HomeMy WebLinkAbout22-EDA-362EDA RESOLUTION 22-EDA-362
CITY OF MOUNDS VIEW
COUNTY OF RAMSEY
STATE OF MINNESOTA
RESOLUTION APPROVING A PRELIMINARY DEVELOPMENT AGREEMENT
WITH REUTER WALTON DEVELOPMENT, LLC BY THE MOUNDS VIEW ECONOMIC
DEVELOPMENT AUTHORITY
WHEREAS, Reuter Walton Development, LLC, a Minnesota limited liability company
(the "Developer") has requested that the Mounds View Economic Development Authority of the
City of Mounds View, Minnesota, a public body corporate and politic under the laws of
Minnesota ("EDA") enter into a Preliminary Development Agreement with it in order to provide
the Developer with certain rights and obligations to facilitate the redevelopment of the
WOODALE APARTMENTS Project Area (the "Project"); and
WHEREAS, the EDA has found and determined that entering into a Preliminary
Development Agreement with the Developer is in the public interest.
NOW, THEREFORE, BE IT RESOLVED by the Mounds View Economic Development
Authority of the City of Mounds View, Minnesota as follows:
That the above -referenced recitals are incorporated into this Resolution.
2. The EDA approves the Preliminary Development Agreement, subject to modifications
that do not alter the substance of the transaction and that are approved by the EDA
Attorney, provided that execution of the Preliminary Development Agreement shall be
conclusive evidence of approval.
3. EDA staff and officials are authorized to take all actions necessary to perform the EDA's
obligations under the Preliminary Development Agreement as a whole.
4. That the Preliminary Development Agreement, contained in Exhibit A of this resolution
is hereby approved, ratified, established, amended, and adopted and shall be placed on
file at City Hall.
ATTEST:
(SEAL)
Adopted this 28th day of November, 2022.
�GG'GVL G�%�GGG I
Carol A. Mueller, 'dent — 0/0 14 Pre
Ny Zik nd, Executive Director
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MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY
AND
REUTER WALTON DEVELOPMENT, LLC
PRELIMINARY DEVELOPMENT AGREEMENT
THIS AGREEMENT, dated this day of November, 2022 (the "Effective Date"), by
and between the Mounds View Economic Development Authority, a public body corporate and
politic under the laws of Minnesota ("EDA") and Reuter Walton Development, LLC, a Minnesota
limited liability company ("Developer") or its assigns:
WITNESSETH:
WHEREAS, the EDA desires to promote development of certain property currently owned
by private parties which is located at 2310 Mounds View Boulevard, in the City of Mounds View,
State of Minnesota, which property is legally described and depicted in Exhibit A attached hereto
("Property"); and
WHEREAS, Developer, or a special purpose entity to be formed by the Developer for the
purpose of completing this project, has submitted or is in the process of submitting a proposal for
development of an approximately four-story, 140-unit affordable residential rental housing --
apartment building in addition to one level of underground parking on a portion of the Property
("Development"), which the terms of such proposal are attached hereto as Exhibit B; and
WHEREAS, the Development requires that the Property be subdivided pursuant to the plat
of WOODALE APARTMENTS (the "Plat"); and
WHEREAS, the Developer agrees to cooperate and work with the EDA and City in
developing and effectuating the Plat; and
WHEREAS, the Development shall occur on the Property located at 2310 Mounds View
Boulevard; and
WHEREAS, the EDA and Developer are interested in discussing and further planning for
the Developer's proposal for the Development; and
WHEREAS, the Developer has indicated that it is seeking business subsidy assistance or
financial incentives from the City and/or the EDA to make the Development feasible; and
WHEREAS, the EDA and/or the City will need to determine if any studies, as may be
determined to be reasonably necessary, should be conducted, including without limitation an
environmental impact or related study, an infrastructure feasibility study, an economic impact
study, and any other studies which are either required by law or deemed appropriate by the EDA
and/or City; and
WHEREAS, the EDA will continue to discuss and negotiate with the Developer regarding
the overall development of the Property; and
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WHEREAS, the EDA is willing to discuss with the Developer any public subsidies which
may be available for the Development, however, nothing herein shall be interpreted as an approval
or guarantee of any future public financial assistance, including but not limited to tax increment
financing, tax abatement, business subsidies, or any other public assistance authorized by law; and
WHEREAS, various ordinance, land use, zoning, and subdivision issues and actions related
to the Development and the Property are required to be approved by the City in order to facilitate
the Development by the Developer; and
WHEREAS, the EDA agrees to cooperate with the Developer to review and to assist the
Developer, where deemed appropriate by the EDA, with obtaining various ordinance, land use,
zoning, and subdivision approvals and actions related to the Development and the Property in order
to facilitate the Development by the Developer, provided that nothing herein shall be interpreted
as an approval or guarantee of any future land use, zoning, or other required City approvals; and
WHEREAS, the EDA is willing to consider and the Developer is desirous to undertake the
Development if (i) a satisfactory agreement can be reached regarding the EDA's commitment for
public costs, if any, necessary for the Development; (ii) satisfactory mortgage and equity
financing, or adequate cash resources for the Development can be secured by Developer; and (iii)
the feasibility and soundness of the Development and other necessary preconditions have been
determined to the satisfaction of the parties.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and
obligations set forth herein, the parties agree as follows:
Future Negotiations.
The parties agree to continue negotiations pursuant to the terms of this Agreement in an
attempt to formulate a definitive plan for a development agreement based on the following:
(a) Developer's proposal, which shows the scope of the proposed Development
in its latest form as of the date of this Agreement, together with any changes or
modifications required by the City or the EDA;
Mutually -satisfactory development agreements or contracts to be negotiated and
agreed upon in accordance with negotiations contemplated by this Agreement;
(b) Mutually -satisfactory terms that may be required for the Development (e.g.
access and utility easements, allocation of infrastructure costs, etc.); and
Other terms and conditions of this Agreement.
2. Statement of Intent.
Although not conclusive or binding on either party, it is the intention of the parties that this
Agreement: (a) documents the present understanding and commitments of the parties; and (b) will
lead to the negotiation and execution of a mutually -satisfactory development agreement or contract
prior to the termination date of this Agreement. The development agreement (together with any
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other agreements entered into between the parties hereto contemporaneously therewith) will
supersede all obligations of the parties hereunder.
3. Term; Duties.
(a) During the term of this Agreement, the EDA agrees to:
(i) Proceed to seek all necessary information with regard to the
anticipated public costs, if any, associated with the Development; and
Should negotiations be successful, enter into a development agreement
and/or contract for private development, satisfactory to the EDA in its sole discretion, with
the Developer for the Development.
(b) During the term of this Agreement, the Developer agrees to:
(i) Develop and submit its detailed proposal, including the plans and
specifications, for purchase and development of the Property;
Conduct a due diligence review of the portion of the Property included in
the Development, including without limitation, which must be acceptable to the Developer
in its sole discretion: title, survey, environmental (Phase I & Phase II reports), soils, and
market studies;
(ii) Obtain approval by the EDA and the City (including its Engineer,
Planning and Inspection Department, and any other governing authority) for approval of
the site plan, exterior elevations and finishes, and zoning approval;
Obtain any other necessary governmental approval from any governing
authority;
(iii) Obtain financing on terms acceptable to Developer, including but
not limited to public subsidies (such as pay-as-you-go TIF in a mutually agreeable amount,
and housing tax credits), grants, private loans, or equity investment(s); and
Should negotiations be successful, enter into a development agreement
and/or contract for private development with the EDA for the Development.
4. Developer Submissions; Business Subsidies; TIF• Housing Tax Credits.
(a) The EDA understands that the Developer may be seeking business subsidy
assistance from the City and/or the EDA. During the term of this Agreement, Developer
shall:
(i) Submit to the EDA a design proposal to be reviewed by the EDA
showing the location, size, and nature of the proposed Development, including layouts,
renderings, elevations, and other graphic or written explanations of the Development. The
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design proposal shall be accompanied by a proposed schedule for the starting and
completion of the Development;
Submit an over-all cost estimate for the design and construction of the
Development;
(ii) Submit a time schedule for the Development;
Undertake and obtain such other preliminary economic feasibility studies,
income and expense projections, and such other economic information as Developer may
desire to further confirm the economic feasibility and soundness of the Development;
(iii) Submit to the EDA the Developer's financing plan showing that the
proposed Development is financially feasible;
Furnish satisfactory financial data to the EDA evidencing Developer's
ability to undertake the Development; and
(iv) Furnish information in its possession and assist the EDA with
obtaining all available business subsidy assistance which the EDA may deem appropriate.
(b) Developer understands that the Tax Increment Financing sought for the
proposed Development must be obtained as outlined by law.
Developer understands that the Housing Tax Credits sought for the proposed
Development must be obtained as outlined by law.
5. Feasibility.
It is expressly understood that execution and implementation of any development
agreement or contract for private development (together with any other agreements entered into
between the parties hereto contemporaneously therewith) shall be subject to:
(a) A determination by the EDA in its sole discretion that its undertakings are
feasible based on (i) satisfaction of City Code requirements; (ii) the purposes and objectives
of any development plan created or proposed for the Development; (iii) the Studies, if any;
and (iv) the best interests of the EDA.
A determination by Developer that the Development is feasible and in the best
interests of Developer.
6. Effective Date; Expiration.
This Agreement is effective from the Effective Date until May 31, 2023. After such date,
neither party shall have any obligation hereunder except as expressly set forth to the contrary
herein.
7. Costs; Escrow.
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Developer shall be solely responsible for all costs incurred by Developer. In addition, upon the
full execution of this Agreement the Developer has paid the EDA an initial non-refundable sum of
$10,000.00 as reimbursement of its Administrative Costs (as defined below) for its evaluation of
the Developer's proposal. For the purposes of this Agreement, the term "Administrative Costs"
means out of pocket costs incurred by EDA together with staff and consultant (including
engineering, legal, financial adviser, environmental advisor, planning advisor, etc.) costs of EDA,
all attributable to or incurred in connection with the review of the development agreement or
contracts (together with any other agreements entered into between the parties hereto
contemporaneously therewith) and review and approvals of any land use, zoning and subdivision
applications for the Property, the negotiation and preparation of this Agreement, and other
documents and agreements in connection with the Development, excluding Studies that result in
the Administrative Costs exceeding the initial $10,000.00 deposit, unless such excess costs are
approved by the Developer as provided below. Developer acknowledges that the Developer's
proposal will require review by and/or consultation with the EDA's financial advisors, engineers,
legal advisors, and other advisors or consultants and staff. Additionally, the EDA may incur
expenses of advisors, consultants and staff related to the preparation of the development agreement
or contracts for said Development. In addition, Developer shall deposit $5,000 to pay fees incurred
by the City or the EDA for bond counsel services to the extent such expenses are not paid from
the proceeds of bonds issued by the City. If at any time after full execution and acceptance of this
Agreement, the EDA determines that the amount deposited by Developer will be insufficient to
pay the EDA's or City's fees and expenses listed above, the EDA may notify the Developer in
writing as to any additional amount required to be deposited. The Developer must deposit such
additional funds within 10 business days after receipt of the EDA's notice. Any additional funds
beyond the initial non-refundable $10,000.00 deposited by Developer and not expended by the
EDA for its Administrative Costs will be returned to the Developer on the Closing Date. Any
public subsidies applied for by the Developer will require separate application fees and deposits
from the fees stated in this Agreement as it pertains to the appropriate public subsidy application.
Up to an additional $30,000.00 subsequent deposit will need to be made at the time application is
made with the EDA and City for public subsidies, particularly when Developer and the City and
EDA agree to move forward with creation of the TIF district for the Property. The foregoing funds
will not be credited towards the purchase price or returned if the transaction does not close. This
Section 7 shall survive termination of this Agreement and shall be binding on the Developer and
the EDA regardless of the enforceability of any other provision of this Agreement.
8. Termination.
This Agreement may be terminated if Developer ceases to negotiate in good faith with the
EDA, and such failure to negotiate in good faith is not cured after 30 days written notice of such
failure by EDA to Developer.
9. Sole Developer.
The Developer is designated as sole developer and shall have exclusive rights of the
Development of the Property through the entire term of this Agreement (the "Term"), with the
following tentative Development milestone dates: finance closing to occur by July 7, 2023,
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commencement of construction to begin by August 1, 2023, and completion of construction to
occur by April 30, 2025.
10. Severability.
If any portion of this Agreement is held invalid by a court of competent jurisdiction, such
decision shall not affect the validity of any remaining portion of the Agreement.
11. Breach; Waiver.
In the event any covenant contained in this Agreement should be breached by one party and
subsequently waived by another 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.
12. Notice.
Notice or demand or other communication between or among the parties shall be
sufficiently given if sent by mail, postage prepaid, return receipt requested or delivered personally:
(a) As to EDA: Mounds View Economic Development Authority
2401 Mounds View Boulevard
Mounds View, MN 55112
Attn: Executive Director
(b) As to Developer: Reuter Walton Development, LLC
4450 Excelsior Boulevard, #400
St. Louis Park, MN 55416
Attn: Nick Walton, Manager
13. Counterparts.
This Agreement may be executed simultaneously in any number of counterparts, all of
which shall constitute one and the same instrument.
14. Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of the
state of Minnesota. Any disputes, controversies, or claims arising out of this Agreement shall be
heard in the state or federal courts of Minnesota, and all parties to this Agreement waive any
objection to the jurisdiction of these courts, whether based on convenience or otherwise.
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IN WITNESS WHEREOF, the Developer has caused this Agreement to be duly executed
in its name and behalf and the EDA has caused this Agreement to be duly executed in its name
and behalf as of the day and year first above written.
DEVELOPER:
REUTER WALTON DEVELOPMENT, LLC
ME
Nick Walton
Its: Manager
EDA:
MOUNDS VIEW ECONOMIC DEVELOPMENT
AUTHORITY
By: "&Ir/
Carol Mueller
Its: President
By: � J, 2 - '//
Nyl ik un
Its: Executive Director
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15. Additional Actions.
The parties hereto understand that additional and separate actions, for which no obligation
is created hereunder, will be required before either the EDA or Developer is obligated to take
various actions with respect to the Development. Those actions include, but are not limited to:
(a) Zoning, comprehensive plan, and subdivision approvals for any land use or
development proposed by Developer; and
Review of any Tax Increment Financing arrangement, or other business subsidy, as
required by law.
16. Incorporation.
The Recitals set forth in the preamble to this Agreement and the Exhibits attached to this
Agreement are incorporated into this Agreement as if fully set forth herein.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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EXHIBIT A
DESCRIPTION/DEPICTION OF PROPERTY
The property located at 2310 Mounds View Boulevard, Mounds View, Minnesota, as depicted below.
Parcel 1:
That part of the East 223 feet of the Northeast Quarter of the Southwest Quarter of Section 8,
Township 30, Range 23, lying Southerly of the center line of State Trunk Highway #10-62.
Ramsey County, Minnesota
Abstract Property
PID No.: 08.30.23.31.0075
A-1
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EXHIBIT B
DEVELOPMENT PROPOSAL — TERM SHEET
This Term Sheet is intended to set forth the general terms upon which the parties hereto
may be willing to enter into a Development Agreement. Except for Section 10 below (which shall
be binding upon the Developer), this Term Sheet shall not be deemed conclusive or legally
binding upon either party and neither party shall have any obligations regarding the property
defined below unless and until a definitive Development Agreement or Contract for Private
Development is approved by the EDA and executed by both parties.
1. Developer: Reuter Walton
2. Property: 2310 Mounds View Blvd (PID: 83023310075)
3. Key Business Terms — Developer:
a. Execution of Development Agreement or Contract for Private Development
b. Preparation and Submittal of Construction Plans and receipt of Building Permit
C. Obtain all land use approvals, permits necessary to construct the project, and
payment of customary City fees including park dedication fees estimated at
$490,000
d. Secure Low Income Housing Tax Credits from Minnesota Housing
4. Key Business Terms — EDA:
a. Creation of a new Tax Increment Financing District for the project, subject to
qualification as a Housing Tax Increment District
b. Drafting and execution of Development Agreement or Contract for Private
Development
5. Minimum Improvements: Construction of a 4-story building with approximately 140 units
of affordable rental housing and related amenities.
6. Schedule: Close on financing by July 7, 2023, Commence construction by August 1, 2023,
and Complete construction by April 30, 2025. For the purpose hereof, "Commence" shall
mean beginning of physical improvement to the Property, including demolition, grading,
excavation, or other physical site preparation work. "Complete" shall mean that the
Minimum Improvements are sufficiently complete for the issuance of a Certificate of
Occupancy.
7. Public Assistance: Subject to all terms and conditions of the Development Agreement or
Contract for Private Development, the EDA will reimburse the Developer through
Available Tax Increment for up to a total of approximately $1,817,000 (Present Value) of
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Qualified Costs related to the Minimum Improvements. "Qualified Costs" shall mean
acquisition, construction of affordable housing, demolition, remediation, site
improvement and infrastructure costs incurred in connection with the construction of the
Minimum Improvements. Payments will be made through a TIF Note issued on a pay-as-
you-go basis over a MAXIMUM of 20 years at a rate the lesser of 5.50% per annum or the
rate of the Developer's first mortgage lien.
8. Lookback: The Public Assistance will be subject to a lookback upon construction
completion of the Minimum Improvements. If the amount of total development costs
actually incurred is less than the amount of estimated total development costs, the Public
Assistance will be reduced by 50% of such deficiency and the principal amount of the TIF
Note will be adjusted accordingly.
9. Minimum Assessment Agreement: Developer and EDA will enter into a Minimum Market
Value Assessment Agreement ("MAA") setting a minimum property tax value for the
building of $28,700,000 for January 2, 2026 for taxes payable in 2027.
10. Fees: The City acknowledges the Developer made an initial escrow deposit of $10,000.00
for reasonable out-of-pocket expenses for legal and financial consultant services. Up to
an additional $30,000.00 subsequent deposit will need to be made at the time application
is made with the EDA and City for public subsidies, particularly when Developer and the
City and EDA agree to move forward with creation of the TIF district for the Property,
drafting the Development Agreement or Contract for Private Development, analysis, and
administrative fees associated with this transaction.
In addition, the Developer will be required to deposit additional funds if the initial escrow
deposit or subsequent deposits are fully drawn. Any funds deposited by Developer and
not expended by the EDA for its legal, financial advisor, or other consultant fees on or
before the date of execution of the Development Agreement or Contract for Private
Development will be returned to the Developer without interest. The Developer shall pay
all other normal and customary EDA fees and expenses, unless otherwise specified in the
Development Agreement or Contract for Private Development, for the approval and
construction of the Minimum Improvements.
11. Miscellaneous:
a. No transfer of Development Agreement without EDA consent.
b. Developer covenants to pay property taxes and maintain customary insurance.
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