160,000 for Parcel B. The Developer has agreed to commence
construction of the above-referenced improvements within thirty (30) days
following the date of this agreement and to diligently and in good faith
complete said improvements within a reasonable period of time thereafter.
Notwithstanding the foregoing the Developer has agreed, whether or not the
improvements have been completed, that the fair market value which shall
be assessed with respect to the Assessed Property on January 2, 1991 shall
be $2,598,750 for Parcel A and $2,160,000 for Parcel B; and on January 2,
1992 shall be $3,712,500 for Parcel A and $2,160,000 for Parcel B. At
such time as plats are filed for Parcel A and Parcel B, the assessment for
each parcel shall be divided equally among the platted lots.
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(2) The minimum market values herein established shall be of no
further force and effect and this Agreement shall terminate upon December
31, 1999, or upon the earlier payment of the Bonds.
(3) Nothing in this Assessment Agreement shall limit the
discretion of the Assessor for the County to assign a market value to the
Assessed Property in excess of $3,712,500 for Parcel A and $2,160,000 for
Parcel B, nor prohibit the Developer from seeking through the exercise of
legal or administrative remedies a reduction in such market value for
property tax purposes, provided, however that the Developer shall not seek
a reduction of the market value of the Assessed Property below $3,712,500
for Parcel A and $2,160,000 for Parcel B, for the year 1992 or any year
thereafter so long as the Assessment Agreement shall remain in effect.
(4) Neither the preamble nor provisions of this Agreement are
intended to, nor shall they be construed as modifying the terms of the TIF
Development Contract between the City and the Developer.
(5) This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of the parties.
THE CITY OF SHOREWOOD, MINNESOTA
By:
Its Mayor
By:
Its Administrator-Clerk
SHERMAN-BOOSALIS INTERESTS, INC.
By:
Its Chief Executive Officer
STATE OF MINNESOTA)
) ss:
COUNTY OF HENNEPIN)
The foregoing instrument was acknowledged before me this _ day
of , 1990, by and
the Mayor and the Administrator-Clerk
of the City of Shorewood, Minnesota.
Notary Public
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..,..:
STATE OF MINNESOTA)
) ss:
COUNTY OF HENNEPIN)
The foregoing instrument was acknowledged before me this ____ day
of , 1990, by George Sherman, Chief Executive Officer, of
Sherman-Boosalis Interests, Inc.
Notary Public
CERTIFICATION BY ASSESSOR
The undersigned, having reviewed the plans and specifications for
the improvements to be constructed and the market value assigned to the
land upon which the improvements are to be constructed, and being of the
opinion that the minimum market values contained in the foregoing
Agreement appear reasonable, hereby certifies as follows: The undersigned
Assessor, being legally responsible for the market value assigned to such
land and improvements upon completion of the improvements to be
constructed thereon, and in no event later than January 2, 1992, shall not
be less than $3,712,500 for Parcel A and $2,160,000 for Parcel B , prior
to termination of this Agreement.
Assessor for the County of Hennepin
STATE OF MINNESOTA)
) ss:
COUNTY OF HENNEPIN)
The foregoing instrument was acknowledged before me this ____ day
of , 1990, by , the
Assessor in and for Hennepin County, Minnesota.
Notary Public
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RESOLUTION NO.
BY
RESOLUTION APPROVING CONTRACT FOR
TAX INCREMENT FINANCE DEVELOPMENT
AND BETWEEN THE CITY OF SHOREWOOD, MINNESOT A
AND SHERMAN-BOOSALIS INTERESTS, INC.
WHEREAS, the City Council of the City of Shorewood passed
Resolution No. 36-90 on 23 April 1990, Designating and Establishing
Development District No.1; Establishing Tax Increment Financing District
No. 1 Located Within Development District No.1; and Approving and
Adopting the Development District Program for Development District No. 1
Including Tax Increment Financing Plan for Tax Increment Financing
District No.1; and
WHEREAS, Subsection 2.06 of such Development Program provides for
the City to enter into a Development Agreement for the property included
in the Development District.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Shorewood as follows:
1. That the Contract attached hereto entitled "Contract for Tax
Increment Finance Development By and Between the City of Shorewood,
Minnesota and Sherman-Boosalls Interests, Inc.", is hereby approved.
2. That the Mayor and City Clerk are hereby authorized to
execute said Contract on behalf of the City Council.
ADOPTED BY THE CITY COUNCIL of the City of Shorewood this
25th day of June, 1990.
Jan Haugen, Mayor
ATTEST:
Laurence E. Whittaker
City Administrator I Clerk
Roll C all Vote:
Ayes - Haugen, Brancel, Gagne, Stover, Watten
Nays - 0
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6/25/90
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CONTRACT
FOR
TAX INCREMENT FINANCE DEVELOPMENT
BY AND BETWEEN
THE CITY OF SHOREWOOD, MINNESOTA
AND
SHERMAN-BOOSALIS INTERESTS, INC.
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Introduction
ARTICLE I
ARTICLE II
Section 2.1
Section 2.2
ARTICLE III
Section 3.1
Section 3.2
Section 3.3
Section 3.4
Section 3.5
Section 3.6
Section 3.7
Section 3.8
. ARTICLE IV
Section 4.1
Section 4.2
ARTICLE V
Section 5.1
Section 5.2
Section 5.3
ARTICLE VI
Section 6.1
Section 6.2
Section 6.3
Section 6.4
Section 6.5
Section 6.6
Section 6.7
Section 6.8
Section 6.9
Section 6.10
Section 6.11
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TABLE OF CONTENTS
Paqe
Defini tions ..................................
Representations and Warranties
Representation and Warranties
of the City ..................................
Representations and Warranties
of the Developer .............................
Construction of the Project; Financing
and Liens
Construction of Project ......................
Commencement and Completion of Construction ..
Construction Done by City....................
General Restrictions .........................
Notice of Default ............................
Destruction of Facilities ....................
Insurance ....................................
Condemnation .................................
Assessment Agreement
Execution of Assessment Agreement ............
Real Property Taxes ..........................
Tax Increment Bonds
Issuance of Tax Increment Bonds ..............
Use of Tax Increments ........................
Developer's Guaranty .........................
General Provisions
Restrictions on Use ..........................
Conflicts of Interest ........................
Provisions Not Merged with Deed ..............
Titles of Articles and Sections ..............
Notices and Demands ..........................
Counterparts .................................
Law Governing ................................
Partial Invalidity ...........................
Assignment ...................................
Rights Cumulative ............................
Amendments, Changes, and Modifications .......
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CONTRACT FOR TAX INCREMENT FINANCE DEVELOPMENT
THIS CONTRACT, made on and entered into as of the _____ day of
, 1990, by and between the City of Shorewood, Minnesota, a
municipal corporation organized and existing under the laws of the State
of Minnesota (the City), and Sherman-Boosalis Interests, Inc., a
corporation licensed to do business in the State of Minnesota (the
Developer) .
WHEREAS, the City has all the powers of a municipal corporation
under Minnesota law; and
WHEREAS, as of the date of this Contract there has been prepared
and approved by the City Council a Development District No. 1 and the
Development Program relating thereto (which program as it may be amended,
is referred to as the "Economic Development Plan"); and
WHEREAS, there is included in the Economic Development Plan a Tax
Increment Financing Plan (which plan as may be amended is referred to as
"the Tax Increment Financing Plan"), providing for the use of tax
increment financing in connection with the Economic Development Project;
and
WHEREAS, the prompt development of the certain area in the
Economic Development Project, which is not now in productive use or in its
highest and best use, the encouragement of business expansion and
improvements, the maintenance of balanced commercial activities, and the
securing of additional employment opportunities are some of the stated
objectives of the Economic Development Plan and the Tax Increment
Financing Plan; and
WHEREAS, in order to achieve the objectives of the Economic
Development Plan and particularly to undertake certain roadway,
interchange and utility improvements in order to make the land in the
Project area suitable for development by private enterprise in conformance
with the Economic Development Plan and in accordance with the development
stage plan approved by the Council on November 20, 1989, the City has
determined to provide aid for the Economic Development Plan through tax
increment financing of the Public Improvements defined herein.
WHEREAS, the City believes that the construction of a development
consisting of 54 twin homes and approximately 50,000 square feet of
retail/office space is in the best interests of the City, 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 Economic Development Plan has been undertaken
and is receiving assistance.
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NOW, THEREFORE, in consideration of the mutual covenants herein
contained, it is hereby agreed by and between the parties hereto as
follows:
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ARTIClol"
Definitions
Section 1.1 Definitions. In this Contract unless a different
meaning clearly appears from the context:
"Articles and Sections" mentioned by number only are the
respective Articles and Sections of this Agreement so numbered.
"Assessor's Market Value" means the market value of the Project as
determined by the Assessor for the City of Shorewood.
"Assessor's Minimum Market Value" means the agreed minimum market
value for property tax purposes certified by the Assessor for the City of
Shorewood for the Project pursuant to Article IV of this Agreement and the
Assessment Agreement.
Assessment Aqreement" means the assessment agreement to be
executed by and between the City and the Developer, and certified by the
Assessor for the County, pursuant to the provisions and requirements of
Minn. Stat. Section 469.177, Subd. 8, establishing the Assessor's Minimum
Market Value.
"Bonds" means the general obligation tax increment bonds to be
issued by the City, the proceeds of which will be used to finance the
public improvements of the Project described in Section 2.1(4). The term
"Bonds" shall also include any bonds or obligations issued to refund any
bonds.
"Certification Date" means April 29, 1990, which is the date on
which the City requested certification of original tax capacity value of
Tax Increment Financing District No.1.
"City" means the City of Shorewood, Minnesota.
"Contract" means this Contract for Tax Increment Finance
Development by and between the City and the Developer, as the same may be
from time to time modified, amended or supplemented.
"Council" means the City Council of Shorewood, Minnesota.
"County" means the County of Hennepin, Minnesota.
"Developer" means the Sherman-Boosalis Interests, Inc.
"Development Property" means the real property described in
Exhibit 1 of this Contract.
"Economic Development Plan" means the City of Shorewood
Development Program for Development District No.1, originally adopted by
the Council on April 23, 1990, and as amended and as it shall be amended.
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"Economic Development Proiect" means the City of Shorewood
Development District No.1.
"Parcel A" means Parcel A as described in the legal description
attached as Exhibit 1 hereto.
"Parcel B" means Parcel B as described in the legal description
attached as Exhibit 1 hereto.
"Party" means either the Developer or the City.
"Parties" means the Developer and the City.
"proiect" means the Development Property and the completed
improvements and buildings.
"Proiect Area" means the real property located within the
boundaries of the Economic Development Project.
Public Improvements" includes (1) improvements to the State
Highway 7 frontage road, (2) upgrading of the intersection of State
Highway 7 and Old Market Road, (3) improvements to Old Market Road, (4)
installation of watermains, and (5) the closing of slip ramps onto State
Highway 7, all as further described in Exhibit 2 attached hereto.
"State" means the State of Minnesota.
"Tax Increment" means the tax increment generated by the Project,
calculated as provided in Minn. Stat. Sections 469.174 - .179.
"Tax Increment District" means the City of Shorewood Tax Increment
Financing District No.1, adopted by the Council on April 23, 1990, and
requested for certification on April 29, 1990.
"Tax Increment Financing Act" means the statutes located at Minn.
Stat. Sections 469.174 - .179.
"Tax Increment Financing Plan" means the Tax Increment Financing
Plan for the Tax Increment District.
-Tax Official" means any City or County Assessor; County Auditor,
City, or 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.
"Termination Date" means the date of expiration of the Assessment
Agreement as provided in Section 5.4.
"Unavoidable Delays" means delays, outside the control of the
Party claiming its occurrence, which are the direct result of strikes,
other labor troubles, unusually severe or prolonged bad weather, acts of
God, fire or other casualty to the Project, litigation commenced by third
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parties which, by injunction or other similar judicial action or by the
exercise of reasonable discretion, directly results in delays, or acts of
any federal, state or local government unit (other than the City) which
directly result in delays, or the failure by [date 90 days prior to latest
date on which the Project is to commence] to secure City approval of the
construction plans for the Project.
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ARTICLE -
Representations and Warranties
Section 2.1. Representations and Warranties of the City. The
City makes the following representations and warranties:
(1) The City has all the powers of a statutory city under the
laws of the State. The City has the power to enter into this Contract and
carry out its obligations hereunder.
(2) The Tax Increment District is a "tax increment financing
district" within the meaning of the Tax Increment Financing Act, and was
created, adopted and approved in accordance with the provisions of the Tax
Increment Financing Act.
(3) The Project contemplated by this Contract is in conformance
with the development objectives set forth in the Economic Development Plan
and Tax Increment Financing Plan, and in accordance with the development
stage plan approved by the Council.
(4) The City promises to use its best efforts to issue the Bonds
and use the proceeds thereof to finance the Public Improvements.
(5) The City has authority, but does not anticipate purchasing
property within the Economic Development Project.
Section 2.2 Representations and Warranties of the Developer. The
Developer makes the following representations and warranties:
(1) The Developer is a corporation under the laws of this state,
has power to enter into this Contract and to perform its obligations
hereunder.
(2) The Developer will cause the Project to be constructed,
operated and maintained in accordance with the terms of this Contract and
the Amended Development Agreement of August 12, 1985, between the City and
the developer's predecessor. The Developer shall also comply with all
local, state and federal laws and regulations (including, but not limited
to, environmental, zoning, energy conservation, building code and public
health laws and regulations).
(3) The Developer has or will obtain, or cause to be obtained,
all required permits, licenses and approvals, and has met all requirements
of all applicable local, state, and federal laws and regulations which
must be obtained or met before the Project may be lawfully constructed.
(4) Neither the execution and delivery of this Contract, the
consummation of the transactions contemplated hereby, nor the fulfillment
of or compliance with the terms and conditions of this Contract is
prevented, limited by or conflicts with or results in a breach of, the
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ARTICLE Jr
Construction of the Proiect: Financinq and Liens
Section 3.1 Construction of Proiect. The Developer agrees that
it will construct the Project, called Waterford Phase Three, including all
site improvements necessary for the construction of 54 townhomes on Parcel
B and will construct at least 32,000 square feet of retail/office space on
Parcel A, and all necessary public improvements associated with the
Project on the Development Property excluding Public Improvements to be
constructed by the City, in conformance with the Developer's plans and
specifications as the same have been submitted to and approved by the
City, and in accordance with the Amended Development Agreement dated
August 12, 1985.
Section 3.2 Commencement and Completion of Construction. Subject
to unavoidable delays, the Developer shall commence construction of the
Project:
(a) Within thirty (30) days of the signing of this Contract; or
(b) On such other date as the Parties shall mutually agree in
writing.
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The Developer shall complete construction of the Project in
accordance with the schedule set forth in the Developer's Agreement to be
executed by the parties on or prior to December 1, 1990.
The Developer, for itself, its successors and assigns,
acknowledges and agrees that, for the purpose of determining the fair
market value of the Development Property for real estate tax purposes, the
value ascribed to the Development Property as of January 2, 1992, shall be
$3,172,500 for Parcel A and $2,160,000 for Parcel B, as provided for under
the Assessment Agreement, notwithstanding the fact that the improvements
contemplated by the Developer, and further, notwithstanding the fact that
the commercial district may not then be in operation or the houses
occupied. The Developer agrees for itself and every successor in interest
to the Development Property, or any part thereof, that the Developer, and
such successors and assigns shall, in good faith, construct the Project in
accordance with this Contract and during such construction, designated
representatives of the City shall be allowed to enter upon the Development
Property to inspect any and all such construction.
Section 3.3 Construction done by City. The City agrees to
construct the "Public Improvements" defined in Section 1.1 herein.
Section 3.4 General Restrictions. The Developer agrees for
itself, and its successors and assigns, and every successor in interest to
the Property, that the Developer and its successors and assigns shall:
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( a)
Not discriminate on the basis of sex, color, creed, national
origin, in the sale, lease or rental, or in the use or
occupancy of the Property or the facilities, or any part
thereof;
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(b)
Not cause the Project to be removed from the public tax
rolls or to become exempt from assessment for general ad
valorem real estate taxes by reason of any conveyance, lease
or other action.
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Section 3.5 Notice of Default. Whenever the City shall deliver
any notice or demand to the Developer with respect to any breach or
default by the Developer in its obligations or covenants under this
Contract, the City shall at the same time forward a copy of such notice or
demand to each holder of any permitted mortgage, lien or other similar
encumbrance at the last address of such holder shown in the records of the
City.
Section 3.6 Destruction of Proiect. So long as any of the Bonds
are outstanding under this Contract, in the event of destruction of any
portion of the Project which reduces the Assessor's Market Value of the
Property below $3,172,500 for Parcel A and $2,160,000 for Parcel B, the
following shall apply:
(a) The Developer shall as soon as reasonably possible, and in
any event on or before the second succeeding December 31
following such destruction, time being of the essence,
repair, rebuild or replace the damage to such extent as will
cause the Assessor's Market Value of the Project to equal or
exceed the Assessor's Market Value thereof as finally
determined most recently prior to such destruction; or
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(b)
If such repair, rebuilding or replacement is not completed
by such date, the Developer shall be liable to the City for
damages in an amount equal to the difference between the Tax
Increment received by the City in each subsequent year and
the Tax Increment that would have been received by the City
had such repair, rebuilding or replacement been completed by
such date.
Section 3.7 Insurance. During the term of this Contract, until
the Bonds are paid in full, the Developer shall maintain (or cause to be
maintained) with reputable insurance company or companies licensed to do
business in Minnesota such insurance covering the Project including all
buildings on Parcel A in such amounts as are customarily carried on such
properties.
The Developer shall annually file with the City a schedule
describing all such policies in force, including the types of insurance,
name of insurers, policy numbers, effective dates, terms and duration and
any other information the Developer deems pertinent.
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Section 3.8 Condemnation. In the event of condemnation of any or
all of the Project, other than by the City, which reduces the Assessor's
Market Value of the completed Project below $3,172,500 for Parcel A and
$2,160,000 for Parcel B the Developer shall take the action specified in
Section 3.6(a); or if such actions cannot be performed, the Developer
shall pay to the City, an amount of the condemnation proceeds thereof
equal to the amount outstanding on the Bonds.
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ARTICLE IV
Assessment Aqreement
Section 4.1 Execution of Assessment Aqreement. The Developer
shall agree to and execute with the City an Assessment Agreement pursuant
to Minn. Stat. Section 469.177, Subd. 8, specifying the Assessor's Minimum
Market Value which shall be established with respect to the Project for
calculation of real estate taxes. Specifically, the Developer shall agree
that as of January 2, 1992, all improvements to the Project with respect
to which any real estate taxes are levied or assessed and payable by the
Developer, shall be assessed based on a market value of not less than
$3,712,500 for Parcel A and $2,160,000 for Parcel B (the Assessor's
Minimum Market Value). Nothing in the Assessment Agreement shall limit
the discretion of the assessor to assign a market value to the property in
excess of such Assessor's Minimum Market Value, nor prohibit the Developer
from seeking through the exercise of legal or administrative remedies a
reduction in such market value for property tax purposes, provided,
however, that the Developer shall not protest or seek a reduction of such
market value below the Assessor's Minimum Market Value in any year so long
as the Assessment Agreement shall remain in effect. The Assessment
Agreement shall remain in effect until December 31, 1999 (the Termination
Date). The Assessment Agreement shall be certified by the Assessor the
County as provided in Minn. Stat. Section 469.177, Subd. 8, upon a finding
by the Assessor that the Assessor's Minimum Market Value represents a
reasonable estimate based upon the plan and specifications for the
improvements to be constructed on the Development Property and the market
value previously assigned to the Development Property. Pursuant to Minn.
Stat. Section 469.177, Subd. 8, the Assessment Agreement shall be filed
for record in the office of the county recorder or registrar of titles of
Hennepin County, and such filing shall constitute notice to any subsequent
encumbrancer or purchaser of the Development Property, whether voluntary
or involuntary, and such Assessment Agreement shall be binding and
enforceable in its entirety against any such subsequent purchaser or
encumbrancer.
Section 4.2 Real Property Taxes. The Developer shall timely pay
all real property taxes payable with respect to the Development Property
and pursuant to the provisions of the Assessment Agreement and any other
statutory or contractual duty which shall accrue subsequent to the date of
its acquisition of title to the Development Property and prior to the sale
of any portion of the property, and until the Developer's obligations have
been assumed by any other person with the written consent of the City and
pursuant to the provisions of this Contract.
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The Developer agrees that prior to the Termination Date:
.
(a) It will not seek administrative review or judicial review of
the applicability of any tax statute relating to the taxation
of real property contained on the Development Property
determined by any tax official to be applicable to the
Project or the Developer or raise the inapplicability of any
such tax statute as a defense in any proceedings, including
delinquent tax proceedings;
(b) It will not seek administrative review or judicial review of
the constitutionality of any tax statute relating to the
taxation of real property contained on the Development
Property determined by any tax official to be applicable to
the Project, or the Developer, or raise the
unconstitutionality of any such tax statute as a defense in
any proceedings, including delinquent tax proceedings;
(c) It will not seek any tax deferral or abatement, either
presently or prospectively authorized under Minn. Stat.
Section 270.07, or any other state or federal law, of the
taxation of real property contained in the Development
Property between the date of execution of this Contract and
the Termination Date; and
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(d) Notwithstanding the prohibitions set out in paragraphs (a),
(b), and (c) above, nothing in this Contract shall prohibit
the Developer from seeking a reduction in the market value of
real property contained in the Development Property provided
such reduction does not fall below the Assessor's Minimum
Market Value.
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ARTICI~
Tax Increment Bonds
Section 5.1 Issuance of Tax Increment Bonds. The City agrees to
exercise its best efforts to take all steps necessary to issue the Bonds
and shall exercise its best efforts to issue the Bonds at such time as
shall, in the judgment of the City, be necessary and desirable to finance
the construction of the public improvements described in Section 2.1 (4).
Section 5.2 Use of Tax Increments. The City shall be free to use
any Tax Increment received from the Tax Increment District for any purpose
for which such increments may lawfully be used pursuant to the provisions
of Minn. Stat. Sections 469.174 - .179, and specifically:
1. To pay principal and interest on the Bonds.
2. To finance or otherwise pay the public costs set forth in the
Tax Increment Financing Plan.
3. To accumulate or maintain a reserve securing the payment when
due of the principal and interest on the Bonds or other bonds to pay
public costs.
4. Return the excess to the County Auditor for redistribution to
the respective taxing jurisdictions in proportion to their tax capacity.
The City pledges and agrees to collect from the County Auditor of
Hennepin County, Minnesota, the entire Tax Increment derived from the
Project. For purposes of this Contract, Tax Increment is received "with
respect to" a particular calendar year if the Tax Increment was generated
by ad valorem real property taxes (or taxes in lieu thereof pursuant to
Minn. Stat. Section 469.176) first becoming due and payable in such
calendar year, irrespective of when such tax Increment is actually paid to
the City.
To the extent excess Tax Increments exceed in any year the amount
necessary to pay the public costs authorized by the Development Program
and Tax Increment Financing Plan, including the amount necessary to cancel
any tax levy as provided in Minn. Stat. Section 475.61, Subd. 3, the City
shall be free to use such excess Tax Increments for any purpose,
consistent with any covenants made with respect to the Bonds, for which
the excess Tax Increments may lawfully be used as provided in Minn. Stat.
Section 469.176, Subd. 2; and the City shall have no obligations to
Developer with respect to the use of such excess Tax Increments. The City
may use the excess amount to:
(1) prepay the outstanding Bonds;
(2) discharge the pledge of Tax Increments thereto;
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(3) pay into an escrow account dedicated to the payment of the
Bonds;
(4) return the excess to the County Auditor for redistribution
to the respective taxing jurisdictions in proportion to their tax capacity
rate.
In addition, the City may choose to modify Tax Increment
Financing Plan No. 1 in order to finance additional public costs of the
Development District.
Section 5.3 Developer's Guaranty. If for any reason the tax
increment anticipated to be generated from the Development Project is
insufficient to pay the annual principal or interest due on the Bonds, the
Developer agrees to pay to the City such amounts as will be necessary so
that the City is able to pay the debt service on the Bonds, as such
payments come due. Any such payments by Developer shall be applied first
to accrued interest.
The Developer shall provide the City with an unrestricted
irrevocable letter of credit in the sum of $678,403.00. In the event,
upon 30 days written notice, the Developer shall fail to pay to the City
the amount necessary to pay the debt service on the Bonds, the City shall
be entitled to draw from the letter of credit such amounts as may be
necessary to pay the debt service. If such letter of credit is not
furnished to the City on or prior to December 1, 1990, this Contract shall
become null and void, and all parties hereto shall be released from all
obligations thereunder.
Section 5.4 Reduction of Developer's Guaranty. The letter of
credit required by Section 5.3 shall be reduced each year commencing with
the year 1994 by a sum equivalent to 80% of the tax increment collected by
the City for the previous year. In no event, however, shall such
reduction reduce the amount of the letter of credit below $224,488.00 for
the year 1995.
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ARTICLf! .-
General provisions
Section 6.1 Restrictions on Use. The Developer agrees for
itself, its successors and assigns and every successor in interest to the
Development Property, or any part thereof, that the Developer and such
successors and assigns shall devote the Development Property to, and only
to, and in accordance with the uses specified in the Shorewood City Code
or in this Contract.
Section 6.2 Conflicts of Interest. No member of the governing
body or other official of the City shall have any financial interest,
direct or indirect, in this Contract, the Project, or any contract,
agreement or other transaction contemplated to occur or be undertaken
thereunder or with respect thereto, nor shall any such member of the
governing body or other official participate in any decision relating to
the Contract which affects its personal interests or the interests of any
corporation, partnership or association in which it is, directly or
indirectly, interested. No member, official or employee of the City shall
be personally liable to the Developer or any successors in interest, in
the event of any default or breach by the City or for any amount which may
become due to the Developer or successor or on any obligations under the
terms of the Contract.
Section 6.3 Provisions Not Merqed With Deed. None of the
provisions of this Contract shall be merged by reason of any deed
transferring any interest in the Development Property, and any such deed
shall not be deemed to affect or impair the provisions and covenants of
this Contract.
Section 6.4 Titles of Articles and Sections. Any titles of the
several parts, Articles and Sections of the Contract are inserted for
convenience of reference only and shall be disregarded in construing or
interpreting any of its provisions.
Section 6.5 Notices and Demands. Except as otherwise expressly
provided in this Contract, a notice, demand or other communication under
the Contract by either party to the other shall be sufficiently given or
delivered if it is dispatched by registered or certified mail, postage
prepaid, return receipt requested, or delivered personally; and
(a) In the case of the Developer, is addressed to or delivered
personally to the Developer at the following address:
Mr. George Sherman
340 Century Plaza
1111 Third Avenue
Minneapolis, MN
South
55404-1040
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(b)
In the case of the City, is addressed to or delivered
personally to the City at the following address:
City of Shorewood
5755 Country Club Road
Shorewood, MN 55331
(c) Either party may upon written notice to the other party
change the address to which such notices and demands are
made.
Section 6.6 Counterparts. This Contract is executed in any
number of counterparts, each of which shall constitute one and the same
instrument.
Section 6.7 Law Governinq. This Contract will be governed and
construed in accordance with the laws of Minnesota.
Section 6.8 Partial Invalidity. If anyone or more of the
covenants, agreements or provisions of this Contract shall be determined
by a court of competent jurisdiction to be invalid, the invalidity of such
covenants, agreements, and provisions shall in no way affect the validity
or effectiveness of the remainder of this Contract and this Contract shall
continue in force to the fullest extent permitted by law.
Section 6.9 Assiqnment. Neither the City nor the Developer
shall have the right to assign its rights or obligations hereunder without
the written consent of the other party, except that the City may assign
all or any part of its rights and duties under this Contract (except its
obligation to issue Bonds) to any governmental unit.
Section 6.10 Riqhts Cumulative. The rights and remedies of the
parties of this Contract, whether provided by law or by this Contract,
shall be cumulative, and the exercise by either party of anyone or more
of such remedies shall not preclude the exercise by it, at the same or
different times, of any other remedies for the same default or breach or
of any of its remedies for any other default or breach of the party.
Delay by a party instituting or prosecuting any cause of action or claim
hereunder shall not be deemed a waiver of any rights hereunder.
Section 6.11 Amendments, Chanqes and Modifications. This
Contract may be amended or any of its terms modified only by written
amendment authorized and executed by the City and the Developer.
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IN WITNESS WHEREOF, the City has caused this Contract to be duly
executed in its name and behalf, and the Developer has caused this
Contract to be duly executed in its name and behalf, on or as of the date
first above written.
instrument was acknowledged before me this
, 1990, by and
, the Mayor and Administrator/Clerk,
Shorewood, Minnesota, a municipal corporation
the State of Minnesota, on behalf of the
STATE OF MINNESOTA)
) ss
COUNTY OF HENNEPIN)
The foregoing
day of
THE CITY OF SHOREWOOD, MINNESOTA
By:
Its Mayor
And
Its Administrator/Clerk
SHERMAN-BOOSALIS INTERESTS, INC.
By:
Its Chief Executive Officer
respectively, of the City of
and political subdivision of
City.
STATE OF MINNESOTA)
) ss
COUNTY OF HENNEPIN)
Notary Public
The foregoing instrument was acknowledged before me this
day of , 1990, by George Sherman, Chief Executive Officer
of Sherman-Boosalis Interest, Inc.
Notary Public
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That part of Section 25 and 36, Township 117, Range 23, (platted
and unplatted) in the City of Shorewood, Hennepin County, Minnesota
lying within and bounded by the following described line:
Commencing at the intersection of the east line of said
Section 25 and the centerline of state Trunk Highway No.7;
thence south along the east l. ine of said Section 25 and
Section 36 (said line also being the centerline of Vine Hill
Road and the easterly boundary of Shorewood) to the
southwesterly right of way lir.e of Covington Road extended:
thence northwesterly along sald southwesterly right of way
line extended and said southweste~ly right of way line to the
south right of way line of said Highway No.7; thence westerly
and southwesterly along said south right of way line of
Highway No. 7 and the southeasterly right of way line of
Radisson Road to the southcasterly extension of the
southwesterly line of Lot 24, Rad1sson Inn Addition, according
to the record plat thereof; t~ence northwesterly along said
southwesterly line and its extensions to the north right of
way line of said Highway No.7; thence northeasterly along
said north right of way line to thc east line of the west half
of the southeast quarter of said Section 25 and the Shorewood-
Deephaven boundary line: thence southerly along said boundary
line to the centerline of ~ald State Trunk Highway No. 7j
thence northeasterly along sdid centerline to the point of
beginning.
EXHIBIT 1