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HomeMy WebLinkAbout01/24/2013 EDA Meeting600 000 *** City of Apple II VaileV NOTICE: The Apple Valley Economic Development Authority will hold a Special meeting at the Municipal Center, on Thursday, January 24, 2013, at 7:00 p.m. to consider the items listed in the following agenda: Information Items: 6. Project Updates: 7. Other Items 8. Adjourn ECONOMIC DEVELOPMENT AUTHORITY MEETING TENTATIVE AGENDA JANUARY 24, 2013 — 7:00 P.M. (immediately following the City Council meeting) 1. Call to Order. 2. Approval of Agenda. 3. Resolution Appointing Officers for 2013. 4. Approval of Minutes of January 8, 2013. 5. Approve Business Assistance Agreements for Parkside Village. A. Continue Public Hearing Concerning a Business Subsidy for IMH, LLC. B. Resolution Approving Business Subsidy Agreement. C. Resolution Approving Development Assistance Agreement. (Agendas are also available on the City's Internet Web Site http://www.cityofapplevalley.org) $1, City of Apple II Valley TO: Board of the Apple Valley Economic Development Authority FROM: Joan Murphy, Department Assistant DATE: January 24, 2013 SUBJECT: APPOINTMENT OF 2013 OFFICERS President Larry S. Severson Vice-President Thomas Goodwin Secretary Pamela J. Gackstetter Treasurer Clint Hooppaw Assistant Treasurer Pamela J. Gackstetter MEMO Community Development A draft resolution is attached, with blanks to be completed, that can be adopted to appoint the 2013 officers. Recommended Action: Motion adopting the resolution appointing 2013 officers of the Economic Development Authority. :jm The resolution organizing the Economic Development Authority provides that the offices of President, Treasurer, and Secretary be elected annually. The appointments remain in effect until the Board elects new officers. The meeting of the Economic Development Authority held May 7, 2012, the following officers were appointed: APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. EDA-13- A RESOLUTION APPOINTING 2013 OFFICERS FOR THE APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY WHEREAS, the Board of the Commissioners of the Apple V alley Economic Development Authority has heretofore adopted Resolution No. EDA-90-1 which provided for initial organization of the Board and adoption of Bylaws; and WHEREAS, said Resolution specifies that the offices of President, Treasurer, and Secretary shall be elected annually, as required by law. NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Apple Valley Economic Development Authority that it hereby appoints and approves the following officers of the EDA for 2013: President Vice-President Secretary Treasurer Assistant Treasurer ADOPTED this 8th day of January, 2013. ATTEST: Pamela J. Gackstetter, Secretary Larry S. Severson, President ECONOMIC DEVELOPMENT AUTHORITY City of Apple Valley Dakota County, Minnesota January 8, 20123 Minutes of the special meeting of the Economic Development Authority of Apple Valley, Dakota County, Minnesota, held January 8, 2013, at 8:00 o'clock p.m., at Apple Valley Municipal Center. PRESENT: Commissioners Bergman, Goodwin, Grendahl, Hamann-Roland, Hooppaw, and Melander. ABSENT: President Severson City staff members present were: Executive Director Lawell, City Attorney Dougherty, Community Development Director Nordquist, Planner Dykes, and Department Assistant Murphy. APPROVAL OF AGENDA Meeting was called to order at 8:43 p.m. by Vice-President Goodwin. MOTION: of Grendahl, seconded by Hooppaw, approving the agenda. Ayes - 6 - Nays - 0. APPROVAL OF MINUTES MOTION: of Hooppaw, seconded by Bergman, approving the minutes of the special meeting of December 27, 2012, as written. Ayes - 4 - Nays — 0. Abstained — 2 Hamann- Roland and Melander. CONTINUE PUBLIC HEARING FOR BUSINESS SUBSIDY AGREEMENT WITH IMH, LLC, PARKSIDE VILLAGE Community Development Director Bruce Nordquist stated that on December 27, 2012, the Apple Valley Economic Development Authority acted to open and continue a public hearing on a business subsidy agreement with IMH, LLC Parkside Village. He said there were still a few outstanding items in the agreement and recommended continuance of the public hearing to January 24, 2013. MOTION: of Hamann-Roland, seconded by Melander, requesting continuance of public hearing to January 24, 2013, at 7:00. Ayes - 6 — Nays - 0. JOINT POWERS AGREEMENT WITH DAKOTA COUNTY CDA TO IMPLEMENT THE "OPEN TO BUSINESS" PROGRAM Planner Margaret Dykes provided information on a Joint Powers Agreement with Dakota County Community Development Agency (CDA) and various participating Dakota County communities to implement the "Open to Business" program in Dakota County. The program is offered through the Metropolitan Consortium of Community Developers (MCCD), and helps small businesses and entrepreneurs that need individual advice and counseling, and access to capital that is not available from the commercial banking system. The technical assistance and financing network offered by Economic Development Authority City of Apple Valley Dakota County, Minnesota January 8, 2013 Page 2 MCCD can make a difference in creating a successful business. The program would provide an on-site business services specialist who would be available for one-on-one consultations starting in February. The business services specialist would provide expertise in start-up financing and business plan development, as well as funding opportunities. Discussion followed. MOTION: of Hooppaw, seconded by Hamann-Roland, approving the Joint Powers Agreement with Dakota County CDA and various participating communities to implement the "Open to Business" program. Ayes - 6 — Nays - 0. PROJECT UPDATES Community Development Director Bruce Nordquist reviewed grant funds available from the CDA for economic development. ADJOURNMENT MOTION: of Hamann-Roland, seconded by Grendahl, to adjourn. Ayes - 6 - Nays - 0. The meeting was adjourned at 8:55 p.m. Respectfully Submitted, Jo a Murphy, Department Approved by the Apple Valley Economic Development Authority on City of Apple Valley TO: FROM: MEETING DATE: SUBJECT: President, Board Members and Executive Director Bruce Nordquist, Community Development Director, AICP MEMO Community Development January 24, 2013 Approve Business Assistance Agreements with IMH for Parkside Village after conducting a public hearing On January 8, the Apple Valley EDA continued a public hearing to January 24, 2013 to consider a business subsidy for IMH LLC. IMH is the owner of the property to be developed as Parkside Village. Attached with this memo are the required resolutions related to the IMH request for business assistance to consider. The Northland Securities memo is also included which discusses: 1. The property owner, IMH, LLC request for a business subsidy for reimbursement of delinquent penalties and interest on previously installed special assessments. 2. The request by IMH, LLC to use tax increment financing assistance for eligible developments costs related to Parkside Village. The tax increment assistance is not considered a business subsidy when developing multi-unit housing. The EDA's financial consultant, Northland Securities, reviewed the IMH request for assistance. Tammy Omdal will present the evaluation of the request for business assistance; reviewing the details of the memo prepared by her and Rusty Fifield. On the evening of January 24, the City Council plans to act on both assistance agreements as well. Prior to City Council execution of agreements, the EDA must approve and execute the agreements. Please bring the Parkside Village Development Project Notebook so that you will have the Business Subsidy Agreement and Development Assistance Agreement available to you as it is not attached to this memo. Recommended Action: 1) Conduct and close a public hearing concerning business subsidy assistance. 2) Approve a Resolution for a Business Subsidy Agreement with IMH, LLC. 3) Approve a Resolution for the Execution of a Development Assistance Agreement with IMH, LLC. APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. EDA -13- A RESOLUTION APPROVING BUSINESS SUBSIDY AGREEMENT WHEREAS, pursuant to the Minnesota Business Subsidy Act, set forth in Minnesota Statutes, Sections 116J.993 to 116J.995 ( "Act "), the Apple Valley Economic Development Authority ( "EDA ") is authorized to grant a business subsidy for the public purpose of increasing the City of Apple Valley's tax base; WHEREAS, IMH Special Asset NT 175 — AVN, LLC, company, ( "IMH ") desires to construct two multiple family rest with 126 units and the other with 196 units), which will increase t NOW, THERE: that it approves the terms and provisions of the Agreement. ATTEST: Pamela J. Gackstetter, Secretary WHEREAS, IMH executed Confessions of Jud.grent (Nos. 3514-35 9, 522-3529) for delinquent real estate taxes on property located in the City for tax years 2007 through 2011, a q P P y portion o f which are for statuto ry penalties and interest incurred on past due special assessments levied by the City ( "P &I "); WHEREAS, the EDA desires to disburse to IMH allPI received by the City as a business subsid y subject to IMH, subject to the terms and provisions set forth in the Business Subsidy Agreement, a copy of which is attached to this T ..esolutio ("Agreernentl: and WHEREAS, the EDA finds it is in the best interes EDA enter into the attached ., reement to further economic development in the City. RESOLVED, by the Board of Commissioners of the EDA , 2013. Larry S. Severson, President zona limited liability uildings in the City (one tax base; e City and its residents that the EXTRACT OF MINUTES OF MEETING OF THE BOARD OF COMMISSIONERS OF THE APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY, MINNESOTA The following members were present: and the following were absent: Member adoption: 5118848v1 A. HELD: January 24, 2013 Pursuant to a meeting of the Board of Commissioners of the Apple Valley Economic Development Authority, Dakota County, Minnesota, was held at the Apple Valley Municipal Center in the City of Apple Valley, Minnesota on Thursday, the 24th day of January, 2013, at :00 o'clock .m. introduced the following resolution and moved its RESOLUTION AUTIJORIZING EXECUTION OF A DEVELOPMENT ASSISTANCE AGREEMENT WHEREAS, IMH Special Asset NT l \\ LLC company an Arizona limited liability ested that the Apple Valle E c o nomic Dev "C't ") assist ompany (the "Developer") has requ Authority. Minnesota (t h "EDA") and the City of Apple Valley, Minnesota (the y with the financing of certain costs incurred in connection with the construction „ of a 322 unit multifamily rental hous ing facility consisting of two buildings (the "Project , ). B. WHEREAS, the Developer, the City and the EDA have determined to enter into a Development Assistance Agreement providing the Developer with financing assistance for the Project (the "Development Agreement"). NOW, TETEREFORE, BE IT RESOLVED by the Board of Commissioners (the "Board") of the Apple Valley Economic Development Authority, Minnesota, , follows: 1. The Board hereby approves the Development Agreement in substantially the form submitted, and the President and Secretary are hereby authorized and directed to execute the Development Agreement on behalf of the EDA. 2. The approval hereby given to the Development Agreement includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the EDA officials authorized by this resolution to execute the Development Agreement. The execution of the Development Agreement by the appropriate officer or officers of the EDA shall be conclusive evidence of the approval of the Development Agreement in accordance with the terms hereof. The motion for adoption of the foregoing resolution was duly seconded by member and, after full discussion thereof, and upon a vote being taken thereof, the following voted in favor thereof: and the following voted against same: whereupon said resolution was declared duly adopted. Adopted this 24 day of January, 2013 by the Apple Valley Economic Development Authority Board of Commissioners. Attest: 5118848v1 Secretary 2 President STATE OF MINNESOTA COUNTY OF DAKOTA CITY OF APPLE VALLEY I, the undersigned, being the duly qualified and acting Secretary of the Apple Valley Economic Development Authority, Minnesota, DO HEREBY CERTIFY that I have carefully compared the attached and foregoing extract of minutes with the original minutes of a meeting of the Board of Commissioners held on the date therein indicated, which are on file and of record in my office, and the same is a full, true and complete transcript therefrom insofar as the same relates to a Resolution Authorizing Execution of a Development Agreement. WITNESS my hand as such Secretary of the Board of Commissioners of the Apple Valley Economic Development Authority, Minnesota this day of January, 2013. 5118848v1 3 Secretary NORTH LAN SECUR1TIES MEMORANDUM To: City of Apple Valley From: Rusty Fifield and Tammy Omdal Date: January 15, 2013 Re: Evaluation of Public Assistance for Parkside Village Project The City of Apple Valley ("the City") and its Economic Development Authority ("the EDA") have requested that Northland Securities evaluate the public financial assistance requested by IMH Special Asset NT 175-AVN, LLC ("IMH") for a proposed development project consisting of 322 housing units ("the Project") in the City's Legacy Village. This memorandum presents the findings of our review and analysis. Background The evaluation of requested public financial assistance is based on the following: • The Memorandum of Understanding ("MOU") between IMH and the City and the EDA dated June 19, 2012. • The terms of the Confessions of Judgment between IMH and Dakota County for the payment of delinquent special assessments and property taxes on IMH parcels dated June 27, 2012. • The application for tax increment financing ("TIF") assistance submitted by IMH dated August 10, 2012. O The tax increment financing plan for TIF District No. 15 adopted by the EDA and the City on November 20, 2012. O Draft "development agreements" that provide the framework for the requested assistance, including the "Development Assistance Agreement". The overall agreement between IMH and the EDA/City contains a variety of elements that are beyond the scope of this memorandum. The evaluation conducted by Northland focuses on the proposed use of tax increment financing. The proposed use of TIF consists of the following elements: 1. The City/EDA has created Housing TIF District No. 15 ("the TIF District") as the basis for the requested TIF assistance. In order for the City to provide TIF assistance, the Project will need to meet required income restrictions required by State Law for a Housing TIF District. IMH will be required to lease at least 20% of the units of the proposed two buildings to residents that income-qualify at 50% of the area-wide median income threshold. The income restrictions will apply over the life of the TIF District. A minimum of 65 units across the two 45 South 7th Street, Suite 2000, Minneapolis, MN 55402 Main: (612) 851-5900 / Direct: (612) 851-4992 / Email: rfifield@northlandsecurities.com Member FINRA and SIPC Evaluation of Public Assistance for Parkside Village Project January 15, 2013 Page 2 buildings will be required to meet the statutory criteria. (The Galante building shall have a minimum of 15 units occupied or held for occupancy by persons whose incomes qualify and the Gabella building shall have a minimum of 25 units occupied or held for occupancy by persons whose incomes qualify.) Given current area-wide income thresholds, it is estimated that initial rents for the qualified one-bedroom and two-bedroom units will be in the range of $785 and $945, respectively, to comply with the income restrictions. 2. The EDA/City and IMH will enter into an Assessment Agreement that sets a minimum market value ($35,195,000) for parcels in the TIF District. 3. The property value used in the tax increment projections is based on estimates provided by Dakota County for the proposed development. The projections assume that the property will appreciate at an annual rate of 5%. The EDA/City has no obligation to provide additional revenues if property values grow at a slower rate. 4. The EDA/City will use 30% of the annual tax increment revenues to cover EDA/City administrative expenses and to repay $1,150,000 in up-front reimbursement to IMH for TIF eligible development costs. (The City will internally finance the payment to IMH through an interfund loan to be paid back from tax increment from the Project.) 5. The EDA/City will use 70% of the annual tax increment revenues to reimburse IMH for up to $5,350,000 of TIF eligible development costs plus interest on the outstanding balance at a rate of 5% on a pay-as-you-go basis. To assist with the Project, IMH is also requesting the City to reimburse IMH (on a pay-go basis) for penalties and interest that have accumulated on the unpaid special assessments. The City does not have the authority to waive collection of the payment. It is important to note that this "interest" is not the same "interest" the City anticipated receiving when the special assessments were certified; it is ("punitive") interest in addition to interest on the original special assessments balance. Under the terms of the Confession of Judgment with Dakota County, IMH will need to pay the penalties and interest on the delinquent special assessments as recorded. IMH is seeking to have the City enter into agreement whereby the City will refund IMH its payment of penalties and interest on the delinquent special assessments. Payments would be made to IMH on an annual basis and only after the City receives cash settlement from the County. Northland Evaluation Northland has reviewed the materials provided by IMH as part of its TIF application. In addition, we have prepared a modified version of the development and operating pro forma for the Project submitted by IMH. The modified pro forma includes revised estimates for sources of revenue and expense for the Project based on the current proposed agreement for development. The pro forma includes Northland's estimates for future tax increment revenue, real estate taxes and special assessments payable, limitations on rental income for affordable units, and future payment of delinquent taxes and special assessments under the terms of the Confession of Judgment that IMH entered into with Dakota County. The updated development and operating pro forma were provided to the City. Evaluation of Public Assistance for Parkside Village Project January 15, 2013 Page 3 Based on the information that is available for review and our analysis, we offer the following findings: 1. The Project meets the statutory criteria for the use of tax increment financing - but for the proposed financial assistance the development as proposed would not occur. 2. Without public financial assistance the return on equity (cost) is at a level that will be difficult, or not possible according to IMH, to attract capital. Given certain assumptions and the proposed terms for an agreement, as well as estimated development costs and net operating income, IMH's return on cost (equity) for the Project over a twelve year period (which includes the first two years of start-up) is estimated to be 6.5% with public finance assistance and 4.6% without assistance. (The first five year return is estimated to be 2.1% with assistance and 1.5% without assistance; the return on cost improves as the outstanding assessments are satisfied. The outstanding assessments will be paid in full by year 2022.) A minimum unleveraged annual average return of 6.9% for the first twelve years was the level identified by IMH in their application for the project to be financially feasible. 3. The Project is challenged by the cost of the public infrastructure that was financed by the City and put in place in prior years. The City does not have the legal authority to "re-spread" the special assessments over a longer period. The City had sought special legislation that would have provided authority to do so but the legislation did not pass. 4. The proposed development is estimated to generate $23,609,000 in tax increment (or $12,396,000 on a present value basis at a 4% rate) over a 25 year life of the TIF District based on an estimated minimum assessed market value for the Project. The estimated tax increment is approximately $13,620,000 greater than projected to be needed to pay for costs (including interest expense) for the Project. It is estimated that all obligations for the Project will be met within 17 to 18 years or by year 2032. After obligations are met for the Project the City will have the option to decertify the TIF District early or to keep the District open in order to pool tax increment for other housing projects. The ability to keep the District active after the developer TIF note is satisfied is complicated by the fact the Developer will no longer be contractually required to satisfy the income requirements that would allow the District to remain active; the District will likely need to be decertified. 5. The up-front assistance ($1,150,000) will be financed by the City through an internal loan from the City's Future Capital Projects Fund to TIF District No. 15. The timing of the up- front payment to IMH will coincide with the issuance of the building permit; allowing for a $975,000 (84.8%) payment at time of the building permit with a $175,000 (15.2%) holdback during construction with a mortgage to the EDA for the four parcels not being sold or developed as security. The mortgage on the four parcels will be released with the City's final payment of $175,000 to IMH at time of issuance of certificate of occupancy. The City will assume risk that tax increment will be available and sufficient over the term of the TIF District to repay the City's internal loan. Evaluation of Public Assistance for Parkside Village Project January 15, 2013 Page 4 6. IMH will assume risk that tax increment will be available and sufficient to repay the ( $5 er TIF note develo p ,350,000). Neither the EDA nor the City has any obligation to provide other revenues to cure future shortfalls in projected tax increment revenues. 7. Another factor in the evaluation of assistance for the Project is the money collected by the City for the payment of taxes and special assessments. In response to the MOU, IMH paid approximately roximately $1,113,000 in tax and special assessment payments in June under confession of judgment. In addition to this amount, IMH also paid approximately $555,000 in 2012 payable tax and special assessments. They will need to pay an estimated additional $2,873,000 in delinquent taxes and special assessments in 2013 on the parcels subject to the re plat of the land for the housing project and on the parcels that will be sold to the City for p gp park land. Approximately $1,732,000 in development and permit fees will be owed to the Ci ty at the time the permit for construction of the housing buildings are pulled; this is estimated to be paid in 2013. Table A provides a summary of the estimated payment amounts by year. Table A Summary of IMH Payments for Tax and Special Assessments and Development/Permit Fees of Total % of for Total Future Payments to City (County) 2012 Item 2013 for Item Years Total Delinquent Taxes $65,034 14.4% $247,070 54.6% $140,065 $452,169 Delinquent Spec. Assess. $882,435 33.2% $1,590,407 59.8% $188,352 $2,661,194 Penalties /Interest on Taxes $25,373 14.4% $96,842 54.8% $54,394 $176,609 Penalties /Interest on Assess. $140,615 12.4% $771,725 68.2% $218,983 $1,131,323 Interest on COT balance $0 0.0% $165,392 62.5% $99,274 $264,665 Subtotal for Payments Subject $1,113,458 23.8% $2,873,449 61.3% $701,067 $4,685,961 To Confession of Judgment Future Special Assessments 2012 Taxes /Special Assessments $555,085 100.0% Subtotal Before $1,668,543 20.9% $3,232,485 40.5% $3,091,371 $7,990,386 Development/Permit Fees Development /Permit Fees Total $0 0.0% $359,035 13.1% $2,390,304 $2,749,340 $0 0.0% $0 $555,085 $0 0.0% $1,731,580 100.0% $0 $1,731,580 $1,668,543 17.2% $4,964,065 51.1% $3,091,371 $9,721,966 Note: Special assessment revenue collected by the City is pledged to the payment of bonds. The debt service expense for payment on the bonds is not included in this report. Evaluation of Public Assistance for Parkside Village Project January 15, 2013 Page 5 8. The IMH parcels would have become tax forfeited property if the $1,113,000 confession of judgment payments had not occurred in June. The special assessments on the property would have been cancelled as part of the forfeiture process. Under this scenario, the City would have had the option to make a reassessment or a new assessment as to the parcels in an amount equal to the amount unpaid on the original assessment. The timing of receipt of any future payment on the unpaid assessments would have remained uncertain and dependent on another development scenario for the property coming forward at a later date. Development Team The development will be built on property owned by IMH Financial Corporation dba IMH Special Asset NT 175 — AVN, LLC. IMH will be the owner of the property, thru a single purpose entity owned 100% by the parent company. IMH will provide 100% of the equity and guarantees to the lender. The developer will be Titan Development I, LLC. Titan has been retained by IMH under a fee agreement to perform all development services for the Project. Northland's observations about the Project and the development group are as follows: 1. IMH has the financial capacity to secure the equity and permanent construction financing to build the proposed development. Financial information about the company is available from SEC filings that can be accessed through the IMH website (www.imhfc.com). 2. Titan Development I, LLC, is a single purpose entity created and wholly owned by Titan Investments. Titan Investments is a privately owned real estate firm based in Denver, Colorado. Stuart Davis, President and CEO of Titan Investments, owns 95% of the company. Titan Investment's portfolio of completed projects shows the capacity to undertake the Project. 3. Titan Development I, LLC, will be the Asset Manager for the project and Pinnacle, a service management company, will be responsible for leasing and property management at the property. Pinnacle will have the reasonability for meeting the affordable conditions with Titan's oversight. 4. The development team hired Triquest Financial Services Corporation ("Triquest") from New York, to provide financial advisory services for the project. The TIF application submitted to the City included a letter from Richard Hyman from Triquest providing an opinion that the projected financial returns without the proposed TIF assistance are not sufficient to attract equity capital to the project. Information provided by Titan indicates that Richard Hyman founded Triquest in 1992. According to information provided, Triquest was one of the first commercial mortgage conduits in the CMBS industry, and it originated or participated in over a $1 billion of transactions until 1996 when it returned largely to investment banking and principal investing activities. 5. Titan Investments has provided a letter (see Attachment to this memorandum) with information on the proposed financing for the Project. The use and source of funds for the Project, including financing, is shown in Table B on the next page. The Developer has Evaluation of Public Assistance for Parkside Village Project January 15, 2013 Page 6 Use of Funds Site costs $2,131,000 3.6% Building construction costs $41,387,000 69.1% Building soft costs and other fees $9,248,000 15.4% City development fees $1,732,000 2.9% Taxes and special assessments paid during development $5,409,000 9.0% Total Use of Funds $59,907,000 100.0% Source of Funds Reimbursement of penalties and interest on special assessments $969,000 1.6% Land sale proceeds from sale of park land $787,000 1.3% Tax increment cash contribution $1,150,000 1.9% Developer equity $13,880,000 23.2% Construction permanent financing $43,121,000 72.0% Total Source of Funds $59,907,000 100.0% identified $6,500,000 of building construction costs that will be eligible for reimbursement from tax increment. $1,150,000 will be reimbursed up-front with cash payment from City and the balance of $5,350,000 will be reimbursed on a pay-go basis with 5% interest to the extent tax increment is available. The $5,350,000 does not appear as a Source of Funds. The payment on the $5,350,000 note will provide future operating income to the Project. Table B Development Source and Use of Funds January 14, 2013 Ms. Tammy Omdal Senior Vice President Northland Securities, Inc. 45 South 75th Street, Suite 2000 Minneapolis, MN 55402 Re: Parkside Village Financing Dear Tammy: The following is an update on the above referenced project. The project will be financed with a conventional senior construction loan, we are not pursuing HUD 221 (d) (4) financing. Five lenders are currently underwriting the project and expect to receive proposals in the near future. We anticipate the terms to be the following, 60% to 70% loan to cost, three-year term, and a completion/cost and repayment guarantee will be required. The balance of the funds will be either all equity or a combination of equity and mezzanine financing. The equity is currently committed by IMH. Based upon the above financing, we anticipate a start of construction in spring of 2013. Regards, Titan Investments 1, LLC Stuart R. Davis President & CEO SRD/ejw ZW1NRW 4700 S. Syracuse Street, Su1te375 Denver, CO 80237 Phone 720 528 7650 Fax 720 528 7654 **0 0000 60000 0** 000 Apple ll C ity of Valley TO: Mayor, City Council Members and City Administrator FROM: Kathy Bodmer, Planner MEETING DATE: January 24, 2013 SUBJECT: Purchase Agreement for Kelley Park Expansion IMH Special Asset NT 176-AVN LLC, applied for Tax Increment Financing (TIF) in order to develop the Parkside Village development, a 322-unit multiple-family development on the northeast comer of Galaxie Avenue and 153r Street W. A Memorandum of Understanding ( VIOU) was executed in June 2012 between IMH and the City which provided a path for resolving delinquent property tax and special assessment obligations while allowing for development of the Legacy of Apple Valley North properties. In connection with the broader financing package that includes TIF financing that is being considered at tonight's City Council meeting and EDA meeting, a purchase agreement was prepared for the City in order to purchase the four parcels identified as Lots A, 13, C, and D, for the expansion of Kelley Park in accordance with the NIGIJ. The four parcels, legally described as Lot 1, Block 4; Lot 1, Block 5; and Lots 1 and 2. Block 6, THE LEGACY OF APPLE VALLEY NORTH, have a total area of 2.49 acres. With Kelley Park at 3.16 acres, the expansion would increase the size of the park to 5.65 acres, consistent in size with what was originally envisioned for the Legacy of Apple Valley North development. The purchase price stated in the Purchase Agreement for the Kelley Park expansion is $787,451. Funding for the purchase of the land will come from the Park Dedication Fund which currently has a balance of approximately $458,000. The park dedication for Parkside Village will be $361,125 which will bring the Park Dedication Fund balance up to $819,125. To complete the purchase, a short term interfund loan may be required from the future capital projects fund in an amount up to $50,000. The interfund loan would be repaid from future park dedication fees which will include the Parkside Village park dedication. Source: Park Dedication Fund • Park Dedication Collected from Parkside Village Total Recommended Action: Amount: $426,326 361,125 $787,451 MEMO Community Development The terms of the purchase agreement state that the City will be responsible for the payment of all real estate taxes and installments of special assessments on the park expansion parcels due and payable in years subsequent to 2012. Funding for these payments will be made from the Park Dedication Fund. Planning Commission Review and Recommendations: At it June 6, 2012, meeting, the Apple Valley Planning Commission reviewed the proposed park expansion and unanimously agreed that the acquisition of the four parcels by the City for park purposes is consistent with the City's 2030 Comprehensive Plan. Parks and Recreation Advisory Committee Recommendation: At its January 5, 2012, meeting, the Apple Valley Parks and Recreation Advisory Committee reviewed a concept development plan that included the potential for Apple Valley City Council Memo Parkside Village & Kelley Park Expansion January 24, 2013, Meeting Page 2 expanding Kelley Park which the Committee supported. At its November 1, 2012, meeting, the Parks and Recreation Advisory Committee voted unanimously to recommend that the City Council acquire the four parcels abutting Kelley Park to expand the park by 2.49 acres, from 3.16 acres presently to 5.65 acres as originally envisioned in connection with the Legacy of Apple Valley North development. The following action would approve the Purchase Agreement in accordance with the recommendations by the Planning Commission and Parks and Recreation Advisory Committee: Approve the Purchase Agreement with IME Special Asset NT 175-AVN for the purchase of Lot 1, Block 4; Lot 1, Block 5; and Lots 1 and 2, Block 6, THE LEGACY OF APPLE VALLEY NORTH, subject to final revisions by the City Administrator and City Attorney. This Purchase Agreement ("Agreement") is made and entered into between IMH Special Asset NT 175-AVN, LLC, an Arizona limited liability company, ("Seller"), and the City of Apple Valley, a Minnesota municipal corporation ("Purchaser"). For purposes of this Agreement, the term "Effective Date" shall mean the date on which this Agreement is executed by Seller and by Purchaser. In consideration of the covenants and agreements contained hercin. the parties agree as follows: 1. Property. Subject to compliance with the terms and n itions of this Agreement, Seller shall sell to Purchaser and Purchaser shall purchase from Selier he real property legally described on EXHIBIT A attached hereto and incorporated herein, together with all easements, tenements, hereditaments, and appurtenances belonging thereto (collectively the "Property"). 2. Purchase Price; Payment. B. Payment. PURCHASE AGREEMENT A. Purchase Price. The purchase price k or the Property shall be Seven Hundred Eighty-Seven Thousand Iour Ilundred Fifty-One and No/100 ($787,451.00) Dollars Price arnest 1VIoney. T e sum o Five Thousand and No/100 Dollars 0.00) refundable earnest money ("Earnest Money") shall be deposited by Purchaser with Dakota County Abstract ("Escrow ent") within five (5) business days following the Effective Date. mest Money, shall be placed and held by Escrow Agent in mercial interest bearing account in accordance with the terms of this Agreement and shall be credited against the Purchase rice in Ih\'or of Purchaser at closing. Any and all interest accruing n the Farnesi Money pursuant to this Agreement shall be paid to urchaser and shall accrue solely for Purchaser's benefit. ash. The balance of the Purchase Price shall be paid in immediately available U.S. funds (subject to prorations, reductions and credits as provided below) by wire transfer, certified or cashier's check at the closing. 3. Title To Be Delivered; Commitment; Title Objections A. Title To Be Delivered. At closing, Seller agrees to convey marketable fee simple title in the Property, subject only to the Permitted Exceptions (defined herein). B. Commitment. As soon as reasonably possible following the Effective Date, Seller at its sole cost and expense shall cause to be issued and c. A. delivered to Purchaser a commitment ("Commitment") covering the Property issued by Escrow Agent wherein Escrow Agent agrees to issue to Purchaser upon the recording of the Deed (defined herein) and the A conveyance documents described herein an Owner's Title s Insurance Policy, with standard coverage, in the 11 amount of the purchase price. The Commitment shall have an effectiv date after the date of r this Agreement, shall be accompanied by copies of all recorded documents affecting the Property, and shall include searches for real estate taxes and pending and levie d s p c ial assessments. Title Objections. Purchaser shall have unt (15) days from the date it receives the Commitment (or any update or supplement thereto) to make its objections to matters disclosed therein in writin to Seller. Any exception disclosed in the co e . tment (or any up. or supplement thereto) and not timely objected to by Purchaser witin the applicable fifteen (15) day period shall be deemed a `"Pcriiitted Exception': hereunder. Seller shall ha uiitil fifteen (15) days after it receives such timely objections to have the sa oved or satisfied, using its best efforts. If Seller shall fail to have such objections removed within that time, then as Purchaser's sole and exelusive remedy, liabihPurchaser may . y at its t o )le discretion, eith minate this A ent without any its part and receive rnest Money i ogether with nteres t , if pplicable) back. (b) waive such bjcclis in writing and proceed to osin with the understanding that ch uncured objection shall be decnied Perniincd Exceptions at closing, or (c) attempt to cure such uncu 0 red ections, at Purchaser's sole cost and expense, in which event chaser shall have an additional fifteen (15) days to attempt to cure such ohjections. and if Purchaser is not successful in curing such objections, Purchaser e the right to either terminate this Agreement ur suant clause 3.D(a) above or waive such objections pursuant to clause 3. above. Notwithstanding anything contained herein to the contrary. Seller all be obligated to cure (i) mortgage or deed of trust financing or similar liens given for security or collateral purposes, (ii) state, federal or local tax liens or liens for the nonpayment of special assessments, and (iii) any other judgment liens, confession of judgment lens or non-consensual liens (collectively, "Liens"), it being the erstanding and agreement that any such Liens will be satisfied out of Seller's proceeds at closing, if not sooner paid. 4. Seller's Pro ert Information Purchaser's Ins ections. Seller's Property Information. Within five (5) business days of the Effective Date, Seller shall deliver to Purchaser, at no cost to Purchaser, complete and accurate copies of any contracts, leases, licenses or other agreements pertaining to the Property and copies of all permits, plats, authorizations, notices, consents, approvals, plans, specifications, surveys, engineering studies, analysis, soil test borings, environmental studies and 2 c. other documentation pertaining to the physical condition, development and operation of the Property and any other information reasonably requested by Purchaser (whether prepared by Seller, Seller's agents or independent contractors, any governmental authority or agency, federal, state or local, or any other third party), to the extent that Seller has the same in its possession and control ("Property Information"). B. Phase I. As soon as reasonably possible following the Effective Date, Purchaser shall order a Phase I environmental report from an environmental consultant licensed in the State innesota. Such Phase I report shall be completed at Purchaser's sole cost and expense. Purchaser's Inspections. Purchaser, its coiinscl. accouiitaiits. agents and other representatives, shall have reasonable access to the Property and all parts thereof. Purchaser and its agents and representatives shall also have the right to enter upon the Property at any time after the execution and delivery hereof for the purpos inspecting, surveying, engineering, test boring, performance of cnvironiiicntal ests and such other work as Purchaser shall consider appropriate d shall have the further right to make such inquiries of governme a utility companies, and any p other persons,apnd esuc a studies and analyses as it considers appropriate co vely the " pection s"). Purchaser shall m indenify a ro a d hold armles r fro and against any liabilities or dama es to persons or rop rty m arising from Purchaser' s en try onto the ProPe or reunder, unless such liabilities damages arise from the negligenc or willful misconduct of Seller, and provided, however, that Purchasers i m emfication andhiolnd g harmless obligatios shall not apply to r dm arsi s oa ages outiroofnm hazards uncovered or in any way related to ental u conta . te , or other en v ring Purchaser Property spections and not introduced onto the Pro erty by or its g loyees or contractors; provided, however, that nothing here asheall • u er s liability for any release or discharge of i env ental hazards arising out of or in anywayr s elated to the Inspectio i e ns. The indemnification contained in this paragraph shall survive environmental. this Agreement and nd shall survive closing. Notwithstanding any provision in this Agreement to the contrary, nothing in this Agreement shall be construed to waive the Purchaser's liability limits under mnesota law. Purchaser shall restore the Property to the condition that existed prior to Purchaser's access. Purchaser shall provide copies of all reports relating to the Inspections to Seller. 3 5. Condemnation. If, prior to the closing, the Property shall be the subject of an action in eminent domain or a proposed taking by a governmental authority other than Purchaser or a related entity, whether temporary or permanent, Purchaser, at its sole discretion, shall have the right to terminate this Agreement upon notice to Seller without liability on its part by so notifying Seller and the Earnest Money (with interest, if applicable) shall be refunded to Purchaser. If Purchaser does not exercise its right of termination, the "Property" shall thereafter be defined to mean the Property less the portion taken by eminent domain or condemnation, with a proportionate reduction in the Purchase Price. 6. Representations, Warranties and Covenants of Seller. In order to induce Purchaser to enter into this Agreement and purchase the Property, Seller hereby represents, warrants and covenants to Purchaser: A. (i) Seller is a duly organized and validly existing limited liability company under the laws of the State of Arizona, (ii) Seller is qualified to do business in the state of Minnesota, (iii) the eller has full right and authority to enter into this Agreement and sell the Property in accordance with the terms of this Agreement, (iv) each cach erSOfl signing on behalf' of the Seller is authorized to do so, (v) Seller is not a 1oreiw n person" as that term is defined under Internal Revenue Codc Section 1445(F)(3). B. Seller has no actual knowlee of any action in cond domain or public taking i ngs now pending or conte the Property. C. Seller has no actual knowledge o pending or threatened action, litigation, or procccding by any organization. person, individual or governmental agen eluding go mental actions under condemnation authority or si milar procccdi ngs) affecting the Property. D. To the actual knowledge of Seller vithoiit investigation, inquiry or expense tO Scllcr. no toxic or hazardous substances or wastes, pollutants contaminants (including but without limitation, asbestos, urea orrnaldehycle, the group of organic compounds known as polychlorinated hiphenyls. PerO1euI1 products including gasoline, fuel oil, crude oil and various consutucnts o such products, or any hazardous substance as ncd in the Comprehensive Environmental Response, Compensation and iability Act of 1980 ("CERCLA"), 42 U.S.C., Sect. 9601-9657 (as amen e ) have been generated, treated stored, released or disposed of, or otherwise placed, deposited in, or located on the Property in violation of applicable laws, nor to the actual knowledge of Seller has any activity been undertaken on the Property that would contribute to: (i) the Property coming a treatment, storage or disposal facility within the meaning of, otherwise bring the Property within the scope of, the Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. Sect. 6901 et seq., or any similar state law or local ordinance, or (ii) a release or threatened release of toxic or hazardous wastes or substance, pollutants or contaminants, from the Property within meaning of or otherwise bring the Property within the scope of CERCLA or any similar state law or local ordinance, or (iii) the discharge of pollutants or effluents into any water source or system, the dredging or filling of any waters or the discharge into the air of any emission, that would require a permit under the Federal Water Pollution Control Act, 33 U.S.C. Sect. 1251, et seq. or the Clean 4 lot, em. d eminent at e against The representations and warranties set forth in this Section 6 shall be continuing and shall be true and correct on and as of the closing date with the same force and effect as if made at that time and all such representations, warranties and covenants shall survive closing and shall not be affected by any investigation, verification or approval by any party hereto or by anyone on behalf' of any party hereto and shall not merge into Seller's deed being delivered at closing. Seller agrees to indemnify and hold Purchaser harmless from and against and to reimburse Purchaser with respect to any and all claims, demands, causes of action, Ioss. daiiiage. liabilities, and costs (including attorney's fees and court costs) asserted against or incurred hy Purchaser by reason of or arising out of the breach of any representation. Nvarranty or C0\ cnant as set forth in this Section 6. Notwithstanding the foregoing, the Seller shall have an obligation to emnify and hold the Purchaser harmless against any environmental claims relating to the Property, period of two (2) years from the date of closing, in an amount not to exceed $100 such obligation shall survive the closing and the delivery of the Deed to Purchaser. Air Act, 42 U.S. C. Sect. 7401 et seq. or any similar state law or local ordinance. To the actual knowledge of Seller no above ground or underground tanks or private septic systems or wells are located in or about the Property. 5 7. Seller Conditions to Closing. The closing o!the transacion contemplated by this Agreement and all the obligations of Selle r this Agrm eeen are subject to fulfillment of the following conditions precedent on or before e Contingcncv Date specified in Section 9 below: A. The Apple Valley City Citv Council or the Apple Valley Economic Deve lopment Authority "EDA") shall have approved documents, acceptable to Seller in Seller's sole discretion, including the Planned elo ment Agreement and the Development Agreement for Parkside the Agreenicnt for Private Installation of Utilities, the Drainage and Utiliuv Fasement, the Development Assistance Agreement and the Busines sidy Agreeinent (collectively, the "Project Documents"). B. E DA shall have estahlished a tax increment finance ("TIF") housing district for the property within the plat of Parkside Village, and TIF financing subject to the following terms: The TIF district shall have a term not to exceed 25 years from the receipt of the first tax increments and the budget of the TIF District shall authorize not less than $6,500,000 of eligible TIF eligible expenditures. As part of the Development Assistance Agreement, the EDA shall provide for an up-front payment to Seller in the amount of $1,150,000, as part of an eligible event under tax increment financing, upon submission of paid invoices in the amount of $1,150,000. C. EDA and Seller shall have entered into a Business Subsidy Agreement, consented to by Purchaser, providing for the reimbursement to Seller of the funds paid or to be paid by Seller to I)akota Couiitv and reimbursed by Dakota County to Purchaser for statutory accrued penalties and interest on delinquent special assessments on tlie property within the plat of The Legacy of Apple Valley North iti an amount not to exceecl $1,131,324.00. Nothing in this Agreement shall be construed as appro val of any application in egard to the property within the plat of Parkside Village, and neither neilher t1i ipp1e Valley City Council nor the EDA shall have any obligation under this Agreement to approvc any application. 8. Purchaser Conditions to Closing. The closing of transaction contemplated by this Agreement and all the obligations ol Purchaser under this \greemcn1. are (in addition to the Title contingency contained in Section 3.C) su jec fulfillment of the following conditions n 9 below: precedent on or before the Contingency Date speci A. iii. Upon submission of paid invoices for eligible project costs, EDA shall issue a $5,350,000 pay-as-you-go TIF Note to Seller with interest at the rate of five percent (5%) per annum and payments equal to seventy percent (70%) of the tax increments, for the period identified in the TIF Note, received by the City. iv. Thirty percent (30%) of the tax increment received by the City shall be retained by the EDA. it of Apple Valley Planning Commission and City Council shall ve determined that the proposed acquisition of the Property is in ompI with the Comprehensive Guide Plan, pursuant to Minn. Stat. § • • 462. rchaser s all have determined that the physical status or condition of the roperty , inciu in without limitation, environmental, geotechnical (soil), wet an , iloodplain , drainage and availability of adequate access and utilities, shall be satisfactory to Purchaser in its sole discretion. 9. Contingency Date. 6 Purchaser, in its sole and absolute discretion, shall have determined that Property is acceptable to Purchaser in all respects. Purchaser shall ermine the same from review of the Property Information and the Inspections performed pursuant to Section 4, and any other inquiries or other examinations, studies or evaluations of the Property, if any, which Purchaser elects to perform or to have performed, and by taking into consideration such facts as Purchaser deems relevant. Seller agrees to cooperate with Purchaser, at no out of pocket expense to Seller, in obtaining any government approvals and to execute any applications or other documents Purchaser reasonably requests of Seller. 11. A. For purposes of this Agreement, the "Contingency Date" shall be March 15, 2013. B. If the conditions set forth in Section 7 of this Agreement have not been satisfied in the sole and absolute discretion of Seller on or before the Contingency Date, Seller shall have the right to terminate this Agreement by written notice to Purchaser on or before the Contingency Date. Failure to timely deliver notice of termination shall be deemed a waiver of such conditions. C. If the conditions set forth in Section 8 satisfied in the sole and absolute disereti Contingency Date, Purchaser shall have th Agreement by written notice to Seller on or before Failure to timely deliver notice of termination shall be de such conditions, except that withstanding anything contaiii the contrary, it shall be a con la of Purchaser's obligation to close this transaction that ( i ) the representations an warranties made by Seller in mg Date with the same force and at such time, and (ii) the status stablished to Purchaser's . Notwithstanding anything Agreement have not been urchaser on or before the ht to terminate this Contingency Date. emed a waiver of ed herein to Section 6 shall be correct as of the Clo effect as if such representations were m and marketability of title shall have satisfaction in accor an is :\urcener to the contrary in e Project u cments, the termination of this Agreement by Purcha Village. not a eller's right to proceed with the deve o ment of Parkside 1 g e , in Seller's sole discretion. D. lfthis Agreement is terminated pursuant to this Section 9, this Agreement shall null and void and all Earnest Money (and all interest, if applicable shal 1 be rcfui1ed to Purchaser. 1 Closing e. Suhiect to the fulfillment or waiver of the conditions hereof, and provide pn)videu that all of the covenants, representations and warranties of Seller are true and correct on the closing ate as though made on such date, the closing of the purchase and sale contemplated by this Agre ment shall take place on or before March 31, 2013 (the "Closing Date"). The closing shall take place at the offices of Escrow Agent or at such other place as Seller and Purchaser may mutuallv determine. Possession of the Property shall be delivered to Purchaser on the Closing Date, the leasehold or possessory interest of Seller and any tenants, licensees or occupants thereof. Seller's Obligations at Closing. At or prior to the Closing Date, Seller shall: A. Deliver to Purchaser Seller's duly recordable Limited Warranty Deed (the "Deed") to the Property (in a form satisfactory to Purchaser) conveying to Purchaser Fee Simple Title to the Property and all rights appurtenant thereto subject only to the Permitted Exceptions. 13. Closin connection with the clo B. Cause to be furnished and delivered to Purchaser a "marked-up" Commitment in form acceptable to Purchaser. C. Deliver to Purchaser Escrow Agent's standard affidavit of seller confirming that Seller is not a "foreign corporation" within the meaning of Section 1445 of the Internal Revenue Code. D. Deliver to Purchaser Escrow Agent's standard affidavit of seller in form and content sufficient to allow Escrow Agen to delete the standard exceptions contained in Purchaser's Owners Title Insurance Policy. E. Deliver to Purchaser a certificate at g confirming that the representations and warranties set forth in Section of this Agreement are true and correct as of the Closing Date as though niade as of such date. F. Deliver to Purchaser such otlier documents as may be ieasonahlv required by Purchaser in connection vith closing the transaction contenp1aied by this Agreement, all in a form i'easoiiably satisfactory to Purchaser. Seller and Escrow Agent. osts. i'he following costs and expenses shall be paid as follows in e cost to prepare and deliver to Purchaser the Commitment including without limitation, the cost of any title search and exam y scrow Agent); all fees to record all of the documents necessary to permit Seller to convey marketable fee simple title to he Property to Purchaser (other than the fee to record the Deed); and one-half (1/2) of the closing fee and/or escrow fee charged by Escrow Agent in connection with the issuance of the Owners Title Insurance Policy to Purchaser, the escrow of Earnest Money, or the closing of this transaction. Any state, county or municipal deed tax, excise tax or transfer fee imposed on the conveyance. iii. Any deferred or delinquent real estate taxes and utilities and real estate taxes as provided in Section 14 below. 8 er of its obligations as set except any interest accrued thereon, c aser shall deliver the balance of iv. Special assessments allocated to Seller as provided in Section 14 below. v. Seller's attorneys' fees and costs. B. Purchaser shall pay: i. The documentary fee necessary to record the Deed. 16. Remedies. The premium for the Owner's Ti Policy or any extended coverage title insurance ''"""lendorsement requested by Purchaser. iii. One-half (1/2) of the closin fee and/or ow fee charged by Escrow Agent in connection with the issuance the Owners Title Insurance Policy to Purchaser. the escrow of Eames Money, or the closing of this transaction. iv. Purchaser's attorneys' fee v. All costs as including, Assessment. 14. Prorations. Real estate taxes including an ecial assessments certified for payment with the real estate allocable to the Property that are due and payable in 2012 shall be paid one-half (1/2) by Se iler and one-half (1/2) by Purchaser. Purchaser shall reimburse Seller for Purchaser's share of the real estate taxes (second half taxes $6,555) and special assessments (second half assess 794) due and payable in 2012. Seller shall pay all real estate taxes anil instaI1mcis of speeial assessments on the Property due and payable in years prior to 2012. Selier simil pay all interest and penalties on any delinquent real estate taxes and special assessments accruin rior to e closing date. Purchaser shall assume responsibility for the payment of all real estate taxes and installments nstallments of special assessments on the Property due and payable in years subsequent to 2012. aced with Purchaser s investigation of the Property mited to the co the Phase 1 Environmental 9 15. Brokerage. Seller and Purchaser represent and warrant to each other that they have not engaged the services of any broker in connection with the sale and purchase contemplated by this Agreement. Each party hereby agrees to indemnify, defend and hold the other party harmless from any claim (including reasonable expenses incurred in defending such claim) made by a broker, sales agent or similar party claiming to be entitled to a commission in connection with this transaction by reason of the acts of the indemnifying party. The terms of this Section 15 shall survive the closing of the transaction contemplated herein. A. Seller Default. If Seller defaults in the performance of this Agreement, Purchaser may either (i) cancel this Agreement by written notice to Seller in which event Escrow Agent shall promptly refund the Earnest money B. (and all interest, if applicable) to Purchaser and the Agreement shall be deemed to be terminated in all respects, or (ii) if Purchaser rt . does not cancel p this Agreement, Seller acknowledges the Pro e y is unique and that money damages to Purchaser in the event of default by Seller are inadequate and Purchaser shall have the right to apply for and to receive from a court of competent jurisdiction equitable relief by way of restraining order, injunction or otherwise, prohibitory or mandatory, to prevent a breach of the terms of this Agreement, or by way of specific performance to enforce performance of the terms of this Agreement. Purchaser Default. If Purchaser delitulis in the performance of this Agreement, Seller may either (i) CLmCei this greement in compliance with applicable law and thereafter iNc Lscro\v Agent shall deliver the Earnest Money (and interest, if applicahk) to Sciler as liquidated damages, or (ii) apply for and receive from a court of competent jurisdiction equitable relief hy way of specific performance to enforce performance of the terms of ihis igieemen 17. Park Land Purchase Restrictions. The Purchaser acknowledges that the proceeds used to purchase the Property are park funds obtained by the Purchaser as provided for by Minn. Stat. § 462.358, subd. 2b. 18. Kght of First Offer. In the event iiiat Purchascr does become the owner of the Property, Purchaser agrees that if Purchaser resolves to sell all or any portion of the Property, Seller shall have a right o f f ITS t f ("Righ t of First Offer"). Purchaser agrees, before marketing the Property to third parties or accepting any offers therefor, to provide written notice to Seller that Purchaser is willing to sell the Property or a specified portion thereof (a "Property Availability Notice"), which ro e Availability Notice shall specify (a) the portion of the Property which Purchaser intends the price at which Seller intends to offer such portion of the Propery to third ies. For tIie next thirty (30) days after the date of the delivery of the Property Availability otic urchaser shall negotiate exclusively with Seller for the sale of the Property (or the specilied po rtion thereof). If, at the expiration of such thirty (30) day period. Purchaser and Selier have been unable to reach agreement on the terms on which Purchaser would sell the specified portion of the Property to Seller, Purchaser shall have the right to consider ancl accept offers from third parties for such portion of the Property; provided, however, that Purchaser shall not agree to sell the applicable portion of the Property to any third party for a price less than 105% of the price most recently offered in writing by Seller, without giving Seller at least ten (10) days notice thereo f and an opportunity to amend Seller's most recent offer; provided, however, that the foregoing prohibition shall not apply if Purchaser determines in its reasonable discretion and in g ood faith that the third party offer in question is materially more favorable to Purchaser than Seller , s most recent offer on other material terms. Upon a sale of any portion of the Property to a third party pursuant to the terms of this Section p 18, Seller's Right of First Offer shall ex i re as to the portion of the Property sold to such third partyand shall remain in full force and effect as to t h the balance of the Property, if any, as to which g no sale has occurred. Notwithstanding the foregoing, the Right of First Offer shall automatically expire upon the earlier of (i) the date of the last transfer of Seller's interest in the lots within the plat of Parkside Village or (ii) 2033. 10 TO SELLER: And with copy to: 19. Miscellaneous. The following general provisions govern this Agreement. A. No Waivers. The waiver by either party hereto of any condition or the breach of any term, covenant or condition herein contained shall not be deemed to be a waiver of any other condition or of any subsequent breach of the same or of any other term, covenant or condition herein contained. Purchaser, in its sole discretion may waive any right conferred upon Purchaser by this Agreement; provided that such waiver shall only be made by Purchaser giving Seller written notice specifically describing the right waived. B. Time of Essence. Time is of the essence of this Aweemetii. C. Governing Law. This Agreement is made and cxecuted under and in all respects to be governed and construed by the laws ol the State of IVIinnesota and the parties hereto hereby agree that any action regarding this Agreement or the subject matter thereof shall be venued in the State of Minnesota District Court in Dakota Countv. Minnesota. IMH Special Asset NT 175-AVN, LLC 7001 North Scottsdale Road, Suite 2050 Scottsdale, AZ 85253 Attn: John McVey IMH Special Asset NT 175-AVN, LLC 4700 South Syracuse Street, Suite 375 Denver, CO 80237 Attn: Stuart Davis 11 with copy to: D. Notices. All notices and demands given or uired to be given by any party hereto to any other shall be deemed to have been properly given if and when delivere d in icrson , the next business day after being ';en bv reputahle overnight commercial courier (e.g. U.P.S. or Federal x ress ). ()1 three (3) business days after having been deposited with the .S. Posta Service and sent by registered or certified mail, postage aid, addressed as follows (or sent to such other address as any party shall s ci party pursuant to the provisions of this Section): TO PURCHASER: City of Apple Valley 7100 West 147th Street Apple Valley, MN 55124 Attn: City Administrator Larkin Hoffman Daly & Lindgren Ltd. 1500 Wells Fargo Plaza 7900 Xerxes Avenue Minnesota 55431 Attn: Peter J. Coyle • Any party, by notice given as aforesaid, may change the address to which subsequent notices are to be sent to such party. E. Successors and Assigns. This Agreement shall sIiaIl hc binding upon and inure to the benefit of the successors and assigns each of the parties hereto. This Agreement may be assigned or transRrred h y Purchaser at any time without consent of Seller provided tlie assignee agrecs to be bound by the terms of this Agreement. Upon such signment, aser shall have no further or other obligations un er this Agreement. F. Invalidity. If for any reason any erm or vision of this Agreement shall be declared void and unenforcea court it shall only affect such particular term or provision of this reement and the balance of this Agreement shall remain in full force and ffect and shall be binding upon the parties hereto. inter Dougherty, Molenda, Solfest, Hills & Bauer P.A. 7300 West 147 Street, Suite 600 Apple Valley, Minnesota 55124Minneapolis, Attn: Michael G. Dougherty G. Complete Agreement. 11 u between the parties in Agr which alon agreement in regard to the Property. This Agreement may be changed only in writing signed by both of the parties hereto and shall apply to and bind the successors and assigns of each of the parties hereto and shall not merge with the deed delivered to Purchaser at closing. This Agreement may be executed in one or more co rparts, each of which when so executed and delivered shall be an original. but vhic1i together shall constitute one and the same instrument. a cu a ion ot lime Periods. Unless otherwise specifically provided herein, in computing any period of time described in this Agreement, the day of the act or event after which the designated period of time begins to run is not to be included and the last day of the period so computed is to be included, unless such last day is a Saturday, Sunday or legal holiday under the laws of the State of Minnesota, in which event the period shall run until the end of the next day which is neither a Saturday, Sunday or legal holiday. The final day of such period shall be deemed to end at 5:00 p.m., Minnesota time. J. Attorneys' Fees. If any dispute arises between the parties regarding this Agreement or the subject matter thereof, neither party shall be entitled to an award of attorneys' fees from the other party. Recovery of reasonable 12 dings and agreements heretofore had Property are merged into this ully and completely expresses the parties' ar IN WITNESS WHEREOF, the parties hereto have executed this Agreement. Dated: Dated: K. Survival. Subject to the limitations in Section 6, all of the warranties, covenants, and representations made herein by either Seller or Purchaser shall survive closing and the delivery of the Deed to Purchaser, or the earlier termination of this Agreement. disbursements and court costs shall be awarded as determined by the Court. SELLER: IMH Special Asset NT 175-AVN, LLC, an Arizona limited liability company By: IMH Financial Corp, a Delaware corporation, Its: Managing Member By: William G. Meris Its: President PURCHASER: By: Pamela J. Gackstetter Its: City Clerk By: Mary Hamann-Roland Its: Mayor CITY OF APPLE VALLEY, a Minnesota municipal corporation 1 3 Lot 1, Block 4, Lot 1, Block 5, Lot 1, Block 6, and Lot 2, Block 6, 1439533.1 EXHIBIT A Legal Description of the Property 14 PARKSIDE VILLAGE Agenda Item: Case Number: PC12-31-ZSBG Staff Reviewer: Kathy Bodmer Applicant: IMH Special Asset NT 175 — AVN, LLC and Titan Development I, LLC Application Date: August 22, 2012 Meeting Date: January 24, 2012 Petition for: Recommended Actions: The property owner, IMH Special Asset NT 175-AVN, LLC and the developer, Titan Development, wish to develop two multiple family buildings with a total of 322 units in the Parkside Village, located on the northeast corner of Galaxie Avenue and 153 Street. The 126-unit "Galante" building is located between Galaxie Avenue and Galante Lane and will have "suburban intensified" characteristics which include reduced setbacks from Galaxie Avenue, a flat roof, and an outdoor rooftop terrace. The 196-unit "Gabella" building, located between Gabella and 152nd Streets, will have more suburban characteristics which will include being set back 18' from 152 Street, a pitched roof, and an open lawn area on the east side of the property. The following land use actions are requested: • Amendments to PD-739 Zoning District (Central Village) • Vacation of Portions of Fortino Street, Fontana Trail and Drainage & Utility Easements • Preliminary Plat of Parkside Village • Final Plat of Parkside Village and Associated Agreements • Site Plan Review/Building Permit Authorization Amendments to PD-739 are requested to allow construction of the two multiple family buildings. Four existing lots within the Legacy of Apple Valley North plat, along with portions of right-of-way which are requested to be vacated, will be replatted to create two buildable lots. Utilities and streets necessary to serve the subdivision were previously installed under the Legacy of Apple Valley North project. Public improvements will be handled under a "Private Installation Agreement" and includes the relocation of a 24" storm sewer line; the removal of street, curb and gutter from the vacated streets; and the extension Gabella Street to connect with Foliage Avenue. Site Plan Review/Building Permit Authorization is requested for the construction of the 126-unit Galante building and 196-unit Gabella building. At its October 17, 2012, meeting, the Apple Valley Planning Commission voted unanimously to recommend approval of the project with conditions. The following motions will approve the project in accordance with the Planning Commission recommendation: 1. Adopt the Ordinance Amending Planned Development Designation No. 739, adding Zones 3 and 4, rezoning certain parcels within The Legacy of Apple Valley North, approving the Planned Development Agreement, approving the ordinance summary, and waiving the second reading (pages 14-33). 2. Adopt the Resolution Vacating Fortino Street and Fontana Trail and directing the City Clerk to publish the Notice of Completion of Vacation in accordance with the attachments (pages 34-43). 3. Adopt the Resolution Approving the Preliminary Plat of Parkside Village with conditions as recommended by the Planning Commission (pages 44-47). 4. Adopt the Resolution Approving the Final Plat of Parkside Village and Development Agreement with conditions and authorizing the City Clerk and Mayor to sign all required documents (pages 48-77). 5. Adopt the Resolution Approving the Site Plan and Giving Building Permit Authorization to construct two multiple family buildings with a total of 322 units in the Parkside Village with conditions as recommended by the Planning Commission (pages 78-81). Page 1 of 13 Page 1 of 145 Summary of Planned Development No. 739 Zoning Amendments Requested: The petitioner requested several Issues: amendments to Planned Development No. 739 to allow for construction of the Galante and Gabelia buildings, as well as to accommodate their master plan. The Planning Commission reviewed the request and recommended the following: 1. Create new subzones in PD-739 so that any changes to the zones in Parkside Village will not impact Founders Circle. 2. Rezone Blocks 2, 3, 7, and 8, to Zone 3, to allow multiple family residential buildings. 3. Maintain Block 9 with its current zoning designation, Zone 2, to allow mixed-use commercial and residential. 4. Rezone Block 1 on the northwest corner of the Parkside Village to Zone 4 which would allow retail and commercial uses (no mixed-use required) in a single-story building with a 2-story design (minimum 25'). 5. Rezone Block 10 to Zone 3 (residential), and allow for assisted care facility on Block 10 (southeast corner of Parkside Village). 6. Delete Zone lA which allowed assisted care facilities. 7. Amend the performance standards for the Galante building in Zone 3 to allow 10% of parking stalls in an underground parking garage to be from 9.0' to 8.5' wide and the depth of 90 surface parking stalls to be reduced from 20' to 19' long. Vacation: Vacations of portions of existing right-of-way and easements are requested in order to combine parcels to create buildable lots. The following vacations are requested: • Fortino Street between Galaxie Avenue and Galante Lane in order to combine Blocks 7 and 8 for the 126-unit Galante building. • Fontana Trail between Gabella Street and 152 Street West to combine Blocks 2 and 3 for 196-unit Gabelia building. • Drainage and utility easements on Blocks 2, 3, 7 and 8, which will be rededicated on the final plat. A 24" storm sewer line is currently located in the right-of-way of Fontana Trail which will need to be relocated. The final plat shows the dedication of a 30' wide drainage and utility easement adjacent to Foliage Avenue for the relocated storm sewer line. Center Point Energy informed the City that they have a gas main along Galaxie Avenue and 153r Street and requested that a 10' drainage and utility easement be retained along Galaxie Avenue. The petitioner submitted a survey which shows that the gas main is located 10' west of the right-of-way line of Galaxie Avenue. Because the gas main is located in the right-of-way rather than in the easement, the City Engineer has determined that the drainage and utility easement could be reduced to seven feet (7') which will be adequately sized to accommodate the existing and future private and public utilities along Galaxie Avenue. Preliminary Plat: The preliminary plat of Parkside Village includes the following: • Blocks 7 and 8 of The Legacy of Apple Valley North plat are combined along with a vacated portion of Fortino Street to create Lot 1, Block 2, Parkside Village for the Galante building. • Blocks 2 and 3 of The Legacy of Apple Valley North plat are combined with a vacated portion of Fontana Trail to create Lot 1, Block 1, Parkside Village for the Gabella building. • Right-of-way is dedicated on the northeast corner of the site to extend Gabella Street out to Foliage Avenue. Final Plat: The proposed final plat of Parkside Village is consistent with the preliminary plat, creating two lots for the multiple family development. Right-of-way is shown dedicated for the extension of Gabella Street out to Foliage Avenue. A 30' Wu easement is dedicated along Foliage Avenue for the relocation of the 24" storm sewer line. Page 2 of 13 Page 2 of 145 A seven foot (7') drainage and utility easement is shown located along Galaxie Avenue. This dedication represents a variance from the standard 10' easement dedication required adjacent to a right-of-way line. The reduced dedication has been reviewed by the City Engineer who has determined that the width of the easement is sufficient to serve the public and private utilities in the area. Documents will be executed in connection with the Final Plat including a Development Agreement, Private Installation Agreement, Drainage and Utility Easement, and Planned Development Agreement. Site Plan: 1. Galante Building: The Galante Building is a 4-story 126-unit multiple family building located on the northeast corner of 153r Street and Galaxie Avenue. At 126 units, the site has a density of 42.9 units/acre. Zoning code requirements including setbacks and the number of parking spaces are met. The petitioner is requesting an amendment to the PD zoning district to allow for reduced parking stall depths in the surface parking lot from 20' to 19' and reduced parking stall widths for 6% of the underground garage parking spaces from 9' to 8.5'. The Planning Commission reviewed other city's requirements and found that Apple Valley has more stringent standards than other neighboring communities. Given the demographic that the building is likely to serve, the Planning Commission recommended that the PD zoning district performance standards be amended to allow for "compact" parking spaces at the Galante site. 2. Gabe lla Building: The 196-unit Gabe lla building is aligned in an east-west configuration between Gabe lla and 152 Streets. At 196 units on a 5.2-acre site, the development has a density of 37.7 units/acre. All parking requirements are met. No variances or zoning amendments are requested for the site plan. The parcel located east of the parking area, adjacent to Foliage Avenue, is proposed to remain as open green space for the residents. Elevation Drawings: The exterior of the two buildings will be constructed with a combination of decorative concrete block, brick, and cementitious fiberboard (CFB). The CFB is to be painted on both buildings. Because of potential nicks in the field and concern about matching "touch-up" paint, the Planning Commission recommended that the City require factory-applied primer, but allow field- painting to ensure a high quality finish consistent with the manufacturer's recommendation. Landscape Plan: The City's Natural Resources Coordinator, Jeff Kehrer, remains concerned about the choice of honeylocust in the area between the Galante building and the Galaxie Avenue sidewalk. He is concerned that the crown of the tree will be too large and scrape against the building at maturity. Mr. Kehrer recommends that the petitioner select a different tree species, like a columnar maple, or another tree species that is sized to fit within the limited space available between the Galante building and Galaxie Avenue. The Planning Commission's recommendation included Mr. Kehrer's recommendations. Planning At its October 17, 2012, meeting, the Apple Valley Planning Commission voted unanimously to Commission recommend approval of the project with conditions as outlined below: Recommend.: 1. Recommend approval of amendments to PD-739 (Central Village), waiving the second reading, as follows: a. Rezone Blocks 2, 3, 7, and 8, THE LEGACY OF APPLE VALLEY NORTH, to Zone 3, to allow those uses as set forth for Zone 1. b. Rezone all of Lot 1, Block 1, The Legacy of Apple Valley North, to Zone 4 which would allow those retail and commercial uses as set forth for Zone 2 (no mixed-use required) in a single-story building with a 2-story design. c. The height of the commercial buildings in Zone 4 as measured from grade shall be a minimum of 25 feet and shall be designed to appear as a two-story building. d. Delete Zone - IA (Assisted Care Facilities and Residential) regulations from Article A31 of the City Code. Page 3 of 13 Page 3 of 145 e. Allow 10% of parking stalls in an underground parking garage to be 8.5' wide in Zone 3 adjacent to Galaxie Avenue. f. Allow the depth of 90 parking stalls to be reduced to 19' in Zone 3 adjacent to Galaxie Avenue. 2. Recommend retaining Zone 2 zoning designation (mixed use) for Block 9, The Legacy of Apple Valley North. 3. Recommend approval of rezoning of Block 10, The Legacy of Apple Valley North, to Zone 3 (residential), and allow for assisted care facility on said Block 10. 4. Recommend approval of the preliminary plat of Parkside Village, subject to compliance with all code requirements and the following conditions: a. Approval of the preliminary plat is subject to the approval of the vacation of the right- of-way of Fortino Street, the right-of-way of Fontana Trail, and all existing drainage and utility easements. b. Drainage and utility easements shall be dedicated in accordance with the City's subdivision ordinance. c. A 30' drainage and utility easement shall be dedicated for the relocated 24" storm sewer line east of the right-of-way line of Fontana Trail in the location directed by the City Engineer. d. A minimum 10' drainage and utility easement shall be dedicated adjacent to Galaxie Avenue and 153r Street West rights-of-way. e. A cash-in-lieu of land parkland dedication shall be required in accordance with the City's dedication formula in the subdivision ordinance. f. Stormwater pond dedication has been previously satisfied. 5. Recommend approval of the site plan and give building permit authorization to construct the 126-unit Galante building, without encroachment into the Galaxie Avenue drainage and utility easement, and the 196-unit Gabella building in the Parkside Village subject to compliance with all City code requirements and construction standards and the following conditions: a. Approval of the building permit is subject to approval and publication of zoning amendments to Planned Development No. 739, Article 31 of the City Code, and execution of a Planned Development Agreement. b. Approval of the building permit is subject to the approval of the vacation of the right-of- way of Fortino Street, the right-of-way of Fontana Trail, and all existing drainage and utility easements. c. Approval of the building permit is subject to approval of the final plat and development agreement of Parkside Village. d. A landscape bid list that confirms that the landscape materials meet or exceed 2-1/2% of the value of the construction of the building based on Means Construction Data shall be submitted at the time of building permit application. Landscape materials include plant materials, underground irrigation systems, public art, fountains, decorative paving, and other outdoor common area elements that create an enhanced sense of place and fosters positive social interactions. e. The landscape plan shall be revised to replace the honeylocust trees along Galaxie Avenue with a tree that is better suited to the limited size of the planting area to be reviewed and approved by the Natural Resources Management Coordinator. f. A lighting plan shall be submitted at time of building permit application. g. A hauling and staging plan shall be submitted at time of Natural Resources Management Permit (NRMP) application. Page 4 of 13 Page 4 of 145 Attachments: 1. Draft Ordinance Amending PD-739 2. Draft Resolution Vacating Public Grounds 3. Draft Resolution Approving Preliminary Plat 4. Draft Resolution Approving Final Plat, Development Agreement, and Associated Documents 5. Draft Resolution Approving Site Plan and Giving Building Permit Authorization 6. Location Map 7. Area Map 8. Comprehensive Plan Map 9. Zoning Map 10. Petitioner Letter 11. Colored Images (Aerial rendering, site plans, elevations & view corridors 12. Requested zoning amendment 13. Preliminary Plat 14. Draft Final Plat 15. Plan Set Galante Building a. Title Sheet b. Survey/Existing Conditions c. Site Plan d. Removals/Erosion Control e. Utilities Plan f. Stormwater Pollution Prevention Plan g. Site Details h. Landscape Plan i. Garage Plan, Floor Plan Level 1 Page 5 of 13 j. Floor Plan Level 2, Level 3 k. Floor Plan Level 4 I. Unit Plans m. Exterior Elevations n. Exterior Elevations - 2 16. Plan Set Gabe Ila Building a. Title Sheet b. Survey/Existing Conditions c. Site Plan d. Removals/Erosion Control e. Utilities Plan f. Stormwater Pollution Prevention Plan g. Site Details h. Landscape Plan i. Garage Plan, Floor Plan Level 1 j. Floor Plan Level 2, Level 3 k. Floor Plan Level 4 I. Unit Plans m. Exterior Elevations n. Exterior Elevations - 2 17. City Engineer Memo 18. Crime Prevention Specialist Memo 19. Fire Marshal Memo 20. Natural Resources Coordinator Memo 21. Resident Email 22. Letter from Norandex re: Field Painting Cementitious Fiberboard Page 5 of 145 Existing Conditions Property Location: Legal Description: Comprehensive Plan Designation Zoning Classification Existing Platting Current Land Use Size: Topography: Existing Vegetation Other Significant Natural Features Adjacent Properties/Land Uses MIX — Mixed Use Planned Development No. 739 Vacant. Lot 1, Block 1, Parkside Village: Lot 1, Block 2, Parkside Village: Flat Grasses, some volunteer trees. N/A. NORTH SOUTH EAST WEST Comprehensive Plan Comprehensive Plan Comprehensive Plan Comprehensive Plan Parkside Village PROJECT REVIEW Generally northeast corner of Galaxie Avenue and 153' Street West. Lot 1, Block 1; Lots 1-3, Block 2; Lot 1, Block 3; Lot 1, Block 4; Lot 1, Block 5; Lots 1-2, Block 6; Lot 1, Block 7; Lot 1, Block 8; Lot 1, Block 9; and Lots 1-2, Block 10; all in THE LEGACY OF APPLE VALLEY NORTH; Dakota County, Minnesota, according to the recorded plat thereof, on file and of record in the Office of the Dakota County Recorder. Lots are currently platted as The Legacy of Apple Valley North. Blocks 2 and 3 along with vacated portion of Fontana Trail will be replatted as Lot 1, Block 1, Parkside Village; Blocks 7 and 8, along with the vacated portion of a Fortino Street, will be replatted as Lot 1, Block 2, Parkside Village. 12.8 Acres not including requested vacated right-of-way. Galaxie Park First, Galaxie Park Third Addition, DJD Addition Zoning/Land Use Legacy of Apple Valley Zoning/Land Use Hillcrest Acres/Orchard Point Townhomes Zoning/Land Use Galaxie Commons and Culvers Zoning/Land Use 5.20 Acres 2.94 Acres C-Commercial PD-254 MIX-Mixed Use PD-716 PD-679 C-Commercial RB Retail Business C-Commercial/MD-Medium Density Residential 6 of 13 Page 6 of 145 Development Project Review Comprehensive Plan: The City's 2030 Comprehensive Plan Land Use Map guides the site for "MIX" (Mixed Use) development. Key 9 of the Comprehensive Plan states that downtown Apple Valley continues to evolve in form, use and density and has expanded to include the Central Village, Apple Valley Transit Station, and Fischer Marketplace. The subject lots are located within the approved Central Village Plan which guides the development of the area for higher intensity mixed uses that include "a mix of places to shop, work, live and play." Livable Communities impact. The City participates in the Livable Communities program. The proposed development is consistent with the City's goal of providing a variety of housing styles in a range of price points to provide more "life-cycle" housing opportunities within the community. Zonin2: The petitioner requests amendments to the Planned Development Zoning District No. 739 in order to develop the property as shown on the plans. The following amendments are requested: 1. Rezone Blocks 2, 3, 7, 8, 9 and 10 to Zone 1 to allow multiple family-only buildings. The petitioner states that the market will not support mixed-use buildings at this time. They propose to provide mixed-use in a horizontal rather than vertical configuration by maintaining Lot 1, Block 1, for a commercial use to serve the Parkside Village neighborhood. The Planning Commission's recommendation did NOT include Block 9 in this rezoning. Instead, Block 9 is recommended to remain Zone 2, Mixed Use. In addition, the Planning Commission recommended creating new zones so that any changes to Parkside Village would not impact Founders Circle. So, the residential zone is proposed to be Zone 3. 2. Rezone all of Block 1 to Zone 2. The east side of Block 1 is currently within Zone 1, so the rezoning will make all of Block 1 within Zone 2 which would be mixed use commercial. 3. Remove Zone JA and allow "assisted care facility" as a permitted use in Zone 1. The petitioner requests that Blocks 9 and 10 be allowed to have assisted care or continuum of care buildings along 153 Street flanking Fresco Terrace (Blocks 9 and 10). As noted above, the Planning Commission recommended that Block 9 remain Zone 2, Mixed Use Commercial/Residential. 4. Amend Zone 2 to remove requirement that mixed-use development must include residential. Currently, Zone 2 requires vertical mixed use buildings with residential and retail and/or office uses. It was expected that the buildings within Zone 2 would have retail on the first floor with office and residential on the upper stories. The Planning Commission recommended that a new zone, Zone 4, be created which allows commercial-only uses. 5. Allow commercial buildings in a single story building with a two-story facade. Design expectations for a "facade" will need to be further defined to ensure the exterior design of any commercial buildings are in keeping with the design goals of the Central Village and the adjacent new or newer developments. Again, these performance standards were included in Zone 4. Vacation: The petitioner is requesting vacation of portions of right-of-way in the Legacy of Apple Valley North to create buildable lots for the Parkside Village development. The vacation is requested by the property owner, IMH Special Asset NT 175-AVN, LLC, and includes a vacation of Fortino Street between Galaxie Avenue and Galante Lane in order to combine Blocks 7 and 8 for the 126-unit Galante building. In addition, the property owner is requesting the vacation of Fontana Trail between Gabella Street and 152 Street West to combine Blocks 2 and 3 for 196-unit Gabella building. Lastly the property owner is requesting vacation of drainage and utility easements on Blocks 2, 3, 7 and 8, which will be rededicated on the final plat. A 24" storm sewer line is currently located in the right-of-way of Fontana Trail that is requested to be vacated. The storm sewer line will need to be relocated to allow for development of the Gabella building. A 30' drainage and utility easement is shown dedicated adjacent to Foliage Avenue for the relocation of the storm sewer line. During the review of the vacation request, Center Point Energy informed the City they have a gas main along Galaxie Avenue and 153 Street and requested that a 10' drainage and utility easement be retained along Galaxie Avenue and a 15' drainage and utility easement be retained along 153 Street. A survey was submitted showing that the gas main along Galaxie Avenue is located 10' west of the right-of-way line rather than within the drainage 7 of 13 Page 7 of 145 and utility easement. As a result, the City Engineer has reviewed the location of the gas main along Galaxie Avenue and has determined that a seven foot (7') wide drainage and utility easement is adequately sized to accommodate the existing and future private and public utilities along Galaxie Avenue. Preliminary Plat: The preliminary plat shows the following: Blocks 7 and 8 are combined along with a vacated portion of Fortino Street to create Lot 1, Block 2, Parkside Village for the Galante building. • Blocks 2 and 3 are combined with a vacated portion of Fontana Trail to create Lot 1, Block 1, Parkside Village for the Gabella building. Right-of-way is dedicated on the northeast corner of the site to extend Gabella Street out to Foliage Avenue. Final Plat: The proposed final plat of Parkside Village is consistent with the preliminary plat, creating two lots for the multiple family development. Right-of-way is shown dedicated for the extension of Gabella Street out to Foliage Avenue. A 30' d/u easement is shown along Foliage Avenue for the relocation of the 24" storm sewer line. A seven foot (7') drainage and utility easement is shown located along Galaxie Avenue. This dedication represents a variance from the standard 10' easement dedication required adjacent to right-of-way lines. The reduced dedication has been reviewed by the City Engineer who has determined that the width of the easement is sufficient to serve the public and private utilities in the area. Development Agreement documents will be executed in connection with the Final Plat. Site Plan: Galante Building: The Galante Building is a 4-story 126-unit multiple family building located on the northeast corner of 153 Street and Galaxie Avenue. Access to the site will be gained from the east side of the property off of Galante Lane. Access to the underground parking will also be taken directly from Galante Lane. At 1 26 units, the 2.94-acre site has a density of 42.9 units/acre. A total of 126 garage and 125 surface parking spaces are required; 135 garage spaces and 157 surface spaces (117 parking lot, 32 on-street and 8 proof-of-parking spaces) are provided on the Galante site. The number of parking spaces meets the code requirements. The setback of the surface parking lot from the Galante Lane right-of-way was increased from five feet (5') to ten feet (10') to allow for additional landscaping. Shifting the building to the east to accommodate the natural gas main in Galaxie Avenue while simultaneously increasing the parking lot setback from Galante Lane has resulted in a reduced area available for the surface parking lot on the east side of the Galante building. The petitioner is showing a reduction in the depth of the head-to-head parking stalls in the center of the site from 20' deep as required by the Zoning Ordinance down to 18.5' deep per stall. They have agreed to increase the stall depth to 19', which means in the head-to-head configuration, the stalls will be reduced from 40' to 38', requiring a variance of two feet (2'). A quick survey was done of neighboring community parking standards: Apple Valley Parkside Village Galante Building Edina Savage Burnsville St. Louis Park Eagan Richfield Minnetonka Stall Width 9' 9' 8.5' 9' 9' 8.5' 10' 9' 8.5' Stall Length 20' 18.5' 18' 18' 18' 18' 19' 18.5' 18' Drive Aisle 24' 24' 24' 24' 24' 25' 24' 24' 26' 8 of 13 Page 8 of 145 Chanhassen 9' 18' 26' Plymouth 9' 18.5' 26' Lakeville 9' 20' 24' Woodbury 9' 20' 25' Eden Prairie 9' 23' , 24' Based on the findings above, several communities use a shorter parking stall depth than Apple Valley. The Planning Commission recommended provisions be included in the PD-739, Zone 3, which would allow shorter head-to-head parking stalls on the Galante lot. The plans indicate that eight (or 6%) of the underground garage parking spaces will be 8.5 wide which is less than the City's typical parking space width requirement of 90". While the City currently has no provision for "compact" parking spaces for either surface parking or garage parking, given the demographic that the building is likely to serve, it may be appropriate to consider them in connection with this development. The following are some examples of compact parking spaces from other communities: • Edina: allows 8'6" wide parking stalls for their standard parking stall width. They allow a 7 '6" "compact" parking space in specific planned development and medical zoning districts up to a maximum of 20% of the required parking spaces. • Richfield: up to 20% of the required parking spaces in parking lots of over 20 spaces may be compact parking spaces. Compact spaces must be a minimum of 8'0" wide, properly signed, and are not permitted for high turnover uses like fast food restaurants. • Minneapolis and St. Paul: both allow 8' wide compact parking stalls. In Minneapolis, up to 25% of the required stalls may be compact and in St. Paul up to 50% of the stalls may be compact. The PD zoning district could allow for "compact" parking spaces on the Galante site which would be consistent with a suburban-intensified development. The massing of the four-story building is broken up with a one-story community area in the middle of the building which will contain such amenities as a fitness area, game room, club area/party room and yoga studio. The building is designed with distinctive rounded tower elements at the intersections of Galaxie Avenue & 153 Street and Galaxie Avenue & 152n Street in keeping with the Central Village Plan vision. The petitioner also took sight lines into consideration from this site to Kelley Park in their building design and placement on the lot based on discussions with the City. The Galante building will have "suburban intensified" characteristics which include construction up to the right- of-way line of Galaxie Avenue, a flat roof, an outdoor rooftop terrace and elements that will encourage pedestrian activity along Galaxie Avenue. Gabella Building: The 196-unit Gabella building is aligned in an east-west configuration between Gabella Street and 152 Street. Access to the site will be taken from the north from Gabella Street. Access to the underground parking garage is taken directly from Gabella on the northwest side of the building and from the internal parking lot on the northeast side of the building. At 196 units on a 5.2-acre site, the development has a density of 37.7 un its/acre. The Gabella building consists of two u-shaped buildings connected with a one-story community area with amenities that will include an outdoor swimming pool, fitness center, Internet cafe, club room/party room, yoga studio and game room. The Gabella building will have more suburban characteristics which will include being set back eighteen feet (18') from 152 Street, a pitched roof, and outdoor patio community/barbeque area. A total 196 garage and 262 surface parking spaces are required; 202 garage and 269 surface parking spaces (233 parking lot and 36 on-street) are provided. The design of the surface and underground garage stalls all meet City Code requirements. 9 of 13 Page 9 of 145 Grading Plan: The grading plan has been reviewed by the City Engineer, Colin Manson, and he notes that the elevation of the floor of the underground parking garage in the Galante building is lower that the high water elevation of the stormwater pond into which it drains, which raises a concern about potential flooding. Mr. Manson is working with the petitioner's engineer on a solution which includes disconnecting the trench drain from the storm sewer system and then installing a pump which would pump the trench drain into a catch basin which will then drain into the storm sewer system. The City Engineer notes that a significant volume of soil will need to be removed from the site. The site will also be tight for construction activities. As a result, Mr. Manson states that staging and hauling plans will be required for review by City staff prior to any land disturbing activity under the Natural Resources Management Permit (NRMP). Elevation Drawings: The exterior building materials of the Galante and Gabella buildings include a combination of brick, cementitious fiberboard (CFB) and a knee wall of decorative concrete block. The plans indicate that the CFB is to be painted, which would be contrary to the Zoning Code requirement that all building materials must be integrally colored. A letter was prepared by Nichiha Fiber Cement regarding the issue of field painting. They state that primer is factory applied, but because of potential nicks in the field and concern about matching "touch-up" paint, factory pre-finishers recommend at least one coat of field applied paint. The Planning Commission concurred that the cost of requiring factory finishing of the product does not seem reasonable in light of the fact that the siding will likely require at least one coat of paint after it is installed. Landscape Plan: The landscape plans include a mix of deciduous and coniferous trees, shrubs and decorative grasses. The minimum value of the landscape plantings must meet or exceed 2-1/2% of the value of the construction of the building. In the case of the Central Village, the landscape budget can include landscape plantings (trees, shrubs, flowers, decorative grasses), decorative pavers, irrigation, benches, flower beds and public art. Hardscape materials like edging, rock, landscape fabric and grass or sod do not count toward the 2-1/2% requirements. Jeff Kehrer, the City's Natural Resources Coordinator, reviewed the plans and provided a memo. Mr. Kehrer states that even though the petitioners have stated that the honeylocust will not grow to be too large because of the constrained conditions, he remains concerned that the crown of the honeylocust on the west side of the Galante building will grow into the building. As a result, he recommends a smaller tree in that location. All of the other issues identified in Mr. Kehrer's previous memo were addressed. Availability of Municipal Utilities: Utilities have been installed and are available at the two building sites. Some utilities will need to be removed and a 24" storm sewer line in Fontana Trail will need to be relocated. Utilities are located along the north line of Block 3 which will be covered with the extension of Gabella Street out to Foliage Avenue. The Petitioner will need to work with the City Engineer to determine which services and utilities will need to be relocated and removed through either a public improvement project or private installation agreement. Street Classifications/Accesses/Circulation: Galante building: • Galaxie Avenue -- Collector street. No changes to access proposed. 153rd Street -- Collector street. No changes to access proposed. • Galante Lane -- Local street. One access point to the parking area and one access point to the underground garage proposed. • 152nd Street -- Local street. No changes to access proposed. • Fortino Street -- Local street. Petitioner is requesting vacation of Fortino Street between Galaxie Avenue and Galante Lane which is currently being reviewed by the City Council. Gabella building: • Foliage Avenue -- Collector street. The petitioner wishes to dedicate right-of-way for Gabella Street which would provide a direct access from Gabella out to Foliage Avenue. This request has been reviewed by the Engineering/Public Works staff and they have no outstanding issues. 10 of 13 Page 10 of 145 9 Gabe lla Street -- Local street. Two driveway access points to the parking lot and one direct driveway access to the underground parking are shown. The petitioner proposes to extend Gabe lla Street to the east so that it intersects with Foliage Avenue. • 152nd Street -- Local street. The plans show a circular driveway in front of the building with four parking stalls that will provide access to the front office. * Galante Lane -- Local street. No change in access requested. • Fontana Trail -- Local street. Petitioner is requesting vacation of Fontana Trail between Gabella Street and 152nd Street which is currently being reviewed by the City Council Pedestrian Access: At the Galante building site, clear pedestrian circulation is provided around the exterior of the site and through the parking lot to the main entrance. The Gabella building contains connections to perimeter walkways, but has fewer pedestrian walkways through the parking lot. Public Safety Issues: Crime Prevention Specialist Pam Walter provided a memo with Crime Prevention Through Environmental Design (CPTED) recommendations. She requests that a lighting plan be provided to evaluate lighting levels in the development. A lighting plan will be submitted at the time of application of the building permit. The City's Fire Marshal, Roy Kingsley, provided a memo concerning Fire Code items that will be required. Recreation Issues: Construction of these buildings, especially the Gabella building, could have impacts on the users of Kelley Park. The timing of construction and construction staging should be done in a manner that minimizes impacts to the popular park. In connection with this development project, the City will be exploring the expansion of Kelley Park. This will be discussed in more detail as the project progresses. Signs: No sign approvals are given at this time. No signs may be installed prior to the issuance of a permit. A separate sign permit must be obtained prior to the installation of any signs on the site or the building. Public Hearing Comments: The public hearing for the Parkside Village was held on September 19, 2012. The following are the issues/questions that were raised. 1. Earlier plans had shown the Gallante building designed with a transparent middle which would provide view corridors from Galaxie Avenue to Kelley Park. Staff Response: Early sketch plans showed the one-story community section of the building to be transparent to allow views from Galaxie Avenue into Kelley Park. As the plans have been refined, the floor plans have changed so that there is no longer a transparent view through the building. A fitness room will be located on the west side of the community area with windows which will provide a street-level view into the building. However, an enclosed club/party room was created behind the fitness area on the east side of the building which opens up onto an outdoor patio area and looks onto Kelley Park. Because the club/party room has a wall that separates it from the fitness area, the middle portion of the building is no longer transparent to Kelley Park. To address the issue of maintaining sight lines to Kelley Park, the petitioner modified the design of the building by shortening the north and south wings of the buildings along 152 Street and 153 Street. The sight line drawings indicate that a view corridor will be maintained at the intersections of Galaxie/153r Street and Galaxie/152 Street to Kelley Park. 2. A question was raised about whether Blocks 9 and 10 should be rezoned at this time to Zone 1 which would allow residential only uses. Currently Block 9 and a portion of Block 10 are located in Zone 2 which requires mixed uses including retail/commercial on the first floor and either office or residential on the upper stories. Staff response: The original approved Master Plan for Legacy North envisioned two 2-story office/commercial buildings flanking Fresco Terrace with a total of 76,000 sq. ft. of floor area. Various recent market studies confirm that office space is not in demand, so the developer wishes to rezone the 11 of 13 Page 11 of 145 parcels for residential uses. The developer envisions a mixed-use development that includes residential and commercial development in a horizontal rather than vertical configuration. 3. A question was raised about whether the parcels adjacent to Kelley Park, which the City expects to obtain in order to expand Kelley Park, have been rezoned. Staff response: No, the parcels adjacent to Kelley Park have not yet been rezoned. The City will wait to rezone the property after the acquisition of the park expansion parcels. 4. A concern was raised concerning the reduction of opportunities for mixed-use, retail and commercial in this project. A question was raised as to whether shops could be constructed in the Galante building at the corners of 152 Street and 153 Street and Galaxie Avenue. Lastly, a comment was made that the City should make sure that the development stays mixed-use and walkable. Staff response: The petitioner has determined that the market currently does not support the previous plan for the area. While there isn't a market for mixed-use buildings at this time, the petitioner agrees with the mixed-use concept and plans to develop Lot 1, Block 1, for commercial uses. So, the developer will create a horizontal rather than vertical mixed use development. The Parkside Village development continues to support the City's goal of creating a mixed-use and walkable neighborhood. 5. A question was raised whether the City had done a traffic study in connection with this project. How will the vacated streets impact traffic levels? Traffic levels and safety are a concern, especially with the popularity of Kelley Park and Music in the Park series. Staff response: A traffic study was conducted in 2003 in connection with the preparation of the Environmental Assessment Worksheet (EAW) for Legacy Village North. Findings of the study were used to help determine the design of the intersections, turn lanes and center medians on Galaxie Avenue and Foliage Avenue. The 2003 report estimated a total of 8,972 daily trips would be generated by this development. It should be noted that the EAW assumed 304,425 sq. ft. of commercial area and 280 residential units would be constructed. These assumptions are different from the Legacy North master plan that was approved in 2004 which called for 221,840 sq. ft. of commercial area and 506 residential units. The City Engineer has reviewed the Traffic Report and determined no further traffic analysis is needed. In general, commercial and retail development have higher traffic demand than residential uses. As a result, reducing the amount of commercial development on the site while increasing the number of residential units is expected to result in lower traffic levels than initially anticipated. 6. City should investigate making 153 Street east of Galaxie Avenue a 2-way street. Staff response: The City Council approved the separation of 153 Street into a 1-way coupler system when it approved the Central Village Plan in 2002. 153r Street was split into two 1-way segments from Garrett Avenue east to Foliage Avenue to provide a walkable environment for the Central Village. By splitting 153rd Street, pedestrians and cyclists only need to cross one or two lanes of traffic rather than four or five which is typically found in commercial areas of the City. The street configuration was intended to help create a mixed-use, vibrant and livable pedestrian-oriented environment which would complement the City's existing downtown. The City Engineers have stated that the location of the intersections are fixed and cannot be re-aligned without significant cost and disruption to the existing properties. 7. Will residents have access to both the Galante and Gabella buildings? Concern about foot traffic and car traffic between the two buildings. Staff response: The petitioner states that, yes, residents of both buildings will have access to common areas in both buildings. The common area to the Gabella building will have security access at its east and west wings providing a secure residential environment for those residents that live there. The Galante residents 12 of 13 Page 12 or 145 will have a fob that activates the front door, pool and fitness areas. Club room and theater will be by reservation only. Although a resident raised a concern that residents of one building using the facilities in the other building are likely to drive between buildings, staff believes that walking will be more convenient, and therefore, traffic between the buildings is not expected to be an issue. 8. Will the roof deck on the Galante building provide a connection to both floors? Staff response: The petitioner states that, yes, Galante residents will use fobs to access the roof deck on second floor from either wing (north & south). However, residents will be unable to enter the wing that they do not live in. Gabelia residents will have restricted access to the roof deck only by use of security keys. 9. How affordable will the project be? The City should make sure it isn't too high end. Staff response: The Parkside Village development is a market rate multiple-family development, with a range of floor plans and unit sizes to provide a range of rental rates. The petitioner has applied for tax increment financing ( TIF ). The use of that financing tool in a market rate rental development requires that 20 percent, or about 65 of the 322 units in the two buildings, must be affordable to persons with incomes at or below $41,950. The average per capita income for Apple Valley, a primarily service and retail economy, is $35,814, while the average household income is $78,571. 10. Concern about development along Foliage Avenue and potential impacts on residents to the east. Staff response: The east side of the Gabella site will contain a green open space area, so impacts to the residential areas southeast of Foliage Avenue and 153 Street are expected to be minimal. When Block 10 is developed in the future at Foliage Avenue and 153 Street, impacts to the residential areas to the east will need to be evaluated. 13 of 13 Page 13 of 145 CITY OF APPLE VALLEY ORDINANCE NO. AN ORDINANCE OF THE CITY OF APPLE VALLEY, AMENDING CHAPTER 155-APPENDIX F OF THE CITY CODE ENTITLED "APPENDIX F: PLANNED DEVELOPMENT DESIGNATIONS" BY AMENDING ARTICLE A31 REGULATING PLANNED DEVELOPMENT DESIGNATION NO. 739. The City Council of Apple Valley ordains: Section 1. That the official zoning map be amended to include the following land under Planned Development Designation No. 739 whereby that land identified and described for Planned Development Designation No. 739 under Ordinance No. 739, effective January 31, 2004, is hereby replaced and new sub -zones are added as follows Zone 1: The north 310.00 feet of Outlot A, Culvers Addition, according to the plat of record with the Dakota County Recorder; and Zone 2: All land enclosed by the following described line: beginning at a point of the south line of the Northwest Quarter (NW 1/4) of Section 34, distant 945.35 feet west of the southwest corner of said NW 1/4; thence N 00°36'33" E 389.99 feet; thence N 00 °16'37" E 310.00 feet; thence N 89 °47'32" E 250.00 feet; thence S 00 °16'37" W 250.00 feet; thence S 45 °00'00" E 225.00 feet; th N 89 °47'32" E 337.50 feet; thence S 00°11'15" W 298.32 feet; thence S 89 °47'32" W 741.19 feet to the point of beginning and there terminating; and Lot 1, Block 4 and Lot 1, Block 5 of The Legacy of Apple Valley North; and The northerly 90 feet of Lots 1 & 2, Block 6 of The Legacy of Apple Valley North. All land enclosed by the following described line: beginning at a point on the south line of the Northwest Quarter (NW 1/4) of Section 34, distant 50.00 feet west of the southwest corner of said NW 1/4; thence 89 °47'32" W 154.16 feet; thence N 00°11'15" E 298.32 feet; thence S 89 °47'32" W 337.50 feet; thence N 45 °00'00" W 225.00 feet; thence N 00° 16'3 7" E 250.00 feet; thence S 89 °47'32" W 250.00 feet; thence N 00°16'37" E 199.17 feet; thence N 00°11'15" E 260.79 feet; thence S 89 °44'28" E 695.40 feet; thence S 00° 11' 15" W 210.79 feet; thence N 89°44'38" E 210.01 feet; thence S 00°11'15" W 948.81 feet to the point of beginning and there terminating; and Page 1 of 8 Page 14 of 145 Lot 1, Block 9 of The Legacy of Apple Valley North; and Lots 1 & 2, Block 6 of The Legacy of Apple Valley North, excepting therefrom the northerly 90 feet of each Lot 1 and Lot 2, Block 6. Zone 3: Lot 1, Block 7 and Lot 1, Block 8 of The Legacy of Apple Valley North, together with that part of Fortino Street lying between the south line of Block 7 and the north line of Block 8 extending from the east line to the west line of said Blocks, all of which is proposed to be re-platted as Lot 1, Block 2 Parkside Village; and Lots 1, 2 and 3, Block 2 and Lot 1, Block 3 of The Legacy of Apple Valley North, together with that part of Fontana Trail lying between the east line of Block 2 and the west line of Block 3, extending from the north line to the south line of said Blocks, all of which is proposed to be re-platted as Lot 1, Block 1 Parkside Village; and Lots 1 and 2, Block 10 of The Legacy of Apple Valley North. Zone 4: Lot 1, Block 1 of The Legacy of Apple Valley North. Section 2. Article A31 of the Apple Valley City Code is hereby amended by deleting Section A31-4 (C), Section A31-5 (C), Section A31-7 (C), and the Zone 1-A column in the Table of Minimum Area Standards and Requirements set forth in Section A31-8(C). Section 3. Article A31of the Apple Valley City Code is hereby amended by adding Section A31-4(C) and (D) to read as follows: A31-4. PERMITTED USES. (1) * (C) Zone 3: Within this zone, no structure or land shall be used except for one or more of the following uses or uses deemed similar by the city council: Any permitted use specified for Zone 1 of Planned Development Designation No 739 herein. (2) Assisted Care Facility on Lots 1 & 2, Block 10 of The Legacy of Apple Valley North. For purposes of this clause, an Assisted Care Facility shall mean a structure or several structures developed as a single facility in which residential housing and limited medical care is provided to persons who reside in a single unit dwelling that includes complete, permanent independent living facilities for the resident, including, but not limited to: living, sleeping, cooking, eating, and sanitation provisions and receives Page 2 of 8 Page 15 of 145 (3) Offices of a general nature where the operations do not include over-the- counter retail sales or warehousing from the site. Individual offices shall not exceed 25% of the gross floor area within any one building. some personalized supportive services or care from the facility staff, but not full, 24-hour personal or medical care. (D) Zone 4: Within this zone, no structure or land shall be used except for one or more of the following uses or uses deemed similar by the City Council: (1) The following retail uses: Antique or gift shops; appliance store (sales and/or repair); art and school supply store; bakery; bank and savings and loan; barbershop; beauty salon; bicycle sales; books; stationary and office supplies; candy; camera and photographic supplies; carpet and rug sales; catering services; china and glassware sales; clothing and costume sales and rental; coin operated amusement devices and similar facilities; department store; drugstore; dry cleaning; dry goods; electronic sales and/or service; florist; furniture store; garden supplies; grocery; hardware store; hobby store; interior decorating; jewelry and watch repair; laundromat; leather goods and luggage; locksmith; musical instruments; nail salon, on-sale liquor, wine or 32 beer in conjunction with a Class I restaurant facility; paint and wallpaper sales; photography studio; pipe and tobacco shop; recorded music sales; Class 1, II, or III restaurant (no drive through facilities allowed), subject to the installation of state of the art ventilation equipment in restaurants where applicable; shoe sales or repair sporting goods, tailoring; theater (except open air drive-in); toy store; video rental and sales. (2) Professional offices for doctors, dentists, lawyers, realtors, insurance agents, and similar uses. Individual tenant office spaces shall not exceed 25% of the first floor gross area within anyone building. (4) Parking ramps and structures in conjunction with a commercial building, (5) A single-story building, provided the following conditions are met: (a) The height of the building as measured from grade shall be a minimum of 25 feet and shall be designed to appear as a two or more story building. The minimum building height shall not include decorative parapets, towers, or other architectural, ornamental or mechanical treatments. (b) Any elevation of the building that fronts a public street, sidewalk, parking lot, or open space as defined herein shall have window coverage of a minimum of 35% of the total square feet area of the elevation. The windows in the lower 50% area of the elevation, as measured from grade to the roof line, shall be constructed of a material that allows unobstructed view into the building. Spandrel glass or other false window material shall not be permitted for windows that are located in the lower 50% area of the elevation, but may be installed in the upper 50% area of the elevation. -The phrase "open space" shall mean any public right-of-way, public property, and any outdoor private property which is open to the general Page 3 of 8 Page 16 of 145 public, including, but not limited to: plaza areas, court yards, outdoor dining areas, patios, commons, gardens or other feature areas for display to and review by the public. Section 4. Article A31of the Apple Valley City Code is hereby amended by adding Section A31-5(C) and (D) to read as follows: § A31-5. CONDITIONAL USES. (C) Zone 3: Within this zone, no structure or land shall be used except for one or more of the following uses or uses deemed similar by the City Council pursuant to the granting of a conditional use permit: (1) Any conditional use specified for Zone 1 of Planned Development Designation No 739 herein. (D) Zone 4.• Within this zone, no structure or land shall be used except for one or more of the following uses or uses deemed similar by the City Council pursuant to the granting of a conditional use permit: (1) Sidewalk display or sales of goods conducted by an occupant of a retail building subject to the following standards: (a) Sidewalk displays or sales shall be permitted only directly in front of the occupant's business, provided that at least five (5) feet of is maintain clearance s mantan at the storefront entrance, the display is located against the building wall and no greater than three (3) feet deep, no higher than the sill of the first floor windows and does not exceed 75 percent of the length of the storefront. (b) Sidewalk displays or sales shall be clean, litter-free, and well- maintained at all times and shall be compatible with the colors and character of the storefront from which the business operates. ' (c) Sidewalk displays or sales shall be permitted only during business hours and shall be removed at the end of the business day. (d) Items for sale shall be displayed on commercially available or professionally constructed, custom-designed shelving or platforms of waterproof, high quality, and durable materials. Cardboard boxes and wood pallets shall not be used for sidewalk displays or sales. (e) A minimum of five (5) feet sidewalk shall remain clear to allow for unencumbered pedestrian movement. (2) Outdoor sidewalk seating in conjunction with a restaurant, subject to the following standards: Page 4 of 8 Page 17 of 145 (a) A minimum of five (5) feet of sidewalk along the curb and leading to the entrance of the restaurant shall be maintained free of tables, chairs, and other obstructions. (b) Temporary barriers shall be used as a way of defining the sidewalk cafe area. (c) Extended awnings, canopies, or large umbrellas with colors that complement the building colors may be permitted. (d) Additional outdoor trash receptacles shall be provided. (e) Tables, chairs, planters, trash receptacles, and other elements of street furniture shall be compatible with the architectural character of the building where the restaurant is located and/or City of Apple Valley street furniture standards. Section 5. Article A31of the Apple Val!ey City Code is hereby amended by adding Section A31-7(C) and (D) to read as follows: § A31-5. PERMITTED ACCESSORY USES. (C) Zone 3: Within this zone, one or more of the following uses or uses deemed similar by the City Council shall be permitted accessory uses: (1) Any permitted accessory use specified for Zone 1 of Planned Development Designation No 739 herein. (D) Zone 4• Within this zone, one or more of the following uses or uses deemed similar by the City Council shall be permitted accessory uses: (1) Any permitted accessory use specified for Zone 2 of Planned Development Designation No 739 herein, except no temporary sales office shall be permitted. Section 6. Article A31of the Apple Valley City Code is hereby amended by adding Section A31-8 (G)(9) 8(10) to read as follows: § A31-8. AREA STANDARDS AND REQUIREMENTS (G) Parking design and maintenance. The following parking requirements shall be incorporated into all site plans: Page 5 of 8 Page 18 of 145 (9) Parcels within Zone 3 and abutting Galaxie Avenue may have up to 10% of the parking stalls in an underground parking garage be a minimum of 8.5 feet wide. (10) Parcels within Zone 3 and abutting Galaxie Avenue may have 90 parking stalls within a surface parking lot a minimum of 19 feet in length, provided a stall abutting a curb may be a minimum of 18.5 feet. Section 7. Summary approved. The City Council hereby determines that the text of the summary marked "Official Summary of Ordinance No. ", a copy of which is attached hereto, clearly informs the public of the intent and effect of the ordinance. The City Council further determines that publication of the title and summary will clearly inform the public of the intent and effect of the ordinance. Section 8. Filing. The City Clerk shall file a copy of this ordinance in her office, which copy shall be available for inspection by any person during regular office hours. Section 9. Publication, The City Clerk shall publish the title of this ordinance and the official summary in the official newspaper of the City with notice that a printed copy of the ordinance is available for inspection by any person during regular office hours at the office of the City Clerk. Section 10. Effective date. This ordinance shall take effect upon its passage and publication of its title and official summary. PASSED by the City Council this Pamela J. Gackstetter, City Clerk day of 2012. Page 6 of 8 Mary Hamann-Roland, Mayor Page 19 of 145 CITY OF APPLE VALLEY ORDINANCE NO. AN ORDINANCE OF THE CITY OF APPLE VALLEY, AMENDING APPENDIX F OF THE CITY CODE ENTITLED "APPENDIX F: PLANNED DEVELOPMENT DESIGNATIONS" BY AMENDING ARTICLE A31 REGULATING PLANNED DEVELOPMENT DESIGNATION NO. 739. The following is the official summary of Ordinance No. approved by the City Council of Apple Valley on , 2012. Article A31 of Appendix F of Chapter 155 of the Apple Valley City Code, regulating Planned Development Designation No. 739 is amended by adding Zones 3 & 4 applicable to and the rezoning of certain parcels of land located within The Legacy of Apple Valley North plat. A printed copy of the ordinance is available for inspection by any person during regular office hours at the office of the City Clerk at the Apple Valley Municipal Center, 7100 West 147 Street, Apple l Valley, 55122. Y9 Effective date. This ordinance shall take effect upon its passage and publication. Page 7 of 8 Page 20 of 145 •• • - • • ••• • . .444.4146.4,..40 Existing Zoning Districts — PD-739 Proposed Zoning Amendments 53RD ST W :i. , 1 , , .,.. PD 739 , , , , •.......„.„,, . ,, , •...,...„.•.........„........„...,„,„..„ . ,_,. ,,, , , ..„.....,.... ., L.„.,.,„..„,...„..,.,,,,. ..„..,....„ „. ,.. 52ND ST W PARKS DE VILLAGE REZONING REQUEST Page 8 of 8 Page 21 of 145 THIS PLANNED DEVELOPMENT AG day of , 2013, by and between the corporation, (hereinafter the "City ") and IMH Specia limited liability company (hereinafter the "Owner "). Lot 1, Block 1, Lot 1, Block 4 Lot 1, Block 5, PLANNED DEVELOPMENT AG PARKSIDE VILL WHEREAS, the Owner is the Minnesota, legally described as follows: T ( "Agreement ") is made this f Apps Valley, a Minnesota municipal T 175-AVN, LLC an Arizona holder of r` property in Dakota County, t 1, Block 9, d 2, Block all in THE LEGACY OF APPLE VALLEY NORTH, according to the recorded plat, and Lot 1, Block 1 and Lot 1, Block 2, all in PARKSIDE VILLAGE, according to the recorded plat (collectively the "Property "), which Property is governed by this Agreement; and Page 22 of 145 WHEREAS, the Owner has submitted an application to amend Planned Development Designation No. 739; and WHEREAS, the parties hereby acknowledge that this Agreement, the attached exhibits (Exhibits A through D) and the additional plans and specifications submitted by Owner and approved by the City constitute the Planned Development Agreement for the Property; NOW, THEREFORE, it is hereby agreed by and between the parties as follows: 1. This Agreement applies to the development and use o the Property. 2. The Owner agrees that its development and e Property shall, in all material respects, comply with the following Exhibits attached hereto and ncorporated herein: Exhibit A Exhibit B Exhibit C Exhibit D in genera postage —__ prePa id, an d addresse ano designating such e Either ParlY may designate c, ang paragra as provide this paragraph. Planned Development Ordinance No. 739, as amended Conditions Plans for Lot 1, Bloc PARKSIDE VILLAGE Plans for Lot 1, Block 2, The Owner further agrees that its development and use of Property shall comply with all additional plans and specifications submitted by Owner an a roved by the City, which are hereby incorporated herein by reference. e plans and s ecifications are available for inspection in full-size format at the Apple Valley Municipal Center 3. Minor deviati from the above ns may be accepted by the City provided that the Community Development Director makes a written determination that the revised plans are 1 conformance with the above-listed plans. her commumca ions under this Agreement by either party eemed delivered if dispatched by registered or certified mail, he party and its attorney(s) at the addresses listed below. :address or attorney(s) for receipt of notice under this writing, and forwarding such writing to the other party • E VILLAGE 2. Page 23 of 145 Notices to the City shall be mailed to: City of Apple Valley 7100 - 147th Street West Apple Valley, Minnesota 55124 Attn: City Administrator With copy to: DOUGHERTY, MOLENDA, SOLFEST HILLS & BAUER P.A. 7300 West 147 Street, Suite 600 Apple Valley, Minnesota 55124 Attn: Mike Dougherty Notices to the Owner shall be mailed to: IMH Special Asset NT 175—AVN, LLC 7001 North Scottsdale Road, Suite 2050 Scottsdale, Arizona 85253 Attn: John McVey IMH Special Asset NT 7 , 4700 South Syracuse Street, Suite 375 Denver, Colorado 80237 Attn: Stuart Davis e as the parties may agree. Iarties. Furthermore, the wrier and approval of the City, 7. his Agreenieiit shall iiin with the Property and shall be recorded in the Office of the Dakota::::COunty Recorderq3:,,,, 8. This Agreement hall be governed by and construed under the laws of the State of Minnesota. 9. Should anY provision of this Agreement be held to be void, invalid, unenforceable or illegal by a court, the validity and the enforceability of the other provisions shall not be affected thereby. Failure of either party to enforce any such provision shall not act as a waiver by the non-defaulting party. IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as of the day of , 2013. 3. Page 24 of 145 OWNER: IMH Special Asset NT 175-AVN, LLC, an Arizona limited liability company By: Its: STATE OF COUNTY OF On this day of ) ss. said County, personally appeared known, who being by me duly sworn, did say t hat e is the of IMH Special Asset NT 175-AVN, LLC, an Aiizona Iimited liability company, named in the instrument, and that said ent was signed on behalf of said limited liability company by authority of the limited liability Iiahiiitv compan\' and acknowledged said instrument to be the free act and deed of the limited liability company. STA F MINNESOT COUNTY DAKOTA 4, CITY OF APPLE VALLEY By: Mary Hamann-Roland Its: Mayor By: Ocstetter Its: Cityl ei' 2013, before me u Notary Public within and for Notary Public to me personally On this day o , 2013, before me a Notary Public within and for said County, personaily appeared Mary Hamann-Roland and Pamela J. Gackstetter to me personally known, who being each by me duly sworn, each did say that they are respectively the Mayor and Clerk of the City of Apple Valley, the municipality named in the foregoing instrument, and that the seal affixed on behalf of said municipality by authority of its City Council and said Mayor and Clerk acknowledged said instrument to be the free act and deed of said municipality. Notary Public Page 25 of 145 THIS INSTRUMENT WAS DRAFTED BY: DOUGHERTY, MOLENDA, SOLFEST HILLS & BAUER P.A. 7300 West 147th Street, Suite 600 Apple Valley, Minnesota 55124 (952) 432-3136 (MDK: 66-32849) 5. Page 26 of 145 EXHIBIT "A" TO PLANNED DEVELOPMENT AGREEMENT (Place holder for Planned Development Ordinance No.'739, as amended) Page 27 of 145 EXHIBIT "B" TO PLANNED DEVELOPMENT AGREEMENT Conditions The following conditions shall apply to the development of the Property: 1. To install all utilities underground in the Property in accordance with the utility plans approved by the City, specifically including electrical, telephone, cable television and gas services. The Owner hereby represent that all utility services will be available for a building prior to occupancy. 2. To grade the Property in accordance with thc grading an d erosion control plans approved by the City. The Owner shall also su mit a of the of the General Storm Water Permit approval from the Minnesota Pollution Control Agency pursuant to Minnesota Rules 7100.1000 - 7100.1100 regarding the State NPDES Permit prior to commencement of grading activity. 3. To install a protective box and cover over eac cleanout an,d6Water shutoff, in accordance with plans approved by the 4. To install all lot moiuimens prior to recorc!ing the plat but not later than December 31, 2013. 5. To comply with all requirements of Natural Resources management regulations as set forth in Chapter 152 of the pple Valley City Code prior to, during anal after the development of the Property. The Owner further agrees to submit to the City for its approval, a Natural Resources Management Plan prior to any construction of land-disturbing activit Y in connection with the construction on each Lot in o the Property. The Owner shall implement and comply with all terms nditions of the approved Plan prior to and during any construction or land- istur in activi ncluding, but not limited to, maintaining the performance security required in Chaper 152 of the Apple Valley City Code. 6. To submit a hauline and staging plan to the City for its approval, at the time of atural Resources Management Permit (NRMP) application. 7 lo instaii erosion control measures in accordance with the Apple Valley Natural Resource Preservation Plan. The Owner shall pay the City a fee as required by Section 152.15 of the City Code and calculated by the City to offset the cost of inspections to ensure compliance with the Plan. Payment shall be made at or prior to the issuance of a Natural Resources Management Permit and building permit(s). 8. To install pedestrian improvements in accordance with the City's adopted Apple Valley Central Village Plan and Planned Development Designation No. 739. Page 28 of 145 9. To install City street trees on boulevard areas of public street right-of-ways, in accordance with species, size, and spacing standards established in the Apple Valley Streetscape Management Plan. 10. Construction shall occur in conformance with the site plans approved by the City, without encroachment into the drainage and utility easement adjacent to Galaxie Avenue, including parking lot paving and a non-surmountable concrete curb and gutter around the entire perimeter with a minimum driveway approach radius of 15' at each public street, and a valley gutter at the edge of the street pavement. 11. The Owner shall repair any and all damage to City reets, curbs, gutters, utilities and other municipal improvements caused by or resulting from the development of the Property, at the Owner's sole cost and expense. 12. Construction shall occur in conformance with the landscape plans approved by the City (including sodded/seeded public boulevard area up o each street curbline); subject to (i.) submission of andscape planting price list for verification of the City's 2-1/2% landsca permit application, (ii) replacement of Avenue with a tree that is better suited to the etaile )i re uirernent at the time of building honeylocust trees along Galaxie mited size of the planting area, to be reviewed and approved the Natural Resources Coordinator, (iii) spacing of the trees to the satisfaction o 's Natural Resources Coordinator and (iv) all plantings counted toward satisfaction of the City's 2-1/2% landscaping requirement shall be located outside of the City s right-of-way. Landscape ma include plant materials, underground irrigation systems, public art, foune ' tains decorative paving, and other outdoor common area elements that create an enhanced sense of place and foster positive social interactions. 1.:signage oplan in conformance with the sign regulations .or revie\v aiid approval to the City prior to the erection of any 14. The Owner s all install a public (or private) street lighting system, constructed to City and Dakota Electric Company standards. The street lighting plan shall be reviewed and approved by the City Engineer prior to issuance of the building permit. 15. The Owner shall submit a site lighting plan to the City for its approval, at the time of building permit application. Any site lighting shall consist of downcast, shoebox lighting fixtures or wallpacks with deflector shields which confine the light to the property. The lighting plan shall be reviewed and approved by the City Planner prior to issuance of the building permit. 16. Construction on Lot 1, Block 1, PARKSIDE VILLAGE, shall occur in accordance with the plans prepared by Kaas Wilson Architects attached to this Planned Development Agreement as Exhibit "C" and incorporated herein, full- Page 29 of 145 size copies of which are available for inspection at the Apple Valley Municipal Center. 17. Construction on Lot 1, Block 2, PARKSIDE VILLAGE, shall occur in accordance with the plans prepared by Kaas Wilson Architects attached to this Planned Development Agreement as Exhibit "D" and incorporated herein, full- size copies of which are available for inspection at the Apple Valley Municipal Center. 18. Construction and earthmoving activities shall be Iiiriited to the hours of 7:00 a.m. to 7:00 p.m. Monday through Friday. Weekend construction hours shall be limited to the hours of 8:00 a.m. to 5:00 p.m. o n Saturday. Construction shall not be performed on Sundays or federal holidays. ere shall be no deviation from the foregoing hours of construction ithom prioi written appro yal by the City Engineer. 19. Earth-moving activities shall not occur when wind velocity exceeds thirty (30) miles per hour. Watering to control dust shall occur as needed and whenever directed by the Apple Valley Building Official or Zoning Administrator. 20. The Owner agrees to attend at1end a niecting with representatives of the City, which meeting requires the attendance all contractors and subcontractors, prior to commencement of any improveme 21. The Owner WiJl 1OI bury an pipe nor install bituminous surface nor pour concrete wit ou specific approval of the City Inspector, which approval shall not be lIflI'CLISOHL1hJy withheld, conditioned or delayed and shall be made by applying * l y standards uniformly and consistently applied in other City projects, prior to thew or ed. contingen 2. Issuance of a Ruild Permit and a final certificate of occupancy for each Lot is on the ject being constructed in conformance with all the preceding conditions as well as all applicable performance standards of the current zoning regulations. In the event that a certificate of occupancy is requested prior to completion of all required site improvements, a suitable financial guarantee in the amount of 125% of the estimated cost of the unfinished improvements shall be required along with an agreement authorizing the City or its agents to enter the premises and complete the required improvements if they are not completed by a reasonably stipulated deadline, with the cost of such City completion to be charged against the financial guarantee. 23. The ongoing use and occupancy of the premises is predicated on the ongoing maintenance of the structure and all required site improvements as listed in the preceding paragraph. No alteration, removal, or change to the preceding building plans or required site improvements shall occur without the express authorization of the City. Site improvements which have deteriorated due to age or wear shall be repaired or replaced in a timely fashion. Page 30 of 145 24. That any material violation of the terms of this Agreement and in particular this section, shall allow the City to stop and enjoin all construction in the Property until authorization to proceed is given by the City. The Owner agrees to hold the City harmless from any damages, causes of action, or claims related to the construction being stopped by the City. Page 31 of 145 10. Grading and 11. Utility Plan (Shee EXHIBIT "C" TO PLANNED DEVELOPMENT AGREEMENT PLANS FOR LOT 1, BLOCK 1, PARKSIDE VILLAGE (GABELLA) See attached plans: 1. Cover Sheet for Parkside Village - Gabella (Sheet A000) dated , 201 2. Garage Plan, Level 1 (Sheet A300) dated 3. Level 2, Level 3 plan (Sheet A320) dated , 201 4. Level 4 plan (Sheet A340) dated , 201_. 5. Unit Plans (Sheet A450) dated , 201 . 6. Exterior Elevations (Sheet A500) dated 201 7. Exterior Elevations (Sheet A501) 8. Removals & Erosion Control Plan (Sheet , 201_. 9. Site Plan / PreliminaryPlat (Sheet G2) dated , 201_. ros1on Control Plan (Sheet C -3 dated , 201_. 12. Storm VUafier PollLition Prevention Plan (Sheet C-5) dated , 201 . 13. Site Details (Sheet C -6) dated , 201 . 14. Landscape Plan (Sheet L -1) dated , 201_. ,201. Page 32 of 145 10. Utility Plan 11. Storm Water Pollu 13. EXHIBIT "D" TO PLANNED DEVELOPMENT AGREEMENT PLANS FOR LOT 1, BLOCK 2, PARKSIDE VILLAGE (GALANTE) See attached plans: 1. Cover Sheet for Parkside Village - Galante (Sheet A000) dated , 201_. 2. Garage Plan, Level 1 (Sheet A300) dated 3. Level 2, Level 3 plan (Sheet A320) dated 4. Level 4 plan (Sheet A340) dated 5. Unit Plans (Sheet A450) dated 6. Exterior Elevations (Sheet A500) dated ;;: , 201_. 7. Removals & Erosion Control Plan (Sheet C -1) dated , 201_. 8. Site Plan / Preliminary Plat (Sheet G2) dated ' , 201 . 9. Grading and Erosion Control Plan (Sheet C -3) dated ' , 201 . , 201 . lan (Shee C -5) dated , 201 . , 201 . -1) dated , 201 . Page 33 of 145 CITY OF APPLE VALLEY RESOLUTION NO. 20 - A RESOLUTION VACATING PUBLIC GROUNDS WHEREAS, pursuant to the requirements of Minnesota Statutes Chapter 412.851, the City Council of Apple Valley held a public hearing on October 11, 2012, with respect to the vacation of certain public grounds described in the attached Notice of Completion of Public Grounds; and WHEREAS, it appears it will be in the best interest of the City of Apple Valley and the public to vacate said grounds as such grounds are no longer needed to serve a public purpose. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Apple Valley, Dakota County, Minnesota, that: 1. The vacation of the public grounds described in the Notice of Completion of Vacation of Public Grounds, attached, is hereby approved. 2. The City Clerk shall present said Notice of Completion of Vacation of Public Grounds to the County Auditor and County Surveyor and then file a copy with the County Recorder pursuant to law. ATTEST: Pamela J. Gackstetter, City Clerk Mary Hamann- Roland, Mayor Page 34 of 145 TO WHOM IT MAY CONCERN: OF VACATION OF PUBLIC GROUNDS IN THE CITY OF APPLE VALLEY, DAKOTA COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN, that pursuant to the resolution of the City Council on the City Council of the City of Apple Valley, Dakota County, Minnesota, passed a resolution vacating the following described public grounds in Apple Valley, to -wit: 20 (SEAL) All drainage and utility easements dedicated in THE LEGACY OF APPLE VALLEY NORTH, according to the recorded plat thereof, Dakota County, Minnesota, which lie within Blocks 2, 3, 7 and 8 of said plat; and That part of Fortino Street lying between the southerly extensions of the west and east lines of Block 7 to the north line of Block 8, all in THE LEGACY OF APPLE VALLEY NORTH, according to the recorded plat thereof, Dakota County, Minnesota; and That part of Fontana Trail lying between the easterly extensions of the north and south lines of Block 2 to the west line of Block 3, all in THE LEGACY OF APPLE VALLEY NORTH according to the recorded plat thereof, Dakota County, Minnesota. Notice is further given that the vacation proceedings were completed by the City Council on the th day of 20 A copy of the Resolution of Vacation of Public Grounds is attached hereto as Exhibit A and incorporated herein. STATE OF MINNESOTA NOTICE OF COMPLETION IN WITNESS WHEREOF, I have set my hand this day of 20 , as Clerk of the City of Apple Valley, Dakota County, Minnesota. 1 ss. Pamela J. Gackstetter, City Clerk Page 35 of 145 On this day of , 20 , before me a notary public within and for Dakota County, Minnesota, personally appeared Pamela J. Gackstetter, City Clerk of the City of Apple Valley, Dakota County, Minnesota, known to be the person described in and who executed the foregoing instrument and acknowledged that she executed the same as her free act and deed with the authorization and under the direction of the City Council of the City of Apple Valley, Dakota County, Minnesota. This document drafted by: Pamela J. Gackstetter, City Clerk City of Apple Valley 7100 West 147th Street Apple Valley, Minnesota 55124 Notary Public Page 36 of 145 GALAXIE PARK FIRST 153RD ST W TIT - ____._T. 151ST ST W FORTING STREET Vacation of D/U Easement Requested r Vacation of Right-of-Way Requested Page 37 of 145 City of Apple Valley Vacation of Easement/Public Grounds Application Form Need for Vacation of Easements Narrative: Parkside Village has been designed to activate Apple Valley s Central Village plan with new multifamily housing. The style of these buildings will encourage people of all ages to live and stay in Apple Valley. They will promote a high level of safety and security for its residents. Parkside Village will provide market rate and affordable housing options with unique unit sizes and styles. The siting of the buildings has been situated to respect the natural environment and promote street level activity. Phase I of the Project is comprised of approximately 332 multifamily apartment units in two distinct and complimentary buildings, surrounding the existing Kelley Park. The building at Galaxie Avenue and 153 Street West is a for story 134-unit building with underground and off-street surface parking. The layout of this building is intended to be urban and modern —fiat roof, dynamic corner towers and minimally set back from the street frontage with a walk up row house feel. in order to maximize the impact along Galaxie, maintain view corridors for Kelley Park and meet the goals of the Apple Valley Central Village plan we are requesting the vacation of Fortino Street between Galaxie Avenue and Gallante Lane. The building north of 152 Street West is proposed to be four stories with 198 units and have a more suburban design — a pitched roof, balconies, and greater setbacks from the sidewalks with a similar walk- up row house feel. This building will be one building, but have the perception o two, connected by a single story common area community element. An underground parking garage will be provided with off-street surface parking. Again, Parkside Village is meant to be a unified development and we would request that Fontana Trail be vacated between 152 Street \Nest and Gabelia Street. The vacation of these two streets does not abut any properties other than the current owner IMH Special Asset NI 1.75 AVN, LLC. In addition, we would request the vacation of the drainage and utility easements which lie within blocks 2, 3, 7 & 8, New drainage and utility easements would be completed with the final plat. 470( S Syracuse Street, Suit 75 Denver, CO &0237 Phone 720 528 7650 Fax 720 528 7654 Page 38 of 145 EASEMENT VACATION All drainage and utility easements dedicated in THE LEGACY OF APPLE VALLEY NORTH, according to the recorded plat thereof, Dakota County Minnesota which lie within Blocks 2 3, 7 and 8 of said plat. Page 39 of 145 0 19 Jo OLt! 1 ( Y \ L -7 - -1 L > ao o au i i 4s9 aq J© uotsua4xa Apa gnOs -- a.._ _I 1 V 09 - 1 X 1 ,► «J 1 / 1 Y t y% s Lf ! 1 N . c 0, 0) 0 N # .. m LL a C C 01 c -. 1 C o O 4,— 4,, Lt H 0 O 0 0 fD tf oc : a) cl o) , ro t H • 0 0 0 . �:..�\ \' C\" Q\' C�,\\` �\\\\\\\\ �\ U\\\\\\\\\\ �` u\• � ."SJQ� \yC\ \�SS\�\\\�@ \w\`34 \\*, w•aaw ♦ ♦>"w w . c ♦ � . www\. \ . R-.. \H�m\w�.. \ r,\ tt �. •� . � •..., \ ..., .. - .�:_ . _ .............. . ....... _� ...:,::::: :::............�.:.. ._ ..... .... S� \\ �\ �.♦ �. �' s\\ �wce\ �� \jya,�zata?.\\..\wa���\...?.... .�.^"D.. ,. ..0 `.�:..,a,'r \\\a>c. .`,�\,♦`^... ..`U`�\. .\``C�\\ \ \`fiW�.\'R7,.'C.\\l\ \ \, . VS ME \\\ •S\Q\ �\\� \�w�,.., w•.t2\\r.\ \ �\. \wa\\�ww\\ \`3.\\\F�4t��,\.yaw�. o\\\�.�.�\ \\\i ♦, � \ ^\.: ..... �'�. ........ _ .. ....._ .... .. ....... \\... .. .. .....,...Z., . ... ,`..a\�..`\� . ♦ .a\�i..... .:\\..\\• a` �\\ \�\\R.�iS� \ \\\\\\\\\ \\Q\*...... _ ...... �\ t\�0.....�\\`,'.•�\. ::.:. �\\\� \ \\i'�.?x.,t. �. ., ... �G�� �.`\\\.. �.\ x�\ �` � �Q@\@\` �\ �\\.\ iw` �,..\ �\\` Z\\ �1• C \\\\\\\\ \ \•C \�•�\\\ \U\*��a\'�D. \�.. Page 40 of 145 e r r- r- -t- t- - tr) $ $__ Easterly extension of the north line of Block 2 75 Road Vacation Sketch for: H SPECIAL ASSET NT 1 75--AV 4° j L4 r - 1 A 1 - I 1-< - 1 1 1 k ,1 r • V, 1 r / 1 \ I . DESCRIPTION OF FONT 75 0 0 11) 4 111 --Easterly extension of the south line of Block 2 e r r r - *. 1 e 1- - - - 75 TO BE VACATED That part of Fontana Trail lying between the easterly extensions of the north and south lines of Block 2 to the west line of Block 3, all in THE LEGACY OF APPLE VALLEY NORTH, according to the recorded plat thereo Dakota County, Minnesota, . 0 t0 40 40 40 Soo e: 1 inch = 50 feet Rehder and Associates, Inc. CIVIL ENGINEERS AND LAND SURVEYORS 3440 Fedora, Dd. SvIte 110 Eeston, Minnosota • Phone (55ij 452-5051 Page 41 of 145 Pamela Gackstetter City Clerk City of Apple Valley Apple Valley, MN 55124-9016 RE: Notice of Public Hearing (for the Legacy of Apple Valley North) Dear Mrs. Gackstetter: Respectfully, CENTERPOINT ENERGY Travis Denzel Engineer 11 515-451-5130 p0: Andrew Balgobin, Administrative Engineer Shanee Bailey, Supervisor, Field operations Charles McCoy, Advanced Foreman 700 West Linden Ave PO Box 1165 Minneapolis, MN 55440-1165 September 14 2012 With reference to the proposed utility easements and Right of Way vacation mentioned above, Center Point Energy does have an existing natural gas main in that portion of the easement proposed to be vacated (see attached map). Since this gas main is an important part of Center Point Energy's distribution system in this area, we must object to this proposed vacation unless suitable easement rights are reserved to Center Point Energy, pursuant to MnSta 160.29 & MnRule 7819.3200. Please reserve an easement to CenterPoint Energy, created by and within the document establishing the easement vacation for Block 8 of said plat and filed with the Dakota County Recorder's office, over the following area: 153th St W right-of- way line to 15' north of this right-of-way line and Galaxie Ave right-of-way line to 15' east of this right-of-way line. We may consider removing our objection should the petitioner wish to reimburse CenterPoint Energy the cost of relocating the existing gas main. To discuss this and any other options that may be available please have the petitioner contact Andrew Balgobin, Administrative Engineer, at 612-321-5426. Thank you for the advance notice and please send me a copy of the final action on this proposal. Page 42 of 145 laN ei 10 -\\ L tag 3AV 39VI103 4 .0 r 1HJ VNVINOJ l 1 • .... '63 0 'de 831 00S36d 0 L Page 43 of 145 g CITY OF APPLE VALLEY RESOLUTION NO. 2012- PRELIMINARY PLAT APPROVAL PARKSIDE VILLAGE WHEREAS, pursuant to Minnesota Statutes 462.358, the City of Apple Valley adopted, as Appendix B of the City Code, regulations to control the subdivision of land within its borders, and WHEREAS, pursuant to Chapter 153 of the City Code, the City Planning Commission held a public hearing on an application for subdivision of land by plat on September 19, 2012, and WHEREAS, the City Planning Commission reviewed the preliminary plat for conformance with the standards of Chapter 153 of the City Code and made a recommendation regarding its approval on October 17, 2012, subject to conditions. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Apple Valley, Dakota County, Minnesota, that the preliminary plat for the following described plat of land is hereby approved for a two year period, to vit: PARKSIDE VILLAGE BE IT FURTHER RESOLVED, that said preliminary plat approval is subject to the appropriate amendments to Planned Development No. 739 ordinance and execution of a revised Planned Development Agreement, which must be completed prior to final plat approval. BE IT FURTI-TER RESOLVED that said preliminary plat approval is subject to vacation of the right-of-way of Fortino Street, the vacation of the right-of-way of Fontana Trail, and the vacation of all existing drainage and utility easements. BE IT FURTHER RESOLVED, pursuant to Chapter 153 of the City Code, that said preliminary plat approval is subject to the following conditions, which shall be incorporated into a subdivision agreement to be considered for approval at the time of submission of the request for final plat approval: This required dedication shall be satisfied by a cash-in-lieu of land contribution based on the benchmark raw land values established for each category of land use in the year that a building permit is issued for each given parcel of land. The 2012 benchmark land value for multiple-family uses is Page 44 of 145 1 1 . The plat shall be configured to have two (2) lots and no outlots. 2. Park dedication requirements are based upon the City's finding that the subdivision, in accordance with the land uses illustrated on the associated site development plan received in City offices on August 22, 2012, and revised plans received October 9, 2012, will create 547.4 residents that will generate a need for 5.228 acres of parkland in accordance with adopted City standards for park services of 0.00955 acres per resident or resident-equivalent. The City finds that each apartment/condominium unit contains 1.7 residents. $175,000 per acre, which the City reasonably determines that it will need to expend to acquire a similar amount of land elsewhere in order to provide the necessary park services as a result of this subdivision. 3. Stormwater pond requirements were previously satisfied. 4. Dedication on the final plat of a 30' drainage and utility easement along the east line of Lot 1, Block 3, The Legacy of Apple Valley North, to be replatted as Lot 1, Block 1, Parkside Village, immediately adjacent to the right-of-way line of Foliage Avenue. 5. Dedication on the final plat of a ten foot (10') wide easement for drainage, utility, street, sidewalk, street lights, and tree plantings along the entire perimeter of lot(s) within the plat wherever abutting public road right-of- ways, unless specifically approved by the City Council. 6. Dedication on the final plat of a five foot (5') wide drainage and utility easement along all common lot lines, unless specifically approved by the City Council. 7. The developer has requested and the City has agreed to design plans and specification for the necessary public improvements to serve the subdivision. A private installation agreement shall be executed for the following public improvements: (i) storm sewer removal, (ii) storm sewer installation, (iii street removal and (iv) street construction including the installation of concrete curb, bituminous pavement and concrete sidewalk at the developer's sole cost and expense. 8. Installation of pedestrian improvements in accordance with the City's adopted Apple 'Valley Central Village Plan and Planned Development No. 739. 9. Submission of a final grading plan and lot elevations with erosion control procedures, to be reviewed and approved by the City Engineer. If the site is one (1) or more acres in size the applicant shall also submit a copy of the of the General Storm Water Permit approval from the Minnesota Pollution Control Agency pursuant to Minnesota Rules 7100.1000 - 7100.1100. regarding the State NPDES Permit prior to commencement of grading activity. 10. Installation of City street trees on boulevard areas of public street right-of- ways, in accordance with species, size, and spacing standards established in the Apple Valley Streetscape Management Plan. 11. Installation of a public (or private) street lighting system, constructed to City and Dakota Electric Company standards. 2 Page 45 of 145 ATTEST: 12. Construction shall be limited to the hours 7:00 a.m. to 7:00 p.m. Monday through Friday. Weekend construction hours shall be limited to Saturdays, from 8:00 a.m. to 5:00 p.m. 13. Earthmoving activities shall be limited to the hours 7:00 a.m. to 7:00 p.m. Monday through Friday. Weekend construction hours shall be limited to Saturdays, from 8:00 a.m. to 5:00 p.m. 14. The City receives a hold harmless agreement in favor of the City as drafted by the City Attorney and incorporated into the subdivision agreement. ADOPTED this th day of Pamela J. Gackstetter, City Clerk 3 , 20 Mary Hamann-Roland, Mayor Page 46 of 145 410 flit:AVM arraavmzaeeimmmssruwramrrrraiuimrsr.errHinmewwmemuo rrommavit 6.Z\ W9 — 0?) 6711_ • 3.9G,Gt.ON — — - O'GG .3„J0 , alleA .1. apoloo pulp oliacipo 6. 11!A 9 P! s 1 -1. d aEueli uo6pas.,f0.).0.4jRbb 9seo94-10N L4 J. 41 is/V■ @14 4 40 0 2 t„LjN L >P0 I9 4 ls@m eql 90 uo!sua xa ApaLllnoS -- 4 1 --- — Page 47 of 145 bb:49:6 Z,OZ/£1,3 I CITY OF APPLE VALLEY RESOLUTION NO. 2012 - FINAL PLAT AND SUBDIVISION APPROVAL PARKSIDE VILLAGE ADDITION WHEREAS, pursuant to Minnesota Statutes 462.358, the City of Apple Valley adopted, as Chapter 153 of the City Code, regulations to control the subdivision of land within its borders; and WHEREAS, pursuant to Chapter 153 of the City Code, the City Planning Commission held a public hearing on an application for subdivision of land by plat on September 19, 2012; and WHEREAS, the City Planning Commission found the preliminary plat to be in conformance with the standards of Chapter 153 of the City Code and recommended its approval on October 17, 2012, subject to conditions, which was subsequently approved by the City Council on 20 ; and WHEREAS, pursuant to Chapter 153 of the City Code, a subdivision agreement between the applicant and the City detailing the installation of the required improvements in the subdivision and the method of payment therefore has been prepared. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Apple Valley, Dakota County, Minnesota, that the subdivision agreement and final plat for the following described plat of land are hereby approved, subject to dedication of a 30' drainage and utility easement adjacent to Foliage Avenue, and the Mayor and City Clerk are authorized to sign the same, to wit: PARKSIDE VILLAGE BE shall be filed IT F URTHER _..- _ I' -, ,_.a, County null and v with the DaKot HER RESOLVED, pursuant to Chapter 153 of the t Recorder within sixty (60) days o release from ii Code, that said plat the City offices or such approval shall be ADOPTED this th day of ATTEST: Pamela J. Gackstetter, City Clerk 1 , 20 . Mary Hamann-Roland, Mayor Page 48 of 145 CERTIFICATE As Apple Valley City Clerk, hereby certify that the forgoing is a true and correct copy of a resolution adopted by the City Council and the final plat described therein is hereby released for recording with the Dakota County Recorder this day of 2 Pamela J. Gackstetter, City Clerk Page 49 of 145 uJ L.9 —J LLJ (r) ;1:W) 9 M 10$ gg'1, 0 7 0 Zg•08 g GON 3„,0.,°,`!6cRcs ""°N "livA - >ro...Att 1../A 'awl 40 uots.110 ADV031d1-11, >Po. ‘') 9 if 0 0 , I c> Page 50 of 145 DEVELOPMENT AGREEMENT Between IMH SPECIAL ASSE And CITY OF A' For KSIDE VILLAGE ,LLC Page 51 of 145 WHEREAS, the City of Apple Valley, a Minnesota municipal corporation (the "City "), has been requested by IMH Special Asset NT 175 -AVN, LLC, an Arizona limited liability company (the "Developer "), to approve for recording the following described plat of land: The Plat of PARKSIDE VILLAGE (the "Plat "); and WHEREAS, pursuant to City Ordinances, the Planning Commission held a public hearing with reference to the application for approval of the Plat on September 19, 2012; and WHEREAS, the Planning Commission recommended its approval on October 17, 2012, subject to conditions; and WHEREAS, the City Council approved the Plat on , 20 t 2 subject to conditions; 1 NOW, THEREFORE in consider � :n of the mutual agreements of the parties it is hereby agreed by and between the parties as "folio 1. 1 Plat. Subjc to he terms and conditions of this Agreement, the City hereby approves for recor Exhibit "A" attached hereto. attached Pla own as PARKSIDE VILLAGE, as shown and noted on overned by the terms and conditions of the City's Zoning Ordinance (the "Ordinance ") Any use or development of the Plat shall be in accordance with the provisions` of the Ordinance for Planned Development Designation No. 739. 3. Exten o Gabella Street. The Developer shall install municipal improvements to connect Gabella Street to Foliage Avenue consistent with plans and specifications to be prepared by the City, all at the Developer's sole cost and expense, as provided in the Agreement for Private Installation of Improvements attached hereto as Exhibit `B" and incorporated herein. Page 52 of 145 4. Relocation of Storm Sewer Line. The Developer shall relocate a portion of the 24 -inch storm sewer line currently located within Fontana Trail consistent with plans and specifications to be prepared by the City, all at the Developer's sole cost and expense, as provided in the Agreement for Private Installation of Improvements attached hereto as Exhibit "B" and incorporated herein. 5. License to Maintain Storm Sewer Line. The D eloper hereby grants to the City a license over, under and across that certain portion of Fontana Trail to be vacated and replatted as part of Lot 1, Block 1, Parkside Village operating and maintaining the existing 24 -inch storn1 sewer line. The foregoing `license may not be terminated or revoked by Developer, but shall ep e automatically upon the City's n for Private 4 In h storm r line ursua the Agreement A met o acceptance of a relocated 2 c sto rn setae p t e� g Installation of Improvements ' nco orated herein. The grant rovements attached heretl as x and n p � g of the foregoing license i n l d the right of the upon the License Area at all reasonable times to construct, reconstruct, inspect, repair and maintain pipes, conduits and mains; aid the further right to remove bituminous pavement and the term f the License, the Developer shall not cause any damage to the 24 -inch storm sewer line located within the License Area and shall be responsible for any damage caused' the Developer or its agents. The Developer shall hold the City and its officers, employees, agents, representatives, attorneys, successors and assigns harmless from any and all claims arising out of ` or related to the existence, use, maintenance, repair, removal, damage or destruction of the 24 -inch storm sewer line within the License Area, except for the City's own negligence. other obstructions. Durin "License Area the purpose of actors, agents and servants to enter Page 53 of 145 6. Drainage and Utility Easement. To accommodate the relocation of the 24-inch storm sewer line, the Developer shall execute and record a drainage and utility easement in favor of the City in the form attached hereto as Exhibit "C" and incorporated herein and deliver a copy of the recorded easement to the City prior to the release of the Plat. 7. Maintenance of Municipal Improvements. The municipal improvements serving the Plat shall be maintained as follows: C. Developer s A. The City shall only be responsible for maintenance of sanitary within public streets and utility easements cledicated to the Cit service and lateral lines, installed outside of the public stre dedicated to the City and having a pipe of less than eight inche A. be the responsibility of the individual prope owner or prop y owners' association. B. The City shall only be responsible for main ce of water lines located within public streets and utility easemcnts dedicate the City. Maintenance of services, shut offs and lateral installed outside of the public streets and easements dedicated to the Lity and ing a pipe of less than six inches in ividual property owner or property diameter, shall be the responsibility t owners' association. Developer Installed accordance with and Llnd under the following conditions: sewer lines located y. Maintenance of and easements iameter, shall The Citv shall only on y be responsible for maintenance of the storm sewer system located w public streets and utility easements dedicated to the City. M aintenance of ea1ch basins and leads to manholes outside of the public streets and mnt s ees icate City shall be the responsibility of the individual prope wner o r erty owners' association. mprovements. Subject to the provisions hereunder, the rade the Lots in the Plat and install improvements within the Plat, in To complete the public improvements as provided in the Agreement for Private Installation of Improvements attached hereto as Exhibit "B". B. To complete all improvements in conformance with the plans and specifications submitted by the Developer and approved by the City, which shall become part of this Development Agreement upon approval by the City. C. To install all utilities underground in the Plat in accordance with the utility plans approved by the City, specifically including electrical, telephone, cable television 3. Page 54 of 145 D. To grade the Plat in accordance with the grading and erosion control plans approved by the City. The Developer shall also submit a copy of the of the General Storm Water Permit approval from the Minnesota Pollution Control Agency pursuant to Minnesota Rules 7100.1000 - 7100.1100 regarding the State NPDES Permit prior to commencement of grading activity. and gas services. The Developer hereby represent that all utility services will be available for a building prior to occupancy. E. To install a protective box and cover over each sewer cleanout and water shutoff, in accordance with plans approved by the City. F. To install all lot monuments prior to recording the plat but not later than December 31, 2013. G. To comply with all requirements oi regulations as set forth in Chapter during and after the development o i submit to the City for its approval, a Natu any construction of an d-disturbing activity each Lot in the P lTh e Developer shall im Plat. and conditions of the e approved Plan plior to and disturbing activity, mcluding, security required in C h apter 1 52 of the the Natural Reso management of the Apple Valley City ode prior to, 1 t Thc Developer furtlicr agrees to sources Management Ilan prior to onnection with the construction on ent and comply with all terms urine any construction or land- mited to, maintaining the performance Iky City Code. To submit and staging lan to the City for its approval, at the time of Natural Resources M1P Management Permit (NRMP) application. To install'616Sion control measures If accordance with the Apple Valley Natural ...,Resource Preservalion ""PWIMITheiiii1:11Developer shall pay the City a fee as required 15 . the City Code and calculated by the City to offset the cost of inspections ensure cnsiire epmpliance with the Plan. Payment shall be made at or prior to the issuance of Natural Resources Management Permit and building permit(s). install pedestrian improvements in accordance with the City's adopted Apple al e central Village Plan and Planned Development Designation No. 739. To instali City street trees on boulevard areas of public street right-of-ways, in accordance with species, size, and spacing standards established in the Apple Valley Streetscape Management Plan. L. Construction shall occur in conformance with the site plans approved by the City, without encroachment into the drainage and utility easement adjacent to Galaxie Avenue, including parking lot paving and a non-surmountable concrete curb and gutter around the entire perimeter with a minimum driveway approach radius of 15' at each public street, and a valley gutter at the edge of the street pavement. 4. Page 55 of 145 M. The Developer shall repair any and all damage to City streets, curbs, gutters, utilities and other municipal improvements caused by or resulting from the development of the Plat, at the Developer's sole cost and expense. N. Construction shall occur in conformance with the landscape plans approved by the City (including sodded/seeded public boulevard area up to each street curbline); subject to (i) submission of a detailed landscape planting price list for verification of the City's 2-1/2% landscaping requirement at the time of building permit application, (ii) replacement of the honeylocust trees along Galaxie Avenue with a tree that is better suited to the limited size of the planting area, to be reviewed and approved by the Natural Resources Coordinator, (iii) spacing of the trees to the satisfaction of the City's Natural urces Coordinator and ( iv) all plantings counted toward satisfaction oI the Citys 2-1/2% landscaping requirement shall be located outside oF thc Citys of-way. Landscape materials may include plant materials, un erground irrigatioii systeiis. public art, fountains, decorative paving, and other outdoor common area e ements that create 0. A separate application and signage plan in must be submitted for review and approval signs. Q an enhanced sense o p ace aiid loster ::::: pos social interactions. ormance with the sign regulations City prior to the erection of any P. The Developer shall install and pay Cor a public (or private) street lighting system, constructed to City and Dakota Electric standards. The street lighting plan shall be re • wed and appioved by the City Engineer prior to issuance of the building permit. The i)cvcloper shall submit a site Iighting plan to the City for its approval, at the time of buil in permit appliealioii. Any site lighting shall consist of downcast, ox Iighting flxturcs or wallpacks with deflector shields which confine the iht tO thc pro The lighting plan shall be reviewed and approved by the City Planner prior to 1SSUUflCC of the building permit. Construction on Lot 1, Block 1, of the Plat shall occur in accordance with the fans prepared y Kaas Wilson Architects attached hereto as Exhibit "D" and incorporated herein, full-size copies of which are available for inspection at the Apple Valley Municipal Center. S. Construction on Lot 1, Block 2, of the Plat shall occur in accordance with the plans prepared by Kaas Wilson Architects attached hereto as Exhibit "E" and incorporated herein, full-size copies of which are available for inspection at the Apple Valley Municipal Center. T. Construction and earthmoving activities shall be limited to the hours of 7:00 a.m. to 7:00 p.m. Monday through Friday. Weekend construction hours shall be limited to the hours of 8:00 a.m. to 5:00 p.m. on Saturday. Construction shall not be performed on Sundays or federal holidays. There shall be no deviation from 5. Page 56 of 145 X. the foregoing hours of construction without prior written approval by the City Engineer. U. Earth-moving activities shall not occur when wind velocity exceeds thirty (30) miles per hour. Watering to control dust shall occur as needed and whenever directed by the Apple Valley Building Official or Zoning Administrator. V. The Developer agrees to attend a meeting with representatives of the City, which meeting requires the attendance of all contractors and subcontractors, prior to commencement of any improvements. W. The Developer will not bury any pipe nor ins concrete without the specific approval of the City Ins not be unreasonably withheld, conditioned or dela applying City standards uniformly and consistently applied" prior to the work being performed. To deliver and to keep in existence wit in the aggregate amount of One Hund Eighty and No/100 D r 0 Dollars ($116,280. payment of the obligations undci this Agreem (The security required by lon includes the cash escrow under Sec io n . \ ce ment m n nt Improvemes.) Each et ter of credit must contain a provision rovision that it is automatically ew able for successive one-yea Pe less at least thirty (30) days prior its ira v tion the issuer delivers written notice to the City of its intend o not ren w the letter of credit. Following receipt of notice of non w - reneal, maY at any time thereafter, present the letter to the issuer and draw in cash * * principal obligation under the letter of credit. it re minous surface nor pour r which approval shall shall be made by ther City projects, etters of credit or cash escrows xteen Thousand Two Hundred o secure the performance and o the satisfaction of the City. ,500.00 letter of credit or or Private Installation of ss f a I3uilding Permit and a final certificate of occupancy for each Lot is COIllh11LCrIt L1Ofl lhe project being constructed in conformance with all the preceding conditions as well as all applicable performance standards of the current zoning regulations. In the event that a certificate of occupancy is quested prior to completion of all required site improvements, a suitable 'inancial guarantee in the amount of 125% of the estimated cost of the unfinished im provements shall be required along with an agreement authorizing the City or its agents aients to enter the premises and complete the required improvements if they are not completed by a reasonably stipulated deadline, with the cost of such City completion to be charged against the financial guarantee. Z. The ongoing use and occupancy of the premises is predicated on the ongoing maintenance of the structure and all required site improvements as listed in the preceding paragraph. No alteration, removal, or change to the preceding building plans or required site improvements shall occur without the express authorization of the City. Site improvements which have deteriorated due to age or wear shall be repaired or replaced in a timely fashion. 6. Page 57 of 145 AA. That any material violation of the terms of this Agreement and in particular this section, shall allow the City (i) to stop and enjoin all construction in the Plat until authorization to proceed is given by the City and (ii) to exercise any other remedies available under this Development Agreement or under the Development Assistance Agreement between the Developer and the City. The exercise of any remedy shall not preclude the exercise of any other remedies available to the City. The Developer agrees to hold the City harmless from any damages, causes of action, or claims related to the construction being stopped by the City. 9. Occupancy. No occupancy of any building in the 1 'shall occur until water, sanitary sewer, and a paved surface are available for use to that to each Lot within the Plat, an amount as determinedbelow upon the basis of units et building) as determined by the City Engineer, which amount sh recording. A. Sewer Availability Charge - The rate per unit based on the year in which the building permit is issued (presently $2,646.00 per unit - $2,365.00 Metro and $281.00 City). The person who applies for a building huikling permit shall pay, at the time of the issuance of the permit, an Llmount cqual to t e rate times the number of units. This fee is subject to change if the obligation of the City to the requiremen s for the Plat, a Metropolitali!'WaSte Control Conannssion chailges. ublic services furnished ifl the following manner: B. Water Systcii. Supply and Storage Charge - The rate per unit is based on the year in which huilding permit is issued (presently $766.00 per unit). The person who applies ' ()1' a building pernii shall pay, at the time of the issuance of the ernhit. an amount qual to the rate times the number of units. pies mutually recognize and agree that park dedication rovided in Chapter 153 of the City Code, shall be satisfied by a cash payment o Three Hundred Sixty-one Thousand One Hundred Twenty-five and No/100 Dollars ($361,125.00 ). TThis amount is due and payable prior to the release of the Plat for 12. Storm Water Dedication. The parties mutually recognize and agree that the storm water pond dedication requirement, as provided in Chapter 153 of the City Code, has been satisfied. 7. Page 58 of 145 13. As-Built Surveys. The Developer must provide the City with as-built site surveys ("Survey") for each building constructed within the Plat, prior to the issuance of the Certificate of Occupancy ("CO") for that building; provided, in the event the Developer is proceeding in good faith to obtain the Survey, and the Survey's availability is the only impediment to the City's issuance of the CO, the City agrees to accept a deposit of $5,000.00 to ensure completion of the Survey and upon receipt of such deposit, City will issue the CO. 14. Release. The Developer hereby speei1caL1y release the members of the City Council from any personal liability in connection \V1h haiidling funds irsuan t to the terms of this Agreement, and further agree to indemnify aiid hold the members of ibe City Council harmless from any claim, of any and every nature whats oever caused or contributed to by the acts or omission of the Developer except a result of this Agreement or the creating of the Pia 15. Binding Tit he parties mutually recognize and agree that all terms and conditions of this \ireemein run with the Plat and shall be binding upon the respective heirs, administrators, successors a IN WITNES the f 13. DEVELOPE IMH Special Asse NI 175-AVN, LLC, an Arizona limited liability company By: Its: members' \villful m isconduct, that may arise as loper. parties have executed this Agreement to be effective as of CITY OF APPLE VALLEY By: Mary Hamann-Roland Its: Mayor By: Pamela J. Gackstetter Its: City Clerk 8. Page 59 of 145 STATE OF COUNTY OF On this day of said County, personally appeared known, who being by me duly sworn, did say that he/she is the IMH Special Asset NT 175-AVN, LLC, an Arizona limited liability company, named in the instrument, and that said instrument was signed on behalf of said limited liability company by authority of the limited liability company and acknowledged said instrument to be the free act and deed of the limited liability company. STATE OF MINNESOTA ) ) ss. COUNTY OF DAKOTA ) day of said County, personally appeared Marys: personally known, who being each by me duly sw Mayor and Clerk of the City of Apple Valley, instrument, and that the seal affixed on behr Council and said Mayor1:0" Clerk acknowledge On this ) ss. , 2013, before me a Notary Public within and for to me personally of , 2013, before I1TIC a Notary Public within and for n-Roland and Pamela .1. Gackstetter to me each did say at they are respectively the e nicipality named in the foregoing said municipality by authority of its City said instrument to be the free act and deed of 9. Page 60 of 145 EXHIBIT "A" TO DEVELOPMENT AGREEMENT Page 61 of 145 EXHIBIT "B" TO DEVELOPMENT AGREEMENT [Place holder for Agreement for Private Installation of Improvements] Page 62 of 145 EXHIBIT "C" TO DEVELOPMENT AGREEMENT [Place holder for Drainage and U Easement Page 63 of 145 EXHIBIT "D" TO DEVELOPMENT AGREEMENT PLANS FOR LOT 1, BLOCK 1, PARKSIDE VILLAGE See attached plans: 1. Cover Sheet for Parkside Village - Gabella (Sheet A000) dated , 201 2. Garage Plan, Level 1 (Sheet A300) dated , 201 3. Level 2, Level 3 plan (Sheet A320) dated 4. Level 4 plan (Sheet A340) dated 5. Unit Plans (Sheet A450) dated 6. Exterior Elevations (Sheet A500) dated , 201 7. Exterior Elevations (Sheet A501) dated 8. Removals & Erosion Control Plan (Sheet C-1) dated , 201 . 9. Site Plan / Preliminary Plat (Sheet C -2) da #ed , 201_. 10. Grading and Erosion Control Plan (Sheet dated , 201 11. Utility Plan (Sheet C -4) dated , 201_. 12. Storm Water Pollution Prevention Plan (Shut C -5) dated , 201_. 13. Site eet , 201 . 14. Landscape Plan (Sheet L -1) dated , 201 . Page 64 of 145 EXHIBIT "E" TO DEVELOPMENT AGREEMENT PLANS FOR LOT 1, BLOCK 2, PARKSIDE VILLAGE See attached plans: 1. Cover Sheet for Parkside Village - Galante (Sheet A000) dated , 201 . 2. Garage Plan, Level 1 (Sheet A300) dated 3. Level 2, Level 3 plan (Sheet A320) dated Ol 4. Level 4 plan (Sheet A340) dated 5. Unit Plans (Sheet A450) dated 6. Exterior Elevations (Sheet A500) dated ,201_ 7. Removals & Erosion Control Plan (Sheet C-1) dated , 201 8. Site Plan / Preliminary Plat (Sheet C -2) dated , 201_. 9. Grading and Erosion Control Plan (Shee 10. Utility Plan (Sheet C -4) dated 11. Storm Water Pollution Prevention Plan (Sheet GS) dated 12. Site Details (She , 201 . 13. Landscape Plan : (Sheet' L -1 � dated , 201_. , 201 . Page 65 of 145 AGREEMENT F PRIVATE INSTALLATION OF IMPROVEMENTS THIS AGREEMENT is made this day of , , 2012, between IMH Special Asset NT 175 —AVN, LLC, an Arizona limited liability company (the "Developer "), and the City of Apple Valley, a Minnesota municipal corporation (the "City "). WHEREAS, the Developer has requested the City's approval for the following described installation of improvements for the land to be replotted and developed as the plat of PA SIDE VILLAGE (the "Property ") (the proposed plat containing the legal description and depiction of the Property is attached hereto as Exhibit " "); and WHEREAS, the proposed replat and development of the Property will necessitate (i) the relocation of a 24 -inch storm sewer line from a portion of Fontana Trail and (ii) the extension of Gabella Street to connect with Foliage Avenue; and WHEREAS, the City has agreed to approve and allow relocation of the storm sewer line and the extension of Gabella Street on the terms and conditions contained herein; NOW, THEREFORE, in consideration of the mutual agreements of the parties, it is hereby agreed by and between the parties as follows: 1. Subject to the terms and conditions of this Agreement, the City hereby approves the relocation of a portion of the 24 -inch storm sewer line located within Fontana Trail and the extension of Gabella Street to connect with Foliage Avenue. 2. Immediately following the execution of this Agreement, the Developer shall execute and record a drainage and utility easement in favor of the City in the form attached Page 66 of 145 hereto as Exhibit "B" and deliver a file-stamped copy of the easement containing recording information to the City. 3. IMPROVEMENTS The Developer has requested and the City has agreed to design plans and specifications for the necessary (i) storm sewer removal, (ii) storm sewer installation, (iii) street removal and (iv) street construction including installation of concrete curb, bituminous pavement and concrete sidewalk (collectively the "Improvements") at the Developer's sole cost and expense. Upon completion of the Improvements, and following acceptance by the City and the recording of the final Plat, the Improvements shall be maintained as follows: i) The City shall only be responsible for maintenance of sanitary lines having a pipe equal to or greater than eight inches in diameter. Maintenance of service and lateral lines having a pipe of less than eight inches in diameter shall be the responsibility of the individual property owner or property owner's association. The Developer shall be responsible for 100% of the cost of installation. ii) The City shall only be responsible for maintenance of water lines having a pipe equal to or greater than six inches in diameter. Maintenance of services, shut offs and lateral lines having a pipe of less than six inches in diameter shall be the responsibility of the individual property owner or property owner's association. The Developer shall be responsible for 100% of the cost of installation. iii) Outside of dedicated public rights-of-way, the City shall only be responsible for maintenance of manholes and outlet lines connecting manholes to the rest of the City's storm sewer system. Maintenance of catch basins and leads to manholes shall be the responsibility of the individual property owner or property owner's association. The Developer shall be responsible for 100% of the cost of installation. The Developer agrees to grade the Property and to install the Improvements in accordance with and under the following conditions: A. To grade the Property in accordance with the Grading Plan on file with the City. B. To install the Improvements as designed by the City and in accordance with City Standards. C. To install each item noted herein at the Developer's sole cost and expense. 2 Page 67 of 145 D. E. F. G. H. To attend a preconstruction meeting with representatives of the City and to require the attendance of all contractors and subcontractors, prior to commencement of construction. The Developer will not bury any pipe, install bituminous surface or pour concrete without the specific approval of the City Inspector, prior to the work being performed. Construction and earthmoving activities shall be limited to the hours of 7:00 a.m. to 7:00 p.m. Monday through Friday. Weekend construction hours shall be limited to the hours of 8:00 a.m. to 5:00 p.m. on Saturday. Construction shall not be performed on Sundays or federal holidays. There shall be no deviation from the foregoing hours of construction without prior written approval by the City Engineer. To deliver and to keep in existence with the City a letter of credit or cash escrow in the amount of Seventy-One Thousand Five Hundred and No/100 Dollars ($71,500.00) to secure the perfomiance and payment of the Developer's obligations under this Agreement as they relate to the installation of the Improvements, in a form and with the terms to the sole satisfaction of the City. At the time of final inspection, if it is determined by the City that the plans and specifications were not strictly adhered to or that work was done without City inspection, the City may require that the Developer post a cash escrow equal to one hundred twenty-five percent (125%) of the estimated amount necessary to correct the deficiency or to protect against deficiencies arising therefrom. Such additional cash escrow shall remain in force for such time as the City deems necessary, not to exceed five (5) years. To pay the City's costs related to the design and installation of the Improvements and this Agreement, including but not limited to administration, legal fees, engineering, surveying and inspection, which the City estimates to be approximately Twelve Thousand Five Hundred and No/100 Dollars ($12,500.00). Such costs shall be paid as follows: The Developer shall deposit the sum of Twelve Thousand Five Hundred and No/100 Dollars ($12,500.00) with the City for payment of the City's costs under this Agreement. ii) Upon separate written request from the Developer, not more than one time per month, the City shall submit a written statement to the Developer with detailed descriptions of the City's costs related to the Improvements and this Agreement, and a statement of the balance of the deposit. iii) If the City's costs exceed the deposit, the Developer agrees to reimburse the City within thirty (30) days of billing. Should the costs be less than the 3 Page 68 of 145 amount of the deposit, upon completion of the Improvements, the amount remaining on deposit shall be returned to the Developer. That any violation of the terms of this Agreement shall allow the City to stop all construction on the Property until authorization to proceed is given by the City. The Developer agrees to hold the City harmless from any damages, causes of action, or claims related to the construction being stopped by the City. 4. The Developer agrees to install all utilities underground in the Property, ............... ................. specifically including electrical, telephone, cable television and gas services. 5. Within thirty (30) days after completion of the Improvements, the Developer shall (i) televise the utilities to ensure they have been completed in accordance with the City Code, • City Standards and the plans and specifications on file with the City and (ii) give written notice to the City that the Improvements have been completed in accordance with the City Code, City Standards and the plans and specifications on file with the City. The City shall then inspect the Improvements and notify the Developer of any Improvements that do not appear to conform to the City Code, City Standards and /or the submitted plans and specifications. If Developer's Improvements do not conform to the City Code, City ` Standards and submitted plans and specifications or are later discovered to not conform, the City shall immediately notify the Developer of the need for repair or replacement. Notwithstanding any provision herein to the t he Developer agrees that in case of emergency, the City may cure any default by Developer without prior notice to Developer, and the Developer waives any and all rights to notice of default in such event. Any cast incurred by the City to cure the default shall be the financial obligation of the Developer, and shall be paid to the City within ten (10) days of receipt of an invoice for such costs. 6. The Developer shall be responsible for the removal and disposal of the portion of the existing 24 -inch storm sewer line located within Fontana Trail which is being replaced by the Improvements. 4 Page 69 of 145 7. The Developer agrees to reimburse the City for all engineering, administrative and legal costs and expenses incurred by the City in connection with this Agreement or the enforcement thereof. 8. Unless a longer warranty period is provided by Minnesota law, the Developer warrants all Improvements required to be performed by Developer, its agents and employees, against poor design, engineering, materials and faulty workmanship for a period of two (2) years after acceptance by the City. Developer shall provide a warranty bond(s), in an amount equal to the cost of the Improvements, for a two (2) year period commencing upon the City's acceptance of the Improvements. The Developer shall be solely responsible for the cost and expense to perform all required repair work to City Standards within thirty (30) days of written notification by the City. 9. The - • surance ri copy of the date s ix (6) DeveloPer required under INSURANCE policy work under this al Requi-rem.:nts: has obtained insurance or the . such insurance ed all insurance ce until shall not shall not co ence w and shall Agreement have filed an d the Developer the r on i General certm a e shall Im 1 mam ments. f until all ins shall contain the insurance p A. eement until te of insuruna_ . The Developer ot Each insurance _ mm der this Section allow anY subcontractor subcont ractor with the City, 1 • tam sue ide wi after th commence wor company without ten k required f°r City has ac wr itt en notice writing h t shall of intent sha contain a ths al-Le y I The Developer mon _ubcon a I not be canceled n to cancel company worbta ne subcontract 0) days company in insurance. insurance policy . cy. C requi tify its . n a clause P tractor to comm the has been o i its su insurance City. party ce. The Developer shall con 1 11 insurance p olicy s shal ri if it ca ncels t providing t b the 1 or e notify the — wr itt en notice tice to the City a copy naming the that the insStandar -tiding Standard Form f 10 urance must nrov- The certificates eloper s spec Developer's be submitted on note the clause clause na g c a opy of this City ,z) urni tice to the Each msu pro of insurance shall d party ACORD to the e as an a s and shal_l intent to canc City as an a dditionally insure additionally • the Cu under the policy. rm c C.-70 under notice lly rtificates of insurance also specifically note the clause .n g minim City ot m na mg coverage s hall specifically i minimum co der the policy. The follow], shall apply. 5 i) Worker's compensation insurance and employer's liability insurance as required by law. ii) Comprehensive general and automobile liability insurance, including coverage for non-owned and hired vehicles, in limits as follows: Page 70 of 145 B. c. 1 General Liability - Bodily Injury Property Damage OR Combined Single Limit Automobile Liability - Bodily Injury OR Property Damage 6 $1,000,000 each occurrence $1,000,000 completed operations $100,000 $1,000,000 each occurrence $2,000,000 aggregate $250,000 each person $500,000 each occurrence ocemence $100,000 eac h $200,000 Combined Single Limit $1,000,000 iii) In addition to all listed coverages. Developer shall procure and maintain an Umbrella or Excess liability policy in a minimum limit of $1,000,000. Minimum Insurance Requirements: Losses other than those covered by insurance shall be the sole responsibility of the Developer. The insurance requirements as set forth herein shall be considered to be minimum requirements only Any other insurance that may be necessary to provide adequate coverage must be provided by the Developer at its sole cost and expense. Contractual Liability: To the fullest extent permitted b y law, the Developer shall indemnify and hokl harmless the City and its agents and employees from and against all claims, damages, losses and expenses, including but not limited to attorneys fees arising out of or resulting from the performance of this Agreement provided cm- rovided that any such claim, age, loss or expense (1) is attributable to bodily injury, sickness, diseaseor l i death, or to injury to or destruction of tangible propert y (other than the work itself) including the loss of use resulting therefrom, and (2) is caused in whole or in part by any negligent act or omission of the Developer, any subcontract , anyone directly or indirectly employed by any of them or anyone for whose or, may of w acts any of them ay be liable, regardless whether or not it is caused in a party indemnified hereunder. Such obligation shall not be construed to P b ne abridge or otherwise reduce any other right or obligation of indemnity which would otherwise exist as to any party or person described in this Section. The Developer hereby specifically releases the members of the City Council from any personal liability in connection with handling funds pursuant to the terms of this Agreement, and further agrees to indemnify and hold the members of the City Council harmless from any claim of any and every nature whatsoever as a result of this Agreement. Page 71 of 145 11. The parties mutually recognize and agree that all terms and conditions of this Agreement shall run with the Property and shall be binding upon the successors and assigns of the Developer. IN WITNESS WHEREOF, the parties have hereunto set their hands this day of , 2012. IMH Special Asset NT 175--AVN, LLC, an Arizona limited liability company By: Its: CITY OF APPLE VALLEY 7 By: Mary Hamann-Roland Its: Mayor By: Pamela J. Gackstetter Its: City Clerk Page 72 of 145 EXHIBIT "A" TO AGREEMENT FOR PRIVATE INSTALLATION OF IMPROVEMENTS [Place holder for proposed Plat including the Legal Description of the Property] Page 73 of 145 EXHIBIT "B" TO AGREEMENT FOR PRIVATE INSTALLATION OF IMPROVEMENTS LPlace holder for Drainage and Utility Easement Page 74 of 145 (the "Property "). The northerly 56 f according to the and (the "Easement Area "). See Ex "A" attac DRAINAGE AND UTILITY EASEMENT THIS EASEMENT is made this day of , 2013, by IMH Special Asset NT 175 -AVN, LLC, an Arizona limited liability company (thc " landowner "), in favor of the City of Apple Valley, a Minnesota municipal corporation (the recor ed hereto and incorporated herein. '). The Landowner is the fee title holder of property legalty escr t d as follows: Lot 1, Block 3, THE LEGACY OF APPLE VAL,, DRTH, according to the recorded plat thereof, Dakota County, Minnesota The Landowner, in consideration of the sum of One Dollar ($1.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, does hereby grant and convey unto the City, its successors and assigns, a permanent nonexclusive easement for drainage and utility purposes over, under and across tie property legally described as follows: of 1, Block 39: LE GA' OF APPLE VALLEY NORTH, at thereof, Dakota County, Minnesota The easterly 3 o feet of Lot 1, Block , THE LEGACY OF APPLE VALLEY NORTH, according t the recorded plat thereof, Dakota County, Minnesota, lying south of the �rtherly 56 feet thereof. The grant of the foregoing easement includes the right of the City, its contractors, agents and servants to enter upon the Easement Area at all reasonable times, to construct, reconstruct, inspect, repair and maintain pipes, conduits and mains but not above - ground utility poles or wires; and the further right to remove trees, brush, undergrowth and other obstructions, all at the City's sole costs and expense. After completion of such construction, maintenance, repair or Page 75 of 145 removal, the City shall restore the Easement Area to the condition in which it was found prior to the commencement of such actions, save only for the necessary removal of trees, brush, undergrowth and other obstructions. The Landowner covenants with the City that it is the fee owner of the Property and has good right to grant and convey the easement herein to the City. This easement and the covenants contained herein shall run with the Property and shall bind the Landowner and its successors and assigns. IN WITNESS WHEREOF, the Landowner has caused this instntmnt to be executed as of the day and year first written above. STATE OF COUNTY OF ) ss On this for said County, personally appeared Special Asset NT 175- instrument, and owledge company THIS INSTRUMENT WAS DRAFTED BY: DOUGHERTY, M 0 LEN DA. SOLFEST, HILLS & BAUER RA. 7300 West 147th Street, Suite 600 Apple Valley, Minnesota 55124 (952) 432-3136 (MDK: 66-32849) Easement No. QCial Asset' ::„175-AVN, L,LC, an ArizOna limited liabilitylimpany 2013, before me a Notary Public within and Notary Public to me personally known, who being by uly sworn, did say that she is the of IMH Arizona limited liability company, named in the instrument to be the free act and deed of the limited liability 2. Page 76 of 145 EXHIBIT "A" „.: •Atf,AAA ,• • • ••••• • • AVM140.00.. 3. Page 77 of 145 WHEREAS, pursuant to Minnesota Statutes 462.357 the City of Apple Valley has adopted, as Chapter 155 of the City Code of Ordinances, zoning regulations to control land uses throughout the City; and WHEREAS, said regulations provide that issuance of a building permit for commercial, industrial, and multiple residential uses require the specific review and approval of development plans by the Apple Valley Planning Commission and City Council; and WHEREAS, approval of such a building permit issuance has been requested for the above referenced project; and WHEREAS, the Apple Valley Planning Commission has reviewed the development plans and made a recommendation as to their approval at a public meeting held on October 17, 2012. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Apple Valley, Dakota County, Minnesota, that the issuance of a building permit for the Parkside Village Galante and Gabella buildings is hereby authorized, subject to the following conditions: 1. Approval of the Site Plan and Building Permit Authorization is subject to the approval and publication of zoning amendments to Planned Development No. 739, Article A31 of the City Code, and execution of a Planned Development Agreement with the City. CITY OF APPLE VALLEY RESOLUTION NO. 2012 - A RESOLUTION AUTHORIZING ISSUANCE OF A BUILDING PERMIT FOR PARKSIDE VILLAGE GALANTE AND GABELLA BUILDINGS AND ATTACHING CONDITIONS THERETO Approval of the Site Plan and Building Permit Authorization is subject to the approval of rezoning of Blocks 2, 3, 7 and 8, THE LEGACY OF APPLE VALLEY NORTHY, to Zone 3. 3. Approval of the Site Plan and Building Permit Authorization is subject to the approval of the vacation of the right-of-way of Fortino Street, the right-of-way of Fontana Trail, and all existing drainage and utility easements. 4. Approval of the Site Plan and Building Permit Authorization is subject to the approval of the final plat and development agreement of Parkside Village. 5. If the Building Permit is not paid for and issued within one (1) year of the date of approval, the approval shall lapse. 1 of 4 Page 78 of 145 6. The Building Permit shall be applicable to property identified as Lots 1, 2 and 3, Block 2; Lot 1, Block 3; Lot 1, Block 7 and Lot 1, Block 8, all in THE LEGACY OF APPLE VALLEY NORTH. 7. Construction shall occur in conformance with the site plan received in City Offices on October 9, 2012, without encroachment into the drainage and utility easement of Galaxie Avenue, including parking lot paving and a non- surmountable concrete curb and gutter around the entire perimeter with a minimum driveway approach radius of 15' at each public street, and a valley gutter at the edge of the street pavement. 8. Construction shall occur in conformance with the landscape plan received in City Offices on October 9, 2012, including sodded/seeded public boulevard area up to each street curbline; subject to the following: a. A landscape bid list that confirms that the landscape materials meet or exceed 2-1/2% of the value of the construction of the building based on Means Construction Data shall be submitted at the time of building permit application. Landscape materials may include plant materials, underground irrigation systems, public art, fountains, decorative paving, and other outdoor common area elements that create an enhanced sense of place and fosters positive social interactions. b. The landscape plan shall be revised to replace the honeylocust trees along Galaxie Avenue with a tree that is better suited to the limited size of the planting area to be reviewed and approved by the Natural Resources Coordinator. Spacing of the trees to the satisfaction of the Natural Resources Coordinator. d. All plantings counted towards the 2-1/2% landscaping requirement shall be located outside of the City's rights-of-way. 9. Construction shall occur in conformance with the elevation plan received in City Offices on October 9, 2012. 10. Site grading shall occur in conformance with a Natural Resources Management Plan (NRMP) which shall include final grading plan to be submitted for review and approval by the City Engineer; subject to the following: a. The property owner shall submit a hauling and staging plan to be reviewed and approved by the City Engineer prior to issuance of the NRMP. 2 of 4 Page 79 of 145 b. The property owner shall submit a copy of the General Storm Water Permit approval, if required, from the Minnesota Pollution Control Agency pursuant to Minnesota Rules 7100.1000 - 7100.1100 regarding the State NPDES Permit prior to commencement of grading activity. 11. A lighting plan shall be submitted at time of application of the building permit. Any site lighting shall consist of downcast, shoebox lighting fixtures or wallpacks with deflector shields which confines the light to the property. The lighting plan shall be reviewed and approved by the planner prior to issuance of the building permit. 12. Approval of a signage plan is not included with this site plan and building permit authorization. A separate application and signage plan in conformance with the sign regulations must be submitted for review and approval to the City prior to the installation of any signs. 13. Construction shall be limited to the hours of 7:00 a.m. to 7:00 p.m. Monday through Friday. Weekend construction hours shall be limited to Saturdays, 8:00 a.m. to 5:00 p.m. 14. Earthmoving activities shall not occur when wind velocity exceeds thirty (30) miles per hour. Watering to control dust shall occur as needed and whenever directed by the Apple Valley Building Official or Zoning Administrator. 15. Issuance of a Building Permit and a final certificate of occupancy is contingent upon the project being constructed in conformance with all the preceding conditions as well as all applicable performance standards of the current zoning regulations. In the event that a certificate of occupancy is requested m i prior to completion of all required site improvements, a suitable financial guarantee in the amount of 125%of the estimated cost of the unfinished improvements shall be required a l ong with an agreement authorizing the City or its agents to enter the premises and complete the required improvements if they are not completed by a reasonably stipulated deadline, with the cost of such City completion to be charged against the financial guarantee. 16. The ongoing use and occupancy of the premises is predicated on the ongoing maintenance of the structure and all required site improvements as listed in the preceding. No alteration, removal, or change to the preceding building plans or required site improvements shall occur without the express authorization of the City. Site improvements which have deteriorated due to age or wear shall be repaired or replaced in a timely fashion. BE IT FURTHER RESOLVED by the City Council of the City of Apple that such issuance is subject to a finding of compliance of the construction plans with the Minnesota State Building Code, as determined by the Apple Valley Building Official, and with the Minnesota State Uniform Fire Code, as determined by the Apple Valley Fire Marshal. 3 of 4 Page 80 of 145 ATTEST: m /\I)(�PTE[�thi day of , 20 . Pamela J. Gackstetter, City Clerk Mary Hamann-Roland, Mayor 4 o[4 Page 81 of 145 GARRETT�.CT 114;$40 GARNET WAY 2NDoS Page 82 of 145 Page 83 of 145 r■iit so• owe Mini,sna,..11 155TH ST W 4 I PARKSIDE VILLAGE COMPREHENSIVE PLAN MAP • • • e e • e, • • • • • • • — • • • • • • • • •••••-• • • • • - e App e„ Valley / . Ai. k ift Ai l .7........ mg ",,,, J 1 Mrlh" Ill ,ff Jim vis..giwi Lr motrol,. l it: .41R1 ‘ ' olu, TIPPErran Assaf ' giniimorpm fic.. .TILIA Al,.. anima %... t ril I r am ra, imainif ..... uP Ir R Page 84 of 145 ArrAffir110 WI Avr .1. #e RSVP rait la l ireA l ve q:47.` E. 4 124 1 1 r 6#4 . 6 1 '. I j is. vs---irpow 4-4,11#.411 Ariti E . 0 % ' i4 � C P Page 85 of 145 October 9, 2012 Kathy Bodmer Municipal Center 7100 147th Street W. Apple Valley,MN 55124 Reference: Parkside Village Galante and Gabella Apartment submission. Dear Kathy, We continue to develop a very good architectural and engineering product that will be an asset for future and current residents of Apple Valley. This letter incorporates our entire consultant/owner team's progress on previously mentioned items that have come up in the process via city planning report. We are attaching revised Civil and Landscape plans that incorporate all of your comments to date. Our comments are in red. I will also note that we have continued to work on our interior unit plans and in the process we have maintained the high degree of architectural design and detail to the exterior, but we have combined some small units to now offer the public 322 apartments as opposed 332. We had 134 units at Galante and we now have 126. Rather than a 198 unit Gabella, we now have 196. The amount of parking has not changed which we see as an asset. We now have a greater ratio of underground parking to apartment units than required by PD-739. Comments from CenterPoint Energy Legal Description We will continue to work with CenterPoint Energy to legally describe their gas utility easements and record them with the county at Final Plat approval. We moved the Galaxie building 1'-0" east to get the edge of our footing away from the easement. Continued Coordination with CenterPoint Energy There are valves that occur well inside the 10'easement and these only occur at the Southwest corner of Galaxie Avenue and 153rd Street West. We are coordinating with CenterPoint Energy, the surveyor, and Gopher State One Call to locate and create easements for these appurtenances. Items in the setback The 1st floor walk-up apartments along Galaxie Avenue will have balconies that overhang the utility easement by 1'-0". Anchored to this overhanging balcony is a steel stair. This stair will rest on the concrete sidewalk below but will not have any footings. The stair can be removed with a wrench if any utility would need access to their underground lines. See Galante sheet L-1 for an enlarged plan detail. The following is from: Colin Manson, City Engineer City of Apple Valley September 13, 2012 Gabella Grading/Storm Sewer 1. Given the proposed vacation of Fontana Avenue, storm sewer running through Fontana Avenue shall be relocated. The preferred location for the storm sewer is in the proposed green space adjacent to Foliage Avenue. Drainage and utility easement shall be dedicated over the relocated storm sewer. Plan revised, Sheet C-4. Tel: 612.879.6000 21 04 4th Avenue South, Suite B, Minneapolis, MN 55404 www.kaaswilson.com Page 86 of 145 Tel: 612.879.6000 2. Inlet protection on existing and proposed structures adjacent to the work shall be provided. Added to proposed utilities, added notes to SWPPP and utility plans, Sheet C-4/C-5. Sanitary Sewer 1. Analysis shall be performed to determine whether the number of sanitary sewer services to the building can be reduced. Comment noted — Analysis is in process to reduce the number of sanitary sewer services to the building. Water 1. Connection of the 8 inch fire and domestic services to the existing 8 inch water main shall be via cut in tee. Plan revised, Sheet C-4 2. The valve on the domestic service shall be located on the property line. Plan revised, Sheet C-4 3. Location of the post or wall mounted indicator valve on the fire service shall be coordinated with the Fire Marshal. Plan revised to show locations per Fire Marshal, Sheet C-4. 5'-0" from building Civil Engineer Ken Kendle will bring domestic and fire protection into the building per city standards at two locations. General 1. Street sweeping shall be performed as necessary should tracking from the site occur. See SWPPP General Notes #4.5, 4.6 2. All work on public infrastructure shall be performed under a City contract. Added as note — Sheet C-1, General Notes, #11 3. The sidewalk adjacent to the building will likely require replacement due to construction damage. Added as note — Sheet C-1, General Notes, #12 and Sheet C-2, Site Layout Notes, #14 4. Private utilities may need to be installed as only a portion of the development is currently served. Development and Design Team will continue to coordinate this work with city. 5. A significant volume soil will be required to be removed from the site. The site will also be relatively tight for construction activity. Staging and hauling plans shall be provided for review by City staff prior to the work beginning. Added as note — Sheet C-1 , General Notes, # 13 Fortino (Galante) Grading/Storm Sewer 1. The downstream storm water pond (WVR-P44) has a high water level of 940.3 feet. The garage floor elevation shall have a minimum of one foot of freeboard and therefore shall be raised to a minimum elevation of 941.3 feet. Per Discussion with City Engineer, building elev. to remain 939.3, as designed; trench drain will be disconnected from city storm sewer. Trench drain to be mechanically pumped to catch basin. Mechanical system to contain check valve to prevent backwater. Sheets C-4, C-6. 2. Existing storm sewer in Fortino Street shall be removed if the street is vacated. Added to plan on Sheet C-1. 21 04 4th Avenue South, Suite B, Minneapolis, MN 55404 www.kaaswilson.com Page 87 of 145 3. Inlet protection on existing and proposed structures adjacent to the work shall be provided. Added to plan on Sheet C-1, C-4, C-5 Sanitary Sewer 1. Additional easement shall be provided over the existing sanitary sewer manhole located in the area of the southwest comer of the building. Added to plan C-2 — updating plat accordingly. Water 1. The domestic and fire services shall be split outside the building. Plan revised, Sheet C-4 2. A valve shall be provided on the domestic line. Plan revised, Sheet C-4 3. Location of the post or wall mounted indicator valve on the fire service shall be coordinated with the Fire Marshal. Plan revised to show locations per Fire Marshal, Sheet C-4 4. The unused water service on the north side of the building shall be removed to the main. Added to plan Sheet C-1. General 1. Street sweeping shall be performed as necessary should tracking from the site occur. See SWPPP General Notes #4.5, 4.6 2. All work on public infrastructure shall be performed under a City contract. Added as note — Sheet C-1, General Notes, #1 1. All patterns and concrete scoring will match city standards. 3. A significant volume soil will be required to be removed from the site. The site will also be relatively tight for construction activity. Staging and hauling plans shall be provided for review by City staff prior to the work beginning. Added as note — Sheet C-1, General Notes, # 13 4. The sidewalk adjacent to the building will likely require replacement due to construction damage. Added as note — Sheet C-1 , General Notes, #12 and Sheet C-2, Site Layout Notes, #14 5. Private utilities may need to be installed as only a portion of the development is currently served. Comment noted — Private utilities will be looked at if needed. 6. The location of signal infrastructure at 153rd Street and Galaxie Avenue shall be field verified. Additional easement over this infrastructure may be required. Signal infrastructure will be verified and an easement established as necessary. 7. Decorative concrete shall not be permitted in City right of way. Plan revised, Sheet C-2 8. Landscaping within the right of way will limit snow removal operations. Landscaping shall be discussed further to accommodate snow removal needs. Note snow removal locations on Landscape Plans, Sheet L-1. Tel: 612.879.6000 21 04 41h Avenue South, Suite B, Minneapolis, MN 55404 www.kciaswilson.com Page 88 of 145 The Following from: Pam Walter Apple Valley Police: Neighborhood Collaboration Officer Program September 2012 Landscape: 1. All ground cover will be below 2'. 2. Shrubs will not exceed 3'. 3. Trees will be pruned above 6'. Tel: 612.879.6000 9. The angle of the curb at the "downstream" end of angled parking bump outs shall be modified to a low for better egress by snow removal equipment. Plan revised, Sheet C-2 Exterior Recommendations: 1. A 12" address will be at the corner of each building 2. All exterior doors will be fobbed. Mech and Stair doors will have security astragals to protect prying Interior Dwelling Units: 1. Eye viewers are specified for each apartment door. 2. Apartment unit doors will have Single cylinder deadbolts with internal release for fire safety are specified in solid core wood rated doors. 3. Apartment unit doors will have High security strike plates with (4) 3" screws 4. All exterior sliding glass doors on 1st and 2nd floor will have a lock in the track. We have not found a window track lock that will not void the warranty of the window. We have specified sliding glass windows which will have a sill that is 52" minimum above the grade. We feel that this is adequate to increase the safety for residents. The windows do have an internal locking system that when locked provide good security for the window. 5. Visible unit numbers will be provided on all interior doors. Underground Structure: 1. A point by point lighting plan is in process that will meet the city of Apple Valley's exterior requirements The garage lighting will be designed by Leaf Mountain Engineering which will provide more than adequate light for the garage. 2. All exterior doors shall be on a fob system so residents can be tracked per door used. Stair and mechanical doors will have an exterior astragal to eliminate the use of a pry bar. 3. Project will take under advisement the use of security cameras. 4. Project will have a security plan in place and will take under advisement the use of security cameras. 5. The garages will use a clean light gray CMU and Concrete flooring. The Electrical engineer is designing adequate lighting at drive and parking bays to eliminate shadows. In addition: A point by point lighting plan is in process that will meet the city of Apple Valley's exterior requirements 21 04 4 Avenue South, Suite B, Minneapolis, MN 55404 WWW. kaaswilson.com Page 89 of 145 Apple Valley Fire Memo All issues within the memo will be followed. The following is from: Jeff Kehrer, Apple Valley, Natural Resource Coordinator September 14, 2012 Tel: 612.879.6000 W, 21 04 4th Avenue South, Suite B, Minneapolis, MN 55404 1. The plan shows honeylocust along the west side of the building where only a 6' wide growing space exists. This is not enough room for large shade trees which will be 40-50' wide in the future. This area is suitable for only a few tree/shrub species that won't overgrow the space. The street frontage along Galaxie Avenue is a busy urban zone. It currently only offers two shade trees as a buffer for the future residents. We feel that the honeylocust species is a good fit for the site because it handles urban conditions well and its smaller leaves will filter light while still acting as a buffer. The honeylocust will not grow beyond the allowable site conditions so its projected canopy would only extend 20-25' wide. With this in mind, we have not revised the species at this time. 2. Spring snow and red baron crabapple are susceptible to apple scab, a common disease that causes premature leaf fall. There are numerous crabapple species that are resistant to apple scab and planting those species will provide a much more attractive landscape. Plant species revised, Sheet L-1 3. Shade trees planted along property lines should be kept within the property for future maintenance. Many are shown on the plan as outside or adjacent to the property line. Revised locations, Sheet L-1 4. Parking lot islands are an extreme planting site and may be more suitable for honeylocust, hackberry, etc, than red maple. There will be an increased potential for sunscald and leaf scorch on maple in these locations. Plant species revised, Sheet L-1 5. An additional shade tree species is recommended to increase species diversity. Suggestions include swamp white oak, hackberry, or linden. Plant species added, Sheet L-1 Gabella 1. All trees planted along property lines should be kept within the property for future maintenance. Many are shown on the plan as outside or adjacent to the property lines. Revised locations, Sheet L-1 2. Spring snow and red baron crabapple are susceptible to apple scab, a common disease that causes premature leaf fall. There are numerous crabapple species that are resistant to apple scab and planting those species will provide a much more attractive landscape. Plant species revised, Sheet L-1 3. Parking lot islands are an extreme planting site and may be more suitable for honeylocust, hackberry, etc, than red maple. There will be an increased potential for sunscald and leaf scorch on maple in these locations. Plant species revised, Sheet L-1 vvww.kaaswilson,com Page 90 of 145 Sincerest Regards, Link Wilson, AIA, CSI, LEED AP Kaas Wilson Architects Tel: 612.879.6000 4. An additional shade tree species is recommended to increase species diversity. Suggestions include swamp white oak, hackberry, or linden. 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The storm sewer shall be centered in the easement. Additionally, the storm sewer may be designed to flow directly north and tie into the existing storm line rather than jog to the west as shown. - All other previous comments have been acknowledged. Sanitary Sewer - Previous comments have been acknowledged. Water - Previous comments have been acknowledged. General Previous comments have been acknowledged. Galante Grading/Storm Sewer MEMO Public Works - The downstream storm water pond (WVR-P44) has a high water level of 940.3 feet. The garage floor elevation shall have a minimum of one foot of freeboard and therefore shall be raised to a minimum elevation of 941.3 feet. As an alternative, the garage entrance trench drain may be pumped to an onsite storm sewer structure. The discharge elevation of the pump's discharge line shall have a minimum elevation of 943 and the pump shall incorporate a check valve. This will likely require a minor relocation of the receiving structure to the east side of the proposed retaining wall to provide the necessary cover. Insulation of the discharge line to prevent freezing may also be required. Page 135 of 145 - Grading of the area south of the garage entrance driveway shall be analyzed to minimize runoff to the trench drain area. - All storm sewer leads installed within the right of way or public easement shall be reinforced concrete pipe. Currently roof leaders are shown to be PVC. - All other previous comments have been acknowledged. Sanitary Sewer - Previous comments have been acknowledged. Water - Previous comments have been acknowledged. General - Previous comments have been acknowledged. Page 136 of 145 Gabe Ila Sanitary Sewer Water General 4. City of Appl ll Valley TO: Kathy Bodmer, Associate City Planner FROM: Colin G. Manson, City Engineer DATE: September 13, 2012 SUBJECT: Parkside Village Kathy, following is comments for the Parkside Village plan received August 22, 2012. MEMO Public Works Grading/Storm Sewer Given the proposed vacation of Fontana Avenue, storm sewer running through Fontana Avenue shall be relocated. The preferred location for the storm sewer is in the proposed green space adjacent to Foliage Avenue. Drainage and utility easement shall be dedicated over the relocated storm sewer. - Inlet protection on existing and proposed structures adjacent to the work shall be provided. - Analysis shall be performed to determine whether the number of sanitary sewer services to the building can be reduced. Connection of the 8 inch fire and domestic services to the existing 8 inch water main shall be via cut in tee. The valve on the domestic service shall be located on the property line. Location of the post or wall mounted indicator valve on the fire service shall be coordinated with the Fire Marshal. Street sweeping shall be performed as necessary should tracking from the site occur. - All work on public infrastructure shall be performed under a City contract. - The sidewalk adjacent to the building will likely require replacement due to construction damage. Private utilities may need to be installed as only a portion of the development is currently served. A significant volume soil will be required to be removed from the site. The site will also be relatively tight for construction activity. Staging and hauling plans shall be provided for review by City staff prior to the work beginning. Page 137 of 145 Fortino Grading/Storm Sewer Sanitary Sewer Water - The domestic and fire services shall be split outside the building. - A valve shall be provided on the domestic line. Location of the post or wall mounted indicator valve on the fire service shall be coordinated with the Fire Marshal. - The unused water service on the north side of the building shall be removed to the main. General - The downstream storm water pond (WVR-P44) has a high water level of 940.3 feet. The garage floor elevation shall have a minimum of one foot of freeboard and therefore shall be raised to a minimum elevation of 941.3 feet. - Existing storm sewer in Fortino Street shall be removed if the street is vacated. - Inlet protection on existing and proposed structures adjacent to the work shall be provided. Additional easement shall be provided over the existing sanitary sewer manhole located in the area of the southwest corner of the building. - Street sweeping shall be performed as necessary should tracking from the site occur. - All work on public infrastructure shall be performed under a City contract. - A significant volume soil will be required to be removed from the site. The site will also be relatively tight for construction activity. Staging and hauling plans shall be provided for review by City staff prior to the work beginning. - The sidewalk adjacent to the building will likely require replacement due to construction damage. - Private utilities may need to be installed as only a portion of the development is currently served. The location of signal infrastructure at 153 Street and Galaxie Avenue shall be field verified. Additional easement over this infrastructure may be required. - Decorative concrete shall not be permitted in City right of way. Landscaping within the right of way will limit snow removal operations. Landscaping shall be discussed further to accommodate snow removal needs. The angle of the curb at the "downstream" end of angled parking bump outs shall be modified to allow for better egress by snow removal equipment. Page 138 of 145 APPLE VALLEY POLICE Neighborhood Collaboration Officer Program Crime Prevention Through Environmental Design (CPTED) recommendations for Parks de Village — GabeUa and GaUante Submitted by: Pam Walter, Crime Prevention Specialist, Apple Valley Police Department Exterior recommendations: l. Provide adequate exterior display of address to allow emergency vehicles to easily locate the property. 2. Exterior doors should be secured with adequate access control (card access or keyed). Landscaping: 1. Groundcover plant should not exceed a height of 2 feet at maturity and should be used within 6 feet of the edge of walkways. 2. Shrubs should not exceed a height of 3 feet and should be used within 6-12 feet from the edge of walkways. 3. Trees planted should be pruned up to a height of 6 feet above ground. Interior dwelling units: l. Eye-viewer in all unt doors, 180 degrees of sight 2. Single cylinder deadbolt lock on all apartment doors, and a metal or solid wood door. 3. High security strike plates with a minimum of four 3-inch screws on all wooden door frames 4. Anti-lift/removal protective device on all windows and sliding doors on first and second floor units. S. Visible unit numbers on all interior doors. Underground Parking Structure: 1. Maintain uniform lighting (no more than 10.1 ratio) throughout the underground parking facility. Make sure the edge of parking stalls are well-lighted as well as the drive aisles (5 foot candles). Designated walkways should maintain a lighting level of 20 foot candles. 2. Provide adequate, secured access control to entrance of underground parking garage (garage door opener for residents, keyed entrance to service door with deadbolt lock and lock plate to prevent tampering/prying of door). S. Install and maintain a high level of surveillance equipment covering all surface parking areas. 4. Surveillance cameras in all elevators. 5. Paint interior walls a light color to enhance the lighting. In addition to the recommendations listed here, exterior property lighting will be an issue. 1 would like to be supplied with a lighting plan to be able to better assess this issue. Please feel free to contact me if you have any questions. I can be reached at 952-953-2706. APPLE VALLE POLICE Neighborhood Collaboration Project VISION A clean, attracfive and safe community, now and in the future. MISSION Page 139 of 145 To be a relational and educational presence in our community and immediately address crime and quality of life issues at their root. Attachments City of App e Valley MEMO Fire Department TO: Kathy Bodmer FROM: Roy Kingsley, Fire Marshal DATE: September 10, 2012 SUBJECT: Parkside Village MSFC 505.1 Address Numbers: Requires numbers to be visible from the street. MSFC 506.1 Key Boxed: Requires building to have an Apple Valley key box installed. MSFC 903.2.5: Requires building to have a fire sprinkler system with standpipes system. MSFC 903.4: Requires a fire alarm system to monitor the fire sprinkler system. MSFC Appendix C: Fire hydrant needs to be located with-in 150' of the Fire Department Connection MSFC 1024.6 Exit Discharge, all exits need to go to a public way. Sidewalks will be required. Page 140 of 145 City of Apple Vaey MEMO Public Works Department TO: Kathy Bodmer, Associate Planner FROM: Jeff Kehrer, Natural Resources Coordinator DATE: October 12, 2012 SUBJECT: PARKSIDE VILLAGE; GALANTE AND GABELLA REVISED LANDSCAPE PLAN The revised landscape plan for Parkside Village at Galante and Gabella has addressed all but two of my previous comments. 1. I do not agree there is ample space for honeylocust trees along Galaxie Avenue at Galante. These trees will be a minimum of 25 feet wide and realistically closer to 35-40 feet wide at maturity. The space between the proposed building and public sidewalk is approximately ten feet. Additionally, there is a concern for sidewalk uplifting by tree roots due to the close proximity of trees to the sidewalk as shown on the plan. Root barriers could be installed at the time of planting to extend sidewalk life, but uplifting will not be eliminated. 2. A planting bed remains in the public street right of way along Galante Lane. All private plantings should be kept within the property boundaries. Page 141 of 145 City of Apple Valley TO: Kathy Bodmer, Associate Planner FROM: Jeff Kehrer, Natural Resources Coordinator DATE: September 14, 2012 SUBJECT: PARKSIDE VILLAGE; GALANTE AND GABELLA LANDSCAPE PLAN REVIEW Following are my comments after reviewing the Parkside Village landscape plan: Galante The plan shows honeylocust along the west side of the building where only a 6' wide growing space exists. This is not enough room for large shade trees which will be 40-50' wide in the future. This area is suitable for only a few tree/shrub species that won't overgrow the space. Spring snow and red baron crabapple are susceptible to apple scab, a common disease that causes premature leaf fall. There are numerous crabapple species that are resistant to apple scab and planting those species will provide a much more attractive landscape. Shade trees planted along property lines should be kept within the property for future maintenance. Many are shown on the plan as outside or adjacent to the property line. Parking lot islands are an extreme planting site and may be more suitable for honeylocust, hackberry, etc, than red maple. There will be an increased potential for sunscald and leaf scorch on maple in these locations. • An additional shade tree species is recommended to increase species diversity. Suggestions include swamp white oak, hackberry, or linden. Gabelia All trees planted along property lines should be kept within the property for future maintenance. Many are shown on the plan as outside or adjacent to the property lines. Spring snow and red baron crabapple are susceptible to apple scab, a common disease that causes premature leaf fall. There are numerous crabapple species that are resistant to apple scab and planting those species will provide a much more attractive landscape. Parking lot islands are an extreme planting site and may be more suitable for honeylocust, hackberry, etc, than red maple. There will be an increased potential for sunscald and leaf scorch on maple in these locations. • An additional shade tree species is recommended to increase species diversity. Suggestions include swamp white oak, hackberry, or linden. Page 142 of 145 MEMO Public Works Department Bodmer, Kathy From: Sent: To: Subject: From: Sam Anderson nnailto:Sarn.Anderson` Sent: Monday, September 10, 2012 11:56 AM To: Murphy, Joan Subject: Public Hearing Comment Murphy, Joan Tuesday, September 11, 2012 9:22 AM Bodmer, Kathy FW: Public Hearing Comment City of Apple Valley development meeting.pdf 1 am writing as a property owner n the affected area of the attached rezoning request. 1 would like to express my strong opposition to such rezoning. Thank you. Sam Anderson Page of 143 of 145 BUILDING MATERIALS DISTRIBUTION, INC Link Wilson Kaas Wilson Architects 2104 4th Avenue South, Suite B Minneapolis, MN 55404 Dear Link Wilson, 2360 W. County Road C, Roseville, MN 55113 P: 651-636-7260 F: 651-636-7269 Thank you for your interest in Nichiha Fiber Cement. I am writing this letter as one professional's opinion in regards to prefinishing vs. field coating of fiber reinforced cement products, Nichiha Sierra Premium in specific. As a distributor of different cladding materials, both prefinished and primed for field painting, we are exposed to many different circumstances. In this specific case it is my personal recommendation to use field coat paint over factory prefinishing. Based on the information I have gathered from my factory prefinishers, they already recommend, at minimum, one coat field applied paint for all smooth cladding products. Yet, another benefit to field coat painting is that you are less likely to have any inconsistencies regarding "touch up" of paint, which can occur when factory prefinished material is used. The warranty provided by Nichiha is not contingent upon paint application, field or factory applied, although the proper paint and manufacture's specifications must be followed. The following is an excerpt from the Nichiha Fiber Cement, Sierra Premium, Architectural Specifications: 3.6 FINISHING AND MAINTENANCE A. Use exterior grade high-quality sealant that complies with either ASTM C-834 (for primed products) or ASTM C-920 (for prefinished products) for all gaps that require filling with sealant. Follow the manufacturer's written instructions for use. B. All field cut edges should be covered with fiber cement sealant or paint. C. Dents, chips, scratches, etc. on the products shall be filled with exterior grade cementious patching or putoi. Follow the manufacturer's written instructions for use. D. All unfinished [pre-primed] products must be painted within 12 months. Exterior grade 100% acrylic latex paints are recommended. Follow the manufacturer's written instructions for use. E. Cleaning: Rub boards with a soft brush using a diluted neutral detergent. Do not use hard tools such as a wire brush or other abrasive materials. It is not my intent to speak on behalf of Nichiha, siding application company, paint manufacture, or paint application company. I look forward to serving your needs. Mitch Turgeon Norandex Sales Representative 612-308-2057 mitch.turgeon@norandex.com IN NO EVENT SHALL NORANDEX BE RESPONSIBLE FOR CONSEQUENTIAL, INCIDENTAL, EXEMPLARY, TREBLE, OR PUNITIVE DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS LETTER, WHETHER SUCH CLAIM IS ASSERTED IN CONNECTION WITH A CLAIM FOR BREACH OF CONTRACT, PROMISSORY ESTOPPEL, EQUITABLE ESTOPPEL, MISREPRESENTATION, ANY OTHER TORT, PRODUCT LIABILITY, OR ANY OTHER ACTION. wwwnorandexcorn Page 144 of 145 10/9/12 Wilson Architects Attn: Link Wilson 2104 4th Avenue South, Suite B Minneapolis, MN 55404 Ph-612.879.6000 Mr. Wilson: You must use 100% acrylic latex materials to prime and paint all of our products. All Sierra Premium Plus products come pre-primed and do not require priming before painting. All of our products can be primed and painted. Please follow the paint manufacturer's guidelines to apply the paint. Sincerely, Lee Croteau Warranty Claims Analyst 10/9/12 Page 145 of 145 604 0 City of Apple Valley TO: Mayor, City Council, City Administrator Economic Development President, Board Members and Executive Director FROM: Bruce Nordquist, Community Development Director, AICP MEETING DATE: January 24, 2013 • The City Council on January 24, 2013 will: • Then the EDA on January 24, 2013 will: Community Development SUBJECT: Conduct a Public Hearing by EDA on Parkside Village Business Subsidy and Authorization of Business Subsidy and Development Assistance Agreements by City Council and EDA for Parkside Village At the January 8, 2013, meeting, the Apple Valley EDA continued a public hearing to January 24, 2013 to consider a business subsidy for IMH LLC. IMH is the owner of the property to be developed as Parkside Village. The EDA will conduct the public hearing as part of it's actions on Parkside Village. However, prior to that: - Amend Planned Development zoning districts for development of 322 housing units. - Vacate Fortino and Fontana Trail for development purposes. - Approve a Preliminary and Final Plat for Parkside Village. Adopt the Site Plan and Building Permit Authorization for Parkside Village. - Acquire additional park land for expanding Kelley Park. - Authorize, with EDA approval, a business subsidy agreement for Parkside Village. - Authorize a development assistance agreement for Parkside Village. - Conduct the public hearing on a business subsidy. - Authorize a business subsidy agreement for Parkside Village; addressing the reimbursement of delinquent penalties and interest on previously installed special assessments. - Authorize a development assistance agreement for Parkside Village; addressing the request by the owner, IMH, to use tax increment financing assistance for eligible development costs related to Parkside Village. The attached business assistance materials include: January 24, 2013 City Resolution authorizing Business Subsidy Agreement. - January 24, 2013 EDA Resolution authorizing Business Subsidy Agreement. January 24, 2013 City Resolution authorizing Development Assistance Agreement. - January 24, 2013 EDA Resolution authorizing Development Assistance Agreement. - Northland Securities memo evaluating the request for assistance dates January 15, 2013. July 19, 2012 executed "Restated Memorandum of Understanding" between IMH, City of Apple Valley, Apple Valley EDA. - November 20, 2012 City Resolution No. 2012-243 Establishing Tax Increment District No. 15 and financing plan therefor. - November 20, 2012 EDA Resolution No. 12-15 Establishing Tax Increment District No. 15 and financing plan therefor. Draft Business Subsidy Agreement for January 24, 2013. Draft Development Assistance Agreement for January 24, 2013. Recommended Actions: Draft resolutions are provided here and the requested resolutions for actions will be provided in the Agenda Packet of January 24, 2013. ATTEST: CITY OF APPLE VALLEY RESOLUTION NO. 2013- A RESOLUTION AUTHORIZING BUSINESS SUBSIDY AGREEMENT WHEREAS, pursuant to the Minnesota Business Subsidy Act, set forth in Minnesota Statutes, Sections 116J.993 to 116J.995 ("Act"), the Apple Valley Economic Development Authority ("EDA") is authorized to grant a business subsidy for the public purpose of increasing the City of Apple Valley's tax base; WHEREAS, IMH Special Asset NT 175 — AVN, LLC, an Arizona limited liability company, ("IMH") desires to develop real property in the City, which will increase the City's tax base; WHEREAS, IMH executed Confessions of Judgment (Nos. 3514-3519, 3522-3529) for delinquent real estate taxes on property located in the City for tax years 2007 through 2011, a portion of which are for statutory penalties and interest incurred on past due special assessments levied by the City ("P&I"); WHEREAS, the EDA desires to disburse to IMH all P&I received by the City as a business subsidy to IMH, subject to the terms and provisions set forth in the Business Subsidy Agreement, a copy of which is attached to this Resolution ("Agreement"); and WHEREAS, the City Council reviewed the Agreement. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Apple Valley, Dakota County, Minnesota, that the City Council approves the terms and provisions of the Agreement between IMH and EDA and directs the Mayor and City Clerk to execute the Agreement, subject to the following condition: 1. EDA's Approval. The Business Subsidy Agreement is subject to, and requires as a precondition to City's execution, the EDA's approval and execution of the Agreement with IMH. ADOPTED this day of , 2013. Pamela J. Gackstetter, City Clerk Mary Hamann-Roland, Mayor ATTEST: APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. EDA -13- A RESOLUTION APPROVING BUSINESS SUBSIDY AGREEMENT WHEREAS, pursuant to the Minnesota Business Subsidy Act, set forth in Minnesota Statutes, Sections 116J.993 to 116J.995 ( "Act "), the Apple Valley Economic Development Authority ( "EDA ") is authorized to grant a business subsidy for the public purpose of increasing the City of Apple Valley's tax base; WHEREAS, IMH Special Asset NT 175 — AVN, LLC, an Arizona limited liability company, ( "IMH ") desires to construct two multiple family residential buildings in the City (one with 126 units and the other with 196 units), which will increase the Cit s tax base; WHEREAS, IMH executed Confessions of Judgment (Nos. 3514-35' , 3522-3529) for delinquent real estate taxes on property located in the ' City for tax years 2007 through 2011, a portion of which are for statutory penalties and interest incurred ; on past due special assessments levied by the City ( "P &I "); WHEREAS, the EDA desires to disburse to IMH all P:I received by the City as a business subsidy to IMH, subject to the terms and provisions set forth in the Business Subsidy Agreement, a copy of which is attached to this Resolution ( "Agreement "); and Pamela J. Gackstetter, Secretary WHEREAS, the EDA finds it is in the best interest f the City and its residents that the EDA enter into the attached Agreement to further economic development in the City. NOW, THEREFORE, BE IT'RESOLVED, by the Board of Commissioners of the EDA that it approves the terms ,nd provisions of the Agreement. ADOPTS this day o , 2013. Larry S. Severson, President 4 5118863v1 EXTRACT OF MINUTES OF MEETING OF THE CITY COUNCIL OF THE CITY OF APPLE VALLEY, MINNESOTA January 24, 2013 Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Apple Valley, Dakota County, Minnesota, was duly called and held on the 24th day of January, 2013, at 7:00 p.m. The following members of the Council were present: and the following were absent: Member introduced the following resolution and moved its adoption: CITY OF APPLE VALLEY RESOLUTION NO. RESOLUTION AUTHORIZING EXECUTION OF A DEVELOPMENT ASSISTANCE AGREEMENT BE IT RESOLVED by the City Council (the "Council") of the City of Apple Valley, Minnesota (the "City "), as follows: A. WHEREAS, IMH Special Asset NT 175 -AVN, LLC, an Arizona limited liability company (the ''Developer ") has requested that the Apple Valley Economic Development Authority, Minnesota (the "EDA ' °) and the City assist with the financing of certain costs incurred in connection with the construction of a 322 unit multifamily rental housing facility consisting of two buildings (the "Project ") B. WHEREAS, the Developer, the City and the EDA have determined to enter into a Development Assistance Agreement providing the Developer with financing assistance for the Project (the "Development Agreement "). NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Apple Valley, Minnesota, as follows: 1. The Council hereby approves the Development Agreement in substantially the form submitted, and the Mayor and the City Administrator are hereby authorized and directed to execute the Development Agreement on behalf of the Council. 2. The approval hereby given to the Development Agreement includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the City officials authorized by this resolution to execute the Development Agreement. The execution of the Development Agreement by the appropriate officer or officers of the City shall be conclusive evidence of the approval of the Development Agreement in accordance with the terms hereof. Attest: ADOPTED on January 24, 2013 by the City Council. Pamela Gackstetter, City Clerk The motion for the adoption of the foregoing resolution was duly seconded by Member , and, after full discussion thereof and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly adopted. 5118863v1 2 Mary Hamann-Roland, Mayor CITY CLERK'S CERTIFICATE I, the undersigned, being the duly qualified and acting City Clerk of the City of Apple Valley, Minnesota, DO HEREBY CERTIFY that I have carefully compared the attached and foregoing extract of minutes of a duly called and regularly held meeting of the City Council of said City held on January 24, 2013, with the original minutes thereof on file in my office and I further certify that the same is a full, true, and correct transcript thereof insofar as said minutes relate to a Resolution Authorizing Execution of a Development Agreement. WITNESS My hand officially and the official seal of the City this day of January, 2013. (SEAL) 511.8863v1. Pamela J. Gackstetter, City Clerk Apple Valley, Minnesota EXTRACT OF MINUTES OF MEETING OF THE BOARD OF COMMISSIONERS OF THE APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY, MINNESOTA Pursuant to a meeting of the Board of Commissioners of the Apple Valley Economic Development Authority, Dakota County, Minnesota, was held, at the Apple Valley Municipal Center in the City of Apple Valley, Minnesota on Thursday, the 24th day of January, 2013, at :00 o'clock .m. The following members were present: and the following were absent: Member adoption: RESOLUTION AUTHORIZING EXECUTION OF A DEVELOPMENT ASSISTANCE AGREEMENT A. WHEREAS, IMH Special Asset NT 175-AVN, LLC, an Arizona limited liability company (the "Developer") has requested that the Apple Valley Economic Development Authority, Minnesota (the "EDA") and the City of Apple Valley, Minnesota (the "City") assist with the financing of certain costs incurred in connection with the construction of a 322 unit multifamily rental housing facility consisting of two buildings (the "Project"). B. WHEREAS, the Developer, the City and the EDA have determined to enter into a Development Assistance Agreement providing the Developer with financing assistance for the Project (the "Development Agreement"). 5118848v1 HELD: January 24, 2013 introduced the following resolution and moved its NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners (the "Board") of the Apple Valley Economic Development Authority, Minnesota, as follows: 1. The Board hereby approves the Development Agreement in substantially the form submitted, and the President and Secretary are hereby authorized and directed to execute the Development Agreement on behalf of the EDA. 2. The approval hereby given to the Development Agreement includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the EDA officials authorized by this resolution to execute the Development Agreement. The execution of the Development Agreement by the appropriate officer or officers of the EDA shall be conclusive evidence of the approval of the Development Agreement in accordance with the terms hereof. The motion for adoption of the foregoing resolution was duly seconded by member and, after full discussion thereof, and upon a vote being taken thereof, the following voted in favor thereof: and the following voted against same: whereupon said resolution was declared duly adopted. Adopted this 24 day of January, 2013 by the Apple Valley Economic Development Authority Board of Commissioners. Attest: 5118848v1 Secretary 2 President STATE OF MINNESOTA COUNTY OF DAKOTA CITY OF APPLE VALLEY I, the undersigned, being the duly qualified and acting Secretary of the Apple Valley Economic Development Authority, Minnesota, DO HEREBY CERTIFY that I have carefully compared the attached and foregoing extract of minutes with the original minutes of a meeting of the Board of Commissioners held on the date therein indicated, which are on file and of record in my office, and the same is a full, true and complete transcript therefrom insofar as the same relates to a Resolution Authorizing Execution of a Development Agreement. WITNESS my hand as such Secretary of the Board of Commissioners of the Apple Valley Economic Development Authority, Minnesota this day of January, 2013. 5118848v1 3 Secretary 10 NO TH./ N MEMORANDUM To: City of Apple Valley From: Rusty Fifield and Tammy Omdal Date: January 15, 2013 Re: Evaluation of Public Assistance for Parkside Village Project Ti The City of Apple Valley ("the City") and its Economic Development Authority ("the EDA") have requested that Northland Securities evaluate the public financial assistance requested by IMH Special Asset NT 175-AVN, LLC ("IMH") for a proposed development project consisting of 322 housing units ("the Project") in the City's Legacy Village. This memorandum presents the findings of our review and analysis. Background The evaluation of requested public financial assistance is based on the following: • The Memorandum of Understanding ("MOU") between IMH and the City and the EDA dated June 19, 2012. • The terms of the Confessions of Judgment between IMH and Dakota County for the payment of delinquent special assessments and property taxes on IMH parcels dated June 27, 2012. • The application for tax increment financing ("TIF") assistance submitted by IMH dated August 10, 2012. • The tax increment financing plan for TIF District No. 15 adopted by the EDA and the City on November 20, 2012. • Draft "development agreements" that provide the framework for the requested assistance, including the "Development Assistance Agreement". The overall agreement between IMH and the EDA/City contains a variety of elements that are beyond the scope of this memorandum. The evaluation conducted by Northland focuses on the proposed use of tax increment financing. The proposed use of TIF consists of the following elements: 1. The City/EDA has created Housing TIF District No. 15 ("the TIF District") as the basis for the requested TIF assistance. In order for the City to provide TIF assistance, the Project will need to meet required income restrictions required by State Law for a Housing TIF District. IMH will be required to lease at least 20% of the units of the proposed two buildings to residents that income-qualify at 50% of the area-wide median income threshold. The income restrictions will apply over the life of the TIF District. A minimum of 65 units across the two 45 South 7th Street, Suite 2000, Minneapolis, MN 55402 Main: (612) 851-5900 / Direct: (612) 851-4992 / Email: rfifield@northlandsecurities.com Member FINRA and SIPC 1k Evaluation of Public Assistance for Parkside Village Project January 15, 2013 Page 2 buildings will be required to meet the statutory criteria. (The Galante building shall have a minimum of 15 units occupied or held for occupancy by persons whose incomes qualify and the Gabella building shall have a minimum of 25 units occupied or held for occupancy by persons whose incomes qualify.) Given current area-wide income thresholds, it is estimated that initial rents for the qualified one-bedroom and two-bedroom units will be in the range of $785 and $945, respectively, to comply with the income restrictions. 2. The EDA/City and IMH will enter into an Assessment Agreement that sets a minimum market value ($35,195,000) for parcels in the TIF District. 3. The property value used in the tax increment projections is based on estimates provided by Dakota County for the proposed development. The projections assume that the property will appreciate at an annual rate of 5%. The EDA/City has no obligation to provide additional revenues if property values grow at a slower rate. 4. The EDA/City will use 30% of the annual tax increment revenues to cover EDA/City administrative expenses and to repay $1,150,000 in up-front reimbursement to IMH for TIF eligible development costs. (The City will internally finance the payment to IMH through an interfund loan to be paid back from tax increment from the Project.) 5. The EDA/City will use 70% of the annual tax increment revenues to reimburse IMH for up to $5,350,000 of TIF eligible development costs plus interest on the outstanding balance at a rate of 5% on a pay-as-you-go basis. To assist with the Project, IMH is also requesting the City to reimburse IMH (on a pay-go basis) for penalties and interest that have accumulated on the unpaid special assessments. The City does not have the authority to waive collection of the payment. It is important to note that this "interest" is not the same "interest" the City anticipated receiving when the special assessments were certified; it is ("punitive") interest in addition to interest on the original special assessments balance. Under the terms of the Confession of Judgment with Dakota County, IMH will need to pay the penalties and interest on the delinquent special assessments as recorded. IMH is seeking to have the City enter into agreement whereby the City will refund IMH its payment of penalties and interest on the delinquent special assessments. Payments would be made to IMH on an annual basis and only after the City receives cash settlement from the County. Northland Evaluation Northland has reviewed the materials provided by IMH as part of its TIF application. In addition, we have prepared a modified version of the development and operating pro forma for the Project submitted by IMH. The modified pro forma includes revised estimates for sources of revenue and expense for the Project based on the current proposed agreement for development. The pro forma includes Northland's estimates for future tax increment revenue, real estate taxes and special assessments payable, limitations on rental income for affordable units, and future payment of delinquent taxes and special assessments under the terms of the Confession of Judgment that IMH entered into with Dakota County. The updated development and operating pro forma were provided to the City. Evaluation of Public Assistance for Parkside Village Project January 15, 2013 Page 3 Based on the information that is available for review and our analysis, we offer the following findings: 1. The Project meets the statutory criteria for the use of tax increment financing - but for the proposed financial assistance the development as proposed would not occur. 2. Without public financial assistance the return on equity (cost) is at a level that will be difficult, or not possible according to IMH, to attract capital. Given certain assumptions and the proposed terms for an agreement, as well as estimated development costs and net operating income, IMH's return on cost (equity) for the Project over a twelve year period (which includes the first two years of start-up) is estimated to be 6.5% with public finance assistance and 4.6% without assistance. (The first five year return is estimated to be 2.1% with assistance and 1.5% without assistance; the return on cost improves as the outstanding assessments are satisfied. The outstanding assessments will be paid in full by year 2022.) A minimum unleveraged annual average return of 6.9% for the first twelve years was the level identified by IMH in their application for the project to be financially feasible. 3. The Project is challenged by the cost of the public infrastructure that was financed by the City and put in place in prior years. The City does not have the legal authority to "re-spread" the special assessments over a longer period. The City had sought special legislation that would have provided authority to do so but the legislation did not pass. 4. The proposed development is estimated to generate $23,609,000 in tax increment (or $12,396,000 on a present value basis at a 4% rate) over a 25 year life of the TIF District based on an estimated minimum assessed market value for the Project. The estimated tax increment is approximately $13,620,000 greater than projected to be needed to pay for costs (including interest expense) for the Project. It is estimated that all obligations for the Project will be met within 17 to 18 years or by year 2032. After obligations are met for the Project the City will have the option to decertify the TIF District early or to keep the District open in order to pool tax increment for other housing projects. The ability to keep the District active after the developer TIF note is satisfied is complicated by the fact the Developer will no longer be contractually required to satisfy the income requirements that would allow the District to remain active; the District will likely need to be decertified. 5. The up-front assistance ($1,150,000) will be financed by the City through an internal loan from the City's Future Capital Projects Fund to TIF District No. 15. The timing of the up- front payment to IMH will coincide with the issuance of the building permit; allowing for a $975,000 (84.8%) payment at time of the building permit with a $175,000 (15.2%) holdback during construction with a mortgage to the EDA for the four parcels not being sold or developed as security. The mortgage on the four parcels will be released with the City's final payment of $175,000 to IMH at time of issuance of certificate of occupancy. The City will assume risk that tax increment will be available and sufficient over the term of the TIF District to repay the City's internal loan. ■5 Evaluation of Public Assistance for Parkside Village Project January 15, 2013 Page 4 6. IMH will assume risk that tax increment will be available and sufficient to repay the developer TIF note ($5,350,000). Neither the EDA nor the City has any obligation to provide other revenues to cure future shortfalls in projected tax increment revenues. 7. Another factor in the evaluation of assistance for the Project is the money collected by the City for the payment of taxes and special assessments. In response to the MOU, IMH paid approximately $1,113,000 in tax and special assessment payments in June under confession of judgment. In addition to this amount, IMH also paid approximately $555,000 in 2012 payable tax and special assessments. They will need to pay an estimated additional $2,873,000 in delinquent taxes and special assessments in 2013 on the parcels subject to the replat of the land for the housing project and on the parcels that will be sold to the City for park land. Approximately $1,732,000 in development and permit fees will be owed to the City at the time the permit for construction of the housing buildings are pulled; this is estimated to be paid in 2013. Table A provides a summary of the estimated payment amounts by year. Table A Summary of IMH Payments for Tax and Special Assessments and Development/Permit Fees Total % of for Total Future Payments to City (County) 2012 Item 2013 for Item Years Total Delinquent Taxes $65,034 14.4% $247,070 54.6% $140,065 $452,169 Delinquent Spec. Assess. $882,435 33.2% $1,590,407 59.8% $188,352 $2,661,194 Penalties/Interest on Taxes $25,373 14.4% $96,842 54.8% $54,394 $176,609 Penalties/Interest on Assess. $140,615 12.4% $771,725 68.2% $218,983 $1,131,323 Interest on COI balance $0 0.0% $165,392 62.5% $99,274 $264,665 Subtotal for Payments Subject $1,113,458 23.8% $2,873,449 61.3% $701,067 $4,685,961 To Confession of Judgment Future Special Assessments 2012 Taxes/Special Assessments $555,085 100.0% Development/Permit Fees Total $0 0.0% $359,035 13.1% $2,390,304 $2,749,340 $0 0.0% $0 $555,085 Subtotal Before $1,668,543 20.9% $3,232,485 40.5% $3,091,371 $7,990,386 Development/Permit Fees $0 0.0% $1,731,580 100.0% $0 $1,731,580 $1,668,543 17.2% $4,964,065 51.1% $3,091,371 $9,721,966 Note: Special assessment revenue collected by the City is pledged to the payment of bonds. The debt service expense for payment on the bonds is not included in this report. Evaluation of Public Assistance for Parkside Village Project January 15, 2013 Page 5 8. The IMH parcels would have become tax forfeited property if the $1,113,000 confession of judgment payments had not occurred in June. The special assessments on the property would have been cancelled as part of the forfeiture process. Under this scenario, the City would have had the option to make a reassessment or a new assessment as to the parcels in an amount equal to the amount unpaid on the original assessment. The timing of receipt of any future payment on the unpaid assessments would have remained uncertain and dependent on another development scenario for the property coming forward at a later date. Development Team The development will be built on property owned by IMH Financial Corporation dba IMH Special Asset NT 175 — AVN, LLC. IMH will be the owner of the property, thru a single purpose entity owned 100% by the parent company. IMH will provide 100% of the equity and guarantees to the lender. The developer will be Titan Development I, LLC. Titan has been retained by IMH under a fee agreement to perform all development services for the Project. Northland's observations about the Project and the development group are as follows: 1. IMH has the financial capacity to secure the equity and permanent construction financing to build the proposed development. Financial information about the company is available from SEC filings that can be accessed through the IMH website (www.imhfccom). 2. Titan Development I, LLC, is a single purpose entity created and wholly owned by Titan Investments. Titan Investments is a privately owned real estate firm based in Denver, Colorado. Stuart Davis, President and CEO of Titan Investments, owns 95% of the company. Titan Investment's portfolio of completed projects shows the capacity to undertake the Project. 3. Titan Development I, LLC, will be the Asset Manager for the project and Pinnacle, a service management company, will be responsible for leasing and property management at the property. Pinnacle will have the reasonability for meeting the affordable conditions with Titan's oversight. 4. The development team hired Triquest Financial Services Corporation ("Triquest") from New York, to provide financial advisory services for the project. The TIF application submitted to the City included a letter from Richard Hyman from Triquest providing an opinion that the projected financial returns without the proposed TIF assistance are not sufficient to attract equity capital to the project. Information provided by Titan indicates that Richard Hyman founded Triquest in 1992. According to information provided, Triquest was one of the first commercial mortgage conduits in the CMBS industry, and it originated or participated in over a $1 billion of transactions until 1996 when it returned largely to investment banking and principal investing activities. 5. Titan Investments has provided a letter (see Attachment to this memorandum) with information on the proposed financing for the Project. The use and source of funds for the Project, including financing, is shown in Table B on the next page. The Developer has 1 5 Evaluation of Public Assistance for Parkside Village Project January 15, 2013 Page 6 identified $6,500,000 of building construction costs that will be eligible for reimbursement from tax increment. $1,150,000 will be reimbursed up-front with cash payment from City and the balance of $5,350,000 will be reimbursed on a pay-go basis with 5% interest to the extent tax increment is available. The $5,350,000 does not appear as a Source of Funds. The payment on the $5,350,000 note will provide future operating income to the Project. Table B Development Source and Use of Funds Use of Funds Site costs $2,131,000 3.6% Building construction costs $41,387,000 69.1% Building soft costs and other fees $9,248,000 15.4% City development fees $1,732,000 2.9% Taxes and special assessments paid during development $5,409,000 9.0% Total Use of Funds $59,907,000 100.0% Source of Funds Reimbursement of penalties and interest on special assessments $969,000 1.6% Land sale proceeds from sale of park land $787,000 1.3% Tax increment cash contribution $1,150,000 1.9% Developer equity $13,880,000 23.2% Construction permanent financing $43,121,000 72.0% Total Source of Funds $59,907,000 100.0% January 14, 2013 Ms. Tammy Omdal Senior Vice President Northland Securities, Inc. 45 South 75th Street, Suite 2000 Minneapolis, MN 55402 Re: Parkside Village Financing Dear Tammy: The following is an update on the above referenced project. The project will be financed with a conventional senior construction loan, we are not pursuing HUD 221 (d) (4) financing. Five lenders are currently underwriting the project and expect to receive proposals in the near future. We anticipate the terms to be the following, 60% to 70% loan to cost, three-year term, and a completion/cost and repayment guarantee will be required. The balance of the funds will be either all equity or a combination of equity and mezzanine financing. The equity is currently committed by IMH. Based upon the above financing, we anticipate a start of construction in spring of 2013. Regards, Titan Investments!, LLC Stuart R. Davis President & CEO SR D/ejw 4700 ,!3. Syracuse ,!Street Suite375 Derwer; CC 80237 Phon 720 528 65C Fax 720 528 7654 k Restated Memorandum of Understanding Between IMH Special Asset NT 175--AVN, LLC and Apple Valley Economic Development Authority and the City of Apple Valley This Memorandum of Understanding ("MOU") between IMH Special Asset NT 175 AVN, LLC ("IMH") and the Apple Valley Economic Development Authority (the "EDA") and the City of Apple Valley ("the City") is made and entered into on the date and pursuant to the terms set forth below. References to "City" refer to both the EDA and the City unless otherwise indicated. It supersedes and replaces that certain Memorandum of Understanding between IMH and the EDA, dated as of January 6, 2012. Whereas, IMH is the fee owner of fourteen (14) platted lots in a portion of the City's Legacy Village referred to as Legacy of Apple Valley North as identified in the attached Exhibit A ("the IMH Property"), resulting from a foreclosure action against the former owner; and Whereas, the IMH Property is subject to Ordinance No. 739, establishing the Central Village together with certain development approvals for the Legacy of Apple Valley North, entitled Planned Development Agreement, Park Dedication Agreement and Development Agreement, all of which are dated May 27, 2004; and Whereas, the IMH Property has been improved with public utilities and street improvements financed by a $6,832,152 special assessment duly adopted by the City pursuant to Minn. Stat. 429.061 and for which there was no appeal; and Whereas, IMH, as successor in possession of the IMH Property, is in default on the aforementioned special assessment in the amount of approximately $2,661,164, together with past-due taxes payable to Dakota County in the amount of approximately $452,169; and Whereas, Dakota County is exercising its statutory authority under Minn. Stat. 281.23 to pursue tax forfeiture against the IMH Property effective on June 20, 2012, based on the aforementioned delinquent special assessments and property taxes; and Whereas, the result of Dakota County's forfeiture action would be IMH' s loss of ownership of the IMH Property; and Whereas, the City's special assessments on the IMH Property would be cancelled by Dakota County's forfeiture action, but pursuant to statutory authority under Minn. Stat. 429.071 may be re-levied at a future date; and Whereas, time is of the essence to avert the pending forfeiture and elimination of the special assessments affecting the IMH Property; and Whereas, IMH and the City desire to pursue development of the IMH Property on terms mutually acceptable to the City and IMH and based on City approval of amendments to the development approvals for the IMH Property; and Whereas, the City acknowledges that IMH has actively been pursuing the development of the IMH Property and has acted in good faith and with diligence with respect to the proposed project and IMH acknowledges that the City has acted in good faith and with diligence in seeking a resolution of the past-due and future special assessments on the IMH Property; and Whereas, any future agreement between the City and IMH regarding the terms and conditions of any new use of the IMH Property will be conditioned on resolving both the past-due taxes payable to Dakota County and the delinquent and future special assessments payable to the City related to the IMH Property. NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS: 1. IMH agrees to diligently prepare and submit applications to the City seeking approvals for the use of the IMH Property, which is expected to include approximately 331 multi- family housing units and approximately 10,000 square feet of retail on a portion of the IMH Property. Initial construction is expected to commence no later than June 30, 2013, based upon City approval of the IMH plans no later than September 30, 2012, subject to business conditions and further subject to City and IMH acceptance of the terms below. 2. The City will promptly, and in good faith, process the IMH applications proposing a change to the allowed use of the IMH Property for consideration at duly scheduled meetings and special meetings of the City's Planning Commission and City Council. Nothing in this MOU is to be construed as pre-approval by the City of any IMH application. 3. In conjunction with IMH's pursuit of approvals governing the use of the IMH Property and tax increment financing as noted below, and subject to the City and EDA actually adopting such approvals, the EDA will recommend to the City the purchase of four (4) parcels identified as A, B, C and D on Exhibit A ("the Park Parcels") of the IMH Property for the expansion of Kelly Park at a price of $7.26/square foot, for a total purchase price of $787,451. 4. The City and IMH will use their best efforts to complete the sale of the Park Parcels to the City on or before July 31, 2012. In conjunction with purchasing the Park Parcels, the City will assume responsibility for the future taxes and special assessments allocable to the Park Parcels. IMH will pay the delinquent special assessments, interest and penalties on the Park Parcels, together with the first half property taxes due in 2012. In addition, the City will pay the second half property taxes due in 2012 and the remaining assessments for the Park Parcels, which are estimated to be $251,611.00. 5. Concurrently with IMH' s sale to the City of the Park Parcels, which is anticipated to occur on or before July 31, 2012, the EDA will be asked to pay to 'WI the sum of $1,150,000 as part of an eligible event under tax increment financing, in exchange for which IMH will provide a guaranty of $1,150,000 to the EDA, in a form and from an issuer reasonably satisfactory to the EDA, assuring the repayment. The IMH guaranty 2. will remain in force and not be released until the issuance of building permits and the actual commencement by IMH of construction in conformity with the approved Plans. 6. Upon submittal of an application, the EDA will be asked to approve the establishment of a Tax Increment Finance ("TIF") housing district, or other applicable TIF district category, to generate up to $6,500,000 of authorized TIF eligible expenditures with a term not to exceed 25 years. a. Twenty percent (20%) of the available increment will be retained by the EDA. b. $5,350,000 pay-as-you-go TIF Note to be issued to IMH with interest at 5%. Payments will be based upon 80% of the available increment. 7. The City will be asked to reimburse IMH within thirty (30) business days upon receipt of the funds paid by IMH to Dakota County and reimbursed by the County to the City for accrued penalties and interest on the delinquent special assessments. Currently, the total amount of such penalties and interest is approximately $1,131,324. 8. The City may be requested by IMH to consider reallocating the remaining special assessments attributed to the IMH Property over a term of up to 20 years or such other term as may be allowed by state law. If IMH is successful in extending the term of the special assessments, the City, to the extent permitted by law, will agree to the new extended term for the payments of the special assessment. 9. The City and IMH will cooperate to ensure timely consideration and approval, as appropriate, of the review of the IMH Property applications, together with the plans, specifications and agreements contemplated by this MOU and as required by law. 10. Notwithstanding the terms of this MOU, IMH reserves the right to challenge in Dakota County district court (or another court with jurisdiction), the authority of Dakota County to seize the IMH Property and to address the past-due special assessments on the IMH Property. In the event IMH determines in the interest of the development of the IMH Property that pursuit of court action is necessary, IMH and the City, nonetheless, pledge to cooperate jointly to achieve an acceptable outcome of all issues affecting the IMH Property. 11. While the parties agree to negotiate in good faith regarding all aspects of this MOU, nothing in this MOU shall bind the City, the EDA or IMH with respect to the terms and conditions identified in this MOU and no party shall have a right to pursue a claim arising from its terms. 3. AGREED TO BY: IMH Special set NT 175 AVN, LLC By IMH • ial C j., its managing member By: it eris Its: President Dated: ( i q I (a, Apple Valley Development Authority By: Lurry����everson Its: President Date: (o By: Thomas La Its: Executive Director Date: t.. City Cit of App Q ..V�.,.... ey By: M Ha ann I land , Its: Ma or + By: J� Y stetter Its: City Clerk 1409313.1 a 4. EXTRACT OF MINUTES OF MEETING OF THE CITY COUNCIL OF THE CITY OF APPLE VALLEY, MINNESOTA November 20, 2012 Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Apple Valley, Dakota County, Minnesota, was duly called and held on the 20th day of November, 2012, at 7:00 p.m. The following members of the Council were present: Hamann-Roland, Bergman, Goodwin, Grendahl, and Hooppaw and the following were absent: None. Member Goodwin introduced the following resolution and moved its adoption: CITY OF APPLE VALLEY RESOLUTION NO. 2012-243 RESOLUTION APPROVING AMENDMENTS TO MASTER DEVELOPMENT PROGRAM FOR MASTER DEVELOPMENT DISTRICT, THE ESTABLISHMENT OF TAX INCREMENT FINANCING DISTRICT NO. 15 AND APPROVING THE TAX INCREMENT FINANCING PLAN THEREFOR BE IT RESOLVED by the City Council (the "Council") of the City of Apple Valley, Minnesota (the "City"), as follows: 1.01. It has been proposed by the Apple Valley Economic Development Authority (the "EDA") that the EDA amend the Master Development Program for the EDA's Apple Valley Master Development District (the "Development District") to reflect increased public development and redevelopment costs and activities and establish Tax Increment Financing District No. 15 within the Development District and approve its tax increment financing plan, all pursuant to the applicable provisions of Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the "Act"), and all as reflected in that certain document entitled in part "Amendments Relating to Apple Valley Master Development District," dated as of November 20, 2012 (the "Program"), and presented for the Council's consideration. 1.03. The City has performed certain actions prior to the adoption and approval of the Program, including (i) 30 days prior notification of the County and School Board and (ii) the 5031674v1 Section 1, Recitals. 1.02. The Council has investigated the facts relating to the Program. holding of a public hearing thereon following at least 10 but not more than 30 days' prior published notice thereof, as required by law. 1.04. Certain written reports (the "Reports") relating to the Program and to the activities contemplated therein have heretofore been prepared and submitted to the Council and/or made a part of the City or EDA files and proceedings on the Program. The Reports include data, information and/or substantiation constituting or relating to (1) the "studies and analyses" on why the new Tax Increment Financing District No. 15 meets the so-called "but for" test and (2) the bases for the other findings and determinations made in this resolution. The Council hereby confirms, ratifies and adopts the Reports, which are hereby incorporated into and made as fully a part of this resolution to the same extent as if set forth in full herein. Section 2. A. oroval of Amendments to the Master Develo ement Pro tram. The amendments to the Master Development Program for the Apple Valley Master Development District are hereby approved, established and adopted. Section 3. TIF District No. 15. There is hereby established in the City within the Master Development District, Tax Increment Financing District No. 15 therein ("TIF District No. 15), the initial boundaries of which are fixed and determined as described in the Tax Increment Financing Plan (the "TIF Plan") therefor. Section 4. Tax Increment Financing Plan. The TIF Plan is adopted as the tax increment financing plan for the TIF District, and the City Council makes the following findings: 4.01. The TIF District is a housing district as defined in Minnesota Statutes, Section 469.174, Subd. 11, the specific basis for such determination being that the approximately 322 unit multifamily apartment rental housing project will provide safe, decent, affordable, sanitary housing for residents of the city and it will result in the preservation and enhancement of the tax base of the State. 4.02. The proposed development in the opinion of the City Council, would not occur solely through private investment within the reasonably foreseeable future. The reasons supporting this finding are that: 5031674v1 (0 IMH Special Asset NT 175-AVN, LLC, has represented to the City that private investment will not finance these development activities because of prohibitive costs relative to rental revenues for low and moderate income housing units. It is necessary to finance these development activities through the use of tax increment financing so that this and other development by private enterprise will occur within the Development District. (ii) A comparative analysis of estimated market values both with and without establishment of TIF District No. 15 and the use of tax increments has been performed as described above. Such analysis is found in Exhibit F of the TIF Plan, and indicates that the increase in estimated market value of the proposed development (less the indicated subtractions) exceeds the estimated market value of the site absent the establishment of the TIF District and the use of tax increments. 2 A3 4.03. In the opinion of the City Council, the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the proj ected tax increments for the maximum duration of TIF District No. 15 permitted by the TIF Plan. The reasons supporting this finding are that: (i) The estimated amount by which the market value of the site will increase without the use of tax increment financing is $4,847,641 (from $2,031,400 to $6,879,041); (ii) The estimated increase in the market value that will result from the development to be assisted with tax increment financing is $33,159,402 (from $2,031,400 to $35,190,802); and (iii) The present value of the projected tax increments for the maximum duration of the district permitted by the tax increment financing plan is $12,396,164. 4.04. The TIF Plan for TIF District No. 15 conforms to the general plan for development or redevelopment of the City of Apple Valley as a whole. The reasons for supporting this finding are that: (i) TIF District No. 15 is properly zoned; and (ii) The TIF Plan will generally compliment and serve to implement policies adopted by the City. 4.05. The TIF Plan will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of the Development District by private enterprise. The reasons supporting this finding are that: The development activities are necessary so that development and redevelopment by private enterprise can occur within the Development District. Section 5. Public Purpose. The adoption of the Program, as amended, for the Development District, and the adoption of the TIF Plan for TIF District No. 15 therein conforms in all respects to the requirements of the Act and will help fulfill a need to develop an area of the State which is already built up to provide employment opportunities and to provide safe, decent, sanitary housing for all residents of the City, to improve the tax base and to improve the general economy of the State and thereby serves a public purpose. Section 6. Certification. The Auditor of Dakota County is requested to certify the original net tax capacity of TIF District No. 15 as described in the TIF Plan, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased in accordance with the Act; and the City Administrator is authorized and directed to forthwith transmit this request to the County Auditor in such form and content as the Auditor may specify, together with a list of all properties within TIF District No. 15 for which building permits have been issued during the 18 months immediately preceding the adoption of this Resolution. 5031674v1 3 Section 7. Filing. The City Administrator is further authorized and directed to file a copy of the Program and TIF Plan for TIF District No. 15 with the Commissioner of Revenue and the Office of the State Auditor. Section 8. Interfund Loan. The City has determined to pay for certain costs (the "Qualified Costs") identified in the TIF Plan for TIF District No. 15 consisting of certain administrative expenses, which costs may be financed on a temporary basis from the City's general fund or any other fund from which such advances may be legally made (the "Fund"). Under Minnesota Statutes, Section 469.178, Subd. 7, the City is authorized to advance or loan money from the Fund in order to finance the Qualified Costs. The City intends to reimburse itself for the payment of the Qualified Costs, plus interest thereon, from tax increments derived from TIF District No. 15 in accordance with the following terms (which terms are referred to collectively as the "Interfund Loan"): (a) The City shall repay to the Fund from which the Qualified Costs are initially paid, the principal amount of $1,700,000 (or, if less, the amount actually paid from such fund) together with interest at 4.00% per annum (which is not more than the greater of (i) the rate specified under Minnesota Statutes, Section 270C.40, or (ii) the rate specified under Minnesota Statutes, Section 549.09) from the date of the payment. (b) Principal and interest on the Interfund Loan ("Payments") shall be paid semi- annually on each February 1 and August 1 commencing with the first February 1 or August 1 occurring after the date the tax increments from TIF District No. 15 are available and not otherwise pledged to and including the earlier of (a) the date the principal and accrued interest of the Interfund Loan is paid in full, or (b) the date of last receipt of tax increment from TIF District No. 15 ("Payment Dates") which Payments will be made in the amount and only to the extent of Available Tax Increment as hereinafter defined. Payments shall be applied first to accrued interest, and then to unpaid principal. (c) Payments on the Interfund Loan are payable solely from "Available Tax Increments" which shall mean, on each Payment Date, all of the tax increment generated in the preceding six (6) months with respect to the Development Property within TIF District No. 15 and remitted to the City by Dakota County, all in accordance with Minnesota Statutes, Sections 469.174 to 469.1794, as amended. Payments on this Interfund Loan are subordinate to any outstanding or future bonds, notes or contracts secured in whole or in part with Available Tax Increment, and are on parity with any other outstanding or future interfund loans secured in whole or in part with Available Tax Increment. (d) The principal sum and all accrued interest payable under this Interfund Loan are pre-payable in whole or in part at any time by the City without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular payment otherwise required to be made under this Interfund Loan. (e) The Interfund Loan is evidence of an internal borrowing by the City in accordance with Minnesota Statutes, Section 469.178, Subd. 7, and is a limited obligation payable solely from Available Tax Increment pledged to the payment hereof under this resolution. The Interfund Loan and the interest hereon shall not be deemed to constitute a 5031674v1 4 eaS- general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the City. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on the Interfund Loan or other costs incident hereto except out of Available Tax Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on the Interfund Loan or other costs incident hereto. The City shall have no obligation to pay any principal amount of the Interfund Loan or accrued interest thereon, which may remain unpaid after the termination of the TIF District. (f) The City may amend the terms of the Interfund Loan at any time by resolution of the City Council, including a determination to forgive the outstanding principal amount and accrued interest to the extent permissible under law. ATTEST: Pamela J. G 5031674v1 ADOPTED on November 20, 2012, by the Apple Valley City Council. stetter, City Clerk 5 The motion for the adoption of the foregoing resolution was duly seconded by member Hooppaw, and, after full discussion thereof and upon a vote being taken thereon, the following voted in favor thereof: Hamann-Roland, Bergman, Goodwin, and Hooppaw and the following voted against the same: Grendahl. whereupon said resolution was declared duly adopted. 26 1, the undersigned, being the duly qualified and acting City Clerk of the City of Apple Valley, Minnesota, DO HEREBY CERTIFY that I have carefully compared the attached and foregoing extract of minutes of a duly called and regularly held meeting of the City Council of said City held on November 20, 2012, with the original minutes thereof on file in my office and I further certify that the same is a full, true, and correct transcript thereof insofar as said minutes relate to the tax increment and related actions referenced therein with respect to the Apple Valley Master Development District of the Apple Valley EDA. WITNESS My hand officially and the official seal of the City this day of November, 2012. (SEAL) 5031674v1 CITY CLERK'S CERTIFICATE Pamela J. Gackstetter, City Clerk Apple Valley, Minnesota 2:7 APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. EDA-12-15 A RESOLUTION APPROVING AMENDMENTS TO MASTER DEVELOPMENT PROGRAM, THE ESTABLISHMENT OF TAX INCREMENT FINANCING DISTRICT NO. 15 AND APPROVING THE TAX INCREMENT FINANCING PLAN THEREFOR A. WHEREAS, the Apple Valley Economic Development Authority ("EDA") and the City of Apple Valley, Minnesota (the "City") have adopted a Master Development Program and established the Master Development District and created Tax Increment Financing Districts within the Master Development District and adopted Tax Increment Financing Plans with respect to these Tax Increment Districts pursuant to Chapter 469 of the Minnesota Statutes in an effort to encourage development and redevelopment of certain designated areas within the City, which program, plans and districts have been amended from time to time; and B. WHEREAS, it has been proposed that the City establish Tax Increment Financing District No. 15 ("TIF District No. 15") as a housing district and adopt a Tax Increment Financing Plan therefor (the "TIF Plan"). C. WHEREAS, the EDA has investigated the facts and have caused the Program and TIF Plan to be prepared and has performed all actions required by law to be performed prior to the approval of the Program and the TIF Plan; and NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the EDA as follows: 1. The Program and the TIF Plan are hereby approved. • 2. The EDA's Secretary is authorized and directed to file a copy of the Program and the TIF Plan with the Commissioner of Revenue and the Office of the State Auditor. The motion for adoption of the foregoing resolution was duly seconded by member Goodwin and, after full discussion thereof, and upon a vote being taken thereof, the following voted in favor thereof: Severson, Hamann-Roland, Goodwin, Hooppaw, Melander, and Bergman. and the following voted against same: Grendahl Adopted this 20th day of November, 2012. ATTEST: Pamela J. Gacl etter, Secretary 2.9 BUSINESS SUBSIDY AGREEMENT THIS BUSINESS SUBSIDY AGREEMENT ("Agreement") is made this day of , 2013, by and between the Apple Valley Economic Development Authority, a public body corporate and a political subdivision of the State of Minnesota, and IMH Special Asset NT 175 — AVN, LLC, an Arizona limited liability company ("EV11-1"). WHEREAS, IMH owns real property legally described on Exhibit "A," attached hereto ("Property"); WHEREAS, IMH desires to construct buildings located on a portion of the Property in order to attract new tenants and create new jobs in the City of Apple Valley; WHEREAS, IMH cannot make the improvements economically feasible without a subsidy; WHEREAS, in accordance with this Agreernent, the Apple Valley Economic • . . • • eve opment Authority desires to subsidize 1h improvements, as hereinafler defined, in an amount not to exceed $1,131,322.00; and NOVV, THEREFORE, in consideration of the mutual undertakings, the parties to this Agreement agree as follows: 3t) ARTICLE 1 Definitions Section 1.1. Definitions. In addition to the defined terms set forth throughout this Agreement, the following terms are defined as follows: "Act" means the Minnesota Business Subsidy Act, set forth in Minnesota Statutes Section 116J.993-.995 and any successor statute. "Benefit Date" means the date on which Recipient provides written proof to the EDA of satisfying the job and wage goals set forth in Section 2.5. Upon acceptance of the proof by the EDA, the "Benefit Date" shall be certified by the EDA and the Recipient in substantially the form set forth at Exhibit "C". "City" means the City of Apple Valley, a Minnesota municipal corporation. "Confessions of Judgment" means the Confessions of Judgment (Nos. 3514-3519, 3522-3529) executed by IMH for delinquent real estate taxes on the Property for tax years 2007 through 2011, collectively. True and accurate copies of the Confessions of Judgment are attached hereto as Exhibit D . "Development Assistance Agreement" means the Development Assistance Agreement, of even date hereof, by and among the EDA. City and Recipient. "Development Property" means that portion of the Property as described on Exhibit "B" attached hereto. "Disbursement Date" means the date(s) of the disbursement of the Loan by the EDA to the Recipient. "EDA" means the Apple Valley Economic Development Authority, a public body corporate and a political subdivision of the State of Minnesota. "Improvements" means the following improvements to the Development Property: (1) constructing a 126-unit multiple family residential building and related improvements in accordance with City-approved site plan and (2) constructing a 196-unit multiple family residential building and related improvements in accordance with City-approved site • • plan. "Loan" means the funds disbursed by the EDA to Recipient in an amount not to exceed One Million One Hundred Thirty-one Thousand Three Hundred Twenty-two and No/100 Dollars ($1,131,322.00). "Gabella Building" means the building located on that part of the Development Property legally described as Lot 1, Block 1, PARKSIDE VILLAGE, Dakota County, Minnesota, 2 1\ "Galante Building" means the building located on that part of the Development Property legally described as Lot 1, Block 2, PARKSIDE VILLAGE, Dakota County, Minnesota. "Note" means the Promissory Note entered into between the EDA and the Recipient in substantially the form set forth in Exhibit "E". "Park Parcels" means all or part of the Property sold, transferred or conveyed to the City for purposes of a public park, including that part of the Property legally described as Lot 1, Block 4; Lot 1, Block 5; Lot 1, Block 6; and Lot 2, Block 6, The Legacy of Apple Valley North, according to the recorded plat, Dakota County, Minnesota. "Parties" means the EDA and the Recipient, collectively. "Recipient" means IMH Special Asset NT 175 AVN, LLC, an Arizona limited liability company. "Remainder Property" means the Property, as defined herein except for the Development Property, as defined herein. ARTICLE 2 Business Subsidy 3 Section 2.1. Business Subsidy Requirements. The provisions of this Article establish the requirements set forth in the Act (Minnesota Statutes Sections 116J.993-.995 and any successor statute). Section 2.2. Incorporation of the Act. Recipient acknowledges and agrees that the provisions of the Act apply to this Agreement and are incorporated herein by reference. Section 2.3. Subsidy. The subsidy consists of the Loan provided to the Recipient. The funds for the Loan shall not exceed the amount received from Dakota County as and for the statutory penalty and interest on special assessment taxes, which were assessed against the Property in tax years 2007 through 2011. Section 2.4. Public Purposes. The public purposes and goals of the subsidy are to increase the tax base of the City by increasing the value of the Property, to create jobs with a livable wage and to enhance the character of the City's residential/business districts. Section 2.5. Goals. The measurable, specific and tangible goals for the subsidy are set forth as follows (collectively referred to as "Goals"): By December 31, 2015, Recipient shall complete the Improvements (i.e., obtain certificates of occupancy for both the Gabella Building and the Galante Building) and, in relation to construction of the Improvements, Recipient shall create a minimum of Two Hundred (200) new construction jobs during construction of the Improvements that pay an average wage in excess of $30.00 per hour. Section 2.6. Loan Repayment. If the Goals are not satisfied, the Recipient shall make payment to the EDA as required in Section 4.2. Section 2.7. Necessity of Subsidy. The subsidy is needed because the Recipient cannot make the Improvements economically feasible without the Loan. Section 2.8. Commitment. The Recipient intends to continue operations in the City for at least five (5) years following the Benefit Date. In accordance with this commitment, the Recipient agrees to the following: (a) Remainder Property. The Recipient shall not sell, transfer or otherwise convey all or part of the Remainder Property prior to the Benefit Date, unless the Recipient obtains the prior written consent of the EDA after public hearing in accordance with Minn. Stat. § 116J.994, subd. 3(e). Subsequent to the Benefit Date, the Recipient may convey all or part of the Remainder Property without the consent of the EDA. (b) Development Property. The Recipient shall not sell, transfer or otherwise convey all or part of the Development Property for at least five (5) years following the Benefit Date, unless the Recipient obtains the prior written consent of the EDA after a public hearing in accordance with Minn. Stat. § 116.1 subd. 3(e) and complies with Article VIII of the Development Assistance Agreement. (c) Park Parcels. Notwithstanding the foregoing, no prior written consent of the EDA is required for the sale, transfer or conveyance of Park Parcels to the City. Section 2.9. Other Financing. In addition to the assistance provided under this Agreement, the Recipient has received or expects to receive as part of this project, the following financial assistance from other "grantors" as defined in the Act: Fax Increment Financing from the EDA in an amount not to exceed $5,350,000.00. Section 2.10. Reporting Requirements. (a) Reporting Time Period. The Recipient shall submit to the EDA information regarding the Goals for two years after the Benefit Date or until the Goals are met, whichever is later. (b) Reporting Form. Recipient shall make its report on forms developed by the Minnesota Department of Employment and Economic Development, pursuant to Minn. Stat. § 116J.994, subd. 7. (c) Reporting Documentation. The report must include: (1) The type, public purpose, and amount of subsidies; (2) The hourly wage of each job created with separate bands of wages; (3) The sum of the hourly wages and cost of health insurance provided by the Recipient with separate bands of wages; (4) The date the job and wage goals will be reached; (5) A statement of the Goals and an update on achievement of those Goals; (6) The name and address of the parent corporation of the Recipient, if any; (7) A list of all financial assistance by all grantors for the Improvements; and 4 ( Any other information the EDA may request. (d) Submission Deadline and Penalty. The report must be submitted to the EDA no later than March 1 of each year for the previous year. If the report is not submitted by March 1, the EDA shall mail a warning to the Recipient within one week of the required submission date. If, after 14 days of the postmark date of the warning, the Recipient fails to submit its report to the EDA, the Recipient must pay to the EDA a penalty of $100.00 for each subsequent day until the report is submitted. The maximum penalty shall not exceed $1,000.00. Section 3.1. Disbursement of Funds. A portion of the delinquent real estate taxes included in the Confessions of Judgment are for statutory penalties and interest incurred on past-due special assessments levied by the City (hereinafter & I"). The EDA hereby agrees to cause the City to disburse to Recipient all P & I received by the City within forty-five (45) days of receipt from Dakota County. However, the City is under no obligation to disburse funds to Recipient if Recipient fails to satisfy the conditions set forth in Section 3.2 of this Agreement. Section 3.2. Conditions of Disbursement. The following conditions must be satisfied prior to disbursement of funds by the EDA: (a) Recipient must meet, or be on track to meet, as determined by the EDA in its sole discretion, the Goals, as set forth in Section 2.5 of this Agreement; (b) Recipient conveys and the City has taken title to the real property legally described as: Lot 1, Block 4, Lot 1 Block 5, and Lots 1 and 2, Block 6, The Legacy of Apple Valley North, according to the recorded plat, Dakota County, Minnesota. (c) Recipient must not be in default under this Agreement, as defined in Section 7.1 herein. ARTICLE 3 Disbursement of Funds ARTICLE 4 Loan Terms and Conditions Section 4.1. Basic Loan Terms. The principal amount of the Loan shall be equal to the funds disbursed to the Recipient by the EDA in accordance with Article 3 of this Agreement or One Million One Hundred Thirty-one Thousand Three Hundred Twenty-two and No/100 Dollars ($1,131,322.00), whichever is less. The Loan shall bear interest at a rate of six percent (6%) per annum, and interest shall commence to accrue as of each disbursement date and continue until the Loan is satisfied or paid in full. The Loan shall be evidenced by the Note, the terms of which are incorporated fully herein by reference. 5 Section 4.2. Repayment of Loan. If Recipient does not meet the Goals, the Loan, including all principal and interest, must be repaid on or before December 31, 2016. Section 4.3. Termination of Article 4 of this Agreement. If the Loan is forgiven pursuant to Article 5 of this Agreement, the provisions of Sections 4.1 and 4.2 of this Agreement shall terminate with the remainder of this Agreement remaining in full force and effect. ARTICLE 5 Loan Forgiveness Section 5.1. Loan Forgiveness Terms and Schedule. If Recipient meets the Goals, provides a sworn statement evidencing the same (as Exhibit "F" hereto) and no event of default exists as set forth in Section 7.1 of this Agreement, the EDA shall forgive the Loan in its entirety. ARTICLE 6 Additional Recipient Obligations Section 6.1. Additional Reporting Requirements. In addition to the reporting requirements set forth in Section 2.10 of this Agreement. Recipient shall provide to the EDA information for incorporation into any progress reports, as required by any state or local government political agency, to monitor implementation of this Agreement for compliance with state and local guidelines. Section 6.2. Nondiscrimination. The provisions of Minnesota Statutes Section 181.59, which relates to civil rights and discrimination, shall be considered a part of this Agreement as though fully set forth herein, and the Recipient shall comply with each such provision throughout the term of this Agreement. Section 6.3. Workers Compensation Insurance. The Recipient shall obtain and maintain workers compensation insurance as required by Minnesota Statutes, Section 176.181, subd. 2. ARTICLE 7 Default Section 7.1. Events of Default. The Recipient shall be in default under this Agreement upon the happening of any one or more of the following events: (a) the Recipient fails to meet any of the Goals, as set forth in Section 2.5 of this Agreement; (b) the Recipient fails to timely make all payments required under the Confessions of Judgment; (c) the Recipient is in breach in any material respect, of any obligation or agreement under this Agreement, with the exception of any default under sections 7.1(a), (b) and (i) for 6 35' which no written notice is required, and remains in breach in any material respect for sixty (60) business days after written notice thereof to the Recipient by the EDA; (d) if any material covenant, warranty, or representation of the Recipient shall prove to be untrue in any material respect, provided such covenant, warranty or representation of the Recipient remains untrue in any material respect for sixty (60) business days after written notice thereof to the Recipient by the EDA; (e) the Recipient fails to pay its debts as they become due, makes an assignment for the benefit of its creditors, admits in writing its inability to pay its debts as they become due, files a petition under any chapter of the Federal Bankruptcy Code or any similar law, state of federal, now or hereafter existing, becomes "insolvent" as that term is generally defined under the Federal Bankruptcy Code, files an answer admitting insolvency or inability to pay its debts as they become due in any involuntary bankruptcy case commenced against it, or fails to obtain a dismissal of such case within sixty (60) days after its commencement or convert the case from one chapter of the Federal Bankruptcy Code to another chapter, or be the subject of any order for relief in such bankruptcy case, or be adjudged a bankrupt or insolvent, or has a custodian, trustee, or receiver appointed for it, or has any court take jurisdiction of its property, or any part thereof, in any proceeding for the purpose of reorganization, arrangement, dissolution or liquidation, and such custodian, trustee, or receiver is not discharged, or such jurisdiction is not relinquished, vacated or stayed within sixty (60) days of the appointment; (0 a final judgment is entered against the Recipient that the EDA reasonably deems will have a material, adverse impact on the Recipient's ability to comply with the Recipient's obligations under this Agreement; (g) the Recipient fails to maintain its existence in good standing in the State of Minnesota with the Minnesota Secretary of State; (h) the Recipient fails to submit to the EDA a completed report as required by Section 2.10 in this Agreement; (i) the Recipient sells, transfers, assigns, leases or otherwise disposes of the Property in violation of Section 2.8 of this Agreement; (j) the Recipient merges or consolidates with any other entity without the prior written approval of the EDA; or (k) there is a loss, theft, substantial damages, or destruction of all or any part of the Development Property or Improvements that is not remedied to the EDA's satisfaction within sixty (60) business days after written notice thereof by the EDA to the Recipient. Section 7.2. Rights and Remedies Upon Default. (a) In the event of default, the EDA shall have the right, at its option, and without demand or notice, which is hereby waived, to declare all or any part of the Loan, less any 7 34 principal forgiven in accordance with Section 5.1 of this Agreement, immediately due and payable. (b) Notwithstanding this section, the EDA shall have all rights and remedies available to it under any other provision of this Agreement or the Act. (c) The Recipient agrees to pay the costs and expenses incurred by the EDA in enforcing its rights under this Agreement, including, but not limited to, the EDA's attorneys' fees. Section 7.3. Waiver. The failure or delay of the EDA to take any action or assert any right or remedy, or the partial exercise by the EDA of any right or remedy shall not be deemed to be a waiver of such action, right or remedy if the circumstances creating such action, right or remedy continue or repeat. ARTICLE 8 Recipient's Acknowledgments, Representations and Warranties Section 8.1. Acknowledgements. The Recipient hereby acknowledges that: (a) Nothing contained in this Agreement, nor any act of the EDA, shall be deemed or construed to create between the EDA and the Recipient any relationship (except as borrower and lender), including, but not limited to, that of principal and agent, limited or general partnership or joint venture. (b) There are no other beneficiaries to this subsidy other than Recipient. Section 8.2. Representations and Warranties. The Recipient hereby represents and warrants that: (a) Recipient does not appear on the Minnesota Department of Employment and Economic Development's list of recipients that have failed to meet the terms of a business subsidy agreement. (b) Recipient has reviewed this Agreement with an attorney, accountant, financial advisor or other appropriate professional and fully understands the legal and tax implications of this Agreement. (c) To the best of the Recipient's knowledge, no member, officer, or employee of the EDA, or its officers, employees, designees, or agents, who exercises or has exercised any functions or responsibilities with respect to the Improvements during his or her tenure shall have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be performed in connection with the Improvements or in any activity, or benefit there from, which is part of the Improvements. 8 (d) The Improvements shall be carried out as promised to the City and the EDA. (e) To the best of the Recipient's knowledge, it has obtained or will obtain all federal, state, and local government approvals, reviews and permits required by law to be obtained in connection with the Improvements and has undertaken and completed all actions necessary for it to lawfully execute this Agreement. (f) To the best of the Recipient's knowledge, it has fully complied with all applicable local, state and federal laws pertaining to its business and will continue such compliance throughout the term of this Agreement. If at any time notice of noncompliance is received by the Recipient, the Recipient agrees to take any reasonable action necessary to comply with the local, state or federal law in question. ARTICLE 9 Miscellaneous Provisions Section 9.1. Release and Indemnification Covenants. Recipient agrees to protect and defend the EDA and its officers, employees, designees and agents, now and forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action, or other proceeding whatsoever, other than intentional acts, by any person or entity, arising or purportedly arising from the improvements to the Development Property. Section 9.2. Immunity. Nothing in this Agreement shall be construed as a waiver of the EDA of any immunities, defenses or other limitations on liability to which the EDA is entitled by law. Section 9.3. Modifications. This Agreement may be modified solely through written amendments hereto executed by the Recipient and the EDA. Section 9.4. Notices and Demands. Any notice demand or other communication under this m Agreeent by either party to the other shall be sufficiently given or delivered if it is dispatched by U.S. Mail or delivered personally to: (a) as to the EDA: Apple Valley Municipal Center 7100 147 St. W. Apple Valley, Minnesota 55124 Attn: Thomas Lawell, Executive Director with copy to Dougherty, Molenda, Solfest, Hills & Bauer, P.A. 7300 West 147 Street, Suite 600 Apple Valley, Minnesota 55124 9 311 (b) as to the Recipient: Attn: Michael G. Dougherty IMH Special Asset NT 175 — AVN, LLC 7001 N. Scottsdale Rd., Suite 2050 Scottsdale, Arizona 85253 Attn: John McVey And IMH Special Asset NT 175-AVN, LLE 4700 South Syracuse Street, Suite 375 Denver, CO 80237 Attn: Stuart Davis with copy to Larkin Hoffman Daly K. Lindgren, Ltd. 1500 Wells Fargo Plaza 7900 Xerxes Avenue Minneapolis, Minnesota 55431 Attn: Peter J. Coyle or at such other address with respect to any party as that party may, from time to time, designate in writing and forward to the other party as provided in this section. Section 9.5. Binding Effect. The covenants and agreements in this Agreement shall bind and benefit the heirs, executors, administrators, successors and assigns of the Parties. Section 9.6. Merger. None of the pro i visions of this Agreement are intended to or shall be merged by reason of any deed transferring any ntere i st in the Property and any such deed shall not be deemed to affect or 'impair the provisions and covenants of this Agreement. Section 9.7. Choice of Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota without regard to its conflict of laws provisions. 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. Section 9.8. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 9.9. Headings. The Parties agree the headings and sub-headings used in this Agreement are solely for convenience of reference, are no part of this Agreement, and are not be considered in construing or interpreting this Agreement. 10 Section 9.10. Entire Agreement. This Agreement, with the exhibits hereto, constitutes the entire agreement between the Parties pertaining to its subject matter and it supersedes all prior contemporaneous agreements, representations and understandings of the Parties pertaining to the subject matter of this Agreement. Section 9.11. Separability. Wherever possible, each provision of this Agreement and each related document shall be interpreted so that it is valid under applicable law. If any provision of this Agreement or any related document is to any extent found invalid by a court or other government entity of competent jurisdiction, that provision shall be ineffective only to the extent of such invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement or any other related document. IN WITNESS WHEREOF the Parties hereto h ave ca this Agreement to be duly executed and delivered this day of 2013. APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and a political subdivision of the State of Minnesota By: Larry S. Severson Its: President By: Thomas Lawell Its: Executive Director IMH SPECIAL ASSET NT — 175 AVN, LLC, an Arizona limited liability company By: 11 Its: APPROVAL OF TERMS AND CONDITIONS HEREIN BY: CITY OF APPLE VALLEY 40 THIS INSTRUMENT WAS DRAFTED BY: DOUGHERTY, MOLENDA, SOLFEST, HILLS & BAUER P.A. 7300 West 147 Street, Suite 600 Apple Valley, Minnesota 55124 (952) 432-3136 (MGD: #66-32849) By: Mary Hamann-Roland Its: Mayor By: Pamela J. Gackstetter Its: City Clerk 12 41 EXHIBIT A Lot 1, Block 1; Lot 1, Block 4; Lot 1, Block 5; Lots 1 and 2, Block 6; Lot 1, Block 9; and Lots 1 and 2, Block 10, THE LEGACY OF APPLE VALLEY NORTH, Dakota County, Minnesota; and Lot 1, Block 1 and Lot 1, Block 2, PARKSIDE VILLAGE, Dakota County, Minnesota 13 EXHIBIT B Lot 1, El lock 1 and Lot 1, Block 2, I' RK II)E ILL CIE Dakota County, Minnesota 14 Pursuant to the Business Subsidy Agreement, made between Apple Valley Economic Development Authority and IMH Special Asset NT 175 - AVN, LLC, (hereinafter, the "Parties") on the day of , 201 , IMH Special Asset NT 175 - AVN, LLC, was approved for a subsidy in an amount of up to One Million One Hundred Thirty-one Thousand Three Hundred Twenty-two and No/100 Dollars ($1,131,322.00) from Apple Valley Economic Development Authority. This subsidy is subject to the terms and conditions set forth in the aforementioned Business Subsidy Agreement. IN WITNESS WHEREOF, the Parties do hereby acknowledge the Benefit Date as defined in Minnesota Statutes § 116J.993, Subd. 2, is , 20 (the "Benefit Date"). EXHIBIT C BENEFIT DATE CERTIFICATION APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY I3y: Larry S. Severson Its: President By: Thomas Lawell Its: Executive Director IMH SPECIAL ASSET NT 175 — AVN, LLC, as Arizona limited liability company By: Its: 15 144 EXHIBIT D [Place holder for Confessions of Judgment 16 201 [First Disbursement Date] EXHIBIT E PROMISSORY NOTE IMH Special Asset NT 175 — AVN, LLC, an Arizona limited liability company (the "Maker"), for value received, hereby promises to pay to the Apple Valley Economic Development Authority, a public body corporate and a political subdivision of the State of Minnesota (the "EDA"), or its assigns (the EDA and any assigns are hereinafter referred to as the "Holder"), at its designated principal office or such other place as the flolder may designate in writing, the principal sum of One Million One Hundred Thirty-one Thousand Three Hundred Twenty-two and 00/100 Dollars ($1,131,322.00) or so much thereof as may be advanced under this Note, with interest as hereinafter provided. The principal of this Not is payable as follows: 1. The principal shall bear interest at a rate of six percent (6%) per annum and interest shall commence to accrue as of each disbursement date. 2. Any outstanding principal and interest is due and payable on or before December 31, 2016. 3. This Note is given pursuant to the Business Subsidy Agreement entered into by the Maker and the EDA on , 2013 (the "Loan Agreement"). All of the agreements, conditions, covenants, provisions, and stipulations contained in the Loan Agreement, or any instrument securing this Note are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein. It is agreed that time is of the essence for this Note. If a default occurs under the Loan Agreement, or any instrument securing this Note, then the Holder of this Note may at its right and option, without notice, declare immediately due and payable the principal balance of this Note, together with any costs of collection including attorney fees incurred by the Holder of this Note in collecting or enforcing payment hereof, whether suit be brought or not, and all other sums due hereunder, or under any instrument securing this Note. The Maker agrees that the Holder of this Note may, without notice to the Maker of this Note and without affecting the liability of the Maker of this Note, accept additional or substitute security for this Note, or release any security or any party liable for this Note or extend or renew this Note. 4. The remedies of the Holder of this Note as provided herein, and in the Loan Agreement, or any other instrument securing this Note, shall be cumulative and concurrent and may be pursued singly, successively or together and, at the sole discretion of the Holder of this Note, may be exercised as often as occasion therefore shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. The Holder of this Note shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed 17 by the Holder of this Note and then only to the extent specifically set forth in the writing. A waiver with reference to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. This Note may not be amended, modified, or changed except only by an instrument in writing signed by the party against whom enforcement of any such amendment, modifications, or change is sought. 5. This Note shall be governed by and construed in accordance with the laws of the state of Minnesota without regard to its conflict of laws provisions. Any disputes, controversies, or claims arising out of this Note shall be heard in the state or federal courts of Minnesota, and all parties to this Note waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise. 6. This Note, with the Loan Agreement, constitutes the entire Note between the parties pertaining to its subject matter and it supersedes all prior contemporaneous Notes, representations, and understandings of the parties pertaining to the subject matter of this Note. 7. Wherever possible, each provision of this Note and each related document shall be interpreted so that it is valid under applicable law. I f any n d rovisio of this Note or any relate document is to any extent found invalid by a court or other g overnmental entity of competent jurisdiction, that provision shall be ineffective onl y to the extent of such invalidity, without invalidating the remainder of such provision or the remaining provisions of this Note or any other related document. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts, and things required to exist, happen, and be performed precedent to or in the issuance of this Note do exist, have happened, and have been performed in regular and due form as required by law. IN WITNESS WHEREOF, the Maker has caused this Note to be duly executed as of the day of ,201 . IMH SPECIAL ASSET NT 175 —AVN, LLC By: Its: By: Its: 18 EXHIBIT F 19 [Place holder for Sworn Construction Statement] 48' This document drafted by: 4985341v10 DEVELOPMENT ASSISTANCE AGREEMENT BY AND AMONG THE APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY, MINNESOTA THE CITY OF APPLE VALLEY, MINNESOTA AND IMH SPECIAL ASSET NT 175 -AVN, LLC BRIGGS AND MORGAN Professional Association 2200 First National Bank Building St. Paul, Minnesota 55101 44 ARTICLE I DEFINITIONS Section 1.1 Definitions ARTICLE II Section 2.1 Section 2.2 Section 2.3 ARTICLE III UNDERTAKINGS BY DEVELOPER AND CITY Section 3.1 Development Property Section 3.2 Site Improvements, Minimum Improvements and Legal and Administrative Expenses Reimbursement: TIF Note Compliance with Low and Moderate Income Requirements Acquisition of Park Land Section 3.3 Section 3.4 Section 3.5 ARTICLE IV CONSTRUCTION OF MINIMUM IMPROVEMENTS Section 4.1 Construction of Minimum Improvements Section 4.2 Construction Plans Section 4.3 Commencement and Completion of Construction ARTICLE V Section 5.1 Section 5.2 Section 5.3 Section 5.4 REPRESENTATIONS AND WARRANTIES 5 Representations and Warranties of the City 5 Representations and Warranties of the Authority 5 Representations and Warranties of the Developer 6 INSURANCE 14 Insurance 14 Condemnation 15 Reconstruction or Payment 16 Relationship to Mortgagee 16 ARTICLE VI ASSESSMENT AGREEMENT AND OTHER COVENANTS Section 6.1 Execution of Assessment Agreement Section 6.2 Real Property Taxes ARTICLE VII Section 7.1 Section 7.2 Section 7.3 Section 7.4 Section 7.5 Section 7.6 ARTICLE VIII Section 8.1 Section 8.2 Section 8.3 MORTGAGE FINANCING 19 Limitation Upon Encumbrance of Property 19 Approval of Mortgage 19 Notice of Default; Copy to Mortgagee 19 Mortgagee's Option to Cure Defaults 20 Authority's and City's Option to Cure Default on Mortgage 20 Subordination and Modification for the Benefit of Mortgagees 20 PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER; INDEMNIFICATION......... ...... ........ ....... ............ . ..... ......... ............. 22 Transfer of Substantially All Assets 22 Prohibition Against Transfer of Property and Assignment of Agreement 22 Approvals 23 ARTICLE IX EVENTS OF DEFAULT 4985341v10 Table of Contents Section 9.1 • Events of Default Defined Page 2 2 8 8 9 9 10 11 12 12 12 13 17 17 17 24 24 1 SO Section 9.2 Remedies on Default 24 Section 9.3 No Remedy Exclusive 25 Section 9.4 No Implied Waiver 25 Section 9.5 Agreement to Pay Attorney's Fees and Expenses 25 Section 9.6 Indemnification of the Authority and the City 25 ARTICLE X ADDITIONAL PROVISIONS 27 Section 10.1 Restrictions on Use 27 Section 10.2 Conflicts of Interest 27 Section 10.3 Titles of Articles and Sections 27 Section 10.4 Notices and Demands 27 Section 10.5 Counterparts 28 Section 10.6 Law Governing 28 Section 10.7 Expiration 28 Section 10.8 Provisions Surviving Rescission or Expiration 28 Section 10.9 Assignment 28 EXHIBIT A DESCRIPTION OF DEVELOPMENT PROPERTY A-1 EXHIBIT B FORM OF TIF NOTE B-1 EXHIBIT C SITE IMPROVEMENTS AND MINIMUM IMPROVEMENTS C-1 EXHIBIT D COMPLIANCE CERTIFICATE D-1 EXHIBIT E PARK LAND E-1 EXHIBIT F FORMS OF ASSESSMENT AGREEMENTS F-1 EXHIBIT G FORM OF MORTGAGE G-1 4985341v10 Table of Contents (continued) 11 Page THIS AGREEMENT, made as of the day of , 20 , by and among the Apple Valley Economic Development Authority, Minnesota (the "Authority"), a political subdivision organized under the laws of the State of Minnesota, the City of Apple Valley, Minnesota (the "City"), a municipal corporation organized and existing under the laws of the State of Minnesota, and IMH Special Asset NT 175-AVN, LLC, an Arizona limited liability company (the "Developer"), WHEREAS, pursuant to Minnesota Statutes, Section 469.124 through 469.133, as amended, the City has heretofore established the Apple Valley Master Development District (the "Development District") and has adopted a development program therefor (the "Development Program"); and WHEREAS, pursuant to the provisions of Minnesota Statutes, Section 469.174 through 469.1794, as amended, (hereinafter the "Tax Increment Act"), the City has heretofore established, within the Development District, Tax Increment Financing District No. 15 (the "Tax Increment District") and has adopted a tax increment financing plan therefor (the "Tax Increment Plan") therefor which provides for the use of tax increment financing in connection with certain development within the Development District; and WHEREAS, in order to achieve the objectives of the Development Program and particularly to make the land in the Development District available for development by private enterprise in conformance with the Development Program, the City and the Authority have determined to authorize and issue a tax increment financing note as set forth herein to assist the Developer with the financing of certain costs of a Project (as hereinafter defined) to be constructed within the Tax Increment District as more particularly set forth in this Agreement; and WHEREAS, the City and the Authority believe that the development and construction of the Project, and fulfillment of this Agreement are vital and are in the best interests of the City, the health, safety, morals and welfare of residents of the City, and in accordance with the public purpose and provisions of the applicable state and local laws and requirements under which the Project has been undertaken and is being assisted. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 4985341v10 WITNESSETH: DEVELOPMENT ASSISTANCE AGREEMENT SZ- ARTICLE I DEFINITIONS Section 1.1 Definitions. All capitalized terms used and not otherwise defined herein shall have the followin g meanings s unless a different meaning clearly appears from the context: Agreement means this Development Assistance Agreement, as the same may be from time to time modified, amended or supplemented; Assessment Agreement means collectively, the Assessment Agreements, in substantially the forms of the agreements contained in Exhibit F attached hereto and hereby made a part of this Agreement, among the Developer, the City and the Assessor for the County, entered into pursuant to Article III of this Agreement; Assessor's Minimum Market Value means collectively, the agreed minimum market value of the Development Property and the Minimum Improvements and for calculation of real property taxes as determined by the Assessor for the County pursuant to the Assessment Agreement; Authorit y Apple the A le Valley Economic Development Authority; Business Day means any day except a Saturday, Sunday or a legal holiday or a day on which banking institutions in the City are authorized by law or executive order to close; City means the City of Apple Valley, Minnesota; Compliance Certificate means the Compliance Certificate in substantially the form attached hereto as Exhibit D; Construction Plans means the plans, specifications, drawings and related documents of the construction work to be performed by the Developer on the Project and the Development Property and the plans (a) shall be as detailed as the plans, specifications drawings and related documents which are submitted to the building inspector of the City, and (b) shall include at least the following: (1) site plan; (2) foundation plan; (3) basement plans; (4) floor plan for each floor; (5) cross sections of each (length and width); (6) elevations (all sides); (7) grading and drainage; and (8) landscape; District; County means Dakota County, Minnesota; Developer means IMH Special Asset NT 175 -AVN, LLC, its successors and assigns; Development District means the real property included in the City's Master Development Development Program means the Master Development Program, as amended, approved in connection with the Development District; 4985341v10 Development Property means the real property described in Exhibit A attached to this Agreement and upon which the Minimum Improvements will be constructed; Event of Default means any of the events described in Section 9.1 hereof; First Mortgage means any Mortgage granted to secure any loan made pursuant to either a mortgage commitment obtained by the Developer from a commercial lender or other financial institution to fund any portion of the construction costs and initial operating capital requirements of the Minimum Improvements, or all such Mortgages as appropriate; Legal and Administrative Expenses means the fees and expenses incurred by the City and/or the Authority in connection with the adoption of the Tax Increment Financing Plan, the preparation of this Agreement and the issuance of the TIF Note; Minimum Improvements means the substantial completion of the Site Improvements and the improvements contemplated by and in accordance with this Agreement and the Construction Plans and as generally described as a 322 unit multifamily rental housing facility consisting of two buildings; Mortgage means any mortgage or security agreement in which the Developer or a predecessor in interest has granted a mortgage or other security interest in the Development Property, or any portion or parcel thereof, or any improvements constructed thereon, and which is a permitted encumbrance pursuant to the provisions of Article VIII; Net Proceeds means any proceeds paid by an insurer to the Developer, the City under a policy or policies of insurance required to be provided and maintained by the Developer pursuant to Article V of this Agreement and remaining after deducting all expenses (including fees and disbursements of counsel) incurred in the collection of such proceeds; Note Payment Date means August 1, 2015 and each August 1 and February 1 of each year thereafter to and including February 1, 2041 if construction of the Project commences in 2013 and August 1, 2016, and each August 1 and February 1 of each year thereafter to and including February 1, 2042 if construction of the Project commences in 2014; provided, that if any such Note Payment Date should not be a Business Day, the Note Payment Date shall be the next succeeding Business Day; Park Land means the real property described on Exhibit E attached to this Agreement; Person means any individual, corporation, partnership, joint venture, association, joint- stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof; Prime Rate means the rate of interest from time to time publicly announced by U.S. Bank National Association in Minneapolis, Minnesota, as its "reference rate" or any successor rate, which rate shall change as and when that prime rate or successor rate changes; Project means the construction of the Minimum Improvements on the Development Property (otherwise referred to as "Parkside Village"); 4985341v10 3 Purchase Agreement means the agreement entered into by and between the Developer and the City dated , 2012, setting forth the terms and conditions for the purchase of the Park Land; Site Improvements means the site improvements undertaken or to be undertaken on the Development Property in connection with the Minimum Improvements, more particularly described on Exhibit C attached hereto; State means the State of Minnesota; Tax Increment Act means Minnesota Statutes, Sections 469.174 through 469.1794, as amended; Tax Increment District means Tax Increment Financing District No. 15 located within the Development District, a description of which is set forth in the Tax Increment Financing Plan, which was qualified as a housing district under the Tax Increment Act; Tax Increment Financing Plan means the tax increment financing plan approved for the Tax Increment District by the Board of Commissioners of the Authority and the City Council for the City and any future amendments thereto; Tax Increments means 70% of the tax increments derived from the Development Property which have been received by the Authority in accordance with the provisions of Minnesota Statutes, Section 469.177; Termination Date means the earlier of (i) February 1, 2042, (ii) the date the TIF Note is paid in full, (iii) the date on which the Tax Increment District expires or is otherwise terminated, or (iv) the date this Agreement and the Assessment Agreement are terminated or rescinded in accordance with their respective terms; TIF Note means the Tax Increment Revenue Note (Parkside Village Project) to be executed by the Authority and delivered to the Developer pursuant to Article III hereof, a copy of which is attached hereto as Exhibit B; Unavoidable Delays means delays, outside the control of the party claiming its occurrence, which are the direct result of strikes, other labor troubles, unusually severe or prolonged bad weather, acts of God, fire or other casualty to the Project, litigation commenced by third parties which, by injunction or other similar judicial action or by the exercise of reasonable discretion, directly results in delays, or acts of any federal, state or local governmental unit (other than the City) which directly result in delays. 4985341v10 4 ARTICLE II REPRESENTATIONS AND WA 11 NTIES Section 2.1 Representations and Warranties of the City. The City makes the following representations and warranties: (1) The City is a municipal corporation and has the power to enter into this Agreement and carry out its obligations hereunder, and the execution of this Agreement has been duly and properly authorized by the City. (2) The Tax Increment District is a "housing district" within the meaning of Minnesota Statutes, Section 469.174, Subdivision 11, and was created, adopted and approved in accordance with the terms of the Tax Increment Act. ( The development contemplated by this Agreement is in conformance with the development objectives set forth in the Development Program. (4) To finance certain costs within the Tax Increment District, the City proposes, subject to further provisions of this Agreement, to reimburse the Developer for a portion of the costs of the Minimum Improvements as further provided in this Agreement. (5) The City makes no representation or warranty, either expressed or implied, as to the Development Property or its condition or the soil conditions thereon, or that the Development Property shall be suitable for the Developer' purposes or needs. Section 2.2 Representations and Warranties of the Authority. The Authority makes the following representations and warranties: (1) The Authority is a public body, corporate and politic of the State and has the power to enter into this Agreement and carry out its obligations hereunder. (2) The Tax Increment District is a "housing district" within the meaning of Minnesota Statutes, Section 469.174, Subdivision 11, and was created, adopted and approved in accordance with the terms of the Tax Increment Act. (3) The development contemplated by this Agreement is in conformance with the development objectives set forth in the Development Program. (4) To finance certain costs within the Tax Increment District, the Authority proposes, subject to the further provisions of this Agreement, to apply Tax Increments to reimburse the Developer a portion of the costs of the Minimum Improvements as further provided in this Agreement. (5) The Authority makes no representation or warranty, either express or implied, as to the Development Property or its condition or the soil conditions thereon, or that the Development Property shall be suitable for the Developer's purposes or needs. 4985341v10 5 cro Section 2.3 Representations and Warranties of the Developer. The Developer makes the following representations and warranties: (1) The Developer is a Arizona limited liability company, is authorized to conduct business in the State, has the power and the authority to enter into this Agreement and to perform its obligations hereunder and, by doing so, is not in violation of any provisions of its articles of organization, operating agreement or member control agreement or the laws of the State. (2) The Developer shall cause the Minimum Improvements to be constructed and the Site Improvements installed in accordance with the terms of this Agreement, the Development Program, and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, energy conservation, building code and public health laws and regulations). (3) The construction of the Minimum Improvements would not be undertaken by the Developer, and in the opinion of the Developer would not have been or be economically feasible within the reasonably foreseeable future, without the assistance and benefit to the Developer provided for in this Agreement. (4) The Developer will use its best efforts to obtain, or cause to be obtained, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable local, state, and federal laws and regulations which must be obtained or met before the Project may be lawfully constructed. (5) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provision of any contractual restriction, evidence of indebtedness, agreement or instrument of whatever nature to which the Developer is now a party or by which it is bound, or constitutes a default under any of the foregoing. (6) The Developer will cooperate fully with the Authority and the City with respect to any litigation commenced with respect to the Project. ( The Developer will cooperate fully with the Authority and the City in resolution of any traffic, parking, trash removal or public safety problems which may arise in connection with the construction and operation of the Project. ( The financing commitments which the Developer will obtain to finance construction of the Minimum Improvements, together with the equity funds available to the Developer, together with the financing provided by the Authority and the City pursuant to this Agreement, will be sufficient to enable the Developer to successfully complete the construction of the Minimum Improvements. ( The construction of the Minimum Improvements shall commence no later than April 15, 2014 and barring Unavoidable Delays, the Minimum Improvements will be substantially completed by December 31, 2015. 4985341v10 6 (10) Upon execution of this Agreement by the parties hereto, the Developer shall record this Agreement with the office of the Dakota County Recorder or Registrar of Titles. 4985341v10 ARTICLE III UNDERTAKINGS BY DEVELOPER AND CITY Section 3.1 Development Property. (1) It is the intent of the parties that the City reimburse the Developer for $1,150,000 of the cost of the Minimum Improvements as provided in (2) below, subject to satisfaction of the following conditions precedent: (A) The Developer shall be in material compliance with all the terms and provisions of this Agreement; (B) The Developer shall have obtained a building permit and commenced construction of the Minimum Improvements in accordance with the Developer Construction Plans approved by the City pursuant to Section 4.2 of this Agreement; (C) Execution of an Assessment Agreement relating to the Development Property and Minimum Improvements by the City, the County and the Developer pursuant to Section 6.1 of this Agreement; (D) If required by the City, the purchase of the Park Land by the City has been completed; (E) If a Mortgage has been recorded against the Development Property, delivery to the City of an agreement by the holder of the First Mortgage agreeing to be bound by the Assessor's Minimum Market Value set forth in the Assessment Agreement relating to the Minimum Improvements; (F) The Developer shall have provided the City with paid invoices of costs of the Minimum Improvements in an amount not less than the sum to be advanced as provided in (2) below; and (G) Execution and recording of a First Mortgage securing the City in the form attached hereto as Exhibit G on Lot 1, Block 1, Lot 1, Block 9 and Lots 1 and 2, Block 10, The Legacy of Apple Valley North, which mortgage shall be released upon certificates of occupancy having been issued for both buildings comprising the Project. (2) $975,000 of the $1,150,000 shall be advanced when the Borrower has satisfied the conditions precedent set forth in (1) above. $87,500 shall be advanced for each building comprising the Project when the Borrower has satisfied the conditions precedent set forth in (1) above and a certificate of occupancy for the applicable building has been issued. ( In the event that an Event of Default occurs under Article IX and it is not cured by the Developer as provided in Article IX, the Developer agrees that upon the demand of the City it shall, within 30 days of such demand, repay the City the $1,150,000, which amount shall be reduced by the amount that the City has reimbursed itself from tax increments from the Tax Increment District in accordance with the interfund loan resolution adopted by the City. 4985341v10 8 Section 3.2 Site Improvements, Minimum Improvements and Legal and Administrative Expenses. (1) The parties agree that the Site Improvements and Minimum Improvements to be constructed by the Developer are essential to the successful completion of the Project. The cost of the constructing of Site Improvements and the Minimum Improvements shall be paid by the Developer. (2) The Authority shall reimburse the Developer for the lesser of $5,350,000 or the cost of the Site Improvements and the Minimum Improvements actually incurred and paid by the Developer the "Reimbursement Amount"), as further provided in Section 3.3 hereof. ( The Developer has deposited with the Authority the sum of $50,000 to reimburse the Authority for its actual out of pocket Legal and Administrative Expenses and any excess will be returned to the Developer. The Legal and Administrative Expenses shall by paid by the Authority from said Developer's deposit. If the Authority determines said deposit to be inadequate, the Developer shall provide additional funds to be escrowed or to pay the Legal and Administrative expenses when due. However, prior to incurring any such expenses in excess of the $50,000 deposit, the Authority will provide the Developer with notice of said excess amount, along with details as to what additional out of pocket expenses the Authority expects to incur. Section 3.3 Reimbursement: TIF Note. The Authority shall reimburse the Developer for a portion of the costs of the Site Improvements and Minimum Improvements through the issuance of the Authority's TIF Note in substantially the form attached to this Agreement as Exhibit B, subject to the following conditions: (1) The TIF Note shall be dated, issued and delivered when the Developer shall have demonstrated in writing to the reasonable satisfaction of the Authority and the City and the City's Building Inspector that the construction of the Minimum Improvements have been substantially completed and that the Developer has incurred and paid all costs of the Minimum Improvements and the Site Improvements, as described in and limited by Section 3.2 and shall have submitted paid invoices for the costs of the Site Improvements and the Minimum Improvements in an aggregate amount of at least $5,350,000. (2) The unpaid principal amount of the TIF Note shall bear simple, non-compounding interest from the date of issuance of the TIF Note, at 5.0% per annum. Interest shall be computed on the basis of a 360 day year consisting of twelve (12) 30-day months. The principal amount of the TIF Note and the interest thereon shall be payable solely from the Tax Increments. ( On each Note Payment Date and subject to the provisions of the TIF Note, the Authority shall pay, against the principal and interest outstanding on the TIF Note, any Tax Increments received by the Authority during the preceding six months. All such payments shall be applied first to accrued interest and then to reduce the principal of the TIF Note. (4) The TIF Note shall be a special and limited obligation of the Authority and not a general obligation of the Authority, and only Tax Increments shall be used to pay the principal of and interest on the TIF Note. If, on any Note Payment Date, the Tax Increments for the payment of the accrued and unpaid interest on the TIF Note are insufficient for such purposes, the 4985341v10 (00 difference shall be carried forward, without interest accruing thereon, and shall be paid if and to the extent that on a future Note Payment Date there are Tax Increments in excess of the amounts needed to pay the accrued interest then due on the TIF Note (5) The Authority's obligation to make payments on the TIF Note on any Note Payment Date or any date thereafter shall be conditioned upon the requirements that: (A) there shall not at that time be an Event of Default that has occurred and is continuing under this Agreement, and (B) this Agreement shall not have been rescinded pursuant to Section 9.2. (6) The TIF 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 TIF Note and the terms of this Section 3.3, the terms of the TIF Note shall govern. The issuance of the TIF Note pursuant and subject to the terms of this Agreement, and the taking by the Authority of such additional actions as bond counsel for the TIF Note may require in connection therewith, are hereby authorized and approved by the Authority. Section 3.4 Compliance with Low and Moderate Income Requirements. (1) The Authority, the City and the Developer understand and agree that the Tax Increment District will constitute a "housing district" under Section 469.174, Subd. 11 of the Tax Increment Act. Accordingly, in compliance with Section 469.1761, Subd. 3 of the Tax Increment Act, the Developer agrees that the Project must satisfy, or be treated as satisfying, the income requirements for a qualified residential rental project as defined in Section 142(d) of the Internal Revenue Code. The parties further agree that no more than 20% of the square footage of the Project (which is the only building receiving assistance from Tax Increments) may consist of commercial, retail, or other nonresidential uses. The Developer must meet the above requirements as follows: (A) At least 20% of the residential units in the Project must be occupied or held for occupancy by persons whose incomes do not exceed 50% of the County median (B) The Galante building shall have a minimum of 15 units occupied or held for occupancy by persons whose incomes do not exceed 50% of the County medium income. The Gabella building shall have a minimum of 25 units occupied or held for occupancy by persons whose incomes do not exceed 50% of the County medium income. (C) The limits described in clauses (A) and (B) must be satisfied through the Termination Date. Income for occupants of units described in clauses (A) and (B) shall be adjusted for family size in accordance with Section 142(d) of the Internal Revenue Code and related regulations. (2) On or before each January 1 and July 1, commencing on July 1, 2015 if construction of the Project commences in 2013 or July 1, 2016 if construction of the Project commences in 2014, the Developer or an agent of the Developer must deliver or cause to be delivered to the Authority, the City and an agent of the Authority and the City, if designated by the Authority and the City, a Compliance Certificate executed by the Developer covering the preceding six (6) months together with written evidence satisfactory to the Authority and the 4985341v10 income; and 10 61 City of compliance with the covenants in this Section. This evidence must include a statement of the household income of each of the qualifying renters, a written determination that each qualifying renter's household income falls within the qualifying limits of this Section (and Section 142(d) of the Internal Revenue Code), and certification that the income documentation is correct and accurate (and that the determination of qualification was made in compliance with Section 142(d) of the Internal Revenue Code). The Authority and the City may review, upon request, all documentation supporting the Developer submissions and statements. In determining compliance with this Section, the Developer must use the County median incomes for the year in which the payment is due on the TIF Note, as promulgated by the Minnesota Housing Finance Agency based on the area median incomes established by the United States Department of Housing and Urban Development. Section 3.5 Acquisition of Park Land. The City expects to acquire the Park Land as described on Exhibit E attached hereto from the Developer for a purchase price of $787,451, the terms and conditions of such acquisition as set forth in the Purchase Agreement to be entered into on or before the execution of this Agreement. 4985341v10 11 (ca. 4985341v10 ARTICLE IV CONSTRUCTION OF MINIMUM IMPROVEMENTS Section 4.1 Construction of Minimum Improvements. The Developer agrees that it will cause the Minimum Improvements on the Development Property to be constructed substantially in conformance with the approved Construction Plans. The Developer agrees that the scope and scale of the Minimum Improvements to be constructed shall not be significantly less than the scope and scale of the Minimum Improvements as detailed and outlined in the Construction Plans. Section 4.2 Construction Plans. The Developer shall cause to be provided to the City Construction Plans, which shall be subject to approval by the City as provided in this Section 4.2. The Construction Plans shall provide for the Minimum Improvements to be constructed on the Development Property, and shall be in conformity with this Agreement, and all applicable state and local laws and regulations. The City shall approve the Construction Plans in writing if: (a) the Construction Plans conform to the terms and conditions of this Agreement; (b) the Construction Plans conform to the terms and conditions of the Development Program; (c) the Construction Plans conform to all applicable federal, state and local laws, ordinances, rules and regulations; (d) the Construction Plans are adequate for purposes of this Agreement to provide for the construction of the Minimum Improvements; and (e) no Event of Default under the terms of this Agreement has occurred; provided, however, that any such approval of the Construction Plans pursuant to this Section 4.2 shall constitute approval for the purposes of this Agreement only and shall not be deemed to constitute approval or waiver by the City with respect to any building, zoning or other ordinances or regulation of the City, 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. The Construction Plans must be rejected in writing by the City within thirty (30) days of submission or shall be deemed to have been approved by the City. If the City rejects the Construction Plans in whole or in part, the Developer shall submit new or corrected Construction Plans within thirty (30) days after receipt by the Developer of written notification of the rejection, accompanied by a written statement of the City specifying the respects in which the Construction Plans submitted by the Developer fail to conform to the requirements of this Section 4.2. The provisions of this Section 4.2 relating to approval, rejection and resubmission of corrected Construction Plans shall continue to apply until the Construction Plans have been approved by the City; provided, however, that in any event the Developer shall submit Construction Plans which are approved prior to commencement of construction of the Minimum Improvements. Approval of the Construction Plans by the City shall not relieve the Developer of any obligation to comply with the terms and provisions of this Agreement, or the provision of applicable federal, state and local laws, ordinances and regulations, nor shall approval of the Construction Plans by the City be deemed to constitute a waiver of any Event of Default. If the Developer desires to make any material change in the Construction Plans after their approval by the City, the Developer shall submit the proposed change to the City for its approval. If the Construction Plans, as modified by the proposed change, conform to the approval criteria 12 listed in this Section 4.2 with respect to the original Construction Plans and do not constitute a material modification to the scope, size or use of the Project or to the site plan therefor, the City shall approve the proposed change. Such change in the Construction Plans shall be deemed approved by the City unless rejected in writing within ten (10) days by the City with a statement of the City's reasons for such rejection. Approval of Construction Plans hereunder is solely for purposes of this Agreement and shall not constitute approval for any other City purpose. Section 4.3 Commencement and Completion of Construction. The Developer shall cause construction of the Minimum Improvements to be commenced on or before April 15, 2014, and, subject to Unavoidable Delays, the Developer shall substantially complete the Minimum Improvements on or before December 31, 2015. All work with respect to the Minimum Improvements to be constructed or provided by the Developer on the Development Property shall be in substantial conformity with the Construction Plans as submitted by the Developer and approved by the City. The Developer agrees that it shall cause designated representatives of the City to be allowed to enter upon the Development Property during the construction of the Minimum Improvements to inspect such construction during normal working hours, on reasonable advance written notice of such inspection. 4985341v10 13 Section 5.1 Insurance. ARTICLE V INSU NCE (1) The Developer will provide and maintain or cause to be maintained at all times during the process of constructing the Minimum Improvements (and, from time to time at the request of the City or the Authority, furnish the requesting party with certificates of insurance on): (C) Worker's compensation insurance, with statutory coverage. (2) Upon completion of construction of the Minimum Improvements and prior to the Termination Date, the Developer shall maintain, or cause to be maintained, at its cost and expense, insurance as follows: (A) Insurance against loss and/or damage to the Minimum Improvements under a policy or policies covering such risks as are ordinarily insured against by similar businesses, including (without limiting the generality of the foregoing) fire, extended coverage, vandalism and malicious mischief, explosion, water damage, demolition cost, debris removal, and collapse in an amount not less than the full insurable replacement value of the Minimum Improvements. No policy of insurance shall be so written that the proceeds thereof will produce less than the minimum coverage required by the preceding sentence, by reason of coinsurance provisions or otherwise, without the prior consent thereto in writing by the City. The term "full insurable replacement value" shall mean the actual replacement cost of the Minimum Improvements (excluding foundation and excavation costs and costs of underground flues, pipes, drains and other uninsurable items) and equipment. All policies evidencing insurance required by this subparagraph (i) with respect to the Minimum Improvements shall be carried in the name of the Developer. The City and the holder of the First Mortgage will be represented on such policies, as their respective interests may appear. 4985341v10 (A) Builder's risk insurance, written on the so called "Builder's Risk - Completed Value Basis" in an amount equal to one hundred percent (100%) of the insurable value of the Minimum Improvements at the date of completion, and with coverage available on the so called "all risk" form of policy; the interest of the Authority and the City shall be protected by naming the Authority and the City as an additional named insured; (B) Commercial general liability insurance (including operations, premises, "X.C.U." where applicable, Products/Completed Operations, Contractual Liability, Broad Form Property Damage and Independent Contractors with limits against bodily injury and property damage of not less than $1,000,000, together with excess umbrella limits of not less than $1,000,000; and 14 CDS (B) Commercial general public liability insurance, including personal injury liability for injuries to persons and/or damages to property, including any injuries resulting from the operation of automobiles or other motorized vehicles on or about the Development Property, in the minimum amount for each year of $1,000,000 (together with excess umbrella limits of not less than $1,000,000). (C) Such other insurance, including worker's compensation insurance respecting all employees of the Developer, in such amount as is customarily carried by like organizations engaged in like activities of comparable size and liability exposure; provided that the Developer may be self-insured with respect to all or any part of its liability for worker's compensation. (3) All insurance required in this Article V shall be taken out and maintained in responsible insurance companies selected by the Developer which are authorized under the laws of the State to assume the risks covered thereby. The Developer shall deposit annually with the Authority and the City a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article V, each policy shall contain a provision that the insurer shall not cancel or materially modify it without giving written notice to the Developer and the Authority and the City at least thirty (30) days before the cancellation or modification becomes effective. As soon as reasonably possible, the Developer shall furnish the City evidence satisfactory to the Authority and the City that the policy has been renewed or replaced by another policy conforming to the provisions of this Article V, or that there is no necessity therefor under the terms hereof. In lieu of separate policies, the Developer may maintain a single policy, or blanket or umbrella policies, or a combination thereof, which provide the total coverage required herein, in which event the Developer shall deposit with the Authority and the City a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. (4) The Developer agrees to notify the Authority and the City immediately in the case of damage exceeding $100,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. Subject to the provisions of any First Mortgage, Net Proceeds of any insurance shall be paid directly to the Developer, and the Developer will forthwith repair, reconstruct and restore the Minimum Improvements to substantially the same or an improved condition or value as they existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction and restoration, the Developer will apply the Net Proceeds of any insurance relating to such damage received by the Developer to the payment or reimbursement of the costs thereof. (5) The Developer shall complete the repair, reconstruction and restoration of the Minimum Improvements, whether or not the Net Proceeds of insurance received by the Developer for such purposes are sufficient, provided that this requirement shall not apply if the City has been reimbursed the $1,150,000 from tax increments from the Tax Increment District or the Developer pays the City the unreimbursed portion of the $1,150,000. Section 5.2 Condemnation. In the event that title to and possession of the Minimum Improvements or any other material part thereof shall be taken in condemnation or by the exercise of the power of eminent domain by any governmental body or other person (except the 4985341v10 15 410 City), so long as the Assessment Agreement shall remain in effect, the Developer shall, with reasonable promptness after such taking, notify the Authority and the City as to the nature and extent of such taking. Section 5.3 Reconstruction or Payment. Upon receipt of any Condemnation Award or property insurance proceeds, the Developer shall use the entire Condemnation Award to reconstruct the Minimum Improvements (or, in the event only a part of Minimum Improvements have been taken, then to reconstruct such part) upon the Development Property or elsewhere within the Tax Increment District; provided, however, that the Developer may instead elect to pay to the City out of the Condemnation Award or property insurance proceeds, if and to the extent any such Condemnation Award or property insurance proceeds are sufficient to reimburse the City and the Authority for all public redevelopment costs incurred by the Authority and the City in connection with the Project. Section 5.4 Relationship to Mortgagee. The provisions of Section 5.1 shall be subject to the subordination, modification and waiver provisions of Section 7.5 but shall otherwise remain in full force and effect with respect to the Developer's obligations to maintain insurance, notify the Authority and the City of any casualty and reconstruct the Minimum Improvements upon such casualty unless provision is made to the satisfaction of the Authority and the City for the reimbursement of all public redevelopment costs incurred by the Authority and the City in connection with the Project. 4985341v10 16 ARTICLE VI ASSESSMENT AGREEMENT AND OTHER COVEN TS Section 6.1 Execution of Assessment Agreement. Simultaneously with the execution of this Agreement, the Developer and the City shall execute the Assessment Agreements, as set forth in Exhibit F, pursuant to the provisions of Minnesota Statutes, Section 469.177, Subdivision 8, specifying the Assessor's Minimum Market Value for the Development Property and the Minimum Improvements for calculation of real property taxes. Specifically, the Developer shall agree (i) to a market value for a portion of the Development Property described therein and building one of the Minimum Improvements which will result in a market value as of January 2, 2016 of not less than $13,830,000 until December 31, 2041; (ii) to a market value for a portion of the Development Property described therein and building two of the Minimum Improvements which will result in a market value as of January 2, 2016 of not less than $21,365,000 such minimum market value at the time applicable is herein referred to as the "Assessor's Minimum Market Value"). Nothing in the Assessment Agreement shall limit the discretion of the Assessor to assign a market value to the property in excess of such Assessor's Minimum Market Value nor prohibit the Developer from seeking through the exercise of legal or administrative remedies a reduction in such market value for property tax purposes, provided however, that the Developer shall not seek a reduction of such market value below the Assessor's Minimum Market Value in any year so long as the Assessment Agreement shall remain in effect. The Assessment Agreement shall remain in effect until December 31, 2041. The Assessment Agreement shall be certified by the Assessor for the County as provided in Minnesota Statutes, Section 469.177, Subdivision 8, upon a finding by the Assessor that the Assessor's Minimum Market Value represents a reasonable estimate based upon the plans and specifications for the Project to be constructed on the Development Property and the market value previously assigned to the Development Property. Pursuant to Minnesota Statutes, Section 469.177, Subdivision 8, the Assessment Agreement shall be filed for record in the office of the county recorder or registrar of titles of Dakota County, and such filing shall constitute notice to any subsequent encumbrancer or purchaser of the Development Property (or part thereof), whether voluntary or involuntary, and such Assessment Agreement shall be binding and enforceable in its entirety against any such subsequent purchaser or encumbrancer, including the holder of any mortgage recorded against the Development Property. Section 6.2 Real Property Taxes. The Developer acknowledges that it is obligated under law to pay all real property taxes payable with respect to the Development Property and pursuant to the provisions of the Agreement until the Developers' obligations have been assumed by any other person with the written consent of the Authority and the City and pursuant to the provisions of this Agreement. The Developer agrees that prior to the Termination Date: (1) It will not seek administrative review or judicial review of the applicability of any tax statute relating to the taxation of real property contained on the Development Property determined by any tax official to be applicable to the Project or the Developer or raise the inapplicability of any such tax statute as a defense in any proceedings, including delinquent tax 4985341v10 17 6a proceedings; provided, however, "tax statute" does not include any local ordinance or resolution levying a tax; (2) It will not seek administrative review or judicial review of the constitutionality of any tax statute relating to the taxation of real property contained on the Development Property determined by any tax official to be applicable to the Project or the Developer or raise the unconstitutionality of any such tax statute as a defense in any proceedings, including delinquent tax proceedings; provided, however, "tax statute" does not include any local ordinance or resolution levying a tax; ( It will not seek any tax deferral or abatement, either presently or prospectively authorized under Minnesota Statutes, Section 469.1813, or any other State or federal law, of the taxation of real property contained in the Development Property between the date of execution of this Agreement and the Termination Date. 4985341v10 18 ARTICLE VII MORTGAGE FINANCING Section 7.1 Limitation Upon Encumbrance of Property. Prior to the completion of the Minimum Improvements, as determined by the Authority and the City, neither the Developer nor any successor in interest to the Development Property or any part thereof shall engage in any financing or any other transaction creating any mortgage or other encumbrance or lien upon the Development Property, other than permitted encumbrances, whether by express agreement or operation of law, or suffer any encumbrance or lien to be made on or attach to the Development Property, other than permitted encumbrances, except: (A) for the purposes of obtaining funds to complete the Site Improvements and the Minimum Improvements (including, but not limited to, labor and materials, equipment, professional fees, real estate taxes, construction interest, organization and other indirect costs of development, costs of constructing the Minimum Improvements, an allowance for contingencies, costs of issuance of any bond or note issue to fund construction or acquisition of the Project, amounts required to fund any bond or note reserves relating to construction or acquisition of the Project, and amounts required to fund any required escrow accounts); and (B) only upon the prior written approval of the Authority and the City in accordance with Sections 7.1 and 7.2. Neither the City nor the Authority shall not approve any Mortgage which does not contain terms that conform to the terms of Section 7.5, except as provided in Section 7.6 of this Agreement. Section 7.2 Approval of Mortgage. The City and the Authority shall approve a Mortgage if: (1) the City and the Authority first receives a copy of all mortgage documents; (2) the mortgage loan, together with other funds available to the Developer, will, in the reasonable judgment of the City and the Authority, be sufficient to construct the Minimum Improvements; (3) neither the City nor the Authority are entitled under Section 9.2 to exercise any of the remedies set forth therein as a result of an Event of Default; (4) the City and the Authority determine that the terms of the Mortgage conform to the terms of Section 7.5. If no action is taken by the City or the Authority to reject the mortgage documents within twenty-one (21) days, they shall be deemed approved. Section 7.3 Notice of Default; Copy to Mortgagee. Whenever the City and the Authority shall deliver any notice or demand to the Developer with respect to any breach or default by the Developer in his obligations or covenants under the Agreement, the City and the 4985341v10 19 rio Authority shall at the same time forward a copy of such notice or demand to each holder of any Mortgage authorized by the Agreement at the last address of such holder shown in the records of the City and the Authority. Section 7.4 Mortgagee's Option to Cure Defaults. After any breach or default referred to in Section 7.3, each such holder of a Mortgage shall (insofar as the rights of the City and the Authority are concerned) have the right, at its option, to cure or remedy such breach or default (or such breach or default to the extent that it relates to the part of the Development Property covered by its mortgage) and to add the cost thereof to the Mortgage debt and the lien of its Mortgage; provided, however, that if the breach or default is with respect to construction of the Minimum Improvements, nothing contained in this Section or any other Section of this Agreement shall be deemed to require such holder, either before or after foreclosure or action in lieu thereof, to undertake or continue the construction or completion of the Minimum Improvements, provided that any such holder shall not devote the Development Property to a use inconsistent with the Development Program or this Agreement without the agreement of the City and the Authority. Section 7.5 Authority's and City's Option to Cure Default on Mortgage. Any Mortgage authorized pursuant to this Article VII, and executed by the Developer or any subordination agreement relating to such mortgage entered into by the City and the Authority with respect to the Development Property or any improvements thereon shall provide that, in the event that the Developer is in default under such Mortgage and the holder of the Mortgage notifies the Developer of such default, the holder of the Mortgage shall also notify the City and the Authority in writing of: (1) the fact of the default; (2) the elements of the default; and (3) the actions required to cure the default. If the default is an "Event of Default" under such Mortgage, which shall entitle such holder thereof to foreclose upon the Development Property, the Minimum Improvements or any portion thereof, and any applicable grace periods have expired, the City and the Authority shall have and each Mortgage executed by the Developer or any subordination agreement relating to such Mortgage entered into by the City and the Authority, with respect to the Development Property or any improvements thereon shall provide that the City and the Authority shall have such an opportunity to cure the "Event of Default" within such reasonable time period as the holder shall deem appropriate. Section 7.6 Subordination and Modification for the Benefit of Mortgagees. (1) In order to facilitate the obtaining of financing for the construction of the Minimum Improvements by the Developer, the City and the Authority agree to subordinate their rights under this Agreement and for the purposes described in Section 7.1(A) of this Agreement, but only provided that the First Mortgage provides that if the holder of the First Mortgage shall foreclose on the Development Property, the improvements thereon, or any portion thereof, or accept a deed to the Development Property in lieu of foreclosure, it shall consent to the 4985341v10 20 '11 Assessor's Minimum Market Value set forth in the Assessment Agreement and provided that such subordination shall not relieve the Developer of its obligation hereunder to restore the Development Property in the event of damage, destruction or condemnation of all or any part of the Development Property. (2) In order to facilitate the obtaining of financing for the construction of the Minimum Improvements, the City and the Authority agree that they shall agree to any reasonable modification of this Article VII or Article V, intercreditor agreement or waiver of its rights hereunder to accommodate the interests of the holder of the First Mortgage, provided, however, that the City and the Authority determine, in their reasonable judgment, that any such modification(s) will adequately protect the legitimate interests and security of the City and the Authority with respect to the Project and the Development Program. The City also agrees to consider such modification(s) of this Article VII with respect to other holders, and to agree to such modifications if the City and the Authority deem such modification(s) necessary and reasonably. (3) The City and the Authority agree that if required by the holder of the First Mortgage as a condition to granting the First Mortgage it will not declare an Event of Default pursuant to Sections 9.1(3) and (4) provided that the provisions of Section 7.6(1) are complied with by the holder of the First Mortgage. 4985341v10 21 4985341v10 ARTICLE VIII PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER; INDEMNIFICATION Section 8.1 Transfer of Substantially All Assets. As security for the obligations of the under Developer nder this Agreement, the Developer represents and agrees that prior to the p g Termination Date, the Developer will not dispose of all or substantially all of its assets g isi the Project to any comprising j Person unless the transferee Person assumes in writing all of the Y obligations of the Developer under this Agreement and the Assessment Agreement. Section 8.2 Prohibition Against Transfer of Property and Assignment of Agreement. The Developer represents and agrees that prior to the Termination Date: ( Except only by of security for, and only for, the purpose of obtaining Y Y wa Y Y financin g necessary to enable the Developer or any successor in interest to the Development Y Property, part thereof, to perform its obligations with respect to the construction of p Y� or any p Minimum 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 g made or created any total or partial sale, assignment, conveyance, or lease (other than in the normal course of business ) , or any trust or power, or 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 p � therein or any agreement or a reement to do any of the same, without the prior written approval of the Authority and the City. (2) The Authority and the City shall be entitled to require, except as otherwise provided in the Agreement, as conditions to any such transfer or assignment that: ( A ) Any proposed transferee shall have the qualifications and financial Y p responsibility, in the reasonable judgment of the Authority and the City, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Developer. (B) Y p Any proposed transferee, by instrument in writing satisfactory to the Authority and the City and in form recordable among the land records, shall, for itself and its successors and assigns, and expressly for the benefit of the Authority and the City, have Y ex ressl assumed all of the obligations of the Developer under this Agreement and expressly bj agreed to be subject to all the conditions and restrictions to which the Developer is g J subjJ ect (unless the Developer agrees to continue to fulfill those obligations, in which case the gp recedin provisions of this Section 8.2(2)(B) shall not apply); provided, however, p that the fact that any transferee of, or any other successor in interest whatsoever to, the Development Property, or any part thereof, shall not, for whatever reason, have assumed p such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by the Authority and the p City) dep rive the Authority and the City of any rights or remedies or controls with respect to the Development Property or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent 22 specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Development Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally or practically, to deprive or limit the Authority and the City of or with respect to any rights or remedies or controls provided in or resulting from this Agreement with respect to the Minimum Improvements that the Authority and the City would have had, had there been no such transfer or change. In the absence of specific written agreement by the Authority and the City to the contrary, no such transfer or approval by the Authority and the City thereof shall be deemed to relieve the Developer, or any other party bound in any way by this Agreement or otherwise with respect to the construction of the Minimum Improvements, from any of its obligations with respect thereto. (C) There shall be submitted to the Authority and the City for review and prior written approval all instruments and other legal documents necessary to demonstrate the qualifications of any successor or assigns to fulfill the obligations under this Agreement and acceptance of the terms herein. Section 8.3 Approvals. Notwithstanding Section 8.1 and 8.2, any approval of a transfer of interest in the Developer, this Agreement, or all or a part of the Development Property required to be given by the Authority and the City under this Article VIII may be denied only in the event that the Authority and the City reasonably determines that the ability of the transferee to perform the Developer's obligations under this Agreement and its obligation, to pay ad valorem real property taxes assessed with respect to the Development Property, or the overall financial security provided to the Authority and the City under the terms of this Agreement, or the likelihood of the Minimum Improvements being successfully constructed and operated and maintained pursuant to the terms of this Agreement, will be materially impaired by the action for which approval is sought. If no action is taken by the City or Authority to reject the transfer of interest contemplated by this Article VIII within twenty-one (21) days such transfer shall be deemed approved. 4985341v10 23 or 4985341v10 ARTICLE IX EVENTS OF DEFAULT Section 9.1 Events of Default Defined. The following shall be "Events of Default" under this Agreement and the term "Event of Default" shall mean whenever it is used in this Agreement any one or more of the following events: (1) Failure by the Developer to timely pay any ad valorem real property taxes assessed and special assessments or other City charges with respect to the Development Property. (2) Failure of the Developer to observe or perform any covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement. (3) The holder of any mortgage on the Development Property or any improvements thereon, or any portion thereof, commences foreclosure proceedings as a result of any default under the applicable mortgage documents. (4) If the Developer shall: (A) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the United States Bankruptcy Act of 1978, as amended or under any similar federal or state law; or (B) make an assignment for the benefit of its creditors; or (C) admit in writing its inability to pay its debts generally as they become due; (D) be adjudicated as a bankrupt or insolvent; or if a petition or answer proposing the adjudication of the Developer as bankrupt or its reorganization under any present or future federal bankruptcy act or any similar federal or state law shall be filed in any court and such petition or answer shall not be discharged or denied within sixty (60) days after the filing thereof; or a receiver, trustee or liquidator of the Developer, or of the Project, or part thereof, shall be appointed in any proceeding brought against the Developer, and shall not be discharged within sixty (60) days after such appointment, or if the Developer, shall consent to or acquiesce in such appointment. (5) If the Developer shall be in default under the Development Agreement for Parkside Village between the Developer and the City or the Purchase Agreement between the Developer and the City relating to the Park Land. Section 9.2 Remedies on Default. Whenever any Event of Default referred to in Section 9.1 occurs and is continuing, the Authority or the City, as specified below, may take any one or more of the following actions after the giving of sixty (60) days' written notice to the Developer, but only if the Event of Default has not been cured within said sixty (60) days: 24 ris (1) The Authority and the City may suspend their performance under this Agreement and the TIF Note until it receives assurances from the Developer, deemed reasonably adequate by both the Authority and the City, that the Developer will cure its default and continue its performance under this Agreement. (2) The Authority and the City may draw upon any guarantee or security provided to the City and the Authority pursuant to any terms of this Agreement to the extent allowed by such guarantee or security. (3) The Authority and the City may cancel and rescind the Agreement and the TIF Note. (4) The Authority and the City may take any action, including legal or administrative action, in law or equity, which may appear necessary or desirable to enforce performance and observance of any obligation, agreement, or covenant of the Developer under this Agreement. Section 9.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority or the City 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 or by statute. 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 9.4 No Implied Waiver. In the event 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. Section 9.5 Agreement to Pay Attorney's Fees and Expenses. Whenever any Event of Default occurs, and the Authority or the City shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement or performance or observance of any obligation or agreement on the part of the Developer herein contained, the Developer agrees that it shall, on demand therefor, pay to the City the reasonable fees of such attorneys and such other expenses so incurred by the Authority or the City. Section 9.6 Indemnification of the Authority and the City. (1) The Developer releases the Authority and the City, its governing body members, officers, agents, including the independent contractors, consultants and legal counsel, servants and employees (collectively the "Indemnified Parties") from, covenants and agrees that the Indemnified Parties shall not be liable for, and agrees to indemnify and hold harmless the Indemnified Parties against any claim, cause of action, suit or liability for 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 Project or on the Development Property. (2) Except for any willful misrepresentation or any willful or reckless misconduct of the Indemnified Parties, the Developer agrees to protect and defend the Indemnified Parties, now 4985341v10 25 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 the actions or inactions of the Developer (or other persons acting on its behalf or under its direction or control) under this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Project; provided, that this indemnification shall not apply to the warranties made or obligations undertaken by the Authority or the City in this Agreement or to any actions undertaken by the Authority or the City which are not contemplated by this Agreement but shall, in any event and without regard to any fault on the part of the Authority or the City, apply to any pecuniary loss or penalty (including interest thereon from the date the loss is incurred or penalty is paid by the Authority or the City at a rate equal to the Prime Rate) as a result of the Project causing the Tax Increment District to not qualify or cease to qualify as a "housing district" under Section 469.174, Subdivision 11, of the Act or to violate limitations as to the use of Tax Increments as set forth in Section 469.176, Subdivision 4d. (3) All covenants, stipulations, promises, agreements and obligations of the Authority and the City contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and the City and not of any governing body member, officer, agent, servant or employee of the Authority and the City, as the case may be. 4985341v10 26 rr (2) in the case of the City is addressed to or delivered personally to the City at: City of Apple Valley, Minnesota Apple Valley Municipal Center 7100 147 Street West Apple Valley, Minnesota 55124-7519 Attn: City Finance Director (3) in the case of the Authority is addressed to or delivered personally to the Authority at: 4985341v10 ARTICLE X ADDITIONAL PROVISIONS Section 10.1 Restrictions on Use. Until termination of this Agreement, the Developer agrees for itself, its successors and assigns and every successor in interest to the Development Property, or any part thereof, that the Developer and such successors and assigns shall operate, or cause the Project to be operated, as a multifamily rental housing facility and shall devote the Development Property to, and in accordance with, the uses specified in this Agreement. Section 10.2 Conflicts of Interest. No member of the governing body or other official of the Authority or the City shall have any financial interest, direct or indirect, in this Agreement, the Development Property or the Project, or any contract, agreement or other transaction contemplated to occur or be undertaken thereunder or with respect thereto, nor shall any such member of the governing body or other official participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. No member, official or employee of the Authority or the City shall be personally liable to the Authority or the City in the event of any default or breach by the Developer or successor or on any obligations under the terms of this Agreement. Section 10.3 Titles of Articles and Sections. Any titles of the several parts, articles and sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 10.4 Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand or other communication under this Agreement by any party to any other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally, and (1) in the case of the Developer is addressed to or delivered personally to: IMH Special Asset NT 175-AVN, LLC 7001 N. Scottsdale Road, #2050 Scottsdale, AZ 85253 Attn: John McVey 27 or at such other address with respect to any such party as that party may, from time to time, designate in writing and forward to the other, as provided in this Section. Section 10.5 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 10.6 Law Governing. This Agreement will be governed and construed in accordance with the laws of the State. Section 10.7 Expiration. This Agreement shall expire on the Termination Date. Section 10.8 Provisions Surviving Rescission or Expiration. Sections 9.5 and 9.6 shall survive any rescission, termination or expiration of this Agreement with respect to or arising out of any event, occurrence or circumstance existing prior to the date thereof. Section 10.9 Assignment. This Agreement may be assigned only with the consent of both the Authority and the City which such consents shall not be unreasonably withheld. The TIF Note may only be assigned pursuant to the terms of the TIF Note. 4985341v10 Apple Valley Economic Development Authority, Minnesota Apple Valley Municipal Center 7100 147 Street West Apple Valley, Minnesota 55124-7519 28 IN WITNESS WHEREOF, the Authority and the City have caused this Agreement to be duly executed in its name and on its behalf and its seal to be hereunto duly affixed, and the Developer has caused this Agreement to be duly executed on its behalf, on or as of the date first above written. STATE OF MINNESOTA ) ) SS COUNTY OF The foregoing instrument was acknowledged before me this day of 20, by , the Mayor and the City Administrator, respectively of the City of Apple Valley, Minnesota. This is a signature page to the Development Assistance Agreement by and among the Apple Valley Economic Development Authority, the City of Apple Valley and IMH Special Asset NT 175-AVN, LLC. 4985341v10 Notary Public S-1 CITY OF APPLE VALLEY, MINNESOTA By Its Mayor By Its City Administrator 80 4985341v10 APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY, MINNESOTA By Its President By Its Secretary STATE OF MINNESOTA ) )SS COUNTY OF ) The foregoing instrument was acknowledged before me this day of 20 b y , the President and , the Secretary, respectively of the Apple Valley Economic Development Authority, Minnesota. Notary Public This is a signature page to the Development Assistance Agreement by and among the Apple Valle y Development Develo ment Authority, the City of Apple Valley and IMH Special Asset NT 175 -AVN, LLC. S -2 STATE OF MINNESOTA ) )SS COUNTY OF ) The foregoing instrument was acknowledged before me this day of 20 b y , the of IMH Special Asset NT 175 -AVN, LLC. 4985341v10 IMH SPECIAL ASSET NT 175 -AVN, LLC By Its Notary Public This is a page signature a e to the Development Assistance Agreement by and among the Apple g Valle y Economic Development Authority, the City of Apple Valley and IMH Special Asset NT 175 -AVN, LLC. S -3 4985341v10 EXHIBIT A DESCRIPTION OF DEVELOPMENT PROPERTY Lot 1 Block 1 and Lot 1, Block 2, Parkside Village, Dakota County, Minnesota. All in the Legacy of Apple Valley North, Dakota County, Minnesota. A -1 No. R -1 4985341v10 EXHIBIT B FO OF TIF NOTE UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF DAKOTA APPLE VALLEY ECONOMIC DEVELOPMENT AUTHORITY TAX INCREMENT REVENUE NOTE (PARKSIDE VILLAGE PROJECT) The Apple Valley Economic Development Authority, Minnesota (the "Authority "), hereb y acknowledges itself to be indebted and, for value received, hereby promises to pay the amounts hereinafter described (the "Payment Amounts ") to IMH Special Asset NT 175 -AVN, LLC, or its g (the assi ns d re istere "Re istered Owner "), but only in the manner, at the times, g g from the sources of revenue, and to the extent hereinafter provided. The principal amount of this Note shall equal from time to time the principal amount stated above, as reduced to the extent that such principal installments shall have been paid in whole or in art pursuant to the terms hereof; provided that the sum of the principal amount p p listed above shall in no event exceed $5,350,000 as provided in that certain Development Assistance Agreement, dated as of , 20 , as the same may be amended from time to time ( the "Development Assistance Agreement "), by and between the Authority, the Cit y . of Apple Valley, Minnesota, and IMH Special Asset NT 175 -AVN, LLC The unpaid principal . rind al amount of the Note shall bear simple, non - compounding interest from the date of issuance of the Note at 5.0% per annum. Interest shall be computed on the basis of a 360 day year consisting of twelve (12) 30-day months. The amounts due under this Note shall be p ayable on August 1, 20 , and on each August 1 and February 1 thereafter to and including February 1, 20 (as determined in g accordance with the Development Assistance Agreement), or, if the first should not be a Business Day (as defined in the Development Assistance Agreement) the next succeeding Business Day " ment Dates ") . On each Payment Date the Authority shall pay by check y"Payment or draft mailed to the person whom was the Registered Owner of this Note at the close of the last business day preceding such Payment Date an amount equal to the sum of the Tax Increments (hereinafler defined) received by the Authority during the six month period preceding such Payment Date. All payments made by the Authority under this Note shall first be applied to accrued interest and then to principal. The Payment Amounts due hereon shall be payable solely from 70% of the tax increments (the "Tax Increments ") from the Development Property (as defined in the Development Assistance Agreement) within the Authority's Tax Increment Financing District Tax Increment Financing District No. 15 (the "Tax Increment District ") within its Master Development District which are paid to the Authority and which the Authority is entitled to B -1 retain pursuant to the provisions of Minnesota Statutes, Sections 469.174 through 469.1794, as the same may be amended or supplemented from time to time (the "Tax Increment Act"). This Note shall terminate and be of no further force and effect following: (i) the last Payment Date defined above, (ii) on any date upon which the Authority shall have terminated the Development Assistance Agreement under Section 9.2(3) thereof; (iii) on the date the Tax Increment District is terminated; or (iv) on the date that all principal and interest payable hereunder shall have been paid in full, whichever occurs earliest. The Authority makes no representation or covenant, expressed or implied, that the Tax Increments will be sufficient to pay, in whole or in part, the amounts which are or may become due and payable hereunder. The Authority's payment obligations hereunder shall be further conditioned on the fact that no Event of Default under the Development Assistance Agreement shall have occurred and be continuing at the time payment is due hereunder, but subject to the terms and conditions under the Development Assistance Agreement such unpaid amounts may become payable, without interest accruing thereon in the meantime, if said Event of Default shall thereafter have been timely cured; and, further, if pursuant to the occurrence of an Event of Default under the Development Assistance Agreement the Authority elects to cancel and rescind the Development Assistance Agreement, the Authority shall have no further debt or obligation under this Note whatsoever. Reference is hereby made to all of the provisions of the Development Assistance Agreement, and said provisions are hereby incorporated into this Note as though set out in full herein. This Note is a special, limited revenue obligation and not a general obligation of the Authority and is payable by the Authority only from the sources and subject to the qualifications stated or referenced herein. This Note is not a general obligation of the Authority and neither the full faith and credit nor the taxing powers of the Authority are pledged to the payment of the principal of this Note and no property or other asset of the Authority, save and except the above- referenced Tax Increments, is or shall be a source of payment of the Authority's obligations hereunder. This Note is issued by the Authority in aid of financing a project pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including the Tax Increment Act. This Note may be assigned only with the consent of the Authority which consents shall not be unreasonably withheld. In order to assign the Note, the assignee shall surrender the same to the Authority 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 Authority. Each permitted assignee shall take this Note subject to the foregoing conditions and subject to all provisions stated or referenced herein. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by 4985341v10 B-2 law; and that this Note, together with all other indebtedness of the Authority outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the Authority to exceed any constitutional, statutory or charter limitation thereon. IN WITNESS WHEREOF, Apple Valley Economic Development Authority, Minnesota, by its Board of Commissioners, has caused this Note to be executed by the manual signatures of its President and Secretary and has caused this Note to be dated as of , 20_. President Secretary 4985341v10 B-3 It is hereby certified that the foregoing Note, as originally issued on 20, was on said date registered in the name of IMH Special Asset NT 175-AVN, LLC, and that, at the request of the Registered Owner of this Note, the undersigned has this day registered 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. NAME AND ADDRESS OF DATE OF SIGNATURE OF REGISTERED OWNERS REGISTRATION EDA SECRETARY IMH Special Asset NT 175-AVN, LLC 7001 N. Scottsdale Road, #2050 Scottsdale, AZ 58253 4985341v10 CERTIFICATION OF REGIST B-4 , 20 20 , 20 , 20 TION EXHIBIT C SITE IMPROVEMENTS AND MINIMUM IMPROVEMENTS Landscaping, including irrigation Foundations and Footings Grading/earthwork Engineering Survey Environmental Testing Soil Borings Site Preparation Onsite Utilities Storm Water/Ponding Outdoor Lighting Onsite Road, Curb, Gutter, Driveway, Sidewalk and Streetscape Improvements Underground Parking Costs of the Minimum Improvements 4985341v10 C-1 The undersigned IMH Special Asset NT 175-AVN, LLC, does hereby certify that as of the date of this Certificate not less than 20% of the residential units in the Project located at in Apple Valley, Minnesota (the "Project") are occupied or held for occupancy by persons whose income is 50% or less of the Dakota County median income. 4985341v10 EXHIBIT D COMPLIANCE CERTIFICATE units in the Galante building are occupied or held for occupancy for persons whose income is 50% or less of the Dakota County median income. units in the Gabe lla building are occupied by persons whose income is 50% or less of the Dakota County median income. Dated this day of , 20 . IMH SPECIAL ASSET NT 175-AVN, LLC By Its [Attach household income verification as required by Section 3.4 of the Development Assistance Agreement by and among the Apple Valley Economic Development Authority, the City of Apple Valley, and IMH Special Asset NT 175-AVN, LLC.] D-1 81 4985341v10 EXHIBIT E PARK LAND Real property description or parcel identification number Lot 1, Block 6 Lot 2, Block 6 Lot 1, Block 5 Lot 1, Block 4 01- 75900 -06 -010 01- 75900 -06 -020 01- 75900 -05 -010 01- 75900 -01 -010 E -1 qo THIS AGREEMENT, dated as of this day of , 20 , is by and among the City of Apple Valley, Minnesota the "City") and IMH Special Asset NT 175-AVN, LLC, an Arizona limited liability company (the "Developer"). WHEREAS, on or before the date hereof the City and Developer have entered into a Development Assistance Agreement dated as of , 20 (the "Agreement") regarding certain real property located in the City (the "Development Property") which property is legally described on Exhibit A attached hereto and made a part hereof. WHEREAS, it is contemplated that pursuant to said Agreement, the Developer will construct a 126 unit market rate apartment multifamily facility (the "Project") on the Development Property in accordance with plans and specifications approved by the City. WHEREAS, the City and Developer desire to establish a minimum market value for the Development Property and the improvements constructed or to be constructed thereon, pursuant to Minnesota Statutes, Section 469.177, Subdivision 8. WHEREAS, the Developer has acquired the Development Property. WHEREAS, the City and the Assessor for Dakota County, Minnesota (the "Assessor") have reviewed construction plans for the Project. NOW THEREFORE, the parties to this Agreement, in consideration of the promises, covenants and agreements made by each to the other, do hereby agree as follows: 1. As of January 2, 2016 and until the termination of this Agreement the minimum market value which shall be assessed for the Project shall be not less than $13,830,000. 2. The minimum market value herein established shall be of no further force and effect and this Agreement shall terminate on (i) the earlier of December 31, 2041 or (ii) the date on which the Tax Increment District expires or is otherwise terminated. 3. This Agreement shall be promptly recorded by the Developer and hereby made a part hereof with the County Recorder of Dakota County, Minnesota. 4. The Assessor has reviewed the plans and specifications for the improvements and the market value previously assigned to the land upon which the improvements are to be constructed, and that the "minimum market value" as set forth above is reasonable. 5. Neither the preamble nor provisions of this Agreement are intended to, or shall they be construed as, modifying the terms of the Agreement between the City and the Developer. 4985341v10 FO EXHIBIT F S OF ASSESSMENT AGREEMENTS WITNESSETH F-1 6. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties. IN WITNESS WHEREOF, the City and the Developer have caused this Agreement to be executed in their names and on their behalf all as of the date set forth above. (SEAL) STATE OF MINNESOTA ) ) ss COUNTY OF DAKOTA ) 4985341v10 CITY OF APPLE VALLEY, MINNESOTA By Its Mayor By Its City Administrator The foregoing instrument was acknowledged before me this day of , 20 , by Mary Hamann-Roland, the Mayor and Tom Lawell, the City Administrator of the City of Apple Valley on behalf of said City. Notary Public Signature page for Assessment Agreement by and between the City of Apple Valley, Minnesota and IMH Special Asset NT 175-AVN, LLC. F-2 STATE OF MINNESOTA ) ) ss. COUNTY OF IMH SPECIAL ASSET NT 175-AVN, LLC The foregoing instrument was acknowledged before me this day of 20 , by , the of IMH Special Asset NT 175-AVN, LLC, an Arizona limited liability company, on behalf of said corporation. This Instrument Drafted By: Briggs and Morgan, P.A. 2200 First National Bank Building St. Paul, MN 55101 4985341v10 By Its Notary Public Signature page for Assessment Agreement by and between the City of Apple Valley, Minnesota and IMH Special Asset NT 175-AVN, LLC. F-3 Project Name: Galante Building Description: Lot 1, Block 2 4985341v10 EXHIBIT A TO ASSESSMENT AGREEMENT LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY All in Parkside Village, Dakota County, Minnesota A-1 94. CERTIFICATION BY COUNTY ASSESSOR The undersigned, having reviewed the Assessment Agreement dated as of 2012 between the City of Apple Valley and IMH Special Asset NT 175-AVN, LLC, an Arizona limited liability company; the plans and specifications for the Project, as defined in the Assessment Agreement; and the market value currently assigned to land upon which the improvements are to be constructed and being of the opinion that the minimum market value contained in the Assessment Agreement appears reasonable, hereby certifies as follows: The undersigned Assessor, being legally responsible for the assessment of the property described as: Commonly known name of property: Legal Description of property: hereby certifies that the market value of assigned to such land and improvements is reasonable. Nothing herein shall limit the discretion of the County Assessor or any other public official or body having the duty to determine the market value of the Development Property for ad valorem tax purposes, to assign to the Development Property a market value in excess of the minimum market value specified above and in this Agreement. STATE OF MINNESOTA ) ) ss. COUNTY OF DAKOTA ) 4985341v10 County Assessor for Dakota County This instrument was acknowledged before me on 20 , by , the County Assessor of Dakota County. Notary Public F-4 CONSENT TO ASSESSMENT AGREEMENT The of (the "Bank"), does hereby consent to all terms, conditions and provisions of the foregoing Assessment Agreement and agrees that, in the event it purchases the Development Property at a foreclosure sale or acquires the Development Property through a deed in lieu of foreclosure or otherwise in satisfaction of the indebtedness owed by the Developer, it and its respective successors and assigns, shall be bound by all terms and conditions of the Assessment Agreement, including but not limited to the provision which requires that the minimum market value of the Development Property shall be $ as of January 2, and subsequent assessments through the January 2, assessment. IN WITNESS WHEREOF, we have caused this Consent to Assessment Agreement to be executed in its name and on its behalf as of this day of , 20_. STATE OF MINNESOTA ) ) ss. COUNTY OF by 4985341v10 By Its This instrument was acknowledged before me this day of , 20 , , the of a , on behalf of the Notary Public F-5 ci ASSESSMENT AGREEMENT THIS AGREEMENT, dated as of this day of , 20 , is by and among the City of Apple Valley, Minnesota (the "City") and IMH Special Asset NT 175-AVN, LLC, an Arizona limited liability company (the "Developer"). WITNESSETH WHEREAS, on or before the date hereof the City and Developer have entered into a Development Assistance Agreement dated as of , 20 (the "Agreement") regarding certain real property located in the City (the "Development Property") which property is legally described on Exhibit A attached hereto and made a part hereof. WHEREAS, it is contemplated that pursuant to said Agreement, the Developer will construct a 196 unit market rate apartment multifamily facility (the "Project") on the Development Property in accordance with plans and specifications approved by the City. WHEREAS, the City and Developer desire to establish a minimum market value for the Development Property and the improvements constructed or to be constructed thereon, pursuant to Minnesota Statutes, Section 469.177, Subdivision 8. WHEREAS, the Developer has acquired the Development Property. WHEREAS, the City and the Assessor for Dakota County, Minnesota (the "Assessor") have reviewed construction plans for the Project. NOW THEREFORE, the parties to this Agreement, in consideration of the promises, covenants and agreements made by each to the other, do hereby agree as follows: 1. As of January 2, 2016 and until the termination of this Agreement the minimum market value which shall be assessed for the Project shall be not less than $21,365,000. 2. The minimum market value herein established shall be of no further force and effect and this Agreement shall terminate on (i) the earlier of December 31, 2041 or (ii) the date on which the Tax Increment District expires or is otherwise terminated. 3. This Agreement shall be promptly recorded by the Developer and hereby made a part hereof with the County Recorder of Dakota County, Minnesota. 4. The Assessor has reviewed the plans and specifications for the improvements and the market value previously assigned to the land upon which the improvements are to be constructed, and that the "minimum market value" as set forth above is reasonable. 5. Neither the preamble nor provisions of this Agreement are intended to, or shall they be construed as, modifying the terms of the Agreement between the City and the Developer. 4985341v10 F-6 6. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties. IN WITNESS WHEREOF, the City and the Developer have caused this Agreement to be executed in their names and on their behalf all as of the date set forth above. (SEAL) STATE OF MINNESOTA ) ) ss COUNTY OF DAKOTA ) 4985341v10 CITY OF APPLE VALLEY, MINNESOTA By Its Mayor By Its City Administrator The foregoing instrument was acknowledged before me this day of , 20 , by Mary Hamann-Roland, the Mayor and Tom Lawell, the City Administrator of the City of Apple Valley on behalf of said City. Notary Public Signature page for Assessment Agreement by and between the City of Apple Valley, Minnesota and IMH Special Asset NT 175-AVN, LLC. F-7 STATE OF MINNESOTA ) ) ss. COUNTY OF This Instrument Drafted By: Briggs and Morgan, P.A. 2200 First National Bank Building St. Paul, MN 55101 4985341v10 IMH SPECIAL ASSET NT 175-AVN, LLC By Its The foregoing instrument was acknowledged before me this day of 20 , by , the of IMH Special Asset NT 175-AVN, LLC, an Arizona limited liability company, on behalf of said corporation. Notary Public Signature page for Assessment Agreement by and between the City of Apple Valley, Minnesota and IMH Special Asset NT 175-AVN, LLC. F-8 EXHIBIT A TO ASSESSMENT AGREEMENT LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY Project Name: Gabe lla Building Description: Lot 1, Block 1 All in Parkside Village, Dakota County, Minnesota 4985341v10 A-1 100 CERTIFICATION BY COUNTY ASSESSOR The undersigned, having reviewed the Assessment Agreement dated as of 2012 between the City of Apple Valley and IMH Special Asset NT 175-AVN, LLC, an Arizona limited liability company; the plans and specifications for the Project, as defined in the Assessment Agreement; and the market value currently assigned to land upon which the improvements are to be constructed and being of the opinion that the minimum market value contained in the Assessment Agreement appears reasonable, hereby certifies as follows: The undersigned Assessor, being legally responsible for the assessment of the property described as: Commonly known name of property: Legal Description of property: hereby certifies that the market value of assigned to such land and improvements is reasonable. Nothing herein shall limit the discretion of the County Assessor or any other public official or body having the duty to determine the market value of the Development Property for ad valorem tax purposes, to assign to the Development Property a market value in excess of the minimum market value specified above and in this Agreement. STATE OF MINNESOTA ) ) ss. COUNTY OF DAKOTA ) 4985341v10 County Assessor for Dakota County This instrument was acknowledged before me on , 20 , by , the County Assessor of Dakota County. Notary Public F-9 10 STATE OF MINNESOTA ) ) ss. COUNTY OF The , of (the "Bank"), does hereby consent to all terms, conditions and provisions of the foregoing Assessment Agreement and agrees that, in the event it purchases the Development Property at a foreclosure sale or acquires the Development Property through a deed in lieu of foreclosure or otherwise in satisfaction of the indebtedness owed by the Developer, it and its respective successors and assigns, shall be bound by all terms and conditions of the Assessment Agreement, including but not limited to the provision which requires that the minimum market value of the Development Property shall be $ as of January 2, and subsequent assessments through the January 2, assessment. IN WITNESS WHEREOF, we have caused this Consent to Assessment Agreement to be executed in its name and on its behalf as of this day of , 20 . by 4985341v10 CONSENT TO ASSESSMENT AGREEMENT By Its This instrument was acknowledged before me this day of , 20 , , the of a , on behalf of the Notary Public F-10 to 2- MORTGAGE by Business Entity MORTGAGE REGISTRY TAX DUE: $2,242.50 Borrower covenants with Lender as follows: 4985341v10 FO EXHIBIT G OF MORTGAGE (Top 3 inches reserved for recording data) G-1 DATE: , 2013 THIS MORTGAGE ("Mortgage") is given by IMH Special Asset NT 175-AVN, LLC, a limited liability company under the laws of Arizona, as mortgagor ("Borrower"), to the City of Apple Valley, a Minnesota municipal corporation, as mortgagee ("Lender"). In consideration of the receipt of Nine Hundred Seventy-Five Thousand and No/100 Dollars ($975,000.00) (the "Indebtedness") from Lender, Borrower hereby mortgages, with power of sale, the real property in Dakota County, Minnesota, legally described as follows: Lot 1, Block 1, Lot 1, Block 9, and Lots 1 and 2, Block 10, all in The Legacy of Apple Valley North, according to the recorded plat thereof. Check here if all or part of the described real property is Registered (Torrens) fl together with all hereditaments and appurtenances belonging thereto (the "Property"), subject to the following exceptions: (a) Covenants, conditions, restrictions (without effective forfeiture provisions) and declarations of record, if any; (b) Reservations of minerals or mineral rights by the State of Minnesota, if any; (c) Utility and drainage easements which do not interfere with present improvements; (d) Applicable laws, ordinances, and regulations; and (e) The lien of real estate taxes and installments of special assessments not yet due and payable. /03 1. Repayment of Indebtedness. If Borrower (a) either (i) substantially completes the Minimum Improvements to the Development Property, as defined in and in accordance with the terms of the Development Assistance Agreement dated , 2013, by and among Apple Valley Economic Development Authority, a public body corporate and politic and a political subdivision of the State of Minnesota (the "Authority"), Lender and Borrower and all amendments thereto (the "Development Assistance Agreement") as evidenced by the issuance of certificates of occupancy for the Minimum Improvements, or (ii) pays the Indebtedness to Lender ; (b) pays all interest on the Indebtedness that may come due as provided in the Development Assistance Agreement; (c) repays to Lender, at the times and with interest as specified, all sums advanced in protecting the lien of this Mortgage; and (d) keeps and performs all the covenants and agreements contained herein, then Borrower's obligations under this Mortgage will be satisfied, and Lender will deliver an executed satisfaction of this Mortgage to Borrower. It is Borrower's responsibility to record any satisfaction of this Mortgage at Borrower's expense. 2. Statutory Covenants. Borrower makes and includes in this Mortgage the following covenants and provisions set forth in Minn. Stat. 507.15, and the relevant statutory covenant equivalents contained therein are hereby incorporated by reference: (a) To warrant the title to the Property; (b) To pay the Indebtedness as herein provided; (c) To pay all taxes; (d) That the Property shall be kept in repair and no waste shall be committed; and (e) To pay principal and interest on prior mortgages (if any). 3. Additional Representations, Covenants and Agreements of Borrower. Borrower makes the following additional representations, covenants and agreements with Lender: (a) Borrower hereby restates and re-affirms all representations, warranties and covenants of Borrower contained in the Development Assistance Agreement. (b) Borrower acknowledges and agrees that neither Lender nor the Authority is in default under the Development Assistance Agreement. (c) If all or any part of the Property is taken in condemnation proceedings instituted under power of eminent domain or is conveyed in lieu thereof under threat of condemnation, the money paid pursuant to such condemnation or conveyance in lieu thereof shall be applied to payment of the amounts due by Borrower to Lender under the Development Assistance Agreement, even if such amounts are not then due to be paid. Such amounts first will be applied to unpaid accrued interest, if any, and next to the principal to be paid as provided in the Development Assistance Agreement in the inverse order of their maturity. Such payment(s) will not postpone the due date of the installments to be paid pursuant to the Development Assistance Agreement or change the amount of such installments. The balance of the money paid pursuant to such condemnation or conveyance in lieu thereof, if any, will be the property of Borrower. (d) Borrower will pay any other expenses and attorneys' fees incurred by Lender pursuant to the Development Assistance Agreement or as reasonably required for the protection of the lien of this Mortgage. 4985341v10 G-2 /04 4. Payment by Lender. If Borrower fails to pay any amounts to be paid hereunder to Lender or any third parties, Lender may make such payments. The sums so paid shall be additional Indebtedness, bear interest from the date of such payment at the rate of eight percent (8%) per annum, be an additional lien upon the Property, and be immediately due and payable upon written demand. This Mortgage secures the repayment of such advances. 5. Default. In case of default (i) in the payment of sums to be paid under the Development Assistance Agreement or this Mortgage, when the same becomes due, (ii) in any of the covenants set forth in this Mortgage, (iii) under the terms of the Development Assistance Agreement, or (iv) under any addendum attached to this Mortgage, Lender may declare the unpaid balance of the Indebtedness and the interest accrued thereon, together with all sums advanced hereunder, immediately due and payable without notice, and Borrower hereby authorizes and empowers Lender to foreclose this Mortgage by judicial proceedings or to sell the Property at public auction and convey the same in fee simple in accordance with Minn. Stat. Ch. 580, and out of the monies arising from such sale, to retain all sums secured hereby, with interest and all legal costs and charges of such foreclosure and the maximum attorneys' fees permitted by law, which costs, charges, and fees Borrower agrees to pay. 6. Transfer Restrictions. Borrower may not sell, assign, or otherwise transfer all or any part of Borrower's interest in the Property, and a controlling interest in Borrower may not be transferred without the written consent of Lender, which consent may be granted or withheld in the sole discretion of Lender. 7. Hazardous Substances. Borrower shall not bring, store, generate, or treat hazardous substances, toxic wastes, or petroleum products on the Property. Borrower hereby indemnifies, defends, and holds Lender harmless from any and all claims, demands, actions, causes of action, liabilities or rights which may be asserted against Lender with respect to such substances, wastes, or products. This obligation shall survive the satisfaction or foreclosure of this Mortgage. 8. Governing Law; Severability. This Mortgage shall be governed by the laws of Minnesota. In the event that any provision or clause of this Mortgage or the Development Assistance Agreement conflicts with applicable law, such conflict shall not affect other provisions of this Mortgage or the Development Assistance Agreement which can be given effect without the conflicting provision. 9. Binding Effect. Terms of this Mortgage will run with the Property and bind the parties hereto and their successors in interest. 4985341v10 [Signature page follows] G-3 105' STATE OF ) ss. COUNTY OF THIS INSTRUMENT WAS DRAFTED BY: (Stamp) DOUGHERTY, MOLENDA, SOLFEST HILLS & BAUER P.A. 7300 West 147th Street, Suite 600 Apple Valley, Minnesota 55124 (952) 432-3136 (MDK: 66-32849) 4985341v10 G-4 Borrower IMH Special Asset NT 175-AVN, LLC By: Its: On this day of , 2013, before me, a Notary Public within and for said County, personally appeared to me personally known, who being by me duly sworn, did say that he/she is the of IMH Special Asset NT 175-AVN, LLC, an Arizona limited liability company, named in the instrument, and that said instrument was signed on behalf of said limited liability company by authority of the limited liability company and acknowledged said instrument to be the free act and deed of the limited liability company. (signature of notarial officer) Title (and Rank): My commission expires: (month/day/year) IC*