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HomeMy WebLinkAboutHousing & Redevelopment Authority Packet 04-10-2012AGENDA SPECIAL MEETING PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY TUESDAY, APRIL 10, 2012 - 6:30 p.m. WHERE: Medicine Lake Room City of Plymouth 3400 Plymouth Boulevard Plymouth, MN 55447 1. CALL TO ORDER - 6:30 P.M. 2. NEW BUSINESS A. Oppidan. Review and approve development agreement with Oppidan for TIF District 1-3 for redevelopment of the Plymouth Shopping Center located on State Highway 55 just west of County Road 73. 3. ADJOURNMENT Agenda Number o?• 4. PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY STAFF REPORT TO: Plymouth Housing and Redevelopment Authority FROM: Jim Barnes, Housing Manager through Steve Juetten, Executive Director MEETING DATE: April 10, 2012 SUBJECT: Oppidan Development — Approve Development Agreement and Related Documents BACKGROUND: At the August 25th, 2011 meeting, the HRA Board approved the request to modify the Tax Increment Financing (TIF) Plan for the HRA, TIF district 1-3on behalf of Oppidan Development. This is for the redevelopment of the Plymouth Shopping Center, which is located on Highway 55 just west of County Road 73 (see attached location map). The Board approved TIF in an amount not to exceed $1,899,645 to assist Oppidan Development with the demolition of the existing building and to make infrastructure improvements. At this point, Oppidan has purchase agreements in place for the entire project, which will include a senior assisted living facility, a McDonald's fast food restaurant and a medical office building. Do to the necessary infrastructure improvements it is anticipated that the project will be completed over a few years with the assisted living site beginning in 2012 and the other two buildings starting in 2013. Staff has worked with the developer over the past 7 months on various aspects of the project and is now ready for the Board to approve the Development Agreement and related documents. The interest rate on the pay-as-you-go note will be 6%, which is a 1/z% lower than the original assumption the board reviewed in August of 2011. There will also be minimum assessment agreements on the three parcels. RECOMMENDATION: Staff recommends that the Plymouth Housing and Redevelopment Authority Board of Commissioners approve the Development Agreement and related documents between the Plymouth Housing and Redevelopment Authority and Oppidan Development for Tax Increment Financing District 1-3 and authorize the Board Chair and the Executive Director to execute the necessary documents. ATTACHMENTS: 1. Location Map 2. Development Agreement 3. Resolution w ? w p o wx o ^ o wu g.0z A nUwI a, 0HqS02ww K4¢ 4U XUo-92Qo og-o gFioWwaa¢u ja) orsoii¢ w¢ oZOoaoOo xdNWoVOoNpo guuYou. n 9a?g¢N¢>2jWa4q2,Y¢V Wm-S°i=}% Z$ W O oO¢¢ b¢a}Wo0a" 0 0 U aJ3SoNY6° Ya$apom owSoV° m' F°$6w$w$°V°$a$oO4d$ mS¢p tg roQiSOmQ wUFoaoaaa a o aW$ c7aQmo 000° oo oho $$$ a$ o$o$ooao_ aNZ so i'1aw= 0RaxZ$ m4 rs-r-r-.----------.Y-------------- ------------- o- 5Opi'9QF$ aS woOoXo.`. 607}1 AVE, 3 - BOTH AVE. 55TH AV E.- r'(7 y 3 } 55TH AVE. SOTHA t 50TH AVE. YY wTHAVE. mo mm 25TH AVE. rT 15TH AVE." S 30TH AVE Y HRA 77F Drstritt 1-3 5TH AVE. 60OGEMOUNTAVE. DAa'--a--a----.-.r'.. w -- j - wbN{ xOz. 9Gc 9vas - '4 8 0 0 $$$ 81.1. n A Cm~'mmaU 0Z3><a2>ylm00Tm.Pz<Xasc-TbpOf'a0Z3aL aCm0OmnvKX$GC aAUv°2 a' S'1 nLZ{KnY<mN3ar0-Z1mA RZImPm° pPDSnmzOpP0nmA zN19p ZU$g$A? bON41mOY^P Fmts%`-= Z Amy2nmJ O WOZP GDP Oz wT.np AA ZA f, ZC 0b 0pp<C AAombAyO Z'THINa9w O e7i-IAj 3pA0 w 001 1 3 DZZ^yA'o z m c°m Z a mnm 2c _° noE min moo P ar >cozoo oK Zn n b o m° m HRA TIF District 1-3 APPROVED OCTOBER 24, 2006 1 0.5 0 1 2 City of Plymouth Miles 30TH AVE. 25TH AVE - 20TH AVE. 15TH AYE. 10TH AVE. AVE. I TAX INCREMENT FINANCING REDEVELOPMENT AGREEMENT TIF 1-3 OPPIDAN) BY AND BETWEEN HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF PLYMOUTH, MINNESOTA, AND KTJ 198, LLC DATED AS OF APRIL 1, 2012 This Document Was Drafted By: DORSEY & WHITNEY LLP (Ise) Suite 1500 50 South Sixth Street Minneapolis, Minnesota 55402 TABLE OF CONTENTS ARTICLE1 DEFINITIONS..........................................................................................................................................2 Section1.1 Definitions.............................................................................................. ........2 ARTICLE 2 REPRESENTATIONS AND WARRANTIES.........................................................................................5 Section2.1 By the Authority...........................................................................................................................5 Section 2.2 By Master Developerr....................................................................................................................5 Section 2.3 Assignment of Development Rights............................................................................................6 ARTICLE 3 USE, OWNERSHIP OF DEVELOPMENT PROPERTY; RESTRICTIONS..........................................7 Section3.1 Use of Development Property .......................................... --- .................................................... 7 Section 3.2 Ownership of Development Property....... . ................................................................................... 7 Section 3.3 Declaration of Restrictive Covenants...........................................................................................7 Section3.4 Business Subsidy Act..................................................................................................................7 Section 3.5 Assessment Agreements...............................................................................................................7 ARTICLE 4 CONSTRUCTION OF PROJECT............................................................................................................8 Section4.1 Phase Site Plans............................................................................................................................8 Section 4.2 Undertaking ofImprovements......................................................................................................8 Section4.3 Certificate of Completion.. ................................................................ ...... ................................... 9 ARTICLE 5 TAX INCREMENT FINANCING OF IMPROVEMENTS...................................................................10 Section 5.1 Payments Pursuant To Limited Revenue Tax Increment Note To Pay TIF Development Costs 10 Section5.2 Assignment of Note... ...................... .................................................... -- .................................. I I ARTICLE 6 PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER—.—..................................................12 Section 6.1 Transfer of Property and Assignment.........................................................................................12 ARTICLE 7 EVENTS OF DEFAULT; FEES.............................................................................................................13 Section7.1 Events of Default........................................................................................................................13 Section 7.2 Remedies on Default..................................................................................................................14 Section7.3 No Remedy Exclusive................................................................................................................ 15 Section7.4 Waivers........................I..............................................................................................................15 ARTICLE 8 ADDITIONAL PROVISIONS......................................................... .....15 Section 8.1 Conflict of Interests; Authority Representatives Nat Individually Liable..................................15 Section 8.2 Equal Employment Opportunity ....................... —................................................................... ....15 Section 8.3 Restrictions on Use.....................................................................................................................15 Section 8.4 Titles of Articles and Sections....................................................................................................16 Section8.5 Notices and Demands ................... --- ................................................................. ....................... 16 Section8.6 Term of Agreement....................................................................................................................16 Section8.7 Counterparts...............................................................................................................................16 continued) 1- Schedule A-1 Development Property Schedule B Project Description Schedule C Description of Master Developer Improvements & Public Development Costs Schedule D Payment Schedule, TIF Schedule Exhibit A Certificate of Completion Exhibit B-1 Form of Covenants and Restrictions Exhibit B-2 Form of Memorandum of Agreement Exhibit C Form of Limited Revenue Tax Increment Note Exhibit D Form of Assessment Agreement Exhibit E Form of Assignment M TAX INCREMENT FINANCING REDEVELOPMENT AGREEMENT THIS TAX INCREMENT FINANCING REDEVELOPMENT AGREEMENT (TIF 1-3 OPPIDAN), made and entered into as of this 1 st day of April, 2012, by and between the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF PLYMOUTH, MINNESOTA, a public body corporate and politic organized and existing under the laws of the State of Minnesota (the "Authority") and KTJ 198, LLC, a Minnesota limited liability company (the "Master Developer"): WITNESSETH: WHEREAS, the Authority was created pursuant to state law now codified as Minnesota Statutes, Sections 469.001 through 469.047 (the "Act"), by a resolution of the City Council of the City of Plymouth, Minnesota (the "City"); and WHEREAS, in furtherance of the objectives of the Act, the Authority has undertaken certain development activities for the purpose of redeveloping blighted areas, improving the local tax base, and improving the general economy of the City and the State of Minnesota, which is a "project" as defined in Minnesota Statutes, Section 469.174, Subdivision 8, known as Redevelopment Project Area No. 1 (the "Project Area") pursuant to a Project Plan for Redevelopment Area No. 1 (the "Project Plan"); and WHEREAS, the Board of Commissioners of the Authority (the "Board") and the City Council of the City have adopted resolutions, respectively, establishing a portion of the Project Area as a tax increment financing district ("Tax Increment District"); and WIIEREAS, in order to achieve the objectives of the Project Plan, the Authority intends to utilize tax increment financing, as described in Minnesota Statutes, Sections 469.174 through 469.1799, to finance the cost of certain public improvements related to the redevelopment of a 20 -acre site located in the City to include a four-story 90 -unit senior assisted living complex, a fast-food restaurant, and a commercial/retail and/or office building and related improvements of a public nature upon or adjacent to the Development Property (the "Project"); and WHEREAS, the Authority believes that the development and construction of the Project, and fulfillment of this Agreement are vital and are in the best interests of the Authority and benefit the health, safety, morals and welfare of the City's residents, and comply with the applicable state and local laws and requirements under which the Project has been undertaken and is being assisted. NOW, THEREFORE, in consideration of the foregoing premises and the mutual obligations set forth in this Agreement, the parties hereto hereby agree as follows: ARTICLE 1 Definitions Section 1,1 Definitions, In this Agreement, unless a different meaning clearly appears from the context: Act" means Minnesota Statutes, Sections 469,001 through 469.047. Agreement" means this Tax Increment Financing Redevelopment Agreement, as the same may be from time to time modified, amended or supplemented. Assessment Agreement" means the Assessment Agreement between the Authority and the Master Developer in the form set forth as Exhibit D hereto, Authority" means the Housing and Redevelopment Authority in and for the City of Plymouth, Minnesota, Available Tax Increment" means any Tax Increment remaining after the payment of any administrative expenses (which administrative expenses shall be limited to no more than 10% of the Tax Increment as permitted by the Tax Increment Act) related to the Development Property then due and owing. Certificate of Completion" means certification in the form attached as Exhibit A, to be provided to Master Developer pursuant to this Agreement. City" means the City of PIymouth, Minnesota, a municipal corporation and political subdivision of the State of Minnesota. County" means Hennepin County, Minnesota, a political subdivision of the State of Minnesota. Development Rights" means the rights of a Developer in and to the applicable parcel, including the rights under this Agreement, Development Rights Assignee" means an assignee of Development Rights under Section 2.3 of this Agreement, Developer" means, with respect to any parcel of the Development Property, until such time as the Master Developer makes an assignment of the Development Rights thereto pursuant to Section 2.3 hereof, the Master Developer, and after the Master Developer makes such assignment, such assignee. Developer does not include a subsequent owner of all or any portion of the Development Property that is not a Development Rights Assignee. Development Contract" means that certain Development Contract (Developer Installed Improvements) dated , 2012, by and between the City and Master Developer. Development Property" means the portion of the Project Area described on Schedule A- 1 attached hereto located in the City. 2- Event of Default" means as set forth in Section 9.1 hereof. First Stage Street Improvements" means the portion of the Street Improvements beginning at the intersection of State Highway 55 and ending at the portion of Outlot B containing utility easements. Improvements" means the improvements to be undertaken by the Developer as part of the Project, all as further described in Schedule C attached to this Agreement. Master Developer" means KT.I 198, LLC, a Minnesota limited liability company. Mortgage" means any mortgage made by Master Developer which covers, in whole or in part, the Development Property. Mortgagee" means the owner or holder of a Mortgage. Net Tax Capacity" means the value of real property as determined by the assessor for the County in accordance with Minnesota Statues, Section 273.13, against which the real property tax is imposed. Note" means a limited revenue tax increment note, the form of which is attached hereto as Exhibit C. Payment Dates" means payments of principal and interest to be made on the dates and in the amounts set for such payments in Schedule D. Phase" or "Phases" means Phase I and Phase II, either separately or together. Phase I" means construction of a four-story, 90 -unit senior assisted living complex and a fast food restaurant and related improvements of a public nature upon or adjacent to the Development Property, including, without limitation, the Street Improvements. Phase 1I" means a commercial/retail and/or office building of approximately 35,000- 48,000 square feet and related improvements of a public nature upon or adjacent to the Development Property. Phase Site Plans" means plans for development of a Phase or portion thereof as described in Section 4.1 Project" means Phase I and Phase II. Project Area" means the area designated for development by the Authority pursuant to the Project Plan and the Act. Project Description" means the description on Schedule B attached hereto. 3- Project Plan" means the Project Plan for the Project Area originally approved by the Board of the Authority on October 21, 2004, and originally approved by the City Council of the City on November 23, 2004. Public Development Costs" means certain costs incurred and to be incurred by the Master Developer or Developer in the construction of the Improvements, the estimated types and amounts of which are shown on Schedule C to this Agreement. Restrictions" means the easements, covenants, conditions and restrictions set forth in Exhibit B-1. Second Stage Street Improvements" means the portion of the Street Improvements beginning at the portion of Outlot B containing the utility easements and continuing to the completion of the Street Improvements at County Road 73. Section" means a Section of this Agreement, unless used in reference to Minnesota Statutes. State" means the State of Minnesota. Street Improvements" means the First Stage Street Improvements and the Second Stage Street Improvements. Tax Increment" means tax increment as, defined in the Tax Increment Act, derived from the Tax Increment District. Tax Increment Act" means Minnesota Statutes, Sections 469.174 through 469.1799, as amended. Tax Increment District" means the Tax Increment Financing (Redevelopment) District No. 1-3 created by the Authority pursuant to the Tax Increment Financing Plan. Tax Increment Financing Plan" means Tax Increment Financing Plan for the Tax Increment Financing (Redevelopment) District No. 1-3 (a redevelopment district) dated October 12, 2006, as modified on August 25, 2011. Unavoidable Delay" means a failure or delay in a party's performance of its obligations under this Agreement, or during any cure period specified in this Agreement which does not entail the mere payment of money, not within the party's reasonable control, including but not limited to acts of God, governmental agencies, the other party, strikes, labor disputes (except disputes which could be resolved by using union labor), fire or other casualty, or lack of materials; provided that within 10 days after a party impaired by the delay has knowledge of the delay it shall give the other party notice of the delay and the estimated length of the delay, and shall give the other party notice of the actual length of the delay within 10 days after the cause of the delay has ceased to exist. The parties shall pursue with reasonable diligence the avoidance and removal of any such delay. Unavoidable Delay shall not extend performance of any obligation unless the notices required in this definition are given as herein required. 4- ARTICLE 2 Representations and Warranties Section 2.1 By the Authority. The Authority makes the following representations to the Master Developer; a) The Authority is a housing and redevelopment authority duly organized and existing under the laws of the State of Minnesota and has the power to enter into this Agreement and carry out its obligations hereunder. The Authority has duly authorized the execution, delivery and performance of this Agreement. b) The Project is for a purpose within the power of the Authority under the Act, and was created, adopted and approved in accordance with the terms of the Act, c) The Tax Increment District is a "redevelopment district" within the meaning of the Tax Increment Act and was created, adopted and approved in accordance with the terms of the Tax Increment Act, Section 2.2 By Master Developer. Master Developer makes the following representations to the Authority: a) Master Developer is a Minnesota limited liability company, has power to enter into this Agreement and has duly authorized the execution and delivery of this Agreement. b) Master Developer will (or will cause one or more Development Rights Assignees to), subject to Unavoidable Delays, complete or cause to be completed the Project in accordance with the terms of this Agreement, and all local, state and federal laws and regulations. c) Master Developer has received no notice or communication from any local, state or federal official that the activities of Master Developer, the City or the Authority with respect to the Development Property may be or will be in violation of any environmental law or regulation. The Master Developer is aware of no facts the existence of which would cause it to be in violation of any local, state or federal environmental law, regulation or review procedure with respect to the Development Property. d) The Master Developer will (or will cause one or more Development Rights Assignees to) obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all local, state and federal laws and regulations which must be obtained or met before the Improvements and the Project may be constructed, e) Neither the execution or 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 by, limited by, conflicts with, or results in a 5- breach of, any restriction, agreement or instrument to which Master Developer is now a party or by which Master Developer is bound. f) Master Developer has no knowledge or information that any member of the governing body of the City or Authority or any other officer of the City or Authority has any direct or indirect financial interest in the Master Developer, the Development Property, the Improvements or the Project. g) Master Developer has received City approval for and has recorded all required plats on the Development Property, Section 2.3 Assignment of Development Ri hg_ts. The Master Developer intends to assign the Development Rights, or portions thereof, to one or more Development Rights Assignee(s), whereupon such Development Rights Assignee(s) shall become the Developers) hereunder. The Authority agrees that it will not unreasonably withhold its consent to such other responsible developer of a portion of the Improvements as the Master Developer may propose as a Development Rights Assignee hereunder. The Authority shall be entitled to require, as conditions to any approval of any Development Rights Assignee under this Section, that: a) The Master Developer retain design control with respect to the Improvements to be constructed by the proposed transferee; b) Any Development Rights Assignee shall have the qualifications and financial responsibility necessary to fulfill the obligations undertaken in this Agreement by the proposed transferee; c) The Development Rights Assignee enters into a written agreement, a form of which is attached hereto as Exhibit E, by which it assumes and agrees to perform the obligations of a Developer under this Agreement, performance of which is due on or after the date of assignment, and agrees to be subject to all the conditions and restrictions to which the Master Developer is subject, and further acknowledging the Restrictions and applicable Assessment Agreement to be recorded against the parcels comprising the Development Property; d) The Development Rights Assignee makes, as of the date of assignment, all representations and (for activities and events occurring on or after the date of assignment) warranties made in this Agreement by the Master Developer (including, without limitation, the representations and warranties contained in Section 2.2); e) If less than the entire Development Rights are being conveyed, the portion of the Improvements being allocated to the Phase or portion thereof for which Development Rights are being conveyed to the Development Rights Assignee must be compatible with the completion of the portion of the Improvements allocated to the Phase or portion of Phase not being conveyed. M The Authority has, as of the date of this Agreement, consented to the assignment of Development Rights to The Waters Senior Living, LLC, a Minnesota limited liability company, and McDonalds USA, LLC, a Delaware limited liability company, or an owner -operator of a McDonalds store, subject to satisfaction of the requirements in paragraphs (c) and (d) of this Section 2.3. ARTICLE 3 Use, Ownership of Development Property; Restrictions Section 3.1 Use of Development Property, Master Developer's use of the Development Property shall be subject to and in compliance with all of the conditions, covenants, restrictions and limitations imposed by this Agreement, the Restrictions and all applicable laws, ordinances, regulations, and approvals of PUD Amendment dated August 23, 2011. Section 3.2 Ownership of Development Property, Master Developer hereby represents and warrants that, as of the date of this Agreement Master Developer is the owner in fee simple of the Development Property, and there will be no liens, defects or other encumbrances upon title to the Development Property that would hinder the development of the Development Property by Master Developer as contemplated by this Agreement. Section 3.3 Declaration of Restrictive Covenants. Master Developer shall prepare, execute, and record on the title to the Development Property a Memorandum of this Agreement in form attached hereto as Exhibit B-2 and a Declaration of Restrictive Covenants in form attached hereto as Exhibit B-1. If the Developer determines that operation of the Development Property consistent with the Restrictions would endanger the financial viability thereof, the Developer may request the Board of Commissioners to consent to the amendment, modification or termination of any of the restrictions in any respect. The Authority is under no obligation to amend, modify or terminate any of the restrictions and may, in its sole and absolute discretion, refuse to do so. Section 3.4 Business Subsidy Act. The tax increment financing assistance provided by the Authority is not a "business subsidy" because it is "redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value" as such terms are defined in Minnesota Statutes, Section I I6J.993, subdivisions 3 and 3(17). Therefore, the provisions of Minnesota Statutes, Sections 116J.993 through 116J.995, are not applicable. Section 3.5 Assessment Agreement. a) An Assessment Agreement shall be executed by the Master Developer and the Authority as of the date hereof, and the Master Developer shall cause the Assessment Agreement and the executed Assessor's Certificate, in the form attached thereto, to be recorded against the Development Property as soon as reasonably practicable and, in any event, prior to the recording of any mortgage, security agreement or other instrument creating a lien on such parcels or transfer of any interest in such parcels, all consistent with Section 3.02 of the Assessment Agreement attached as Exhibit D hereto. 7- ARTICLE 4 Construction of Project Section 4.1 Phase Site Plans. Prior to commencing construction of the Improvements for a Phase, Developer must submit Phase Site Plans for the Phase to the Authority for review. The Phase Site PIans must provide for the construction of the Improvements for that Phase in a manner that conforms to the Tax Increment Financing Plan, this Agreement and all applicable federal, state and local laws, statutes, ordinances and regulations. The Authority shall approve the Phase Site Plans in writing if, in the reasonable discretion of the Authority, the Phase Site Plans: (a) conform to the terms and conditions of this Agreement; (b) conform to all applicable federal, state and local laws, ordinances, rules and regulations; and (c) no Event of Default has occurred. The Authority shall delegate its approval of the Phase Site Plans to the City. No approval by the Authority shall relieve Developer of the obligation to comply with the terms of this Agreement, applicable federal, state and local laws, ordinances, rules and regulations, or to properly construct the Project. No approval by the Authority shall constitute a waiver of an Event of Default, Any disapproval of the Phase Site Plans shall set forth the reasons therefor, and shall be made within 30 days after the date of their receipt by the Authority. If the Authority rejects the Phase Site Plans, in whole or in part, Developer shall submit new or corrected Phase Site Plans within 30 days after written notification to Developer of the rejection. The provisions of this Section relating to approval, rejection and resubmission of corrected Phase Site Plans shall continue to apply until the Phase Site Plans have been approved by the Authority. If the Developer desires to make any material change to the Phase Site Plans for a Phase after the Authority has approved them, the Developer must submit the proposed change to the Authority for its review and approval, and the Authority must approve the proposed change unless the Authority reasonably determines that, as a result of the proposed change, one or more of the requirements set forth in this Section are not satisfied. If the Authority rejects the proposed change the Authority must notify the Developer of the Authority's rejection of the proposed change within ten (10) Business Days of the Authority's receipt of the proposed change. Section 4.2 Undertaking of Improvements. a) Subject to Unavoidable Delays and except as provided below, Developer will construct or cause to be constructed the First Stage Street Improvements no later than December 31, 2012, Developer will construct or cause to be constructed the Second Stage Street Improvements no later than December 31, 2013. Developer anticipates that it will construct or cause to be constructed Phase I of the Project no later than December 31, 2012 and Phase I1 of the Project no later than December 31, 2015. b) Upon approval by the Authority of the Phase Site Plans for each Phase, the Developer shall promptly begin the Phase and diligently prosecute the completion the development of the Development Property in accordance with the requirements of the Project Description. Developer shall make reports, in such detail and at such times as may reasonably be requested by the Authority, as to the actual progress of Developer with respect to the Project. c) Developer shall not interfere with, or construct any improvements over, any public street or utility easement without the prior written approval of the City. All connections to public utility lines and facilities shall be subject to approval of the City and any private utility company involved. All street and utility installations, relocations, alterations and restorations shall be at Developer's expense and without expense to the City or the Authority. Developer at its own expense shall replace any public facilities or utilities damaged during the Project by the Developer or its agents or by others acting on behalf of or under their direction or control of the Developer. Notwithstanding anything herein to the contrary, neither the Developer nor the Development Property shall be subject to assessment for costs associated with the construction of the Improvements, Section 4.3 Certificate of Completion. a) Promptly after completion of the Improvements including the First Stage Street Improvements but excluding the Second State Street Improvements, evidenced by the Developer's provision of an architect's or general contractor's certificate to the Authority and evidence that Developer has met the requirements contained in the certificate of the City Engineer, the Authority will furnish Developer with a Certificate of Completion as to such Improvements, which shall be conclusive evidence of satisfaction and termination of the agreements and covenants of this Agreement with respect to the obligations of Developer to complete such Improvements. The furnishing by the Authority of a Certificate of Completion for such Improvements shall not constitute evidence of compliance with or satisfaction of any obligation of Developer to any Mortgagee. The Authority may delegate its provision of a Certificate of Completion for such Improvements to the City. b) Promptly after completion of the Second Stage Street Improvements, evidenced by the Developer's provision of an architect's or general contractor's certificate to the Authority and evidence that Developer has met the requirements contained in the certificate of the City Engineer, the Authority will furnish Developer with a Certificate of Completion as to such Improvements, which shall be conclusive evidence of satisfaction and termination of the agreements and covenants of this Agreement with respect to the obligations of Developer to complete such Improvements. The furnishing by the Authority of a Certificate of Completion for such Improvements shall not constitute evidence of compliance with or satisfaction of any obligation of Developer to any Mortgagee. The Authority may delegate its provision of a Certificate of Completion for such Improvements to the City. c) If the Authority shall refuse or fail to provide a Certificate of Completion, the Authority shall, within 15 days after the Developer provides the architect's or general contractor's certificate referenced in Section 4.3(a) or (b), provide Developer with a written statement specifying in what respect Developer has failed to complete the Improvements in accordance with this Agreement, or is otherwise in default, and what m measures or acts will be necessary, in the opinion of the Authority, for Developer to obtain the Certificate of Completion. ARTICLE 5 Tax Increment Financiri off Improvements Section 5.1 Payments Pursuant To Limited Revenue Tax Increment Note To Pay TIF Development Costs. The Developer agrees to and shall be responsible to pay all of its respective costs of the Project, as herein provided. However, the Authority, in order to encourage the construction of the Project, is willing to finance the Public Development Costs. The Authority agrees that it will make payments to the Master Developer, including from funds currently held by the City, and pursuant to a limited revenue tax increment note (the "Note"), the form of which is attached hereto as Exhibit C, in a principal amount sufficient to pay the Public Development Costs attributable to the Improvements as listed on Schedule C hereto, with the Note to be issued and interest to begin to accrue upon the date of issuance of the Certificate of Completion pursuant to Section 4.3(a) hereof, said payments of principal and interest to be made on the dates the "Payment Dates") and in the amounts set for such payments in Schedule D hereto, which is incorporated herein, but subject to the following terms and conditions, including adjustment as provided in Subsection (c) below: a) Notwithstanding the Payment Dates provided in Schedule D, no payments shall be made by the Authority to the Master Developer unless and until the City engineer has confirmed in writing to the Authority that the Improvements including the First Stage Street Improvements but excluding the Second Stage Street Improvements have been completed, and the Certificate of Completion has been issued as contemplated in Section 4.3(a) hereof. b) The Authority will apply the Tax Increment first to pay any administrative expenses relating to the Development Property to the extent permitted by the Tax Increment Act and to the extent that such expenses have not been paid or reimbursed to the Authority by the Master Developer, Any Tax Increment remaining after the payment of any administrative expenses then due and owing (the "Available Tax Increment") shall be paid to the Master Developer for reimbursement of the Public Development Costs plus interest as provided above on the Payment Dates, up to the maximum principal amount of 1,599,645.00. c) If, upon completion of the Improvements, the total of the actual Public Development Costs are Iower than the total of the Public Development Costs shown in Schedule C and the budget included as part of the initial Schedule D, then the principal amount to be reimbursed to the Master Developer hereunder shall be reduced to the actual total cost amount of the Public Development Costs and a new Schedule D shall be prepared and substituted, which will amortize said actual cost over the remaining Payment Dates such that amortized payments of principal and interest in each year thereafter are equal, as nearly as practicable, such principal to bear interest at the rate of six percent (6%) per annum. In addition, in the event the time for distribution of property tax revenues to the Authority by the County shall be modified from the dates presently in force, the parties shall amend Schedule D to the extent necessary to conform with the 10- intention of the parties that the Payment Dates shall fall approximately 30 to 45 days after the expected dates upon which the Authority receives its major property tax distributions from the County. d) The Authority shall be obligated to make the payments to the Master Developer required pursuant to this Section 5 only from and to the extent of the Available Tax Increment actually received from the Tax Increment District for any tax year, and such payments shall never be considered to be a general obligation or indebtedness of the Authority or the City; provided that the amount required to be paid by the Authority to the Master Developer on any Payment Date shall not exceed the amount set forth in Schedule D as amended. If, on any Payment Date, the amount of the Available Tax Increment available to the Authority from the Tax Increment District and to be paid to the Master Developer under Section 5.1 is not sufficient to pay the installment then due the Master Developer under this Section 5.1 in full, the funds available shall be applied first to interest and then to principal then due. To the extent that an installment of principal or interest to be paid under this Section 5.1 is not paid on a Payment Date because the amount of Available Tax Increment under Section 5.1(b) is insufficient therefor, such installment shall continue to be an obligation of the City under the terms of this Agreement, but shall not bear interest from and after said Payment Date, and shall be paid, subject to the provisions of Section 5.1(e) hereof, only from Available Tax Increment actually received and available therefor under Section 5.1(b) hereof on the next subsequent Payment Dates, after the payment of the installment of principal and interest payable on said subsequent Payment Date. e) Upon thirty (30) days' written notice to the Master Developer, the Authority may prepay all or a portion of the outstanding principal balance due to the Master Developer pursuant to this Section 5. 1, and Schedule D, without penalty, on any date at a prepayment price equal to the outstanding principal balance to be prepaid plus accrued interest to the prepayment date. If a partial prepayment is made, the prepayment shall be applied to the last maturing installments of principal and the semiannual payments required under this Section 5.1 and Schedule D shall not otherwise be reduced. Subsequent to any partial prepayment, a revised Schedule D shall be prepared and executed by the parties hereto. Excess Tax Increment from the Development Property shall automatically be applied to the prepayment of all or a portion of the principal balance due hereunder. Section 5.2 Assignment of Note. The Note shall be not assignable nor transferable without the prior written consent of the Authority; provided, however, that such consent shall not be unreasonably withheld or delayed if. (a) the assignee or transferee delivers to the Authority a written instrument acknowledging the limited nature of the Authority's payment obligations under the Note, and (b) the assignee or transferee executes and delivers to the Authority a certificate, in form and substance satisfactory to the Authority, pursuant to which, among other things, such assignee or transferee represents (i) that the Note is being acquired for investment for such assignee's or transferee's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, (ii) that the assignee or transferee has no present intention of selling, granting any participation in, or otherwise distributing the same, (iii) that the assignee or transferee is an "accredited investor" within the meaning of Rule 501 of the 11- Regulation D under the Securities Act of 1933, as amended, (iv) that the assignee or transferee, either alone or with such assignee's or transferee's representatives, has knowledge and experience in financial and business matters and is capable of evaluating the merits and risks of the prospective investment in the Note and the assignee or transferee is able to bear the economic consequences thereof, (v) that in making its decision to acquire the Note, the assignee or transferee has relied upon independent investigations made by the assignee or transferee and, to the extent believed by such assignee or transferee to be appropriate, the assignee's or transferee's representatives, including its own professional, tax and other advisors, and has not relied upon any representation or warranty from the Authority, or any of its officers, employees, agents, affiliates or representatives, with respect to the value of the Note, (vi) that the Authority has not made any warranty, acknowledgment or covenant, in writing or otherwise, to the assignee or transferee regarding the tax consequences, if any, of the acquisition and investment in the Note, vii) that the assignee or transferee or its representatives have been given a full opportunity to examine all documents and to ask questions of, and to receive answers from, the Authority and its representatives concerning the terms of the Note and such other information as the assignee or transferee desires in order to evaluate the acquisition of and investment in the Note, and all such questions have been answered to the full satisfaction of the assignee or transferee, (viii) that the assignee or transferee has evaluated the merits and risks of investment in the Note and has determined that the Note is a suitable investment for the assignee or transferee in Iight of such party's overall financial condition and prospects, (ix) that the Note will be characterized as a restricted security" under the federal securities laws because the Note is being acquired in a transaction not involving a public offering and that under such laws and applicable regulations such securities may not be resold without registration under the Securities Act of 1933, as amended, except in certain limited circumstances, and (x) that no market for the Note exists and no market for the Note is intended to be developed. The Authority hereby consents to the assignment of the Note to Mirmwest Bank, provided that Minnwest Bank delivers to the Authority a written instrument acknowledging the limited nature of the Authority's payment obligations under the Note and executes and delivers to the Authority a certificate, in form and substance satisfactory to the Authority, meeting the requirements of (b) listed in this Section 5.2. ARTICLE 6 Prohibitions Against Assignment and Transfer Section 6.1 Transfer of Pro eegy and Assignment. Prior to the issuance of the Certificates of Completion, except for assignment of the Development Rights to a Development Rights Assignee pursuant to Section 2.3, and except as hereinafter provided, the Developer has not made and will not make, or suffer to be made, any total or partial sale, assignment, conveyance, Iease, or other transfer, 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 same, without the prior written approval of the Authority, which shall not be unreasonably withheld. The Authority shall be entitled to require as conditions to any such approval that: (i) the proposed transferee have the qualifications and financial responsibility, as reasonably determined by the Authority, necessary and adequate to fulfill the obligations undertaken in this Agreement by Master Developer; and (ii) the proposed transferee, by recordable instrument satisfactory to 12- the Authority shall, for itself and its successors and assigns, assume all of the obligations of Master Developer under this Agreement. No transfer of, or change with respect to, ownership in the Development Property or any part thereof, or any interest therein, however consummated or occurring and whether voluntary or involuntary, shall operate, legally or practically, to deprive or limit the Authority of or with respect to any rights or remedies or controls provided in or resulting from this Agreement with respect to the Development Property and the completion of the Project that the Authority would have had, had there been no such transfer or change. There shall be submitted to the Authority for review all legal documents relating to the transfer. In the absence of specific written agreement by the Authority to the contrary, no such transfer or approval by the Authority thereof shall be deemed to relieve Developer, or any other party bound in any way by this Agreement or otherwise with respect to the completion of the Project, from any of its obligations with respect thereto. Notwithstanding the foregoing, this Section 6.1 shall not apply to any transfer or assignment to (i) any entity controlling, controlled by or under common control with the Master Developer or (ii) any entity in which the majority equity interest is owned by the parties that have a majority equity interest in Master Developer. Provided that no Event of Default exists hereunder, any such transfer or assignment shall release Master Developer from its obligations hereunder upon execution and delivery to the Authority by the transferee or assignee of an instrument in form and substance satisfactory to the Authority by which the transferee or assignee assumes the obligations of the Master Developer hereunder. ARTICLE 7 Events of Default; Fees Section 7.1 Events of Default. 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 unless the context otherwise provides), any one or more of the following events which occurs and continues for more than 30 days after notice by the defaulting party of such default (and the term "default" shall mean any event which would with the passage of time or giving of notice, or both, be an "Event of Default" hereunder): a) Failure of the Developer to construct or cause to be constructed the Improvements as required hereunder. b) Failure of any Developer or the Authority to observe and perform any other covenant, condition, obligation or agreement on its part to be observed or performed hereunder; provided that the failure to construct Phase I or Phase II shall not be an Event of Default hereunder, however, if a Phase is undertaken, Developer shall observe and perform any other covenant, condition, obligation or agreement on its part to be observed or performed hereunder related to a Phase and failure to so observe and perform in respect of a Phase may constitute a default hereunder. The Developer has not covenanted to complete Phase I or Phase II by any certain date. c) Failure of any Developer to pay any taxes on the Development Property as they become due. 13- e) Failure of any Developer to construct or cause to be constructed the Street Improvements, as completion of the Street Improvements is integral to the Project and the general plan for the development or redevelopment of the City as a whole, e) A default under the Development Contract, Section 7.2 Remedies on Default. In the event the Authority desires to exercise any of its rights or remedies as provided herein or otherwise available to the Authority at law or in equity, the Authority shall first provide written notice to Master Developer or Developer setting forth with specific particularity the Event of Default and the action required to cure or remedy the same (the "Default Notice"), Master Developer or Developer shall have thirty (30) days from receipt of a Default Notice to cure or remedy the Event of Default specified in the Default Notice, or such longer period as may be reasonably required to complete the cure as soon as reasonably possible under the circumstances. If, following Master Developer or Developer's receipt of a Default Notice, Master Developer or Developer does not cure or remedy the Event of Default therein specified within the time provided above, the Authority may take any one or more of the following actions: a) Suspend its performance under this Agreement until it receives assurances from Master Developer or Developer, deemed adequate by the Authority, that Master Developer or Developer will cure its default and continue its performance under this Agreement. b) Use Tax Increment to complete the Project and permanently reduce the amount of Tax Increment paid to the Master Developer under the Note by the same amount. c) Terminate all rights of Master Developer or Developer under this Agreement and the Note, including the right to receive Tax Increment payments under the Note. d) Withhold a Certificate of Completion for the First Stage Street Improvements or the Certificate of Completion for the Improvements. e) Take whatever action at law or in equity may appear necessary or desirable to the Authority to enforce performance and observance of any obligation, agreement, or covenant of Master Developer or Developer under this Agreement. In the event the Authority should fail to observe or perform any covenant, agreement or obligation of the Authority on its part to be observed and performed under this Agreement, Master Developer or Developer may take any one or more of the following actions: f) Suspend its performance under this Agreement until it receives assurances from the Authority deemed adequate by Master Developer or Developer, that the Authority will cure its default and continue its performance under this Agreement. g) Terminate all rights of the Authority under this Agreement. 14- h) Take whatever action at law or in equity may appear necessary or desirable to Master Developer or Developer to enforce performance and observance of any obligation, agreement, or covenant of the Authority under this Agreement, Section 7.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority or to the Master Developer or to the Developer 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 Iaw 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. In order to entitle the Authority, Master Developer, or Developer to exercise any remedy reserved to them, it shall not be necessary to give notice, other than such notice as may be required under this Agreement. Section 7.4 Waivers. All waivers by any party to this Agreement shall be in writing. If any provision of this Agreement is breached by any party and thereafter waived by another party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. ARTICLE 8 Additional Provisions Section 8.1 Conflict of Interests;.Authority Representatives Not Individually Liable. No member, official, employee, or consultant or employees of the consultants of the Authority shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official, consultant or the consultant's employees or employee participate in any decision relating to this 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, consultant or the consultant's employees, or employee of the Authority shall be personally liable to Master Developer, Developer, or any successor in interest, in the event of any default or breach by the Authority or for any amount which may become due to Master Developer, Developer or successors or on any obligations Linder the terms of this Agreement. Section 8.2 Equal Employment Opportunity. Developer, for itself and its successors and assigns, agrees that during the construction of the Improvements and the Project it will comply with any applicable affirmative action and nondiscrimination laws or regulations. Section 8.3 Restrictions on Use. Developer agrees for itself, and its successors and assigns, and every successor in interest to the Development Property, or any part thereof, that Developer, and such successors and assigns, shall devote the Development Property to, and only to and in accordance with, the uses specified in the Project Plan, this Agreement and other agreements entered into between the Master Developer and the Authority or the City, and shall not discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the use or occupancy of the Development Property or any improvements erected or to be erected thereon, or any part thereof. 15- Section 8.4 Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 8,5 Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under this Agreement by any party to another party shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally as follows: a) in the case of Master Developer, addressed to or delivered personally to: KTJ 198, LLC 5125 County Road 101 Suite 100 Minnetonka, MN 55345 Attn: Vice President b) in the case of the Authority, addressed or delivered personally to: Ilousing and Redevelopment Authority in and for the City of Plymouth 3400 PIymouth Boulevard Plymouth, Minnesota 55447 Attn: Executive Director 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 party as provided in this Section. Section 8.6 Term of Agreement. This Agreement shall terminate upon the earlier of: (i) February 1, 2034; (ii) payment in full of the amounts to be paid to the Master Developer pursuant to Section 5.1 hereof and amounts to be paid to the Authority hereunder; and (iii) as otherwise terminated by the City pursuant to Section 7.2 hereof Section 8.7 Counterparts, This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. 16- IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first above written, HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF PLYMOUTH By Its Chair By Its Executive Director STATE OF MINNESOTA ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of 2012, by Jeff Kulaszewicz, the Chair of the Housing and Redevelopment Authority in and for the City of Plymouth, Notary Public STATE OF MINNESOTA ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of 2012, by Steve Juetten, the Executive Director of the Housing and Redevelopment Authority in and for the City of Plymouth, Notary Public S-1 KTJ 198, LLC Its [Chief Executive Officer] STATE OF MINNESOTA ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of , 2012, by , the [Chief Executive Officer], on behalf of the company, Notary Public S-2 SCHEDULE A-1 DEVELOPMENT PROPERTY Tracts A, B and C, Registered Land Survey No. 1676, Hennepin County, Minnesota. (Torrens Property, Certificate of Title No. 1207792). Together with: That part of the Southeast Quarter of the Northeast Quarter of Section 35, Township 118, Range 22, Hennepin County, Minnesota, described as follows: Commencing at the Southwest corner of the Southeast Quarter of the Northeast Quarter, Section 35, Township 118, Range 22; thence North along the West line thereof 805 feet; thence East parallel to the South line of said quarter -quarter 683.20 feet to the point of beginning; thence continuing East along said parallel line 100 feet; thence Northeasterly, deflecting to the left 81 degrees 49 minutes a distance of 108.3 feet, more or less to the Southerly right-of-way line of State Trunk Highway No. 55; thence Northwesterly along the Southerly right-of-way line of said Highway 97.99 feet; thence Southwesterly 136.74 feet, more or less, to the point of beginning. Together with: That part of the Southeast Quarter of the Northeast Quarter of Section 35, Township 118, Range 22, Hennepin County, Minnesota, lying Southerly of the centerline of the Eastbound lane of State Trunk Highway No. 55 (as now located and established) and lying Southwesterly of the Northeasterly line of Old County Road No. 6 (also being the Northeasterly line of'1'ract B, Registered Land Survey No. 1676) and the Northwesterly extension thereof, and lying Northerly of the Northeasterly lines of Tracts A and B, Registered Land Survey No. 1676; and lying Northerly of a line beginning at the Northwest corner of Tract B, Registered Land Survey No. 1676; thence North 74 degrees 06 minutes 45 seconds West on an assumed bearing along the Northwesterly extension of the North line of said Tract B, a distance of 97.99 feet; thence South 8 degrees 54 minutes 02 seconds West, a distance of 15.11 feet to the Northeast corner of Tract A, Registered Land Survey No. 1676, and there terminating; and lying Southeasterly of a line drawn Northeasterly from the Northwest corner of Tract A, Registered Land Survey No. 1676, at a right angle to the North line of said Tract A, a distance of 75.00 feet to the centerline of the Eastbound lane of State Trunk Highway No. 55 (as now located and established), which lies Southwesterly of a line run parallel with and distant 70.00 feet Southwesterly (as measured at right angles) of the following described line: Beginning at a point on the West line of the Northeast Quarter of said Section 35, distant 1065.36 feet South of the Northwest corner thereof, thence run Southeasterly at an angle of 73 degrees 22 minutes 02 seconds from said West line of the Northeast Quarter (measured from South to East) for 2608.47 feet to a tangent spiral point; thence deflect to the right on a spiral curve of decreasing radius (spiral angle 2 degrees 00 minutes 00 seconds) for 200 feet to a spiral curve point; thence deflect to the right on a 2 degrees 00 minutes 00 seconds circular curve (delta angle 11 degrees 34 minutes 00 seconds) for 578.33 feet to a curve spiral point and there terminating, S -A-1 Together with: That part of the Southwest Quarter of Northwest Quarter of Section 36, Township 118, Range 22, Hennepin County, Minnesota, lying Southwesterly of the Southwesterly line of Old County Road No. 6 and described as beginning at the intersection of the West line of said Section 36 with the Southwesterly line of Old County Road 6, thence Southerly along the West line of said Section 36, a distance of 313.50 feet; thence Northeasterly to a point on the Southwesterly Iine of OId County Road No. 6, distant 173.10 feet Southeasterly of point of beginning; thence Northwesterly along the Southwesterly line of Old County Road No. 6, a distance of 173.10 feet to the point of beginning. Together with: That part of the Southwest Quarter of the Northwest Quarter of Section 36, Township 118, Range 22, Hennepin County, Minnesota, lying Southwesterly of the Southwesterly line of Old County Road No. 6, and described as commencing at the Southwest conger of the Northwest Quarter of said Section 36, thence Northerly along the West line of said Section 36, a distance of 210.30 feet to the point of beginning; thence deflect to the right at an angle of 90 degrees 30 minutes, a distance of 9.00 feet; thence Northeasterly 358.30 feet to a point on the Southwesterly line of Old County Road No. 6, distant 248.10 feet Southeasterly of the intcrsection of said Southwesterly line with the West line of said Section 36; thence Northwesterly along the Southwesterly line of Old County Road No. 6, a distance of 75.00 feet; thence Southwesterly to a point on the West Iine of said Section 36, distant 122.10 feet Northerly of the point of beginning; thence Southerly 122.10 feet along the West line of said Section 36 to the point of beginning. S -A-2 SCHEDULE B PROJECT DESCRIPTION The Project includes the redevelopment of an existing 20 -acre site, comprised of two phases of construction; Phase I will be a four-story, 90 unit senior assisted living complex consisting of approximately 130,000 square feet, an approximately 5,000 square foot fast food restaurant, and related improvements of a public nature upon or adjacent to the Development Property, including, without limitation, the street improvements to Trunk Highway 55 south frontage road, West Medicine Lake Drive, and County Road 73 as further described in the Development Contract. Phase II will be a commercial/retail and/or office building of approximately 35,000-48,000 square feet and related improvements of a public nature upon or adjacent to the Development Property. 5-13-1 SCHEDULE C IMPROVEMENTS & PUBLIC DEVELOPMENT COSTS Improvement Demolition Environmental Testing and Remediation First Stage Street Improvements Second Stage Street Improvements Utilities Relocation Costs Total S -C-1 Public Development Cost 238,950 317,750 200,000 1,899,645 SCHEDULED PAYMENT SCHEDULE, TIF SCHEDULE S -D-1 EXHIBIT A CERTIFICATE OF COMPLETION WHEREAS, KTJ 198, LLC (the "Master Developer"), is the Master Developer of property in the City of Plymouth, County of Hennepin and State of Minnesota described on Exhibit A attached hereto and made a part hereof (the "Development Property"); and WHEREAS, the Development Property is subject to the provisions of a certain Tax Increment Financing Redevelopment Agreement (TIF 1-3 Oppidan) (the "Agreement'), dated as of April 1, 2012, by and between Master Developer and the Housing and Redevelopment Authority in and for the City of Plymouth (the "Authority"); and WHEREAS, Master Developer and Developer (as defined in the Agreement) has fully and duly performed all of the covenants and conditions of Master Developer under the Agreement with respect to the completion of the [Improvements (as defined in the Agreement) including the First Stage Street Improvements (as defined in the Agreement) but excluding the Second Stage Street Improvements (as defined in the Agreement)] [the Second Stage Street Improvements]; NOW, THEREFORE, it is hereby certified that all requirements of Master Developer and Devcloper under the Agreement with respect to the construction of such Improvements have been completed and duly and fully performed, and this instrument is to be conclusive evidence of the satisfactory termination of the covenants and conditions of the Agreement as they relate to the construction of such Improvements; provided, however, the Covenants and Restrictions provided for in Exhibit B -I of the Agreement and other ongoing covenants with respect to such Improvements shall remain in full force and effect to the extent and with respect to the property specified in Section 3.3 of the Agreement. A-1 Dated this day of , 20_. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF PLYMOUTH Its STATE OF MINNESOTA ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this 20_, by , the Housing and Redevelopment Authority in and for the City of Plymouth, Notary Public A-2 day of of the EXHIBIT B-1 DECLARATION OF RESTRICTIVE COVENANTS This Declaration is made and executed as of the day of , 2012, by KTJ 198, LLC, a Minnesota limited liability company ("Declarant"), WHEREAS, Declarant is fee owner of the premises described on Appendix A hereto located in the County of Hennepin, State of Minnesota (the "Property"). WHEREAS, the Housing and Redevelopment Authority in and for the City of Plymouth, Minnesota (the "HRA") has entered into a Tax Increment Financing Redevelopment Agreement TIF 1-3 Oppidan), dated April 1, 2012 (the "Redevelopment Agreement"), with the Declarant. The Redevelopment Agreement provides for certain aid and assistance to be provided by the HRA in connection with the construction by the Declarant of certain public improvements on the Property; and WHEREAS, Section 3.3 of the Redevelopment Agreement provides for this Declaration to be executed by Declarant and for this Declaration to be filed of record in the real estate records. NOW, THEREFORE, in consideration of the foregoing and in compliance with its obligations under Section 3.3 of the Redevelopment Agreement, Declarant, for itself, and its successors and assigns, does hereby declare that the Property shall be owned, used, occupied, sold and conveyed subject to the following covenants and restrictions: 1. The Development Property shall not be exempt from real estate taxes notwithstanding the ownership or use of the land and, specifically, shall not be a part of a job opportunity building zone or other tax free zone under local or state law. 2. The Development Property shall not be sold, transferred, conveyed or leased to any of the following parties: a) An institution of purely public charity; b) A church or ancillary tax-exempt housing; c) A public hospital; d) A public school district; e) An organization exempt from federal income taxes pursuant to Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, if as a result of such sale, transfer, conveyance or lease the Development Property would become exempt from real estate taxes; or f) A Minnesota cooperative association organized under Minnesota Statutes, Section 308.05 and 308.18 for the purpose of complying with the provisions of Minnesota Statutes, Section 273.133, subdivision 3, or any other party that would cause the Development Property to be valued and assessed for real estate tax purposes at a lower percentage of its market value than the Development Property is then being valued and assessed for real estate tax purposes or would result in the Development Property becoming exempt from real estate taxes, 3. The Development Property shall not be used for any of the following purposes: a) The operation of a public charity; b) A church or house of worship; c) The operation of a public hospital; d) The operation of a public schoolhouse, academy, college, university or seminary of learning; or e) Any other use which would cause the Development Property to be valued and assessed for real estate tax purposes at a lower percentage of its market value than the Development Property is then being valued and assessed for real estate tax purposes or would result in the Development Property becoming exempt from real estate taxes. 4. The Development Property shall be devoted to uses consistent with Section 8.3 of the Redevelopment Agreement. 5. The Development Property owner shall: a) comply with all non-discrimination laws in federal and Minnesota state laws in the sale, lease, use or occupancy of the Development Property, the Improvements or any part thereof, b) develop the Development Property in an orderly manner consistent with the City's zoning ordinances and comprehensive plan and City approvals. 6. The covenants and restrictions herein contained shall run with the title to the Development Property and shall be binding upon all present and future owners and occupants of the Development Property; provided, however, that the covenants and restrictions herein contained shall inure only to the benefit of the Authority and may be released or waived in whole or in part at any time, and from time to time, by the sole act of the Authority, and variances may be granted to the covenants and restrictions herein contained by the sole act of the Authority. These covenants and restrictions shall be enforceable only by the Authority, and only the Authority shall have the right to sue for and obtain an injunction, prohibitive or mandatory, to prevent the breach of the covenants and restrictions herein contained, or to enforce the performance or observance thereof. 7. The covenants and restrictions herein contained shall remain in effect until the payment in full of principal of, and interest on the limited revenue tax increment note issued in accordance with the Redevelopment Agreement, and thereafter shall be null and void. Apendix A Tracts A, B and C, Registered Land Survey No, 1676, Hennepin County, Minnesota. (Torrens Property, Certificate of Title No, 1207792). Together with: That part of the Southeast Quarter of the Northeast Quarter of Section 35, Township 118, Range 22, Hennepin County, Minnesota, described as follows: Commencing at the Southwest corner of the Southeast Quarter of the Northeast Quarter, Section 35, Township 118, Range 22; thence North along the West line thereof 805 feet; thence East parallel to the South line of said quarter -quarter 683.20 feet to the point of beginning; thence continuing East along said parallel line 100 feet; thence Northeasterly, deflecting to the left 81 degrees 49 minutes a distance of 108.3 feet, more or less to the Southerly right-of-way line of State Trunk Highway No. 55; thence Northwesterly along the Southerly right-of-way line of said Highway 97.99 feet; thence Southwesterly 136.74 feet, more or less, to the point of beginning. Together with: That part of the Southeast Quarter of the Northeast Quarter of Section 35, Township 118, Range 22, Hennepin Comity, Minnesota, lying Southerly of the centerline of the Eastbound lane of State Trunk Highway No. 55 (as now located and established) and lying Southwesterly of the Northeasterly line of Old County Road No. 6 (also being the Northeasterly line of Tract B, Registered Land Survey No. 1676) and the Northwesterly extension thereof; and lying Northerly of the Northeasterly lines of Tracts A and B, Registered Land Survey No. 1676; and lying Northerly of a line beginning at the Northwest corner of Tract B, Registered Land Survey No. 1676; thence North 74 degrees 06 minutes 45 seconds West on an assumed bearing along the Northwesterly extension of the North line of said Tract B, a distance of 97.99 feet; thence South 8 degrees 54 minutes 02 seconds West, a distance of 15.11 feet to the Northeast corner of Tract A, Registered Land Survey No. 1676, and there terminating; and lying Southeasterly of a Iine drawn Northeasterly from the Northwest corner, of Tract A, Registered Land Survey No. 1676, at a right angle to the North line of said Tract A, a distance of 75.00 feet to the centerline of the Eastbound lane of State Trunk Highway No. 55 (as now located and established), which lies Southwesterly of a line run parallel with and distant 70.00 feet Southwesterly (as measured at right angles) of the following described line: Beginning at a point on the West line of the Northeast Quarter of said Section 35, distant 1065.36 feet South of the Northwest corner thereof, thence run Southeasterly at an angle of 73 degrees 22 minutes 02 seconds from said West line of the Northeast Quarter (measured from South to East) for 2608.47 feet to a tangent spiral point; thence deflect to the right on a spiral curve of decreasing radius (spiral angle 2 degrees 00 minutes 00 seconds) for 200 feet to a spiral curve point; thence deflect to the right on a 2 degrees 00 minutes 00 seconds circular curve (delta angle 1 I degrees 34 minutes 00 seconds) for 578.33 feet to a curve spiral point and there terminating. Together with: That part of the Southwest Quarter of the Northwest Quarter of Section 36, Township 118, Range 22, Hennepin County, Minnesota, lying Southwesterly of the Southwesterly line of Old County Road No. 6 and described as beginning at the intersection of the West line of said Section 36 with the Southwesterly line of Old County Road 6, thence Southerly along the West line of said Section 36, a distance of 313.50 feet; thence Northeasterly to a point on the Southwesterly line of Old County Road No. 6, distant 173.10 feet Southeasterly of the point of beginning; thence Northwesterly along the Southwesterly line of Old County Road No. 6, a distance of 173.10 feet to the point of beginning. Together with: That part of the Southwest Quarter of the Northwest Quarter of Section 36, Township 118, Range 22, Hennepin County, Minnesota, lying Southwesterly of the Southwesterly line of Old County Road No. 6, and described as commencing at the Southwest corner of the Northwest Quarter of said Section 36, thence Northerly along the West line of said Section 36, a distance of 210.30 feet to the point of beginning; thence deflect to the right at an angle of 90 degrees 30 minutes, a distance of 9.00 feet; thence Northeasterly 358.30 feet to a point on the Southwesterly line of Old County Road No. 6, distant 248.10 feet Southeasterly of the intersection of said Southwesterly line with the West line of said Section 36; thence Northwesterly along the Southwesterly Iine of Old County Road No. 6, a distance of 75.00 feet; thence Southwesterly to a point on the West line of said Section 36, distant 122.10 feet Northerly of the point of beginning; thence Southerly 122.10 feet along the West line of said Section 36 to the point of beginning EXHIBIT B-2 MEMORANDUM OF AGREEMENT THIS MEMORANDUM OF DEVELOPMENT AGREEMENT, is made this day of , 2012 between the Housing and Redevelopment Authority in and for the City of Plymouth, Minnesota, a public body corporate and politic ("Authority") and KTI 195, LLC, a Minnesota limited liability company (the "Developer"): WITNESSETH: WHEREAS, the Authority and the Developer entered into that Tax Increment Financing Redevelopment Agreement (TIF 1-3 Oppidan) dated April 1, 2012 (the "Agreement"), whereby the Authority agreed to provide certain assistance to Developer in connection with the construction of certain improvements (the "Improvements") upon the premises described on Exhibit A hereto located in the County of Hennepin, State of Minnesota (the "Property"). WHEREAS, in accordance with the terrns of the Agreement the Developer has agreed to construct the Improvements; and therein. WHEREAS, the Agreement contains certain restrictions and covenants as further set forth WHEREAS, Authority and Developer desire to give record notice of said Agreement; NOW, THEREFORE, in consideration of the foregoing, the Authority and Developer agree as follows: Public Assistance. The Authority has agreed to provide certain financial and other assistance to Developer in accordance with the tei7ns of the Agreement. 2. Minimum Improvements, The Developer has agreed to construct the Improvements in accordance with the terms of the Agreement. Other Terms and Conditions. All other covenants, terms and provisions set forth in the Agreement are hereby incorporated by reference, and made a part hereof, 4. Copy of Agreement. A copy of the Agreement is on file at the off -ices of the Authority at 3400 Plymouth Blvd., Plymouth, MN 55447, IN WITNESS WHEREOF, the parties have executed this Memorandum of Development Agreement as of the date set forth above. B-6 Fxliibit A Tracts A, B and C, Registered Land Survey No. 1676, Hennepin County, Minnesota. (Torrens Property, Certificate of Title No. 1207792). Together with: That part of the Southeast Quarter of the Northeast Quarter of Section 35, Township 118, Range 22, Hennepin County, Minnesota, described as follows: Commencing at the Southwest corner of the Southeast Quarter of the Northeast Quarter, Section 35, Township 118, Range 22; thence North along the West line thereof 805 feet; thence East parallel to the South line of said quarter -quarter 683,20 feet to the point of beginning; thence continuing East along said parallel line 100 feet; thence Northeasterly, deflecting to the left 81 degrees 49 minutes a distance of 108.3 feet, more or less to the Southerly right-of-way line of State Trunk Highway No. 55; thence Northwesterly along the Southerly right-of-way line of said Highway 97.99 feet; thence Southwesterly 136.74 feet, more or less, to the point of beginning. Together with: That part of the Southeast Quarter of the Northeast Quarter of Section 35, Township 118, Range 22, Hennepin Colony, Minnesota, lying Southerly of the centerline of the Eastbound lane of State Trunk Highway No. 55 (as now located and established) and lying Southwesterly of the Northeasterly line of Old County Road No. 6 (also being the Northeasterly line of Tract B, Registered Land Survey No. 1676) and the Northwesterly extension thereof, and lying Northerly of the Northeasterly lines of Tracts A and B, Registered Land Survey No. 1676; and lying Northerly of a line beginning at the Northwest corner of Tract B, Registered Land Survey No. 1676; thence North 74 degrees 06 minutes 45 seconds West on an assumed bearing along the Northwesterly extension of the North line of said Tract B, a distance of 97.99 feet; thence South 8 degrees 54 minutes 02 seconds West, a distance of 15.11 feet to the Northeast corner of Tract A, Registered Land Survey No. 1676, and there terminating; and lying Southeasterly of a line drawn Northeasterly from the Northwest corner of Tract A, Registered Land Survey No. 1676, at a right angle to the North line of said Tract A, a distance of 75.00 feet to the centerline of the Eastbound lane of State Trunk Highway No. 55 (as now located and established), which lies Southwesterly of a line run parallel with and distant 70.00 feet Southwesterly (as measured at right angles) of the following described line: Beginning at a point on the West line of the Northeast Quarter of said Section 35, distant 1065,36 feet South of the Northwest corner thereof; thence run Southeasterly at an angle of 73 degrees 22 minutes 02 seconds from said West line of the Northeast Quarter (measured from South to East) for 2608.47 feet to a tangent spiral point; thence deflect to the right on a spiral curve of decreasing radius (spiral angle 2 degrees 00 minutes 00 seconds) for 200 feet to a spiral curve point; thence deflect to the right on a 2 degrees 00 minutes 00 seconds circular curve (delta angle 11 degrees 34 minutes 00 seconds) for 578.33 feet to a curve spiral point and there terminating. Together with: That part of the Southwest Quarter of the Northwest Quarter of Section 36, Township 118, Range 22, Hennepin County, Minnesota, lying Southwesterly of the Southwesterly line of Old County Road No. 6 and described as beginning at the intersection of the West line of said Section 36 with the Southwesterly line of Old County Road 6, thence Southerly along the West line of said Section 36, a distance of 313.50 feet; thence Northeasterly to a point on the Southwesterly line of Old County Road No. 6, distant 173.10 feet Southeasterly of the point of beginning; thence Northwesterly along the Southwesterly line of Old County Road No. 6, a distance of 173.10 feet to the point of beginning. Together with: That part of the Southwest Quarter of Northwest Quarter of Section 36, Township 118, Range 22, Hennepin County, Minnesota, lying Southwesterly of the Southwesterly line of Old County Road No. 6, and described as commencing at the Southwest corner of the Northwest Quarter of said Section 36, thence Northerly along the West line of said Section 36, a distance of 210.3 0 feet to the point of beginning; thence deflect to the right at an angle of 90 degrees 3 0 minutes, a distance of 9.00 feet; thence Northeasterly 358.30 feet to a point on the Southwesterly line of Old County Road No. 6, distant 248.10 feet Southeasterly of the intersection of said Southwesterly line with the West line of said Section 36; thence Northwesterly along the Southwesterly line of Old County Road No. 6, a distance of 75.00 feet; thence Southwesterly to a point on the West line of said Section 36, distant 122.10 feet Northerly of the point of beginning; thence Southerly 122.10 feet along the West line of said Section 36 to the point of beginning. EXHIBIT C FORM OF LIMITED REVENUE TAX INCREMENT NOTE UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF PLYMOUTH TAX INCREMENT REVENUE NOTE OF 2012. CROSSROAD COMMONS PROJECT) PRINCIPAL AMOUNT: $1,899,645.00 INTEREST RATE: 6.00% The Housing and Redevelopment Authority in and for the City of Plymouth, Minnesota the "Authority"), hereby acknowledges itself to be indebted and, for value received, hereby promises to pay to KTJ 198, LLC, 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 stated above with interest, from the date hereof, at the rate per annum stated above. This Tax Increment Revenue Note of 2012 (Crossroad Commons Project) (or "Note") is issued pursuant to the provisions of that certain Tax Increment Financing Redevelopment Agreement (TIF 1-3 Oppidan), dated as of April 1, 2012, as the same may be amended from time to time (the "Redevelopment Agreement"), by and between the Housing and Redevelopment Authority in and for the City of Plymouth, Minnesota (the "Authority") and KTJ 198, LLC (the Master Developer"). Provided that the Master Developer has submitted evidence to the Authority that costs of the Improvements (as defined in the Redevelopment Agreement) have been incurred and paid as provided in the Redevelopment Agreement, the principal and interest amounts due under this Note (the "Note Payment Amounts") shall be payable on 1, 20 —'and on each February 1 and February 1 thereafter to and including February 1, 2034, or, if the first should not be a Business Day (as defined in the Redevelopment Agreement) the next succeeding Business Day (the "Note Payment Dates"). On each Note Payment Date the Authority 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 preceding such Note Payment Date, the Available Tax Increments (as hereinafter defined) received by the Authority from the Tax Increment District (as hereinafter defined) since the preceding Note Payment Date or, in the case of the first Note Payment Date, prior to such first Note Payment Date, as provided in the Redevelopment Agreement. All payments shall be C-1 first applied to interest accrued on the Note and then to the unpaid principal of the Note, The Authority shall not be required to make any payments on the Note subsequent to February 1, 2034, and any balance of principal and interest remaining unpaid subsequent to the payment made on February 1, 2034 shall be deemed forgiven by the Master Developer. In no event shall the total Note Payment Amounts paid under this Note exceed the maximum amount of Interest on this Note will compound semi-annually. The Note Payment Amounts due hereon shall be payable solely from a portion of the tax increments, less the Authority's administrative fee of ten percent (10%), from the Development Property within the Authority's Tax Increment Financing (Redevelopment) District No. 1-3 (the Tax Increment District") within its Redevelopment Project Area No. 1, which are paid to the Authority and which the Authority is entitled to retain pursuant to the provisions of Minnesota Statutes, Sections 469.174 through 469.1799, as the same may be amended or supplemented from time to time (the "Available Tax Increments"). This Note shall terminate and be of no further force and effect following the last Note Payment Date defined above, on any date upon which the Authority shall have cancelled and rescinded the Redevelopment Agreement or the Note pursuant to said Redevelopment Agreement, or on the date that all principal and interest shall have been paid in full, whichever occurs earliest. The Authority makes no representation or covenant, express or implied, that the Available Tax Increments will be sufficient to pay, in whole or in part, the amounts which are or may become due and payable hereunder. The Authority's payment obligations hereunder shall be further conditioned on the fact that no Event of Default under the Redevelopment 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 Redevelopment Agreement the Authority elects to cancel and rescind the Redevelopment Agreement, the Authority shall have no further debt or obligation under this Note whatsoever, Reference is hereby made to all of the provisions of the Redevelopment Agreement, including without limitation Section 3.3 thereof, for a fuller statement of the rights and obligations of the Authority to pay the principal of and interest on 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 Authority and is payable by the Authority only from the sources and subject to the qualifications stated or referenced herein. This Note is not a general obligation of the Housing and Redevelopment Authority in and for the City of Plymouth, Minnesota, and neither the full faith and credit nor the taxing powers of the City are pledged to the payment of the principal of and interest on this Note and no property or other asset of the Authority, save and except the above - referenced Available Tax Increments, is or shall be a source of payment of the Authority's obligations hereunder. This Note is issued by the Authority in aid of financing a project pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 through 469.1799, C-2 This Note may be assigned only with the consent of the Authority, which consent must not be unreasonably withheld. In order to assign the Note, the assignee shall surrender the same to the Authority either in exchange for a new fully registered note or for transfer of this Note on the registration records for the Note maintained by the Authority. Each permitted assignee shall take this Note subject to the foregoing conditions and subject to all provisions stated or referenced herein. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; and that this Note, together with all other indebtedness of the Authority outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the Authority to exceed any constitutional or statutory limitation thereon. IN WITNESS WHEREOF, the Housing and Redevelopment Authority in and for the City of Plymouth, Minnesota, by its Board of Commissioners, has caused this Note to be executed by the manual signatures of its Chair and Executive Director and has caused this Note to be issued on and dated as of , 20 . Executive Director C-3 Chair CERTIFICATION OF REGISTRATION It is hereby certified that the foregoing Note, as originally issued on , 20_, was on said date registered in the name of KT7 198, 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 REGISTERED OWNER DATE OF REGISTRATION 20 C-4 SIGNATURE OF SECRETARY EXHIBIT D-1 FORM OF ASSESSMENT AGREEMENT THIS ASSESSMENT AGREEMENT is dated as of April 1, 2012, and is between the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF PLYMOUTH, MINNESOTA, a public body corporate and politic organized and existing under the laws of the State of Minnesota (the "Authority"), and KTJ 198, LLC, a Minnesota corporation (the "Master Developer"). IN CONSIDERATION OF the mutual covenants and benefits herein described, the Authority and the Master Developer recite and agree as follows: Section 1. Recitals. 1.01. Project Area, Project Plan, The Authority has heretofore undertaken certain development activities for the purpose of redeveloping blighted areas, improving the local tax base, and improving the general economy of the City and the State of Minnesota, which is a project" as defined in Minnesota Statutes, Section 469.174, subdivision 8, known as Redevelopment Project Area No. 1 (the "Project Area") pursuant to a Project Plan for Redevelopment Area No. 1 (the "Project Plan"), 1.02. Tax Increment Financing District; Project. Pursuant to the Minnesota Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 to 469.1799, as amended (the TIF Act"), the City of Plymouth, Minnesota (the "City") and the Authority have approved a tax increment financing plan (the "Financing Plan"), which is the proposed method for financing the development activities currently proposed to be undertaken pursuant to the Project PIan and establishes a portion of the Project Area as a tax increment financing district ("Tax Increment District"). The Financing Plan proposes to finance the cost of certain public improvements related to the redevelopment of a 20 -acre site located in the City to include a four-story, 90 unit, senior assisted living complex and a fast-food restaurant (the "Project"), The Project is currently owned by the Master Developer. 1.03. Implementation. The Authority and the City have each authorized and directed their respective officers to take all actions necessary to implement and carry out the Project Plan and the Financing Plan. The Project Plan and the Financing Plan propose that the Authority finance certain costs of or related to the Project, payable from tax increment (as defined in the TIF Act) derived from the District ("Tax Increment"). 1.04, Redevelopment Agreement. The Authority and the Master Developer have entered into a Tax Increment Financing Redevelopment Agreement (TIF 1-3 Oppidan), dated as of April 1, 2012 (the "Redevelopment Agreement"), which provides that the Master Developer, or its permitted assignee, will improve the real property described in Exhibit A hereto (the Land") by the construction of the portion of the Project located thereon. The Redevelopment Agreement provides that upon the execution and delivery of the Redevelopment Agreement, the Authority and Master Developer are to enter into this Assessment Agreement. D-1 Section 2, Minimum Market Value, 2.01, Agreed Upon Minimum, The Master Developer agrees that the minimum market value of the Land and the Project for ad valorem tax purposes, shall be as follows: Lot 1, Block 1, and Outlot D, Crossroads Commons, Hennepin County, Minnesota: for the assessment made as of January 1, 2013, not less than $6,000,000, and for the assessment made as of January 1, 2014, and continuing throughout the term of this Assessment Agreement, not less than $12,200,000. Lot 1, Block 2, Crossroads Commons, Hennepin County, Minnesota: for the assessment made as of January 1, 2013, not less than $730,075, and for the assessment made as of January 1, 2014, and continuing throughout the term of this Assessment Agreement, not less than $2,000,000. Outlot B, Crossroads Commons, Hennepin County, Minnesota: for the assessment made as of January 1, 2013, not less than $3,500,000, and for the assessment made as of January 1, 2014, and continuing throughout the term of this Assessment Agreement, not less than $7,400,000. and shall not be reduced by any action taken by the Master Developer (other than a deed in lieu of, or under threat of, condemnation by the City or Hennepin County or other condemning authority), to less than the said amounts, and that during the term of this Assessment Agreement no reduction of the market value therefor below said minimum market values shall be sought by the Master Developer or granted by any public official or court except in accordance with Minnesota Statutes, Section 469.177, Subdivision 8, This minimum market value shall apply only to the Land, the Project and any other facilities situated on the Land. In the event of involuntary conversion of the Land and the Project for any reason (other than condemnation by a public entity), the minimum market value shall not be reduced to an amount less than said minimum market values. The Master Developer acknowledges and agrees that the Land and the Project are subject to ad valorem property taxation and that such property taxes constitute taxes on "real property" (as provided in Section 469.174 of the TIF Act) and, to the extent reflecting net tax capacity rates of taxing jurisdictions levied against the captured net tax capacity of the District, Tax Increment. 2.02. Higher Market Value. Nothing in this Assessment Agreement shall limit the discretion of the assessor of the City or any other public official or body having the duty to determine the market value of the Land, the portion of the Project located thereon and other facilities on the Land for ad valorem tax purposes, to assign to the Land, the portion of the Project located thereon or to any other improvements constructed on the Land, on a nondiscriminatory basis and treated fairly and equally with all other property so classified in the respective counties, a market value in excess of the minimum market value specified in Section 2.01. The Master Developer or Developer (as defined in the Redevelopment Agreement) shall have the normal remedies available under the law to contest any estimated assessor's estimated value in excess of said minimum market values, but only to the extent of the excess. D-2 2,03. Substantial Com leption. For purposes of this Assessment Agreement and the determination of the market value of the Land and the Project for ad valorem tax purposes, the Master Developer agrees that the various phases of the Project shall be deemed to be completed in accordance with the Redevelopment Agreement as of the dates shown below for each lot (the required dates of completion), whether in fact completed or not: Lot 1, Block 1, and Outlot D: May 31, 2013 Lot 1, Block 2: July 1, 2013 Outlet B: December 31, 2013 Section 3. Filing and Certification. 3.01. Assessor Certification. The Authority shall present this Assessment Agreement to the assessor of the City and request such assessor to execute the certification attached hereto as Exhibit C. The Master Developer shall provide to the assessor all information relating to the Land and the portion of the Project located thereon requested by the assessor for the purposes of discharging the assessor's duties with respect to the certification. 3.02. Filing, Prior to the recording of any mortgage, security agreement or other instrument creating a lien on the Land, the Master Developer shall cause this Assessment Agreement and a copy of Minnesota Statutes, Section 464,177, subdivision S, attached hereto as Exhibit B, to be recorded in the office of the County Recorder or Registrar of Titles of Hennepin County, and shall pay all costs of such recording. Section 4. Relation to Redevelopment Agreement. The covenants and agreements made by the Master Developer in this Assessment Agreement are separate from and in addition to the covenants and agreements made by the Master Developer or Developer in the Redevelopment Agreement and nothing contained herein shall in any way alter, diminish or supersede the duties and obligations of the Master Developer or Developer under the Redevelopment Agreement, Section 5. Miscellaneous Provisions, 5.01. Binding Effect. This Assessment Agreement shall inure to the benefit of and shall be binding upon the Authority and the Master Developer and any Developer and their respective successors and assigns, and upon all subsequent owners of the Land and the portion of the Project located thereon. 5.02, Severability. In the event any provision of this Assessment Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 5,03. Amendments, Changes and Modifications. Except as provided in Section 5.04, this Assessment Agreement may be amended or any of its terms modified only by written amendment authorized and executed by the Authority and the Master Developer and otherwise in compliance with Section 469.177, subdivision S, of the Act. D-3 5.04, Further Assurances and Corrective Instruments, The Authority and the Master Developer agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged or delivered, such supplements hereto and such farther instruments as may reasonably be required for correcting any inadequate or incorrect description of the Land or the portion of the Project located thereon, or for carrying out the expressed intention of this Assessment Agreement. 5.05, Execution Counterparts. This Assessment 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. 5.0 6. plicable Law. This Assessment Agreement shall be governed by and construed in accordance with the internal laws of the State of Minnesota. 5,07. Captions. The captions or headings in this Assessment Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or Sections of this Assessment Agreement. 5.08, Effective Date. This Assessment Agreement shall be affective as of April 1, 2012. 5.09. Termination Date. This Assessment Agreement shall terminate upon the termination of the District in accordance with Minnesota Statutes, Section 469.176, subdivision 1. 5.10, Definitions, Terms used with initial capital letters but not defined herein shall have the meanings given such terms in the Redevelopment Agreement, unless the context hereof clearly requires otherwise. IN WITNESS WHEREOF, the Authority has caused this Assessment Agreement to be executed in its name by its duly authorized officers and the Master Developer has caused this Assessment Agreement to be executed in its corporate name. HOUSING AND REDEVELOPMENT IN AND FOR THE CITY OF PLYMOUTH, MINNESOTA By Its Chair By Its Executive Director STATE OF MINNESOTA ) ss. COUNTY OF IIENNEPIN ) The foregoing instrument was acknowledged before me this day of 20u, by Jeff Kulaszewicz, Chair, and Steve Juetten, Executive Director, of the Housing and Redevelopment Authority in and for the City of Plymouth, Minnesota, a public body corporate and politic organized and existing Colder the laws of the State of Minnesota, on behalf of the public body. Notary Public D-5 KT7 198, LLC Its Chief Executive Officer STATE OF MINNESOTA ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of , 20_, by , the Chief Executive Officer, on behalf of the corporation. Notary Public 1 , EXHIBIT A DESCRIPTION OF LAND Tracts A, B and C, Registered Land Survey No. 1676, Hennepin County, Minnesota. (Torrens Property, Certificate of Title No. 1207792). Together with: That part of the Southeast Quarter of the Northeast Quarter of Section 35, Township 118, Range 22, Hennepin County, Minnesota, described as follows: Commencing at the Southwest corner of the Southeast Quarter of Northeast Quarter, Section 35, Township 118, Range 22; thence North along the West line thereof 805 feet; thence East parallel to the South line of said quarter -quarter 683.20 feet to the point of beginning; thence continuing East along said parallel line 100 feet; thence Northeasterly, deflecting to the left 81 degrees 49 minutes a distance of 108.3 feet, more or less to the Southerly right-of-way line of State Trunk Highway No. 55; thence Northwesterly along the Southerly right -of ---way line of said Highway 97.99 feet; thence Southwesterly 136.74 feet, more or less, to the point of beginning, Together with: That part of the Southeast Quarter of the Northeast Quarter of Section 35, Township 118, Range 22, Hennepin County, Minnesota, lying Southerly of the centerline of the Eastbound lane of State Trunk Highway No. 55 (as now located and established) and lying Southwesterly of the Northeasterly line of Old County Road No, 6 (also being the Northeasterly line of Tract B, Registered Land Survey No. 1676) and the Northwesterly extension thereof; and lying Northerly of the Northeasterly lines of Tracts A and B, Registered Land Survey No. 1676; and lying Northerly of a line beginning at the Northwest corner of Tract B, Registered Land Survey No. 1676; thence North 74 degrees 06 minutes 45 seconds West on an assumed bearing along the Northwesterly extension of the North line of said Tract B, a distance of 97.99 feet; thence South 8 degrees 54 minutes 02 seconds West, a distance of 15.11 feet to the Northeast corner of Tract A, Registered Land Survey No. 1676, and there terminating; and lying Southeasterly of a line drawn Northeasterly from the Northwest corner of Tract A, Registered Land Survey No. 1676, at a right angle to the North line of said Tract A, a distance of 75.00 feet to the centerline of the Eastbound lane of State Trunk Highway No. 55 (as now located and established), which lies Southwesterly of a line run parallel with and distant 70.00 feet Southwesterly (as measured at right angles) of the following described line: Beginning at a point on the West line of the Northeast Quarter of said Section 35, distant 1065.36 feet South of the Northwest corner thereof; thence run Southeasterly at an angle of 73 degrees 22 minutes 02 seconds from said West line of the Northeast Quarter (measured from South to East) for 2608.47 feet to a tangent spiral point; thence deflect to the right on a spiral curve of decreasing radius (spiral angle 2 degrees 00 minutes 00 seconds) for 200 feet to a spiral curve point; thence deflect to the right on a 2 degrees 00 minutes 00 seconds circular curve (delta angle 11 degrees 34 minutes 00 seconds) for 578.33 feet to a curve spiral point and there terminating. D-7 Together with: That part of the Southwest Quarter of the Northwest Quarter of Section 36, Township 118, Range 22, Hennepin County, Minnesota, lying Southwesterly of the Southwesterly line of Old County Road No. 6 and described as beginning at the intersection of the West line of said Section 36 with the Southwesterly line of Old County Road 6, thence Southerly along the West line of said Section 36, a distance of 313.50 feet; thence Northeasterly to a point on the Southwesterly line of Old County Road No, 6, distant 173.10 feet Southeasterly of the point of beginning; thence Northwesterly along the Southwesterly line of Old County Road No, 6, a distance of 173.10 feet to the point of beginning. Together with: That part of the Southwest Quarter of the Northwest Quarter of Section 36, Township 118, Range 22, Hennepin County, Minnesota, lying Southwesterly of the Southwesterly line of Old County Road No. 6, and described as commencing at the Southwest corner of the Northwest Quarter of said Section 36, thence Northerly along the West line of said Section 36, a distance of 210.30 feet to the point of beginning; thence deflect to the right at an angle of 90 degrees 30 minutes, a distance of 9.00 feet; thence Northeasterly 358.30 feet to a point on the Southwesterly line of Old County Road No. 6, distant 248,10 feet Southeasterly of the intersection of said Southwesterly line with the West line of said Section 36; thence Northwesterly along the Southwesterly line of Old County Road No. 6, a distance of 75.00 feet; thence Southwesterly to a point on the West line of said Section 36, distant 122.10 feet Northerly of the point of beginning; thence Southerly 122.10 feet along the West line of said Section 36 to the point of beginning. I3:1 EXHIBIT B COPY OF MINNESOTA STATUTES, SECTION 469,177, SUBDIVISION S Assessment agreements. An authority may enter into a written assessment agreement with any person establishing a minimum market value of land, existing improvements, or improvements to be constructed in a district, if the property is owned or will be owned by the person. The minimum market value established by an assessment agreement may be fixed, or increase or decrease in later years from the initial minimum market value. If an agreement is Rilly executed before July 1 of an assessment year, the market value as provided under the agreement must be used by the county or local assessor as the taxable market value of the property for that assessment. Agreements executed on or after July 1 of an assessment year become effective for assessment purposes in the following assessment year. An assessment agreement terminates on the earliest of the date on which conditions in the assessment agreement for termination are satisfied, the termination date specified in the agreement, or the date when tax increment is no longer paid to the authority under section 469.176, subdivision 1. The assessment agreement shall be presented to the county assessor, or city assessor having the powers of the county assessor, of the jurisdiction in which the tax increment financing district and the property that is the subject of the agreement is located. The assessor shall review the plans and specifications for the improvements to be constructed, review the market value previously assigned to the land upon which the improvements are to be constructed and, so Iong as the minimum market value contained in the assessment agreement appears, in the judgment of the assessor, to be a reasonable estimate, shall execute the following certification upon the agreement: 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. The assessment agreement shall be filed for record and recorded in the office of the county recorder or the registrar of titles of each county where the real estate or any part thereof is situated. After the agreement becomes effective for assessment purposes, the assessor shall value the property under section 273.11, except that the market value assigned shall not be less than the minimum market value established by the assessment agreement. The assessor may assign a market value to the property in excess of the minimum market value established by the assessment agreement. The owner of the property may seek, through the exercise of administrative and legal remedies, a reduction in market value for property tax purposes, but no city assessor, county assessor, county auditor, board of review, board of equalization, commissioner of revenue, or court of this state shall grant a reduction of the market value below the minimum market value established by the assessment agreement during the term of the agreement filed of record regardless of actual market values which may result from incomplete construction of improvements, destruction, or diminution by any cause, insured or uninsured, except in the case of acquisition or reacquisition of the property by a public entity. Recording an assessment agreement constitutes notice of the agreement to anyone who acquires any interest in the land or improvements that is subject to the assessment agreement, and the agreement is binding upon them. W • An assessment agreement may be modified or terminated by mutual consent of the current parties to the agreement. Modification or termination of an assessment agreement must be approved by the governing body of the municipality. If the estimated market value for the property for the most recently available assessment is less than the minimum market value established by the assessment agreement for that or any later year and if bond counsel does not conclude that termination of the agreement is necessary to preserve the tax exempt status of outstanding bonds or refunding bonds to be issued, the modification or termination of the assessment agreement also must be approved by the governing bodies of the county and the school district. A document modifying or terminating an agreement, including records of the municipality, county, and school district approval, must be filed for record. The assessor's review and certification is not required if the document terminates an agreement. A change to an agreement not fully executed before July 1 of an assessment year is not effective for assessment purposes for that assessment year. If an assessment agreement has been modified or prematurely terminated, a person may seek a reduction in market value or tax through the exercise of any administrative or legal remedy. The remedy may not provide for reduction of the market value below the minimum provided under a modified assessment agreement that remains in effect. In no event may a reduction be sought for a year other than the current taxes payable year. D-10 EXHIBIT C ASSESSOR'S CERTIFICATE The undersigned, being the duly qualified and acting assessor of the City of PIymouth, Minnesota, hereby certifies that. 1. I am the assessor responsible for the assessment of the Land described in the foregoing Exhibit A; 2. I have read the foregoing Assessment Agreement dated as of April 1, 2012; 3, I have received and read a duplicate original of the Redevelopment Agreement referred to in the Assessment Agreement; 4, 1 have received and reviewed the architectural and engineering plans and specifications for the portion of the Project agreed to be constructed on the Land pursuant to the Redevelopment Agreement; 5. I have received and reviewed an estimate prepared by the Master Developer of the cost of the Land and the portion of the Project to be constructed thereon; b. I have reviewed the market value previously assigned to the Land on which the applicable portion of the Project is to be constructed, and the minimum market value to be assigned to the Land and the portion of the Project located thereon by the Assessment Agreement is a reasonable estimate; and 7. 1 hereby certify that the market value assigned to the Land and the Project described on the foregoing Exhibit A by the Assessment Agreement is reasonable and the market value assigned to the Land and the Project shall be as follows: Lot 1, Block 1, and Outlot D, Crossroads Commons, Hennepin County, Minnesota: for the assessment made as of January 1, 2013, not less than $6,000,000, and for the assessment made as of January 1, 2014, and continuing throughout the term of this Assessment Agreement, not less than $12,200,000. Lot 1, Block 2, Crossroads Commons, Hennepin County, Minnesota: for the assessment made as of January 1, 2013, not less than $730,075, and for the assessment made as of January 1, 2014, and continuing throughout the term of this Assessment Agreement, not less than $2,000,000. Outlot B, Crossroads Commons, Hennepin County, Minnesota: for the assessment made as of January 1, 2013, not less than $3,500,000, and for the assessment made as of January 1, 2014, and continuing throughout the term of this Assessment Agreement, not less than $7,400,000. D-1 I Dated; , 20 City Assessor, City of Plymouth, Minnesota D-12 FORM OF ASSIGNMENT OF DEVELOPMENT RIGHTS THIS ASSIGNMENT OF DEVELOPMENT RIGHTS (this "Assignment") is made and entered into on this _ day of , 20_, by and between KTJ 198, LLC, a Minnesota limited liability company (the "Master Developer"), and , a the "Development Rights Assignee"), WHEREAS, the Master Developer has entered into that certain Tax Increment Financing Redevelopment Agreement (TIF 1-3 Oppidan) with the Housing and Redevelopment Authority in and for the City of Plymouth, Minnesota, a public body corporate and politic (the Authority"), dated as of April 1, 2012 (the "Redevelopment Agreement"); WHEREAS, pursuant to the Redevelopment Agreement, the Master Developer has agreed to construct a Project (as defined in the Redevelopment Agreement) and Improvements as defined in the Redevelopment Agreement) on the Development Property (as defined in the Redevelopment Agreement); and WHEREAS, the Master Developer desires to assign its Development Rights, as described in Section 2.3 of the Development Agreement, to [ ] on that certain portion of the Development Property described in Exhibit A attached hereto. NOW, THEREFORE, in consideration of the sum of One Dollar ($1.00) and other good and valuable consideration, Master Developer assigns to Development Rights Assignee its Development Rights to [ , including its rights under the Redevelopment Agreement. 1. The Master Developer shall retain design control with respect to the Improvements, if any, to be constructed by the Development Rights Assignee. 2. The Development Rights Assignee assumes and agrees to perforin the obligations of a Developer under the Redevelopment Agreement, performance of which is due on or after the date of this Assignment, and agrees to be subject to all conditions and restrictions to which the Master Developer is subject, and further acknowledges the Restrictions and Assessment Agreement that have been recorded against the parcels comprising the Development Property, 3. The Development Rights Assignee makes the following representations to the Authority: a) The Development Rights Assignee is a , has the power to enter into this Assignment, and has duly authorized the execution and delivery of this Assignment. b) The Development Rights Assignee will, subject to Unavoidable Delays (as defined in the Redevelopment Agreement) complete or cause to be completed the portion of the Project which has been assigned to the Development Rights Assignee in D-13 accordance with the terms of the Redevelopment Agreement, and all local, state, and federal laws and regulations. c) The Development Rights Assignee has received no notice or communication from any local, state or federal official that the activities of the Development Rights Assignee, the City or the Authority with respect to the portion of the Development Property being assigned to the Development Rights Assignee may be or will be in violation of any environmental law or regulation. The Development Rights Assignee is aware of no facts the existence of which would cause it to be in violation of any local, state or federal environmental law, regulation or review procedure with respect to the portion of the Development Property so assigned. d) The Development Rights Assignee will obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all local, state and federal laws and regulations which must be obtained or met before the portion of the Project assigned to the Development Rights Assignee may be constructed. e) Neither the execution or delivery of this Assignment, the assumption of the Development Rights, the consummation of the transactions contemplated hereby or by the Redevelopment Agreement, nor the fulfillment of or compliance with the terms and conditions of the Redevelopment Agreement is prevented by, limited by, conflicts with, or results in a breach of, any restriction, agreement or instrument to which the Development Rights Assignee is now a party or by which the Development Rights Assignee is bound. f) The Development Rights Assignee has no knowledge or information that any member of the governing body of the City or Authority or any other officer of the City or Authority has any direct or indirect financial interest in the Development Rights Assignee, or the portion of the Development Property or the Project assigned to the Development Rights Assignee. g) The Development Rights Assignee has the qualifications and financial responsibility necessary to fulfill the obligations being assigned to the Development Rights Assignee h) The Development Rights Assignee makes, as of the date of assignment, all other representations and warranties made in the Redevelopment Agreement by the Master Developer which relate to the Development Rights being assigned. 4. [If less than the entire Development Rights are being conveyed] The Portion of the Improvements being allocated to the Phase (as defined in the Redevelopment Agreement) or portion thereof for which Development Rights are being conveyed to the Development Rights Assignee are compatible with the completion of the portion of the Improvements allocated to the Phase or portion of the Phase not being conveyed.] D-14 IN WITNESS WHEREOF, Master Developer and Development Rights Assignee have caused this Assignment to be executed this day of , 20_, CONSENTED AND AGREED TO BY: HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF PLYMOUTI-I Its D-15 KTJ 198, LLC 01 Its [Chief Executive Officer] DEVELOPMENT RIGHTS ASSIGNEE] IF Its HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF PLYMOUTH RESOLUTION NO. 2012-05 RESOLUTION APPROVING A REDEVELOPMENT AGREEMENT FOR TAX INCREMENT FINANCING REDEVELOPMENT) DISTRICT NO. 1-3 BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Plymouth, Minnesota (the "Authority"), as follows; 1. The Authority has previously formed Redevelopment Project Area No. I (the Project Area") and adopted a project plan therefore (the "Project Plan"), and the Authority has previously prepared and adopted the Tax increment Financing Plan for Tax Increment Financing Redevelopment) District No. 1-3 (the "TIF Plan"). Pursuant to the TIF Plan, the Authority has prepared a Tax Increment Financing Redevelopment Agreement (TIF 1-3 Oppidan) to be entered into between the Authority and KTJ 198, LLC (the "Redevelopment Agreement"). 2. Findings; Redevelopment Agreement. The Authority hereby finds that the Redevelopment Agreement is in the best interest of the Authority and meets the economic development goals of the comprehensive plan of the City and is in accordance with the public purpose and provisions of the applicable state and local laws and requirements under which the Project has been undertaken and complies with the requirements of the Project Plan and the TIF Plan. 3. Approval of Redevelopment Agreement. The Authority hereby adopts and approves the Redevelopment Agreement in substantially the form presented to and on file with the Authority as of this date and directs the Chair and the Executive Director of the Authority to execute the Redevelopment Agreement and documents related thereto. Adopted by the Housing and Redevelopment Authority in and for the City of Plymouth, this 10"' day of April, 2011