02-23-2005 Council Agenda - Laserfiche WebLink

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• Section 8.9 requires the Developer to provide a 5350,000 Letter of credit to the EDA to secure the obligations under Sections 6.3 and 8.3 of the Development Agreement. • Section 10 obligates the City to subordinate its rights under the Agreement to the rights of the Developer's lender. The EDA is not obligated to subordinate its rights under the Assessment Agreements to the rights of the Developer's lender. • As the Developer completes the Minimum Improvements with respect to the Parcels, the Parcels are released from the Right of Re- Entry, certain obligations of the Developer under this Agreement, but not the Assessment Agreement. • If the Developer defaults in the performance of its obligations under the Agreement the EDA may pursue any remedies available at law or in equity to recover damages the EDA has suffered or will suffer as a result of the default (unless the default is the failure to pay Tax Increment Shortfall amounts pursuant to Section 8.2, it would typically be difficult for the EDA to prove actual, monetary damages). If the default is the failure to complete construction of buildings pursuant to the requirements of Section 6.3, the EDA may, after giving notice and providing an opportunity to cure, exercise a right of re- entry. The right of re -entry provides, in essence, that if one of the described defaults occurs, title to any undeveloped portions of the Development Property reverts back to the EDA. The EDA must commence an action in Ramsey County District Court to establish the Developer's default and to obtain an order of the court transferring title back to the EDA. Purchase Agreements Each Purchase Agreement will obligate the EDA to convey one of the five Parcels to the Developer. The purchase prices are as follows: Parcel I = 3300,000, Parcels 2 -4 = SI, Parcel 5 = 8215,000. The conveyances will be made subject to the EDA's reservation of the right of re -entry described above. 4 8