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HomeMy WebLinkAboutIV. a. Block 29 Concept PlanPRELIMINARY DEVELOPMENT 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 Fourth Street, Hastings, Minnesota 55033, and Stotko Speedling Construction, Inc., a Minnesota corporation (the “Developer”) with its principal office at 1303 Eddy Street, Hastings, Minnesota 55033. WITNESSETH : 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 Property through the construction of a two story officebuilding, 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 the Developer to further refine its development concept and to negotiate with the Authority concerning public participation in and approval of the proposed Development; and WHEREAS , 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 canbe reached regarding the 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 Authority 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 necessary 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 an opportunity to assemble such necessary information, to refine the abovereferenced development concept, and to negotiate with the Authority concerning the execution of a purchase and development agreement (the "Contract") which, if executed, will set forth the rights and responsibilities of the Authority and the Developer with respect to such development. HEDRA Meeting Packet - April 21, 2011Page 11 of 39 During the term of this Agreement, the Authority agrees that it will not enter into or negotiate a 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 the 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 Board of Commissioners on April 9, 2009, attached as EXHIBIT B The Contract (together with any other agreements entered into between the parties hereto contemporaneously therewith) 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 Property 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 term 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 Authority a proposed schedule forthe undertaking of the Development, including without limitation, the timing of the closing on financing. (d)Seek to secure a commitment for financing sufficient for construction of the Development. HEDRA Meeting Packet - April 21, 2011Page 12 of 39 (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 Authority 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 contractors shall have the right to enter upon the Redevelopment Property at reasonable times and after notice to the Authority. The Developer shall indemnify, defend and hold the Authority harmless 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 Property. (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 prepared or collected at the sole expense of the Developer. The Developer agrees that it will provide the Authority 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 will undertake the following: (a)Provide to theDeveloper title information based on which the Developer can update evidence of title to the Redevelopment Property. (b)Cause to be prepared drafts of the Contract. (c)Provide to the Developer any surveys and 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 market value is justified. (e)Use its best efforts to cure any valid title objections made by the Developer. Section 6. Negotiation of Contract. During the term of this Agreement, the Authority and the Developer shall proceed with the negotiation of a Contract 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 HEDRA Meeting Packet - April 21, 2011Page 13 of 39 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 other or to any third party under or with respect to this Agreement. If the Developer determines during the term of this Agreement that undertaking the Development is not financially feasible, it will promptly notify the Authority of such determination and the parties will terminate this Agreement. Section 7. Effect of Approvals. No approval given by the Authority hereunder or in connection herewith shall be deemed to constitute an approval of the Development for any purpose other than as stated herein and the process outlined in this Agreement shall not be deemed to supersede any concept review, conditional use permit, vacation, subdivision, orother zoning or planning approval process of the Authority 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 will 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 written amendments hereto signed by both of the parties to this Agreement. Section 10. Termination. The agreement shall be effective until June 30, 2012, subject to progress review in June 2011 or Developer notification, described as follows. (a) Prior to the June 2011, Authority meeting, the parties will consider the existing economic and market conditions and the developer’s progress on the development concept. If the Authority finds that current conditions make the execution of a development contract within twelve months unlikely, or finds that there has been a lack of substantial progress on Developer Undertakings, the Authority may terminate the agreement. (b) The Developer will notify the Authority in writing if, at any time, they conclude that the proposed development concept is not feasible and they are terminating the agreement and/or are requesting an opportunity to submit a new concept. 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 other communication from one party to the other shall be deemed effective if sent by certified mail, postage prepaid, return receipt requested or HEDRA Meeting Packet - April 21, 2011Page 14 of 39 delivered personally to a party at its address in the first paragraph of this Agreement, or at such other address as such party may designate in writing to the other party. HEDRA Meeting Packet - April 21, 2011Page 15 of 39 IN WITNESS WHEREOF , the Authority has caused this Agreement to beduly executed in its name and behalf and the Developer has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written HASTINGS ECONOMIC DEVELOPMENTAND REDEVELOPMENT AUTHORITY By__________________________________ Its ____________________ STOTKO SPEEDLING CONSTRUCTION, INC. By__________________________________ Its _________________________________ By__________________________________ Its _________________________________ HEDRA Meeting Packet - April 21, 2011Page 16 of 39 EXHIBIT A Redevelopment Property Lots 1 and 2 except the west 6 feet thereof, Block 29, Town of Hastings EXHIBIT B Developer’s Proposal HEDRA Meeting Packet - April 21, 2011Page 17 of 39