11-24-2004 Council Agenda - Laserfiche WebLink

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• Section 7.3 acicnowledges that the Mellgren Property will not be subject to the terms of the Agreement or the Assessment Agreement if the Developer defaults in the perfouuance of its obligations under the Contract for Deed and fails to acquire fee title to the Mellgren Property. • Section 8.2 obligates the Developer to pay the EDA an amount equal to the amount of any "Tax Increment Shortfalls." "Tax Increment Shortfalls" are defined as the difference between $9,203 and the amount of tax increments the EDA actually receives with respect to each of the real estate tax payments due on May 15 and October 15, 2005; the difference between $36,005 and the amount of the tax increments the EDA actually receives with respect to each of the real estate tax payments due on May 15 and October 15, 2006; and the difference between $62,692 and the amount of the tax increments the EDA actually receives with respect to each of the real estate tax payments due on each May 15 or October 15 from May 15, 2007 through and including October 15, 2022. • Section 8.2 also obligates the Developer to provide the EDA, with a personal guaranty from George Sherman to secure the Developer's obligations under Section 8.2. • Section 8.3 caps the amount of the Tax Increment Shortfall the Developer is obligated to pay to the EDA in the years 2009 thru 2022. The cap is the amount of the Tax Increment Shortfall, if any, in 2008. • Sections 8.4, 8.5 and 8.6 still need to be inserted into the Agreement. The will be copied from corresponding provisions in the Development Agreement for the Commercial Property. These two Sections will obligate the EDA to apply any excess tax increments received with respect to the commercial property in a given year to satisfy any Tax Increment Shortfall relating to the townhome site before the EDA may require the Developer to pay the Tax Increment Shortfall relating to the townhome property. Conversely, it will require the EDA to apply any excess tax increments from the townhome property to cover any tax increment shortfall on the commercial property. Section 8.5 will obligate the EDA to use any excess tax increments that the EDA has on hand immediately prior to the termination of the Tax Increment District to reimburse the Developer for Tax Increment Shortfall payments the Developer has made during the term of the 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 Agreement to the rights of the Developer's lender. • As the Developer sells townhome units to individual purchasers, the units are released from the Right of Re- Entry, obligations of the Developer under this Agreement, the Assessment Agreement and the Mortgage. • If the Developer defaults in the perfouuance 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 1551028v1 -19-