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HomeMy WebLinkAbout09-14-1998 EDA CITY OF MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY MONDAY,SEPTEMBER 14, 1998 AGENDA ROLL CALL: President McCarty, Vice President Koopmeiners, Commissioner Gunn, Commissioner Quick, Commissioner Stigney 1. AGENDA ADDITIONS: 2. APPROVAL OF MINUTES July 28, 1998 EDA Minutes 3. SPECIAL ORDER OF BUSINESS: None 4. CONSENT AGENDA None 5. COUNCIL BUSINESS A. Consideration of EDA Resolution No. 98-EDA-97 Approving the Proposed changes to the development agreement pertaining to the Building N site within the Mounds View Business Park. B. Consideration of EDA Resolution No. 98-EDA-98 Authorizing the preparation of a Phase I Environmental Site Assessment [ESA] OR Phase I and II ESAs of the RentAll property, for the various reasons specified in the proposed Resolution. F. REPORTS G. ADJOURNMENT ,61 CITY OF MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY MONDAY JULY 27, 1998 ROLL CALL President McCarty called the meeting to order at 8:50 p.m., July 27, 1998. MEMBERS PRESENT: President McCarty, Vice-President Koopmeiners, Commissioners Gunn, Quick, and Stigney. ALSO PRESENT: City Administrator Chuck Whiting, Community Development Director Rick Jopke, Housing Inspector Steve Dorgan, Economic Development Director Kevin Carroll, and Recorder Dave Hix. 1. AGENDA ADDITIONS No additions were considered. 2. APPROVAL OF MINUTES MOTION/SECOND: Stigney/Koopmeiners to approve the July 13, 1998 meeting minutes as submitted. VOTE: Ayes - 4 Nays - 0 Abstain- l(McCarty) Motion carried 3. SPECIAL ORDER OF BUSINESS No special order of business was considered. 4. CONSENT AGENDA No Consent Agenda was considered. 5. AUTHORITY BUSINESS A. Discussion of HRP property - 8283 Long Lake Road Dorgan gave his report as follows: Staff was asking the Authority for direction with the property located at 8283 Long Lake Road. The property was acquired by the City in March of 1997. In October of 1997 the City Council directed staff to discuss with developers the possibilities of further developing this property. To date no development has been proposed for the property. Numerous calls have been received from private individuals wanting to develop the site as a single-family residence. Page 2 EDA July 27, 1998 MOTION/SECOND: Quick/Stigney to direct staff to continue to market the property as a subdividable lot and wait for a private proposal prior to proceeding further on the sale of the lot. VOTE: Ayes - 5 Nays - 0 Motion carried B. Discussion of Home Improvement Loan Interest Subsidy Program Dorgan gave his report as follows: Staff has been working with the EDC over the past several months to develop a Home Improvement Loan Program. Guidelines for the program have been put in resolution form which was presented to the EDA for their approval. The program was composed of two components as follows: 1. Subsidizing MHFA, Minnesota Housing Finance Agency,home improvement loans. A. Increases the maximum household income from $49,000 to $69,900 B. To be used for homes built before 1965 2. Subsidize market rate loans by a rate of 3 percent Two financial institutions will be sponsoring the programs in the City; Western Bank and The Center for Energy Environment, a nonprofit lender. Both components would use TIF funds available through the City. The City currently has allocated$130,000 for 1998. Of that amount, $5,600 has been used leaving an available balance of$124,400. This program proposes to allocate $75,000 for intersubsidies for the two components. $40,000 for the MHFA component and $35,000 for the market rate loans. The EDA recently approved the purchase of an HRP property located at 6991 Pleasant View Drive for a price of$62,500. The funds for this property will also be allocated out of the remaining $124,000 TIF funds. Staff is recommending allocating Home Improvement Loan Interest Subsidy Program funds over a two-year period to allow the purchase of this HRP property. Stigney voiced his opposition to subsidizing home improvement loans to people that can afford to do improvements with their own funds. Page 3 EDA July 27, 1998 Quick asked how prospective program participants would be qualified. Dorgan stated the person would go to the lender and the llender would establish their household income. The lender would then determine if the proposed work was on its list of qualified improvements. When all conditions of the approval process are met the bank or other lender issues the loan with the City being responsible for subsidizing the loan interest. MOTION/SECOND: Koopmeiners/Stigney to direct staff to develop a Home Improvement Loan Interest Subsidy Program and set the proposed program on a future agenda for action or further discussion. VOTE: Ayes - 5 Nays.- 0 Motion carried C. Consideration of Resolution No. 98-EDA-96,Modifying the Business Improvement Partnership Loan Program in certain respects. Carroll gave his report as follows: Staff is recommending the reactivation of the Business Improvement Partnership Loan Program that had been started in 1995. This Program was developed to assist local businesses in the expansion or improvement of their operations. The program is, or could be, one of the most visible manifestations of the city's commitment to improving the local business climate. If handled properly,the Program could engender good will and generate favorable publicity for the businesses that recieve assistance and for the City itself. The 1998 budget allocates $45,000 for Business Improvement Partnership Loans none of which has apparently been loaned, to date. The Program should first be specifically targeted to conforming businesses that are located in buildings that are structurally sound, but that are unattractive, inefficient, outdated, or in need of improvement or renovation for other valid reasons. An effort should be made to avoid generating more interest than the City has the financial means to accommodate in order to minimize ill will and/or claims of favoritism with respect to those who do receive loans. City money should not be used to improve nonconforming uses that the City may eventually want to eliminate or relocate. Loan funds should be used in a manner that would produce visible results, thereby improving not only the business in question but also the overall appearance of the City's business district. Staff is recommending eliminating the requirement that a business be in operation in Mound View for two years before becoming eligible for the Program. Given the fact that loan proceeds Page 4 EDA July 27, 1998 will generally be used for interior and exterior structural and cosmetic improvements that will stay in the City, the City will benefit from any such improvements even if other businesses eventually occupy the improved business sites. Requests from longstanding members of the local business community should be entitled to priority over a relative newcomer, all other things being equal. This is not a grant program but a loan program. The Program has a history of 100 percent repayment by all who have participated in the program. This is a prime example of how a city can "prime the pump"for improving both the tax base and also the appearance of the business community. Stigney stated he would not be in favor of changing the two-year requirement that is on the books currently. MOTION/SECOND: Stigney/Gunn to approve Resolution No. 98-EDA-96, Modifying the Business Improvement Partnership Loan Program, deleting Item A of the Resolve Clause. VOTE: Ayes - 5 Nays - 0 Motion carried D. Consideration of Resolution No. 98-EDA-95, Appointing Economic Development Commission members to fill the two current vacancies. MOTION/SECOND: McCarty/Gunn to approve, as amended, Resolution No. 98-EDA-95 striking in the "Now Therefore Be It Resolved" that the Economic Development Authority of the City of Mounds View hereby appoints Sean Walther and Wendy Marty to the Economic Development Commission, with terms expiring December 31, 2000 and December 31, 1998 respectively. Striking the rest of the recommendation that Mr. Laube be held in limbo in case somebody decides not to serve. VOTE: Ayes - 5 Nays - 0 Motion carried 6. REPORTS No reports were considered from the Commissioners or staff 7. ADJOURNMENT MOTION/SECOND: Koopmeiners/Stigney to adjourn the meeting. VOTE: Ayes - 5 Nays - 0 Motion carried Page 5 EDA July 27, 1998 There being no further business before the EDA, President McCarty adjourned the meeting at 9:20 p.m. Respectfully submitted, Daw 4/(kAA___-- Dave Hix Recorder Item No. /7 Meeting Date: 9-14-98 Staff Report No. Type of Business: EDAB WK: Work Session;PH:Public Hearing; CA:Consent Agenda;EDAB:EDA Business Mounds View Economic Development Authority Staff Re ort To: Mounds View Economic Development Authority From: Rick Jopke, Community Development Director Item Title/Subject: Amendments to the Development Agreement with the Everest Group concerning the Building N Project. Date of Report: September 11, 1998 SUMMARY The EDA has approved an original development agreement with conditions and subsequently some amendments to the agreement as requested by the Everest Group in order to facilitate the development of a vacant site in the Mounds View Business Park. The EDA has also denied other requested amendments. The Everest Group has requested additional changes to the development agreement to change the development entity, slightly reduce the size of the building, and to allow them flexibility to do a build-to-suit deal where Everest would build the building but immediately sell it to a new owner who would-occupy the building. In that situation Everest is requesting that they be released from their obligations under the development agreement and that the obligations be transfered to the new owner. A copy of the redline version of the development showing the proposed changes is attached. Jim O'Meara from Briggs and Morgan drafted the original agreement on behalf of the EDA has reviewed the proposed changes and indicated that there are no legal issues with the proposed changes. ACTION TO BE CONSIDERED Approval of EDA Resolution No. 98-EDA-97 (to be handed out at the meeting) approving the proposed changes to the development agreement pertaining to the Building N site within the Mounds View Business Park. Rick Jopke Community Development Director N:\DATA\GROUPS\ECONDEV\EDA-EDC\EDA\09-14-98.WPD E1secaLi j 9/10/98 Draft DEVELOPMENT ASSISTANCE AGREEMENT By and Between THE MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY And • MICHAEL INVESTMENTS, LTD. [BUILDING °N" PROJECT] This document drafted by: Briggs and Morgan 2200 First National Bank Building 332 Minnesota Street Saint Paul, Minnesota 55101 Telephone: (6-12) 223 -6600 Facsimile: (G12) (651) 226 ---64S0 334465.REb v5 to v4 9/10/98 Z 8 zILHLI9g8 'ON/1G:80 'LS/Zc:80 96 . I I '60 (IV) vvIvow 79 qx-niw. t+Jrua TABLE OF CONTENTS (This Table of Contents is not part of the Development Assistance Agreement and is only for convenience of reference. ) Page ARTICLE I m DEFINITIONS 1-1 Section 1 .1. Definitions 1-1 ARTICLE II —_ REPRESENTATIONS, COVENANTS AND WARRANTIES . . 2-1 Section 2.1 . Representations and Warranties by the Authority 2-1 Section 2 . 2 . Representations, Covenants and Warranties by the Developer 2-* 1 ARTICLE III THE IMPROVEMENTS 3-i Section 3 . 1. Undertakings of the Developer 3-1 Section 3 . 2 . Undertakings of the Authority 3-1 Section 3 .3 . Construction Plans 3-3 Section 3 .4 . Certificate of Completion 3-4 ARTICLE IV PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER; INDEMNIFICAATION 4-1 Section 4 . 1 . Prohibition Against Transfer of Property and Assignment of Agreement 4-1 Section 4 .2 . Release and Indemnification Covenants . 4-2 ARTICLE V EVENTS OF DEFAULT 5-1 Section 5 . 1 . Events of Default Defined 5-1 Section 5 .2 . Remedies on Default 5-1 Section 5 . 3 . No Remedy Exclusive 5-1 Section 5.4 . No Additional Waiver Implied by One Waiver 5-1 Section 5 . 5 . Default by Authority; Specific Performance. 5-2 ARTICLE VI -- Additional Provisions 6-1 Section 6 . 1. Titles of Articles and Sections 6-1 Section 6 .2 . Notices and Demands 6-1 Section 6.3 . Counterparts 6-1 Section 6 .4 . Law Governing 6-1 Section 6 .5 . Time of the Essence 6-1 Section 6 . 6 . No Third —Party Beneficiaries . . . . 6-1 ARTICLE VII a TERMINATION OF AGREEMENT; EXPIRATION 7-1 Section 7 .1 . Termination 7-1 Section 7 . 2 . Sections to Survive Termination 7-1 334455_REn v5 to v4 9/10/95 1 1 P J 71 P) IQCY 'OM/IC:Qf 'T,Q/7c :Qf QF i l 'Rn (Tuj) ^frIunw 74 CnnTuQ wnuJ EXHIBIT A --- DEVELOPMENT PROPERTY . . . . . . . . . . . . . A-1 EXHIBIT B — FORM OF EDA NOTE . . . . . . . . . . . . . . B-1 EXHIBIT C CERTIFICATE OF COMPLETION C-1 EXHIBIT D PUBLIC IMPROVEMENTS D --1 EXHIBIT E SITE IMPROVEMENTS . . . . . . . . . . . . . E --1 334455.RED v5 to v4 9/10/99 iii t, r 71 )?') 1acc nv/IC:Qn 'TQ/ac :Qn QP 1 i mn !Tuai Munvnler 79 Onnrya wnuj DEVELOPMENT ASSISTANCE AGREEMENT THIS AGREEMENT is dated as of FcLtua y 17 9gptembeT 1,4, 1998; is by and between the Mounds View Economic Development Authority and Michael Investments, Ltd. , a Minnesota ti.,da.rcirati�a general ,partnership; and provides as follows: ARTICLE I DEFINITIONS Section 1. 1 . Definitions . In this Agreement, unless a different meaning clearly appears from the context : "Agreement" means this Development Assistance Agreement by and between the Authority and the Developer, as the same may be from time to time modified, amended or supplemented. "Authority" means the Mounds View Economic Development Authority. "Board" means the Board of Commissioners of the Authority, its governing body. "fonds" means (1) the City' s $6, 000, 000 Taxable General Obligation Tax Increment Bonds, Series 1988A, dated February 1, 1988, (2) the City' s $930, 000 General Obligation Tax Increment Bonds, Series 19899, dated November 1, 1989, (3) the City's $1, 490 , 000 Taxable General Obligation Tax Increment Bonds, Series 1989C, dated November 1, 1989, (4) and any bonds or similar obligations issued by the City or the Authority to refund any of the Bonds (including without limitation (i) the City's $4, 945, 000 Taxable General Obligation Tax Increment Refunding Bonds, Series 1996B, dated May 1, 1995, and issued to "crossover refund" the above -entioned Series 1988A Bonds as of February 1, 1996; (ii) the City' s $2, 770, 000 Taxable General Obligation Tax Increment Refunding Bonds, Series 1996A, dated March 1, 1996, to the extent issued to advance refund the above --mentioned Series 1989C Bonds (pursuant to which said Series 1989C Bonds will be paid in full on February 1, 1997) ; and (iii) the City's $815, 000 General Obligation Tax Increment Refunding Bonds, Series 1996B, dated March 1, 1996, and issued to advance refund and pay in full on February 1, 1997, the above --mentioned Series 1989 Bonds) . "Certificate of Completion" means the certificate substan- tially in the form of the attached Exhibit C, to be executed by the Authority upon the conditions provided in Section 3 .4 hereof upon completion of the Improvements . 334455.RED vS to v4 9/10/98 1-1 (171)7P) 19GR '011/1G :Rfl 'i.R/RG :Rfl 96 11 (jN ) Vr)NfW RTITNcl Wf)T "City," means the City of Mounds View, Minnesota. "Construction Plans" means the plane, specifications, drawings and related documents on all construction work to be performed by or on behalf of the Developer on the Development Property, including the Improvements and all other on —_cite improvements to • be performed, installed or constructed upon the Development Property pursuant to this Agreement. Such plans shall at a minimum include, where applicable, the following: (i) site plan; (ii) foundation plan; (iii) basement plans; (iv) floor plan for each floor; (v) cross sections of each (length and width) ; (vi) elevations (all sides) ; (vii) the Design Plans; and (viii) adequate plans, drawings and specifications relating to all driveways, walks, parking and other improvements to be constructed upon the Development Property by the Developer. "Design Plana" means plans which show in adequate detail the design, architectural style, facia, signing, lighting, landscaping, parking and interior traffic components of the Improvements, or applicable portions thereof. "Developer" means The Eve.icbt ©tour Michael Investments, Ltd. , a Minnesota 1..w.1.1Ju.Lation aeneral .parinersk. , or its successors or assigns under this Agreement, 6,, any entlLj co,itroll.ug, Coiit.LO1]. j Ly cunt. of 1.4.t.h The Eve-.est , . , . • - - - . "Development Costs" means the S615, 000 current market value of the Development Property plus the unreimbursed costs incurred and paid by the Developer in making the site improvements (the "Site Improvements") for the Improvements and in installing the necessary public infrastructure improvements (the "Public Improvements") for the Improvements, all as further described and defined in Section 3 .2 . "Development District" means the Authority' s Development District No. 2, as amended. (Note: As of May 9, 1994, the Development District has been incorporated into the Authority' s Mounds View Economic Development Project. ) "Development Program" means the Authority' s Development Program for the Development District, as amended. (Note: As of May 9, 1994, the Development Program has been incorporated into the Project Plan of its Mounds View Economic Development Project . ) "Development Property" means the real property described in Exhibit A of this Agreement . "EDA Note" means the obligation substantially in the form of the attached Exhibit B which is described in Section 3 .2 . 334455.RED v5 to v4 9/10/98 1-2 _ 9 d ZILZOLI99E 'ON/IG :RO 'iS/R9:Rf] RF f ► ';in liNl) hrununur 29 :inniU4 TArnuJ "Event of Default" means any Event of Default described in Section 5 . 1 of this Agreement. "Improvements" means the approximately 103, 000 97,463 square foot building which may be constructed by the Developer as manufacturing/warehouse/office facilities to be located on the ' Development Property within the Tax Increment Finance District, and all other improvements, including walks, landscaping, utility improvements and relocations, and fixtures and equipment, to be constructed or installed upon the Development Property in connection with and in order to facilitate the above described improvements. "Party" means either the Developer or the Authority, as the context may require . "Parties" means the Developer and the Authority. "Public Improvements" means the public infrastructure improvements for the Improvements described in Section 3.2 and Exhibit D. "5j,te Improvements" means the site improvements for the Improvements described in Section 3 .2 and Exhibit E. "State" means the State of Minnesota. "Tax Increment Act" means Minnesota Statutes, Sections 469.174 through 469. 179, as the same may be amended or supplemented. "Tax Increments" means those tax increments which the Authority shall be entitled to receive and retain, and which the Authority shall have actually received, from Ramsey County from time to time from the Tax Increment Financing District pursuant to the Tax Increment Act; provided that the term "Tax Increments" shall specifically not include any amounts of tax increment generated by the Tax Increment Financing District which pursuant to the applicable terms of the Tax Increment Act (as it may exist or be amended from time to time) may be required to be paid to or reserved for the State of Minnesota, Ramsey County, or any other entity or official; and "Available Tax Increments" means 90k of the Tax Increments generated by the portion of the tax capacity of the Development Property which exceeds $22,342. "Tax Increment Financing District" means the Authority' s Tax Increment Financing District No. 1 (which has also been sometimes referred to as Tax Increment Redevelopment District No. 1) within the Development District, as now under the governance and control of the Authority, as described in Section 2.1 (C) . "Unavoidable Delays" means any delay outside the control of the Party claiming its occurrence which is the direct result of 334455.3..ED vS to 114 9/10/9B 1-3 1 4 ?IL7RL1gcR 'OM/1c :9P 'rc/ q:Rn R6 l I fl (T ) 111IOHOW 29 ST)IHR WOH4 strikes, other labor troubles, unusually severe or prolonged bad weather, unavailability of materials, Acts of God, fire or other casualtyto the Improvements, litigation (including without limitaton bankruptcy proceedings) and which directly results in delays; or acts of any federal, state or local governmental unit which directly result in delays, 334455.RED 1,5 to V4 9/10/98 1-4 7I )7,P) 19cP, MI/lG:Rf! '?r/t7c.Rf1 Rfi 1 i 'fin Goal wvnunW 29 gnniuQ Wnu� ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES Section 2. 1. Representations and Warranties by the Authority. The Authority represents and warrants that: (a) The Authority is a municipal corporation and political subdivision of the State organized and existing under the laws of the State. (b) The Authority has the authority to enter into this Agreement and carry out its obligations hereunder, subject to the same enforceability exceptions provided in Section 2.2 (a) with respect to the Developer. (c) The Authority represents that the City established the Development District and adopted its Development Program pursuant to the Minnesota Municipal Development District Act, previously found in Minnesota Statutes, Chapter 472A, and now codified in Minnesota Statutes, Sections 469.124 through 469. 134, and that the City established the Tax Increment Financing District within the Development District pursuant to the Tax Increment Act. The Authority also represents that pursuant to Minnesota Statutes, Section 469 .093, on March 28, 1994, the City Council adopted an enabling resolution and thereby established the Authority. Pursuant to Minnesota Statutes, Section 469.094, Subdivision 2, the City transferred to the Authority, and the Authority accepted from the City transfer of, the control, authority, and operation of the Development District, including the Tax Increment Financing District therein, thereby empowering the Authority to exercise all of the powers that the City could exercise with respect to the Development District, subject to the covenant and pledge by the Authority to perform the terms, conditions, and covenants of all bond indentures and other agreements executed for the security of any bonds issued and any other activities undertaken with respect to the Development District. (d) The Authority makes no representation, guarantee, or warranty, either express or implied, and hereby assumes no responsibility or liability as to the Development Property or its condition (whether regarding soils, pollutants, hazardous wastes or materials or otherwise) or that the Development Property will be suitable for the purposes or needs of the Developer. Section 2 .2 . Representation Covenants and Warranties by the Developer. The Developer represents, covenants, and warrants that: 334455.RED v5 to VA 9/10/9a 2-1 _ 6 d 7iLZELI99e Wi9 :80 '1S/17G:80 Q6 .11 '6fl (iud) mir .Inw rnnTU =unUJ (a) The Developer is a corporation duly organized, existing, and in good standing under the laws of the State of Minnesota. The Developer has full power and authority to enter into this Agreement and to perform its obligations hereunder and has taken or caused to be taken all actions necessary to make the Agreement, when executed and delivered by the Parties, the valid and binding agreement and obligation of the Developer, enforceable in accordance with its terms, except to the extent such enforceability may be limited by equitable principles and by laws affecting remedies and by bankruptcy, moratorium and insolvency laws and laws affecting creditors' rights, heretofore or hereafter enacted. (b) If the Developer completes the Improvements, they shall be completed in accordance with the terms of this Agree- ment and all applicable local, State and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations) . (c) The Developer has received no notice or communication from any local, state or federal official to the effect (and, to the best of the Developer' s knowledge, there is no other basis upon which to believe) that the execution of this Agreement or the performance by the Developer under this Agreement is, may be or will be in violation of any local, state or federal law or regulation. (d) The Developer agrees and covenants that it will use its best efforts to obtain or cause to be obtained, in a timely manner, all required permits, authorizations, licenses and approvals, including environmental and zoning approvals for the Development Property and the Improvements, and that r the Developer will meet and abide by, in a timely manner, all requirements and conditions of all such permits, authorizations, licenses, and approvals and of all applicable local, state, and federal laws and regulations which must be obtained or met before the Improvements may be lawfully undertaken and completed. (e) Neither the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby nor the fulfillment of or compliance with the terms and condi- tions of this Agreement is prevented or limited by or in conflict with or will result in a breach of the terms, conditions11or provisions of the Developer' s Articles yr t IIILJJiJUtatitJll or Dy-Laws partnership agreement or other organizational documents or of any evidences of indebtedness, agreement, or instrument of whatever nature to which the Developer is now a party or by which it or its property is bound or will constitute a default under any of the foregoing. 334455.RED v5 to v4 9/10/9B 2-2 • Ill (1 71)7P! IACD 'ON/IC :P11 '1R/CC :Pf1 PA H f 79 Qnnrua urMua (f) The Developer represents that it would not be able to undertake the Improvements in the reasonably foreseeable future without the assistance to be provided by the Authority under this Agreement. (g) The Developer currently owns the Development Property and represents that it consists of approximately 300, 038 square feet of land area. The Developer represents that the Development Property consists of tax parcel numbers 08 –_30 –_23 144 10002, .10012 and -0016 and 08 -30 –1.23 —41 °0012 and that, for property taxes payable in 1997, the tax capacity of the Development Property is $22,342. (h) The Developer acknowledges that it has reviewed Minnesota Statutes, Section 116J. 991, and entitled "Public Assistance to Business; Wage and Job Requirements, ' requiring that within 2 years of receiving the assistance provided pursuant to this Agreement, which for this purpose shall be deemed to be the 2 year period beginning on the date of the Certificate of Completion, the Developer shall comply with certain jobs and other obligations stated in the above -mentioned statute. The Developer hereby covenants to comply with said obligations, and the Parties agree that said goal level shall be the creation of at least 2 permanent full = _time jobs within the applicable 2 year period. The Developer acknowledges and agrees that, as required by this statutory provision, failure to meet said goals will result in an Event of Default hereunder and in an obligation of the Developer to repay all of the assistance provided pursuant to this Agreement. The Developer further agrees that said jobs shall have an hourly wage of at least $6.50 per hour, inclusive of - benefits. This subparagraph shall not be construed as imposing on the Developer any obligation beyond the scope and purpose of the above -7mentioned statute to maintain or provide minimum employment and wage levels . The Developer further agrees to provide to the Authority in a timely manner, or to the State of Minnesota, as may be applicable, with such information and detail about the Improvements as may be necessary, including information relating to the employment and wage levels described in this subparagraph and the compliance with any reporting requirements imposed by law with respect thereto on either the Authority or the Developer. (i) In practice, the Developer reasonably expects that upon the completion and full occupancy of the Improvements there could well be as many as 20 jobs provided, but this expectation is not intended by the Parties and shall not be construed as a performance covenant hereunder or a standard against which compliance with subsection (h) above or Minnesota Statutes, Section 116J.991, shall be determined. 334455.RED VE to v4 9/1O/99 2-3 11d 7 l 1 Z9'L 19G9 'OIC/19 :90 1S/99 :90 96 11 60 (INd) NI/DHOW SDo INR ONd ARTICLE III THE IMPROVEMENTS Section 3 .1 . Undertakings of the Developer. Subject to Unavoidable Delays, the Developer agrees to exercise reasonable effort to cause the Improvements to be completed. The Authority acknowledges that the Developer's ability to construct the Improvements is subject to current market conditions, including without limitation the availability of tenants, owners and financing and that the Developer is not obligated to cause the construction of the Improvements on a speculation basis. Pursuant to prior agreement of the Parties the Authority retained the services of Dahlen & Dwyer to prepare an appraisal (the "Appraisal") of the fair market value of the Development Property based on its present state and the type of use represented by the Improvements. The fair market value of the Development Property is determined to be $615, 000 pursuant to the Appraisal. The Developer shall pay or reimburse the Authority for the $1, 500 cost of the Appraisal. The Authority has provided the Developer with a copy of the completed Appraisal. Section 3 . 2 . Undertakings of the Authority. The Developer hereby represents to the Authority that the Developer (aal/,, its ' - = has incurred and paid or will incur and pay the Development Costs, hereby defined to be the sum of (1) the current fair market value of the Development Property, being $615, 000, as indicated in the Appraisal; (2) the demonstrated costs of the public infrastructure improvements (the "Public Improvements") described in Exhibit D, but only if and to the extent the costs thereof are unreimbursed expenses of the Developer which are not repayable by special assessment or other means; and (3) the demonstrated and unreimbursed costs of the Developer incurred in making the necessary site improvements (the "Site Improvements") to the Development Property in connection with the completion of the Improvements, as described in Exhibit E. The Authority hereby agrees to defray the Developer' s Development Costs via the issuance of the EDA Note in the maximum principal amount equal to the lesser of (1) $1,200, 000 and the (2) sum of the demonstrated costs of the Site Improvements and the Public Improvements (unless specifically assessed) plus the $615, 000 fair market value of the Development Property under the Appraisal . The EDA Note shall be issued to the Developer (or to such other person or entity as the Developer shall have theretofore designated in writing to the Authority as the initial registered owner of the EDA Note) , as registered owner thereof, substantially in the form of Exhibit B to this Agreement, the issuance of which EDA Note is hereby authorized and approved, subject to the following conditions : 334455.RFD v5 to v4 9/10/98 3-1 71 d 710Z19gE 'OSI/19:90 '.rS/99:80 86 .11 '60 (I ,4) ttVflufW 29 mug wnua (a) The EDA Note shall be dated, issued and delivered on or as soon as practicable following the date of execution and delivery of this Agreement, provided no Event of Default shall have occurred and be at the time continuing. (b) As conditions to such reimbursement of Development Costs pursuant to the EDA Note, (i) the Authority shall have executed the Certificate of Completion, (ii) the Developer shall have submitted to the Authority such documentary proofs as shall be reasonably acceptable to the Authority demonstrating the final, as incurred, costs of the above – described Public Improvements and Site Improvements, and (iii) there shall have been satisfied all of the conditions precedent thereto provided in Section 3 .4 . (c) Subject to the provisions of the EDA Note, the principal of and interest on the EDA Note shall in the aggregate be payable on each February 1 and August 1, commencing with the first August 1 or February 1 (as the case may be) following the date of the Certificate of Completion, and continuing through February 1, 2014 (the "Payment Dates") , in the respective amount or amounts described in this subsection. The sole source of funds available for payment of the Authority' s obligations under this Section and correspondingly under the EDA Note shall be the Available Tax Increments. The amounts otherwise payable on the EDA Note on each Payment Date shall be limited to the Available Tax Increments received by the Authority within the preceding 6 months. All payments made on the EDA Note shall be applied first to pay accrued and unpaid interest on the EDA Note and second toward payment of principal. All amounts of Tax Increments which are not Available Tax Increments are not subject to this Agreement, and the Authority retains full discretion as to any authorized application thereof, regard- less of whether the Available Tax Increments are sufficient to reimburse the Developer in full for the above =described costs. To the extent that the Available Tax Increments are insufficient, through the final Payment Date (February 1, 2014) , to pay all accrued and unpaid interest on and the principal of the EDA Note, said unpaid amounts shall then cease to be any debt or obligation of the Authority whatsoever. (d) The unpaid principal of the EDA Note shall bear simple, non -compounded interest from the date of the Certificate of Completion at 8. 00 per annum. Interest shall be computed on the basis of a 360 –:day year consisting of 12 months of 30 days each. (e) The EDA shall not endeavor to issue the EDA Note so that the interest thereon shall be exempt from federal or 334455.R.ED v5 to v4 9/i0/9e 3-2 21 d Z1L?EL1gg2 'ON/lc:20 'iS/4G :RO R6 11 '6f1 (iva) mum CnniNQ wnm State income taxation, and the Parties accordingly anticipate that the EDA Note will be a "taxable" obligation. (f) The EDA Note shall be a special and limited revenue obligation of the Authority and not a general obligation of the Authority, and only Available Tax Increments shall be used to pay the principal of and interest on the EDA Note. The EDA Note shall not be any obligation whatsoever of the City. (g) The Authority's obligation to make payments on the EDA Note shall be conditioned upon the requirement that there shall not at the time have occurred and be continuing an Event of Default; provided, however, that if such Event of Default shall subsequently have been cured to the reasonable satisfaction of the Authority, such unpaid obligations shall thereupon be reinstated and thereby become due and payable. (h) The EDA Note shall be governed by and payable pursuant to the additional terms thereof, as set forth in Exhibit B. In the event of any conflict between the terms of the EDA Note and the terms of this Section 3 .2, the terms of the EDA Note shall govern. (i) Following any termination of this Agreement by the EDA pursuant to Section 5 .2 or 3 .4 (c) hereof, no further or unpaid amounts of the EDA Note shall then or thereafter be due and payable by the Authority under this Section or the EDA Note but shall thereupon be extinguished. (i) The pledge of the Available Tax Increments made in this Section 3 .2 and in the EDA Note to payment of the EDA Note shall in all respects be junior and subordinate to the pledge of and need for the Tax Increments to provide timely payment of the debt service on the Bonds; provided, however, that the Authority does covenant to the Developer to apply all other Tax Increments (that is, all Tax Increments other than the Available Tax Increments) to such purposes and to resort to Available Tax Increments only in the event that said other increments are insufficient for such debt service purposes. Section 3 .3 . Construction Plans. (a) The Authority shall have no obligation to the Developer to take any action pursuant to any provision of this Agreement until such time as the Developer has submitted Construction Plans to the Authority, and the Authority has approved such Construction Plans. The Authority shall approve the Construction Plans if it determines that they conform to the applicable provisions of this Agreement; provided, however, that any such approval of the Construction Plans pursuant to this Section 3 .3 shall constitute approval for the purposes of this Agreement only and shall not be deemed to 334455.RED v5 to 1'4 9/10/98 3-3 bi ri 71)P) 1QCPY1k1/1C :Rf1 'iC/1C :Qn QF 11 's;fl lival nrvnvnur (Inn= nv constitute approval or waiver by the Authority with respect to any building, zoning or other ordinances or regulation, and shall not be deemed to be sufficient plans to serve as the basis for the issuance of a building permit if the Construction Plans are not as detailed or complete as the plans otherwise required for the issuance of a building permit. Such Construction Plans must be rejected in writing by the Authority within 10 working days of submission or shall be deemed to have been approved by the Authority. Any rejection of the Construction Plans shall state in writing the Authority's reasons therefor. If the Authority rejects the Construction Plans in whole or in part, the Developer may submit new or corrected Construction Plans within 30 days after receipt by the Developer of written notification of the rejection, accompanied by a written statement of the Authority specifying the respects in which the Construction Plans submitted by the Developer fail to conform to the requirements of this Section 3 .3. The provisions of this Section 3.3 relating to approval, rejection and resubmission of the Construction Plans shall continue to apply until the Construction Plans have been fully approved by the Authority. Approval of the Construction Plans by the Authority shall not relieve the Developer of any obligation to comply with the provisions of this Agreement or the provisions of applicable federal, state and local laws, ordinances and regulations, and approval of the Construction Plans by the Authority shall not be deemed to constitute a waiver of any Event of Default. (b) If the Developer desires to make any material change in the Construction Plans after their approval by the Authority, the Developer shall submit the proposed change to the Authority for its approval or rejection pursuant to this Section. A proposed change in the Construction Plans shall be deemed approved unless rejected by the Authority in writing within 10 working days of submission thereof with a statement of the Authority' s reasons for such rejection. Section 3 .4 . Certificate of Completion. (a) Promptly after completion of the Improvements in accordance with the provisions of this Agreement, and upon written request made to the Authority, the Authority will execute the Certificate of Completion in the form attached hereto as Exhibit C, which shall then be a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement with respect to the completion of the Improvements. The following shall be conditions precedent to the Authority' s obligation to execute the Certificate of Completion: (i) There shall exist no Event of Default hereunder, and the Improvements shall have been 334455.RED v5 to V4 9/10/98 3-4 51 d Z 1 LZBL 1998 'ON/I 8 :80 'ZS/)_c:80 96 .I ►. '60 (1N,d) tjynvnw 29 c nn.i c wnw completed in substantial conformity to the terms of this Agreement; (ii) The City shall have issued a Certificate of Occupancy for the Improvements. (b) If the Authority determines that it cannot execute the Certificate of Completion, it eha1l, within 20 days after written request therefor, provide a written statement indicating in adequate detail why it cannot do so and also indicating what measures or acts it will be necessary to be taken or performed in order to permit execution of the Certificate of Completion_ (c) If the Developer does not substantially complete the Improvements by December 31, 1999, the Authority may terminate this Agreement upon 30 days prior written notice to the Developer. Upon such termination, neither Party shall have any further right, title, obligation or interest hereunder, except as provided pursuant to Section 7.2 . • 334455.1ED v5 to v4 9/10/99 3-5 at J 71)7,x') IOW 'Mi/IIQ ;P(1 'ir/Qc:Qf? P6 I I 'Fa03141 Nrxnunw 2i gnnruQ ern ARTICLE IV PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER; INDEMNIFICATION Section 4 .1. Prohibition Against Transfer of Progerty and Assignment of Agreement. The Developer represents and agrees that prior to the execution of the Certificate of Completion: (a) Except only by way of security for the purpose of obtaining financing necessary to enable the Developer or any successor in interest to the Development Property, or any part thereof, to perform its obligations with respect to the Improvements under this Agreement, and any other purpose authorized by this Agreement, the Developer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or any transfer in any other mode or form, of or with respect to the Agreement or the Development Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, except for the leasing of portions of the Improvements in the ordinary course of the Developer' s business of developing and leasing facilities such as the Improvements, without the prior written approval given by the Authority in its sole discretion; provided, however, if the Developer wishes to assign this Agreement, the Authority will not unreasonably withhold approval thereof if the conditions stated in subsection (b) below are met,; and provided further _that this Section 4,1. shall not -rohibit ,or im-ose conditions u.on the Developer's execution of an agreement for the sale of the Development Property as lona as said ,aczeement provides that the clpsin- and actual conve ance of the Develo-ment Pro-ert thereunder may not _oecur until after the execution of the Certificateyof Co• •letion but the Develo-er shall not be released from its ob4gations hereunder except_as,provided in Section 4.2 (e) . (b) The Authority shall be entitled to require, except as otherwise provided in the Agreement, as conditions to any such approval that: (i) Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Developer. 334455.RZ v5 Co v4 9/10198 4-1 LI d Z f L78L 1998 'oN/19 :80 'ZS/8G:80 86 ,l l '60 (111d) munw 29 cnn lug wnua (ii) Any proposed transferee, by instrument in writing satisfactory to the Authority, shall, for itself and its successors and assigns, and expressly for the benefit of the Authority, have expressly assumed all of the obligations of the Developer under this Agreement and agreed to be subject to all the conditions and restrictions to which the Developer is subject unless the Developer agrees to continue to fulfill those obligations. In addition, the Authority may require the Developer and/or the transferee to join in such agreements as the Authority may reasonably determine to be necessary to clarify the respective rights and obligations of the interested parties, e.g. , to obtain a waiver and acknowledgement from the transferee if that transferee is not also becoming the registered owner of the EDA Note. (iii) There shall be submitted to the Authority for review and prior written approval all instruments and other documents involved in effecting the transfer of any interest in this Agreement or the Development Property; provided that the purposes of said review and approval shall be only to ascertain that said documents do not contravene the terms of this Agreement and sufficiently provide for the intended and permitted transfer. Specifically, but without limitation, the economics of the transfer, as between the Developer and its transferee, shall not be a basis for the Authority to withhold consent thereto. Section 4 .2 . Release andIndemnification Covenants. (a) The Developer releases from and covenants and agrees that the Authority and the governing body members, officers, agents, including its independent contractors, consultants and legal counsel, servants and employees thereof (hereinafter, for purposes of this Section, collectively the "Indemnified Parties") shall not be liable for and agrees to indemnify and hold harmless the Indemnified Parties against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Improvements, provided (1) that the foregoing indemnity shall not apply to any liability arising pursuant to an act or omission of any of the Indemnified Parties and (2) that the claim or matter against which such indemnification is sought 334455.RED v5 to v4 9/10/98 4-2 Ql 4 7117 ) IQCP nM/1C :Qfl •TQ/Qc:Q(1 QP n (Tu3) \TvnvmAT 17 cinnTItcT tarn*.t- is based upon the acts of the Developer or others acting on its behalf or under its direction or control. (b) Except for any willful misrepresentation or any willful or wanton misconduct of the Indemnified Parties, the Developer agrees to protect and defend the Indemnified Parties, now and forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Improvements, provided (1) that this indemnification shall not apply to the warranties made or obligations undertaken by the Authority in this Agreement and (2) that the claim or matter against which such indemnification is Bought is based upon the acts of the Developer or others acting on its behalf or under its direction or control. (c) All covenants, stipulations, promises, agreements and obligations of the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and not of any governing body member, officer, agent, servant or employee of the Authority. (d) This Agreement shall not create and shall not be construed to create any partnership, joint venture, agency or employment relationship between the Parties. (e) Notj tandingr the foregoixu7 to the contrary, after the , execution of the Certificate of C• , •let'on if the Developer transfers the Development Property- to a third paritx and_said third party accepts the obligations of_the Developer, hereunder, and if the conditions stated in Section 41,. b) are satisfied, the Developer shall, in . 1 agreement with the Authority vidinq the sam@�be released from all obligations and liabilities under this Section _4` except fob a�7� liabilities which may arise with respect to actions taken or circuatgtances existing prior, to the effective date of said release. 334455_RED Y5 to v4 9/10/3B 4-3 61 4 71!78) tgg2 Ml/1q :pfl 'LS/6C :fl R6 .l l '60 (1N,J) VONoW S0D1NN WON4 ARTICLE V EVENTS OF DEFAULT Section 5 . 1. Events of Default Defined. The following are Events of Default under this Agreement : Failure in the substantial observance or performance of any covenant, condition, obligation, or agreement on the part of the Developer to be observed or performed under this Agreement. An Event of Default shall also include any occurrence which would with the passage of time or giving of notice become an Event of Default as defined hereinabove. Section 5. 2. Remedies on Default. Whenever any Event of Default occurs, in addition to all other remedies available to the Authority at law or in equity or elsewhere in this Agreement, (1) the Authority may suspend its performance under the Agreement until it receives assurances from the Developer, deemed adequate by the Authority, that the Developer has cured its default and will continue its performance under the Agreement and (2) , after provision of 30 days written notice from the Authority to the Developer of the Event of Default, but only if the Event of Default has not been cured within said 30 days, or if the Event of Default cannot be cured within 30 days, the Developer does not provide assurances to the Authority reasonably satisfactory to the Authority that the Event of Default will be promptly cured, then the Authority may terminate this Agreement. _ Section 5 . 3 . No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient . Section 5 .4 . No Additional Waiver T.mplied by One Waiver. If any agreement contained in this Agreement should be breached by any Party and thereafter waived by any other Party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. 334455.RED v5 to v4 9/10/98 5-1 f7 7112P1 lQcP 'oN1/1c :gfl '?R/Fc:Qf QA r '.Rn (TUJ1 krIMINAT CnnTIM wrIUJ Section 5 .5 . Default by Authority: Specific Performance. If the Authority is in default of its obligations under this Agreement, the Authority agrees that the Developer shall have the remedy of specific performance, in addition to such other remedies as the Developer may have administratively, at law or in equity. In such event, the Developer may suspend its performance hereunder until it receives assurances reasonably satisfactory to the Developer that the default of the Authority will be cured as soon as reasonably possible. 334455.RED v5 to Y4 9/10/98 5-2 17 ,J 71)7P) 1QCP W1c :fl '1R/nn:fin PA 11 .An 11x41 ttiv?!N(11N 79 R?1f 1AQ ARTICLE VI Additional Provisions Section 6.1, Titles of Articles and Sections. Any titles of the several parts, Articles and Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting, any of the provisions hereof, Section 6 .2. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand or other communication under the Agreement by either Party to the other shall be sufficiently given or delivered if sent by regular mail, postage prepaid, or delivered personally or telecopied, (a) in the case of the Developer, to Michael. Investments, Ltd. , 2665 Long Lake Road, Suite 120, Roseville, Minnesota 55113, Attention: Jeffrey L. Nielsen, President; with a copy to Glenn Bergman, Peterson, Pram & Bergman, 300 Princeton Bank Building, 50 East Fifth Street, St. Paul, Minnesota 55101 -1197; and (b) in the case of the Authority, to the Mounds View Economic Development Authority at the Mounds View City Hall, 2401 Highway 10, Mounds View, Minnesota 55112, Attention: Mounds View EDA Executive Director. 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 Party as provided in this Section. Section 6 .3 . Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute an original hereof and all of which shall constitute one and the same instrument. Section 6 .4 . Law Governing. The parties agree that this Agreement shall be governed and construed in accordance with the laws of the State of Minnesota. Section 6.5. Time of the Essence. Time shall be of the essence in this Agreement . Section 6.6. No Third --Party Beneficiaries. There shall, as against the Authority, be no third warty beneficiaries to this Agreement . More specifically, the Authority enters into this Agreement, and intends that the consummation of the Authority obligations contemplated hereby shall be, for the sole and exclusive benefit of the Developer, and notwithstanding the fact that any other "persons" may ultimately participate in or have an interest in the Project, or any portion thereof, the Authority does 334455.RED v5 to v4 9/10/98 6-1 % F,lL? Ll9Gg 'ON/19 :20 U/011:60 R6 .11 .6R (JL ) NivnTnw mug wnuu not intend that any party other than the Developer shall have, as alleged third party beneficiary or otherwise, any rights or interests hereunder as against the Authority, and no such other party shall have standing to complain of the Authority's exercise of, or alleged failure to exercise, its rights and obligations, or of the Authority' s performance or alleged lack thereof, under this Agreement. 334455.RED v5 to v4 9/10/98 6-2 8Z d Z I L78L 1998 'OSI/l9 :90 1S/00:60 96 .l 1 '60 (INA) Nvwow W inn tui WOW ARTICLE VII TERMINATION OF AGREEMENT; EXPIRATION Section 7. 1. Termination. The Authority may terminate this Agreement as provided herein, and otherwise this Agreement shall terminate upon payment of the EDA Note in accordance lith its terms and the discharge of all of the Parties ° other respective obligations hereunder, but no such. termination shall terminate any indemnification or other rights or remedies arising hereunder due to any Event of Default which occurred prior to such termination. Section 7.2 . Sections to Survive Termination. Section 4 .2 shall, in addition to the other surviving provisions referenced in Section 7. 1, survive the termination of this Agreement. IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf by its duly authorized representatives, and the Developer has caused this Agreement to be duly executed in its name and behalf by its duly authorized representatives on or as of the date first above written. MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY By President By r Executive Director MICHAEL INVESTMENTS,, LTD. By Its President By Its Chairman of the Board [Execution page of Development Assistance Agreement with the Mounds View Economic Development Authority. ] 334455.RFS 7 r v5 to v4 9/10/98 bZ d 21)78) IPGR 'QUI/Iq :pfl iR/If: l Rfi 11 n(m) mimunw rnnrua wnw EXHIBIT A DEVELOPMENT PROPERTY The Development Property consists of the following described properties, all located in the City of Mounds View, Ramsey County, Minnesota: Current Tax Parcel Nos. 08 L30 L23 -0012, 08 -7,30 -723 -=_44 -_0002, 08 -x-30 -n23 -=_44 =0012 and 08 -30 -23 1144 -0016, said parcels constituting the following described property: Lot 3, Block 3, PROGRAMMED LAND FIRST ADDITION Lot 2, Block 1, PROGRAMMED LAND SECOND ADDITION That part of Outlot A, MOUNDS VIEW BUSINESS PARK, lying east of a line beginning at a point on the south line of said Outlot A, said point being South 89 degrees 19 minutes 21 seconds East, assumed bearing, 409. 00 feet from the southwest corner of said Outlot A; thence North 31 degrees 43 minutes 48 seconds East 19 .26 feet to the north line of said Outlot A and said line there terminating; That part of the south 5 acres of Lot 2, Block 2, PINECREST ADDITION lying east of a line beginning at a point on the north line of said south 5 acres, said point being 414.36 feet east of the northwest corner of said south 5 acres; thence south at an angle of 90 degrees 00 minutes 00 seconds right to the south line of said Lot 2, and said line there terminating. (NOTE: Said parcels to be replatted as Lot 1, Block 1, MOUNDS VIEW BUSINESS PARK EAST 2ND ADDITION) 334455.RED v5 to v4 9/10/98 A-1 c7 r ?t 17Q) 1CCQ •n r/IC :Qn .Tr/in.Ff QF ! ! Fn ova) murgmw 14 Qnn Tug Tow EXHIBIT B FORM OF EDA NOTE No. R --1 • UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF RAMSEY MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY TAXABLE TAX INCREMENT REVENUE NOTE OF 1998 (BUILDING "N" PROJECT) [1] The Mounds View Economic Development Authority (the "EDA") hereby acknowledges itself to be indebted and, for value received, hereby promises to pay to or its registered assigns (the "Registered Owner") , but only in the manner, at the times, from the sources of revenue, and to the extent hereinafter.provided, the Principal Amount of this Note (as defined in paragraph [2] hereof) and to pay interest on the unpaid portions of the Principal Amount of this Note at the rate of interest of eight and no hundredths percent (8 . 00%) per annum. Interest shall accrue from the date of the Certificate of Completion and ehall be computed on the basis of a 360 —_day year consisting of 12 30 qday months. Thie Note is the "EDA Note" described and defined in that certain Development Assistance Agreement, dated as of Feblaazy 1? September 14, 1998 (as the same may be amended from time to time, the "Development Agreement") , between the EDA and The Eve.LcbL ©.Loup Michael Investments, Ltd. , a Minnesota 1.u,ck,ndl.aLrua4 gerne�ral partnerhip., as the initial Developer under the Development Agreement. Each capitalized term which his used but not otherwise defined in this Note shall have the meaning given to that term in the Development Agreement. [2] The Principal Amount of this Note shall be the lesser of (1.) $1, 200, 000 and (2) the $615, 000 appraised value of the Development Property determined pursuant to the Appraisal plus the amounts of costs for both the Public Improvements (unless specially assessed) and the Site Improvements, all as completed in the subsequent certification thereof which appears hereinafter in this Note. [3] Subject to the terms hereof, amounts due on this Note shall be payable on each February 1 and August 1, commencing on the first August 1 or February 1 (as the case may be) following the 334455,H.ED N'S to "4 9/10/96 B-1 - n7 T 7T 17C! 1!l('C 'fk!/1l 'Ofl .To/rn'gfl OF ! r 'pn r't?T' kruntrnur ro nhnrnrt urntrr date of the Certificate of Completion and continuing through February 1, 2014 (the "Payment Dates") . [4] On each Payment Date (or, if not a business day of the EDA, the first business day thereafter) the EDA shall pay by check or draft mailed to the person that was the Registered Owner of this Note at the close of the last business day of the EDA preceding such Payment Date an amount equal to the lesser of (1) the Available Tax Increments received by the EDA within the S --month period preceding said Payment Date and (2) the sum of (i) the accrued and unpaid interest hereon and (ii) the aggregate amount of the unpaid principal of this Note. The EDA shall have the option at any time to prepay in whole or in part the principal amounts of this Note at par plus accrued interest. All payments made by the EDA under this Note shall be applied first to pay accrued and unpaid interest on this Note and second toward payment of principal hereof. C51 This Note shall terminate and be of no further force and effect on any date upon which the EDA shall have terminated the Development Agreement, on the last Payment Data (February 1, 2014) following payment thereon of the Available Tax Increments then due, or on the date that all principal and interest payable hereunder shall have been paid in full, whichever occurs earliest. [6] The pledge of Available Tax Increments to the payment of this Note is junior and subordinate to the need and use thereof for payment of the Bonds, all as defined and described in the Development Agreement. [7] The EDA makes no representation or covenant, express or implied, that the revenues described herein will be sufficient to pay, in whole or in part, the amounts which are or may otherwise become due and payable hereunder. Any amounts which remain unpaid on this Note following the final Payment Date (February 1, 2014) shall no longer be a debt or obligation of the EDA whatsoever. [8] The EDA' s payment obligations hereunder shall be further conditioned on the fact that there shall not at the time have occurred and be continuing an Event of Default under the Development Agreement, and, further, if pursuant to the occurrence of an Event of Default under the Development Agreement the EDA elects to terminate the Development Agreement, the EDA shall have no further debt or obligation under this Note whatsoever. Reference is hereby made to the provisions of the Development Agreement for a fuller statement of the obligations of the Developer and of the rights of the EDA thereunder, and said provisions are hereby incorporated by reference into this Note to the same extent as though set out in full herein. The execution and delivery of this Note by the EDA, and the acceptance thereof by the Developer or its designee, as the initial Registered Owner hereof, shall conclusively establish this Note as the "EDA Note" 334455.RED v5 to VA 9/10/98 B-2 17 71?7F,J 1acR 'Qt,1/1G :Rl '1.R/7fl: fl P6 11 '6fl (1Nf AfVt13.1f1AJ 29 ryflfjUQ TA(1UJ EXHIBIT B FORM OF EDA NOTE No. R --1 UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF RAMSEY MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY TAXABLE TAX INCREMENT REVENUE NOTE OF 1998 (BUILDING "N" PROJECT) [1] The Mounds View Economic Development Authority (the "EDA") hereby acknowledges itself to be indebted and, for value received, hereby promises to pay to or its registered assigns (the "Registered Owner") , but only in the manner, at the times, from the sources of revenue, and to the extent hereinafter provided, the Principal Amount of this Note (as defined in paragraph (2] hereof) and to pay interest on the unpaid portions of the Principal Amount of this Note at the rate of interest of eight and no hundredths percent (8 . 00$) per annum. Interest shall accrue from the date of the Certificate of Completion and shall be computed on the basis of a 360 –_day year consisting of 12 30 -day months. This Note is the "EDA Note" described and defined in that certain Development Assistance Agreement, dated as of FeldrumLy 1:7 September 14, 1998 (as the same may be amended from time to time, the "Development Agreement") , between the EDA and 'Ile Eve.zc-abl. GLoup Michael Investment, Ltd. , a Minnesota 1...vLrtrLat.1011 general partnership, as the initial Developer under the Development Agreement. Each capitalized term which his used but not otherwise defined in this Note shall have the meaning given to that term in the Development Agreement. [2] The Principal Amount of this Note shall be the lesser of (1) $1, 200 , 000 and (2) the $615, 000 appraised value of the Development Property determined pursuant to the Appraisal plus the amounts of costs for both the Public Improvements (unless specially assessed) and the Site Improvements, all as completed in the subsequent certification thereof which appears hereinafter in this Note. (3] Subject to the terms hereof, amounts due on this Note shall be payable on each February 1 and August 1, commencing on the first August 1 or February 1 (as the case may be) following the 334455,RED v5 to v4 9/10/98 B-1 n7 T 7117r1 inns •n Ar/To'on •-n /tn•rn nG IT .nn /-771 kr!rntt«TAr ro rnnT=" •ArntT- date of the Certificate of Completion and continuing through February 1, 2014 (the "Payment Dates") . (4] On each Payment Date (or, if not a business day of the EDA, the first business day thereafter) the EDA shall pay by check or draft mailed to the person that was the Registered Owner of this Note at the close of the last business day of the EDA preceding such Payment Date an amount equal to the lesser of (1) the Available Tax Increments received by the EDA within the 6 --month period preceding said Payment Date and (2) the sum of (i) the accrued and unpaid interest hereon and (ii) the aggregate amount of the unpaid principal of this Note. The EDA shall have the option at any time to prepay in whole or in part the principal amounts of this Note at par plus accrued interest. All payments made by the EDA under this Note shall be applied first to pay accrued and unpaid interest on this Note and second toward payment of principal hereof. (5] This Note shall terminate and be of no further force and effect on any date upon which the EDA shall have terminated the Development Agreement, on the last Payment Date (February 1, 2014) following payment thereon of the Available Tax Increments then due, or on the date that all principal and interest payable hereunder shall have been paid in full, whichever occurs earliest. (6] The pledge of Available Tax Increments to the payment of this Note is junior and subordinate to the need and use thereof for payment of the Bonds, all as defined and described in the Development Agreement. [7] The EDA makes no representation or covenant, express or implied, that the revenues described herein will be sufficient to pay, in whole or in part, the amounts which are or may otherwise become due and payable hereunder. Any amounts which remain unpaid on this Note following the final Payment Date (February 1, 2014) shall no longer be a debt or obligation of the EDA whatsoever. [8) The EDA' s payment obligations hereunder shall be further conditioned on the fact that there shall not at the time have occurred and be continuing an Event of Default under the Development Agreement, and, further, if pursuant to the occurrence of an Event of Default under the Development Agreement the EDA elects to terminate the Development Agreement, the EDA shall have no further debt or obligation under this Note whatsoever. Reference is hereby made to the provisions of the Development Agreement for a fuller statement of the obligations of the Developer and of the rights of the EDA thereunder, and said provisions are hereby incorporated by reference into this Note to the same extent as though set out in full herein. The execution and delivery of this Note by the EDA, and the acceptance thereof by the Developer or its designee, as the initial Registered Owner hereof, shall conclusively establish this Note as the "EDA Note" 334455.= v5 to v4 9/10/98 13-2 - 7 • 71 17c IncC 'nKi/1n 'on •Th /7f11pf1 ^F 1 r .af} (TITr1, kruT UnTAT ?D 1,'\f\TtTQ wnuI (and shall conclusively constitute discharge of the EDA' s obligation to issue and deliver the same) under the Development Agreement. [9] This Note is not any obligation of any kind whatsoever of any public body, except that this Note is a special and limited revenue obligation but not a general obligation of the EDA and is payable by the EDA only from the sources and subject to the qualifications and limitations stated or referenced herein. Neither the full faith and credit nor the taxing powers of the EDA are pledged to or available for the payment of the principal of or interest on this Note, and no property or other asset of the EDA, save and except the above referenced Available Tax Increments, is or shall constitute a source of payment of the EDA' s obligations hereunder, [10] This Note is issued by the EDA in aid of financing a project pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469. 174 through 469.179. [111 This Note may be assigned but upon such assignment the assignor shall promptly notify the EDA thereof in writing, and the assignee shall surrender this Note to the EDA either in exchange for a new fully registered note or for transfer of this Note on the registration records for the Note maintained by the EDA. Each such • assignee shall take this Note subject to the foregoing conditions and subject to all provisions stated or referenced herein. [12] This Note has been issued as a taxable and not as a tax —_exempt obligation, and the EDA makes no representation, express or implied, that the interest on this Note is or may be excludable from gross or taxable net income of the Registered Owner for income tax purposes . [13] IN WITNESS WHEREOF, the Mounds View Economic Development Authority has caused this Note to be executed by the manual signatures of its President and its Executive Director and has caused this Note to be issued and dated as of 1998. President Executive Director 3344S3.RED v5 to v4 9/10/98 B-3 Q7 J 71 !771 !OCA' '!l1f/!C :On 'TQ/71:Rn QR nITU J1 11VnLU(Ti 79 Qnnf'JQ TMf(1tJJ CERTIFICATION OF REGISTRATION It is hereby certified that the foregoing Note was as of the latest date listed below registered in the name of the last Registered Owner noted below, and that, at the request of said Registered Owner of this Note, the undersigned has as of said ' applicable date registered this Note as to principal and interest on the Note in the name of such Registered Owner, as indicated in the registration blank below, on the books kept by the undersigned for such purposes. DATE OF SIGNATURE OF EDA NAME OF REGISTERED OWNER REGISTRATION EXECUTIVE DIRECTOR , 1998 19 , 19 Subsequent Certification of Costs of Public Improvements and Site Improvement . The undersigned Executive Director of the Mounds View Economic Development Authority, pursuant to Section 3 .2 of the Development Agreement, hereby certifies that the Developer has certified, and the Authority has accepted certification of a total of $ of costs of Site Improvements and a total of $ of costs of Public Improvements. I further certify that pursuant to said provisions of the Development Agreement and the applicable terms of this Note, the finally determined Principal Amount of this Note is $ Dated: Executive Director, Mounds View Economic Development Authority 334455_ARD v5 to v4 9/ ,Q/98 B-4 'C!F7 1 71170i Imo 'n Ar/ir! 'Ofl 'To /Ot .an OF 1 ! 'P� 'TUJ1 krvnttnru ro 'nnrra rarnrTJ EXHIBIT C CERTIFICATE OF COMPLETION WHEREAS, the Mounds View Economic Development Authority (the "Authority") and ''li E,.eresL aLwug Mighael anvestmenta, Ltd. , a Minnesota Lviyutal.l.un general partnership (the "Developer") , have executed a Development Assistance Agreement, dated PcbL.aa. 1-7 September 14, 1998 (the "Development Agreement") , with respect to the completion by the Developer of certain improvements (the "Improvements") , specifically, an approximately lOa, OQo 722,463 square foot building on certain land (the "Development Property“) described in the Development Agreement; and WHEREAS, said Developer has to the present date substantially performed its undertakings under the Development Agreement in a manner deemed sufficient by the Authority to permit the execution of this certificate pursuant to Section 3 .4 of the Development Agreement: NOW, THEREFORE, this is to certify that the Improvements have been completed on the Development Property in substantial conformance with the terms of the Development Agreement . MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY By Its Dated: , 19 334455.RED v5 to v4 9/14/98 C-1 C /nC 1 7117C11(1('C 'n.1I1n 'p(1 'in n nG T f TIT 7in rw,*-nru 'n rnn rr-r ,On” EXHIBIT D PUBLIC IMPROVEMENTs Public Improvements include the following types of expenses for the Development Property incurred by the Developer: Public right -of -.away costs for Program Avenue improvements (adjacent to Development Property) , including: Estimated Cost Street Lighting $ 3, 000 Entry/Driveway Aprons 13, 000 Curbs and Gutter (north side of Program Avenue only) 4, 000 Traffic Control Signs 1, 000 Program Avenue Excavation and Repair 5, 000 Landscaping and Irrigation within Public Right -of =Way 15,000 Water Main and Hydrants to serve Development Property 55, 000 Storm Sewer to serve Development Property 2, 000 (Connection at Program Avenue) Engineering and Testing Fees for Public Improvements to serve Development Property 15, 000 Administrative Costs: Supervision 6, 000 Inspection Fees 5, 000 Permits 2, 000 Surveys 5,000 334455.2ED v5 Lo v4 9/10/98 D-1 !n /in T 71Il !(tin 'nk! /In 'ori 'rn ;r! 'no on II Tr) (*tt'1 ',rUn!MAt '10 T1Yt'tTT /ATnttr EXHIBIT E SITE IMPROVEMENTS Site Improvements include the following types of expenses for the Development Property incurred by the Developer: Estimated Cost Erosion Control/Silt Fence $ 5, 000 Site Clearing and Tree Removal 5, 000 Soil Correction 50, 000 Grading/Backfilling/Compaction of Fill 55, 000 Sanitary Sewer 15, 000 Ponding and Storm Sewer System 75, 000 Retaining Walls 85, 000 Paving - Include Costs of Base Construction excluding Asphalt 56, 000 Landscaping and Irrigation Sprinkler System 50,000 Project Identification Signage 15, 000 Soil Testing and Location Surveys 7, 000 Environmental Costs, Assessments, Work Programs, Abatement/Clean =Up ** Architectural/Design Fees (Site Only) 4, 000 Engineering and Inspection Fees (Site Only) 15, 000 Site Work Permit Fees 7, 000 *4 No environmental issues or remediation costs are anticipated at this time. 334455.Rffi v5 to v4 9/10/99 E-1 rC /70 1 711701inn. nnr/Ir •on •*0 /0 on no r •on 1,77,\ T.,,.,^„* r r^^,.,.^ •.-^,,. RESOLUTION NO. A RESOLUTION APPROVING AND AUTHORIZING THE EXECUTION OF A DEVELOPMENT ASSISTANCE AGREEMENT WITH THE EVEREST aReup M/CRAEL INVE$TMEN'rs, LTD. , REGARDING THE BUILDING "N" PROJECT It is hereby resolved by the Board of Commissioners (the "Board") of the Mounds View Economic Development Authority (the "Authority") as follows: 1. Recitals. (a) The Authority has the powers provided in Minnesota Statutes, Sections 469.124 to 469.134 and 469.090 to 469.108 (collectively, the "Act") . (b) Pursuant to and in furtherance of the objectives of the Act, the Authority has undertaken a program to promote development and redevelopment of certain land within the City of Mounds View and in this connection is engaged in carrying out the Mounds View Economic Development Project (the "Project") within the City. (c) There has been approved pursuant to the Act a Project Plan for the Project. (d) The redevelopment and development of property within - the Project by private developers are stated objectives of the Project Plan. (e) In order to achieve the objectives of the Project Plan, the Authority has determined to provide substantial aid and assistance through the financing of certain of the public costs of development.�. (f) TIS= av ol. 0 t. G�ot,p Michael Investments, Ltd. (the "Developer") , has presented the Authority with a proposal for the completion of certain improvements within the Project, consisting generally of the construction of an approximately 103, 000 square foot building, and a certain Development Assistance Agreement between the Authority and the Developer (the "Development Agreement") stating the terms and conditions thereof and the Authority's responsibilities respecting the assistance thereof has been presented to the Board for its consideration. 3344S5.Rffi v5 to v4 9/10/98 1 /r,p + 'Tt i-!ni Tn n r+ 'p !!n ,^p Tri /0t ,op no ! t ,nn /TTT+t. a1T TF'TTT nTli 'YI MPP T77n WAIT 7 2 . The Board hereby determines that the Authority's execution and performance of the Development Agreement would be in furtherance of the Project Plan and hereby approves the Development Agreement substantially in the form presented to the Board and hereby authorizes the officers of the Authority in their discretion and at such time, if any, as they may deem appropriate to execute the same on behalf of the Authority, with such additions and modifications as those officers may deem desirable or necessary, as evidenced by their execution thereof. 3 . Upon execution and delivery of the Development Agreement, the officers and employees of the Authority (including members of the City staff, acting in their capacity as staff to the Authority as well) are hereby authorized and directed to take or cause to be taken such actions as may be appropriate or necessary on behalf of the Authority to implement the Development Agreement, including without limitation issuance of the EDA Note and execution of the Certificate of Completion under the Development Agreement. 4 . The Board hereby determines that the execution and performance of the Development Agreement Will help realize the public purposes of the Act and are in furtherance of the Project Plan. Adopted by the Board of Commissioners of the Mounds View Economic Development Authority on , 1997. 334455.RED vt to of 9/10/98 2 !C1!-C 7t 17C! I ricc 'nj/fr .On 'To /n7'g0 OR ` 'Pnt,7J1 kiln-k7Hier ro 7nnnrc* /AMU7 Secretary's Certificate I, the undersigned, being the duly qualified and acting Secretary of the Mounds View Economic Development Authority, do • hereby certify that I have carefully compared the attached and foregoing resolution adopted at a special or regular meeting of the Board of Commissioners of said Authority duly called and regularly held on the date therein indicated with the original thereof on file in my office and I further certify the same is a full, true, and correct copy thereof, insofar as the same relates to the approval of a certain Development Assistance Agreement between the Authority and T11= Evereiel. Gip Michael investments, Ltd. , respecting a certain Building "N" project. Z further certify that Boardmember moved the adoption of said resolution, that Boardmember seconded said motion, and that upon a vote being taken thereon, the following Boardmembers voted in favor thereof : and the following Boardmembers voted against the same : whereupon said resolution was declared duly passed and adopted. WITNESS my hand as such Secretary of said Authority this day of , 1997. Secretary Mounds View Economic Development Authority 334455.RED v5 co v4 9/10/99 I!' f'(` 17('I ;nen •nor/in •nn '?r+ !n7'an nr. I 1 'gin (?TT,?1 uunTTNAT ?0 nnnTTTCT TATniTT COMPARISON OF FOOTERS -FOOTER 1- 334455 .* FvotCr Discontinued 334455.5 334455.RED v5 to v4 9/10/96 4 r /r}r T 7! I7('11nrr •nsr IT •nn 'To /n7°gin or: ! t •^n /TiuT1 kr„M„n,” M ^^^,,,,, M^„ This redlined draft, generated by CompareRite (TM) - The Instant Redliner, shows the differences between - original document : I:\DMS\OMBJAM\0334455. 04 and revised document: I :\DMS\OMEJAM\762F05! .WED CompareRite found 97 change (s) in the text CompareRite found 1 dhange (s) in the notes Deletions appear as Strikethrough text Additions appear as Bold+Dbl Underline text 334455.REU v5 to v4 9/10/98 S 1C/IC i 7117C1 !OCC 'nu/Tt •gn 'To/17.Po OF ! r 'Pr r-II 1 'rvnnnnr "'nnTurr wrn.T Item No. . 6 Meeting Date: 9-14-98, Staff Report No. Type of Business:EDAB WK Work Session;PH:Public Hearing; CA:Consent Agenda;;EDAB:EDA Business Mounds View Economio Development Authority Staff Re port To: Mounds View Economic Development Authority From: Kevin Carroll, Economic Development Coordinator Item Title/Subject: Mermaid Hotel/Banquet Center--RentAll property— Environmental Site Assessment(s) Date of Report: September 10, 1998 SUMMARY On August 24, 1998 the City Council adopted Resolution No. 5260, which authorized staff and consultants to proceed with various actions including (but not limited to) the negotiation of an option/purchase agreement for the RentAll property. Information about the actual or potential presence of contaminants or other environmental problems on the RentAll property would be very useful in connection with the negotiation of an option/purchase agreement for the property. Resolution No. 5260 also authorized City staff and consultants to proceed with the development of an application to DTED for a redevelopment grant that could potentially be applied to the City's financial obligations in the event that a Development Agreement related to the proposed Mermaid hotel and banquet center is ultimately executed by the City/EDA and the Developer(s). The recipients of the DTED redevelopment grants will be determined by a point system, under which [up to] 20 of the possible 100 [maximum] points will be related to environmental issues: up to 15 points for"redevelopment in connection with contamination remediation needs" and up to 5 points for"multi- jurisdictional projects that take into account...environmental impact." DTED representatives have indicated that the submission of an objective, independent environmental site assessment [ESA]would be expected, if not required, in connection with any redevelopment grant application that seeks to have points awarded for environmental issues. In anticipation of the potential need for an ESA of the RentAll site, City staff recently contacted three reputable environmental consultants to request written cost projections regarding various types and levels of environmental assessments. The projected costs for a Phase I ESA of the RentAll site ranged from $1750.00 to $2795.00, with Peer Environmental & Engineering Resources, Inc. ["Peen] submitting the lowest estimate. The projected costs for a Phase I and Phase II ESAs of the RentAll site ranged from $3900.00 to $5300.00, with Peer again submitting the lowest estimate. EDA Memo September 10, 1998 Page 2 The application deadline for the DIED Redevelopment Grant is October 1, 1998, and the time needed to complete a Phase I ESA or PHASE I and II ESAs would be approximately two weeks. If this matter is deferred until the next Council meeting on September 28th, insufficient time will remain to complete any kind of ESA and incorporate it into our DTED grant application. Accordingly, this Memo will be accompanied by a proposed Resolution, along with a copy of a related staff Memo dated 9-8-98 and a copy of relevant portions of Peer's "Proposal for Environmental Site Assessment." Peer's entire Proposal, and those submitted by the two other environmental consultants who were contacted, will be made available for review upon request. I do understand that some might ordinarily prefer to await the final execution of a Development Agreement with the Developer(s) before proceeding with the environmental assessments that are being recommended. However, the timetable (in particular, the 10- 1-98 application deadline) imposed by the DTED Redevelopment Grant program simply will not allow us to defer such assessments.without seriously reducing the likelihood of being chosen as one of the eventual grant recipients. It should also be mentioned that if the Developers agree to concurrently proceed with Phase I ESAs on the properties that they will be obligated to acquire, the cost to the City for the RentAll Phase I ESA will probably be significantly less than the $1750.00 figure that is specified in the proposed Resolution. ACTION TO BE CONSIDERED Approval of EDA Resolution No. 98-EDA-98 authorizing the preparation of a Phase I E v' onmental Site Assessment [ESA] OR Phase 1 and II ESAs of the RentAll property, for t arious r - ons specified in the proposed Resolution. 11 K- ' Carroll 7-4029) E anomic Development Coordinator N:\DATA\GROUPS\EC ONDEVIEDA-EDC\EDA109-1498.KPC MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 98-EDA-98 CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION AUTHORIZING THE PREPARATION OF PHASE I or PHASE I AND II ENVIRONMENTAL SITE ASSESSMENT(S) OF THE "RENT ALL" PROPERTY WHEREAS, on August 24, 1998 the City Council adopted Resolution No. 5260; and WHEREAS, said Resolution authorized staff and consultants to proceed with various actions including (but not limited to) the negotiation of an option/purchase agreement for the RentAll property; and WHEREAS, information about the actual or potential presence of contaminants or other environmental problems on the RentAll property would be very useful in connection with the negotiation of an option/purchase agreement for the property in question; and WHEREAS, the aforesaid Resolution No. 5260 also authorized City staff and consultants to proceed with the development of an application to DTED for a redevelopment grant that could potentially be applied to the City's financial obligations in the event that a Development Agreement related to the proposed Mermaid hotel and banquet center is ultimately executed by the City/EDA and the Developer(s); and WHEREAS, the recipients of the DTED Redevelopment Grants will be determined by a point system, under which [up to] 20 of the possible 100 [maximum] points will be related to environmental issues: up to 15 points for"redevelopment in connection with contamination remediation needs" and up to 5 points for"multi-jurisdictional projects that take into account...environmental impact;" and WHEREAS, DTED representatives have indicated that the submission of an objective, independent environmental site assessment [ESA]would be expected, if not required, in connection with any redevelopment grant application that seeks to have points awarded for environmental issues; and WHEREAS, in anticipation of the potential need for an ESA of the RentAll site, City staff recently contacted three reputable environmental consultants to request written cost projections regarding various types and levels of environmental assessments; and WHEREAS, the projected costs for a Phase I ESA of the RentAll site ranged from $1750.00 to $2795.00, with Peer Environmental & Engineering Resources, Inc. ['Peer] submitting the lowest estimate; and WHEREAS, the projected costs for a Phase I and Phase II ESA of the RentAll site ranged from $3900.00 to $5300.00, with Peer Environmental & Engineering Resources, Inc. Peer) submitting the lowest estimate; and WHEREAS, the application deadline for the DTED Redevelopment Grant is October 1, 1998, and the time needed to complete a Phase I ESA or PHASE I and II ESAs would be approximately two weeks; NOW, THEREFORE, BE IT RESOLVED that the Economic Development Authority of the City of Mounds View hereby: Authorizes City staff to retain Peer Environmental & Engineering Resources, Inc. to prepare a Phase I Environmental Site Assessment [ESA] of the RentAll property, with the understanding that City staff will have the discretion to authorize Peer to immediately proceed with a Phase II ESA if such action is necessitated or warranted by the results of the Phase I ESA, and with the further understanding that written reports regarding any such ESA(s) will be provided to the City in time for the City to incorporate them into the City's application for a DTED Redevelopment Grant by the applicable deadline of October 1, 1998. Dated this 14th day of September, 1998. ATTEST: President (SEAL) Executive Director MEMO To: Rick Jopke, Community Development Director From: Kevin Carroll,Economic Development Coordinator Subject: Mermaid Hotel—DTED Redevelopment Grant—Environmental Issue(s) Date: September 8, 1998 This Memo will summarize my discussion with you earlier today regarding the matter(s)referred to above. After you have reveiwed it, I intend to provide copies of this Memo to Dave Maroney, John Seibert and the Halls so that they can review the portions of the Memo that are potentially applicable to them. As you know, a point system will be used to determine the recipients of the$1.5 million that will be awarded to metro-area projects in October or November of this year as part of the first phase of the DTED Redevelopment Grant program. Up to 20 of the possible 100 [maximum] points will relate to the environment: a maximum of 15 points for"redevelopment in connection with contamination remediation needs" and a maximum of 5 points for"multi jurisdictional projects that take into account....environmental impact." DTED is not interested in speculation regarding these environmental issues. Specific, objective data must be submitted to qualify for points. Accordingly, I contacted three well-known and reputable environmental consultants last month to request written proposals regarding the projected cost of various levels of environmental site assessment ["ESA")work. Generally speaking, the low"bidder" was Peer Environmental&Engineering Resources,Inc. [hereinafter"Peer'']. Examples: — Cost projections for a Phase I ESA for the Rent-All site ranged from$1750.00 to $2795.00, with Peer being the lowest. — Cost projections for a Phase I and Phase II ESA for the Rent-All site ranged from $3900.00 to $5300.00, with Peer being the lowest. — Cost projections for a Phase I ESA for all of the parcels in the"Project Area" (including Rent-All, Mermaid,Lambert and Mnsic Off 10)ranged from$2300.00 to $12,381.13, with Peer being the lowest. In fairness, it should be noted that the consultant who (generally) submitted the highest figures used an assessment standard that was"consistent with the MPCA Voluntary Investigation and Cleanup (VIC) Program Guidance Documents,"while the other two consultants used the "ASTM. standard. I have been told that the MPCA standard is more comprehensive and/or requires more work(primarily historical research). However, a contact person at DTED informed me that for purposes of the DTED Redevelopment Grant, D11.1.) does not particularly care which standard is employed, as long as the analysis shows whether or not there is a contamination problem and, if so, how the developer(or the grant applicant) proposes to address the Rick Jopke Page 2 September 8, 1998 contamination problem. However,for purposes of the[separate]DTED Contamination Cleanup and Investigation Grant program, an assessment using the MPCA standard would probably be required, along with a Response Action Plan approved by the MPCA, in order to qualify for a potential DTED grant. In any event, I have contacted the"high bidder" [Dahl and Associates, Inc.] to request that they send us a supplemental cost projection based upon the ASTM standard, so that all three of the proposals can be compared on the same basis. My preliminary recommendations regarding a course of action are as follows: 1. Ask the City Council/EDA(at the 9-1498 meeting) for authorization to retain the lowest "bidder" [Peer, unless Dahls"ASTM" estimates are lower than Peer's] to immediately perform a Phase I Environmental Site Assessment [ESA] on the Rent-All site. Related option: ask the Council/EDA(on 9-14) for advance authorization to immediately proceed with a Phase II ESA if the Phase I indicates a need for it, so that the additional data can be made available prior to the 10-1-98 grant application deadline. 2. Suggest to Mr. Seibert and the Halls (the"Developers") that they retain the same consultant to immediately.conduct a Phase I ESA for the other parcels that will be involved in the project(three Mermaid parcels, plus Lambert, Cabot, Music Off 10), with the understanding the total cost of the seven Phase I ESAs (including the Rent-All ESA) will be allocated among the various parties on a mutually acceptable basis. One possibility: Peer has projected a total cost of $2300.00 for an ESA of all seven parcels involved, or about$330.00 per parcel;the City could pay$330.00 and the Developer(s) could pay the remainder. Related option: suggest to the Developers that they authorize the consultant to immediately proceed with a Phase II ESA of the six"non-Rent-All" sites if the Phase I indicates a need for that, and/or if this type of analysis will eventually be required anyway in connection with the Developers' construction financing. 3. Make a prompt decision regarding whether a asbestos survey should be done in connection with the City's and/or the Developers' Phase I ESA work, IF that information cannot be gleaned from the Phase I itself Estimates for the asbestos survey (for all of the structures that would be demolished as part of the Project) ranged from$1350.00 to $3742.00. 4. In the event that any Phase I or Phase II ESA requested by the City or the Developers discloses contamination that must be dealt with whether or not a D Tull Redevelopment Grant is awarded, consider submitting(prior to the 11-1-98 deadline) an application to DTED under the D LE) Contamination Cleanup and Investigation Grant program in the hope of reducing the cost to the City and or to the Developers. I will update this Memo as new information becomes available regarding these issues. :DATA\USERSU EV NCSHAREMMERMAID.uEM 1 .uYs,:>.-4 y '. ;}1l µ7J. i7 Wil e • -- '----.....,;,-t .c....."':''',---,'`I''•a ,........„. 7: ,7„...,_,-___,..____ ,...._......... ....... ..-=*.m.lorr-_ --reg � fPROPOSAL FOR , � r �v � , ENVIRONMENTAL SITE ,..,...„,...4.,,,,,,,,,,,-„,„,..„--, _ a-•� r r�t � sw 4 _ ......„ T. ASSESSMENT v Firs fir xr„c. , F'r 1�4..la .4 :.Y•/- Tar ISS'/ �^ a� 2' "Z ” jT j, - �.tVj-, - rg ,x Mermaid Hotel/Banquet Center Project "+,yr.-.A%.P-.--L.,— Mounds View, Minnesota , Tr. , X77- Y(�1✓. . k1,. {15at , _'i,."Ii 9:v}t..- , . ;,;!fix fix; _ ,,,' zah, .��+.ta.C. • _ _ ,, y ^!-% ' .xG . '..0:74r::4* `.W7hs- .1.'- r- 1. ..YL a}_ "rte` 5. :: yv Fjt, - _,.:*'-'1. September, 1998 v! ' Y TFrt . +r f A q M .y�.. 1-:;,,,,-- y y i I Prepared for: _{trY City of Mounds View Pee.Environmental & Engineering Resources, Inc. _ -?7T0-Computer Avenue Minneapolis,;MN 55435 1 _ 2---.;::::-..,'-.. .. -A,.....i.. .- I 7710 Computer Avenue, Suitel0l Minneapolis, Minnesota 55435 (612 ) 83 1 •334 1 inemmonemmuir Fax 6 1 2) 83 1 •4552 I Mr. Kevin P. Carroll September 3, 1998 Economic Development Coordinator City of Mounds View 2401 Highway 10 Mounds View, MN 55112-1499 RE: Proposal for Environmental Site Assessment Mermaid Hotel/Banquet Center Project Mounds View, Minnesota Dear Mr. Carroll: Peer Environmental & Engineering Resources, Inc. (PEER) is pleased to furnish this proposal to conduct an Environmental Site Assessment of the Mermaid Hotel/Banquet Center Project in Mounds View, Minnesota. It is our understanding that the property consists of seven contiguous parcels that contain four buildings that were constructed in the 1960's. The parcels are described in Attachment 1. We have attached the following: Attachment 1 —Site Map and Related Information Attachment 2—PEER Corporate Profile and Statement of Qualification Attachment 3 —Descriptions of Similar Projects completed by PEER Attachment 4—Personnel experience including certifications, education, and training Attachment 5 —Proposed scope of services and cost projections Attachment 6—Agreement of General Conditions and Schedule of Charge b Attachment 2 describes, in summary form, the history and range of services provided by PEER. At the conclusion of the section, we have included 10 brief summaries of environmental projects we have done for governments, public agencies and institutions. Attachment 3 contains five more detailed summaries of projects similar to this proposed assessment. In each instance, our client required an environmental site assessment for a real estate transaction and/or redevelopment. In several cases, our activities required considerable interface with local and state governmental and regulatory bodies. Attachments 2 and 3 contain both names and phone numbers of client references for individual projects PEER has performed. Additionally, you may also wish to contact individuals familiar with PEER based on substantial project involvement over time. They include: o it 7-��-� p 4-i2-y cG LA-t-( 7 ---14 e- P e e r Environmental & E , i _ - �.....y r ol.� /04 44oCITY OF MV [ J003 - - _ -} `p .. _ • --L. _ _ • H. %- R -.."-.-- - Q Ps :•••• . .• • • _ _ •.•. 1 •- _i_ --` •- «Z ..... -7_ : ~.ice,r ' _.AA.:� • . •.a.. • / - �_ -• , 1 2. 1%i r -X."10."....,'", 10.^•r,•,...-A-.:''- •••• •• ••. • 1 '''I''.". ` ,_ _ 4 �'qs8--�}J �� -�'� j�to3 - • _- - T .4 •. {` : .•A.• I55 =: PARK - -.• - . �' _ :_ , _ 4)(23) : - ,- - - :�' 1. . ,.. 1(ci, : • } z.�-.` .:.- ..• ) _. +A.,... err..::4,• . • . • • • • I1 • \CP. :��;,..� �. 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I .0 _ - • r;. . - . - .. r /'3 13:30 FAX 612 734 3162 CITY OF MV Q002/002 I [REVISED] 111 MERMAID HOTEITBANQUET CENTER PROJECT City of Mounds View Site Information for Phare I and Phase II Environmental Assessment Cost Projections jMap#, Bnsines.4/Owner Address Parcel ID parcel size ming size #1 Perkins [not affected by proposed development] #2 Mermaid/Charles Hall 2200 Hwy 10 083023430006 1.78 ac. 39,823 sq.ft. #3 same as above same 083023430007 3.78 ac. see above #4 same as above same 083023430008 .98 ac. see above 1 #5 Rent All/Ribob CoJEljim Co. 2190 Hwy10 083023430009 .91 ac. 3,176 sq.& #6 [Not affected] #7 Lambert Equip.Co_ 2297 C.R.H 083023430004 1.68 ac. 8,000 sq.ft. 1 #8 Music Off 10/Jack Canfield 2295 C.R.H 083023430005 .40 ac. 7,461 sq.ft. #9 Everest Dev. Co. * C.R. H 083023430021* 1.28 ac. n/a *Parcel shown on map is actually a portion of a larger adjoining parcel located to the north;#9 f does not have a mailing address located on County Road(C.R.)H;mailing address for larger t adjoining parcel is 2290 Woodale Drive;Ramsey County records indicated that the PID for the entire parcel is as shown above, but some City records suggest that the parcel was divided into at least separate PID numbers far TIF purposes, in which case#9 may be located within PUD 08302343 0023. YEAR. OF CONSTRUCTION Rent All: 1967 Mermaid: 1966 Music Off 10: 1968 Lampert's; 1967 C:\OFFICE\WPWINNWP]DOCSWERMA.IDLE V • CORPORATE PROFILE Peer Environmental & Engineering Resources, Inc. is a specialized consulting firm offering full service capabilities for site investigation and remediation, solid and hazardous waste management, petroleum and chemical storage tanks,and environmental due diligence. Since our incorporation in 1991, PEER has specialized in providing environmental services to corporate and governmental clients involved in property transfer, business expansion and site redevelopment. Since inception in 1991, PEER has grown to over 30 professionals with expertise in civil engineering (9 persons), geology (12), hydrology (1), environmental science (7) and economics/geogaphy (2). Resumes of these persons, as well as further detail on the projects summarized in the enclosure,will be supplied when requested. ENVIRONMENTAL CONSULTING AND ENGINEERING CAPABILITIES Environmental consulting and engineering services are provided in the following areas (areas marked with an asterisk* are described in greater detail later in this section). • Asbestos Abatement* Regulatory Compliance and Permitting • Project Design Preparation of Specifications and Bid Documents Abatement oversight Building Surveys Development of Operations and Maintenance Plans • Other Hazardous Substances* Lead Based Paint Urea Formaldehyde Insulation Indoor Air Duality Regulatory Compliance and Permitting RCRA Closure Plans and Part B Permits Air Emissions Facility Permits Storm Water Discharge (NPDFS)Permits Waste Characterization and Disposal Landfill Closure and Corrective Actions Transaction Screens and Phase I ESAs • Phase II Investigation and Analysis I • Real Estate Environmental Site Assessments Transaction Screens and Phase I ESAs Phase Il Investigation and Analysis Asbestos and Lead Paint Surveys ASTM Standards Training Third Party Reviews and Expert Testimony 1 • Petroleum and ChemicalStorage Storabe Tanks New Installation and Upgrade Design Tank Closure Preremoval Site Assessments Engineering Plans, Specifications and Permitting Release Investigation and Cleanup State Reimbursement Applications • Site Investigation and Remediation Voluntary Investigation and Cleanup Program Hydrogeologic Investigation Risk Assessment Remedial Action Design and Implementation + Specifications and Construction Management Agricultural Chemical Releases The areas of interest to the State of Minnesota Department of Administration 12/15/97 State Register announcement are described further below. ASBESTOS ABATEMENT Knowledge of state and federal environmental regulations and reporting requirements is essential for providing environmental services in asbestos related projects. PEER's personnel have the experience and are knowledgeable in the current federal, state, and local asbestos regulations. PEER prides itself on keeping abreast of the continually changing regulatory environment. PEER's experienced personnel have managed asbestos related projects from start to finish including conducting building surveys; development of O&M plans; development of bid specifications; acting as general contractor, selection of abatement subcontractors; preparation of State and Federal notifications; scheduling; abatement oversight; air monitoring; project documentation;and follow-up report. f Examples of 10 such projects are included on the attachment further details can be provided when requested. OTHER HAZARDOUS MATERIALS Knowledge of state and federal environmental regulations and reporting requirements is essential � P g for providing environmental services in solid and ba7ardous waste management. PEER personnel understand state and federal requirements related to: • Lead Based Paint • Urea Formaldehyde Foam Insulation • Indoor Air Quality • Resource Conservation and Recovery Act(RCRA) • Comprehensive Environmental Response,Compensation and Liability Act(CERCLA) • Superfund Amendments and Reauthorization Act(SARA) • National Pollutant Discharge Elimination System(NPDES) • Underground Storage Tank(UST)regulations • Toxic Substances Control Act(TSCA) • Federal Insecticide,Fungicide,and Rodenticide Act(FIFRA) • Clean Air Act(CAA) • Clean Water Act(CWA) PEER's personnel have the experience and are knowledgeable in the current federal, state,and local Lead Based Paint regulations. PEER prides itself on keeping abreast of the continually changing regulatory environment. PEER's experienced personnel have managed lead based paint related projects from start to finish including: building surveys; development of O&M plans; preparation of bid specifications; acting as general contractor, selection of abatement subcontractors; preparation of State and Federal notifications; scheduling; abatement oversight; air monitoring; project documentation; and follow- up reporting. PEER has experience in RCRA compliance issues for Hazardous Waste Generators and Treatment, Storage and Disposal Facility Owners/Operators. Personnel have prepared and implemented RCRA Closure Plans and ground water monitoring plans. In addition,personnel have assisted facilities in obtaining RCRA Part B permits, identifying potential areas of non-compliance and developing plans to insure that RCRA compliance is maintained. i Increasing focus on non-point sources of environmental degradation has brought storm water runoff and agricultural chemical usage under scrutiny and regulation. PEER assists industrial and municipal clients in evaluating and implementing engineering controls to minimize impacts, and establishing and meeting permit requirements. PEER has completed investigations and remedial actions on a variety of agricultural chemical release sites, and is knowledgeable of the special federal and state programs addressing the regulation and control over the agricultural chemical industry. Environmental compliance audits are conducted for various types of industries in order to identify potential issues of regulatory non-compliance and implement corrective measures so that fines or contamination incidents can be avoided. The broad waste management experience of PEER's personnel and their familiarity with pertinent state and federal regulations and requirements give PEER the capabilities to perform environmental compliance audits for a wide variety of industrial clients. PEER recogizes the sensitive nature of environmental auditing, and works closely with the client and their legal"counsel\to effectively report results and recommendations. PEER personnel's broad waste management experience and familiarity with pertinent state and federal requirements allow PEER to successfully manage a wide range of waste management projects. ilir Environmental Site Assessments (ESAs)are conducted in advance of most transactions involving commercial real estate, including transfer of title, refinancing, business acquisition, and expansion of existing facilities. The purpose of an ESA is to identify potential environmental concerns, such as soil and ground water contamination, hazardous waste and asbestos, and evaluate the risk of environmental impairment and liability. ESAs can also be used for benchmarking site conditions, property and business valuations, property tax abatement, public reporting, accounting and . .- disclosures, and responsible party searches. An ESA is a risk management tool available to property owners and occupants, buyers and investors, developers, lenders, and governmental units involved in economic development,property acquisition and public works projects. 1 I I . I I iginiiiiiii y to o m cn 'a> U tO to 04 0 ri�;flfi`'iii W W a_ RPM 0 Sire •O �' '%t0 33 Q (0 (II r- tn as no on • ••i,..,:;:; ....E Q\ O\ 00 0Q O\ O O\ ;;>:' 75::ii O U..... .- ... O C .-, Q\ Q\ - 0p 0\ :Vet mi 7i p :ix to 7 %::z•*..w!K:i: N to y a.. u en 0 to C O .» '£•,•.::C•Y.z:>:=: 0 E a �o E-I E E N a t_: In.—m < _i::. -a E R t.. R f".. N �`�.tb 4 C N... i.iiia: .al u) y0. N �-. y O •�.R'`) 00 vi c�1 .0 > C •.... ��...... �^QI'r. a. o0 �C... o73 00 0 °i Q.... •y 0 Lo a er w r] (� C oo,i�00 `.'•ter. Csi `::: :% _ OI ->V] R CVAcil N N M C cd' U Z.0""' O • E N 00 �O :,::::::::•,...:::*:::: s 0<�:� Z CO 0 tw •> a) O._ 0. o 0,'"--7 C 0 O so 0 p..a a N .E �+ ;:rte!:` C 7 " 5 In 5. T. C G R 0 5 4^ C C s: U d. N >.N ^�"';: fn �.. 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N C U U c<"cc'•,.: V- cu ! dl = = .... _. 3_ :?ivi+:::▪ :: ° C . a L O Ci y y 4.)c � C '_`▪••.. ^ a2::::: t. > :Q Q t. U N,— N. U o. = ° u �, 3 > ;:mss> y E a. y ?i :io U a E _ 1:1 s::c CO 4) > R a o V =z " v =•:EiN -.) ' o ^+ o U 0 ... Z aUco c.. 1Q > av 0p 71 5 c.,....:::::::: m — ca U Ni ::::§i0 Z E. O -o 0 2 a c°i PROPOSED SCOPE OF SERVICES It is our understanding that three separate cost projections are required for three different assessment options. The three options include the following: 1. A Phase I Environmental Site Assessment of the Rent All property; 2. A Phase I and Phase II Environmental Site Assessment of the Rent All property; 3. A Phase I Environmental Site Assessment of all seven parcels (totaling approximately 10.81 acres). The applicable scopes of work for a Phase I and a Phase II Environmental Site Assessment are described below: Phase I Environmental Site Assessment The Phase I Environmental Site Assessment will be conducted in accordance with ASTM Standard Practice E 1527-97, which is an industry standard defining good commercial and customary practice for conducting an Environmental Site Assessment. The purpose of this assessment will be to identify recognized environmental conditions relating to the subject property as defined by the ASTM Standard. Federal and state records will be obtained from appropriate government agencies or commercial services to check if the subject property or other sites within ASTM specified search distances are identified in connection with the potential release of hazardous substances or petroleum products. Geologic maps and publications will be reviewed to interpret surficial geologic, hydrologic and groundwater flow conditions on and near the property. PEER will evaluate the significance of any government listing found, with respect to potential environmental impacts to the subject property, based on the nature of the listing and estimated hydrogeologic conditions. Historical research will be performed to evaluate past land use activities on and near the property. Standard sources of information include readily available aerial photographs, Sanborn Fire Insurance maps, and city directories. PEER will evaluate the available historical information with respect to the presence or likely presence of recognized environmental conditions on the property. A site reconnaissance will be performed to visually and physically observe the property. Any evidence of the past or current use, treatment, storage, disposal or generation of ha7nrdous substances and petroleum products will be documented. Current and past uses of adjoining properties will be observed and documented with respect to recogi7ed environmental conditions to the extent that observations from the subject property or public corridors can readily distinguish adjoining site features. Observations will be made to identify building materials that may contain asbestos. Scope of Services Page 2 Interviews will be conducted with persons who may have knowledge of past and present land use activities on the property and who are readily available for interviews (any special matters of confidentiality must be called to our attention ahead of time). Persons targeted for interviews normally include the property owner(s), significant occupants, and local government officials. Interviews may be conducted in person, by telephone, or through the use of a written questionnaire. Phase II Environmental Site Assessment A limited Phase II Environmental Investigation will be conducted on the subject property • (Rent All only) to evaluate potential impacts to soil and/or ground water beneath site from present and/or past land use activities. PEER proposes the following tasks for the limited Phase II Subsurface Investigation. General For the purposes of this proposal, soil sampling probes will be advanced at four locations within the boundaries of the property. The exact locations will be selected based upon site constraints, such as underground and overhead utilities, access, etc., and the results of the Phase I. The proposed investigation is designed to provide an indication of soil and ground water quality and to evaluate potential impacts at the subject property as a result of the operation of a gasoline station at the subject property. Specific work tasks will include: Sampling Tasks • Clearance of public utilities through gopher-one call. Any information on the location of private utilities will be the responsibility of the property owner. PEER can arrange for private utilities to be cleared by an independent contractor. This would be considered an increase to the stated scope of services and additional charges of approximately $$5-$150 would apply. • Advancement of four 20-feet deep soil probes using a truck mounted, hydraulically driven sampling probe. • Collection of soil samples from each probe location utilizing a shelby-tube sampling device connected to the soil probe. Samples will be collected continuously to the termination depth of the probe. Scope of Services Page 3 • Soil samples will be screened in the field for the presence of organic vapors using a hand-held portable photoionisation detector(PID). In general, the sample which displays the highest PID reading or the sample from the water table interface in each probe location will be submitted to the laboratory for analysis. Other factors influencing soil sample selection include visual and olfactory indications such as staining and strong odors. • A ground water sample, if encountered,will be collected from the base of each probe. • All probing equipment which comes in contact with soil will be decontaminated prior to the next use. All soil sampling apparatus will be decontaminated between sample locations to reduce the risk of potential cross-contamination. • Each probe location will be restored to near original conditions upon completion. Sample Analysis Soil and three ground water samples will be submitted for analytical testing. The samples will be submitted to an independent laboratory for analysis. The samples will be analyzed for the following parameters: • Gasoline Range Organics (GRO) • Diesel Range Organics (DRO) • Benzene, Ethyl Benzene, Toluene, and Xylene(BETX) Report The report will summarize the results of the assessment, including documentation of information sources, findings and conclusions, and our professional opinion of the impact of any recognized environmental conditions in connection with the property. Two original reports will be provided. Additional report copies and special distribution requirements can be accommodated for an additional cost. Scheduling Services will be initiated immediately upon receipt of authorization. Peer will provide a report within three to four weeks of project authorization. Should you require a shorter turn around time additional fees may be required. Scope of Services Page 4 User Responsibilities To meet the scope of the ASTM E 1527-97 Standard Practice, the user of the Phase I report is responsible for communicating to PEER any specialized knowledge or experience that is material to recognized environmental conditions in connection with the property. In a transaction involving the purchase of commercial real estate, the buyer must consider if the purchase price is known to be significantly less than the purchase price of comparable properties, and make written record of an explanation of any such lower price. The user should advise PEER whether they know of: (1) any pending, threatened, or past litigation relevant to hazardous substances or petroleum products in, on, or from the property; (2) any pending, threatened, or past administrative proceedings relevant to hazardous substances or petroleum products in, on, or from the property; and (3) any notices from any government entity regarding any possible violation of environmental law or possible liability relating to hazardous substances or petroleum products. PEER will review copies of any previous environmental or geotechnical investigation reports, environmental permits, tank registrations, or other documents that may be helpful in evaluating environmental conditions or regulatory compliance for the property if they can be provided within the allowable time frame. Review of such documents may be considered an increase to the stated scope of services. Prior to delivery- So that they may be identified within the reports, the user must supply the names of all parties intending to rely on the executed service and subsequent report. At any time following the completion and issuance of the report, additional reliance may be obtained at Peer's discretion for an additional fee. Cost Estimates Option 1: The cost to complete the Phase I Environmental Site Assessment of the Rent All property would be $1,750.00, invoiced on a lump-sum basis. Option 2: The cost to complete the Phase I and Phase II Environmental Site Assessment of the Rent All property would be invoiced on a time and materials basis not to exceed $3,900.00 (this includes $320.00 for sample analysis, $900.00 for the sampling probes, and $580.00 for field monitoring services, coordination, equipment, and expenses). If it is determined that fewer borings or samples are required, then the cost will be reduced accordingly. E } _ f Scope of Services Page 5 • Option 3: The cost to complete the Phase I Environmental Site Assessment of all seven parcels would be $2,300.00, invoiced on a lump sum basis. If asbestos surveys are required for the Rent All, Lambert and Music Off 10 buildings, a cost to complete that work is estimated to be $2,000.00. A more precise estimate can be provided once access to the buildings is provided.