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HomeMy WebLinkAboutHEDRA IV b. Block 29 Preliminary agreementPRELIMINARY DEVELOPI\1ENT AGREEMENT THIS AGREEMENT is made and entered into this day of 2009, by and between the Hastings Economic Development and Redevelopment Authority (the "Authority") with its principal office at 101 East Fourfli Sheet, Hastings, Minnesota »033, and Stotko Speedling Construction, Inc., a Minnesota corporation (the "Developer") with its principal office at 1303 Eddy Street, Hastings, Minnesota 55033. «'ITNESSETH: WHEREAS, the Authority is the owner of certain real property (the "Redevelopment Property") located in the City of Hastings (the °City"); and WHEREAS, the Developer has presented to the Authority- a concept for the development of the Redevelopment Properly through the construction of a two story office building, parking lot, utilities and landscape improvements (the "Development'), which proposal contemplates the Authority's conveyance of the Redevelopment Property to the Developer for a nominal purchase price; and WHEREAS, the Authority's Board of Commissioners have reviewed the Developer's development concept and desires to enter into this Preliminary Development Agreement to allow flee Developer to further refine its development concept and to negotiate with the Authority concerning public participation in and approval of the proposed Development and «'HEREAS, the Authority and Developer intend to proceed with the Development if: (i) a design for the Development can be agreed upon by the Authority and the Developer; (ii) a satisfactory agreement can be reached regarding flee purchase price to be paid by the Developer for the Redevelopment Property; (iii) satisfactory financing for the Development can be secured; and (iv) the economic feasibility and soundness of the Development and other necessary preconditions have been determined to the satisfaction of the parties. NOW, THEREFORE, in consideration of the covenants and obligations of the parties hereto, the .Authority and the Developer hereby agree as follows: Section 1. Preliminary Nature of Agreement. The Aufliority and Developer agree that this Agreement is intended to be preliminary in nature. Before the Authority- and Developer can make a decision on whether to proceed with the implementation of the Developer's development concept, it will be necess:y to assemble and consider information relative to the uses, design, economics and other aspects of the Development. The purpose of this Agreement is to allow the Developer air opportunity to assemble such necessay information, to refine the above referenced development concept, and to negotiate with the Authority concerning the execution of a purchase and development agreement (the "Contract") which, if executed, will set for-flr the rights and responsibilities of the Authority and the Developer with respect to such development. 2 During the terns of this Agreement, the Authority agrees that it will not enter into or negotiate s similar agreement with any party other than the Developer for a project on the Redevelopment Property Section 2. Present Intent of Parties. It is the intention of the parties that this Agreement document their present understanding and commitments and that if the following conditions can be fulfilled to the satisfaction of the Authority and Developer that the parties will proceed in an attempt to formulate a mutually satisfactory Contract: (a) the Developer demonstrates the feasibility of dte Development as refined pursuant to this Agreement; (b) the Developer provides such documentation regarding the economic feasibility of the Development as the .Authority may wish to receive during the term of this Agreement; (c) the completion of all undertakings required by this Agreement in a satisfactory and timely manner; (d) the satisfaction of such other conditions as are determined to be appropriate by either party; and (e) the Development is generally consistent with the proposal submitted to the Authority's Bo:n'd of Commissioners on April 9, 2009, attached as EXHIBIT B The Contract (together with any other agreements entered into between the parties hereto contemporaneously there~a~ith) when executed will supersede all understandings and obligations of the parties hereunder. Section 3. Development Design. The Developer's concept for the Development on the Redevelopment Properly is preliminary in nature and must be refined before implementation. The concept as proposed involves the construction of a two story office building, parking lot, utilities and landscape improvements. Section 4. Developer Undertakings. During the teen of this Agreement the Developer shall do the following: (a) Continue to refine its site and building plans for the Development. (b) Seek to secure tenants or purchasers in the Development. (c) Submit to the Authorilu a proposed schedule for the undertaking of the Development, including widtout limitation, the timing of the closing on financing. (d) Seek to secure a commitment for financing sufficient for construction of the Development. 3 (e) Using title information and a survey provided by the Authority, update evidence of title to the Redevelopment Property and provide to the Authority any objections to title. (f) Submit to the Attthorily a project pro forma detailing all costs of the Development and the sources and uses of all funds to be raised to finance the Development, including justification for the Developer's payment of less than market value for the Redevelopment Property. (g) Undertake preliminary engineering and soil testing of the Redevelopment Property. For this purpose, the Developer and its conh'actors shall have the right to enter upon the Redevelopment Properly at reasonable times and after notice to the Authority. The Developer shall indemnify, defend and hold the Authority h:umless from and against any claims or damage, of whatsoever nature, arising out of the entry- onto the Redevelopment Property and shall repair any damage caused to the Redevelopment Properly. (i) Using environmental reports and studies provided by the Authority and such other studies and testing deemed necessary, determine the acceptability of the environmental condition of the Redevelopment Property. All of the information described above shall be prep:u'ed or collected at the sole expense of flee Developer. The Developer agrees that it will provide flee Aufliorily with quarterly status reports on progress made with respect to its activities under this Agreement. Section 5. Authority Undertakings. During the term of this .Agreement, the .Authority ~a~ill undertake the following: (a) Provide to the Developer title information based on which the Developer can update evidence of title to the Redevelopment Properly-. (b) Cause to be prepared drafts of the Contract. (c) Provide to the Developer any surveys acrd environmental reports in the possession of the Authority. (d) Analyze information provided by the Developer to determine if the conveyance of the Redevelopment Property for a purchase price that is less than m:uket value is justified. (e) Use its best efforts to cure any valid title objections made by the Developer. Section 6. Nez?otiation of Contract. During the term of this Agreement, the Authority and the Developer shall proceed with the negotiation of a Conbact relative to the Development. The decision to enter into a Contract shall be in the sole discretion of each of the parties. If prior to execution of the Contract either party determines in its sole discretion that it is not in its best 4 interest, for whatever reason, to proceed with the Development, it shall so notify the other party, whereupon this Agreement shall terminate and neither party shall have any rights or obligations to the odter or to any tltird party under or witlt respect to dtis Agreement. If the Developer determines during the term of this Agreement that undertaking the Development is not financially feasible, it will promptly notify the Attthorily of such determination and the parties will terminate this .Agreement. Section 7. Effect of Annrovals. No approval given by the .Authority hereunder or in connection herewith shall be deemed to constitute art approval of the Development for any purpose oflter titan as stated herein and dte process outlined in tltis Agreement shall not be deemed to supersede any concept review, conditional use permit, vacation, subdivision, or other zoning or planning approval process of the Attthorilu or the City relative to the development of real estate. Section 8. Payment of Costs. The Authority- agrees that it will pay its out of pocket costs incurred for attorneys and consultants relating to the preparation of this agreement and the Contract. The Developer will be responsible for all of its costs hereunder, including, but not limited to, updating evidence of title to the Redevelopment Property and environmental and soils conditions testing. The Contract anti specify the parties° responsibilities with respect to costs incurred after execution of the Contract. Section 9. Modifications. This .Agreement may be modified and the term hereof may be extended only through an-itten amendments hereto sin ed by both of the parties to this Agreement. Section 10. Termination. This Agreement shall be effective until Jttne 30, 2012. If for any reason a Contract has not been entered into by the parties by such date or any mutually approved extension dtereof; tltis Agreement shall be null and void and neidter parTy shall have any liability or obligations to the other. Section 11. Severability. If any portion of this Agreement is held invalid by a court of competent jurisdiction, such decision shall not affect the validity of any remaining portion of this Agreement. Section 12. Notices. Notice, demand, or oflter conuuunication fiom one party to the other shall be deemed effective if sent by certified mail, postage prepaid, return receipt requested or delivered personally to a party at its address in the first paragraph of this Agreement, or at such oflter address as such party may designate in wY'iting to the other party. 5 IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and the De~reloper has caused this Agreement to be duly executed in its nante and behalf on or as of the date first above ~n~ritten HASTINGS ECONOMIC DEVELOPMENT AND REDEVELOPMENT AUTHORITY By Its By Its STOTIiO SPEEDLING CONSTRUCTION, INC. By Its 6 EXHIBIT A Redevelopment Property Lots 1 and 2 except the west 6 feet thereof, Block 29, Town of Hastings ~YHIBIT B Developer's Proposal