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Res 2018- 91 Execution of Contract for Private Devlp Mendota Heights Apartments-Michael DevelopmentEXTRACT OF MINUTES OF MEETING OF THE CITY COUNCIL OF THE CITY OF MENDOTA HEIGHTS, MINNESOTA HELD: November 20, 2018 Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Mendota Heights, Dakota County, Minnesota, was duly called and held at the City Hall in said City on November 20, 2018, at 7:00 p.m. The following members were present: Mayor Garlock, Councilors Duggan, Miller, Paper, Petschel. and the following were absent: None Member Paper introduced the following resolution and moved its adoption: CITY OF MENDOTA HEIGHTS DAKOTA COUNTY, MINNESOTA RESOLUTION 2018-91 RESOLUTION AUTHORIZING EXECUTION OF A CONTRACT FOR PRIVATE DEVELOPMENT (MENDOTA HEIGHTS APARTMENTS — MICHAEL DEVELOPMENT) WHEREAS, The Heights Of Mendota North, LLC (the "Developer") has requested the City of Mendota Heights, Minnesota (the "City") to assist with the financing of certain costs incurred in connection with the construction of a 62 -unit market -rate apartment building to be constructed by the Developer (the "Project"); and WHEREAS, the Developer and the City have determined to enter into a Contract for Private Development providing for the City's tax increment financing assistance for the Project (the "Contract"). NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Mendota Heights, Minnesota, as follows: 1. The City Council hereby approves the Contract in substantially the form submitted, and the Mayor and City Administrator are hereby authorized and directed to execute the Contract on behalf of the City. 2. The approval hereby given to the Contract 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 Contract. The execution of the Contract by the appropriate officer or officers of the City shall be conclusive evidence of the approval of the Contract in accordance with the terms hereof. Adopted by the City Council of the City of Mendota Heights this 20th day of November, 2018. CITY COUNCIL CITY OF MENDOTA HEIGHTS Neil Garlock, Mayor ATTEST: 6, - (--� Lorri S ith, City Clerk STATE OF MINNESOTA COUNTY OF DAKOTA CITY OF MENDOTA HEIGHTS I, Mark McNeill, the undersigned, being the duly qualified and acting City Administrator of the City Council of the City of Mendota Heights, 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 City Council City 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 Contract for Private Development. WITNESS my hand as such City Administrator of the City Council of the City of Mendota Heights, Minnesota this 20th day of November, 2018. Mark McNeill City Administrator Pj CONTRACT FOR PRIVATE DEVELOPMENT BETWEEN THE CITY OF MENDOTA HEIGHTS, MINNESOTA AND THE HEIGHTS OF MENDOTA NORTH, LLC Dated: November 20, 2018 This document was drafted by: BRIGGS AND MORGAN (MLI) Professional Association 2200 IDS Center 80 South 8t' Street Minneapolis, MN 55402 11193287v1 CONTRACT FOR PRIVATE DEVELOPMENT THIS CONTRACT FOR PRIVATE DEVELOPMENT (the "Agreement") is made as of the 20th day of November, 2018, by and between the CITY OF MENDOTA HEIGHTS, MINNESOTA, a municipal corporation and political subdivision organized and existing under the laws of the State of Minnesota (the "City"), and THE HEIGHTS OF MENDOTA NORTH, LLC, a Minnesota limited liability company (the "Developer"). RECITALS WHEREAS, the City has determined that there is a need to promote and secure (i) the prompt development of certain property located within the City, which property is not now in productive use or in its highest and best use, in a manner consistent with the City's Comprehensive Plan, and (ii) additional housing opportunities within the City, thereby improving living standards, and in connection therewith has previously created Municipal Development District No. 1 (the "Development District"), pursuant to Minnesota Statutes, Sections 469.124 through 469.133, as amended (the "Development District Act"), and has also adopted a Development Program for the Development District (the "Development Program"); and WHEREAS, in furtherance of the goals and objectives of the Development Program, the City has created Tax Increment Financing (Redevelopment) District No. 2 (the "TIF District"), pursuant to Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the "TIF Act"), and has adopted a Tax Increment Financing Plan therefor (the "TIF Plan"), which provides for the use of tax increment financing in connection with certain development within the Development District and the TIF District; and WHEREAS, in order to achieve the objectives of the Development Program and the TIF Plan, and particularly to make certain land in the Development District and the TIF District available for development by private enterprise in conformance with the Development Program and the TIF Plan, the City has determined to assist the Developer with the financing of certain costs of the following project (the "Project"): the acquisition of certain real property in the City as described in EXHIBIT A of this Agreement (the "Development Property"), and the development of a market -rate apartment building, to be constructed on the Property, totaling approximately 62 units with surface and underground parking (the "Minimum Improvements"), through the issuance of a Tax Increment Financing Revenue Note, in the total estimated aggregate principal amount of $700,000 (the "TIF Note"), as more particularly set forth in this Agreement; and WHEREAS, the City believes that the development and construction of the Project and fulfillment of this Agreement are vital and are in the best interests of the City, as well as the health, safety and welfare of residents of the City, and in accordance with the public purposes and provisions of applicable state and local laws and requirements under which the Project has been undertaken and is being assisted; and WHEREAS, the requirements of the Business Subsidy Law, Minnesota Statutes, Section 116J.993 through I I6J.995, do not apply to this Agreement pursuant to an exemption for housing. 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: 11193287v1 ARTICLE 1 DEFINITIONS 1.1 Definitions. The following terms shall have the meanings given in this Agreement, unless a different meaning clearly appears from the context: "Administrative Costs" is as defined in Section 2.2(11) of this Agreement. "Administrative Expenses" means expenses incurred by the City with respect to the Project and the TIF Plan, the TIF Note, or this Agreement, as defined in Section 469.174, Subdivision 14 of the TIF Act, and in amounts equal up to ten percent (10%) of the Tax Increment received by the City. "Affiliate" means any person directly or indirectly controlling or controlled by or under direct or indirect common control with a person and any purchaser or all or substantially all of the assets of such person. For this purpose, "control" means the power to direct management and policies, directly or indirectly, whether through ownership of voting securities, by contract or otherwise, and the terms "controlling" and controlled" have correlative meanings. "Agreement" means this Contract for Private Development, as the same may be from time to time modified, amended or supplemented. "Authorizing Resolution" means the resolution of the City Council of the City authorizing issuance of the TIF Note and the approval of this Agreement. "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 Mendota Heights, Minnesota. "County" means Dakota County, Minnesota. "Developer" means The Heights of Mendota North, LLC, a Minnesota limited liability company, its successors and assigns; "Development District" means Municipal Development District No. 1. "Development Program" means the Development Program approved in connection with the Development District. "Development Property" means the real property located in the City, as described in EXHIBIT A attached to this Agreement. "Event of Default" means any of the events described in Section 4.1 hereof. "Minimum Assessment Agreement" means that certain Minimum Assessment Agreement by and between the City and the Developer, and certified to by the County Assessor, regarding the 2 11193287v1 placement of a minimum market value for the Development Property and the Minimum Improvements, a form of which is attached hereto as EXHIBIT C. "Minimum Improvements" means development of a market -rate apartment building, to be constructed on the Development Property, totaling approximately 62 units with surface and underground parking. "Project" means the acquisition of the Development Property, and the construction of a market -rate apartment building thereon, totaling approximately 62 units, with surface and underground parking. "Qualified Costs" means the following categories of costs that may be reimbursed to the Developer by the City out of Tax Increment: (1) Cost of acquisition of the Development Property; (2) Cost of site improvements and preparation of the Development Property; (3) Utility costs to service the Development Property; and (4) Such other costs as are incurred by the Developer and reasonably determined by the City to constitute Qualified Costs under the TIF Act. "State" means the State of Minnesota. "Tax Increment" means 90% of the tax increment revenue derived from the Development Property, which has been received and retained by the City in accordance with the provisions of Section 469.177 of the TIF Act. "Termination Date" means the earlier of (i) the date the TIF District terminates by law, (ii) the date by which the City has received sufficient Tax Increment with respect to the Project to reimburse itself for the Administrative Expenses and the Developer for all principal and accrued interest on the TIF Note, (iii) February 1, 2032, or (iv) the date this Agreement is terminated or rescinded in accordance with its terms hereunder. "TIF Act" means Minnesota Statutes, Sections 469.174 through 469.1794, as amended. "TIF District" means Tax Increment Financing (Redevelopment) District No. 2, located within the Development District, which was qualified as a redevelopment district under the TIF Act. "TIF Note" means the Tax Increment Financing Revenue Note (The Heights of Mendota North, LLC) to be executed by the City and delivered to the Developer pursuant to Article III hereof, in the approximate principal amount of $700,000, a copy of which is attached hereto as EXHIBIT B. "TIF Note Payment Date" means each February 1 and August 1, commencing on August 1, 2021, and thereafter to and including the Termination Date; provided, that if any such TIF Note 3 11193287v1 Payment Date should not fall on a Business Day, the TIF Note Payment Date shall be the next succeeding Business Day. "TIF Plan" means the Tax Increment Financing Plan, approved for the TIF District by the City Council of the City pursuant to Resolution No. 2017-48, adopted on June 20, 2017. "Unavoidable Delays" means delays, outside the control of the parry 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. (The remainder of this page is intentionally left blank.) 11193287v1 ARTICLE 2 REPRESENTATIONS AND WARRANTIES 2.1 Representations and Warranties of the City. The City makes the following representations and warranties: (1) The City is a municipal corporation and political subdivision and has the power to enter into this Agreement and carry out its obligations hereunder. (2) The TIF District is a "redevelopment district" within the meaning of Section 469.174, Subdivision 10 of the TIF Act. (3) The Project is in conformance with the development objectives set forth in the Development Program. Separately from this Agreement, any land use permits required as a part of the Project shall be governed by City land use ordinances, specific land use approvals and other agreements. (4) The City 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. (5) The persons executing this Agreement and related agreements and documents on behalf of the City have the authority to do so and to bind the City by their actions. (6) The City has received no notice or communication from any local, State or federal official that the activities of the Developer or the City in the Development District or the TIF District may be or will be in violation of any law or regulation. The City is aware of no facts the existence of which would cause it to be in violation of any local, State or federal law, regulation or review procedure. (7) To finance certain costs within the TIF District, the City proposes, subject to the other provisions of this Agreement, to apply certain Tax Increment through the TIF Note to reimburse the Developer for the Qualified Costs in connection with the Project. The City neither pledges nor provides any other financial assistance to the Developer to reimburse for the Qualified Costs in connection with the Project. 2.2 Representations and Warranties of the Developer. The Developer makes the following representations and warranties: (1) The Developer is a Minnesota limited liability company duly organized and in good standing under the laws of the State, has power 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, bylaws or the laws of the State. (2) The Developer will cause the Project to be acquired, constructed, maintained and operated in compliance with the terms of this Agreement, the Development 11193287v1 Program, the TIF Plan, all issued permits for the Project 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 Developer will secure adequate financing to complete the Project, and will provide adequate evidence of said financing for the construction of the Project. (4) The construction of the Project to the size and scope contemplated by this Agreement would not have been undertaken by the Developer, and in the opinion of the Developer would not be economically feasible within the reasonably foreseeable future, without the assistance and benefit to the Developer provided for in this Agreement. (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) So long as the Developer owns the Development Property, the Developer shall promptly advise the City in writing of all litigation or claims affecting any part of the Project, which may delay or require changes in construction of the Project, and all written complaints and charges made by any governmental authority materially affecting the Project or materially affecting the Developer or its business, which may delay or require changes in construction of the Project. (7) The Developer will cooperate with the City in resolution of any traffic, parking, trash removal or public safety problems which may arise in connection with the construction of the Project. The Developer will additionally construct the Project as provided herein in accordance with all local, State and federal energy conservation laws and regulations that are applicable to the Project. (8) The Developer will obtain 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. The Developer did not obtain a building permit for any portion of the Project before the date of approval of the TIF Plan. (9) The Developer has made its own projections of Tax Increment and revenues to be generated from the Project and of the Developer's return on investment and the Developer has not relied on any assumptions, calculations, determinations or conclusions made by the City, its governing body members, officers or agents, including the independent contractors, consultants and legal counsel, servants and employees thereof, with respect to the foregoing or in determining to proceed with the Project. (10) The person or persons executing this Agreement and related agreements and documents on behalf of the Developer have the authority to do so and to bind the Developer by their actions. 0 11193287v1 (11) The Developer has deposited $ 15,000.00 in escrow with the City to pay for, or reimburse the City for payment of, all City -incurred expenses in connection with the issuance of the TIF Note, analyzing the need for tax increment financing assistance, and the preparation of this Agreement (collectively, the "Administrative Costs"). Administrative Costs include, but are not limited to, fees paid to attorneys, the City's independent municipal advisor, and any engineering consultants retained by the City in relation to the Project. The City shall pay the Administrative Costs from the escrow funds deposited by the Developer. If the City in good faith requires additional funds to pay for or reimburse the Administrative Costs, the City shall inform the Developer in writing of such expenses, and the Developer shall deposit the requested amount into escrow with the City within 10 business days after receipt of the written notice. (12) 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 to be operated, the Project as a multifamily residential rental facility and shall devote the Development Property to, and in accordance with, the uses specified in this Agreement. (The remainder of this page is intentionally left blank.) 7 11193287v1 ARTICLE 3 PROJECT FINANCING AND ADMINISTRATION 3.1 Issuance of the TIF Note. The City shall reimburse the Developer for a portion of the costs incurred for the Project, as identified in this Agreement, through the issuance of the TIF Note, in substantially the form attached to this Agreement as EXHIBIT B. The principal amount of the TIF Note shall be in the original aggregate principal amount not -to -exceed $700,000. (1) The TIF Note shall be dated, issued in the principal amount stated above, and delivered to the Developer upon receipt by the City from the Developer of evidence of Qualified Costs (shown in the form of contractor certifications, invoices, lien waivers, or the like), incurred in an amount equal to or exceeding the final principal amount of the TIF Note. (2) The TIF Note shall be deemed validly issued and the unpaid principal of the TIF Note shall bear simple non -compounding interest from the date that the City has determined the paid invoices are in compliance with the terms of the Development Agreement, at the lower of 5.25% per annum or the Developer's interest rate on the Project financing as determined by the City's municipal advisor. Interest shall be computed on the basis of a 360 day year consisting of twelve (12) 30 -day months. (3) The principal amount of the TIF Note and the interest thereon shall be payable solely and exclusively from Tax Increment, and shall, subject to the limitations set forth in Section 4.2 hereof, be conditioned on the Developer being compliant with the terms and provisions of this Agreement and all issued permits for the Project. (4) On each TIF Note Payment Date and subject to the provisions of the TIF Note, the City shall pay to the Developer, solely from the Tax Increment received by the City during the preceding six months (or, with respect to the first TIF Note Payment Date, in the period commencing on the date of issuance of the TIF Note through the day prior to the first TIF Note Payment Date) principal and accrued interest on the TIF Note. All such payments shall be applied first to the payment of accrued interest and then to the payment of the principal of the TIF Note. (5) If, on any TIF Note Payment Date, the Tax Increment for payment of the accrued and unpaid interest on the TIF Note is insufficient for such purposes, the difference shall be carried forward, with interest at the rate set forth in the TIF Note, and shall be paid if and to the extent that on a future TIF Note Payment Date there is Tax Increment in excess of the amounts needed to pay the accrued interest then due on the TIF Note. (6) The City's obligation to make payments on the TIF Note on any TIF Note Payment Date or any date thereafter shall, subject to the limitations set forth in Section 4.2 hereof, be conditioned upon the requirement that (A) there shall not at that time be an Event of Default that has occurred and is continuing under this Agreement or any issued permits for the Project, and (B) this Agreement shall not have been rescinded pursuant to Section 4.2(b) hereof. 11193287v1 (7) The TIF Note shall be governed by and payable pursuant to the additional terms thereof, as set forth in EXHIBIT B, and as provided in the Authorizing Resolution, the terms of which are incorporated into this Agreement by reference. In the event of any conflict between the terms of the TIF Note and the terms of this Section, 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 City of such additional actions as bond counsel for the City may require in connection therewith, are hereby authorized and approved by the City. (8) No agreements or provisions contained in this Agreement shall give rise to any pecuniary liability of the City or a charge against its general credit or taxing powers, or shall obligate the City financially in any way except with respect to the application of the Tax Increment as specifically provided in this Agreement and in the TIF Note. The TIF Note, including principal and any other payments however designated, and the interest due thereon do not and shall never constitute a general obligation of the City within the meaning of any state constitutional or statutory provision and do not and shall not constitute or give rise to a pecuniary liability or moral obligation of the City, the State or any of its political subdivisions, or a charge against its general credit or taxing powers, or to the extent permitted by law, any pecuniary liability of any officer, employee or agent of the City. The provisions of this paragraph are controlling notwithstanding anything in this Agreement to the contrary. (9) The estimate of Qualified Costs eligible for Tax Increment is based upon budget estimates submitted by the Developer. The Developer understands and acknowledges that if the Qualified Costs exceed the Tax Increment, the Developer will only be reimbursed for Qualified Costs in the principal amount of the TIF Note, and accrued interest thereon. 3.2 Developer Acknowledgments. The Developer understands and acknowledges the following: (1) The City makes no representations or warranties regarding the amount of Tax Increment that will be available, or that revenues pledged to repayment of the TIF Note will be sufficient to pay all or any of the amounts payable on the TIF Note. The City additionally makes no representations as to the sufficiency of the Development Property (including soil conditions or the presence of any hazardous substances on the Development Property) for the Project. Any estimates of Tax Increment available prepared by the City, or the City's independent municipal advisor, consultants, agents, employees or officers in connection with the TIF District or this Agreement are for the sole benefit of the City, and are not intended as representations on which the Developer or any purchaser of the TIF Note may rely. The Developer further understands and acknowledges that no assistance is being provided by the City under this Agreement except through the issuance of the TIF Note, and the Developer has no claim against any funds of the City except as set forth in the Authorizing Resolution and the TIF Note. (2) Up to ten percent (10%) of Tax Increment will be retained by the City for the on-going Administrative Expenses related to the TIF District. 0 11193287v1 3.3 Construction of Minimum Improvements. The Developer agrees that it will construct the Minimum Improvements on the Development Property in substantial accordance with this Agreement and the plans, specifications, drawings, and related documents relating to the construction work to be performed on the Development Property. At all times prior to the Termination Date and during which the Minimum Improvements are owned by the Developer, the Developer will operate and maintain, preserve and keep the Minimum Improvements or cause such improvements to be maintained, preserved and kept in good repair and condition. The City has no obligation to operate or maintain the Minimum Improvements. The Developer additionally agrees not to engage in any financing that creates any mortgage or other encumbrance or lien upon the Development Property or the Minimum Improvements, whether by express agreement or operation of law, or suffer any encumbrance or lien to be made on or attached to the Development Property or the Minimum Improvements, other than the liens or encumbrances directly and solely related to the acquisition, construction and equipping of the Development Property and the Minimum Improvements. 3.4 Commencement and Completion of Construction. Subject to Unavoidable Delays, the Developer shall commence construction of the Minimum Improvements no later than June 1, 2019. Such commencement shall at a minimum consist of subsurface excavation activities on the Development Property. Subject to Unavoidable Delays, the Developer shall substantially complete the construction of the Minimum Improvements no later than December 31, 2020. The Developer shall make such reports to the City regarding construction of the Minimum Improvements as the City deems necessary or helpful in order to monitor progress on construction of the Minimum Improvements. (The remainder of this page is intentionally left blank.) 10 11193287v1 ARTICLE 4 EVENTS OF DEFAULT; INDEMNIFICATION 4.1 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 with respect to the Development Property. (2) Failure by the Developer to cause the construction of the Project to be completed pursuant to the terms, conditions and limitations of this Agreement or any issued permits for the Project. (3) Failure of the Developer to observe or perform any other covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement. (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; or (d) be adjudicated as bankrupt or insolvent; or if a petition or answer proposing the adjudication of the Developer as a 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 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 60 days after such appointment, or if the Developer, shall consent to or acquiesce in such appointment. 4.2 Remedies on Default. Whenever any Event of Default referred to in Section 4.1 occurs and is continuing, the City, as specified below, may take any one or more of the following actions after the giving of 30 days' written notice to the Developer, citing with specificity the item or items of default and notifying the Developer that it has 30 days within which to cure said Event of Default. If the Event of Default is by its nature incurable within 30 days, the City shall not take 11 11193287v1 any one or more of the following actions below if the Developer, in the good -faith opinion of the City, is undertaking action to cure the Event of Default as soon as reasonably possible. (1) The City may suspend its performance under this Agreement and the TIF Note until it receives written assurances from the Developer, deemed adequate by the City, that the Developer will cure its default and continue its performance under this Agreement, and no interest shall accrue on the TIF Note for the benefit of the Developer while performance is suspended in accordance with this Section 4.2. (2) The City may cancel and rescind this Agreement and the TIF Note. (3) 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. (4) Notwithstanding any provision to the contrary herein, the City agrees that if the Developer completes construction of the Project and has assigned the TIF Note to an assignee, which has been separately approved by the City, the City will not exercise any remedies set forth in this Section 4.2 which would have the effect of reducing, suspending or terminating any payments on the TIF Note. This paragraph shall not limit the City's remedies provided under any other agreement between the City and the Developer, provided such remedies do not have the effect of reducing, suspending or terminating any payments on the TIF Note. 4.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to 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. 4.4 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. 4.5 Agreement to Pay Attorney's Fees and Expenses. Whenever any Event of Default occurs and 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 City. 12 11193287v1 4.6 Indemnification of Citv. (1) The Developer releases from and covenants and agrees that the City, its governing body members, officers, agents, including the independent contractors, consultants and legal counsel, and employees thereof (collectively, the "Indemnified Parties"), shall not be liable for and agrees to indemnify and hold harmless the Indemnified Parties against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Project, provided that the foregoing indemnification shall not be effective for any intentional actions of the Indemnified Parties that are not contemplated by this Agreement. (2) Except for any willful misrepresentation or any willful or wanton misconduct of the Indemnified Parties, the Developer agrees to protect and defend the Indemnified Parties, now and forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from the actions or inactions of the Developer (or if 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. (3) All covenants, stipulations, promises, agreements and obligations of the City contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the City and not of any governing body member, officer, agent, servant or employee of the City, as the case may be. (The remainder of this page is intentionally left blank.) 13 11193287v1 ARTICLE 5 INSURANCE 5.1 Required Insurance. (1) The Developer agrees to provide and maintain at all times during the process of constructing the Minimum Improvements and, from time to time at the request of the City, will furnish the City with proof of payment of premiums on: (i) 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 in nonreporting form on the so called "all risk" form of policy; (ii) Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations and contractual liability insurance) together with an Owner's Contractor's Policy with limits against bodily injury and property damage of not less than $1,500,000 for each occurrence (to accomplish the above required limits, an umbrella excess liability policy may be used); and (iii) Workers' compensation insurance, with statutory coverage. The policies of insurance required pursuant to clauses (i) and (ii) above shall be placed with financially sound and reputable insurers licensed to transact business in the State. The policy of insurance delivered pursuant to clause (i) above shall contain an agreement of the insurer to give not less than thirty (30) days' advance written notice to the City in the event of cancellation of such policy or change affecting the coverage thereunder. The City shall be named as an additional insured under the policies of insurance referred to in (i) and (ii) above. (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, and from time to time at the request of the City shall furnish proof of the payment of premiums on, insurance as follows: (i) Insurance against loss 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, heating system explosion, water damage, demolition, debris removal, collapse and flood, 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 and shall be determined from time 14 11193287v1 to time at the request of the City, but not more frequently than once every three years, by an insurance consultant or insurer, selected and paid for by the Developer and approved by the City; and (ii) 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. In lieu of any of the foregoing, the Developer may provide assurance to the City that the Developer has self-insured for the amounts and terms satisfying this Section. (3) The parties agree that all of the provisions set forth in this Article shall terminate upon the Termination Date. 5.2 Evidence of Insurance. All insurance required in this Article 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 agrees to deposit with the City copies of policies evidencing all such insurance, or 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, each policy shall contain a provision that the insurer shall not cancel nor materially modify the policy without giving written notice to the Developer and the City at least 30 days before the cancellation or modification becomes effective. In lieu of separate policies, the Developer may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Developer shall deposit with the City a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. 5.3 Notification; Repair, Reconstruction and Restoration. So long as the Developer is the owner thereof and until the Termination Date, the Developer agrees to notify the City immediately in the case of damage exceeding $50,000 in amount to, or destruction of, the Minimum Improvements, or any portion thereof resulting from fire or other casualty. Subject to the rights of applicable lenders, in such event the Developer shall forthwith repair, reconstruct, and restore the Minimum Improvements to substantially the same or an improved condition or value as it 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. Any net proceeds remaining after completion of such repairs, reconstruction and restoration shall be the property of the Developer. In the event the Developer does not repair, reconstruct or restore the Minimum Improvements, the City shall have no further obligation to make payments to the Developer under the TIF Note. 5.4 Reconstruction of Minimum Improvements. If the Minimum Improvements are damaged or destroyed before or after completion thereof, but prior to the Termination Date, and the net proceeds from the Developer's applicable insurance policies are sufficient to pay all costs related thereto, and the holder of any mortgage covering the Development Property consents thereto, then the Developer shall commence the reconstruction of the Minimum Improvements 15 11193287v1 within 180 days of the availability of such insurance proceeds. The Developer's obligation to reconstruct the Minimum Improvements shall end on the Termination Date. 16 11193287v1 ARTICLE 6 USE OF TAX INCREMENT 6.1 Use of Tax Increment. Except with respect to its obligations to the Developer under this Agreement in connection with the Tax Increment, the City shall be free to use any Tax Increment it receives from the TIF District for any purpose for which such Tax Increment may lawfully be used under the TIF Act and pursuant to other general provisions of State law, and the City shall have no obligations to the Developer with respect to the use of such Tax Increment. 6.2 Reimbursement of Tax Increment. Section 469.176, Subdivision 4j of the TIF Act limits the use of Tax Increment in a redevelopment district to specific permitted uses. Section 469.1771, Subdivision 3 of the TIF Act requires the City to pay the County for Tax Increment distributed to the City and used to assist a project which does not qualify for tax increment assistance. If the City is required to pay Tax Increment to the County or any other governmental entity pursuant to Section 469.1771 of the TIF Act, or any other provision of the TIF Act, by reason of any Developer act or omission that is inconsistent with or contrary to the terms of this Agreement, the Developer agrees, for itself and its successors and assigns, to reimburse a similar amount to the City within 30 days' written notice from the City. This obligation to reimburse Tax Increment to the City shall run with the Development Property, and each subdivided part thereof, and shall bind the Developer and its successors and assigns. The City is authorized to undertake all necessary legal action to recover said amounts described in this Section from the Developer. Any sum owed under this Section but not reimbursed by the Developer or its successors and assigns shall remain a lien against the Development Property and the Minimum Improvements, or any part thereof, until paid. 6.3 Right to Collect Delinquent Taxes. The Developer acknowledges that the City is providing substantial aid and assistance in furtherance of the completion of the Minimum Improvements through issuance of the TIF Note. The Developer understands that the Tax Increment pledged to payment of the TIF Note is derived from real estate taxes on the Development Property and the Minimum Improvements, which taxes must be promptly, timely, and fully paid. To that end, the Developer agrees for itself, its successors and assigns, in addition to the obligation pursuant to State statute to pay real estate taxes, that it is also obligated by reason of this Agreement, through the Termination Date, to pay before delinquency all real estate taxes assessed against the Development Property and the Minimum Improvements. The Developer acknowledges that this obligation creates a contractual right on behalf of the City to sue the Developer or its successors and assigns to collect delinquent real estate taxes, and any penalty or interest thereon, and to pay over the same as a tax payment to the County. In any such suit, the City shall also be entitled to recover from the Developer the City's costs, expenses and reasonable attorney fees. Nothing in this Section shall prevent the Developer from contesting the amount of real estate taxes (whether because of valuation, classification or otherwise, but subject always to the requirements and restrictions of the Minimum Assessment Agreement) in accordance with State law. 17 11193287v1 6.4 Reduction of Taxes. (1) The Developer agrees that through the Termination Date it will not cause a reduction in the real property taxes paid in respect of the Development Property through: (i) willful destruction of the Development Property or any part thereof, (ii) willful refusal to reconstruct damaged or destroyed property from insurance proceeds available to the Developer for such purposes; (iii) application for a deferral of real property tax on the Development Property pursuant to any law or regulation; or (iv) conveyance or transfer of the Development Property to any entity that is exempt from payment of real property taxes under State law. (2) Subject always to the requirements and restrictions of the Minimum Assessment Agreement, the Developer may use any administrative or legal process provided under State law to seek a reduction of market value of the Development Property and the Minimum Improvements for ad valorem tax purposes, provided that (i) promptly upon filing any petition or claim with any tax official, the Developer shall provide written notice of such action to the City, and (ii) if the Developer files such a position or claim, the City will withhold payment of any Tax Increment (without interest) that is attributable to the tax payable year that is the subject of the petition or claim until the petition or claim is fully resolved such that the County has finally determined the amount of property taxes payable with respect to the Development Property for that year. 6.5 Minimum Assessment Agreement. The parties hereto acknowledge and agree to execute that certain Minimum Assessment Agreement, a form of which is attached hereto as EXHIBIT C. The Minimum Assessment Agreement will provide that the minimum market value which shall be assessed for ad valorem tax purposes for the Development Property, together with the Minimum Improvements constructed thereon, shall be (i) $4,960,000 as of January 2, 2020, for taxes payable in 2021, and (ii) $9,920,000 as of January 2, 2021, for taxes payable in 2022, notwithstanding the progress of construction of the Minimum Improvements by such date, and said minimum value shall remain in effect as of each January 2 thereafter until the earlier of the following: (i) the date of receipt by the City of the final payment from the County of Tax Increment from the TIF District; or (ii) the date when the TIF Note and any interfund loan or loans attributable to the TIF District have been fully paid or defeased in accordance with their terms. The events referred to in this paragraph shall be evidenced by a certificate or affidavit in recordable form executed by the City. The Minimum Assessment Agreement shall be recorded with the County Recorder's Office. The Developer shall pay all costs of recording. 18 11193287v1 ARTICLE 7 PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER 7.1 Representation as to Development. The Developer represents and agrees that its undertakings pursuant to this Agreement are and will be for the purpose of development of the Development Property and the Minimum Improvements and not for speculation in land holding. 7.2 Prohibition Against Developer's Transfer of Development Property and Assignment of Agreement. The Developer represents and agrees that prior to issuance of a Certificate of Occupancy by the City for the Minimum Improvements: (1) Except only by way of security for, and only for the purpose of obtaining financing necessary to enable the Developer or any successor -in -interest to the Development Property, or any part thereof, to perform its obligations with respect to making, owning or operating the 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 made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Development Property or any part thereof or any interest therein, or any contract or agreement to do any of the salve, without the prior written approval of the City, unless the Developer remains liable and bound by this Agreement, in which event the City's approval is not required. In the absence of a specific written agreement by the City to the contrary, no such transfer or approval by 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. (2) In the event the Developer, upon transfer or assignment of the Development Property or any portion thereof, seeks to be released from its obligations under this Agreement as to the portions of the Development Property that are transferred or assigned, the City shall be entitled to require, except as otherwise provided in this Agreement, as conditions to any such release that: (i) Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the City, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Developer as to the portion of the Minimum Improvements or the Development Property to be transferred. (ii) Any proposed transferee, by instrument in writing satisfactory to the City and in form recordable among the County's land records, shall, for itself and its successors and assigns, and expressly for the benefit of the City, have expressly assumed all of the obligations of the Developer under this Agreement as to the portion of the Minimum Improvements or the Development Property to be transferred and agreed to be subject to all the conditions and restrictions to which the Developer is subject as to such portion; provided, however, that the fact that 19 11193287v1 any transferee of, or any other successor -in -interest whatsoever to, the Minimum Improvements or the Development Property, or any part thereof, shall not, for whatever reason, have assumed 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 City) deprive the City of any rights or remedies or controls with respect to the Development Property or any part thereof 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 specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Minimum Improvements or 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 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 or the Development Property that the City would have had, had there been no such transfer. In the absence of specific written agreement by the City to the contrary, no transfer or approval by 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. (iii) Any and all instruments and other documents involved in effecting the transfer of any interest in this Agreement or the Minimum Improvements or the Development Property governed by this Article shall be in a form reasonably satisfactory to the City. (3) Any notice of rejection from the City shall contain detailed reasons for the rejection. The City's approval of any transfer shall not be unreasonably withheld. In the event the foregoing conditions are satisfied, the Developer shall be released from its obligation under this Agreement as to the portion of the Minimum Improvements or the Development Property that is transferred, assigned or otherwise conveyed. (4) After the Minimum Improvements have been completed and a Certificate of Occupancy has been issued by the City, the Developer may transfer or assign any portion of the Development Property or the Developer's interest in this Agreement without the prior written consent of the City, provided that until the occurrence of the Termination Date, the transferee or assignee is bound by all the Developer's obligations hereunder. Prior to any such transfer or assignment, the Developer shall submit to the City written evidence of any such transfer or assignment, including the transferee or assignee's express assumption of the Developer's obligations under this Agreement. If the Developer fails to provide such evidence of transfer and assumption, the Developer shall remain bound by all of its obligations under this Agreement. 7.3 Affiliate. The prohibitions of this Article do not apply to any transfer of the Project to an Affiliate of the Developer. 20 11193287v1 ARTICLE 8 ADDITIONAL PROVISIONS 8.1 Conflicts of Interest. No member of the governing body or other official of 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 City shall be personally liable to 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. 8.2 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. 8.3 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: The Heights of Mendota North, LLC 971 Sibley Memorial Hwy, Suite 300 Lilydale, Minnesota 55118 Attention: Michael J. Swenson with copy to: (Developer's legal counsel) Larkin, Hoffman, Daly & Lindgren, Ltd. 8300 Norman Center Drive, Suite 1000 Minneapolis, Minnesota 55437-1060 Attention: Thomas P. Stoltman, Esq. (2) in the case of the City is addressed to or delivered personally to the City at: City of Mendota Heights 1101 Victoria Curve Mendota Heights, Minnesota 55118 Attention: City Administrator 21 11193287v1 With copy to: Briggs and Morgan, P.A. 2200 IDS Center 80 South 8th Street Minneapolis, MN 55402 Attention: Mary Ippel 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. 8.4 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. 8.5 Law Governing. This Agreement will be governed and construed in accordance with the laws of the State. 8.6 Expiration. This Agreement shall expire on the Termination Date. 8.7 Provisions Surviving Rescission or Expiration. Sections 4.5 (Agreement to Pay Attorney's Fees and Expenses) and 4.6 (Indemnification of City) 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. 8.8 Governing Law; Venue. This Agreement shall be construed in accordance with the laws of the State. Any dispute arising from this Agreement shall be heard in the State or federal courts of Minnesota, and all parties waive any objection to the jurisdiction thereof, whether based on convenience or otherwise. 8.9 Entire Agreement. This Agreement 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. This Agreement may be modified, amended, terminated, or waived, in whole or in part, only by a writing signed by all of the parties. 8.10 Re-execution of Documents. The City and the Developer agree to re -execute any documents which may be necessary to correct an error or to enable said document to be filed of record. 8.11 Severability. If any provision or application of this Agreement is held unlawful or unenforceable in any respect, such illegality or unenforceability shall not affect other provisions or applications that can be given effect, and this Agreement shall be construed as if the unlawful or unenforceable provision or application had never been contained herein or prescribed hereby. 22 11193287v1 IN WITNESS WHEREOF, the City has caused this Contract for Private Development 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 in its name and on its behalf, on or as of the date first above written. CITY OF MENDOTA HEIGHTS, MINNESOTA Bye J Neil Garlock, Mayor By Lorri Smith, City Clerk (SEAL) (City signature page for the Contract for Private Development, by and between the City of Mendota Heights, Minnesota, and The Heights of Mendota North, LLC) S-1 THE HEIGHTS OF MENDOTA NORTH, LLC Its: (Developer signature page for the Contract for Private Development, by and between the City of Mendota Heights, Minnesota, and The Heights of Mendota North, LLC) S-2 EXHIBIT A DESCRIPTION OF DEVELOPMENT PROPERTY Property located in the City of Mendota Heights, Dakota County, Minnesota with the following parcel identification numbers and/or legal description: 277520005020 277520005050 277520005070 277520005110 277520005110 277520005160 277520005380 277520005420 277520005421 A-1 No. R-1 EXHIBIT B FORM OF TIF NOTE UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF DAKOTA CITY OF MENDOTA HEIGHTS TAX INCREMENT FINANCING REVENUE NOTE (THE HEIGHTS OF MENDOTA NORTH, LLC) $700,000 The City of Mendota Heights, Minnesota (the "City"), hereby acknowledges itself to be indebted and, for value received, hereby promises to pay the amounts hereinafter described (the "Payment Amounts") to The Heights of Mendota North, LLC, a Minnesota limited liability company (the 'Developer"), or its registered assigns (the "Registered Owner"), but only in the manner, at the times, from the sources of revenue, and to the extent hereinafter provided. The principal amount of this Note 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 part pursuant to the terms hereof; provided that the sum of the principal amount listed above shall in no event exceed Six Hundred Thirty Four Thousand and No/100 Dollars ($700,000.00), as provided in that certain Contract for Private Development, dated as of November 20, 2018, as the same may be amended from time to time (the 'Development Agreement"), by and between the City and the Developer. This Note shall be deemed validly issued and the unpaid principal amount hereof shall bear interest from the date that the Developer has submitted to the City and the City has determined that the closing statement, purchase agreement, and paid invoices in the amount of the Reimbursement Amount (as defined in the Development Agreement) are in compliance with the terms of the Development Agreement at the simple non -compounded rate of percent C__%) per annum. Interest shall be computed on the basis of a 360 day year consisting of twelve (12) 30 -day months. All capitalized but undefined terms herein shall be defined as in the Development Agreement. The amounts due under this Note shall be payable on each February 1 and August 1, commencing on August 1, 2021 and thereafter to and including the Termination Date, or, if the first payment date should not be on a Business Day, the payment shall be made on the next succeeding Business Day (the "Payment Dates"). On each Payment Date the City shall pay by check or draft mailed to the person that was the Registered Owner of this Note at the close of the last business day of the City preceding such Payment Date an amount equal to the Tax Increment received by the City during the six-month period preceding such Payment Date (or, with respect to the first Payment Date, in the period commencing on the date of issuance of this Note through the day that is prior to the first Payment Date). All payments made by the City under this Note shall first be applied to accrued interest and then to principal. This Note is pre -payable by the City, without penalty, in whole or in part, on any date. The Payment Amounts due hereon shall be payable solely from 90% of Tax Increment derived from the Development Property within the City's Tax Increment Financing District No. 2 (the "TIF District") within its Municipal Development District No. 1, which is paid to the City and which the City is entitled to 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 "TIF Act"). This Note shall terminate and be of no further force and effect following the Termination Date. The City makes no representation or covenant, express or implied, that the Tax Increment will be sufficient to pay, in whole or in part, the amounts which are or may become due and payable hereunder. In the event Tax Increment is not sufficient, the City is not responsible to further fund or reimburse the Developer (or its assigns or creditors) for any such shortfall. The City is not responsible to fund or reimburse any obligation of the Developer (or its assigns or creditors) unless expressly stated in this Agreement. Subject to the terms of the Development Agreement, the City's payment obligations hereunder shall be further conditioned on the fact that no Event of Default under the Development Agreement shall have occurred and be continuing at the time payment is otherwise due hereunder, but such unpaid amounts shall become payable if said Event of Default shall thereafter have been cured; and further, if pursuant to the occurrence of an Event of Default under the Development Agreement the City elects, subject to the provisions of Section 4.2 of the Development Agreement, to cancel and rescind the Development Agreement, the City shall have no further debt or obligation under this Note whatsoever. Reference is hereby made to all of the provisions of the Development Agreement, including without limitation Section 3.1 thereof, for a fuller statement of the rights and obligations of the City to pay the principal of this Note, 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 City and is payable by the City only from the sources and subject to the qualifications stated or referenced herein. This Note is not a general obligation of the City, and neither the full faith and credit nor the taxing powers of the City are pledged to the payment of the principal of this Note and no property or other asset of the City, save and except the above referenced Tax Increment, is or shall be a source of payment of the City's obligations hereunder. This Note is issued by the City in aid of financing a project pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including the TIF Act. This Note may be assigned only with the consent of the City. In order to assign the Note, the assignee shall surrender the same to the City 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 City. 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 law; and that this Note, together with all other indebtedness of the City outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the City to exceed any constitutional or statutory limitation thereon. IN WITNESS WHEREOF, the City of Mendota Heights, Minnesota, by its City Council, has caused this Note to be executed by the manual signatures of its Mayor and City Clerk and has caused this Note to be dated as of , 20 City Clerk Mayor DO NOT EXECUTE UNTIL EVIDENCE OF QUALIFIED COSTS ARE GIVEN TO THE CITY - REFER TO SECTION 3.3(1). IM CERTIFICATION OF REGISTRATION It is hereby certified that the foregoing Tax Increment Financing Revenue Note was registered in the name of The Heights of Mendota North, 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 SIGNATURE OF CITY REGISTERED OWNER DATE OF ADMINISTRATOR REGISTRATION The Heights of Mendota North, LLC 971 Sibley Memorial Hwy, Suite 300 Lilydale, Minnesota 55118 20 Im :E EXHIBIT C FORM OF MINIMUM ASSESSMENT AGREEMENT MINIMUM ASSESSMENT AGREEMENT BETWEEN THE CITY OF MENDOTA HEIGHTS, MINNESOTA AND THE HEIGHTS OF MENDOTA NORTH, LLC AND CERTIFIED BY: DAKOTA COUNTY ASSESSOR'S OFFICE Dated as of: This document was drafted by: BRIGGS AND MORGAN (MLI) Professional Association 2200 IDS Center 80 South 8t' Street Minneapolis, MN 55402 C-1 11193287v1 MINIMUM ASSESSMENT AGREEMENT THIS MINIMUM ASSESSMENT AGREEMENT (the "Agreement"), is made on or as of the , 20 , by and between the City of Mendota Heights, Minnesota, a municipal corporation and political subdivision existing under the laws of the State of Minnesota (the "City"), and The Heights of Mendota North, LLC, a Minnesota limited liability company (the "Developer"). WITNESSETH, that WHEREAS, on or before the date hereof, the City and the Developer entered into a Contract for Private Development (the "Development Agreement"), pursuant to which the City is to provide tax increment financing assistance to the Developer, derived from certain real property (the "Development Property") located within the City's Municipal Development District No. 1 and Tax Increment Financing District No. 2; and WHEREAS, pursuant to the Development Agreement, the Developer is obligated to acquire the Development Property, legally described on EXHIBIT A attached hereto, and construct certain improvements thereon, including a market -rate apartment building totaling approximately 62 units, with surface and underground parking (the "Minimum Improvements"); and WHEREAS, the City and the Developer desire to establish a minimum market value for the Development Property and the Minimum Improvements to be constructed thereon, pursuant to Section 469.177, Subdivision 8 of the TIF Act; and WHEREAS, the City and the Dakota County Assessor (the "Assessor") have reviewed the preliminary plans and specifications for the Minimum Improvements and have inspected the Development Property. NOW, THEREFORE, the parties to this Agreement, in consideration of the promises, covenants and agreements made by each to the other, agree as follows: 1. The minimum market value which shall be assessed for ad valorem tax purposes for the Development Property, together with the Minimum Improvements constructed thereon, shall be (i) $4,960,000 as of January 2, 2020, for taxes payable in 2021, and (ii) $9,920,000 as of January 2, 2021, for taxes payable in 2022, notwithstanding the progress of construction of the Minimum Improvements by such date, and said minimum value shall remain in effect as of each January 2 thereafter until termination of this Agreement under paragraph 2 hereof. 2. The minimum market value established herein shall be of no further force and effect and this Agreement shall terminate on the earlier of the following: (i) the date of receipt by the City of the final payment from the County of Tax Increment from the TIF District; or (ii) the date when the TIF Note and any interfund loan or loans attributable to the TIF District have been fully paid or defeased in accordance with their terms. The events referred to in this paragraph shall be evidenced by a certificate or affidavit in recordable form executed by the City. 3. This Agreement shall be promptly recorded in the County land records by the Developer by no later than December 31, 2018. The Developer shall pay all costs of recording. C-2 11193287v1 4. Neither the preambles nor provisions of this Agreement are intended to, nor shall they be construed as, modifying the terms of the Development Agreement between the City and the Developer. 5. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties. 6. Each of the parties has authority to enter into this Agreement and to take all actions required, and has taken all actions necessary to authorize the execution and delivery of this Agreement. 7. If any provision of this Agreement shall be held invalid and unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 8. The parties hereto agree that they will, from time to time, execute, acknowledge and deliver, or cause to be delivered, such supplements, amendments and modifications hereto, and such required further instruments as may be reasonably required for correcting any inadequate, or incorrect, or amended description of the Development Property or the Minimum Improvements or for carrying out the expressed intention of this Agreement, including, without limitation, any further instruments required to delete from the description of the Development Property such part or parts as may be included with a separate assessment agreement. 9. Except as provided in paragraph 8 of this Agreement, this Agreement may not be amended nor any of its terms modified except by a writing authorized and executed by all parties hereto, in compliance with Section 469.177, Subdivision 8 of the TIF Act. 10. This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 11. This Agreement shall be governed by and construed in accordance with the laws of the State. 12. Capitalized but undefined terms in this Agreement shall have the meanings assigned in the Development Agreement. (The remainder of this page is intentionally left blank.) C-3 11193287vl CITY OF MENDOTA HEIGHTS, MINNESOTA By: Its: Mayor By: Its: City Clerk STATE OF MINNESOTA ) ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me this day of , 20_, by Neil Garlock and Lorri Smith, the Mayor and City Clerk, respectively, of the City of Mendota Heights, Minnesota, a municipal corporation and political subdivision under the laws of the State of Minnesota, on behalf of the City. Notary Public (Signature page of the City of Mendota Heights, Minnesota to the Minimum Assessment Agreement) C-4 11193287v1 THE HEIGHTS OF MENDOTA NORTH, LLC By: Its: STATE OF MINNESOTA ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 20_, by Michael Swanson, the Chief Manager of The Heights of Mendota North, LLC, a Minnesota limited liability company, on behalf of the company. Notary Public (Signature page of The Heights of Mendota North, LLC to the Minimum Assessment Agreement) C-5 11193287vl EXHIBIT A TO MINIMUM ASSESSMENT AGREEMENT LEGAL DESCRIPTION OF THE PROPERTY C-6 11193287v1 CERTIFICATION BY COUNTY ASSESSOR The undersigned, having reviewed certain construction plans for the Minimum Improvements, and the market value assigned to the Minimum Improvements and the Development Property, as described in the Minimum Assessment Agreement, dated as of , by and between the City of Mendota Heights, Minnesota, and The Heights of Mendota North, LLC, to which this certification is attached, states as follows: Legal Description of Property: The undersigned assessor, being legally responsible for the assessment of the above described property, certifies that the market values assigned to the land and improvements are reasonable. Nothing herein shall limit the discretion of the undersigned assessor or any other public official or body having the duty to determine the market value of the above-described Minimum Improvements and Development Property for ad valorem tax purposes, to assign to such Minimum Improvements and Development Property a market value in excess of the minimum market value specified above and in the Minimum Assessment Agreement. All capitalized but undefined terms herein are assigned definitions as provided in that certain Contract for Private Development, dated as of November 20, 2018, by and between the City of Mendota Heights, Minnesota, and The Heights of Mendota North, LLC. Assessor Dakota County, Minnesota STATE OF MINNESOTA ) ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me this day of , 20_, by , the Assessor for the County of Dakota, Minnesota. C-7 11193287v1 Notary Public