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HomeMy WebLinkAboutCity Council Packet 03-13-1996 Special 2CITY OF PLYMOUTH AGENDA SPECIAL COUNCIL MEETING WEDNESDAY, MARCH 13, 1996 7000 P.M. CITY CENTER LUNCHROOM 1. Approve Amendment to Ordinance 80-9, the Plymouth Zoning Ordinance, to create City Center Districts and related allowable uses and performance standards. City of Plymouth (96009) 2. Approve Rezoning of the property in the Plymouth City Center Area (also known as Downtown Plymouth), to several new City Center" zoning districts. City of Plymouth (96010) 3. Revocation of Plymouth Hills MPUD (Mixed Planned Unit Development) Conditional Use Permit 78-2, as it applies to the property in the Plymouth City Center area (also known as Downtown Plymouth). The City of Plymouth proposes to eliminate the MPUD designation for this area and replace it with new zoning districts establishing allowable uses and performance standards. City of Plymouth (96011) 4. Approve Site Plan for Temporary Sales Office for Life Time Fitness. City of Plymouth (96026) 5. Approve Wetland Mitigation Plan for the Recreational Sports Complex located east of the intersection of 36th Avenue and Plymouth Blvd. Requires super -majority vote. DATE: February 13, 1996 TO: Dwight Johnson, City Manager allt 4+ - FROM: Anne Hurlburt, Community Development Director SUBJECT: Request for Special City Council Meeting on March 13, 1996 Design of the Life Time Sports Complex and City Ice Arena has been proceeding at a brisk pace. Staff from several departments have been working closely with the architects and site planners, to ensure that construction can begin as quickly as possible and ensure that the recreational facilities can open this fall. Before construction can begin, a number of permits and approvals are required, including local site plan, conditional use and wetlands permits, watershed district approval, Army Corps of Engineers approval. We have calculated a very tight schedule that would allow site clearing and partial grading to begin before the end of March, with full grading to begin by April 13. A copy of the latest updated timeline is attached. In order to meet this schedule, a special City Council meeting must be held on March 13, 1996 to approve the wetland mitigation plan. Every day delay after the 13th will result in a day delay for issuing a full grading permit. At this time of year, every day counts. In addition to the wetland mitigation plan for the Life Time Sports Complex, I recommend that several other items relating to the implementation of the City Center Plan be added to this special meeting agenda. The items are: 1) Zoning Text Amendments for City Center Districts (96009); 2) Zoning Map Amendments (96010) and 3) Revocation of Plymouth Hills MPUD 78-2 (96011). The Planning Commission will be holding public hearings on these items at their February 13 meeting. Normally we would be placing these on the March 6 Council agenda. However, both Barb Senness and I will be on vacation and unable to attend that meeting. It is important that the Council act on these items at the same time or prior to action on the site plan for the Sports Complex on March 20. Eo M 0 m L w N N CD.C: Co C) CU o _E 3L L 7 X000 c0LL N E w D Co 0-" I C9 L a _ W Ug Or- N Agenda Number: / TO: Dwight Johnson, City Manager FROM: Anne Hurlburt, Community Development Director SUBJECT: Zoning Ordinance Amendments to Create City Center Districts and Related Allowable Uses and Performance Standards (96009) DATE: February 27, 1996 for the City Council Meeting of March 13 1996 1. PROPOSED MOTION Adopt the attached ordinance amending the Zoning Ordinance to create four City Center zoning districts and establish allowable uses and performance standards, as recommended by the Planning Commission. Approval of a Zoning Ordinance amendment requires a 5/7 vote of the City Council. 2. BACKGROUND The City Center plan was adopted by the City Council on January 23, 1996. On January 26, 1996, the Metropolitan Council found the Comprehensive Plan amendment to have no potential impact upon metropolitan systems plans and that the City could put the amendment into effect immediately. The proposed text amendments are the first of three actions that will be considered by the City Council on March 13. At its February 13 meeting, the Planning Commission held a public hearing on amendments to the text of the Zoning Ordinance to create four new zoning classifications to implement the land use plan and development standards for the City Center area, also known as Downtown Plymouth. The Commission recommended approval of the zoning text amendment on a 6 to 0 vote, incorporating one change (adding "art galleries" as a permitted use in the CC -R and CC - RE districts) that was recommended by staff. 3. DESCRIPTION OF THE AMENDMENT The ordinance amendment is structured as follows: Section 1: Adds four non-residential Districts: CC -P City Center - Public District CC -R City Center - Retail District CC -RE City Center - Retail/Entertainment District CC -OT City Center - Office/ Technical District File 96009, Page 2 Section 2: Establishes the purpose of the districts. Section 3: Lists permitted and conditional uses for each of the four districts, as well as a list of accessory uses which are permitted in all of the new districts. This section also lists uses allowed by administrative permit. These are generally the same uses that are allowed in the existing commercial districts. A matrix is attached, which shows the list of uses for the proposed CC districts, as well as those that would be allowed in all of the other draft zoning districts which are currently under consideration. The matrix will = be adopted as part of the ordinance at this time, and is provided for reference purposes only. Section 4: This section establishes that lot area, depth, width, coverage, setbacks and height requirements. The standards in this section are based on the design guidelines in the adopted City Center Concept Plan. Section 5: This section sets special design and performance standards for the CC districts. The same standards will apply in all four of the districts. The standards in this section are based on the design guidelines in the adopted City Center Concept Plan. The section on signs f), page 13) refers to the current signage requirements for the B-2 district. Changes in this and other sections of the amendment will need to be made when the full zoning ordinance revision is adopted, to account for such references. 4. PUBLIC HEARING TESTIMONY A letter dated February 7, 1996 was received from James Guddal of Westland Equities, commenting on some of the specific requirements of the CC -OT district. This letter was a follow-up to a meeting that was held between Planning staff and landowners with property in the CC -OT district. The letter suggested some changes to the lists of permitted and conditional uses. Mr. Guddal made the same comments verbally at the public hearing on February 13. Staff had the following comments on these suggestions: Comment: Auto Accessory Stores should be permitted use. Response: The City Center area deliberately excludes new automobile -oriented uses. Those uses are more appropriate in highway business locations, not in a "downtown" area. The amount of car traffic to the use is = the main factor here, but the character of the use. Auto -oriented uses are not recommended for the City Center because they do not create strong relationships with their neighbors, and the automobile invariably dominates the site. Comment: Barber and Beauty Shops should be permitted rather than conditional uses. Response: Barber and Beauty Shops are service uses, and are recommended as conditional uses in the CC -RE and CC -OT districts. Other examples of service uses that are conditional include tanning salons, therapeutic massage and dry cleaning and laundry pick up. While such services may be compatible with the primary uses encouraged in these districts, they may not be appropriate in every situation if the intended character of the district is to be maintained. For example, a small beauty shop as a stand alone use may not meet the design guidelines, but if it were incorporated into a larger structure or center it may be quite appropriate. The File 96009, Page 3 Conditional Use Permit process allows greater public scrutiny for compliance with the design guidelines. Comment: Carpet, Rugs and Tile should be a conditional use. Response: Mr. Guddal gave as an example an oriental rug shop. An oriental rug shop, if it sells one -of -a -kind pieces, would be treated as an art gallery for zoning purposes. Staff suggested, and the Planning Commission recommended, adding art galleries to the list of permitted uses in the CC -RE and CC -R districts to address this concern. This has been incorporated into the ordinance. We did not recommend adding carpet, rugs and tile generally as a use in the CC districts. Typically, carpet and tile stores geared toward the retail market require large spaces for storage of rolls of carpet and the like, and are not the small shops described in the letter. In a retail setting, they would not fit the pedestrian character desired for retail development in City Center. If a carpet and tile business fit in the "showroom" category, it could be permitted, but the character of the development would be different. Comment: Distribution Centers should be a conditional use. Response: Distribution centers are uses that generate heavy truck traffic and should not be permitted in City Center. They would not be compatible with the retail uses in the City Center area, with the pedestrian -friendly development desired, or with the surrounding residential and public uses. Comment: Commercial Business Schools should be a permitted use. Response: A business school would fall into the category of "trade school/vocation school" and is listed as a conditional use in the CC -OT district. They are conditional rather than permitted uses because such schools can vary widely in the number of students, hours of operation and traffic patterns. The CUP process would allow for individual evaluation of the compatibility with the City Center plan. In addition to the above comments, which were made in writing prior to the hearing, there were several verbal comments on the draft ordinance made at the public hearing. One speaker asked for a clarification of the intent of the parking lot setback requirements. It was explained that the parking setbacks are different than in other districts to require that buildings, rather than parking lots, will be close to the street frontage. There was also a question about what the detailed design standards would be for public plazas, which the City Center Plan requires for major buildings (over 30,000 square feet.) Staff referred to the language in Section 2.2, "Gathering Spaces", in the Plan. It was explained that there are not detailed design requirements (such as building materials, specific seating or detailed landscaping requirements), but that the plazas would be designed as part of each project. Another concern was how the required storm water holding ponds would be maintained. The City Engineer explained the pond maintenance requirements, which are the same for the entire City. File 96009, Page 4 There was a general concern about the number and type of uses that are listed as conditional uses, rather than permitted uses, in the various zoning districts. Several of the land owners expressed a desire that uses (such as liquor sales and restaurants) be listed as permitted rather than conditional uses. They were concerned that the City might withhold approval. Staff explained that the City must show that the proposed use does not meet the ordinance standards for conditional use permits to deny a use. It was also pointed out that in the current MPUD, almost all uses are conditional because they require amendment of the PUD, a conditional use permit process. Under the proposed zoning, many more uses are permitted by right without a conditional use permit or PUD approval. Another issue raised at the hearing was the familiarity of the four new Planning Commissioners with the issues concerning the City Center Plan. Prior to the hearing, two extensive briefing sessions were held to familiarize the new Commissioners with Commission procedures, the Plan and the draft zoning amendments. 5. COMMENTS RECEIVED SINCE THE PUBLIC HEARING After the public hearing, two additional pieces of correspondence were received. The first was a letter from Mr. James Guddal (Westland Equities) concerning the discussion at the hearing. The letter reiterated earlier comments on oriental rug sales and art galleries, staff's response to the question on public plazas, the compatibility of automobile oriented uses in the City Center, and the general criteria for evaluating conditional uses. A copy of the letter dated February 14, 1996, as well as a copy of my response, are attached. A letter was also received from Mr. Ken Streeter (attached, dated February 19, 1996.) Mr. Streeter requests that the Council change the amendment to make free-standing restaurants without drive-through a permitted use rather than a conditional use in the CC -R district. Mr. Street made his comment verbally to the Planning Commission, but after they had closed the hearing on the ordinance text amendment. Staff had indicated that we did not oppose this suggested change, but at the same time we did not recommend it. We believe that there is some justification for imposing greater scrutiny for compliance with the design guidelines on all free-standing restaurants. 6. DISCUSSION There was some confusion at the public hearing, because the Planning Commission was holding three separate public hearings concerning the City Center area. Mr. Streeter did not make his comment concerning restaurants until after the Commission had already closed the hearing and made their recommendation. Then, during the public hearing on the rezonings, additional comments on the ordinance text were offered. The Commission was aware that they could have reconsidered their action on the ordinance text amendments to make additional changes, but they chose not to do so. Contrary to the statement in Mr. Guddal's February 14 letter, there are no "staff approved revisions" that were not incorporated into the ordinance as recommended by the Commission. The only staff recommended change was the addition of art galleries" to the list of uses, which was adopted by the Commission as part of their recommendation. File 96009, Page 5 7. RECOMMENDATION Staff recommends approval of the ordinance amending the Zoning Ordinance to create four City Center zoning districts and establish allowable uses and performance standards, as recommended by the Planning Commission. ATTACHMENTS: 1. Draft Ordinance dated 2/20/96 2. Draft Commercial/Industrial Use District Matrix 3. February 7, 1996 Letter from Westland Equities 4. February 13, 1996 Planning Commission Minutes 5. February 14, 1996 Letter from Westland Equities 6. February 16, 1996 Letter from Anne Hurlburt to James Guddal, Westland Equities 7. February 19, 1996 Letter from Kenneth Streeter g:\cd\plan\staffrep\cc\96009.doc 2/20/96 CITY OF PLYMOUTH DHENNEPINCOUNTY, MINNESOTA ORDINANCE NO. 96- F AN ORDINANCE AMENDING ORDINANCE NO. 80-9, THE PLYMOUTH ZONING ORDINANCE, BY CREATING CITY CENTER DISTRICTS AND RELATED ALLOWABLE USES AND PERFORMANCE STANDARDS. THE CITY OF PLYMOUTH ORDAINS: Section 1. Section 5, Subd. A., Districts of Ordinance No. 80-9, the Plymouth Zoning Ordinance, is hereby amended by adding the following non-residential districts: CC -P City Center - Public District CC -R City Center - Retail District CC -RE City Center - Retail/Entertainment District CC -OT City Center - Office/Technical District Section 2. Section 8, Subd. A.2, Purpose and Intent: Business Districts, of Ordinance No. 80-9, the Plymouth Zoning Ordinance, is hereby amended by adding the following: d. The purpose of the City Center Districts (CC -P; CC -R; CC -RE; CC -OT) is to provide for the establishment of a "downtown" which is a blend of cultural, recreational, civic, entertainment, commercial retail, and office uses as defined and guided by the Comprehensive Plan. Section 3. Section 8, Subd. B, Allowable Uses: Business Districts, of Ordinance No. 80-9, the Plymouth Zoning Ordinance, is hereby amended by adding the following: Permitted Uses: The following are permitted uses within the CC Districts: CC -P. a) Amphitheater. b) Bus/transit station or terminal without vehicle storage. c) Community center. d) Day care. e) Essential services. f) Parks and recreational facilities, structures and buildings. g) Private clubs/lodges. 1 RAPP h) Publicly owned civic or cultural buildings such as libraries, city offices, auditoriums, public administration buildings and historical developments. i) Recreational indoor, commercial (i.e., sports and health clubs, bowling alley, roller rinks, etc.). CC -R. a) Antique shop. b) Appliance and electronic stores including incidental repair and assembly but not fabricating or manufacturing. c) Art and school supply sales. ' d) Art gallery. e) Bakery goods and baking of goods for retail sales on the premises. f) Bank, savings and loan, credit unions and other financial institutions, including drive up tellers g) Barber shops. h) Beauty parlors. i) Bicycle sales and repair. 0) Books, office supplies or stationary stores and sales. k) Bus/transit station or terminal without vehicle storage. 1) Camera and photographic supplies, sales, and film processing. m) Candy, ice cream, popcorn, nuts, frozen desserts, and soft drink sales. n) Clothes, rental and sales. o) Coin and philatelic stores. p) Convenience grocery market (not supermarket type and without motor fuel facilities and delicatessen food service). q) Copy service but not including printing press or newspaper. r) Delicatessen/coffee shop. s) Drug store. t) Dry cleaning pick up and laundry pick up stations including incidental repair and assembly but not including processing. u) Essential services. v) Fabric and notions sales and store. w) Florist shop. x) Frozen food retail, but not including a locker plant. y) Funeral homes and mortuaries. z) Furriers when conducted only for retail trade on premises. aa) Gift or novelty store. bb) Governmental and public regulated utility (essential services) buildings and structures (excluding public works type facilities and uses). cc) Grocery, supermarket and superstores. dd) Hardware store. ee) Hobby and craft store. ff) Ice sales with storage not to exceed five (5) tons. gg) Jewelry stores. 2 hh) Laundromat, mat, self-service washing and drying. ii) Leather goods and luggage stores. q1J) Liquor, off sale. kk) Locksmiths. ll) Massage therapy. mm) Meat market, but not including processing for a locker plant. nn) Medical, dental, and chiropractic offices and clinics. oo) Music (instruments, equipment, tapes, compact discs, etc.) shops and sales. pp) Offices, commercial and professional. qq) Paint and wallpaper sales. rr) Plumbing, televisidn, radio, electrical sales and such repair as is accessory use to the retail establishment permitted within this district. ss) Sewing machine sales and service. tt) Sexually oriented businesses - accessory. uu) Shoe repair. vv) Sporting goods and recreational equipment sales. ww) Studios - artist, music, photo, decorating, dance, etc. xx) Tailoring services. yy) Tanning salon. zz) Toy stores. aaa) Variety stores and stores of similar nature. bbb) Veterinary clinic and kennel and pet supply sales. ccc) Video rental and sales. 0cap '7 a) Amusement centers. b) Art gallery. c) Book, office supply or stationary stores and sales. d) Camera and photographic supplies, sales and film processing. e) Candy, ice cream, popcorn, nuts, frozen desserts, and soft drink sales. f) Delicatessen/coffee shop. g) Essential services. h) Gift or novelty store. i) Hobby and craft store. 0) Music (instruments, equipment, tapes, compact discs, etc.) shops and sales. k) Restaurants (not of the drive-in, convenience or drive-through type), cafes. 1) Sexually oriented businesses - accessory. m) Studios - artist, music, photo, decorating, dance, etc. n) Theaters (indoor only). o) Toy stores. p) Video rental and sales. 3 CC -OT. RAFT a) Bank, savings and loan, credit unions and other financial institutions, including drive up tellers. b) Conference centers. c) Copy service, but not including printing press or newspaper. d) Essential services. e) Funeral homes and mortuaries. f) Laboratories. g) Medical, dental, and chiropractic offices and clinics. h) Offices, commercial and professional. i) Printing establishments, commercial. 0) Radio and TV stations. k) Recreation indoor, commercial. 1) Sexually oriented businesses - accessory. m) Studios - artist, music, photo, decorating, dance, etc. n) Wholesale showrooms. Accessory Uses: The following are permitted accessory uses within all CC Districts: a) Accessory uses incidental and customary to uses allowed as permitted, conditional, interim, and administrative permit in this Section. b) Commercial or business buildings and structures for a use accessory to the principal use provided that: 1) Such structure shall not exceed thirty (30) percent of the gross floor space of the principal use. 2) The principal building meets minimum size requirements established by the respective CC District. c) Fences as regulated by Section 10, Subdivision D of this Ordinance. d) Off-street parking and off-street loading as regulated by Section 10, Subdivision B of this Ordinance, but not including semi -trailer truck storage. e) Public garage/parking ramp. f) Signs as regulated by Section 10, Subdivision A of this Ordinance, as applicable to the B-2 District and Section 8, Subdivision G of this Ordinance. 4 Conditional Uses: The following are conditional uses in CC Districts: All CC Districts. a) Buildings in excess of height limitations as specified in Section 8, Subdivision E of this Ordinance provided that: 1) The construction does not limit solar access to abutting and/or neighboring properties. b) Religious worship facilities and related social events provided that: 1) The space utilized for such activities is shared with a use allowed within this district or occupies no more than twenty (20) percent of a multi -tenant building. 2) Activities shall be limited to worship services and directly related social events. CC -P District. a) Retail commercial activities and personal services, provided that: 1) Merchandise is sold at retail. 2) Personal services are limited to those uses and activities which are allowed as a permitted or permitted accessory use within a B-2 Zoning District. 3) The retail activity and personal services are located within a structure whose principal use is not commercial sales. 4) The retail activity and personal services shall not occupy more than fifteen (15) percent of the gross floor area of the building. 5) No directly or indirectly illuminated sign or sign in excess of ten (10) square feet identifying the name of the business shall be visible from the outside of the building. 6) No signs or posters of any type advertising products for sale or services shall be visible from the outside of the building. 5 CC -R District. It a) Liquor on -sale when accessory to a restaurant. b) Restaurants internal to a multi -tenant shopping center or freestanding, provided that: 1) The use will not conflict with existing or potential neighboring uses. 2) The storage, preparation, and serving of food items are subject to the approval of the Zoning Administrator who shall provide'specific written sanitary requirements based upon the applicable State and County regulations. 3) Except for a freestanding facility, drive through may be allowed subject to provisions of Section 10, Subdivision D of this Ordinance. c) Motor vehicle fuel sales (excluding convenience grocery market with such facilities), auto repair -minor and tire and battery store and services, provided that: 1) Regardless of whether the dispensing, sale or offering for sale of motor fuels and/or oil is incidental to the conduct of the use or business, the standards and requirements imposed by this Section for motor fuel stations shall Apply. These standards and requirements are, however, in addition to other requirements which are imposed for other uses of the property. 2) Motor fuel facilities shall be installed in accordance with State and County standards. Additionally, adequate space shall be provided to access gas pumps and to allow maneuverability around the pumps. Underground fuel storage tanks are to be positioned to allow adequate access by motor fuel transports and unloading operations which do not conflict with circulation, access and other activities on the site. Fuel pumps shall be installed on pump islands. 3) Whenever fuel pumps are to be installed, pump islands shall be installed. Pump islands and their related parking and maneuvering aisle shall be located no closer to the street or adjacent property lines than this Chapter allows for parking spaces, provided that such location does not encroach upon street right- of-way, pedestrian areas, or adjacent property. 4) A protective canopy located over pump islands may be an accessory structure on the property and may be located twenty (20) feet or more from the front lot line, provided adequate visibility both on and off site is maintained. 2 ORAFT 5) There shall be no outdoor service operation of lubrication equipment, hydraulic lifts of service pits, tire changing, drive systems repair and tuning, or similar operations. 6) No outside storage, sales or rental shall be allowed except as specifically allowed by separate conditional use permit, except as otherwise provided by administrative permit. 7) Sale of products other than those specifically mentioned in this sub- section shall be limited to those allowed in this district and shall be subject to approval as part of W conditional use permit. d) Convenience Grocery Market with Prepared Food and/or Motor Fuel Sales. Grocery, food operations, and/or convenience motor fuel (no vehicle service or repair), provided that: 1) Convenience/deli food is of the take-out type only and that no provision for seating or consumption on the premises is provided. Furthermore, that the enclosed area devoted to such activity, use and merchandise shall not exceed fifteen (15) percent of the gross floor area. 2) The storage, preparation and serving of food items are subject to the approval of the Zoning Administrator who shall provide specific written sanitary requirements based upon the applicable State and County regulations. 3) That the proximate area and location of space devoted to non -automotive merchandise sales shall be specified in the application and in the conditional use permit. Exterior sales or storage shall be allowed by administrative permit. 4) The off-street loading space(s) and building access for delivery of goods shall be separate from customer parking and entrances and shall not cause conflicts with customer vehicles and pedestrian movements. 5) The hours of operation shall be limited to 6:00 AM to 11:00 PM, unless extended by the Council as part of the conditional use permit. 6) Motor fuel facilities shall be installed in accordance with State and City standards. Additionally, adequate space shall be provided to access gas pumps and to allow maneuverability around the pumps. Underground fuel storage tanks are to be positioned to allow adequate access by motor fuel transports and unloading operations which do not conflict with circulation, access and other activities on the site. Fuel pumps shall be installed on pump islands. 7 CRAFT 7) A protective canopy located over pump islands may be an accessory structure on the property and may be located twenty (20) feet or more from the front lot line, provided adequate visibility both on and off site is maintained. 8) Litter Control. The operation shall be responsible for litter control within three hundred (300) feet of the premises and litter control is to occur on a daily basis. Trash receptacles must be provided at a convenient location on site to facilitate litter control. e) Day care nursery facilities as a principal or accessory use provided that: 1) The use complies with the provisions of Section 9, Subdivision E of this Ordinance. f) Commercial car washes as an accessory use. CC -RE District. a) Liquor on -sale when accessory to a restaurant. b) Retail commercial activities and personal services, provided that: 1) Retail uses and personal services are limited to those uses and activities which are allowed as a permitted or permitted accessory use within a CC -R Zoning District. 2) The use or activity complies with the specific intent and purpose of the City Center Plan portion of the Comprehensive Plan. CC -OT District. a) Day care nursery facilities as a principal or accessory use provided that: 1) The use complies with the provisions of Section 9, Subdivision E of this Ordinance. b) Liquor, on -sale when accessory to a restaurant. c) Manufacturing, compounding, assembly, packaging, treatment or indoor storage of products and materials as an accessory use provided that: 1) The use is accessory to a permitted use within this district. 2) No outside storage is associated with the use. N. RAFT d) Retail commercial activities and personal services, provided that: 1) Retail uses and personal services are limited to those uses and activities which are allowed as a permitted or permitted accessory use within a CC -R Zoning District. 2) The use or activity complies with the specific intent and purpose of the City Center Plan portion of the Comprehensive Plan. e) Restaurant, internal to another structure provided that: 1) The use will not conflict with existing or potential neighboring uses or joint building activities. 2) The storage, preparation, and serving of food items are subject to the approval of the Zoning Administrator who shall provide specific written sanitary requirements based upon the applicable State and County regulations. f) Trade or vocational schools. g) Warehousing/indoor storage provided that: 1) The use is accessory to ayermitted use within this district. Uses by Administrative Permit: Subject to applicable provisions of this Section, performance standards and processing requirements established by this Ordinance, the following are uses allowed in CC Districts by administrative permit as may be issued by the Zoning Administrator: Subd. 1. Open or outdoor sales, rental or display as an accessory use in association with an allowed principal use: Subd. 2. Other uses of the same general character as those listed as a permitted use. Subd. 3. Outside, above ground storage facilities of gaseous, non -liquid fuels used for heating purposes, or for motor fuel dispensing purposes related to the approved principal use, but not for sale. Subd. 4. Temporary outdoor promotional events and sales. Section 4. Section 8, Subd. E, Schedule of Non -Residence District Requirements for Lot Area, Depth, Width, Coverage, Setbacks, Height of Ordinance No. 80-9, the Plymouth Zoning Ordinance, is hereby amended by adding the following: 0 DRAFT The following minimum requirements shall be observed in CC Districts, subject to additional requirements, exceptions and modifications set forth in this Ordinance. Subd. 1. District Area. None. Subd. 2. Lot Area. None. Subd. 3. Lot Width. None. Subd. 4. Lot Depth. None. Subd. 5. Structural Coverage Per Lot. Forty (40) percent -maximum, twenty (20) percent -minimum. Accessory public garage/parking ramps and storm water ponding areas are to be excluded from the lot size calculation for structural coverage. Subd. 6. Setbacks. a) Front Yard. Twenty (20) feet, maximum, except when abutting intermediate arterials, the maximum may be exceeded. b) Side Yard - Corner Lot. Twenty (20) feet, maximum, except when abutting intermediate arterials, the maximum may be exceeded. c) Side Yard - Interior Lot. None. d) Rear Yard. 1) Principal Structure. Sixty (60) percent of lot depth or one hundred (100) feet, whichever is least. 2) Other. Twenty-five (25) percent of lot depth. Subd. 7. Building Height. a) Principal Structure. Four (4) stories or forty-five (45) feet, whichever is least, provided that any portion of the building beyond the second (2nd) story or thirty (30) feet, whichever is least, shall be stepped back at the street frontage at a 1:1 ratio. b) Accessory Structure. One (1) story or twenty (20) feet, whichever is least. t1] DRAFT Section 5. Section 8, Subd. G, Performance Standards of Ordinance No. 80-9, the Plymouth Zoning Ordinance, is hereby amended by adding the following: 4. Special Design and Performance Standards - CC Districts: The following special design and performance standards shall be observed in the CC District subject to the additional standard requirements, exceptions and modifications set forth in this Ordinance: a) Parking: 1) No parking spaces shall be located between the immediate front of the principal structure and the abutting front lot line. 2) No more than fifty (50) percent of the parking provided on the lot shall be located in front of the rear building line to the front yard lot line. 3) No parking spaces shall be located on corner, lots at the point of street intersections. 4) A reduction of up to ten (10) percent in the number of required off-street parking spaces may be approved by the Zoning Administrator in the case of shared parking areas between abutting uses. 5) A reduction of one (1) parking space from the number of required off- street parking spaces may be approved by the Zoning Administrator for each on - street parking space provided at the lot frontage on a public street. b) Loading: 1) Loading areas and docks, as required by Section 10, Subdivision B of this Ordinance, shall be limited to the rear of the principal building. 2) Special landscape screening or building design measures shall be required to minimize and limit the visual impact of loading docks and areas. c) Pedestrian Circulation: 1) Each property shall be responsible for the installation and maintenance of a sidewalk pursuant to City standards at all lot lines abutting streets except intermediate arterials. 2) Each property shall provide a sidewalk pursuant to City standards from the front lot line to the main entrance of the principal structure. 3) Each property shall provide a designated pedestrian circulation system through and from off-street parking areas into the principal structure. 11 4) Properties which back onto the natural area, pedestrian corridor shall make appropriate landscape improvements and pedestrian connections and may be required to grant an easement for the corridor. d) Landscaping: 1) The dominant tree species and planting patterns utilized on site shall be the same as the species of street tree and planting patterns to the front of the property, except as provided below. 2) Shade tree plantings shall be provided in parking lots to an extent achieving twenty-five (25) percent shade of the parking area within fifteen (15) years. 3) The periphery of all parking lots shall be landscaped and screened in compliance with Section 10, Subdivision D of this Ordinance and the City Center provisions of the Comprehensive Plan. 4) Berms shall be allowed only in rear yard areas. 5) Water quality ponding areas shall be located to the rear or side of properties and shall be designed and landscaped in a park -like character, as specified by the City Center portion of the Comprehensive Plan. Water quality ponds shall also be designed to City engineering standards. If an alternative design is required, City -approved plantings shall be installed as opposed to fencing. 6) Existing trees shall be maintained and preserved to the extent possible and in compliance with Section 500.24 of the City Code. The landscaping of areas along pedestrian corridors shall have a consistent character throughout the City Center Zoning Districts and shall be comprised of design and landscape features as specified by the City Center portion of the Comprehensive Plan. e) Plazas. 1) All properties with principal buildings in excess of thirty thousand 30,000) square feet shall be required to have a public plaza area(s). 2) The design of plazas shall include special paving, seating facilities, lighting fixtures and other similar type features which comply with the City Center chapter of the Comprehensive Plan. 12 0 Signs. RAFT 1) Signs as regulated by Section 10, Subdivision A of this Ordinance, as applicable to the B-2 District and Section 8, Subdivision G of this Ordinance may be allowed subject to the limitations noted below. 2) Freestanding pylon signs shall be allowed only for properties fronting intermediate arterial streets. Such signs shall be limited to such frontages. 3) Business identification signs shall be incorporated into the building facade and shall not project more than twelve (12) inches beyond the plane of the building nor extend beyond the roof line. g) Buildings. 1) All sides of buildings shall have an equal appearance in terms of materials and general design. 2) The architectural appearance, including building character, permanence, massing, density and composition, scale, construction materials, and functional plan of all principal buildings shall comply with the City Center chapter of the Comprehensive Plan. 3) All principal buildings shall have entries that are visible or obvious from the street. 4) The major building massing of the principal structure shall parallel the street frontage of the lot. 5) Trash and recycling storage areas shall be designed internal to the principal building and shall not be allowed in an external fenced structure. h) Lighting. 1) Glare, whether direct or reflected, and as differentiated from general illumination, shall not be visible at any property line. 2) Any lights used for exterior illumination shall not be visible at any property line. 3) Freestanding light poles shall not exceed twenty-five (25) feet in height. 13 i) Other. 1) Other special design features and requirements as specified by the City Center chapter of the Comprehensive Plan shall be required as applicable to respective properties within the district. Section 6. Effective Date. This Ordinance shall be in effect upon its date of passage. ADOPTED this day of 1996. ATTEST: Laurie Ahrens, City Clerk E Joy Tierney, Mayor 14 4pPLYMOUTH, MINNT-SOTA COMERCIALIINDUSTRIAL USE DISTRICT MATRIXMI P = Permitted Use A=Accessory Use C=Conditional Use I=Interim Use AP=Administrative Permit c ... p A A A A A Accessorycommercial/business structures A A A A A A P' C C.......................C ....C...._; C C Accessory_ enclose........ .......... C........................4................_...... ................... 4........._._...........»......._........»..... i ...... .............. t................. E Amusement centers P: P Antique or gift shop_ P P C C Appliance and electrical stores including incidental repair and P P C C assembly but not fabricating. or manufacturing _ ia...........................................;............»... ...........». .................. .. Y....»._._._ ._..».»....._. P _ ........... ........ _..... A, .... .............. P ...... _ ........... P.......:....................._..............o......... and school supplies Automobile accessory store ' a o P i ri C Automobile parking lots, principal use _ i t.................6...................-_............. ................. .._......»....._........................._......... .............. .«......... ..... ..... .............. AUTOMOTIVE SERVICES: 4 _.».........»............. _ ..._... »....... »..._.._. 4 .. Motor vehicle fuel ....................... _............. _................ __......... _.......... _._.._ .---_... PC.....»..._.._............. C P P T s C C ........_............».. _. _. Re air ma or C C C Re air - minor i C i C C:Bakery goods and baking of goods for retail sales on the PC P P C .. _ r._.. ....................... ... ........... ....................... i i................_........»....._......._................................ credit unions and other PP Bank, savings and loan, savingsv P 4. premises p p P financial institutions C_....... _.... _.................................................»..»................................... p......... .... _..... _......... Y................4................ ......................»...... ...._ ... _. P P C C W` BBeaza r parlorsPPP C PP i p i p P C — C _...._... ......... ..... it __._.................................. P ; P_....._....z...............___».. .._ _.._......_.. » Bicycl sales and repair »........................................ P C....................C...............................,. Boat, and s owmobile sales enclosed P.».»_...._»................ 0 ..... _..... _............... P............................................... Books, office su lies or statione stores P pP C i C 1 C i C C Buildings in excess of height limitations C C C C C C P _........... __. _ .... _............ .....................................»........... i .. » us/transit station with vehicle»storageB B us/transit station or terminal without vehicle storage ....... P........... : Y................Y................ .._..._.. ...__....._. ».......... .......... ........ .....». ..... ... p..._......:................_...............................:...........................................;..................,. s ;Camera andphotographic su lies sales and film rocessin P............. P P_ a............................................. P P i C frozen desserts and soft drip} P P C C C Candy, ice cream, popcorn, nuts, fro P P P i P P P =. i sales — PLYMOUTH, MINNESOTA COMMERCIAL/INDUSTRIAL USE DISTRICT MATRIX P = Permitted Use A=Accessory Use C=Conditional Use I=Interim Use AP=Administrative Permit Pammmy C '_. C £ C Car washes, commercial s P•`• L geta..rugs andtile .«......_._....»..... _................................................................................. 4.........._....4.........._»» i................ Cemetery P_........................................p C C j..«.._............................................:................_. Clothes rental and sales P p C C Coin and philatelic stores lleges P 6.................................................. p a...............:.......... p p Commercial recreation, indoor (i.e., bowling alleys, rollerP rinks, etc:) i................ C CommunitycentersP P p p Conference centers P »_ P tionsContractoropera.................................. ... __............. ...........».................................. P P P P.... C C Co & withoutConveniencegrocerymarket (not supermarket type P P motor fuel facilities »delicatessen• food service) i.......................................................»............. C C a................................ Convenience roe h prepacgrocerymarketwithred foods and/or motor C C C€ fuel sales P C p Copy service but not including printing press or newspaper P P P P tional facilitiesC........_COITeC a...........................................b................» C..... C »C d.............» iC C P/C Day care nursery s P Department, discount and warehouse stores P P Distribution Centers f P p Drug store...................................................................._._.»....................................................... DryP...........•........_. ; C.» C..........._...............»............................_ C C...... cleaning including plant and accessory pressing andd 4........................ P C C R.............. ........... repg.........._......................... Dry cleaning pick up and laundry pick up stations including P P i p p incidental repair and assembly but not including processin___ P 6 Dry good store Elderly (senior citizen) housing C................».................»...._....... t........ p p i p P P :Essential services P P........... P.».»....._P P ».« P....«..............»P........................ 4 .................» j C Explosive materials/bulk retailer PLYMOUTH, MUMMOTA COMMERCIAL/INDUSTRIAL USE DISTRICT MATRIX P = Permitted Use A=Accessory Use C=Conditional Use I=Interim Use AP=Administrative Permit 11 ----------------- P P C i C '• Fabric and notion sales and stores A A A A 4.......i.....«A...... Fences as regulated by Section 21130.«.»..~.~.................................................. a. _ '.............« P€'•.....»p........._ A...............«...?'......«......... 0._. ...._C..._............«. i. 0 ....». ................ ................. g...................._. Florist shop............._...................... ...... ................................................. P ................1 P P i.........«P_..............«C P C C i Frozen food retail but not includin a locker plant C P p, P p p C p Funeral homes and mortuaries p Furniture storess P P Furriers when conducted r re radeC..«..... C............._.............«..................t.................................«.............................................«...»......_.._......................__........»..._on1Y_f........«tail.t..........._onpremises..-............ s Garden supply storesP P P p p C Gift or novelty store p p C C p p Governmental and public regulated utility (essential services) C P P p p buildings and structures (excluding public works types facilities L and uses .......................................... d................ a........... «._ 6........................ J............... P _ Government buildings including public»works GROCERY STORES: C C ':. C C C Convenience storeroce market - with gas W p P........» Convenience «store) grocery market --without._......_..:......................... P P p............................................«.....«........ p P i. C C b......... ....... Supermarket j...............« P P 6...........«........... P i......................... C 4......». ... j._ .»...... 4........................ ....................... »....... __.._....... -.... «._........ _»............................... Superstore P p P C C Hardware store Heavy manufacturin a................a.................................«»_......_......_. s P. ................................_...«....... d................_............ w ............. .. P... « raft store p......t .............«....._ P...... t. 1...............0-................. Home occupations and home offices as regulated by SectionA21145 C Hospital i P......«. p...._ C..........a........«C.......... I...........................................»......................._.......«.......« orateIcesaleswithst a not to exceed fiveeed........e tons...............-.......................... P P .................... P C C f.............-..... .... f............ .. Jewelry stores and luggage stores _..................... p ............ ».p... ...... «... f......................... p p p p p P Laboratories i p Landscape nurseries » V p CLaundromatr._Seif service washin and d inP ...... P P.............. P....................««_........................._. C.........«:.........» .......... C. g..............._!....g.... ..................... ............... PLYMOUTH, MINNESOTA COMMERCIAL/INDUSTRIAL USE DISTRICT MATRIX P = Permitted Use A= Accessory Use C= Conditional Use I= Interim Use AP= Administrative Permit gal P P C I C j Leather goods and luggage stores P P P P........ C Liquor, off -sale CCPCP C C C Liquor, on -sale C C Living quarters accessory to a commercial/industrial/principal use P P P P P C C C I C Locksmiths P Lumber yards, building material sales, and similar bulk type retail sales establishments t ................. .................. .................... P P P l*,*****"*,*"*,**"*,***,****""**",*,*1*11*"*--*--* ................. 1 Machine shopsshop..s....................._.......................... C C P P P Manufacturing or assembly of products P P P P C C C C Massage, therapeutic P P P C P C Medical/dental/chiropractic clinics and offices C P P C C 1 . ..... . ............................................ Meat market, but not includin p Rq PP P P Mini -storage C i Motel motor hotels, hotelsPP Motor fuel storageEE_Q]!N Motor vehicle, farm implement, and recreation equipment ices.andy p and accessor Multiple family dwelling structuresP P P P C Music (instruments, equipment, tapes, compact discs, etc.) shop and sales P Nursing homes, halfway houses, similar group housinggroupgCC ...... A A A A A A A A A A Nursing ......... I .. . .... . .................................. . .................... ..................... .................... A Off-street parking and off-street lo A P P P P P P C C CP Offices, professional or commercial leased C P P P P Offices related to other allowed uses Open or outdoor service, sale and rental as a principal or I accessory use 1 .................. ......... ....... ................ ..................... Ap AP AP i AP AP AP AP AP C C C a.................................._.....: t C/ Ci C/ AP Open and outdoor storage as a principal or accessory useAPAP AP AP : AP PLYMOUTH, MV;NESOTA COM MRCIAL/INDUSTRIAL USE DISTRICT MATRIX P = Permitted Use A=Accessory Use C=Conditional Use I=Interim Use AP=Administrative Permit L' P_ AP AP € AP AP AP AP AP AP AP ' AP AP AP AP AP Outdoor promotional and sales activities beyond the confines of i the principal building, temporary AP AP€ AP AP AP AP AP AP AP AP AP AP Outside above ground storage facilities for gaseous, non-liquid fuels used for heating purposes, or for motor fuel dispensing - resalen ........ ... .............. Paint J........................ Ps p P 6...... C...................«C.................._...................«.......i................................................ ot«for ..................................................... _..................................... and w salesallpaper......................................_...._......._._._._.._.._.«.........-.................... P i P«_....« J............................ P roundsParksla P Pawn shops C C € Planned......................... p P J........._.....»_._. C C J......... Plumbing, , , air asumbing, telev sionradioelectrical sales and such repairpP is accessory use to the retail establishment permitted within this district i P................9........... P.....«....................... 1..................:................. f................... P Pre-school, elementary, junior or senior high schools having aCregularcourseofstudyaccreditedbytheStateofMinnesota P p p s Printing establishments, commercial P....»J..__P P........ _Private clubs or.lodges.._................................................._...«............................................ C........_. P............................................................. PrivateP garages and off-street arkin1? g anoff-street oa mgAd................a........................................................................................_ J................................... P P •. P P P p....................................._...._.. p P C C C 11g__ ........................................_................................................. Professional/commercial offices C P C C C A A A A Public garagelparking ramp P P Publicly owned civic or cultural buildings, such as libraries, city offices, auditoriums, public administration buildings and historical developments e.........«............................................._...«......................_«.._ s P pP.......>............................... p ..-;......«P ........ Radio and television stations i ......P ........._... P Reception halls Recreational vehicles and equipment (accessory storages J................ q........... _.... i C C C C C 6......... .......... C C J..................:...................................J........................_....................»...............«.........._........................... Reduction in lot area requirements P s institute h as churches, Religious ons, such hes, chapels, temples, C synagogues and mosque limited to worship and related social 1 ................. ._............... ev ents PLYMOUTH, MINNESOTA COMMERCIAL/INDUSTRIAL USE DISTRICT MATRIX P = Permitted Use A=Accessory Use C=Conditional Use I=Interim Use AP= Administrative Permit o ; Residential care facilities serving sixteen 16 or fewer personsP RESTAURANTS: 4...............;.»».._»...... C Drive-in/convenience (fast) food... 4....»C ................. ........................................H-.............................................................'....................................0................... P P p P C C C Delicatessen/coffeecoffee sho C P P C p C : Restaurants/Cafes P........-P Sewing -machine sales and service.............................._....»......................._.............. P P C...........'s..........C................................................>......... p P.... P Sexually business..--accesso'................................................................ PP 4 . .................... P............_.....»P....._._..». P.............p..;..........P.............. p P P Sexually oriented business - principal P p p p P C C C C Shoe repair A A A 0 ................4...............: A .........»f' ...................»A A................-A............-`............'°'.............P'.......a................ 4............. A..... Signs regulated bY...Section 21155_ ................ _......... Social services or other non directly related worship typeC s activities as oanaccessory use within a religious 4 ................1................ P k........................ C C 0...................».......... s Sporting oods and recreational ui ment salePP C Storage, utilization or manufactureof explosives PP P p artist,_musicx.Photot_decoratin r. Studios ._. etc:........................ P a........................... P P_..» P C....................C................................_C dance, C...... Tailor sho...s.......................»._._..._..._..._................»........................._...................................... F p P.».... ».. 3pp p P C C C C s Tannin salon i P p Theaters, not of the outdoor drive-in type F... Townhouses uadraminiums and manor homes P r................t»...........................».........»;...........P.....................P_.. p ............................................ C @.....».........»................z..1...................................x....................................................»..__.»....................... To stores P C P P P Trade schools/vocation schools C ':. C C u P P P Wu Truck terminalsN. ........................................».._............................................. ip o ....................................................................................-................................ ores and tores of aVarietyst....................._S• Veterina P..................._C..................._C....-......;..............._...............:........:.»............................................. P C C clinic and kennelandet sur 1 sales P P P P P P C Video rental and sales C C p p P T »Warehousing and indoor _storage»excluding hazardous wasteP C Waste facilities P = Permitted Use PLYMOUTH, MINNESOTA COMMERCIAL/INDUSTRIAL USE DISTRICT MATRIX A=Accessory Use C=Conditional Use I=Interim Use Administrative Permit Wholesale showrooms WESTLAND EQUITIES 3025 N. HARBOR SUITE 316 PLYMOUTH, MN 55441 February 7, 1996 (612) 559-0014 Planning Commission City of Plymouth Re: Commercial/Industrial Use District Matrix Dear Commissioners: We appreciate the opportunity to have met with Barbara Sennes and John Keho last week to attain a better understanding of potential uses in City Center as it relates to CC -OT and are pleased to see that there has been expansion of the Matrix to allow additional uses. This can only help spur development and to better serve the community by providing them more choices. However, there still remain a few areas of disagreement for the CC -OT lots that we feel quite strongly about. (I'm speaking for Westland, John Day and Mr. Morrisette.) Specifically, we believe that with the overwhelming approval by the voters of the Rec Center referendum and construction of the center, substantial auto traffic will be created on 37th Ave and Plymouth Blvd. Great! Isn't that what the City needs for the Rec Center to be a success? The Staff says they do not want more auto uses in this district. We firmly believe that to deny the potential for a free standing AUTO ACCES- SORY STORE (such as Champion Auto without service bays) within this district fails to recognize that the traffic is already going to be there because of the Rec Center. We fail to see the justification for not allowing this use. It -should be a "P" use. We also believe that B—arber and_Beauty_Shops should be "P" and not "C" uses. Carpet, Rugs and Tile should be a "C" use. It's very possible for a "oriental rug" store to go into a small space on the first floor of an office building, just like 50th and France. Distribution Centers should be a "C" use in CC -OT. Isn't this a proper use within the "office tech" concept? We are not referring to the large regional truck distribution centers. Commercial Business School. It is not clear whether or not a school such the Minnesota School of Business is allowed in the Trade School Category. A business school is very much an office use and should be assigned a "P", perhaps in its own category. Thank you for your consideration. Yours truly, Ja es Guddal, La downer CC -`OT. cc. John Day; Rodney Morrisette EXCERPT FROM DRAFT PLANNING COMMISSION MINUTES OF FEBRUARY 13, 1996 MEETING City of Plymouth (96009) Acting Chairman Ribbe presented the request by the City of Plymouth for an Amendment to Ordinance No. 80-9, the Plymouth Zoning Ordinance, to create City Center Districts and related allowable uses and performance standards. Planning Supervisor Senness stated that the City Center plan was adopted by the City Council on January 23, 1996. On January 25, 1996, the Metropolitan Council found the Comprehensive Plan amendment to have no potential impact upon metropolitan systems plans and that the City could put the amendment into effect immediately. The proposed text amendments are the first of three actions to be considered by the Planning Commission. Planning Supervisor Senness introduced David Licht, consultant. Mr. Licht gave an overview of the Ordinance Amendment as proposed, outlining that the amendment creates four districts. Director Hurlburt commented that staff received a letter dated February 7, 1996, from James Guddal that is part of the staff report. She added that staff did recommend a specific change to the draft ordinance after receiving Mr. Guddal's letter to add "art galleries" as a permitted use in the CC -R and CC -RE Districts. Director Hurlburt also stressed that this agenda item pertains to the text amendment for the City Center Zoning Districts. Acting Chairman Ribbe opened the public hearing. Acting Chairman Ribbe introduced James Guddal of 4465 Vicksburg Lane. Mr. Guddal asked what the design criteria is for plazas as it refers to on Page 12 (e). He stated it is not clear whether or not a school such as the Minnesota School of Business is allowed in the Trade School category as noted on Page 9 (f). He stated that a business school is very much an office use and should be a permitted use, not a conditional use. Acting Chairman Ribbe introduced Ken Streeter of 13100 35th Avenue North. Mr. Streeter asked for clarification on parking spaces, specifically as it relates to Page 11 (a) 1) and (2). He stated that there is a need for flexibility depending upon a design that may be more aesthetically pleasing. Acting Chairman Ribbe introduced Robert Guth of 2925 Holly Lane. Mr. Guth asked what will happen to his property (liquor store) if the ordinance is approved. Mr. Guth stated that under the proposed ordinance, his property would be zoned as CC -RE, and it would be more appropriate under CC -R. He stated that if the CC -RE zoning is approved, language should be added to include liquor stores as a permitted use. Mr. Guddal asked if the maintenance standards have been developed for water quality ponding areas, and what it would cost the owners. Acting Chairman Ribbe closed the public hearing. In response to Mr. Guddal's question, Director Hurlburt stated that water quality ponds are now required for all new developments in the City. City Engineer Faulkner stated that all developers are required to sign a pond maintenance agreement. The agreement states that the developer is responsible to keep the ponding area the same as it was in the original design. Before the City signs off on the developers financial guarantee, it would be inspected to see if the ponding area is functioning. He added that it would be hard to estimate the maintenance frequency at this time. Mr. Streeter asked when a pond has multiple owners, if there would be the capability of the City maintaining the pond and billing the owners. City Engineer Faulkner replied that the details have not been worked out yet, but the issue could be raised before finalizing the Water Quality Plan. In response to Mr. Guddal's question regarding plazas, Director Hurlburt stated that the intent is to provide a space for public gathering at the entrance of major buildings. There would be flexibility depending upon the design and the business proposed. Mr. Guddal asked if each project would be evaluated individually. Director Hurlburt responded affirmatively. She added that the plaza would only pertain to buildings that are over 30,000 square feet. Mr. Licht responded to Mr. Streeter's issue for clarification of parking spaces. He stated that the parking standards are reflective of design standards of the approved plan. The concept is to bring the buildings to the front of the property. The standards allow for flexibility according to design considerations. In response to Mr. Guddal's question of trade and vocational schools, Mr. Licht stated that a business or commercial type of business school would fall under vocational or trade school. The traffic is different for these types; thus, a Conditional Use Permit is required, and granted if the use is conforming. In response to Mr. Guth's question of his liquor store, Mr. Licht stated that off sale liquor is a permitted use in the CC -R district and therefore, is a conditional use in the CC -RE district. Mr. Licht stated that Mr. Guth's liquor store activity is not precluded. Mr. Guth commented that if a Conditional Use Permit is required, it may or may not be approved. Mr. Licht explained the legal framework of a Conditional Use Permit, which is a permitted activity provided certain conditions are met. Mr. Licht contended that there is some degree of judgment required, but that the ordinance works in the favor of the property owner. MOTION by Commissioner Spigner, seconded by Commissioner Bildsoe to recommend approval of the request by the City of Plymouth for an Ordinance Amending Ordinance No. 80-9, The Plymouth Zoning Ordinance, by creating City Center Districts and related allowable uses and performance standards. Director Hurlburt asked if the MOTION included incorporating art galleries as a permitted use. Commissioner Spigner and Commissioner Bildsoe responded affirmatively. Commissioner Spigner asked if Mr. Guth's liquor store would have certain rights under the new ordinance. Director Hurlburt explained that under the new administrative procedures for an existed use in a new zoning classification, would mean that the liquor store would automatically be considered a conforming use. Roll Call Vote. 6 Ayes. MOTION carried unanimously. WESTLAND EQUITIES February 14, 1996 Ann W. Hurlburt, AICP Community Planning Director City of Plymouth, MN Dear Ann: 3025 N. HARBOR SUITE 316 PLYMOUTH, MN 55441 612) 559-0014 Re:Rezoning Downtown Plymouth Amending Ordinance No 80-9. With regard to the discussions during the Public Hearing last night, I understand the following to be true: 1. With regard to allowable uses, ORIENTAL RUG SALES will be designated a "P" for permitted use in CC -OT. ART GALLERIES will be added as a permitted use in CC -OT. 2. PLAZAS that are required when buildings exceed 30,000 sq ft are intended to create an open space need for pedestrians do not have specific design criteria but will be part of and compatible to the specific project presented by the developer. 3. We are being denied a "P" use for an auto acces- sory store because staff does not want to allow a use that caters to autos even though four uses that do utilize auto oriented customers in the same block and are contiguous to our lot have aleady been approved. 4. We are being denied CC -R zoning for the same reason as Item 3 even though, the City of Plymouth by its construction of the recently passed Recreation Center referendum will create substantially more traffic than several business' combined. 5. That with reference to CONDITIONAL USE designations, the City of Plymouth has the burden of proof to demonstrate that a project is a nonconforming use. The burden of proof is not on the landowner. Due to the very obvious confusion on part of the Planning Com- mission as to what it was voting on and since the public hearing was closed before staff approved revisions could be incorporated into the Amendment of Ordinance 80-9, we assume you will apprise Council of the error and recommend that the changes noted above will be incorporated. If staff does not intend to correct this error, then please notify us. If our understanding of the issues as stated above are not accu- rate, thank you for informing us accordingly within twenty four hours of the date of this letter. Yours truly, Personally delivered 2/14/96 3PM aures Guddal February 16, 1996 Mr. James Guddal Westland Equities 3025 N. Harbor Suite 316 Plymouth, MN 55441 Dear Mr. Guddal: q l.oGxfA Thanks for your comments on the City Center Zoning hearings that were held on Tuesday evening. Tentatively, the City Council is scheduled to consider the Planning Commission's recommendations at a special meeting on March 13. I will be preparing reports for the Council explaining the comments that were made at the hearing. I may be recommending additional changes. A copy of my report will be available after it is mailed to the Council (tentatively on March 8.) I do wish to comment on the specific points in your letter. 1. Oriental rug sales will not be listed in the ordinance as a permitted use. However, art galleries will be listed. Art galleries will be defined in such a way as to include a gallery selling one -of -a -kind oriental rugs. Art galleries will be listed as permitted uses in the CC -R and CC -RE districts, and therefore will be a conditional use in the CC -OT district. 2. The design of public plazas, required for major buildings (over 30,000 sq.ft.) will be guided by the language in the City Center Plan. I refer you specifically to Section 2.2, "Gathering Spaces." They will be designed as a part of each project. We do not have detailed design requirements (such as colors, certain style of seating, etc.) 3. Auto accessory uses are not listed as a permitted use in the City Center Area. The plan states that auto -related uses are not a good fit for the area as they do not create strong relationships with their neighbors, and the automobile invariably dominates the site. A business that is automobile oriented is not the same as a use to which customers arrive in automobiles, or a use which attracts a large volume of automobile traffic. We are aware that there already are auto -oriented uses in the City Center, but do not want to encourage more. We do not consider a mortuary or a day care center automobile oriented uses. 4. The land use and zoning designations are based on what was determined to be the most viable uses for each site. We incorporated flexibility into the ordinance allowing retail uses in the CC -OT by conditional use permit) to recognize that we PLYMOUTH :1 Beautilul P(ace'h) Live 3403 PL'• ':10UTH =_ -jULEVAR • PLYMOUTH. MINNESOTA 55447-1482 do not have perfect knowledge of the market, and that the attractiveness of the OT area for retail may change. We did not designate any areas CC -OT to limit traffic, as you imply in your letter. 5. As explained at the public hearing, a conditional use is a use that is generally acceptable in a given district, if certain conditions are met. Legal advice indicates that it is up to the City to show that the conditions are not met in order to deny a conditional use permit. A major criteria is compatibility with the City Center plan, as along with compliance with any special conditions established for any specific use. If you have any additional comments or questions, please feel free to call me at 509-5401. Sincerely, Anne W. Hurlburt, AICP Community Development Director E C E I V E FEB ? 1 1996 CITY OF PLYMOUTH COh!M!!NITyDtPA!TMFN February 19, 1996 Plymouth Mayor and City Council Members 3400 Plymouth Boulevard Plymouth, Minnesota 55447-1482 RE: City Center Master Plan Dear Madam Mayor and City Council Members: We respectfully request that our land to be zoned CC -R not require a conditional use permit for restaurants that do not need drive - thru capabilities. I have discussed this matter with staff and they indicated they are "neutral" on this issue. It would, however, greatly enhance the marketability of the property. Your favorable consideration will be greatly appreciated. Sincerely, Kenneth R. Streeter President, Piymouth Hills Partnership Recommended Amendment to Section 3 (Page 9) of Draft Ordinance: Add Subd. 5 to list of Uses by Administrative Permit allowed in -all CC Districts: Temporary Sales Office for a period not to exceed one year. e) Restaurant, internal to another structure provided that: 1) The use will not conflict with existing or potential neighboring uses or joint building activities. 2) The storage, preparation, and serving of food items are subject to the approval of the Zoning Administrator who shall provide specific written sanitary requirements based upon the applicable State and County regulations. f) Trade or vocational schools. g) Warehousing/indoor storage provided that: 1) The use is accessory,to a,permitted use within this district. Uses by Administrative Permit: Subject to applicable provisions of this Section, performance standards and processing requirements established by this Ordinance, the following are uses allowed in CC Districts by administrative permit as may be issued by the Zoning Administrator: Subd. 1. . Open or outdoor sales, rental or display as an accessory use in association with an allowed principal use: Subd. 2. Other uses of the same general character as those listed as a permitted use. Subd. 3. Outside, above ground storage facilities of gaseous, non -liquid fuels used for heating purposes, or for motor fuel dispensing purposes related to the approved principal use, but not for sale. Subd. 4. Temporary outdoor promotional events and sales. So bd 5, Tt m o rary Sojte O Ph Le Oar iz Peh'cx1 Kot -b 51e y ear. Section 4. Section 8, Subd. E, Schedule of Non -Residence District Requirements for Lot Area, Depth, Width, Coverage, Setbacks, Height of Ordinance No. 80-9, the Plymouth Zoning Ordinance, is hereby amended by adding the following: G a SECTION 21015 - ADMINISTRATION - CONDITIONAL USE PERMITS 21015.01. PURPOSE: The purpose of a conditional use permit is to authorize and regulate uses which may be beneficial in a specific instance to the general welfare of the community, yet ensure that such uses are not detrimental to surrounding property, and are consistent with the stated purpose of the zoning district in which such uses are located regarding conditions of operation, location, arrangement, and construction. 21015.02. PROCEDURE: Pursuant to Minnesota Statutes 15.99, an application for a conditional use permit shall be approved or denied within sixty (60) days from the date of its official and complete submission unless extended pursuant to Statute or a time waiver is granted by the applicant. If applicable, processing of the application through required state or federal agencies shall extend the review and decision-making period an additional sixty (60) days unless this limitation is waived by the applicant. Additional City requirements are as follows: Subd. 1. Request for conditional use permits, as provided within this Chapter, shall be filed with the Zoning Administrator on an official application form. Such application shall be accompanied by a fee as set forth in the City Code. Such application shall also be accompanied by detailed written and graphic materials, the number and size as prescribed by the Zoning Administrator, fully explaining the proposed change, development, or use and a list of property owners located within five hundred (500) feet of the subject property in a format prescribed by the Zoning Administrator, except in the case of correctional facilities and waste facilities where the notification shall be to property owners located within one thousand three twenty (1,320) feet of the subject property. The request shall be considered as being officially submitted when all the information requirements are complied with. Subd. 2. Upon receipt of said application, the Zoning Administrator shall set a public hearing following proper hearing notification. The Planning Commission shall conduct the hearing, and report its findings and make recommendations to the City Council. Notice of said hearing shall consist of a legal property description, description of request and map detailing property location, and be published in the official newspaper at least ten (10) days prior to the hearing and written notification of said hearing shall be mailed at least ten (10) days prior to all owners of land within five hundred (500) feet of the boundary of the property in question, except in the case of correctional facilities and waste facilities where the notification shall be to property owners located within one thousand three hundred twenty 1,320) feet of the subject property. Subd. 3. Failure of a property owner to receive said notice shall not invalidate any such proceedings as set forth within this Chapter. 21015-1 Subd. 4. The Zoning Administrator shall instruct the appropriate staff persons to prepare technical. reports where appropriate, and provide general assistance in preparing a recommendation on the action to the City Council. Subd. 5. The Planning Commission shall consider possible adverse effects of the proposed conditional use. Its judgment shall be based upon (but not limited to) the following factors: a) Compliance with and effect upon the Comprehensive Plan, including public facilities plans. b) The establishment, maintenance or operation of the conditional use will promote and enhance the general public welfare and will not be detrimental to or endanger the public health, safety, morals or comfort. c) The conditional use will not be injurious to the use and enjoyment of other property in the immediate vicinity for the purposes already permitted, nor substantially diminish and impair property values within the neighborhood. d) The establishment of the conditional use will not impede the normal and orderly development and improvement of surrounding property for uses permitted in the district. e) Adequate public facilities and services are available or can be reasonably provided to accommodate the use which is proposed. f) The conditional use shall, in all other respects, conform to the applicable, regulations of the district in which it is located. g) The conditional use complies with the general and specific performance standards as specified by this Section and this Chapter. Subd. 6. The Planning Commission and City staff shall have the authority to request additional information from the applicant concerning operational factors or to retain expert testimony with the consent and at the expense of the applicant concerning operational factors, said information is to be declared necessary to establish performance conditions in relation to all pertinent sections of this Chapter. Subd. 7. The applicant or a representative thereof may appear before the Planning Commission in order to answer questions concerning the proposed request. Subd. 8. The Planning Commission shall make a finding of fact and make a recommendation on such actions or conditions relating to the request as they deem necessary to carry out the intent and purpose of this Chapter. Such recommendation shall be in writing and accompanied by the report and recommendation of the City staff. 21015-2 Subd. 9. The City Council shall not grant a conditional use permit until they have received a report and recommendation from the Planning Commission and the City staff after the first regular Planning Commission meeting at which the request was considered. Subd. 10. Upon receiving the report and recommendation of the Planning Commission and the City staff, the City Manager shall schedule the application for consideration by the City Council. Such reports and recommendations shall be entered in and made part of the permanent written record of the City Council meeting. Subd. 11. Upon receiving the report and recommendation of the Planning Commission and the City staff, the City Council shall have the option to set and hold a public hearing if deemed necessary and shall make a recorded finding of fact and may impose any condition it considered necessary to protect the public health, safety and welfare. Subd. 12. If, upon receiving said reports and recommendations of the Planning Commission and City staff, the City Council finds that specific inconsistencies exist in the review process and thus the final recommendations of the City Council will differ from that of the Planning Commission, the City Council may, before taking final action, refer the matter back to the Planning Commission for further consideration. The City Council shall provide the Planning Commission with a written statement detailing the specific reasons for referral. This procedure shall be followed only one time on a singular action. Subd. 13. Approval of a request shall require passage by a majority vote of the entire City Council. Subd. 14. Whenever an application for a conditional use permit has been considered and denied by the City Council, a similar application for the conditional use permit affecting substantially the same property shall not be considered again by the Planning Commission or City Council for at least six (6) months from the date of its denial; and a subsequent application affecting substantially the same property shall likewise not be considered again by the Planning Commission or City Council for an additional six (6) months from the date of the second denial unless a decision to reconsider such matter is made by a majority vote of the full City Council. 21015.03. INFORMATION REQUIREMENT: The information required for all conditional use permit applications shall be as specified in Section 21045.06 of this Chapter. 21015.04. GENERAL PERFORMANCE: As may be applicable, the evaluation of any proposed conditional use permit request shall be subject to and included, but not limited to, the following general performance standards and criteria: Subd. 1. The use and the site in question shall be served by a street of sufficient capacity to accommodate the type and volume of traffic which is generated. 21015-3 Subd. 2. The site design for access and parking shall minimize internal as well as external traffic conflicts and shall be in compliance with Section 21135 of this Chapter. Subd. 3. A pedestrian circulation system shall be clearly defined and appropriate provisions made to protect such areas from encroachment by parked or moving vehicles. Subd. 4. Adequate off-street parking and off-street loading shall be provided in compliance with Section 21135 of this Chapter. Subd. 5. Loading docks and drive -up facilities shall be positioned so as to minimize internal site access problems and maneuvering conflicts, to avoid visual or noise impacts on any abutting residential use or district, and are in compliance with Section 21135 of this Chapter. Subd. 6. Whenever a non-residential use abuts a residential use or district, a buffer area with screening and landscaping shall be provided in compliance with Section 21130 of this Chapter. Subd. 7. General site screening and landscaping shall be provided in compliance with Section 21130 of this Chapter. Subd. 8. All exterior lighting shall be so directed that the light source shall not be visible from the public right-of-way or from neighboring residential uses or districts, and shall be in compliance with Section 21105 of this Chapter. Subd. 9. Potential exterior noise generated by the use shall be identified and mitigation measures as may be necessary shall be imposed to insure compliance with Section 21105 of this Chapter. Subd. 10. The site drainage system shall be subject to the review and approval of the City. Subd. 11. The architectural appearance and functional design of the building and site shall not be so dissimilar to the existing or potential buildings and area so as to cause impairment of property values or a blighting influence. All sides of the principal and accessory structures are to have essentially the same or a coordinated, harmonious finish treatment. Subd. 12. Provisions shall be made for an interior location for recycling and trash handling and storage or an outdoor, enclosed receptacle area shall be provided in compliance with Section 21105 of this Chapter. Subd. 13. All signs and informational or visual communication devices shall be in compliance with Section 21155 of this Chapter. 21015-4 d r Subd. 14. The use and site shall be in compliance with any federal or state laws or regulations which are applicable and any related permits are obtained and documented to the City. Subd. 15. Any applicable business licenses mandated by City Code are approved and obtained. Subd. 16. The hours of operation may be restricted when there is potential negative impact upon a residential use or district. Subd. 17. The use complies with all applicable performance standards of the zoning district in which it is located. 21015.05. REVOCATION: The Planning Commission may recommend, and the City Council may direct, the revocation of any conditional use permit for cause upon determination that the authorized conditional use is not in conformance with the conditions of the permit or is in continued violation of this Chapter, City Codes, or other applicable regulations. The Planning Commission shall schedule a public hearing in the manner set forth in Section 21015.02 and shall notify the responsible person to whom the permit was issued, that they have an opportunity to show cause why the permit should not be revoked. The Planning Commission shall make a report to the City Council following the hearing including a recommendation and the reasons therefore. The City Council shall consider the report from the Planning Commission and shall, by resolution, declare its findings as to whether the conditional use permit shall be revoked, including the reasons therefore. The Zoning Administrator shall provide the responsible person to whom the permit was issued a copy of the proceedings and findings of the Planning Commission and City Council. 21015.06. A MNDMENT: Holders of a conditional use permit may propose amendments to the permit at any time, following the procedures for a new permit as set forth in this section, except where administrative approval may be granted, as defined and set forth in Section 21045. No significant changes in the circumstances or scope of the permitted use shall be undertaken without approval of those amendments by the City. The Zoning Administrator shall determine what constitutes significant change. Changes include, but are not limited to, hours of operation, number of employees, expansion of structures and/or premises, different and/or additional signage, and operational modifications resulting in increased external activities and traffic, and the like. The Planning Commission may recommend, following the procedures for hearing and review set forth in this section and the City Council may approve significant changes and modifications to conditional use permits, including the application of additional or revised conditions. 21015-5 21015.07. EXPIRATION: Unless the City Council specifically approves a different time when action is officially taken on the request, permits which have been issued under the provisions of this section shall expire without further action by the Planning Commission or the City Council, unless the applicant commences the authorized use within one (1) year of the date the conditional use permit is issued; or, unless before the expiration of the one (1) year period; the applicant shall apply for an extension thereof by completing and submitting a request for extension, including the renewal fee as set forth in the City Code. The request for extension shall state facts showing a good faith attempt to complete or utilize the use permitted in the conditional use permit. A request for an extension not exceeding one (1) year shall be subject to the review and approval of the Zoning Administrator. Should a second extension of time or any extension of time longer than one (1) year be requested by the applicant, it shall be presented to the Planning Commission for a recommendation and to the City Council far a decision. 21015.08. SITE IMPROVEMENT PERFORMANCE AGREEMENT AND FINANCIAL GUARANTEE: Following the approval of a conditional use permit as required by this Section and prior to the issuing of any building permits or the commencing of any work, the applicant, as may be - applicable, shall guarantee to the City the completion of all private exterior amenities as shown on the approved site plan and as required by the ' conditional use permit approval. The guarantee shall be made by means of a site improvement performance agreement and a financial guarantee as specified in Section 21045 of this Chapter. 21015-6 Agenda Number: TO: Dwight Johnson, City Manager FROM: Anne Hurlburt, Community Development Director SUBJECT: Rezoning of Property in the Plymouth City Center Area to Various CC", City Center Zoning Districts (96010) DATE: February 27, 1996 for the City Council Meeting of March 13, 1996 1. PROPOSED MOTION Adopt the ordinance amending the zoning map, rezoning property in the City Center areas to new classifications consistent with the Concept Plan and Design Guidelines and the Comprehensive Plan, as recommended by the Planning Commission. Approval of a Zoning Ordinance amendment requires a 5/7 vote of the City Council. 2. BACKGROUND The City Center plan was adopted by the City Council on January 23, 1996. On January 26, 1996, the Metropolitan Council found the Comprehensive Plan amendment to have no potential impact upon metropolitan systems plans and that the City could put the amendment into effect immediately. The proposed zoning map amendments are the second of three actions that will be considered by the City Council on March 13. The proposed zoning classifications for the City Center area are shown on the attached map. The district classifications correspond to the designations shown by the land use concept sketch included in section 1.3 of the City Center Design Guidelines, which has been adopted by reference as part of the City's Comprehensive Plan. An excerpt from the Concept Plan showing this sketch is attached. The recommended zoning district boundaries follow parcel boundaries for clarity and to facilitate the legal descriptions needed for proper notice and recording of zoning changes. At its February 13 meeting, the Planning Commission held a public hearing on the zoning map amendments, and recommended approval by a vote of 6 to 0. Me File 96010, Page 2 if 3. PUBLIC HEARING TESTIMONY During the public hearing on the map amendments, many comments were made regarding the text of the district regulations. These comments are discussed in the report on that item 96009.) The Planning Commission held three separate hearings on issues related to the City Center Area, and there was apparently some confusion on the part of several of the landowners as to what comments were appropriate for each hearing. A letter was received, and verbal comments made, by Brad Lis, Carlson Real Estate (see attached letter.) The Company has an interest in the land directly south of the Cub Foods store. The concept plan proposes to realign 35th Avenue to the north side of this property, to provide a full intersection with Vicksburg Lane. Carlson submitted a sketch that shows a retail center on this site. The plan shwos the intersection with Vicksburg at approximately the same location, but curves the road along the south side of the property. Carlson requests that the property be zoned CC -R (City Center Retail) rather than CC -RE (City Center Retail Entertainment.) This would permit convenience retail uses not permitted by right in the CC -RE district. (All retail commercial activities and personal services are permitted in CC -RE by conditional use permit.) The letter indicates that they believe that it would be premature to change the zoning to CC -RE until such time as they complete their plans and determine the appropriate street alignment. They further noted that there are restrictive covenants that prohibit the property from being used for a theater. There are a number of reasons why staff does not support Carlson's request at this time: The concept plan proposes an "entertainment center" for the area south of Cub, which could include restaurants, and retail uses in addition to a theater. The Carlson sketch shows a building oriented to the north, away from the entertainment center area. We are concerned that reducing the land area of this district may have an adverse impact on the viability of the entertainment concept. Planning and engineering staff are extremely skeptical that the road alignment shown on the sketch will be feasible, given the stacking distance and turning movements that would occur. Another road design may be possible, but the "Y" intersection shown on the sketch would probably not be safe and would probably not function properly. More study would be needed to determine if an alternative road alignment is feasible. Until that occurs, it would be premature to assume that the road could take the southerly alignment. Zoning the Carlson site "CC -R" would be inconsistent with the Concept Plan and Design Guidelines and therefore also inconsistent with the Comprehensive Plan. If, after further study, it was determined that the Carlson site could not be developed consistent with the adopted Concept Plan, and/or traffic studies showed that a southerly alignment for 35th Avenue were preferred, the Concept plan could be changed and the property rezoned to CC -R, or a conditional use permit issued if appropriate. To change the zoning prior to more detailed planning and traffic studies, however, would be premature. File 96010, Page 3 Regarding the restrictive covenant on the land, we are aware of the restrictions. The covenant specifically excludes a theater, but would allow for almost all of the other uses permitted or conditional in the CC -RE district. Mr. Lis asked that the City keep the location of the zoning boundary flexible, so that it would follow the road whether it is moved or kept in the current location. This is not possible. A zoning boundary must be described precisely, and cannot be moved except by specific City action to do so. Following the public hearing, the Mayor received a letter from Roger and Marilyn Teske requesting that their property on 37th Avenue North be zoned retail as opposed to Office/Tech. Because all City Center retail uses are allowed with a Conditional Use Permit in the Office/Tech District, staff believes that this district can offer great flexibility in uses and would not support this proposed change. 4. RECOMMENDATION: I recommend approval of the zoning map amendments as proposed, consistent with the Concept Plan and Design Guidelines and the Comprehensive Plan, and as recommended by the Planning Commission. ATTACHMENTS 1. Existing Zoning Map 2. Proposed Zoning Map 3. Excerpt from City Center Concept Plan and Design Guidelines 4. Letter Dated February 8, 1996 from Brad Lis, Carlson Real Estate Company 5. Letter Dated March 5, 1996 from Roger and Marrilyn Teske 6. Draft Ordinance 7. Planning Commission Minutes g:\cd\plan\staffrep\cc\96010.doc Existing Zoning City Center Area I- mss<_ ... .... '•: iB X R Pul B-1 84-8 v ;ice r isPUDr R 2 C a) w EN z C) O U a)Ci N _, c= ca it sp cu -a Q .b oC °' 0 o OF- C) c5 c5 c c5 L r UUUUa Va a o v .. 1.3 Mixing Uses Intent: Downtowns are places of mixed uses. Plymouth's City Center should be a mix of commercial, office, public, entertain- ment, recreation and housing uses. This range of uses should occur on the various blocks of City Center, within individual parcels, and even within a single building. Strategies: Establish a general guide for use/activi- ty in the City Center area; allow uses that are appropriate to occur outside of the guide if the pattern of use and activi- ty furthers the goal of an active and vital center (without compromising compati- bility). Allow a percentage reduction in parking required for development that mixes uses with peak parking times that area complementary. 1.4 Focal Points Intent: Some locations within the City Center have great significance, and when developed, they can lend identity and signature to the center. When consider- ing landmarks, recognize that focal points do not have to be buildings -- special sites and well-developed streets could become signature elements of Plymouth's City Center. Strategies: Use resources to promote development of a "landmark" quality in key locations Recognize that the City has most con- trol over the public spaces of downtown especially streets); promote more intense development of these areas to create a signature for the entire City Center. City Center Design Guidelines City of Plymouth, Minnesota o Par4 •-` - I i y I a pJ6 i G s041N Uses that are mixed throughout the center will create a more vital, active, interesting and useable center for Plymouth. Buildings, site and streets can all be focal points for City Center, and each can lend identity to the center. d The Structure of Downtown: Page 2 February 8, 1996 C A R L S O N REAL ESTATE C 0 M WUUSSENGER Ms. Anne Hurlburt, Community Development Director City of Plymouth 3400 Plymouth Boulevard Plymouth, MN 55447 RE: Plymouth City Center Plan Planning Commission - February 13, 1996 Dear Anne: I am writing in regard to the parcel of land directly south of the CUB store and north of the current 35th Avenue. As you know, I am in the process of preparing a traffic study and site plans which would incorporate an approximate 20,000 square foot convenience/service retail center into the CUB development. As such, I have made the request that the property to the north of 35th Avenue should be zoned CC -R so that the street can be the clean break for the zoning line, and the CC -RE zoning can begin to the south of 35th Avenue. I believe that it is premature to change the zoning on Carlson's piece of land before the exact placement of the street extension is determined. If, in fact, the zoning is changed now, we will be saddled with the burden to return it to the CC -R zoning on the land north of 35th to do our development. Another problem with changing the zoning to CC -RE on this piece of land is that there are recorded restrictive covenants on this property which specifically prohibit the land being used as part of a theater development. I am enclosing a copy of a draft of a site plan and will be contacting you shortly to discuss the results of our traffic analysis. In the meantime, I request that you either leave the zoning on our parcel CC -R or put of a provision into the resolution which states that the land to the north of 35th will be CC -R and the land to the south will be CC -RE. Please contact me with any questions or concerns. Sincerely, CARLSON REAL ESTATE COMPANY, INC. Brad Lis Managing Director of Investments 612)333-9869 2222 Plaza VII, 45 South Seventh Street, Minneapolis, Minnesota 55402 612-333-9898 D D i q 0 UN CITY OF PLYMOUTH COMMUNITY DEVELOPMENT DEPARTMENT March 5, 1996 Mayor Joy Tierney MAY of Plymouth 3,400 Plymouth Blvd. Plymouth, MN 55447 P. We are a part of Westland Equities Ltd. which owns property on 37th Avenue North in the City Center area. A proposal will be coming before the City Council this month wherein thi property would be zoned "Offi.ce/Tach". We would strongly encourage that this property be moved to "Retail" zoning. Retail would not only give Westland an opportunity for broader use of the property, but very likely would give P1ymouth potential for a larger tax base. As long-time residents of Plymouth (now over 30 years), we invested in the Downtown Plymouth area to be a part of the growth. We would hate to see lzmztationsput on thig property whidh may not be advantageous to the City as well as the investors. incerely, e6~ cl Rog r W. Teske 14900 31st Ave. N. Plymouth, MN 53447 CITY OF PLYMOUTH ORDINANCE NO. 96- NOVa AN ORDINANCE AMENDING THE ZONING ORDINANCE TO CLASSIFY CERTAIN LANDS LOCATED NORTH OF T.H. 55 AND WEST OF VICKSBURG LANE NORTH (96010) Section 1. Amendment of Ordinance. Ordinance No. 80-9 of the City of Plymouth, Minnesota, adopted June 15, 1980 as amended, is hereby amended by changing the classification on the City of Plymouth Zoning Map from B-1 (Office Limited Business and B-2 (Shopping Center Business) to CC (City Center) with respect to the hereinafter described property: The property in the Plymouth City Center Area (also known as Downtown Plymouth), generally lying north of Highway 55, east of Vicksburg Lane, south of Rockford Road and west of Plymouth Boulevard, together with portions of Plymouth Creek Park, Plymouth City Hall (3400 Plymouth Boulevard) and the U.S. Post Office Property 3300 Plymouth Boulevard). Area to be rezoned to "CC -P". City Center - Public District: Lot 1, Block 1, Plymouth Hills Addition (1611822340008) Lot 3, Block 2, Plymouth Hills Addition (1611822330004) Lot 1, Block 1 Plymouth Center Addition (2111822210003) Outlot A, Plymouth Center Addition (2111822210004) Outlot B, Plymouth Center Addition (2111822240003) Lot 1, Block 1, Plymouth Center Second Addition(2122118210007) Outlot A, Plymouth Center Second Addition (2111822210008) Area to be rezoned to "CC -R", City Center - Retail District: That portion of Lot 4, Block 2, Plymouth Hills Addition lying west of the east 253 feet thereof (1611822330010) Lots 1, 2 and 3 of Block 4, Plymouth Hills Addition (2111822220011, 2111822220012 and 2111822220003) Those part of Lot 4 and of Lot 5, Block 5, Plymouth Hills, Hennepin County, Minnesota, according to the recorded plat thereof, which lies easterly of "Line 1 " and westerly of "Line 2" and their extensions, said Line 1" and "Line 2" are described as follows: "Line 1" beginning ata point on the northerly line of said Lot 4 distant 71.02 feet southeasterly Ord. No. 96- , Pa8e 2 of the northwest corner of Lot 4 as measured along said northerly line of Lot 4; thence southerly to a point on the southerly line of Lot 4, distant 62.95 feet southeasterly of the southwest corner of Lot 4 as measured along said southerly line and said line there terminating. "Line 2" beginning at a point on the northerly line of said Lot 5 distant 22.55 feet southwesterly of the northeast corner of Lot 5 as measured along said northerly line; thence southerly to a point on the southerly line of Lot 5, distant 100.27 feet northwesterly of the southeast corner of Lot 5 as measured along said southerly line and said line there terminating. 2111822220014) Lot 6, Block 5 and that part of Lot 5, Block 5, Plymouth Hills, Hennepin County, Minnesota, according to the recorded plat thereof, which lies easterly of a line and its extensions, described as follows: Beginning at a point on the northerly line of said Lot 5 distant 22.55 feet southwesterly of the northeast corner of Lot 5 as measured along said northerly line; thence southerly to a point on the southerly line of Lot 5, distant 100.27 feet northwesterly of the southeast corner of Lot 5 as measured along said southerly line and said line there terminating. 2111822240010) Lot 7, Block 5, Plymouth Hills Addition (2111822240005) Lot 1, Block 1, Plymouth Hills Second Addition (1611822320006) That part of Lot 1 lying east of the west 229.9 feet thereof and the north 30 feet of Lot 5, Block 1, Plymouth Hills Third Addition 1611822320025) The west 229.90 feet of Lot 1, Block 1, Plymouth Hills Third Addition 1611822320021) Lot 1, Block 1, Plymouth Hills Sixth Addition (1611822220015) Area to be rezoned to "CC -RE". City Center - Retail/Entertainment District: Lots 1 and 2, Block 5, Plymouth Hills Addition (21 1 1 822220004 and 2111822220005) Lot 3, Block 5, and that part of Lot 4, Block 5, Plymouth Hills, Hennepin County, Minnesota, according to the recorded plat thereof, which lies westerly of a line and its extensions, described as follows: Beginning at a point on the northerly line of said Lot 4 distant 71.02 feet southeasterly of the northwest corner of Lot 4 as measured along said northerly line of Lot 4; thence southerly to a point on the southerly line of Lot 4, distant 62.95 feet southeasterly of the southwest corner of Lot 4 as measured along said southerly line and said line there terminating. 2111822220013) Ord. No. 96- , Page 3 Lot 2, Block 1, Plymouth Hills Sixth Addition (2111822220016) That part of the west 491.92 feet of the south half of the northwest quarter of the northwest quarter lying northerly of State Highway No. 55, Section 21, Township 118, Range 22; Hennepin County Minnesota. (2111822220009) Area to be rezoned to "CC -OT". City Center - Office/Technical District: Lots 1 and 2, Block 2, Plymouth Hills Addition (1611822330002 and 1611822330003) The east 253 feet of Lot 4, Block 2 Plymouth Hills Addition 1611822330009) Lots 2, 3 and 4, and that part of Lot 5 lying south of the north 30 feet thereof, Block 1, Plymouth Hills Third Addition (1611822330006, 1611822330007,1611822330011) Lot 3, Block 1, Plymouth Hills Sixth Addition (2111822220017) Section 2. Effective Date. This Ordinance shall take effect upon its passage and publication. Adopted by the Plymouth City Council this * day of * 1996. Joycelyn H. Tierney, Mayor ATTEST: Laurie F. Ahrens, City Clerk plan\staffrep\ord\96010 EXCERPT FROM DRAFT PLANNING COMMISSION MINUTES OF FEBRUARY 13, 1996 MEETING City of Plymouth (96010) Acting Chairman Ribbe introduced the request by the City of Plymouth for Rezoning of the property in the Plymouth City Center Area (also known as Downtown Plymouth), to several new "City Center" zoning districts. Director Hurlburt gave an overview of the February 8, 1996 staff report. Director Hurlburt stated that a letter dated February 8, 1996, was received from Carlson Real Estate Company, which has an interest in the land directly south of the Cub Foods Store. The concept plan proposes to realign 35th Avenue to the north side of this property, to provide a full intersection with Vicksburg Lane. Carlson submitted a sketch that shows a retail center on this site, with the road aligned along the south side of the property. Carlson requested that the property be zoned CC -R rather than CC -RE. That would permit convenience retail uses not permitted by right in the CC -RE district. Director Hurlburt stated that staff does not support Carlson's request at this time because they are skeptical that the road alignment shown on the sketch would be feasible, given the stacking distance and turning movements that would occur. Staff was concerned that reducing the land area of this district may have an adverse impact on the viability of the entertainment concept. Further, zoning the Carlson site CC -R would be inconsistent with the Concept Plan and Design Guidelines and therefore inconsistent with the Comprehensive Plan. Acting Chairman Ribbe stated that there seems to be a great deal of concern between the CC -R and CC -RE districts. He asked how staff views the differences and what constitutes an approvable use. Director Hurlburt explained that the CC -RE district is the only one that allows theaters and other entertainment uses. The CC -R district is geared toward retail and shopping uses. Conditional uses are considered appropriate under compatibility with the City Center Plan. Acting Chairman Ribbe opened the public hearing. Acting Chairman Ribbe introduced Ken Streeter of 13100 35th Avenue North. Mr. Streeter requested an amendment to the CC -R district to allow restaurants/cafes without requiring a Conditional Use Permit. Director Hurlburt pointed out that Mr. Streeter's request was an issue that should have been raised during the previous public hearing, as the text was just approved. Director Hurlburt stated that the Commissioners could reconsider the previous amendment. Acting Chairman Ribbe introduced Brad Lis, representing Carlson Real Estate, 2222 Plaza VII, Minneapolis. Mr. Lis stated that there are restricted covenants that prohibit the property from being used for a theater. Mr. Lis stated that wherever 35th Avenue ends up, the property north of it should be zoned CC -R. Mr. Lis commented that the proposal is inconsistent with what the City Council told him. Acting Chairman Ribbe introduced James Guddal of 4465 Vicksburg Lane. Mr. Guddal asked if the items raised in his letter dated February 7, 1996 had been addressed in the previous public hearing. Director Hurlburt replied affirmatively. Director Hurlburt gave an overview of the issues raised by Mr. Guddal in his letter. Mr. Guddal's letter suggested that auto stores should be a permitted use in the CC -OT district. Barber and Beauty Shops should be a permitted use, not a conditional use and Carpet, Rug and Tile should be a conditional use. Director Hurlburt stated that the City Center deliberately excludes new automobile -oriented uses. Those uses are more appropriate in highway business locations, not in a "downtown" area. The amount of car traffic to the use in not the main factor, but the character of the use. Barber and Beauty shops are personal services uses. All of these uses may not be appropriate in the CC -OT district, so a conditional use requirement is recommended. Carpet and tile stores are geared toward the retail market and are uses that require large spaces for storage. It is possible that an oriental rug shop, if it sells one -of -a -kind pieces, could be treated as an art gallery for zoning purposes. Distribution centers are uses that generate heavy truck traffic and should be not permitted in City Center. A business school would fall into the category of "trade school/vocational school" and is listed as a conditional use in the CC -OT district. Mr. Guddal stated that the Rasmussen School of Business is an example of a commercial business with no difference in the amount of traffic or people traffic. A business of that kind should be a permitted use and not a conditional use. Director Hurlburt explained that there are different types of trade schools with different traffic patterns, which makes it so variable and that is why staff is requesting a Conditional Use Permit. The Conditional Use Permit would give staff the opportunity to review each proposal. The burden of proof would be on the City that a business would not be allowed under the standards. Mr. Guddal stated that the definitions should be clear enough so that proposed uses do not end up in court. Mr. Guddal stated that he was concerned that the new Commissioners have not had the opportunity to become familiar with the issues concerning the City Center plan. Acting Chairman Ribbe assured Mr. Guddal that the new Commissioners had been thoroughly briefed and attended study sessions regarding the issues. Mr. Guddal asked if carpet, rug and tile businesses would be a permitted under the proposed C-4 district. Director Hurlburt replied affirmatively. Mr. Guddal commented that the new recreation center would generate a million trips per day. He asked why the City is promoting the recreational center if they are so concerned with businesses that create more traffic. Director Hurlburt replied that the recreational center projects approximately one million trips per year. She stated that the issue is for auto accessory stores is not traffic, but rather the nature of use, which is geared to motorists and not pedestrian friendly, thus not appropriate for a "downtown" setting. Mr. Guth stated that he is apprehensive about having to obtain a Conditional Use Permit and wants his property zoned CC -R. Mr. Guddal stated that the properties surrounding his property caters to the motoring public, and his property should be zoned CC -R. Acting Chairman Ribbe closed the public hearing. In response to Mr. Lis, Director Hurlburt stated that the zoning must follow definite lines based on today's parcel descriptions. She added that the boundary can be moved later, but it may not be necessary, depending upon the proposals. Director Hurlburt explained that right now everything that goes in to downtown Plymouth requires a Conditional Use Permit because of amending the Planned Unit Development. If the proposal is approved, there will be more uses that are permitted, rather than requiring a Conditional Use Permit. Mr. Lis stated that the Comprehensive Plan showed the street going through and the proposed Zoning District map does not. He stated that it does not make sense that the land north of the street is being proposed CC -RE. Director Hurlburt stated that the proposed Zoning District map shows the lines for current existing conditions. Commissioner Spigner asked what types of restaurants would not be appropriate under the proposed zoning ordinance. Director Hurlburt stated that both the CC -RE and the CC -R allow restaurants. The CC -RE allows sit down restaurants and the CC -R requires a Conditional Use Permit. Freestanding restaurants are not allowed to have drive-thrus. MOTION by Commissioner Bildsoe, seconded by Commissioner Spigner to recommend approval of the zoning map amendments, consistent with the Concept Plan and Design Guidelines and the Comprehensive Plan. Roll Call Vote. 6 Ayes. MOTION carried unanimously. Director Hurlburt stated that if the Commission wishes to change any language in the zoning ordinance, they would now need to reconsider their first action. Acting Chairman Ribbe asked if the Commissioners if anyone want to make a motion. No motion made. Agenda Number: TO: Dwight Johnson, City Manager FROM: Anne Hurlburt, Community Development Director SUBJECT: Revoke Plymouth Hills MPUD (78-2) Conditional Use Permit (CUP) for City Center Area (96011) DATE: February 27, 1996 for the City Council Meeting of March 13, 1996 1. PROPOSED MOTION Adopt the resolution revoking the Conditional Use Permit (CUP) for Mixed Planned Unit Development (MPUD) Number 78-2, also known as the Plymouth Hills Addition, for property in the City Center area. Amending or revoking a conditional use permit requires a 5/7 vote of the City Council. 2. BACKGROUND The City Center plan was adopted by the City Council on January 23, 1996. On January 26, 1996, the Metropolitan Council found the Comprehensive Plan amendment to have no potential impact upon metropolitan systems plans and that the City could put the amendment into effect immediately. The proposed conditional use permit revocation is the third of three actions that will be considered by the City Council on March 13. At its February 13 meeting, the Planning Commission held a public hearing on the proposal to revoke the conditional use permit, and recommended approval by a vote of 6 to 0. No one testified at the public hearing. 3. DISCUSSION In 1976, the City Council approved a General Development Plan for the Plymouth Hills Development, which covered a 218 acre tract of land located north of Highway 55, south of County Road 9/ Old Rockford Road, east of Vicksburg and west of Niagara Lane (extended). The plan included a variety of commercial and multi -family residential uses. In 1978, the general development plan was revised, and the City Council approved a planned unit development conditional use permit for MPUD 78-2. The MPUD approval specified that each File 96011, Page2 development shown by the development plan would undergo individual site plan approvals. Over the years, the original MPUD 78-2 has been amended many times, to approve individual site plans for the commercial developments. The MPUD was also amended as each residential project was approved and removed from the original MPUD and given separate residential PUD approval. Copies of the 1977 and 1992 MPUD plans are attached to show some of the history of the general development plans approved for the area. The remainder of MPUD 78-2 as it exists today is shown on the existing zoning map, attached. It now includes only the commercial portion of the original PUD, and is encompassed by the "City Center" area. Conditional use permits may be revoked if the City demonstrates that the property is not in conformance with the conditions upon which the permit was based. Plymouth's zoning ordinance requires that conditional uses meet the following standards: 1) Compliance with and effect upon the Comprehensive Plan. 2) The establishment, maintenance or operation of the conditional use will promote and enhance the general public welfare and will not be detrimental to or endanger the public health, safety, morals or comfort. 3) The conditional use will not be injurious to the use and enjoyment of other property in the immediate vicinity for the purposes already permitted, nor substantially diminish and impair property values within the neighborhood. 4) The establishment of the conditional use will not impede the normal and orderly development and improvement of surrounding property for uses permitted in the District. 5) Adequate measures have been or will be taken to provide ingress, egress, and parking so designed as to minimize traffic congestion in the public streets. 6) The conditional use shall, in all other respects, conform to the applicable regulations of the district in which it is located. Now that the City Center Concept Plan and Design Guidelines have been adopted as part of the City's Comprehensive Plan, and if the recommended zoning text and map amendments are adopted, the conditional use permit for MPUD 78-2 will no longer be in compliance with criteria (1), (4) and (6) for conditional use permits as provide by Section 9, Subdivision A of the Zoning Ordinance. File 96011, Page3 4. RECOMMENDATION I recommend revocation of the conditional use permit for MPUD 78-2 as set forth in the attached resolution, as recommended by the Planning Commission. ATTACHMENTS: 1. Existing Zoning Map, City Center Area 2. Map of Proposed Zoning Districts, City Center 3. Draft Resolution Revoking MPUD 78-2 4. Planning Commission Minutes g: \cd\plan\ staffrep\cc\96011. doe C w EN z o N 0 Ejap T7 N L 8Ncu cu -0 U ou) o Existing Zoning City Center Area D slow 2.! R.P-U-1 D R.P-U-1 CITY OF PLYMOUTH RESOLUTION 96 - REVOKING CONDITIONAL USE PERMIT FOR MIXED PLANNED UNIT DEVELOPMENT 78-2, FOR PROPERTY LOCATED NORTH OF T.H. 55 AND EAST OF VICKSBURG LANE N (96011) WHEREAS, on August 28, 1978 the Plymouth City Council adopted Resolutions 78-850 and 78-851, approving a revised General Development Plan for the Plymouth Hills Addition and a conditional use permit for the development, establishing MPUD-78-2 on the property described in Attachment A to this Resolution; and WHEREAS, since that time the MPUD has been amended many times to provide for changes in the overall plan and for specific development approvals; and WHEREAS, the City Council determined that the existing Comprehensive Plan, zoning regulations and MPUD did not provide sufficient direction for the orderly development and improvement of the area, which was known as "Downtown Plymouth" or Plymouth City Center; and WHEREAS, on January 23, 1996 the City Council adopted an amendment to the Land Use Guide Plan of the Comprehensive Plan, providing for development of the area designated CC", City Center, in conformance with the Concept Plan and Design Guidelines report dated December 4, 1995, and WHEREAS, on March 6, 1996, the City Council adopted amendments to the Zoning Ordinance establishing use districts and related allowable uses and performance standards to provide for development in accordance with the Comprehensive Plan; and WHEREAS, on March 6, 1996, the City Council also adopted an amendment to the Zoning Ordinance reclassifying all of the property located in MPUD 78-2, as describe in Attachment A of this Resolution, to zoning district consistent with the Plan; and WHEREAS, the provisions of the conditional use permit for MPUD 78-2 have been found to be obsolete based on the revised Plan and zoning requirements, and no longer in compliance with the standards for Conditional Uses provided by Section 9, Subdivision A of the Zoning Ordinance, specifically: 1) The MPUD is no longer in compliance with the Comprehensive Plan. 96011, Page 2 2) Continuing the MPUD designation will impeded the development and improvement of the property for the uses permitted in the City Center Plan and zoning districts. 3) The conditional use permit does not conform to the applicable regulations of the CC, City Center zoning districts. WHEREAS, the Planning Commission has reviewed the proposed revocation of the MPUD conditional use permit at a duly called Public Hearing and recommended approval; NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF PLYMOUTH, MINNESOTA, that it should and hereby does revoke the conditional use permit dissolve MPUD 78-2 in its entirety. Adopted by the City Council on *, 1996. STATE OF MINNESOTA) COUNTY OF HENNEPIN) SS. The undersigned, being the duly qualified and appointed City Clerk of the City of Plymouth, Minnesota, certifies that I compared the foregoing resolution adopted at a meeting of the Plymouth City Council on with the original thereof on file in my office, and the same is a correct transcription thereof. WITNESS my hand officially as such City Clerk and the Corporate seal of the City this day of City Clerk p1an\staffrep\res\96011 96011, Page 3 Attachment A Lot 1, Block 1, Plymouth Hills Addition (1611822340008) Lot 3, Block 2, Plymouth Hills Addition (1611822330004) That portion of Lot 4, Block 2, Plymouth Hills Addition lying west of the east 253 feet thereof (1611822330010) Lots 1, 2 and 3 of Block 4, Plymouth Hills Addition (2111822220011, 2111822220012 and 2111822220003) Those part of Lot 4 and of Lot 5, Block 5, Plymouth Hills, Hennepin County, Minnesota, according to the recorded plat thereof, which lies easterly of "Line 1 " and westerly of "Line 2" and their extensions, said "Line 1 " and "Line 2" are described as follows: "Line 1" beginning at a point on the northerly line of said Lot 4 distant 71.02 feet southeasterly of the northwest corner of Lot 4 as measured along said northerly line of Lot 4; thence southerly to a point on the southerly line of Lot 4, distant 62.95 feet southeasterly of the southwest corner of Lot 4 as measured along said southerly line and said line there terminating. Line 2" beginning at a point on the northerly line of said Lot 5 distant 22.55 feet southwesterly of the northeast corner of Lot 5 as measured along said northerly line; thence southerly to a point on the southerly line of Lot 5, distant 100.27 feet northwesterly of the southeast corner of Lot 5 as measured along said southerly line and said line there terminating. (2111822220014) Lot 6, Block 5 and that part of Lot 5, Block 5, Plymouth Hills, Hennepin County, Minnesota, according to the recorded plat thereof, which lies easterly of a line and its extensions, described as follows: Beginning at a point on the northerly line of said Lot 5 distant 22.55 feet southwesterly of the northeast corner of Lot 5 as measured along said northerly line; thence southerly to a point on the southerly line of Lot 5, distant 100.27 feet northwesterly of the southeast corner of Lot 5 as measured along said southerly line and said line there terminating. (2111822240010) Lot 7, Block 5, Plymouth Hills Addition (2111822240005) Lot 1, Block 1, Plymouth Hills Second Addition (1611822320006) That part of Lot 1 lying east of the west 229.9 feet thereof and the north 30 feet of Lot 5, Block 1, Plymouth Hills Third Addition (1611822320025) The west 229.90 feet of Lot 1, Block 1, Plymouth Hills Third Addition 1611822320021) 96011, Page 4 Lot 1, Block 1, Plymouth Hills Sixth Addition (1611822220015) Lots 1 and 2, Block 5, Plymouth Hills Addition (2111822220004 and 2111822220005) Lot 3, Block 5, and that part of Lot 4, Block 5, Plymouth Hills, Hennepin County, Minnesota, according to the recorded plat thereof, which lies westerly of a line and its extensions, described as follows: Beginning at a point on the northerly line of said Lot 4 distant 71.02 feet southeasterly of the northwest comer of Lot 4 as measured along said northerly line of Lot 4; thence southerly to a point on the southerly line of Lot 4, distant 62.95 feet southeasterly of the southwest corner of Lot 4 as measured along said southerly line and said line there terminating. (2111822220013) Lot 2, Block 1, Plymouth Hills Sixth Addition (2111822220016) Lots 1 and 2, Block 2, Plymouth Hills Addition (1611822330002 and 1611822330003) The east 253 feet of Lot 4, Block 2 Plymouth Hills Addition (1611822330009) Lots 2, 3 and 4, and that part of Lot 5 lying south of the north 30 feet thereof, Block 1, Plymouth Hills Third Addition (1611822330006, 1611822330007, 1611822330011) Lot 3, Block 1, Plymouth Hills Sixth Addition (2111822220017) EXCERPT FROM DRAFT PLANNING COMMISSION MINUTES OF FEBRUARY 13, 1996 MEETING CITY OF PLYMOUTH (96011) Acting Chairman Ribbe introduced the request by the City of Plymouth for Revocation of Plymouth Hills MPUD (Mixed Planned Unit Development) Conditional Use Permit Number 78-2, as it applies to the property in the Plymouth City Center Area (also known as Downtown Plymouth). The City of Plymouth proposes to eliminate the MPUD designation for this area and replace it with new zoning districts establishing allowable uses and performance standards. Director Hurlburt gave an overview of the February 8, 1996 staff report. Commissioner Thompson asked if existing uses would be considered conforming. Director Hurlburt replied affirmatively. The proposed action would eliminate the Planned Unit Development from the downtown area. Acting Chairman Ribbe opened and closed the public hearing as there was no one present to speak on the issue. MOTION by Commissioner Thompson, seconded by Commissioner Stoebner to recommend the revocation of the Conditional Use Permit for Mixed Planned Unit Development 78-2, for property located north of Highway 55 and east of Vicksburg Lane. Roll Call Vote. 6 Ayes. MOTION carried unanimously. Agenda Number: _Z/ TO: Mayor and City Council FROM: Dwight Johnson, City Manager SUBJECT: Postpone Consideration of Approval of the Lifetime Fitness Sales Trailer DATE: March 8, 1996 for March 13, 1996 City Council Meeting 1. ACTION REQUESTED: Postpone consideration of approval of the Lifetime Fitness Sales Trailer until the March 20, 1996 Regular City Council Meeting. 2. DISCUSSION: Given that consideration of the contract with Lifetime Fitness will not be on the agenda until March 20, staff recommends that the Council postpone action on approval of the Lifetime Fitness sales trailer until the March 20, 1996 regular meeting. 3. RECOMMENDATION: I recommend that the City Council postpone consideration of approval of the Lifetime Fitness Sales Trailer until the regular City Council meeting on March 20, 1996. City of Plymouth 3400 Plymouth Boulevard Plymouth, Minnesota 55447 Res. No. 96 - POSTPONING CONSIDERATION OF APPROVAL OF LIFETIME FITNESS SALES TRAILER UNTIL THE MARCH 20, 1996 REGULAR COUNCIL MEETING. BE IT THEREFORE RESOLVED by the City Council of the City of Plymouth, Minnesota, that consideration of approval of the Lifetime Fitness Sales Trailer is postponed until March 20, 1996 Regular City Council meeting. Agenda Number: TO: Dwight Johnson, City Manager FROM: Barbara Senness, Planning Supervisor through Anne Hurlburt, Community Development Director SUBJECT: LIFE TIME FITNESS. SITE PLAN AMENDMENT FOR SALES OFFICE IN CUB PARKING LOT LOCATED AT 3550 N. VICKSBURG LANE (96026) REVIEW DEADLINE: April 30, 1996 DATE: March 6, 1996 for the City Council Meeting of March 13, 1996 1. PROPOSED MOTION: Move the resolution approving a Site Plan Amendment for a temporary sales office for Life Time Fitness to be located in the CUB Foods parking lot. 2. BACKGROUND: The applicant is requesting a Site Plan Amendment to allow the placement of a temporary sales office for Life Time Fitness in the northwest corner of the existing CUB parking lot. The office would be a custom-made, double -wide trailer constructed off-site and moved in two sections to the parking lot location. The trailer would be 24 feet wide and 60 feet long. The applicant has proposed cream -colored wood siding with forest green trim for the trailer. The applicant plans to put the trailer in place immediately following City Council approval and maintain the sales facility in the CUB location until the Life Time Fitness facility is open for business, which is tentatively scheduled for the end of this year. The trailer would be placed in a little -utilized portion of the CUB parking lot. The lot would easily accommodate the expected traffic of a maximum of roughly 15 cars at any one time. This traffic level is based on Lifetime's experience at other presale locations. Because of the temporary nature of this facility, the City would not require any additional landscaping or screening from adjacent property. CITY OF PLYMOUTH RESOLUTION 96 - APPROVING A SITE PLAN AMENDMENT FOR LIFE TIME FITNESS FOR PROPERTY LOCATED AT 3550 N. VICKSBURG LANE (96026) WHEREAS, Life Time Fitness has requested approval of a Site Plan Amendment for a temporary sales office, located in the northwest corner of the CUB Foods parking lot south of 36th Avenue North and east of Vicksburg; and WHEREAS, the Planning Commission has reviewed said request and recommends approval. NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF PLYMOUTH, MINNESOTA, that it should and hereby does approve the request by Life Time Fitness for a Site Plan Amendment to allow placement of a temporary sales office on property located south of 36th Avenue North and east of Vicksburg, subject to the following conditions: 1. The Site Plan Amendment is for a temporary sales office, in accordance with the plans received by the City on March 8, 1996, except as amended by this resolution. 2. Any signage shall be in compliance with the Ordinance. 3. The temporary sales office shall be removed from the CUB site within 10 days of issuance of a Certificate of Occupancy for the Life Time Fitness building. Adopted by the City Council on *, 1996. 586373 cwa O4,q W. 7:7- r i cwa O4,q W. DATE: March 7, 1996 for the City Council Meeting of March 13, 1996. TO: Dwight D. Johnson, City Manager through Fred G. Moore, P.E., Director of Public Works FROM: Daniel L. Faulkner, P.E. City Engineer SUBJECT: Wetland Replacement Plan Application (Impacting Greater than 10,000 sq. ft.) City of Plymouth Recreation Sports Facility CITY PROJECT NO. 541 ACTION REQUESTED: Make a motion to adopt the attached resolution approving filling wetlands and the Wetland Replacement Plan for City of Plymouth Recreation Sports Facility. BACKGROUND: On behalf of the City of Plymouth, McCombs Frank Roos Associates (MFRA) has submitted a Wetland Replacement Plan for the proposed Plymouth Recreation Sports Facility. The project will include the construction of a sports facility along Plymouth Boulevard including fitness area, swimming pools, and ice arena. The project will impact a 1.45 acres low quality PEMC/PUBF seasonally flooded) Wetland through utilizing the wetland as a storm water quality pond and additional site grading. Although mitigation may not be required for the entire impacted wetland basin, a 2.97 acre 2:1) mitigated PEMC/PUBF will be constructed on-site adjacent to existing nearby wetlands, as indicated by the following table: Basins Arm Acres Tvne Impacted Area, Acres Mitigated Area, Acres A 1.45 2 & 3/ PUBF 1.45 2.97 B 49.21 2&3 0 0 Total Wetland Impacted Under WCA = _ > 1.45 2.97 Notices of Project Application, as required by the State Wetland Act of 1991, (WCA) have been published and the 30 day review period established by the regulation ends on March 13, 1996. A copy of the application is available for review in the Engineering Department. Currently, we have not received any comments, however, any received comments or appeals will be reported to the Council accordingly. RECOMMENDATIONS AND CONCLUSIONS: I recommend that the City Council authorize the Mayor to sign the attached resolution approving the Wetland Replacement Application for the Plymouth Recreation Sports Facility Daniel L. Faulkner, P.E. attachment : Resolution Findings of Fact GAENGMETLANMURMSPORTS. DOC CITY OF PLYMOUTH RESOLUTION NO. 96 - APPROVING FILLING WETLANDS AND THE WETLAND REPLACEMENT PLAN FOR Recreation Sports Facility CITY PROJECT NO. 541 WHEREAS, the developers of City of Plymouth Recreation Sports Facility propose to fill wetlands for the construction of Recreation Sports Facility; and WHEREAS, there are no reasonable alternatives for the location of this facility, and WHEREAS, a Mitigation Plan was prepared replacing the wetlands in kind at a 2 to 1 ratio which is required by the Wetland Conservation Act of 1991; and WHEREAS, the Replacement Plan meets the requirements of the Wetland Act. NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF PLYMOUTH, MINNESOTA: That the Mayor is authorized to execute the LGU'S Findings of Facts, approving the filling of wetlands and the Replacement Plan for on-site wetland restoration subject to the following conditions: 1. The replacement wetland must be monitored for a five (5) year period from the date of completion. 2. The Engineering Department shall prepare an annual monitoring report to the city of Plymouth on the anniversary date of the completion of the replacement wetland for a period of five (5) years containing information required in WCA rule 8420.0620. 3. The replacement wetland must be constructed concurrently with building construction. 4. A deed creating a restrictive covenant running with the land for the replacement area must be recorded. The deed shall be submitted to the City for approval before recording. Adopted by the City Council on March 13, 1996. G:\ENG\WErLANDS\RML\SPORTRES.DOC Applicant: WETLAND CONSER VA TION A CT - SEQUENCING/REPLACEMENT PLAN LGU's FINDINGS OF FACT CITY OF PLYMOUTH Recreation Sports Facility CITY PROJECT NO. 541 City of Plymouth 3400 Plymouth Blvd. Plymouth, MN 55447-1482 ph # (509)-5000 Proiect Location: S 1/2 Sec. 16, & N1/2 Sec. 21, Township 118, Range 22 File No.: City Project 541. Authorized Agent: McCombs Frank Roos Associates (MFRA) I. DETERMINATION OF IMPACT AVOIDANCE 1) Is project wetland dependent F-1 yes Fx1 no 2) Has applicant provided at least 2 alternatives in addition to the roposed project such as: Alternate sites X yes no Alternative project configurations X yes no No build alternative X yes no a) Are the 2 alternatives considered good faith efforts FRI yes F-1 no Why or why not? (If no, proposal must be denied) b) Have all feasible and prudent alternatives available that F -R-1 yes F-1 no would avoid impacts to wetlands been considered? If no, proposal must be denied, if yes, proceed to items II -IV) II. DETERMINATION OF IMPACT MINIMIZATION 1) Has the applicant demonstrated an effort to minimize impacts to wetlands by considering modification of the project? Size X yes no not feasible Scope X yes no not feasible Configuration X yes no not feasible Density X I yes no 2) If any are answered no, explain objections Applicant has 30 days to modify proposal if warranted, or it is denied) G:\ENG\WEPLANDS\FFACrS\SFORTFF.DOC III. DETERMINATION OF IMPACT RECTIFICATION 1) An activity may qualify for a no -loss determination if all of the questions below are answered yes. a) Will all of the physical characteristics of the affected F-1 yes 0 no wetland be restored to pre -project conditions?? b) Will the physical characteristics of the wetland be restored F-1 yes 0 no within 6 months? c) Has the applicant provided a performance bond sufficient a yes 0 no to cover costs of restoring the wetland? IV. DETERMINATION OF REDUCTION OR ELIMINATION OF IMPACTS OVER TIME 1) Will additional wetland impacts be reduced or eliminated 0 yes F-1 no through sound project operation and maintenance? 2) Will best management practices be used to protect wetland Fx__1 yes F-1 no functions and values? V. UNAVOIDABLE IMPACTS 1) Will unavoidable wetland impacts that remain be replaced? FRI yes F-1 no If all of the above questions are answered yes, then sequencing has been adequately addressed. Sequencing Adequately Addressed INSequencingNOTAdequatelyAddressed VI. REPLACEMENT PLAN The Replacement Plan as proposed in the application from City Of Plymouth along with supporting reports and documents: Approved INDenied The approval is subject to the conditions established in Resolution 94- as adopted by the LGU. Authorized LGU Official Date G:XENG\WECLANDSkFFACrMPORTFF. DOC f I •o L Y0 SAULT SA p SC—CTA,E Ja7 ,•r u—DT :KE ep y u /0 u ` l• eTw V W iJ t z z ( Z J 4. •. J IC c ] R Carw ? 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N E9 A E t:. ; Z 49 < 4 I Q yJ f Y 2TTM ` Q .( j« W J < l9' YW i t r(.2 H t 3 2T TH AVE. J S IA E. 2T ( +T: Ai T A - 26TH A y 6 T A sT c : 109 N6T AV _ d ._...•: r s oN s H twi - -•'— _' ---• O --- — IL '- Cr 25TH < 1 H V = rw c. - m AVE. i r J a A AND r+E : vE PUBLIC Z A. 4~ ` S Tv D WORKS W F41.14' AVEN0. AV£ EJ4-' NO' : ci.ti •vimi GARAGE t` AVE2OT 23 RO AVE.N0.]Rat4t_ i4t FAF Figure 1. Plymouth Recreation Sports Facility Location Map NPlymouth Creek Park Property City of Plymouth, Engineering Department H Y Wp F 0: QZ = U Q m3 OY a M n CARLSON REAL ESTATE COMPANY VIA MESSENGER March 7, 1996 Mr. Dwight Johnson City Manager City of Plymouth 3400 Plymouth Boulevard Plymouth, MN 55447 RE: Downtown Plymouth Dear Dwight: s Please find enclosed a memo I received from BRW regarding their review of the traffic and alignment of 35th Avenue in downtown Plymouth. As we discussed, I would like this to be included with the information for the downtown zoning meeting on Wednesday, March 13, 1996. I would like to discuss the enclosed concept plan with both the planning staff and the downtown subcommittee prior to the meeting. I would request that the zoning on our piece of land remain as it currently is so that we can move forward with this project. I appreciate your help. Sincerely, CARLSON RE ESTATE COMPANY, INC. Brd Lis Managing Director of Investments 612)333-9869 enclosures 2222 Plaza VII, 45 South Seventh Street, Minneapolis, Minnesota 55402 612-333-9898 B R W INC. Planning Transportation Engineering Urban Design Thresher Square 700 Third Street So. Minneapolis, MN 55415 612/370-0700 Fax 612/370-1378 Denver Milwaukee Minneapolis Orlando Phoenix Portland San Diego Seattle DATE: TO: FROM: RE: Memorandum March 5, 1996 Brad Lis Richard Wolsfeld, PE Traffic Analysis of Proposed Development at 35th Avenue North/Vicksburg v6/ r: I have compared the proposed land use development plan of Carlson Real Estate Company with the land use assumed in the SRF "Downtown Concept Plan Traffic Study" dated September 11, 1995. The comparisons are as follows: Proposed Carlson Real Estate Company Development: 21,200 gross square feet of retail required parking Land use scenarios analyzed in the SRF Report appear to have the following land use assumptions on a site configured approximately the same as your site: 28,000 gross square foot theater 26,000 gross square feet of retail shopping transit station ramp parking The projected traffic from the proposed land use is as follows: 4,085 daily trips 179 PM Peak Hour Inbound 171 PM Peak Hour Outbound Obviously, your proposed development would generate less daily and PM peak hour trips than the land use assumed in the Downtown Concept Plan Traffic Study. Furthermore, the level of service at Vicksburg and 35th Avenue North would be improved over that reported. The attached drawings represent two conceptual alternative alignments for 35th Avenue North which will provide the same or better traffic operations than the alignment shown in the Downtown Concept Plan Traffic Study. RW/ch Attachments 823157 0 N I I 1-1 G 6 s TEL: 1-612-348-3932 Mar 8.96 16:19 No.037 P.01 PETER Mc LAVONLIN COMMISSIONER PAX -348.9701 x s' BOARD OF HENNEPIN COUNTY COMMISSIONERS A-Z4QO QOVLRNMENT CENTER MINNEAPOLIS, MINNESOTA -55487-0240 March 7, 1996 Joy Tierney, Mayor City of Plymouth 3400 Plymouth Boulevard Plymouth, MN 55447 Dear Ma rney. This past Wednesday, both of us participated in a conference call with other local officials and Secretary of Labor Robert Reich. Secretary Reich briefed us on the current status of funding for the Summer Youth Employment Program. Currently, the Senate is considering some funding for the 1996 Summer Youth Program. The House, however, continues to not be interested in funding this program. As you are probably aware, the Summer Youth Program, in both Hennepin County and the City of Minneapolis, provides valuable work experience for young people as well as providing valuable community improvements. A majority of the young people in the program are 14 and 15 years of age and cannot obtain employment in the private sector, Many young people in the program participate in academic enrichment classes in addition to their work activities. We urge you to immediately call members of the Minnesota congressional delegation and urge their support for funding a 1995 Summer Youth Program, This funding decision must be made by the middle of this month. Thank you for your help and support. Sincerely Peter McLaughlin, Chair Hennepin County Board of Commissioners Sincerely, Sharon Sayles Belton Mayor City of Minneapolis VOC9 PRINTRn oN NIXY(AXT) PAPPA L RIDA' A ne"ta Cit;.i vol t, No. g Lmc axft l »a. A weekly legislative update from the League of Minnesota Cities March 8, 1996 Tac bilis move toward conference committee The House passed their omni- bus tax bill Thursday evening and the Senate is expected to take up their version late on Friday. The two bills bear little resemblance to each other, so we expect entertaining and possibly explosive negotiations as the conference committee meetings begin early next week. House bill hits a new low The House omnibus tax bill includes an amendment success- fully offered by Representatives Ron Abrams and Bob Milbert (and apparently supported by the business community) that would require cities, counties and town- ships to slash their 1997 levies to pay for property tax relief for cabins, commercial, industrial, apartments and homestead property. Under this amendment, the legislature decides who receives relief and local units pay for the relief, The county auditor would reduce each city, county and township 1997 levy by an amount equal to the difference between the net tax capacity computed using 1996 class rates and 1997 class rates multiplied by the local unit's 1996 tax rate. This sounds complicated but using a little shorthand, you can compute an estimated amount for your city. The class rate changes in the House tax bill reduce nearly every major class by an average of approximately 4.6 percent. So if you take 4.6 percent of your net tax capacity and multiply it by your 1996 tax rate, you will approxi- mate your city's mandated levy reduction. Tax Chair Ann Rest opposed the amendment, but the House approved it on a 78 to 54 vote. It is likely that many legislators did not understand the amendment but given the floor debate, that can hardly be considered an excuse. Call your Representative and tell them that it is ridiculous policy to require local units to slash their budgets to pay for property tax reductions granted by the state. Other notable features of the House bill include an increase in transportation financing by a phased -in transfer of the motor vehicle sales tax from the state's general fund to the highway fund. Senate takes a stab at reform The Senate's 348 -page tax bill includes a series of major prop- erty tax reform provisions and new taxes. Of greatest concern to cities are the elimination of HACA, a requirement that certain levy increases be applied to market value and major class rate changes. The bill would eliminate city, township and special district HACA in 1997, while the counties' portion would be redirected to reduce county property tax levies within cities for categorical pro- grams like criminal justice or the court system. At the same time, LGA would increase by $50 million and be distributed without any grandfathering. Check this week's Cities Bulletin for a thorough description of the Senate tax bill. Will there be anything left to tax? provision in the Senate tax bill would grant an almost total exemp- tion for private property located at public airports. Senator Pat Pariseau (R -Farmington) amended the bill in committee to create a new tax exemption for property (buildings and improvements) owned by any person or entity, used for an airport facility, and located on leased land at an airport owned by a city or a reliever airport owned or operated by the Metropolitan Airports Commission (MAC) in a city of less than 50,000. The exemption would only become effective if the business and the city agree on payment for police and fire protection. Schools, counties, or other taxing districts would not be compensated. The House tax bill does not have a similar provision. Because city owned airports could adjust their leases, the tax ex- emption would be most significant for cities with MAC -owned airports or others. Reliever airports that would be affected include Lake Elmo, Eden Prairie, Crystal, Anoka, and Lakeville. For more information on city legislative Issues, contact any member of the League of Minnesota Cities Intergovernmental ,Relations team. T'd WdST:20 96. 60 adW GROUND LEASE and between CITY OF PLYMOUTH, MINNESOTA and FCA, LTD, d/b/a LIFE TIME FITNESS 1 moved from here; text not shown} 33862.11 rW WJnw:A3/o7/De I t TABLE OF CONTENTS Page Recitals....................................... 1 Definitions ..................................... 2 Article One - Lease of Property 4 Article Two - City Residential Use Covenants and Minimum Operational Standards ............ 4 Article Three 1 S;,ltoo D str et Use Covenants 10 At' - Use of Property - Site Development and Construction of Club/Pool Complex .............. 1#3 Article {wive} r Construction Disbursement ........ {14} Article {Six [ - Permitted Leasehold Mortgage ..... Article Six; - Parkin Lot Article - Covered Walkway and Common Wall Agreement ....................... Article x -Name of Complex and Signage .... {29} UN Article I1" - City's Right of First Refusal ....... I Article Life Time Option to Purchase ..... {} Article - Payment of Taxes and Other Impositions................................ { 24 Tui d:.:.::::.........:..:._.::.i:.::::::,:::::<::::::?.::::.iii.:.:::..::.:.»:>::::..:.:::..:..:......:............................::.:::.:.: . i: iiiiiii:?•iii:•iii}:vii::••+•::::.:::i::viiiiiii:•iiiiii:0:•i:•i:4:Jiii: ii:iii•is i;i iii:•iii:6:4iiiiii:•?hii:G': ::::::-: 33862.11 RNKNRW:A3f07/98 i t t Article Thirteen - 23 Article Fourteen Use of Insurance Proceeds ............ Article .:.:::......... y -Compliance with Laws, Ordinances and Regulations ...................... Article (z - Changes and Alterations .... {34+ Article ) Discharge of Liens ........ {34} M Article Twenty - Use of Club/Pool Property ....... {3 S Article Twenty - Entry on Club/Pool Property by th Article Twenty- - Indemnification of the City ...... :. t:•;iyp;. •. ••.e<i.'•;;:}:nf.^.,sec!.......{rrv,y::5?R4!'.. ::.:y;;.,.;...: ::>:i[:::::;:;...: Selteal ' 39 Article Twenty -Four - Lf 41 Artiele Twenty Nine )Contingencies ................. EM {49 33862.11 RNK1JRW:r03/07/9E ii i AGREEMENT dated this day of tali, 1996 by and between the CITY OF PLYMOUTH, a Minnesota municipal corporation, as Lessor and hereinafter referred to as the "City," and FCA, LTD., a Minnesota corporation, doing business as LIFE TIME FITNESS, having its principal office and place of business at Suite 275, 6442 City West Parkway, Eden Prairie, MN 55344, as Lessee and hereinafter referred to as "Life Time" [and WDEPENDENT SGI10G TTS TPdG:F28 a publie-seheel eefper-atien under- the laws of Minnesota, hereinafter- Fefeffed te as the "Seheel-D.—Ine, RECITALS The City owns property near 36th Avenue and Plymouth Boulevard which it is developing in conjunction with Life Time into a recreational center ("Recreation Center Property"). The Recreation Center Property shall be subdivided into four parcels: (1) the Ice Arena parcel which the City is developing into an indoor ice arena ("Ice Arena Complex"); 2) a parcel which Life Time is developing into a combined Fitness Center and swimming and diving complex ("Club/Pool Complex"); (3) the City -owned parking lot parcel ("Parking Lot"); and (4) a City -owned parcel ("City Owned Undeveloped Parcel"). The City is leasing to Life Time the property upon which the Club/Pool Complex shall be developed pursuant to this Agreement. The City is contributing $2.6 million toward the cost of tenant improvements for the Club/Pool Complex and site work {and-theSeheel Dist sublessee f Life Time rlag 33862.11 fW K/JR W:r03/07/Q6 1 A dans anti agxne setoxt asncuc4ne.'or`xof Y(: K} i?::•iii': i•is3i}i:"iii•i}::.}:.- iiiiiiW.: Py:• X4i1`+'•ilii'{•(iAi::n:: P% 1:,M...H.:• :i:.........: jAuii": i Jme(s aw::::: f:: jj` v•...1. vrx :w.:: :•:: ::w:[J•••::::.::v...a../.]. .P......}.....j.(..f.. .... iiL I .s.i/:i Y{i{ V Cl 3 IIK i.W 1i. ; i.::. i:.iiLi4:...............:...................................:...:..:.:...:::.; ..........:.. v}iiii:'iii}}:?..'nii:i:4iii:4'+ii??iY.,i .,.; ••.}:.: .:.:.::....iii};^iiiy,:: •.vi'::::: ;:::. :: :•: :.::. :.: :.. :::::.::::::: :::::::• .. ::.:::: :.. . ... .::::::: :::.:::::. : :.::::........... .. .................... ... ........... .. two additional leisure pools(, by Plyfneuth fesidents and Seheel Distfiet residents, students and ad diving teaffis. This agreement ("Agreement") sets forth the rights and obligations of the parties, their successors and assigns, relating to the lease of the Club/Pool Property (as defined below) to Life Time by the City, the construction and operation of the Club/Pool Complex. NOW, THEREFORE, the parties agree as follows: 1. "Agreement" shall mean this Ground Lease and (Censtfueti 6M§§M Agreement. 2. "Contribution" shall mean_the cash contribution of the City in the amount of t,:.::r,::.:..c.:.....:.::.a:.v..:.:.:....,,:..:.... s ......... and the cash contribution of Life Time in the amount of {A8;8AE9A} Ram disburseddisbursed pursuant to Article Five of this Agreement. 3. "City" shall mean the City of Plymouth, a municipal corporation under the laws of Minnesota. 4. "City Residential Use Covenants and Minimum Operation Standards" shall mean the covenants and standards as described in Article Two of this Agreement. 5. "City Owned Undeveloped Parcel" shall mean the real property described on Exhibit 33862.11 rwivJmv:ro /07/Q6 -2- 6. "Club/Pool Complex" shall mean all improvements located upon the real property described on Exhibit "_" attached hereto. 7. "Club/Pool Property" shall mean the real property described on Exhibit " " attached hereto. 8. "Daily Rates" shall mean the fees charged by Life Time to Plymouth residents[, the-Seheel Distfiet). for use of the Club/Pool Complex as described in Article 2.02 of this Agreement. 9>ff '°vurs::s nxs::wlrndear a>::1.>:: kh...:...........................::::.:::::::::::::::::.:.:.:::::::::::::::::::.:::::::::::::::::::.>;::::::::::.: she rst';z©rit:ste a1 1 Y€hp r<'aYb>dJust. ; a m ni between lie .....arid a e.'%rne.; Ice Arena Complex" shall mean the real property and its improvements described on Exhibit " " attached hereto. Impositions" shall mean the obligations and charges described in Article Twelve of this Agreement. 33862.11 R"K/JRW:A3/O7/9E -3- 1-111 T,rT U4. "Leasehold Mortgage" shall mean the mortgage described in Article Six 41 of this Agreement. affl. "Life Time" shall mean FCA Ltd., a Minnesota corporation, doing business as Life Time Fitness. 14 (M. "Parldng Lot" shall mean the real property and improvements described on Exhibit I'—" attached hereto. M. "Recreation Center Property" shall mean the combination of the Parldng Lot, Club/Pool Property, Ice Arena Complex and the City Owned Parcel. Distriet, as Sublessee, a eepy of whieh is attaehed herete as Exhibit 1111. ARTICLE ONE Lease of Property 1.01 Lease. The City hereby leases to Life Time the Club/Pool property located at 36th Avenue and Plymouth Boulevard in the City of Plymouth, Hennepin County, Minnesota hereinafter "Club/Pool Property"). 1.02 Term. The lease shall be for a term of forty (40) years commencing on 2 DID 33x62.11 f0YK/JRW:M/07/9G -4- 1.03- xaoxt . As consideration for the :.:. :.,:.::::.::::::::..::;:.:; :::..::.......:.........:..... t s} rip t?et o;e of the City fand Seheel-Bistfieq for the Club/Pool Complex building, site improvements by the City and this Agreement, the Club/Pool Complex shall be subject to, and Life Time, its successors and assigns, shall be bound by, during the term of this Agreement, the "City Residential Use Covenants and Minimum Operational Standards" set forth in Article Two herein and the tr>t3zs'riit ARTICLE TWO City Residential Use Covenants and Minimum Operational Standards 2.01 The "Residential Use Covenants and Minimum Operational Standards" set forth below are an integral part of the consideration of the City leasing the Club/Pool Property to Life Time and the City making the City's Contribution toward the cost and construction of the Club/Pool Complex Without the Residential Use Covenants and Minimum Operational Standards, the City would not lease the Club/Pool Property to Life Time and agree to the other obligations herein. 2.02 The Club/Pool Complex shall be available to all Plymouth residents, at the corresponding rates per person for a period of one year commencing on the date the Club/Pool Complex opens: Rate a) Adults $8.00 ($6.00 pool use only) (daily) 33862.11 EWK/JfiW:A3/07/9E -5- b) Second Adult Family Member or Child ages 13 through 17 $5.00 (daily) c) Under 13 $3.00 (daily) d) Daycare (Parent must remain $2.00 per child for on Club/Pool Property while child is {if} two (2) hours 1iI Daycare) e) Life Time shall offer a summer pool rate to be determined pass similar to other public outdoor by the City pools once Life Time has obtained a membership base of 10,000 members. A resident of the City of Plymouth is not required to be a member of Life Time Fitness to use the Club/Pool Complex under the Daily Rate structure. For the period of one (1) year following the opening for business of the Club/Pool Complex, persons aged 13 and under of members of Life Time Fitness shall not be charged a separate initiation fee and, when accompanied by their parent or legal guardian, shall have admission to the Club/Pool Complex without separate charge or payment of dues during family hours and subject to age limitations on the use of the Club/Pool Complex applicable to children and families generally during family hour. 33862.11 INK/JRW;r03/07/9E -6- Agin 2Tv4} M Effective March 1 of each year of this Agreement commencing March 1, 1998, the {Baily) Rates set forth in-(Seefiens} # j 2.02 (and --2.03} shall be subject to a maximum adjustment for inflation. The adjustment formula is: the applicable Daily Rate shall be multiplied by a fraction, the numerator of which is the Consumer Price Index for December of the preceding year and the denominator of which is the CPI for December of 1995. This formula is expressed by the following numerical example which is designed to demonstrate the January 1, 1998 estimated adjustment: Applicable (CPI Dec. 1992) Daily Rate x (CPI Dec. 1995) = New 1998 Daily Rate This annual adjustment shall be determined by using as the CPI the "Consumer Price Index for all Urban Consumers (CPI -U) U.S. City Average, All Items," published by the Bureau of Labor Statistics. 33862.11 FWK/JRW:g3/07/88 -7- If the name of the aforesaid "Consumer Price Index" as described above shall be changed, or a similar index substituted for the aforesaid index by the United States Government, the substituted index shall be used by the City and Life Time in determining the adjustment. Should the publication of the "Consumer Price Index" be discontinued by the Bureau of Labor Statistics, U.S. Department of Labor, then the parties by agreement shall substitute a comparable index. L names to tie tno e tbersht 'r pgle xstit} l c'a If Life Time enters into an agreement with another City in Minnesota in which Daily Rates, pass rates, or initiation fees are established, the rates in this Agreement may, at the City's discretion, be adjusted so that each rate under this Agreement is no higher than such other rates. 2.03} Any WORM resident of the Citeheeseq to become a member of Life Time shall be {elle&* en a fifteen percent 15 %) discount off of the lowest membership initiation fee then available to the public at any club owned or operated by Life Time. '' S1 a aft elt` tf , t{o sux The initial initiation fees and sale of membershipsps to Plymouth residents shall be at the prices set forth below. This price shall be available for at least the 90 -day period prior to the Club/Pool Complex opening. 33862.11 RNK/JRW:10.7N7/99 -8- Initiation Fee Monthly Membership Fee Rate guaranteed for 12 months) Single Person $125 $29 per month Two People $210 $49 per month Three People $295 $69 per month Four People $380 $69 per month 85.00 for each additional Person) 2--W t ) The use of the Club/Pool Complex by Plymouth residents[, Seheel D shall be subject to the same rules, regulations, conditions and limitations of usage as all regular Life Time members, including requirements for written parental consent on file for anyone under the age of 18. 12.071 Life Time shall not discriminate between Plymouth residents(, Seheel Distliet students and residents paying the Daily Rate and Life Time members with respect to the use of the facilities, provisions of services, reservation rights, and daycare services. 1 The Club/Pool Complex shall be open and operating (a rrir daily from 5:00 a. m. to 11:00 p. m., except for partial daily hours on five holidays. Certain non -athletic services provided in the Club/Pool Complex (e.g. daycare services, massage services) may be limited as reasonably determined by Life Time. The limitation of certain services shall only be based on the lack of demand for such services. 2-09i MM Life Time shall provide lifeguards for the leisure pools and the outdoor pool as part of Life Time's operation of the Pool/Club Complex. Lifeguards shall be on 33862.11 MK/JRW:r03/O7/9e -9- 3 The Ice Arena shall be available without additional fees to Life Time members during public skating hours. The City h Seheel D stf et) and Life Time shall establish procedures to handle complaints regarding the operation of the Club/Pool Complex including, but not limited to complaints relating to the "Residential Use Covenants and Minimum Operational Standards" (and ere^' T''"`"^4 Use -E ." . Life Time shall promptly furnish the City [and Seheel Distfiet}. with a copy of all written complaints it receives. The City+, Sekeel-B} and Life Time shall meet at least quarterly to discuss all matters relating to this Agreement and the operation of the Club/Pool Complex. Life Time shall provide quality customer service equal to or exceeding the level of serviced provided by Life Time to its customers in 1996. 2131 M All pools shall be maintained and repaired by Life Time and must maintain and pass public health standards at all times. 2-14} MM The temperature of the pool water in the leisure and outdoor pools must be approved by the City and shall be 85 (degrees (pi i, Tenedegree). fie Disftiet ejid shall be degrees (plus or minus one degree). 33862.11 RNKNRW:r03M7/QG -10- The Club/Pool Complex must meet all OSHA standards. The Club/Pool Complex must meet all fire codes and may be inspected by the City for compliance. The Club/Pool Complex must meet all Americans With Disabilities Act requirements for public buildings. Life Time shall make reasonable efforts as determined by the City to work with jspeeial needs peptilatieft. Speeial needs pepulatieft shall niean time availability, the City may rent the pools for its exclusive use forXI.. swimming lessons at times selected by the City at market rates offered by facilities in the Twin City Metropolitan Area. 2.19 Within sixty (60) days of the opening of the Club/Pool Complex, (Life Tim shaH previde a senier- rete fef swi i _ AaWe te the City f-ef Plyfneuth fesidents wh ineludes a r.edueed. initiet The senier fates pr-evided by Life Time to the City undef this seetien shall also be av61a1.1e te the residents ef the Seheel DisL-iet-. 2.20 Within sixty (60) -days ef -r-ning ef the Gub/Pee4 Gefnf4ex, j Life Time shall provide a program satisfactory to the City allowing low income residents of the City access to the Club/Pool Complex. The (fates pr-evided b Tifie T-iffle te the City under- this seet shall also be available te the residents ef the Seheel Distfiet. 33862.11 RNK/JRW:,03/07/96 -11 1002WEd aY> r i . a t x r 7 >' .. ur.c se 22 s a be tv r yyr??•++..•;w.• ••.x;r ,xyrr. •};?.;mwry}:y};y,.;x •: r:l%: :1)00007 ..; '+•i:•0'••. ::t?Y :??H?••• 2.21) MW Life Time shall cooperate with the City Park and Recreation Department on two jointly sponsored community events per year. Life Time shall cooperate with the City's Park and Recreation Department and the School District on joint programming. 2.22} f The City may have bulletin board display space in the Club without charge to the City. 2.23)No membership cap shall apply to Plymouth residents _ f-eside t ttipSeheeiDistfieti 1 Y. i••: i i — i : •i i : .:: is ii Mr. M IkIfft1wrM/ Y. ii w i i i • i i : 1 Y, i :.r.'t:fig:.t•:i.:•w:!.t:.:.ii.w u. tit L: i•" Use of Property - Site Development and Leasehold Improvements of Club/Pool Complex fA (11-1. Life Time Fitness shall design, construct, own, market and operate the Club/Pool Complex on the Club/Pool Property in accordance with the provisions of this Agreement. The parking area constructed upon the Parking Lot shall service the Recreation Center Property without cost to any user of the Club/Pool Complex under this Agreement. Construction shall commence no later than September 1, 1996 and shall be completed no later than September 1, 1997. 4:92) The Club/Pool Complex which includes the fitness center, 25 yard features, whirlpool and outdoor leisure pool with waterslide shall be constructed and equipped by Life Time, at its cost, in accordance with the following plans and specifications: (identify plans and specs). 431 Life Time shall pay for the cost of all site lighting for the Parking Lot parcel, the parking lot construction including sub -base, gravel base, bituminous surfacing, storm sewers, NURP pond construction (except grading), outdoor signage, concrete curb and gutter and striping. 4.04i OM The City shall be responsible for the following site work for the Club/Pool Property: traffic circle on Plymouth Boulevard and 36th Avenue, wetland mitigation or reclamation, site fencing, landscaping and irrigation. Life Time shall be responsible for the following site work for the Club/Pool Property and Parking Lot: site clearing, grading, sub -base for the Parking Lot, grading and excavation for a NURP pond, drain lines, sanitary sewer and watermains to the Club/Pool Complex. Prior to constructing the Club/Pool Complex on the Club/Pool Property, Life Time shall perform an inspection. The City makes no express or implied warranties concerning the site work. 4051 The City shall separately contract for civil site engineering services for the Recreation Center property. The City shall pay the civil site engineering costs relating to the NURP pond and wetland mitigation. All other civil site engineering costs shall be apportioned in accordance with the construction costs identified in paragraphs 4.03 and 4.04 above. 3)6 All site work for the Club/Pool Property and Parking Lot shall be in accordance with the following plans and specifications: (identify site plans) 33862.11 RNKMRW:r03/07/96 -14- PM Life Time shall construct at its cost the Club/Pool Complex in accordance with the following plans and specifications: (identify). All material change orders relating to or affecting the design and features of the Club/Pool Complex must be approved by the City in writing, which approval shall not be unreasonably withheld. 4081 MM The City shall advertise for bids and award the construction contract for the Ice Arena Complex according to applicable law if the bids are satisfactory to the City. M The City shall contribute $2.6 million toward the cost of improvements to the Club/Pool Complex. {The-;Sehee' l eentr-ibute $1.6 millien tewffd Life Time shall be solely responsible for all costs in excess of the [$4.2 -niffie 1 contributed by the City-Seheel Distfiet}, including but not limited to financing, all administrative, architectural, engineering, construction management, surveying and -legal costs, but excluding any City staff time or City attorney expense. 4 ) M The Club/Pool Complex shall not open for business prior to completion of the Ice Arena Complex, unless significant unforeseen circumstances as reasonably determined by the City cause the Ice Arena Project to be delayed. Life Time shall pay permit fees, sewer availability charges ("SAC" fees), and City sewer and water connection charges associated with the Club/Pool Property and Club/Pool Complex. 33862.11 F NK/JRW:r03/07/96 -15- ARTICLE {FALB} MM Construction Disbursement 5.01} All monies to be deposited by the City ($2.6 million's-Sehee' Dist die and Life Time } . ;.`::: n, • X88-9AA:99}}($5 t} t{l)j in connection with improvements to the Club/Pool Complex on the Club/Pool Property and other site work shall be disbursed by a title company approved by the City [and Seheel Distf ^*' in accordance with a disbursement agreement acceptable to the City[, Seheel Distf et) and Life Time. Any interest on money deposited by the City [andSehee' Ti stfi e*' shall be turned over to the City jbel`vr ;:rtilat gal+ tuc is issuedo ZIt':I Life Time shall a all charges imposed b thepaygPoY title company. 5-02} M No portion of the Contribution of the City [er Seheel Dist iet shall be advanced and deposited with the title company as provided herein until the following documents are received or the following conditions are met: a. A 1987 ALTA form of mortgagee title insurance policy from a company and agent acceptable to the City which policy (the "Title Policy") shall, prior to or contemporaneously with the first advance: (i) insure the priority and sufficiency of any Leasehold Mortgage placed upon the property pursuant to Article Six herein as a first lien upon the Club/Pool Property; (ii) show all easements or other matters affecting the Club/Pool Property, all subject only to such exceptions or qualifications as are acceptable to the City (Gael D ); (iii) insure unconditionally against all possible contractors', suppliers' and mechanics' lien claims; (iv) contain any endorsements or assurances that the City feral Distfiet} may reasonably request for 33x62.11 W4K/JRW:r03/07/98 -16- protection of its interests, including but not limited to pending disbursement and interim mechanic's lien endorsement. b. The disbursement agreement described in Section 5.01 is fully executed. C. Evidence of insurance as required by this Agreement is received and approved by Qh.City {meheel Distiiet}, d. A written opinion by a third party attorney acceptable to the City mel Disti-7iet}, covering such matters as the City s necessary, including, without limitation, statements of opinion to the effect that: 1. Life Time is a legal entity duly created in accordance with and in a condition of good standing under the laws of the state of its formation, with full authority to transact business in Minnesota. 2. The execution and delivery of this Agreement and the Leasehold Mortgage and the completion and operation of all improvements, does not violate, conflict with, or constitute a default under any terms of the Life Time's formative documents, or any mortgage, indenture, lease, agreement, license, permit, judgment, decree, order, statute, ordinance, rule or regulation to which Life Time is subject or bound. 3. There is no pending litigation or judgment entered of record against Life Time or directly related affiliates. 4. Life Time shall pay for the cost of such written opinion. e. A Sworn Construction Statement in a form acceptable to the City{79eheel let} and to the title company, indicating the total costs for actual or 33862.11 RNKIJRW:,09/07/90 -17- estimated construction and development of the Club/Pool Complex that will or have been incurred by Life Time and containing line items and amounts as required by the City [and-Seheel Distr-ieti . f. A contract between Life Time and a general contractor acceptable to the City and -Seheel-Bistiiet} with a guaranteed maximum cost for construction of the Club/Pool Complex, and accompanied by copies of all subcontracts thereunder. g. A contract between Life Time and the architect designing the Club/Pool Complex, together with acknowledged collateral assignments of the Life Time's interest in the Plans and Specifications to the City-(and-Seheel Digit}. The assignment to City {^peel-Distfietj as required in this section shall be subordinate to a prior assignment in favor of the holder of the Leasehold Mortgage. h. A building construction schedule acceptable to the City [and Seheel Distf eti i. A certification from the Architect stating that the Plans and Specifications are complete in all respects and contain all details requisite for construction of the Club/Pool Complex which , when built in accordance therewith, shall comply with all zoning and building codes, laws, ordinances and regulations. j. Life Time's deposit with the title company of sufficient funds to complete the construction of the Club/Pool Complex and Life Time's share of site improvement and engineering costs. k. Life Time's deposit of the debt service escrow with the City pursuant to Section 6.06. 33862.11 RNK/JRW:,03/07/08 -18- 1. A loan commitment in form and content acceptable to City and School District. 83}#a{# The requirement of this Article satisfies the requirements of the City's Zoning Ordinance for financial security to guaranty the completion of extension amenities a td cif the Ctty'.s sv bzordaz` dvel wente>< Permitted Leasehold Mortgage 1 Life Time may place a mortgage upon the Club/Pool Complex in an amount which shall not exceed $4 million or such higher amount as the City {ted-Seheel Diet} shall Ueifitl-y} approve, which approval shall not be unreasonably withheld Leasehold Mortgage"). The mortgage is for the sole purpose of securing construction and subsequent permanent financing for Life Time's share of the cost of constructing the Club/Pool Complex. 602} Mg The Indebtedness secured by the Leasehold Mortgage shall be amortized over a period of thirty years or less. Life Time may refinance the indebtedness secured by the mortgage provided the amount of the remaining principal balance is not increased and the new debt is not amortized for a period of time extending beyond fthe er 6.03) tM Any mortgage allowable hereunder shall contain f. (a)] a provision which requires that the City (and Dist-fiet). receive notice of default and opportunity to cure rights from the mortgag , 33862.11 RNK/JRW:MM7/96 -19- Agfeemen 6.04) M Life Time shall not secure any additional debt with the Club/Pool Complex without the prior written consent of the City {ef the Seheel DisL e 6.05) . The City shall subordinate its fee interest A&MM in the Club/Pool Complex to the leasehold mortgage WOMMOM 6,04 Life Time shall deposit with the City an amount equal to four months of debt service on the Leasehold Mortgage to be placed upon the Club/Pool Property by Life Time as permitted herein. The funds are to be held in escrow by the City and used by the City, at its option, to cure any default under the leasehold mortgage. Accrued interest on the escrow funds, shall be paid on a quarterly basis to Life Time. ARTICLE (SEVENI PM1 Parking Lot 7.01) t Life Time and any successor to Life Time occupying the Club/Pool Complex is hereby granted a non-exclusive perpetual easement in and to the Parking Lot for the purpose of customer and employee parking. The Parking Lot shall contain a minimum of 670 improved parking spaces to be used by users of the Club/Pool Property and shall -be constructed by Life Time in accordance with the site plans and specifications identified in Section 33862.11 F"K/JRW;103/07198 -20- Prior to the first construction disbursement, a non-exclusive parking easement in the form attached hereto as Exhibit " " shall be filed against the Recreation Center Property. 783} M The City at its cost shall provide snow and ice control for the Parking Lot and maintain the landscaping including the lawn irrigation system. All other repairs and maintenance of the Parking Lot shall be performed by Life Time, with the costs shared equally by Life Time and the City. Life Time shall be solely responsible for the repair, maintenance, replacement and energy cost for the parking lot lighting. ARTICLE {EIGHT) Cir` : Covered Walkway and Common Wall Agreement A temperature -controlled enclosed walkway shall be constructed alongside and connecting the Ice Arena Complex and the Club/Pool Complex. Life Time and the City shall grant to the other a reciprocal easement for pedestrian passage to and from the respective facilities via the enclosed walkway in the form depicted on Exhibit The City shall have the option at the City's expense to extend the enclosed walkway to abutting property owned by the City. 8.021 'M Each party shall be responsible for the costs of operation and maintenance of the covered walkway located on their respective parcels. The wall between the Ice Arena Complex and the Club/Pool Complex is a common wall. The parties respective rights and obligations pertaining to the wall are as follows: a. The cost of designing and constructing the common wall shall be paid for fifty percent (50%) by Life Time and fifty percent (50%) by the City. 33862.11 RNK/JRW:rO3107/D6 -21- b. A common wall covenant to be recorded against the title to the Club/Pool Property is attached hereto as Exhibit "—" 8.04) The City may in the future construct an additional building abutting the Club/Pool Complex. The same terms as specified above shall be applied to the common wall. ARTICLE (NWEI MM Name of Complex and Signage 9.01} M The name of the Recreation Center Property shall be vl:: 0 1... The name of Life Time Fitness Club shall be included on signage near the main entrance to the property in accordance with the plans and specifications identified in Section 4.07. The City reserves the right to alter the signage configuration so long as the visibility of the Life Time Fitness Center sign is not unreasonably impaired. ARTICLE (T -EN) The City's Right of First Refusal 10.01) For a period ending five (5) years after the Club/Pool Complex opens for business, Life Time may not sell or assign its interest under this Agreement or sell or assign the Club/Pool Complex except as provided herein. Life Time may sell its interest under this Agreement at any time during the first five years after the Club/Pool Complex opens for business, if Life Time fr-eeeives a value of $15 ef gfeater- per- shffe fer the sale e f . .. ......................... its steek! WO.M. WIMM. ..P. .. ... I ........ .... 33W.11 RNKMRW:M3M7MG -22- Agreement which Life Time intends to accept, Life Time shall notify the City [and- Sehee} Distrieti by sending to the City (and Sehee' Bidet} a copy of the proposed contract and notify the City of Life Time's intention to accept such offer. The City shall have the right within ninety (90) days after receipt of the notice from Life Time to accept the terms of such contract to purchase, assignment or sublease in its own name, or in the name of a nominee, and on the terms specified in the proposed contract. If the City does not exercise its right of first refusal by sending Life. Time notice within such ninety -day period, Life Time may then sell, assign or sublease its rights to the Club/Pool Complex to the entity who made the bona fide offer provided that such sale, assignment or sublease is on the same terms and conditions, as set forth in proposed contract. ARTICLE Life Time Option to Purchase M Life Time shall have the right at the expiration of the term and only at the expiration of the term of this Agreement to purchase the Club/Pool Property by paying to the City the sum of One Hundred Thousand Dollars ($100,000.00) ("Purchase Price"). Life Time shall give the City one hundred twenty (120) days notice of Life Time's intention to exercise its right to purchase the Club/Pool Complex and shall pay the Purchase Price to the City on the expiration date of this Agreement. Life Time shall not have the 33862.11 RNK/JRW:A3/07/9E -23- right to purchase the Club/Pool Property if there has been a default under the terms of this Agreement and the default exists at the time this Agreement terminates. The City shall, upon payment of the Purchase Price, deliver to Life Time a limited warranty deed conveying title to the Club Pool Property subject to all encumbrances, liens, restrictions, covenants, and easements (then -e€-reee* ARTICLE (T-3AW VE Payment of Taxes and Other Impositions 2.01 Life Time shall pay or cause to be paid (except as provided in Section 12.02), before any fine, penalty, interest or cost may be added thereto, all real estate taxes, assessments, water and other public utility charges and all other charges or burdens whatsoever kind and nature, which at any time prior to or during the term of this Agreement may have been, or may be assessed, levied, confirmed, imposed upon, or grow or become a lien on, the Club/Pool Property or any part thereof, or any appurtenance thereto, or the rent of income received from subtenants or licensees, or any use or occupancy of the Leased Club/Pool Property, or such rights, obligations, easements, and franchises as may now or hereafter be appurtenant, or appertain, to the use of the Club/Pool Property, all of which charges are hereinafter referred to as "Impositions." z Life Time shall pay any Impositions which are incurred or accrue prior to the date of execution of this Agreement to the extent such imposition is a direct or indirect result of action taken by the Life Time with respect to the construction of the Club/Pool Complex. 33862.11 - 24- RNK/JRW:103107/96 fin mi Life Time shall be responsible for the payable 1996 real estate taxes and installments for special assessments and for every year thereafter during the term of this Agreement. 12:e41 M An Imposition relating to a fiscal period of the taxing authority, a part of which period is included within the term of this Agreement and a part of which is included in a period of time after the expiration of the term of this Agreement, shall, whether or not such imposition shall be assessed, levied, confirmed, imposed upon or in respect of or become a lien upon the Club/Pool Property, or shall become payable, during the term of this Agreement, be adjusted between the City and Life Time as of the expiration of the term of this Agreement, so that Life Time shall pay that portion of such imposition which that part of such fiscal period included in the period of time before the expiration of the term of this Agreement bears to such fiscal period, and the City shall pay the remainder thereof, provided, however, that Life Time shall not be entitled to receive any apportionment, if Life Time shall be in default in performing any of the terms of this Agreement. ARTICLE { Surrender 13-011 M Life Time shall on the last day of the term hereof (unless Life Time has exercised its right to purchase the Club/Pool Property) or upon any earlier termination of this Agreement, or upon any entry or re-entry by the City upon the Club/Pool Property pursuant to this Agreement, surrender and deliver to the City the Club/Pool Property including the Club/Pool Complex, fixtures, equipment and furnishings without fraud or delay, subject to the provisions of this Agreement, in good order, condition and repair, reasonable wear and tear excepted, free and clear of any mortgages, liens or encumbrances. 33862.11 TIK/JNW:r03/07/96 -25- 112 M All furnishings, fixtures and equipment installed in, affixed to, placed upon or used in connection with the operation of the Club/Pool Complex shall become the property of the City upon termination of this Agreement (unless Life Time shall purchase the Club/Pool Property under the terms of this Agreement) or surrender of the premises to the City. Life Time shall keep and maintain such furnishings, fixtures and equipment at all times throughout the term of this Agreement in good and usable condition with all necessary replacements thereof, sufficient for the operation of the Club/Pool Complex, and shall deliver the same in such condition to the City as additional rent at termination of Life Time's tenancy hereunder. Upon the date fixed for the expiration of the term of this Agreement (unless Life Time Purchases the Club/Pool Property pursuant to the terms of this Agreement) or upon the sooner termination of the term thereof, as the case may be, the Club/Pool Complex, fixtures and furnishings shall automatically and without further act upon the part of Life Time or the City become the property of the City and title thereto shall vest in the City free and clear of all liens and encumbrances and without payment therefor by the City. Life Time will, upon request of the City, promptly execute and deliver to the City a deed or such other appropriate instrument of conveyance as the City may deem necessary or desirable to evidence or confirm the vesting of title to the Club/Pool Complex in the name of the City, in recordable form reasonably satisfactory to the City. 13.041 x:1:2>Q The Club/Pool Complex is and shall remain the property of Life Time until the date herein fixed for the expiration of the term of this Agreement or until the sooner termination thereof. Life Time's estate, title or interest in the Club/Pool Complex shall not be subleased, assigned, transferred or otherwise conveyed or encumbered in whole 33862.11 NNK/JRW:rO3/07/9e -26- or'in part, nor purported to be subleased, assigned, transferred, or otherwise conveyed or encumbered in whole or in part, separate and apart from Life Time's interest under this Agreement, nor shall there be any sublease, assignment, transfer or conveyance of the estate, title or interest of Life Time in the Club/Pool Complex in whole or in part by operation of law or by judicial order, decree or judgment, separate and apart form Life Time's interest under this Agreement except as permitted in this Agreement. 1t ; It is the intention and agreement of the parties that Life Time's interest in this Agreement and all of Life Time's right, title and interest in and to the Club/Pool Complex shall be nonseparable and that any attempts to transfer or mortgage either of such interests, except as expressly permitted under the terms of this Agreement, shall be void and of no force and effect unless there shall be a complete transfer or mortgage, as the case may be, of Life Time's interest under this Agreement and of all Life . Time's right, title and interest in and to the Club/Pool Complex to the same party. It is also the intention and agreement of the parties that the separation of title to the Club/Pool Property from title to the Club/Pool Complex is not to change the character of the Club/Pool Complex as real estate. The provisions of this Article Thirteen shall survive any termination or expiration of this Agreement. ARTICLE {FOURTEEIS4 (MMM Insurance 14.011 Life Time, at its sole cost and expense, shall keep the Club/Pool Complex and all the fixtures, furnishings and equipment therein, insured against loss or damage by fire and against loss or damage by such other risks now or hereafter embraced by 33862.11 RNK/JRW:A3/07/9E -27- Extended Coverage," so called, and against such other risks or hazards and in an amount not less than 100% of the full replacement value of the Club/Pool Complex and Contents. During the construction of the Club/Pool Complex or any alterations thereto, Life Time shall provide Builders Risk Insurance written on Completed Value Form.'``:;;I X4:021 In addition to the insurance required in Section (14.01) above, Life Time, at its sole cost and expense, shall purchase and maintain during the entire term of this Agreement: a. Comprehensive bodily injury and property damage liability insurance against claims for bodily injury, death or property damage, occurring in, on, or about the Club/Pool Property, the Club/Pool Complex, or any elevator or escalator therein and on, in or about the adjoining parking lots and passageways, naming the City and the Life Time as the insured, such insurance to afford minimum protection, during the term of this Agreement, of not less than Two Million D•llars ($2,000,000.00) (in _ - glc€uts bc ly ut tpm erty dam ge c°hre -lundred `Thousand b. Boiler and pressure vessel (including, but not limited to, steam pipes, pressure pipes, and condensation return pipes) insurance, provided the Club/Pool 33862.11 F"KfJRW;r03/071R8 -28- Complex contains a boiler or other pressure vessel or pressure pipes, in an amount not less than Two Hundred Fifty Thousand Dollars ($250,000.00) and plate glass insurance upon store fronts wherever located and upon any other plate glass installed on the ground floor of the Club/Pool Complex; C. Rent, rental value or business interruption insurance against loss of rent or income due to fire and the risks now or hereafter embraced by "Extended Coverage," in an amount at least equal to the annual gross operating income of Life Time at the Club/Pool Property. Such rent, rental value or business interruption insurance shall be made payable to the City and any Leasehold Mortgage holder described in Article Six. In the event that the Club/Pool Complex shall be destroyed or damaged, the proceeds of such rent or rental value insurance shall be applied periodically to the payments due the Leasehold Mortgage holder or the City pursuant to this Agreement until the restoration of the Club/Pool Property, at which time any balance of such proceeds shall be returned to Life Time, provided Life Time is not in default under this Agreement or the Leasehold Mortgage. e. Such other insurance insuring against such risks, in such amounts with such protective provisions as may be reasonably required from time to time by the City [and Sebee!Bistfiet} of the Club/Pool Property and Club/Pool Complex. f. Demolition and restoration insurance for the benefit of the City to insure that, in the event the Improvements on the Club/Pool Property are destroyed by fire or other casualty and not rebuilt by the Life Time, the remains of the improvements are demolished and the Club/Pool Property are restored to their 33862.11 RNK/JRW:r03/07/Qe —29— present condition Cl.g., a level, grassy field on grade). The proceeds of the policy shall be payable solely to the City. 14.03) '# All insurance policies set forth in this Article Fourteen shall name the City[, the Sebes and any Leasehold Mortgage holder as additional parties insured, or as fffleAgagesj.a or loss payee, whichever is applicable. 14-041 t All insurance shall be effected under valid and enforceable policies issued by insurers of recognized responsibility which are licensed to do business in the State of Minnesota and which have been approved by the City [aid Seheel Dist et as to the qualifications of insurers and the amounts of insurance to be written by each. Upon the execution of this Agreement, and thereafter not less than thirty (30) days prior to the expiration dates of any expiring policy or policies theretofore furnished pursuant to this Article ufteefr} ' 't r r of this Agreement, originals of the policies, copies thereof, or certificates of insurance, in the case of bodily injury and property damage liability insurance, bearing notations evidencing the payment of premiums or by other evidence of such payment, shall be delivered by Life Time to the City (and Sebe,,, Dist . e i - d Each policy required in this Article Fetee}xte shall te the extent ebt6naWe-,4 have attached thereto (a) an endorsement that such policy shall not be cancelled @fM§)Iffi@N without at least days' prior written notice to the City sand Sebee T,%:•t'; and (b) an endorsement to the effect that no act or omission of the Life Time shall invalidate the interest of such person or entity entitled to such notice. 33862.11 RNK/JRW:r03tO7/90 _30_ f Each policy shall be reviewed and increased every year with minimum protection amounts adjusted based upon the increase in the CPI as set forth in the formula provided in Section. 2.04 of this Agreement. ARTICLE [FEFFEENI ""MM Use of Insurance Proceeds 15-011 1` In case of damage to or destruction of the Club/Pool Complex by fire or other casualty, Life Time, shall at Life Time's sole cost and expense, whether or not the insurance proceeds, if any, shall be sufficient for the purpose, and irrespective of the amount of any loss, restore, repair, replace, rebuild the Club/Pool Property or the Club/Pool Complex and other improvements thereon, as nearly as possible to its value, condition and character immediately prior to such damage or destruction in accordance with plans approved by the City {fie}-Distfietj. Such restoration, repairs, replacements, rebuilding or alterations shall be commenced with due diligence, and in good faith, and prosecuted with due diligence and in good faith, unavoidable delays excepted. All insurance money paid pursuant to this Agreement on account of such damage or destruction, less the actual cost, fees and expenses, if any, incurred in connection with the adjustment of the loss, shall be applied to the payment of the cost of the aforesaid demolition, restoration, repairs, replacement, rebuilding, including the cost of temporary repairs for the protection of Club/Pool Property or the Club/Pool Complex. pending the completion of permanent restoration, repairs, replacements, rebuilding (all of which temporary repairs, protection of property and permanent restoration, repairs, replacement, rebuilding are hereinafter collectively referred to as the "Restoration"). The insurance proceeds shall be paid out from time to time as such Restoration progresses by a 33862.11 RNK/JRW:103/07/09 -31- title company or other dispersing agent agreed to by the parties with normal lien waivers and other requirements. 15.03} M No destruction of, or damage to, the Club/Pool Property or any part thereof by fire or any other casualty shall permit Life Time to surrender this Agreement or shall relieve Life Time from its liability under the terms and conditions of this Agreement including additional rent payable under this Agreement, and Life Time waives any rights now or hereafter conferred upon it by statute or otherwise to quit or surrender this Agreement or the Club/Pool Property or any part thereof or to any suspension, diminution, abatement or reduction of rent on account of any such destruction or damage. ARTICLE {SIXTEENI The City's Right to Perform Life Time's Covenants If Life Time shall at any time fail to pay any Imposition in accordance with the provisions of Article Twelve hereof, or to take out, pay for, maintain and deliver any of the insurance policies provided for in Article Fourteen hereof, or shall fail to make any other payment or perform any other act on its part to be made or performed in accordance with any terms and provisions of this Agreement, the City after ten (10) business days' prior written notice to Life Time (or without notice in case of an emergency) and without waiving, or releasing Life Time from, any obligation of Life Time contained in this Agreement, may, but shall be under no obligation to: a) N 33862.11 RNKMRW:r03/07/99 pay any Imposition payable by Life Time pursuant to the provisions of Article Twelve hereof, or take out, pay for and maintain any of the insurance policies provided for in Article Fourteen hereof, or 32- W make any other payment or perform any other act on Life Time's part to be made or performed as in this Agreement provided including, but not limited to payments due under the Leasehold Mortgage or performance of any terms or conditions of the Leasehold Mortgage; and may enter upon the Club/Pool Property for any such purpose, and take all such action thereon, as may be necessary therefor. 1 6.02} p2 All sums so paid by the City (ef Seheel Distfietj and all costs and expenses, including attorney's fees, incurred by the City in connection with the performance of any such act, shall be paid by Life Time to the City fof Sekeel-Bish-io} as the case may be on demand, and the City (and Seheel B et) shall not be limited in the proof of any damages which the City may claim against Life Time arising out of or by reason of Life Time's failure to provide and keep in force insurance as aforesaid, to the amount of the insurance premium or premiums not paid or incurred by Life Time and which would have been payable upon such insurance, but the City {aftd-Sehee} Diet} shall also be entitled to recover damages for such breach, the uninsured amount of any loss (to the extent of any deficiency in the insurance required by the provisions of this Agreement), damages, costs and expenses of suit, including reasonable counsel fees, suffered or incurred by reason of damage to, or destruction of, the Club/Pool Property and the Club/Pool Complex or any part thereof, occurring during any period when Life Time shall have failed or neglected to provide insurance as aforesaid. 16.031 1a3 Under no circumstances shall the exercise by the City {ef Seheel-Bigfie} of the right granted in this Article {Sicteefq ... j to enter upon the Club/Pool Property or the Club/Pool Complex for any purpose specified herein and take such 33862.11 RNK/JRW:103/07/96 _ _ action as may be necessary, or the exercise of any other right or remedy granted to the City fer-SeheelBistfiet} under any other provision of this Agreement to cure, prevent or take any other action with respect to any default by Life Time, constitute an eviction of Life Time, result in a termination of this Agreement, or in any manner whatsoever relieve Life Time from liability to pay any amounts due under this Agreement or to comply with the Residential Use Covenants and Minimum Operational Standards for Seheel Dzs Gevenantsl and from the performance of any term of this Agreement by Life Time. 16.041 fM The exercise of any right by the City for- Seheal Distr -et) under this Agreement shall not alter, abridge, supersede or otherwise affect the obligations of the City under this Agreement to give any notice required by any provisions of this Agreement, nor alter, abridge, supersede or otherwise affect the rights of any Leasehold Mortgage to cure any default of Life Time or to take any action permitted hereunder in connection therewith. X6:85} 1 The provisions of this Section f 16. 051 shall have no application to the City's right to terminate this Agreement under any other term covenant or condition of this Agreement or to the City's rights to enter, re-enter or to obtain possession of the Club/Pool Property and the Club/Pool Complex following termination of this Agreement in accordance with the provisions hereof. 33862.11 RNK/JRW:\03I07/96 -34- ARTICLE Repairs and Maintenance of the Club/Pool Property x:011 Throughout the term of this Agreement, Life Time, at its sole cost and expense, shall take good care of the Club/Pool Complex, furnishings, fixtures and equipment, and shall keep the same in good order and condition reasonable wear and tear excepted, and make all necessary repairs thereto, interior and exterior, structural and nonstructural, ordinary and extraordinary, foreseen and unforeseen.. When used in this Article {Seventeen} tggft, the term "repairs" shall include all necessary replacements, renewals and alterations needed to maintain the Club/Pool Complex as a first class facility of its type. All repairs made by Life Time shall be at least equal in quality and class to the original work. In December of each year, Life Time shall provide the City (and DistfieO documentation summarizing all repair, maintenance and repair activities occurring in the previous twelve months. The City [and Seheei D s.w t , at its own expense, may inspect the Club/Pool Complex. Deficiencies noted by the City few S,,. eel Tom' ^•^ to Life Time must be corrected within sixty (60) days at Life Time's expense. Life Time may temporarily close portions of the Club/Pool Complex for necessary repairs from time to time after reasonable notice to City [and Seheel Dom}. The necessity for and adequacy of repairs to the Club/Pool Complex and the fixtures therein pursuant to this Agreement shall be measured by the standard which is appropriate for buildings of similar construction and class, provided that Life Time shall in any event make all repairs necessary to avoid any structural damage or deterioration to the Club/Pool Complex. 33x62.11 RNK/JRW:g3/07/09 -35- 1:7V3} Life Time shall keep and maintain all portions of the Club/Pool Property, and the sidewalks, curbs, entrances, passageways and, to the extent required by law all areas adjoining the same in a safe, clean and orderly condition, free of dirt, rubbish, snow, ice, and unlawful obstructions. A4} The City [and Seheel Distr-ietj shall not be required to furnish any services or facilities or to make any repairs or alterations to the Club/Pool Property and the Club/Pool Complex. Life Time hereby assumes the full and sole responsibility for the condition, operation, repair, replacement, maintenance and management of the Club/Pool Property and the Club/Pool Complex subject to the terms of this Agreement. anantueinents,aidrplarer t. e.bpt shall ljubm ted n nr.befo der my PQr the hex# calendar. cost and expense, shall promptly comply with all present and future laws, ordinances, orders, rules, opinions, directives, regulations and requirements of all federal, state, and city governments, courts, commissions, attorneys general, any national or local insurance rating bureau, or any other body exercising functions similar to those of any of the foregoing, 33862.11 RNK/JRW:rO3/O7/98 -36- which may be applicable to the proposed operations and activities on the Club/Pool Property, the Club/Pool Complex or any part thereof. M Life Time shall likewise observe and comply with, or shall cause to be observed and complied with, all the requirements of all policies of public liability, fire and other insurance at any time enforce with respect to the Club/Pool Property and the Club/Pool Complex. Y • M DERMI Changes and Alterations 19-011 Life Time shall have the right, at any time and from time to time during the term of this Agreement, to make, at its sole cost and expense, changes and alterations in, to or of the Club/Pool Complex, subject, however, in all cases to the following: a) No structural change or alteration, involving in the aggregate an estimated cost of more than Seventy -Five Thousand Dollars ($75,000.00), shall be made without the prior written consent of the City which consent shall not be unreasonably withheld. yOwt, ULVKFFsg Peel anda withheld. Changes ef Edtefatiefis te the eempetitien peel, diving peel and related faeilities she4l b .,.1,.u,.ted t 1, t' a 1 rrvvwuut - - - f b) No change or alteration shall be undertaken until Life Time shall have procured and paid for, so far as the same may be required from time to time, 33862.11 MK/JRW:A3/07/00 —37— all permits and authorizations of any federal, state, or city government or departments, or subdivisions of any of them, having jurisdiction. c) Any structural change or alteration, involving in the aggregate an estimated cost of more than Seventy -Five Thousand Dollars ($75,000.00) shall be conducted under the supervision of a licensed architect or a licensed professional engineer selected by Life Time and approved in writing by the City and no such structural change or alteration shall be made except in accordance with detailed plans and specifications and cost estimates prepared and approved in writing by such architect or engineer, and approved in writing by the City (such approval not to be unreasonably withheld). d) Any change or alterations shall, when completed, be of such a character as not to reduce the value and utility of the Club/Pool Complex below its value and utility immediately before such change or alteration. e) Any change or alteration shall be made promptly (unavoidable delays excepted) and in good and workmanlike manner and in compliance with all applicable permits and authorizations and building and zoning laws and with all other laws, ordinances, orders, rules, regulations and requirements of all federal, state, and city governments, departments, commissions, boards and officers, any national or local insurance rating bureau, or any other body hereafter exercising functions similar to those of any of the foregoing. f) The cost of any such change or alteration shall be paid in cash or its equivalent, so that the Club/Pool Property shall at all times be free of liens for labor and materials and the Club/Pool Complex and free from any 33862.11 RNK/JRW:,W /07/BG -38- encumbrances, chattel mortgages, conditional bills of sale, or security interests. g) Whenever appropriate the fire insurance with "Extended Coverage," as required to be maintained during the term of this Agreement in Section 7.01 of Article 7 hereof, shall be adapted to provide, during any period of building construction, for Builder's Risk Insurance written on the Completed Value Form or on the Monthly Reporting Form. h) If the estimated cost of any such structural change or alteration shall in the aggregate be in excess of Seventy -Five Thousand Dollars ($75,000.00) Life Time shall, before commencement of work, at Life Time's sole cost and expense, furnish to the City a surety company performance bond, issued by a surety company acceptable to the City, in an amount at least equal to the estimated cost of such change or alteration, guaranteeing the completion thereof within a reasonable definite time, free and clear of all liens, encumbrances, security interests, chattel mortgages, conditional bills of sale, and other charges, and in accordance with the plans and specifications approved by such obligee. In connection with any such structural change or alteration for which amounts have been deposited or are to by used pursuant to this Agreement, no such performance bond or other security shall be required except to the extent that such estimated costs exceed the amount deposited or to be used pursuant to this Agreement. 19.02}18 The dollar amounts listed in Sections 1$7 a c and (h) shall be adjusted for inflation as set forth herein. The adjustment formula is: 33862.11 RNK/JRW:rO3/07/98 In 75,000.00 , 000. and related faei4ifies)f multiplied by a fraction the numerator of which is the CPI for the month preceding the expiration of the Term and the denominator of which is the consumer price index for December, 1995. This adjustment shall be determined by using as the CPI the "consumer price index for all urban consumers (CPI -U) U.S. City Average, all Terms" Bureau of Labor Statistics. If the name of the "consumer price index" as described above shall be changed a substituted index shall be used as set forth in Section 2.03 of this Agreement. ARTICLE ('i'Ix' .. -.(NM Discharge of Liens 20.01} 1 # Except for the Leasehold Mortgage, Life Time shall not create or permit to be created or to remain, and shall discharge, any lien, encumbrance or charge, levied on account of any Impositions or any mechanic's, laborer's or materialman's lien or any mortgage, conditional sale, title retention agreement, security interest or chattel mortgage, or otherwise which might be or become a lien, encumbrance or charge upon the Club/Pool Property or any part thereof provided that any Imposition may, after the same becomes a lien on the Club/Pool Property, be paid or contested in accordance with this Agreement and any mechanic's, laborer's or materialman's lien may be discharged in accordance with Section 19fl of this Article (Twenty.1 (N 29:02} 1 Q) If, because of any act or omission of Life Time, any mechanic's lien or other lien, charge or order for the payment of money shall be filed against the Club/Pool Property or the City except as provided herein, Life Time shall, at its own cost and expense cause the same to be discharged of record or bonded within ninety (90) days 33862.11 RNK/JRW:r03/07/98 -40- after written notice from the City to Life Time of the filing thereof; and Life Time shall indemnify and save the City harmless against and from all costs, liabilities, suits, penalties, claims and demands, including reasonable counsel fees, resulting therefrom. Nothing in this Agreement contained shall be deemed or construed in any way as constituting the consent or request of the City, express or implied, by inference or otherwise, to any contractor, subcontractor, laborer or materialman for the performance of any labor or the furnishing of any materials for any specific improvement, alteration to, or repair of the Club/Pool Property or any part thereof or for the demolition or the replacement of the Club/Pool Property or any part thereof. ARTICLE TWENTY{-9NEI Use of Club/Pool Property Life Time may use the Club/Pool Property for the Club/Pool Complex pursuant to the terms and conditions set forth in this Agreement only and for no other purpose. Life Time shall construct, operate, maintain, repair and reconstruct (the latter as provided herein) the Club/Pool Complex in accordance with all applicable zoning and building codes and regulations and the terms and conditions of this Agreement. Life Time shall not use or allow the Club/Pool Property or any part of either to be used or occupied for any unlawful purpose or in violation of any certificate of compliance covering or affecting the use of the Club/Pool Property or any part thereof and shall not suffer any act to be done or any condition to exist on the Club/Pool Property or any part thereof or any article to be brought thereon which may be dangerous, unless safeguarded as required by law, or which may, in law, constitute a nuisance, public or private, or which may make void or voidable any insurance then in force with respect thereto. 33862.11 RNKugw:tO31O71Qe _A 1 _. Life Time shall not do or suffer any waste or damage, disfigurement or injury to the Club/Pool Property, the Club/Pool Complex or any part thereof. ARTICLE TWENTY M Entry on Club/Pool Property by the City I} In addition to the City's right of entry under any other provision of this Agreement, Life Time shall permit the City and {Seheel Distr-iet and their -1t5 authorized representatives to enter the Club/Pool Property or the Club/Pool Complex at all reasonable times for the purpose of (a) inspecting the same and (b) making any necessary repairs thereto and performing any work therein that may be necessary by reason of Life Time's failure to make any such repairs or perform any such work or to commence the same for thirty (30) business days after written notice from the City or Seheel Distfiet 4 without notice in case of an emergency. Nothing herein contained shall create or imply any duty upon the part of the City (ea Sehee' r.st„et1 to make any such repairs or do any such work; and performance thereof by the City [of ebeel Distr-ietj shall not constitute a waiver of Life Time's default in failing to perform the same. 22.021 MM The City {wee}-Distfimay during the progress of any work in the Club/Pool Property or the Club/Pool Complex keep and store therein or elsewhere upon the Club/Pool Property all necessary materials, tools, supplies and equipment. The City shall not be liable for inconvenience, annoyance, disturbance, loss of business or other damage of Life Time by reason of making such repairs or the performance of any such work, or on account of bringing materials, tools, supplies and equipment into or through the Club/Pool Property during the course thereof and the 33862.11 F"K/JRW:rO3i07ree -42- obligations and liabilities of Life Time under this Agreement shall not be affected or released thereby. In making any such repairs or performing any such work, however, the City Seheel--Bistfietj shall proceed with a minimum of inconvenience to the Life Time. ARTICLE TWENTY (THREEI an Indemnification of the City 23.011 (M Notwithstanding any provision to the contrary contained in this Agreement, Life Time shall indemnify and save harmless the City {and-Seheel D } against and from all liabilities, obligations, damages, penalties, claims, costs, orders, charges and expenses, including reasonable architects' and attorneys' fees, which may be imposed upon or incurred by or asserted against the City {and-Sehee4 Distr-ietj by reason of any of the following occurring during the term of this Agreement: a) any work or thing done in, on or about the Club/Pool Property, Club/Pool Complex or any part thereof by Life Time or its employees agents, contractors, licensees or invitees; b) any use, non-use, possession, occupation, condition, operation, maintenance or management of the Club/Pool Complex or Club/Pool Property or any part thereof or any street, avenue, alley, sidewalk, curb, passageway, entrances, or structures, or space adjacent thereto; c) any negligence on the part of Life Time or any of its agents, contractors, servants, employees, licensees, or invitees; d) any accident, injury or damage to any person or property occurring in, on or about the Club/Pool Property or the Club/Pool Complex or any part thereof or 33862.11 RNK t IRW-T, N17I AZ any street, avenue, alley, sidewalk, curb, passageway, entrances; or structures or space adjacent thereto; e) any failure on the part of Life Time to keep, observe and perform any of the terms, covenants, agreements, provisions, conditions or limitations contained in this Agreement on Life Time's part to be kept, observed and performed; or f) Any claim or allegation relating to Life Time's (or Life Time's officers, employees and agents) management or operation of the Club/Pool Complex including, but not limited to, claims or allegations related to violations of Minn. Stat. Chapter 325G (as may be amended); false advertising or other deceptive practices; consumer fraud; civil rights violations; or human rights discrimination claims. 23:021 In case any action or proceeding is brought against the City fer Seheel-D} by reason of any such claim, Life Time upon written notice from the City f er—Seheel Disti-7ietj shall at Life Time's sole cost and expense, including attorneys' fees, resist or defend such action or proceeding by an attorney approved by the City f er-Sehee} 13isti-ietj in writing, such approval not to be unreasonably withheld, but no approval of attorney shall be required in each and every instance where the claim is resisted or defended by an attorney of an insurance carrier obligated so to resist or defend such claim. ARTICLE TWENTY Condemnation 24.011 Q In the event that the Club/Pool Property or part thereof shall be taken in condemnation proceedings or by the exercise of any right of eminent domain, or by appropriation or through private purchase in lieu thereof, the parties to this Agreement shall 33862.11 RNK/JRW:r03/O7/9S -44- attempt to value Life Time's interest in the improvements[, Sehe .; L istfi_t'„ i t • • l7 --'— a va L.JL 111 iJ leaseheld A4 and the City's land value and reversionary interest in the Club/Pool Complex. If agreement is not reached within thirty (30) days after the submission by the parties to each other of a proposed distribution, then any party may request arbitration as hereinafter provided to establish the value of their respective interests under the value premise stated above. In no event shall the amount received by the City be less than the value of the < .. Y ........,, ..:::.;:...............;..:.:. tipex< ":;`'` taken as if it were unencumbered . <...........................,..;........:. PnY e ed by this Agreement and valued at the time of taking. 24021 If at any time during the term of this Agreement title to the whole or materially all of the Club/Pool Property or the Club/Pool Complex shall be taken by the exercise of the right of condemnation or eminent domain or as otherwise provided above, this Agreement shall terminate and expire on the date of such taking. Life Time shall, in all respects, keep, observe and perform all the terms, covenants, agreements, provisions, conditions and limitations of this Agreement on Life Time's part to be kept, observed and performed up to the date of such taking. For purposes of this Article Twenty -{-1 M materially all of the Club/Pool Property or the Club/Pool Complex shall be deemed to have been taken if the portion of the Club/Pool Complex not so taken cannot be so repaired or reconstructed as to constitute a complete structure capable of being operated as a the Club/Pool Complex as required by the terms and conditions of this Agreement. 24.3} M If at any time during the term of this Agreement title to less than the whole or materially all of the Club/Pool Property shall be taken, as aforesaid, this Agreement shall continue and Life Time shall promptly, except for unavoidable delays, at Life Time's expense, and subject to compliance with the provisions of Article 19 of this 33862.11 RNQJRW:g3/07/09 -45- Agreement relative to changes and alterations, restore the Club/Pool Property and the Club/Pool Complex, to the extent as nearly as possible, to the condition and character immediately prior to such partial taking. All of the compensation collected by Life Time pursuant to Section {24.01] of this Agreement, shall be applied and paid over toward the cost of demolition, repair and restoration of such partial taking, substantially in the same manner and subject to the same conditions as those provided in Section 15.02 of this Agreement with respect to insurance and other monies. Any balance of the award or other compensation for such partial taking of the building remaining after payment of such costs of demolition, repair and restoration, as aforesaid, shall be paid over to the Leasehold Mortgage holder, or if there be no Leasehold Mortgage holder, then the balance of the net award shall be paid to Life Time te io Life T.;tt e}s artd the Ctfy's reserve e nfrbuf on a de'd herezn. In the event that the costs of such demolition, repairs and restoration shall exceed the compensation collected, Life Time shall pay the deficiency forthwith. ARTICLE TWENTY Default Provisions 25-011 M The occurrence of any one of the following events shall be considered a default by Life Time entitling the City to exercise any and all remedies set forth herein. a) 33862.11 INK/JHW:r03/07/9G Life Time's sale, assignment, sublease or other transfer of any interest in this Agreement or the Club/Pool Complex{;-emeept for- the Sublease Se'- ' 46- b) Notwithstanding any other provision contained herein, no occurrence of any event specified in this Section -{ 5. hereof or any other breach or default under this {6f--eu se} (ft§@" shall constitute an Event of Default permitting City to exercise any remedies under this ndLease} rirrt unless the subject of said occurrence, breach or default shall constitute a material term or provision of this Agreement and the City shall have given Life Time at least thirty (30) days notice of such occurrence, breach or default and Life Time shall have failed to cure or otherwise correct such occurrence, breach or default within said time, provided that if the occurrence, breach or default is of a nature or kind as to require more than thirty (30) days to cure or correct, City shall not exercise any remedies hereunder provided that Life Time has commenced said cure or correction and is pursuing such cure with reasonable diligence. In the event of a good faith dispute by the parties regarding the existence of such an occurrence, breach or default, such dispute shall be subject to arbitration under Article 26 hereof and during the pendency of such arbitration any notice of an Event of Default given by City to Life Time hereunder shall be deemed tolled until the expiration of ten (10) days after the final decision of the arbitrator. No breach of any obligation of Life Time under Article 2 hereof shall be deemed incurable or not cured as long as Life Time has taken reasonable steps or precautions to assure that said breach shall not occur in the future. No default or breach by Life Time under the Leasehold Mortgage shall constitute an Event of Default hereunder unless the Leasehold Mortgagee shall have 33862.11 RNK/JRW:rO3A7/98 -47- affirmatively commenced the undertaldng of a remedy (other than the mere sending of a notice of default) under the Leasehold Mortgage or related security documents; c) Any material representation or warranty made by Life Time in this Agreement, or in any certificate or document furnished under the terms of, or in conjunction with, this Agreement is untrue, false or misleading. d) Because of action or inaction on the part of the Life Time, construction on the Club/Pool Complex is substantially abandoned, delayed or discontinued for more than thirty (30) days. e) The City determines that the remaining undisbursed Leasehold Mortgage proceeds together with the (Gapitel-Celion's) gt xt j o a z e of the City r"mal-i jet) and Life Time's Capital Contribution, are insufficient to fully pay all of the unpaid costs of the Club/Pool Complex and estimated expenses of completion, and Life Time fails after thirty (30) days written demand to deposit with the title company disbursing the foregoing sufficient funds as may reasonably be required by the City, so as to permit the payment of all such costs and the completion of the Club/Pool Complex. f) Life Time commits waste or allows the Club/Pool Complex to deteriorate. g) Life Time fails to keep the Club/Pool Complex insured as required by the terms of this Agreement. 33862.11 r"K/JRW:ro3i07/Ve -48- h) The institution of any proceeding against Life Time, or/any officer or director of Life Time for which the potential penalty is forfeiture of the Club/Pool Complex, any portion thereof or any other assets. i) Lifetime applies for, or consent in writing to, the appointment of a receiver, trustee, or liquidator of Life Time or of all or substantially all of Life Time's assets; 0) Life Time files a voluntary petition in bankruptcy, or, admits in writing of its inability to pay its debts as they become due; k) Life Time makes a general assignment for the benefit of creditors; 1) Life Time files a petition or an answer seeking reorganization or arrangement with creditors or to take advantage of any insolvency law; or m) If an order, judgment or decree shall be entered by any court of competent jurisdiction on the application of a creditor adjudicating Life Time a bankrupt or insolvent. 25.02} M No failure by the City to insist upon the strict performance of any term, covenant, agreement, provisions, condition or limitation of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute a waiver of any such breach or of such term, covenant, agreement, provision, condition or limitation. No term, covenant, agreement, provision, condition or limitation of this Agreement to be kept, observed or performed by Life Time, and no breach thereof, shall be waived, altered or modified except by a written instrument executed by the City. No waiver of any breach shall affect or alter this Agreement, but each and every term, covenant, agreement, 33862.11 RNK/JRW;rO3/07/68 -49- provision, condition and limitation of this Agreement shall continue in full force and effect with respect to any other then existing or subsequent breach thereof. 25.03) (M Upon the occurrence of any Event of Default this Agreement shall be terminated and the City shall be entitled to possession of the Club/Pool Property, and all improvements, fixtures, furnishings and equipment. At its sole discretion, the City may exercise any and all other remedies at law or equity allowed in lieu of or in addition to its contractual right to terminate the Agreement. 29.04 If this Agreement is terminated as provided in Artiele 25.03 then (1*46r4he remainder of what would have been the term ef the Lease, and (2) so long as the City owns the Club/Pool Propei4y, the Seheel Distr-iet Use Covenant and Sublease Sha survive. Under sueh eireunistenees, the Sehool Distriet shan Make --fits to the City for its share of the eest ef operation and maintenanee of the GlubiR 01 Gemplex as agreed by the City and Sehael Distriet or in the event of a dispute, by an arbitrater seleeted in aeeer-danee with AAiele 26.01. If the City sells the Club/Poe Property prior to what would have beeit the end of the term of this Agreetnent and the Sublease, the preeeeds &em sueh sale shaH be divided as Mew• ("W" W) AU eneumbr-anees agaheGu•PU.. ..a bti /oolopey saReased%t 33862.11 FNK/JRW:r03/O7/96 -50- Except as provided in Section {26921any dispute arising out of this Agreement shall be submitted to binding arbitration through the American Arbitration Association. Arbitration shall be conducted in accordance with the Rules of Commercial Arbitration. In the event either or both parties to this lease apply to the arbitrator, all parties shall be bound by, comply with, and perform and fulfill the final award or finding, without recourse to any other court of tribunal except as is necessary to enforce the final award in accordance with the Minnesota Laws on arbitration. This arbitration clause shall not apply if the City declares that an event of default has occurred and seeks to terminate this Agreement and recover the Club/Pool Property. In such an event, the City shall have the right to initiate action in the appropriate court without any duty to arbitrate. ARTICLE TWENTY -{SE} M Notices All notices required under the terms of this Agreement shall be deemed to have been properly served or given three (3) days after their deposit in the United States mail if sent by registered or certified mail, return receipt requested, postage prepaid or two (2) days after deposit in a nationally recognized overnight courier service, addressed to Life Time or the City at the address set forth below; to Life Time: 33862.11 fW K/JRW: r031O7/Qa —51— Suite 275 6442 City West Parkway Eden Prairie, MN 55344 to the City: 3400 Plymouth Boulevard Plymouth, MN 55447 or to such other address within the continental limits of the United States and to the attention of such party as the parties may from time to time designate by written notice to the other. ARTICLE TWENTY (EIGHT) ( Miscellaneous No third party is entitled in any way to rely upon any provision in this Agreement. This Agreement is intended solely for the benefit of Life Time{;} the City land the Seheel Distfietj and no third party shall have any rights or interest in any provision of this Agreement, or as a result of any action or inaction of the City in connection therewith. 128.021 . The exhibits attached to this Agreement are considered an integral part of it as if fully set forth within it. 28-031 . All prior understandings, letters of intent, discussions and agreements are merged in the governing terms of this Agreement, which is a complete and final written expressions of the intent of the parties. This Agreement may be amended only pursuant to the terms of an exhibit, if attached and executed for that purpose, or by a 33862.11 RNV/JFtW:Mt07/96 -52- separately signed writing between the parties. This Agreement may not be amended or modified orally. 28-041 OW Section headings are for the convenience of reference only, and shall not govern the interpretation of any provisions. 28-05} ........ ........ Time is of the essence of this Agreement. 28.06} UM The invalidity, illegality or unenforceability of any provision of this Agreement or any other document executed in connection with this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement. f-28-071 The parties agree that nothing contained in this Agreement is intended or shall be construed to establish the parties as joint venturers or partners. 28.081(M.' . This Agreement has been freely negotiated. This Agreement shall not be construed against the drafter. This Agreement shall be liberally construed to protect the public interest and any ambiguities shall be resolved in favor of the City 4and AR-TIGLE TWENTY NINEI Gentingeneiesf 29 ....................... 01 This Agf-eefnent is subjeet t. t 33662.11 INK/JRW:rO3/07/96 -53- M. w{{:.... ;. :q, r :..h.:; ry;. ..;..::,..: y{:....i,v:::?<•'i ::i4}Y.::.,:..;??^:x: •:i:i?:i•i:?O}y:i•iii:i,i"bi::.{{:-.•:.}:ixxi: +:3:^.:d^?:MS':.i%•:x, JF.:x,+{ryv,;:,{.v.}x:iv: 'O:hb:yw;xvn}; Y..:;''i<' C# << ...:d. ,UTi;'sob h rts••ni[l r .. .: +: -st Wit. a the following conditions: a) The City's approval of any necessary amendments to its comprehensive plan and zoning ordinance, zoning and subdivision approval, and all other necessary City approval including variance and conditional use permits M. b) The City and Life Time obtaining any other necessary permits from other public regulatory entities necessary to carry out the terms of this Agreement i:::::::>:>;;::;: :........::>::..:: ?>..:..,::wsrh>::: xi:i::.::::.:>.dtss1 :x' '•'+''•',aaacr: iii•.;::..:{;S:';:+..;::<}i:;i:±;'ii:iii:'i•:::Yui::.:::';:>:;::i:;'t:is i::•'.';:;:•,.::},`..:.iSi't:<;; }i••Y.Ch%riiy rgw.;Y •{:i"{;:np..v: .., .ty. i+ '<:i"': •:j;:yy4:}::2:i: iiii:iiiiiii:.iii iii:::i o'iiii':i.:ii iiiii..... ':: iiiiii::::::::.::::::::::.::. .::::::. ::::.... :::::::::::::. -::::::::::::. iii?.:.:i.'.1'tii: iii;:ii:::; Y ii:': ti;::::;:?;:;:;: t : .. d c oc 1 sct tex n u to tirs<'::::.-:;<.:.roti:.>....::.:.::::. nx••••.;.-v-;nw:,xvxx:y}v:;n};;:.a;.}}}:S;<:ii :in;.,}yy:n:n; ;{;r{::.}};: },wr}xi:i}i:y};.}:LLni:?iiy ::•n::v:.yvx: •: i:;i}•;:'?:?:ivi.•ii:•:)"'ii}yi:•i::iii:;:i{ti :i:;i{.`xni}}}:}•}ice:?• y: :: •ry.:: }}iv, ans::;:o.r.::'vwved Y........::..............................::..:::.:::.:::::.::::..................:................. ......... :............................ c::.. ate c fied Bch Vit, ri c r t.g nc s art not wa e;:orulfille x this u ..... an.... vim. IN TESTIMONY WHEREOF, as of the day and year first hereinabove written the parties have executed this Agreement. 33862.11 RNK/JRW:r03/O7/98 -54- CITY OF PLYMOUTH SEAL) AND Joycelyn Tierney, Mayor Dwight Johnson, City Manager FCA LTD., doing business as LIFE TIME FITNESS BY: Its AND _ Its STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of 1996, by Joycelyn Tierney and by Dwight Johnson, respectively the Mayor and City Manager of the City of Plymouth, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its City Council. Notary Public 33862.11 RNK/JRW:r03/07/98 _55e STATE OF MINNESOTA ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of 1996) by and the and of FCA Ltd Fitness, on behalf of said corporation. 33862.11 RNK/JRW:iO3/07/66 a Minnesota corporation, doing business as Life Time Notary Public 56- w T! wournPAPIRM ATTACH EXHIBIT " - ICE ARENA COMPLEX CITY OWNED UNDEVELOPED PARCEL CLUB/POOL COMPLEX PARKING LOT PROPERTY CLUB/POOL PROPERTY COMMON WALL COVENANT RECIPROCAL PARKING AND ACCESS AGREEMENT NON-EXCLUSIVE PARKING EASEMENT 33862.11 rwwJmv:b3ro7roe -57- GROUND LEASE and DEVELOPMENT AGREEMENT between CITY OF PLYMOUTH, MINNESOTA and FCA, LTD, d/b/a LIFE TIME FITNESS fl 33862.11 twa/JRW:r03ro7f68 TABLE OF CONTENTS Page Recitals....................................... 1 Definitions ..................................... 2 Article One - Lease of Property ........................ 4 Article Two - City Residential Use Covenants and Minimum Operational Standards 4 Article Three - Use of Property - Site Development and Construction of Club/Pool Complex ................... 10 Article Four - Construction Disbursement .................. 12 Article Five - Permitted Leasehold Mortgage ................ 15 Article Six - Parking Lot ............................ 16 Article Seven - Covered Walkway and Common Wall Agreement ............................ 17 Article Eight - Name of Complex and Signage ............... 18 Article Nine - City's Right of First Refusal ................. 18 Article Ten - Life Time Option to Purchase ................. 19 Article Eleven - Payment of Taxes and Other Impositions ......................... . ....... 20 Article Twelve - Surrender ............................ 21 Article Thirteen - Insurance ........................... 23 Article Fourteen - Use of Insurance Proceeds ................ 26 33862.11 RNK/JRW:,03/07/08 1 Article Fifteen - City's Right to Perform Life Time's Covenants ............................. 27 Article Sixteen - Repairs and Maintenance of the Club/Pool Property .............................. 30 Article Seventeen - Compliance with Laws, Ordinances and Regulations ........................... 31 Article Eighteen - Changes and Alterations ................. 32 Article Nineteen - Discharge of Liens ..................... 34 Article Twenty - Use of Club/Pool Property ................. 36 Article Twenty -One - Entry on Club/Pool Property by the City ..... 36 Article Twenty -Two - Indemnification of the City ............. 37 Article Twenty -Three - Condemnation .................... 39 Article Twenty -Four - Default Provisions .................. 41 Article Twenty -Five - Arbitration ....................... 44 Article Twenty -Six - Notices .......................... 45 Article Twenty -Seven - Miscellaneous .................... 45 Article Twenty -Eight - Contingencies ..................... 47 33862.11 11RNK/JRW:x03/07/98 11 AGREEMENT dated this day of March, 1996 by and between the CITY OF PLYMOUTH, a Minnesota municipal corporation, as Lessor and hereinafter referred to as the "City," and FCA, LTD., a Minnesota corporation, doing business as LIFE TIME FITNESS, having its principal office and place of business at Suite 275, 6442 City West Parkway, Eden Prairie, MN 55344, as Lessee and hereinafter referred to as "Life Time". RECITALS The City owns property near 36th Avenue and Plymouth Boulevard which it is developing in conjunction with Life Time into a recreational center ("Recreation Center Property"). The Recreation Center Property shall be subdivided into four parcels: (1) the Ice Arena parcel which the City is developing into an indoor ice arena ("Ice Arena Complex"); 2) a parcel which Life Time is developing into a combined Fitness Center and swimming and diving complex ("Club/Pool Complex"); (3) the City -owned parking lot parcel ("Parking Lot"); and (4) a City -owned parcel ("City Owned Undeveloped Parcel"). The City is leasing to Life Time the property upon which the Club/Pool Complex shall be developed pursuant to this Agreement. The City is contributing $2.6 million toward the cost of tenant improvements for the Club/Pool Complex and site work in exchange for the covenants and agreement set forth herein as an inducement for Life Time to locate, construct, and operate its health club business in the City of Plymouth City Center and in order to induce Life Time to construct an operating facility larger than its normal health club, including two additional leisure pools and a competition pool. 33862.11 RNK/JRW:r03/07/98 _ 1 This agreement ("Agreement") sets forth the rights and obligations of the parties, their successors and assigns, relating to the lease of the Club/Pool Property (as defined below) to Life Time by the City, the construction and operation of the Club/Pool Complex. NOW, THEREFORE, the parties agree as follows: 1. "Agreement" shall mean this Ground Lease and Development Agreement. 2. "Contribution" shall mean the cash contribution of the City in the amount of 2.6 million, and the cash contribution of Life Time in the amount of $500,000.00 disbursed pursuant to Article Five of this Agreement. 3. "City" shall mean the City of Plymouth, a municipal corporation under the laws of Minnesota. 4. "City Residential Use Covenants and Minimum Operation Standards" shall mean the covenants and standards as described in Article Two of this Agreement. 5. "City Owned Undeveloped Parcel" shall mean the real property described on Exhibit " of 6. "Club/Pool Complex" shall mean all improvements located upon the real property described on Exhibit "_" attached hereto. 7. "Club/Pool Property" shall mean the real property described on Exhibit " " attached hereto. 8. "Daily Rates" shall mean the fees charged by Life Time to Plymouth residents for use of the Club/Pool Complex as described in Article 2.02 of this Agreement. 9. "Family Hours" shall mean hours when children under age 13 may use the Club/Pool Complex. Family hours during the first 12 months the Club/Pool Complex is open shall be at least: 33862.11 RNK/JRW:r03107/9e —2— Sunday 8:00 AM - 4:00 PM Monday 12 Noon - 2:30 PM Tuesday 12 Noon - 2:30 PM and 6:00 PM - 8:00 PM Wednesday 12 Noon - 2:30 PM Thursday 12 Noon - 2:30 PM Friday 8:00 AM - 4:00 PM Saturday 2:00 PM - 8:00 PM Outdoor Pool (in season) Monday - Saturday 10:00 AM - 5:00 PM Family hours may be adjusted by agreement between the City and Life Time. 10. "Ice Arena Complex" shall mean the real property and its improvements described on Exhibit " " attached hereto. 11. "Impositions" shall mean the obligations and charges described in Article Twelve of this Agreement. 12. "Leasehold Mortgage" shall mean the mortgage described in Article Six of this Agreement. 13. "Life Time" shall mean FCA Ltd., a Minnesota corporation, doing business as Life Time Fitness. 14. "Parking Lot" shall mean the real property and improvements described on Exhibit " " attached hereto. 15. "Recreation Center Property" shall mean the combination of the Parking Lot, Club/Pool Property, Ice Arena Complex and the City Owned Parcel. 33862.11 RNK/JRW:r03/07/66 -3- ARTICLE ONE Lease of Property 1.01 Lease. The City hereby leases to Life Time the Club/Pool property located at 36th Avenue and Plymouth Boulevard in the City of Plymouth, Hennepin County, Minnesota hereinafter "Club/Pool Property"). 1.02 Term. The lease shall be for a term of forty (40) years commencing on April 1, 1996, and expiring on March 31, 2036. 1.03 Consideration. As consideration for the tenant improvement allowance of the City for the Club/Pool Complex building, site improvements by the City and this Agreement, the Club/Pool Complex shall be subject to, and Life Time, its successors and assigns, shall be bound by, during the term of this Agreement, the "City Residential Use Covenants and Minimum Operational Standards" set forth in Article Two herein and the other terms and conditions of this Ground Lease. ARTICLE TWO City Residential Use Covenants and Minimum Operational Standards 2.01 The "Residential Use Covenants and Minimum Operational Standards" set forth below are an integral part of the consideration of the City leasing the Club/Pool Property to Life Time and the City making the City's Contribution toward the cost and construction of the Club/Pool Complex. Without the Residential Use Covenants and Minimum Operational Standards, the City would not lease the Club/Pool Property to Life Time and agree to the other obligations herein. 33862.11 RNK/JRW:r03/O7/96 -4- 2.02 The Club/Pool Complex shall be available to all Plymouth residents, at the corresponding rates per person for a period of one year commencing on the date the Club/Pool Complex opens: a) Adults b) Second Adult Family Member or Child ages 13 through 17 C) Under 13 d) Daycare (Parent must remain on Club/Pool Property while child is in Daycare) Rate 8.00 ($6.00 pool use only) (daily) 5.00 (daily) 3.00 (daily) 2.00 per child for two (2) hours e) Life Time shall offer a summer pool rate to be determined pass similar to other public outdoor by the City pools once Life Time has obtained a membership base of 10,000 members. A resident of the City of Plymouth is not required to be a member of Life Time Fitness to use the Club/Pool Complex under the Daily Rate structure. For the period of one (1) year following the opening for business of the Club/Pool Complex, persons aged 13 and under of members of Life Time Fitness shall not be charged a separate initiation fee and, when accompanied by their parent or legal guardian, shall have admission to the Club/Pool Complex without separate charge or payment of dues during family hours and subject to age limitations on the use of the Club/Pool Complex applicable to children and families generally during family hour. 2.03 Effective March 1 of each year of this Agreement commencing March 1, 1998, the Rates set forth in Section 2.02 shall be subject to a maximum adjustment for inflation. The adjustment formula is: the applicable Daily Rate shall be multiplied by a 33862.11 RNK/JRW:r03/07/88 -5- fraction, the numerator of which is the Consumer Price Index for December of the preceding year and the denominator of which is the CPI for December of 1995. This formula is expressed by the following numerical example which is designed to demonstrate the January 1, 1998 estimated adjustment: Applicable (CPI Dec. 1997) Daily Rate x (CPI Dec. 1995) = New 1998 Daily Rate This annual adjustment shall be determined by using as the CPI the "Consumer Price Index for all Urban Consumers (CPI -U) U.S. City Average, All Items," published by the Bureau of Labor Statistics. If the name of the aforesaid "Consumer Price Index" as described above shall be changed, or a similar index substituted for the aforesaid index by the United States Government, the substituted index shall be used by the City and Life Time in determining the adjustment. Should the publication of the "Consumer Price Index" be discontinued by the Bureau of Labor Statistics, U.S. Department of Labor, then the parties by agreement shall substitute a comparable index. Daily rates may not, however, be adjusted a higher percentage than the percentage adjustment Life Time makes to the monthly membership fee for a single person which is currently $29.00 per month. If Life Time enters into an agreement with another City in Minnesota in which Daily Rates, pass rates, or initiation fees are established, the rates in this Agreement may, at the City's discretion, be adjusted so that each rate under this Agreement is no higher than such other rates. 33862.11 RNK/JRW:.03/07/Q8 -6- 2.04 Any person who is a resident of the City at the time they choose to become a member of Life Time shall be given a fifteen percent (15%) discount off of the lowest membership initiation fee then available to the public at any club owned or operated by Life Time. Life Time shall inform all eligible residents of their right to this discount. The initial initiation fees and sale of memberships to Plymouth residents shall be at the prices set forth below. This price shall be available for at least the 90 -day period prior to the Club/Pool Complex opening. Initiation Fee Monthly Membership Fee Rate guaranteed for 12 months) Single Person $125 29 per month Two People $210 49 per month Three People $295 69 per month Four People $380 69 per month 85.00 for each additional Person) 2.05 The use of the Club/Pool Complex by Plymouth residents shall be subject to the same rules, regulations, conditions and limitations of usage as all regular Life Time members, including requirements for written parental consent on file for anyone under the age of 18. 2.06 Except as otherwise expressly provided in this Agreement, Life Time shall not discriminate between Plymouth residents paying the Daily Rate and Life Time members with respect to the use of the facilities, provisions of services, reservation rights, and daycare services. 2.07 The Club/Pool Complex shall be open and operating at a minimum daily from 5:00 a.m. to 11:00 p.m., except for partial daily hours on five holidays. Certain non -athletic services provided in the Club/Pool Complex (e.g. daycare services, massage services) may 33862.11 FWK/Jnw:,W/0719e —7— be limited as reasonably determined by Life Time. The limitation of certain services shall only be based on the lack of demand for such services. 2.08 Life Time shall provide lifeguards for the leisure pools and the outdoor pool as part of Life Time's operation of the Pool/Club Complex. Lifeguards shall be on duty during all Family Hours. 2.09 (reserved) 2.10 The Ice Arena shall be available without additional fees to Life Time members during public skating hours. 2.11 The City and Life Time shall establish procedures to handle complaints regarding the operation of the Club/Pool Complex including, but not limited to complaints relating to the "Residential Use Covenants and Minimum Operational Standards". Life Time shall promptly furnish the City with a copy of all written complaints it receives. The City and Life Time shall meet at least quarterly to discuss all matters relating to this Agreement and the operation of the Club/Pool Complex. Life Time shall provide quality customer service equal to or exceeding the level of serviced provided by Life Time to its customers in 1996. 2.12 All pools shall be maintained and repaired by Life Time and must maintain and pass public health standards at all times. 2.13 The temperature of the pool water in the leisure and outdoor pools must be approved by the City and shall be 85 degrees (plus or minus one degree). 2.14 The Club/Pool Complex must meet all OSHA standards. 2.15 The Club/Pool Complex must meet all fire codes and may be inspected by the City for compliance. 33862.11 RNK/JRW:r03/07/88 -8- 2.16 The Club/Pool Complex must meet all Americans With Disabilities Act requirements for public buildings. Life Time shall make reasonable efforts as determined by the City to work with persons with disabilities. 2.17 Subject to time availability, the City may rent the pools for its exclusive use for swimming lessons at times selected by the City at market rates offered by facilities in the Twin City Metropolitan Area. 2.18 Within sixty (60) days of the opening of the Club/Pool Complex, Life Time shall provide a senior rate, age 60 and above, for swimming acceptable to the City for Plymouth residents which includes a reduced initiation fee. 2.19 Within sixty (60) days of the opening of the Club/Pool Complex, Life Time shall provide a program satisfactory to the City allowing low income residents of the City access to the Club/Pool Complex. The City may purchase from Life Time up to 500 daily passes per calendar year for children under age 13 and up to 200 daily passes per calendar year for children age 13 through 17. The purchase price shall be two-thirds of the otherwise applicable Daily Rate for Plymouth residents. 2.20 Life Time shall cooperate with the City Park and Recreation Department on two jointly sponsored community events per year. Life Time shall cooperate with the City's Park and Recreation Department and the School District on joint programming. 2.21 The City may have bulletin board display space in the Club without charge to the City. 2.22 No membership cap shall apply to Plymouth residents. 33862.11 INK/JRW:rO3/O7/9B -9- ARTICLE THREE Use of Property - Site Development and Leasehold Improvements of Club/Pool Complex 3.01 Life Time Fitness shall design, construct, own, market and operate the Club/Pool Complex on the Club/Pool Property in accordance with the provisions of this Agreement. The parking area constructed upon the Parking Lot shall service the Recreation Center Property without cost to any user of the Club/Pool Complex under this Agreement. Construction shall commence no later than September 1, 1996 and shall be completed no later than September 1, 1997. 3.02 The Club/Pool Complex which includes the fitness center, 25 yard competition 8 -lane pool, diving pool, indoor leisure pool with waterslide and other play features, whirlpool and outdoor leisure pool with waterslide shall be constructed and equipped by Life Time, at its cost, in accordance with the following plans and specifications: (identify plans and specs). 3.03 Life Time shall pay for the cost of all site lighting for the Parking Lot parcel, the parking lot construction including sub -base, gravel base, bituminous surfacing, storm sewers, NURP pond construction (except grading), outdoor signage, concrete curb and gutter and striping. 3.04 The City shall be responsible for the following site work for the Club/Pool Property: traffic circle on Plymouth Boulevard and 36th Avenue, wetland mitigation or reclamation, site fencing, landscaping and irrigation. Life Time shall be responsible for the following site work for the Club/Pool Property and Parking Lot: site clearing, grading, sub - 33862.11 RNK/JRW:M/07/96 _10- base for the Parking Lot, grading and excavation for a NURP pond, drain lines, sanitary sewer and watermains to the Club/Pool Complex. Prior to constructing the Club/Pool Complex on the Club/Pool Property, Life Time shall perform an inspection. The City makes no express or implied warranties concerning the site work. 3.05 The City shall separately contract for civil site engineering services for the Recreation Center property. The City shall pay the civil site engineering costs relating to the NURP pond and wetland mitigation. All other civil site engineering costs shall be apportioned in accordance with the construction costs identified in paragraphs 4.03 and 4.04 above. 3.06 All site work for the Club/Pool Property and Parking Lot shall be in accordance with the following plans and specifications: (identify site plans) 3.07 Life Time shall construct at its cost the Club/Pool Complex in accordance with the following plans and specifications: (identify). All material change orders relating to or affecting the design and features of the Club/Pool Complex must be approved by the City in writing, which approval shall not be unreasonably withheld. 3.08 The City shall advertise for bids and award the construction contract for the Ice Arena Complex according to applicable law if the bids are satisfactory to the City. 3.09 The City shall contribute $2.6 million toward the cost of improvements to the Club/Pool Complex. Life Time shall be solely responsible for all costs in excess of the sums contributed by the City, including but not limited to financing, all administrative, architectural, engineering, construction management, surveying and legal costs, but excluding any City staff time or City attorney expense. 33862.11 RNK/JRW:r03/07/98 ' 11 3. 10 The Club/Pool Complex shall not open for business prior to completion of the Ice Arena Complex, unless significant unforeseen circumstances as reasonably determined by the City cause the Ice Arena Project to be delayed. 3.11 Life Time shall pay permit fees, sewer availability charges ("SAC" fees), and City sewer and water connection charges associated with the Club/Pool Property and Club/Pool Complex. ARTICLE FOUR Construction Disbursement 4.01 All monies to be deposited by the City ($2.6 million) and Life Time 500,000.00) in connection with improvements to the Club/Pool Complex on the Club/Pool Property and other site work shall be disbursed by a title company approved by the City in accordance with a disbursement agreement acceptable to the City and Life Time. Any interest on money deposited by the City shall be turned over to the City before a certificate of occupancy is issued for the Club/Pool Complex. Life Time shall pay all charges imposed by the title company. 4.02 No portion of the Contribution of the City shall be advanced and deposited with the title company as provided herein until the following documents are received or the following conditions are met: a. A 1987 ALTA form of mortgagee title insurance policy from a company and agent acceptable to the City which policy (the "Title Policy") shall, prior to or contemporaneously with the first advance: (i) insure the priority and sufficiency of any Leasehold Mortgage placed upon the property pursuant to Article Six herein as a first lien upon the Club/Pool Property; (ii) show all 33862.11 - 12- RNK/JRW:,03107/89 easements or other matters affecting the Club/Pool Property, all subject only to such exceptions or qualifications as are acceptable to the City; (iii) insure unconditionally against all possible contractors', suppliers' and mechanics' lien claims; (iv) contain any endorsements or assurances that the City may reasonably request for protection of its interests, including but not limited to pending disbursement and interim mechanic's lien endorsement. b. The disbursement agreement described in Section 5.01 is fully executed. C. Evidence of insurance as required by this Agreement is received and approved by the City. d. A written opinion by a third party attorney acceptable to the City, covering such matters as the City deems necessary, including, without limitation, statements of opinion to the effect that: 1. Life Time is a legal entity duly created in accordance with and in a condition of good standing under the laws of the state of its formation, with full authority to transact business in Minnesota. 2. The execution and delivery of this Agreement and the Leasehold Mortgage and the completion and operation of all improvements, does not violate, conflict with, or constitute a default under any terms of the Life Time's formative documents, or any mortgage, indenture, lease, agreement, license, permit, judgment, decree, order, statute, ordinance, rule or regulation to which Life Time is subject or bound. 3. There is no pending litigation or judgment entered of record against Life Time or directly related affiliates. 33862.11 RNK/JRW:,03fO7,V6 -13- 4. Life Time shall pay for the cost of such written opinion. e. A Sworn Construction Statement in a form acceptable to the City and to the title company, indicating the total costs for actual or estimated construction and development of the Club/Pool Complex that will or have been incurred by Life Time and containing line items and amounts as required by the City. f. A contract between Life Time and a general contractor acceptable to the City with a guaranteed maximum cost for construction of the Club/Pool Complex, and accompanied by copies of all subcontracts thereunder. g. A contract between Life Time and the architect designing the Club/Pool Complex, together with acknowledged collateral assignments of the Life Time's interest in the Plans and Specifications to the City. The assignment to City as required in this section shall be subordinate to a prior assignment in favor of the holder of the Leasehold Mortgage. h. A building construction schedule acceptable to the City. i. A certification from the Architect stating that the Plans and Specifications are complete in all respects and contain all details requisite for construction of the Club/Pool Complex which , when built in accordance therewith, shall comply with all zoning and building codes, laws, ordinances and regulations. j. Life Time's deposit with the title company of sufficient funds to complete the construction of the Club/Pool Complex and Life Time's share of site improvement and engineering costs. k. Life Time's deposit of the debt service escrow with the City pursuant to Section 6.06. 33862.11 MK/JNW:103/07/98 -14- 1. A loan commitment in form and content acceptable to City and School District. 4.03 The requirement of this Article satisfies the requirements of the City's Zoning Ordinance for financial security to guaranty the completion of extension amenities and of the City's subdivision ordinance for a development agreement. ARTICLE FIVE Permitted Leasehold Mortgage 5.01 Life Time may place a mortgage upon the Club/Pool Complex in an amount which shall not exceed $4 million or such higher amount as the City shall approve, which approval shall not be unreasonably withheld ("Leasehold Mortgage"). The mortgage is for the sole purpose of securing construction and subsequent permanent financing for Life Time's share of the cost of constructing the Club/Pool Complex. 5.02 The Indebtedness secured by the Leasehold Mortgage shall be amortized over a period of thirty years or less. Life Time may refinance the indebtedness secured by the mortgage provided the amount of the remaining principal balance is not increased and the new debt is not amortized for a period of time extending beyond thirty (30) years. 5.03 Any mortgage allowable hereunder shall contain a provision which requires that the City receive notice of default and opportunity to cure rights from the mortgagee. 5.04 Life Time shall not secure any additional debt with the Club/Pool Complex without the prior written consent of the City. 5.05 The City shall subordinate its fee interest and interest under this Agreement in the Club/Pool Complex to the leasehold mortgage and shall execute a subordination agreement if required by the Leasehold Mortgage. 33862.11 RNK1JRW:r03/07189 -15- 5.06 Life Time shall deposit with the City an amount equal to four months of debt service on the Leasehold Mortgage to be placed upon the Club/Pool Property by Life Time as permitted herein. The funds are to be held in escrow by the City and used by the City, at its option, to cure any default under the leasehold mortgage. Accrued interest on the escrow funds, shall be paid on a quarterly basis to Life Time. ARTICLE SIX Parking Lot 6.01 Life Time and any successor to Life Time occupying the Club/Pool Complex is hereby granted a non-exclusive perpetual easement in and to the Parking Lot for the purpose of customer and employee parking. The Parking Lot shall contain a minimum of 670 improved parking spaces to be used by users of the Club/Pool Property and shall be constructed by Life Time in accordance with the site plans and specifications identified in Section 6.02 Prior to the first construction disbursement, a non-exclusive parking easement in the form attached hereto as Exhibit " Property. shall be filed against the Recreation Center 6.03 The City at its cost shall provide snow and ice control for the Parking Lot and maintain the landscaping including the lawn irrigation system. All other repairs and maintenance of the Parking Lot shall be performed by Life Time, with the costs shared equally by Life Time and the City. Life Time shall be solely responsible for the repair, maintenance, replacement and energy cost for the parking lot lighting. 33862.11 R"K/JRW;rG3/07/96 -16- ARTICLE SEVEN Covered Walkway and Common Wall Agreement 7.01 A temperature -controlled enclosed walkway shall be constructed alongside and connecting the Ice Arena Complex and the Club/Pool Complex. Life Time and the City shall grant to the other a reciprocal easement for pedestrian passage to and from the respective facilities via the enclosed walkway in the form depicted on Exhibit "_". The City shall have the option at the City's expense to extend the enclosed walkway to abutting property owned by the City. 7.02 Each party shall be responsible for the costs of operation and maintenance of the covered walkway located on their respective parcels. 7.03 The wall between the Ice Arena Complex and the Club/Pool Complex is a common wall. The parties respective rights and obligations pertaining to the wall are as follows: a. The cost of designing and constructing the common wall shall be paid for fifty percent (50%) by Life Time and fifty percent (50%) by the City. b. A common wall covenant to be recorded against the title to the Club/Pool Property is attached hereto as Exhibit " ". 7.04 The City may in the future construct an additional building abutting the Club/Pool Complex. The same terms as specified above shall be applied to the common wall. 33862.11 RNKMRW:r03/O7/96 -17- ARTICLE EIGHT Name of Complex and Signage 8.01 The name of the Recreation Center Property shall be selected by the City, but it shall include a reference to Life Time. The name of Life Time Fitness Club shall be included on signage near the main entrance to the property in accordance with the plans and specifications identified in Section 4.07. The City reserves the right to alter the signage configuration so long as the visibility of the Life Time Fitness Center sign is not unreasonably impaired. ARTICLE NINE The City's Right of First Refusal 9.01 For a period ending five (5) years after the Club/Pool Complex opens for business, Life Time may not sell or assign its interest under this Agreement or sell or assign the Club/Pool Complex except as provided herein. Life Time may sell its interest under this Agreement at any time during the first five years after the Club/Pool Complex opens for business, if Life Time pays the City $500,000 if the sale occurs within one year after the Club/Pool Complex opens for business, $400,000 if the sale occurs within two (2) years after the opening, $300,000 if the sale occurs within three (3) years after opening, $200,000 if the sale occurs within four (4) years of opening, or $100,000 if the sale occurs more than four 4) years after opening but less than five (5) years after opening. In addition, if Life Time receives a bona fide offer from any entity to acquire Life Time's interest under this Agreement which Life Time intends to accept, Life Time shall notify the City by sending to the City a copy of the proposed contract and notify the City of Life Time's intention to accept such offer. The City shall have the right within ninety (90) days after receipt of the 33862.11 RNK/JRW:,031O7t96 -18- notice from Life Time to accept the terms of such contract to purchase, assignment or sublease in its own name, or in the name of a nominee, and on the terms specified in the proposed contract. If the City does not exercise its right of first refusal by sending Life Time notice within such ninety -day period, Life Time may then sell, assign or sublease its rights to the Club/Pool Complex to the entity who made the bona fide offer provided that such sale, assignment or sublease is on the same terms and conditions, as set forth in proposed contract. ARTICLE TEN Life Time Option to Purchase 10.01 Life Time shall have the right at the expiration of the term and only at the expiration of the term of this Agreement to purchase the Club/Pool Property by paying to the City the sum of One Hundred Thousand Dollars ($100,000.00) ("Purchase Price"). Life Time shall give the City one hundred twenty (120) days notice of Life Time's intention to exercise its right to purchase the Club/Pool Complex and shall pay the Purchase Price to the City on the expiration date of this Agreement. Life Time shall not have the right to purchase the Club/Pool Property if there has been a default under the terms of this Agreement and the default exists at the time this Agreement terminates. 10.02 The City shall, upon payment of the Purchase Price, deliver to Life Time a limited warranty deed conveying title to the Club Pool Property subject to all encumbrances, liens, restrictions, covenants, and easements contemplated by this Agreement. 33862.11 - 19- RNK/JRW:r03/07/6E ARTICLE ELEVEN Payment of Taxes and Other Impositions 11.01 Life Time shall pay or cause to be paid (except as provided in Section 12.02), before any fine, penalty, interest or cost may be added thereto, all real estate taxes, assessments, water and other public utility charges and all other charges or burdens whatsoever kind and nature, which at any time prior to or during the term of this Agreement may have been, or may be assessed, levied, confirmed, imposed upon, or grow or become a lien on, the Club/Pool Property or any part thereof, or any appurtenance thereto, or the rent of income received from subtenants or licensees, or any use or occupancy of the Leased Club/Pool Property, or such rights, obligations, easements, and franchises as may now or hereafter be appurtenant, or appertain, to the use of the Club/Pool Property, all of which charges are hereinafter referred to as "Impositions." 11.02 Life Time shall pay any Impositions which are incurred or accrue prior to the date of execution of this Agreement to the extent such imposition is a direct or indirect result of action taken by the Life Time with respect to the construction of the Club/Pool Complex. 11.03 Life Time shall be responsible for the payable 1996 real estate taxes and installments for special assessments and for every year thereafter during the term of this Agreement. 11.04 An Imposition relating to a fiscal period of the taxing authority, a part of which period is included within the term of this Agreement and a part of which is included in a period of time after the expiration of the term of this Agreement, shall, whether or not such imposition shall be assessed, levied, confirmed, imposed upon or in respect of or become a lien upon the Club/Pool Property, or shall become payable, during the term of this 33862.11 _ 20_ FNK/JFW:N3/07/88 Agreement, be adjusted between the City and Life Time as of the expiration of the term of this Agreement, so that Life Time shall pay that portion of such imposition which that part of such fiscal period included in the period of time before the expiration of the term of this Agreement bears to such fiscal period, and the City shall pay the remainder thereof, provided, however, that Life Time shall not be entitled to receive any apportionment, if Life Time shall be in default in performing any of the terms of this Agreement. ARTICLE TWELVE Surrender 12.01 Life Time shall on the last day of the term hereof (unless Life Time has exercised its right to purchase the Club/Pool Property) or upon any earlier termination of this Agreement, or upon any entry or re-entry by the City upon the Club/Pool Property pursuant to this Agreement, surrender and deliver to the City the Club/Pool Property including the Club/Pool Complex, fixtures, equipment and furnishings without fraud or delay, subject to the provisions of this Agreement, in good order, condition and repair, reasonable wear and tear excepted, free and clear of any mortgages, liens or encumbrances. 12.02 All furnishings, fixtures and equipment installed in, affixed to, placed upon or used in connection with the operation of the Club/Pool Complex shall become the property of the City upon termination of this Agreement (unless Life Time shall purchase the Club/Pool Property under the terms of this Agreement) or surrender of the premises to the City. Life Time shall keep and maintain such furnishings, fixtures and equipment at all times throughout the term of this Agreement in good and usable condition with all necessary replacements thereof, sufficient for the operation of the Club/Pool Complex, and shall deliver 33862.11 - 21- RNK/JRW:r03/07/88 the same in such condition to the City as additional rent at termination of Life Time's tenancy hereunder. 12.03 Upon the date fixed for the expiration of the term of this Agreement (unless Life Time Purchases the Club/Pool Property pursuant to the terms of this Agreement) or upon the sooner termination of the term thereof, as the case may be, the Club/Pool Complex, fixtures and furnishings shall automatically and without further act upon the part of Life Time or the City become the property of the City and title thereto shall vest in the City free and clear of all liens and encumbrances and without payment therefor by the City. Life Time will, upon request of the City, promptly execute and deliver to the City a deed or such other appropriate instrument of conveyance as the City may deem necessary or desirable to evidence or confirm the vesting of title to the Club/Pool Complex in the name of the City, in recordable form reasonably satisfactory to the City. 12.04 The Club/Pool Complex is and shall remain the property of Life Time until the date herein fixed for the expiration of the term of this Agreement or until the sooner termination thereof. Life Time's estate, title or interest in the Club/Pool Complex shall not be subleased, assigned, transferred or otherwise conveyed or encumbered in whole or in part, nor purported to be subleased, assigned, transferred, or otherwise conveyed or encumbered in whole or in part, separate and apart from Life Time's interest under this Agreement, nor shall there be any sublease, assignment, transfer or conveyance of the estate, title or interest of Life Time in the Club/Pool Complex in whole or in part by operation of law or by judicial order, decree or judgment, separate and apart form Life Time's interest under this Agreement except as permitted in this Agreement. 33862.11 RNK/JRW:r03/07/98 -22- 12.05 It is the intention and agreement of the parties that Life Time's interest in this Agreement and all of Life Time's right, title and interest in and to the Club/Pool Complex shall be nonseparable and that any attempts to transfer or mortgage either of such interests, except as expressly permitted under the terms of this Agreement, shall be void and of no force and effect unless there shall be a complete transfer or mortgage, as the case may be, of Life Time's interest under this Agreement and of all Life Time's right, title and interest in and to the Club/Pool Complex to the same party. It is also the intention and agreement of the parties that the separation of title to the Club/Pool Property from title to the Club/Pool Complex is not to change the character of the Club/Pool Complex as real estate. 12.06 The provisions of this Article Thirteen shall survive any termination or expiration of this Agreement. ARTICLE THIRTEEN Insurance 13.01 Life Time, at its sole cost and expense, shall keep the Club/Pool Complex and all the fixtures, furnishings and equipment therein, insured against loss or damage by fire and against loss or damage by such other risks now or hereafter embraced by "Extended Coverage," so called, and against such other risks or hazards and in an amount not less than 100% of the full replacement value of the Club/Pool Complex and Contents. During the construction of the Club/Pool Complex or any alterations thereto, Life Time shall provide Builders Risk Insurance written on Completed Value Form. All insurance policies required herein shall list the City as a loss payee in an amount equal to the City's contribution. 13.02 In addition to the insurance required in Section 13.01 above, Life Time, at its sole cost and expense, shall purchase and maintain during the entire term of this Agreement: 33862.11 - 23- R"K/JRW:r03/O7/9G a. Comprehensive bodily injury and property damage liability insurance against claims for bodily injury, death or property damage, occurring in, on, or about the Club/Pool Property, the Club/Pool Complex, or any elevator or escalator therein and on, in or about the adjoining parking lots and passageways, naming the City and the Life Time as the insured, such insurance to afford minimum protection, during the term of this Agreement, of not less than Two Million Dollars ($2,000,000.00) with single limits bodily injury/property damage and a Three Hundred Thousand Dollar ($300,000.00) umbrella policy; b. Boiler and pressure vessel (including, but not limited to, steam pipes, pressure pipes, and condensation return pipes) insurance, provided the Club/Pool Complex contains a boiler or other pressure vessel or pressure pipes, in an amount not less than Two Hundred Fifty Thousand Dollars ($250,000.00) and plate glass insurance upon store fronts wherever located and upon any other plate glass installed on the ground floor of the Club/Pool Complex; C. Rent, rental value or business interruption insurance against loss of rent or income due to fire and the risks now or hereafter embraced by "Extended Coverage," in an amount at least equal to the annual gross operating income of Life Time at the Club/Pool Property. Such rent, rental value or business interruption insurance shall be made payable to the City and any Leasehold Mortgage holder described in Article Six. In the event that the Club/Pool Complex shall be destroyed or damaged, the proceeds of such rent or rental value insurance shall be applied periodically to the payments due the Leasehold 33862.11 RNK/JRW:r03/O7/96 -24- Mortgage holder or the City pursuant to this Agreement until the restoration of the Club/Pool Property, at which time any balance of such proceeds shall be returned to Life Time, provided Life Time is not in default under this Agreement or the Leasehold Mortgage. e. Such other insurance insuring against such risks, in such amounts with such protective provisions as may be reasonably required from time to time by the City of the Club/Pool Property and Club/Pool Complex. f. Demolition and restoration insurance for the benefit of the City to insure that, in the event the Improvements on the Club/Pool Property are destroyed by fire or other casualty and not rebuilt by the Life Time, the remains of the improvements are demolished and the Club/Pool Property are restored to their present condition (i.e., a level, grassy field on grade). The proceeds of the policy shall be payable solely to the City. 13.03 All insurance policies set forth in this Article Fourteen shall name the City and any Leasehold Mortgage holder as additional parties insured, or as mortgagee or loss payee, whichever is applicable. 13.04 All insurance shall be effected under valid and enforceable policies issued by insurers of recognized responsibility which are licensed to do business in the State of Minnesota and which have been approved by the City as to the qualifications of insurers and the amounts of insurance to be written by each. Upon the execution of this Agreement, and thereafter not less than thirty (30) days prior to the expiration dates of any expiring policy or policies theretofore furnished pursuant to this Article Thirteen of this Agreement, originals of the policies, copies thereof, or certificates of insurance, in the case of bodily injury and 33862.11 RNK/JRW:r03/07/96 -25- property damage liability insurance, bearing notations evidencing the payment of premiums or by other evidence of such payment, shall be delivered by Life Time to the City. 13.05 Each policy required in this Article Thirteen shall have attached thereto (a) an endorsement that such policy shall not be cancelled or not renewed without at least sixty (60) days' prior written notice to the City; and (b) an endorsement to the effect that no act or omission of the Life Time shall invalidate the interest of such person or entity entitled to such notice. 13.06 Each policy shall be reviewed and increased every year with minimum protection amounts adjusted based upon the increase in the CPI as set forth in the formula provided in Section. 2.04 of this Agreement. ARTICLE FOURTEEN Use of Insurance Proceeds 14.01 In case of damage to or destruction of the Club/Pool Complex by fire or other casualty, Life Time, shall at Life Time's sole cost and expense, whether or not the insurance proceeds, if any, shall be sufficient for the purpose, and irrespective of the amount of any loss, restore, repair, replace, rebuild the Club/Pool Property or the Club/Pool Complex and other improvements thereon, as nearly as possible to its value, condition and character immediately prior to such damage or destruction in accordance with plans approved by the City. Such restoration, repairs, replacements, rebuilding or alterations shall be commenced with due diligence, and in good faith, and prosecuted with due diligence and in good faith, unavoidable delays excepted. 14.02 All insurance money paid pursuant to this Agreement on account of such damage or destruction, less the actual cost, fees and expenses, if any, incurred in connection 33862.11 RNK/JRW:r03/07/OE -26- with the adjustment of the loss, shall be applied to the payment of the cost of the aforesaid demolition, restoration, repairs, replacement, rebuilding, including the cost of temporary repairs for the protection of Club/Pool Property or the Club/Pool Complex pending the completion of permanent restoration, repairs, replacements, rebuilding (all of which temporary repairs, protection of property and permanent restoration, repairs, replacement, rebuilding are hereinafter collectively referred to as the "Restoration"). The insurance proceeds shall be paid out from time to time as such Restoration progresses by a title company or other dispersing agent agreed to by the parties with normal lien waivers and other requirements. 14.03 No destruction of, or damage to, the Club/Pool Property or any part thereof by fire or any other casualty shall permit Life Time to surrender this Agreement or shall relieve Life Time from its liability under the terms and conditions of this Agreement including additional rent payable under this Agreement, and Life Time waives any rights now or hereafter conferred upon it by statute or otherwise to quit or surrender this Agreement or the Club/Pool Property or any part thereof or to any suspension, diminution, abatement or reduction of rent on account of any such destruction or damage. ARTICLE FIFTEEN The City's Right to Perform Life Time's Covenants 15.01 If Life Time shall at any time fail to pay any Imposition in accordance with the provisions of Article Twelve hereof, or to take out, pay for, maintain and deliver any of the insurance policies provided for in Article Fourteen hereof, or shall fail to make any other payment or perform any other act on its part to be made or performed in accordance with any terms and provisions of this Agreement, the City, after ten (10) business days' prior 33862.11 RNK/JRW:r03tO7/96 -27- written notice to Life Time (or without notice in case of an emergency) and without waiving, or releasing Life Time from, any obligation of Life Time contained in this Agreement, may, but shall be under no obligation to: a) pay any Imposition payable by Life Time pursuant to the provisions of Article Twelve hereof, or b) take out, pay for and maintain any of the insurance policies provided for in Article Fourteen hereof, or c) make any other payment or perform any other act on Life Time's part to be made or performed as in this Agreement provided including, but not limited to payments due under the Leasehold Mortgage or performance of any terms or conditions of. the Leasehold Mortgage; and may enter upon the Club/Pool Property for any such purpose, and take all such action thereon, as may be necessary therefor. 15.02 All sums so paid by the City and all costs and expenses, including attorney's fees, incurred by the City in connection with the performance of any such act, shall be paid by Life Time to the City as the case may be on demand, and the City shall not be limited in the proof of any damages which the City may claim against Life Time arising out of or by reason of Life Time's failure to provide and keep in force insurance as aforesaid, to the amount of the insurance premium or premiums not paid or incurred by Life Time and which would have been payable upon such insurance, but the City shall also be entitled to recover damages for such breach, the uninsured amount of any loss (to the extent of any deficiency in the insurance required by the provisions of this Agreement), damages, costs and expenses of suit, including reasonable counsel fees, suffered or incurred by reason of damage to, or 33862.11 RNK/JRW:r03/07/08 -28- destruction of, the Club/Pool Property and the Club/Pool Complex or any part thereof, occurring during any period when Life Time shall have failed or neglected to provide insurance as aforesaid. 15.03 Under no circumstances shall the exercise by the City of the right granted in this Article Fifteen to enter upon the Club/Pool Property or the Club/Pool Complex for any purpose specified herein and take such action as may be necessary, or the exercise of any other right or remedy granted to the City under any other provision of this Agreement to cure, prevent or take any other action with respect to any default by Life Time, constitute an eviction of Life Time, result in a termination of this Agreement, or in any manner whatsoever relieve Life Time from liability to pay any amounts due under this Agreement or to comply with the Residential Use Covenants and Minimum Operational Standards and from the performance of any term of this Agreement by Life Time. 15.04 The exercise of any right by the City under this Agreement shall not alter, abridge, supersede or otherwise affect the obligations of the City under this Agreement to give any notice required by any provisions of this Agreement, nor alter, abridge, supersede or otherwise affect the rights of any Leasehold Mortgage to cure any default of Life Time or to take any action permitted hereunder in connection therewith. 15.05 The provisions of this Section 15.05 shall have no application to the City's right to terminate this Agreement under any other term covenant or condition of this Agreement or to the City's rights to enter, re-enter or to obtain possession of the Club/Pool Property and the Club/Pool Complex following termination of this Agreement in accordance with the provisions hereof. 33862.11 - 29- RNK/JRW:iO3/07/99 ARTICLE SIXTEEN Repairs and Maintenance of the Club/Pool Property 16.01 Throughout the term of this Agreement, Life Time, at its sole cost and expense, shall take good care of the Club/Pool Complex, furnishings, fixtures and equipment, and shall keep the same in good order and condition reasonable wear and tear excepted, and make all necessary repairs thereto, interior and exterior, structural and nonstructural, ordinary and extraordinary, foreseen and unforeseen. When used in this Article Sixteen, the term "repairs" shall include all necessary replacements, renewals and alterations needed to maintain the Club/Pool Complex as a first class facility of its type. All repairs made by Life Time shall be at least equal in quality and class to the original work. In December of each year, Life Time shall provide the City documentation summarizing all repair, maintenance and repair activities occurring in the previous twelve months. The City, at its own expense, may inspect the Club/Pool Complex. Deficiencies noted by the City to Life Time must be corrected within sixty (60) days at Life Time's expense. 16.02 Life Time may temporarily close portions of the Club/Pool Complex for necessary repairs from time to time after reasonable notice to City. The necessity for and adequacy of repairs to the Club/Pool Complex and the fixtures therein pursuant to this Agreement shall be measured by the standard which is appropriate for buildings of similar construction and class, provided that Life Time shall in any event make all repairs necessary to avoid any structural damage or deterioration to the Club/Pool Complex. 16.03 Life Time shall keep and maintain all portions of the Club/Pool Property, and the sidewalks, curbs, entrances, passageways and, to the extent required by law all areas 33862.11 RNK/JRW:,03/07/98 -30- adjoining the same in a safe, clean and orderly condition, free of dirt, rubbish, snow, ice, and unlawful obstructions. 16.04 The City shall not be required to furnish any services or facilities or to make any repairs or alterations to the Club/Pool Property and the Club/Pool Complex. Life Time hereby assumes the full and sole responsibility for the condition, operation, repair, replacement, maintenance and management of the Club/Pool Property and the Club/Pool Complex subject to the terms of this Agreement. 16.05 Annual Budget. Life Time shall submit an annual budget to the City for maintenance, improvements, and replacement. The budget shall be submitted on or before November 1st annually for the next calendar years. ARTICLE SEVENTEEN Compliance with Laws, Ordinances and Regulations 17.01 Throughout the term of this Agreement, Life Time, at its sole cost and expense, shall promptly comply with all present and future laws, ordinances, orders, rules, opinions, directives, regulations and requirements of all federal, state, and city governments, courts, commissions, attorneys general, any national or local insurance rating bureau, or any other body exercising functions similar to those of any of the foregoing, which may be applicable to the proposed operations and activities on the Club/Pool Property, the Club/Pool Complex or any part thereof. 17.02 Life Time shall likewise observe and comply with, or shall cause to be observed and complied with, all the requirements of all policies of public liability, fire and other insurance at any time enforce with respect to the Club/Pool Property and the Club/Pool Complex. 33862.11 RNK/JRW:r03107/98 -31- ARTICLE EIGHTEEN Changes and Alterations 18.01 Life Time shall have the right, at any time and from time to time during the term of this Agreement, to make, at its sole cost and expense, changes and alterations in, to or of the Club/Pool Complex, subject, however, in all cases to the following: a) No structural change or alteration, involving in the aggregate an estimated cost of more than Seventy -Five Thousand Dollars ($75,000.00), shall be made without the prior written consent of the City which consent shall not be unreasonably withheld. b) No change or alteration shall be undertaken until Life Time shall have procured and paid for, so far as the same may be required from time to time, all permits and authorizations of any federal, state, or city government or departments, or subdivisions of any of them, having jurisdiction. c) Any structural change or alteration, involving in the aggregate an estimated cost of more than Seventy -Five Thousand Dollars ($75,000.00) shall be conducted under the supervision of a licensed architect or a licensed professional engineer selected by Life Time and approved in writing by the City and no such structural change or alteration shall be made except in accordance with detailed plans and specifications and cost estimates prepared and approved in writing by such architect or engineer, and approved in writing by the City (such approval not to be unreasonably withheld). 33862.11 FWK/JNW:103/07/88 -32- d) Any change or alterations shall, when completed, be of such a character as not to reduce the value and utility of the Club/Pool Complex below its value and utility immediately before such change or alteration. e) Any change or alteration shall be made promptly (unavoidable delays excepted) and in good and workmanlike manner and in compliance with all applicable permits and authorizations and building and zoning laws and with all other laws, ordinances, orders, rules, regulations and requirements of all federal, state, and city governments, departments, commissions, boards and officers, any national or local insurance rating bureau, or any other body hereafter exercising functions similar to those of any of the foregoing. f) The cost of any such change or alteration shall be paid in cash or its equivalent, so that the Club/Pool Property shall at all times be free of liens for labor and materials and the Club/Pool Complex and free from any encumbrances, chattel mortgages, conditional bills of sale, or security interests. g) Whenever appropriate the fire insurance with "Extended Coverage," as required to be maintained during the term of this Agreement in Section 7.01 of Article 7 hereof, shall be adapted to provide, during any period of building construction, for Builder's Risk Insurance written on the Completed Value Form or on the Monthly Reporting Form. h) If the estimated cost of any such structural change or alteration shall in the aggregate be in excess of Seventy -Five Thousand Dollars ($75,000.00) Life Time shall, before commencement of work, at Life Time's sole cost and 33862.11 RNK/JRW:r03/07/96 -33- expense, furnish to the City a surety company performance bond, issued by a surety company acceptable to the City, in an amount at least equal to the estimated cost of such change or alteration, guaranteeing the completion thereof within a reasonable definite time, free and clear of all liens, encumbrances, security interests, chattel mortgages, conditional bills of sale, and other charges, and in accordance with the plans and specifications approved by such obligee. In connection with any such structural change or alteration for which amounts have been deposited or are to by used pursuant to this Agreement, no such performance bond or other security shall be required except to the extent that such estimated costs exceed the amount deposited or to be used pursuant to this Agreement. 18.02 The dollar amounts listed in Sections 18.01 (a) (c) and (h) shall be adjusted for inflation as set forth herein. The adjustment formula is: $75,000.00 multiplied by a fraction the numerator of which is the CPI for the month preceding the expiration of the Term and the denominator of which is the consumer price index for December, 1995. This adjustment shall be determined by using as the CPI the "consumer price index for all urban consumers CPI -U) U.S. City Average, all Terms" Bureau of Labor Statistics. If the name of the consumer price index" as described above shall be changed a substituted index shall be used as set forth in Section 2.03 of this Agreement. ARTICLE NINETEEN Discharge of Liens 19.01 Except for the Leasehold Mortgage, Life Time shall not create or permit to be created or to remain, and shall discharge, any lien, encumbrance or charge, levied on 33862.11 RNK/JRW:r03/07196 -34- account of any Impositions or any mechanic's, laborer's or materialman's lien or any mortgage, conditional sale, title retention agreement, security interest or chattel mortgage, or otherwise which might be or become a lien, encumbrance or charge upon the Club/Pool Property or any part thereof provided that any Imposition may, after the same becomes a lien on the Club/Pool Property, be paid or contested in accordance with this Agreement and any mechanic's, laborer's or materialman's lien may be discharged in accordance with Section 19.02 of this Article Nineteen. 19.02 If, because of any act or omission of Life Time, any mechanic's lien or other lien, charge or order for the payment of money shall be filed against the Club/Pool Property or the City except as provided herein, Life Time shall, at its own cost and expense cause the same to be discharged of record or bonded within ninety (90) days after written notice from the City to Life Time of the filing thereof, and Life Time shall indemnify and save the City harmless against and from all costs, liabilities, suits, penalties, claims and demands, including reasonable counsel fees, resulting therefrom. 19.03 Nothing in this Agreement contained shall be deemed or construed in any way as constituting the consent or request of the City, express or implied, by inference or otherwise, to any contractor, subcontractor, laborer or materialman for the performance of any labor or the furnishing of any materials for any specific improvement, alteration to, or repair of the Club/Pool Property or any part thereof or for the demolition or the replacement of the Club/Pool Property or any part thereof. 33862.11 RNK/JRW:,03/07/98 -35- ARTICLE TWENTY Use of Club/Pool Property 20.01 Life Time may use the Club/Pool Property for the Club/Pool Complex pursuant to the terms and conditions set forth in this Agreement only and for no other purpose. Life Time shall construct, operate, maintain, repair and reconstruct (the latter as provided herein) the Club/Pool Complex in accordance with all applicable zoning and building codes and regulations and the terms and conditions of this Agreement. Life Time shall not use or allow the Club/Pool Property or any part of either to be used or occupied for any unlawful purpose or in violation of any certificate of compliance covering or affecting the use of the Club/Pool Property or any part thereof and shall not suffer any act to be done or any condition to exist on the Club/Pool Property or any part thereof or any article to be brought thereon which may be dangerous, unless safeguarded as required by law, or which may, in law, constitute a nuisance, public or private, or which may make void or voidable any insurance then in force with respect thereto. 20.02 Life Time shall not do or suffer any waste or damage, disfigurement or injury to the Club/Pool Property, the Club/Pool Complex or any part thereof. ARTICLE TWENTY-ONE Entry on Club/Pool Property by the City 21.01 In addition to the City's right of entry under any other provision of this Agreement, Life Time shall permit the City and its authorized representatives to enter the Club/Pool Property or the Club/Pool Complex at all reasonable times for the purpose of (a) inspecting the same and (b) making any necessary repairs thereto and performing any work therein that may be necessary by reason of Life Time's failure to make any such repairs or 33862.11 FWK/JFtW;r03fO7f9G -36- perform any such work or to commence the same for thirty (30) business days after written notice from the City or without notice in case of an emergency. Nothing herein contained shall create or imply any duty upon the part of the City to make any such repairs or do any such work; and performance thereof by the City shall not constitute a waiver of Life Time's default in failing to perform the same. 21.02 The City may during the progress of any work in the Club/Pool Property or the Club/Pool Complex keep and store therein or elsewhere upon the Club/Pool Property all necessary materials, tools, supplies and equipment. The City shall not be liable for inconvenience, annoyance, disturbance, loss of business or other damage of Life Time by reason of making such repairs or the performance of any such work, or on account of bringing materials, tools, supplies and equipment into or through the Club/Pool Property during the course thereof and the obligations and liabilities of Life Time under this Agreement shall not be affected or released thereby. In making any such repairs or performing any such work, however, the City shall proceed with a minimum of inconvenience to the Life Time. ARTICLE TWENTY-TWO Indemnification of the City 22.01 Notwithstanding any provision to the contrary contained in this Agreement, Life Time shall indemnify and save harmless the City against and from all liabilities, obligations, damages, penalties, claims, costs, orders, charges and expenses, including reasonable architects' and attorneys' fees, which may be imposed upon or incurred by or asserted against the City by reason of any of the following occurring during the term of this Agreement: 33862.11 RNK/JRW:r03107/98 -37- a) any work or thing done in, on or about the Club/Pool Property, Club/Pool Complex or any part thereof by Life Time or its employees agents, contractors, licensees or invitees; b) any use, non-use, possession, occupation, condition, operation, maintenance or management of the Club/Pool Complex or Club/Pool Property or any part thereof or any street, avenue, alley, sidewalk, curb, passageway, entrances, or structures, or space adjacent thereto; c) any negligence on the part of Life Time or any of its agents, contractors, servants, employees, licensees, or invitees; d) any accident, injury or damage to any person or property occurring in, on or about the Club/Pool Property or the Club/Pool Complex or any part thereof or any street, avenue, alley, sidewalk, curb, passageway, entrances, or structures or space adjacent thereto; e) any failure on the part of Life Time to keep, observe and perform any of the terms, covenants, agreements, provisions, conditions or limitations contained in this Agreement on Life Time's part to be kept, observed and performed; or f) Any claim or allegation relating to Life Time's (or Life Time's officers, employees and agents) management or operation of the Club/Pool Complex including, but not limited to, claims or allegations related to violations of Minn. Stat. Chapter 325G (as may be amended); false advertising or other deceptive practices; consumer fraud; civil rights violations; or human rights discrimination claims. 33862.11 RNK/JRW:103/07/99 -38- 22.02 In case any action or proceeding is brought against the City by reason of any such claim, Life Time upon written notice from the City shall at Life Time's sole cost and expense, including attorneys' fees, resist or defend such action or proceeding by an attorney approved by the City in writing, such approval not to be unreasonably withheld, but no approval of attorney shall be required in each and every instance where the claim is resisted or defended by an attorney of an insurance carrier obligated so to resist or defend such claim. ARTICLE TWENTY-THREE Condemnation 23.01 In the event that the Club/Pool Property or part thereof shall be taken in condemnation proceedings or by the exercise of any right of eminent domain, or by appropriation or through private purchase in lieu thereof, the parties to this Agreement shall attempt to value Life Time's interest in the improvements and the City's land value and reversionary interest in the Club/Pool Complex. If agreement is not reached within thirty 30) days after the submission by the parties to each other of a proposed distribution, then any party may request arbitration as hereinafter provided to establish the value of their respective interests under the value premise stated above. In no event shall the amount received by the City be less than the value of the Club/Pool Complex property taken as if it were unencumbered by this Agreement and valued at the time of taking. 23.02 If at any time during the term of this Agreement title to the whole or materially all of the Club/Pool Property or the Club/Pool Complex shall be taken by the exercise of the right of condemnation or eminent domain or as otherwise provided above, this Agreement shall terminate and expire on the date of such taking. Life Time shall, in all 33862.11 RNK/JRW:r03/07/98 -39- respects, keep, observe and perform all the terms, covenants, agreements, provisions, conditions and limitations of this Agreement on Life Time's part to be kept, observed and performed up to the date of such taking. For purposes of this Article Twenty -Three materially all of the Club/Pool Property or the Club/Pool Complex shall be deemed to have been taken if the portion of the Club/Pool Complex not so taken cannot be so repaired or reconstructed as to constitute a complete structure capable of being operated as a the Club/Pool Complex as required by the terms and conditions of this Agreement. 23.03 If at any time during the term of this Agreement title to less than the whole or materially all of the Club/Pool Property shall be taken, as aforesaid, this Agreement shall continue and Life Time shall promptly, except for unavoidable delays, at Life Time's expense, and subject to compliance with the provisions of Article 19 of this Agreement relative to changes and alterations, restore the Club/Pool Property and the Club/Pool Complex, to the extent as nearly as possible, to the condition and character immediately prior to such partial taking. All of the compensation collected by Life Time pursuant to Section 23.01 of this Agreement, shall be applied and paid over toward the cost of demolition, repair and restoration of such partial taking, substantially in the same manner and subject to the same conditions as those provided in Section 15.02 of this Agreement with respect to insurance and other monies. Any balance of the award or other compensation for such partial taking of the building remaining after payment of such costs of demolition, repair and restoration, as aforesaid, shall be paid over to the Leasehold Mortgage holder, or if there be no Leasehold Mortgage holder, then the balance of the net award shall be paid to Life Time and the City in amounts proportionate to Life Time's and the City's respective contribution as defined herein. In the event that the costs of such demolition, repairs and 33862.11 RNK/JRW:r03/07196 -40- restoration shall exceed the compensation collected, Life Time shall pay the deficiency forthwith. ARTICLE TWENTY-FOUR Default Provisions 24.01 The occurrence of any one of the following events shall be considered a default by Life Time entitling the City to exercise any and all remedies set forth herein. a) Life Time's sale, assignment, sublease or other transfer of any interest in this Agreement or the Club/Pool Complex; b) Notwithstanding any other provision contained herein, no occurrence of any event specified in this Section 24.01 hereof or any other breach or default under this Agreement shall constitute an Event of Default permitting City to exercise any remedies under this Agreement unless the subject of said occurrence, breach or default shall constitute a material term or provision of this Agreement and the City shall have given Life Time at least thirty (30) days notice of such occurrence, breach or default and Life Time shall have failed to cure or otherwise correct such occurrence, breach or default within said time, provided that if the occurrence, breach or default is of a nature or kind as to require more than thirty (30) days to cure or correct, City shall not exercise any remedies hereunder provided that Life Time has commenced said cure or correction and is pursuing such cure with reasonable diligence. In the event of a good faith dispute by the parties regarding the existence of such an occurrence, breach or default, such dispute shall be subject to arbitration under Article 26 hereof and during the pendency of such arbitration any notice of an 33862.11 RNK/JRW:,03107/99 -41- Event of Default given by City to Life Time hereunder shall be deemed tolled until the expiration of ten (10) days after the final decision of the arbitrator. No breach of any obligation of Life Time under Article 2 hereof shall be deemed incurable or not cured as long as Life Time has taken reasonable steps or precautions to assure that said breach shall not occur in the future. No default or breach by Life Time under the Leasehold Mortgage shall constitute an Event of Default hereunder unless the Leasehold Mortgagee shall have affirmatively commenced the undertaking of a remedy (other than the mere sending of a notice of default) under the Leasehold Mortgage or related security documents; c) Any material representation or warranty made by Life Time in this Agreement, or in any certificate or document furnished under the terms of, or in conjunction with, this Agreement is untrue, false or misleading. d) Because of action or inaction on the part of the Life Time, construction on the Club/Pool Complex is substantially abandoned, delayed or discontinued for more than thirty (30) days. e) The City determines that the remaining undisbursed Leasehold Mortgage proceeds together with the Tenant Improvement Allowance of the City and Life Time's Capital Contribution, are insufficient to fully pay all of the unpaid costs of the Club/Pool Complex and estimated expenses of completion, and Life Time fails after thirty (30) days written demand to deposit with the title company disbursing the foregoing sufficient funds as may reasonably be 33862.11 RNK/JR W : r03fO7/96 -42- required by the City, so as to permit the payment of all such costs and the completion of the Club/Pool Complex. f) Life Time commits waste or allows the Club/Pool Complex to deteriorate. g) Life Time fails to keep the Club/Pool Complex insured as required by the terms of this Agreement. h) The institution of any proceeding against Life Time, or/any officer or director of Life Time for which the potential penalty is forfeiture of the Club/Pool Complex, any portion thereof or any other assets. i) Lifetime applies for, or consent in writing to, the appointment of a receiver, trustee, or liquidator of Life Time or of all or substantially all of Life Time's assets; 0) Life Time files a voluntary petition in bankruptcy, or admits in writing of its inability to pay its debts as they become due; k) Life Time makes a general assignment for the benefit of creditors; 1) Life Time files a petition or an answer seeking reorganization or arrangement with creditors or to take advantage of any insolvency law; or m) If an order, judgment or decree shall be entered by any court of competent jurisdiction on the application of a creditor adjudicating Life Time a bankrupt or insolvent. 24.02 No failure by the City to insist upon the strict performance of any term, covenant, agreement, provisions, condition or limitation of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute a waiver of any such breach or of such term, covenant, agreement, provision, condition or limitation. No term, 33862.11 RNK/JRW:r03tO7/96 -43- covenant, agreement, provision, condition or limitation of this Agreement to be kept, observed or performed by Life Time, and no breach thereof, shall be waived, altered or modified except by a written instrument executed by the City. No waiver of any breach shall affect or alter this Agreement, but each and every term, covenant, agreement, provision, condition and limitation of this Agreement shall continue in full force and effect with respect to any other then existing or subsequent breach thereof. 24.03 Upon the occurrence of any Event of Default this Agreement shall be terminated and the City shall be entitled to possession of the Club/Pool Property, and all improvements, fixtures, furnishings and equipment. At its sole discretion, the City may exercise any and all other remedies at law or equity allowed in lieu of or in addition to its contractual right to terminate the Agreement. ARTICLE TWENTY-FIVE Arbitration 25.01 Except as provided in Section 25.02, any dispute arising out of this Agreement shall be submitted to binding arbitration through the American Arbitration Association. Arbitration shall be conducted in accordance with the Rules of Commercial Arbitration. In the event either or both parties to this lease apply to the arbitrator, all parties shall be bound by, comply with, and perform and fulfill the final award or finding, without recourse to any other court of tribunal except as is necessary to enforce the final award in accordance with the Minnesota Laws on arbitration. 25.02 This arbitration clause shall not apply if the City declares that an event of default has occurred and seeks to terminate this Agreement and recover the Club/Pool 33862.11 RNKIJPW:A3/O7/D8 -44- Property. In such an event, the City shall have the right to initiate action in the appropriate court without any duty to arbitrate. ARTICLE TWENTY-SIX Notices 26.01 All notices required under the terms of this Agreement shall be deemed to have been properly served or given three (3) days after their deposit in the United States mail if sent by registered or certified mail, return receipt requested, postage prepaid or two (2) days after deposit in a nationally recognized overnight courier service, addressed to Life Time or the City at the address set forth below; to Life Time: Suite 275 6442 City West Parkway Eden Prairie, MN 55344 to the City: 3400 Plymouth Boulevard Plymouth, MN 55447 or to such other address within the continental limits of the United States and to the attention of such party as the parties may from time to time designate by written notice to the other. ARTICLE TWENTY-SEVEN Miscellaneous 27.01 No third party is entitled in any way to rely upon any provision in this Agreement. This Agreement is intended solely for the benefit of Life Time and the City and no third party shall have any rights or interest in any provision of this Agreement, or as a result of any action or inaction of the City in connection therewith. 33862.11 - 45- RNK1JAW:r03/07/88 27.02 The exhibits attached to this Agreement are considered an integral part of it as if fully set forth within it. 27.03 All prior understandings, letters of intent, discussions and agreements are merged in the governing terms of this Agreement, which is a complete and final written expressions of the intent of the parties. This Agreement may be amended only pursuant to the terms of an exhibit, if attached and executed for that purpose, or by a separately signed writing between the parties. This Agreement may not be amended or modified orally. 27.04 Section headings are for the convenience of reference only, and shall not govern the interpretation of any provisions. 27.05 Time is of the essence of this Agreement. 27.06 The invalidity, illegality or unenforceability of any provision of this Agreement or any other document executed in connection with this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement. 27.07 The parties agree that nothing contained in this Agreement is intended or shall be construed to establish the parties as joint venturers or partners. 27.08 This Agreement has been freely negotiated. This Agreement shall not be construed against the drafter. This Agreement shall be liberally construed to protect the public interest and any ambiguities shall be resolved in favor of the City. 27.09 If the City is prevented from carrying out any of its obligations under this Agreement because of a court order or judgment, Life Time shall have no recourse against the City for damages or any other relief. 27.10 The City agrees to build an indoor ice arena or the ice arena complex if it receives bids satisfactory to the City. 33862.11 - 46- RNK/JRW;r03/07/69 27. 11 The subject matter of any provision in this Agreement that requires Life Time and the City to cooperate or to agree in the future to do something is subject to arbitration if the parties do not agree. ARTICLE TWENTY-EIGHT Contingencies 28.01 The City's and Life Time's obligations under this Agreement are subject to and contingent upon the following conditions: a) The City's approval of any necessary amendments to its comprehensive plan and zoning ordinance, zoning and subdivision approval, variance and conditional use permit approval, and all other necessary City approval including variance and conditional use permits by not later than April 1, 1996. b) The City and Life Time obtaining any other necessary permits from other public regulatory entities necessary to carry out the terms of this Agreement by not later than April 1, 1996. c) Life Time and Independent School District No. 284 ("School District") entering into a sublease covering the Club/Pool Complex on terms acceptable to Life Time and the City by no later than April 1, 1996. d) City and School District entering into a non -disbursement agreement on terms acceptable to Life Time and the City by no later than April 1, 1996. 28.02 The contingencies set forth herein may be waived by either party provided the waiving party sends written notice to the other party no later than one week prior to the date specified for each contingency. If the contingencies are not waived or fulfilled, this Agreement shall be null and void. 33862.11 RNK/JRW:r03/07/89 -47- IN TESTIMONY WHEREOF, as of the day and year first hereinabove written the parties have executed this Agreement. CITY OF PLYMOUTH U -03M SEAL) MN -1-101 Joycelyn Tierney, Mayor Dwight Johnson, City Manager FCA LTD., doing business as LIFE TIME FITNESS BY: Its AND _ Its STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of 1996, by Joycelyn Tierney and by Dwight Johnson, respectively the Mayor and City Manager of the City of Plymouth, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its City Council. Notary Public 33862.11 RNK/JRW:r03/07/88 -48- STATE OF MINNESOTA ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of 1996, by and the and of FCA Ltd., a Minnesota corporation, doing business as Life Time Fitness, on behalf of said corporation. Notary Public 33862.11 - 49- RNK/JRW:r03/O7/96 ATTACH EXHIBIT "_" — ICE ARENA COMPLEX CITY OWNED UNDEVELOPED PARCEL CLUB/POOL COMPLEX PARKING LOT PROPERTY CLUB/POOL PROPERTY COMMON WALL COVENANT RECIPROCAL PARKING AND ACCESS AGREEMENT to " — NON—EXCLUSIVE PARKING EASEMENT 33862.11 FMK/JRW:r03/07/96 -50- CARLSON REAL ESTATE COMPANY VIA MESSENGER March 7, 1996 Mr. Dwight Johnson City Manager City of Plymouth 3400 Plymouth Boulevard Plymouth, MN 55447 RE: Downtown Plymouth Dear Dwight: Please find enclosed a memo I received from BRW regarding their review of the traffic and alignment of 35th Avenue in downtown Plymouth. As we discussed, I would like this to be included with the information for the downtown zoning meeting on Wednesday, March 13, 1996. I would like to discuss the enclosed concept plan with both the planning staff and the downtown subcommittee prior to the meeting. I would request that the zoning on our piece of land remain as it currently is so that we can move forward with this project. I appreciate your help. Sincerely, CARLSON RE ESTATE COMPANY, INC. Br Lis Managing Director of Investments 612)333-9869 enclosures 2222 Plaza VII, 45 South Seventh Street, Minneapolis, Minnesota 55402 612-333-9898 B R W INC. Planning Transportation Engineering Urban Design Thresher Square 700 Third Street So. Minneapolis, MN 55415 612/370-0700 Fax 612/370-1378 Denver Milwaukee Minneapolis Orlando Phoenix Portland San Diego Seattle DATE: TO: FROM: RE: March 5, 1996 Brad Lis Richard Wolsfeld, PE Memorandum Traffic Analysis of Proposed Development at 35th Avenue North/Vicksburg I have compared the proposed land use development plan of Carlson Real Estate Company with the land use assumed in the SRF "Downtown Concept Plan Traffic Study" dated September 11, 1995. The comparisons are as follows: Proposed Carlson Real Estate Company Development: 21,200 gross square feet of retail required parking Land use scenarios analyzed in the SRF Report appear to have the following land use assumptions on a site configured approximately the same as your site: 28,000 gross square foot theater 26,000 gross square feet of retail shopping transit station ramp parking The projected traffic from the proposed land use is as follows: 4,085 daily trips 179 PM Peak Hour Inbound 171 PM Peak Hour Outbound Obviously, your proposed development would generate less daily and PM peak hour trips than the land use assumed in the Downtown Concept Plan Traffic Study. Furthermore, the level of service at Vicksburg and 35th Avenue North would be improved over that reported. The attached drawings represent two conceptual alternative alignments for 35th Avenue North which will provide the same or better traffic operations than the alignment shown in the Downtown Concept Plan Traffic Study. RW/ch Attachments 23157 U AMessage from the President In 1994 the Twin Cities commercial real estate market encountered significant absorption of office and industrial space. Several markets experienced their lowest vacancy in years. There is increased speculation among developers about the possibility of starting a new office project. Already underway are several speculative industrial developments. The apartment market has also picked up in activity. Properties of all sizes changed hands during the year. Net operating incomes have increased, and continue to increase, yielding Robert Dunbar better values and giving owners the opportunity to either divest entirely or reinvest in properties with more units. The increasing net operating income, resulting from declining vacancy and higher rents, will allow many of the 80's investors to finally see some investment appreciation which had been stymied following the 1986 tax act. The major buyers of today, Real Estate Investment Trusts (REITs), continue to increase their holdings in Twin Cities properties, particularly in retail and industrial. During the past year. several mid-sized shopping centers were acquired by large, national REITs. Similarly, industrial properties have been acquired by REITs and institutional investors. We anticipate increased activity in all areas during 1995. Continued lease -up in the commercial market will create a shortage of large blocks of space, particularly in office and industrial buildings. It is our opinion that once rental rates have appreciated to a high The Outlook: A Year of Opportunity & Challenges ooking out over the landscape of the year ahead, Griffin Companies sees a number of cross currents emerging in 1995 which will affect the market for commercial real estate: a strong economy... continuing corporate growth... imbalances in supply and demand in some market sectors... the re-emergence of speculative development... rising interest rates ... and the return of a bolder, more aggressive landlord determined to earn a return on his investment. Taken together, they have all the makings of an exciting year, full of challenges as well as opportunities. The following is a category -by -category look at what's in store, as seen by Griffin Companies and its specialists. 1995 OFFICEOO Declining vacancies, climbing rates, fewer choices for tenants..." Steve Chirhart and J. Craig Kirkpatrick Office Sales & Leasing Vacancies will continue to decline as new construction remains non- existent. During 1994 total 6ffice space absorption reached 1,926,000 sq. ft. or 3.4% of the total market, approximately 1% stronger than the five-year average of 2.5%. We estimate a reduction in absorption during 1995 as rental rates rise and the availability of large block vacancies continues to diminish, to approximately half of the 1994 level, or a net increase in demand of 963,367 sq. ft. or about 1.7% of the total market. This would reduce overall market vacancies to single digit levels nearing 9.5%. Although capital is available, lenders will scrutinize each deal much more carefully and require equity to avoid the problem loan scenario suffered in the late '80's and early '90's. Net Absorption Trends - Sq. F,. Total Market 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 1990 1991 1992 1993 1994 Lease Rates With improving occupancy, rate increases will follow. Net rate increases within the Minneapolis CBD and Southwest Quadrant will be strongest, followed by the western suburbs. The St. Paul CBD, South Airport Market and northern suburbs Continued on page 6 Continued on page 2 1995 RETAIL OUTLOOK Minneapolis has become an even stronger retail market" Russ McGinty Director, Retail Leasing In 1994 the overall vacancy rate in the Twin Cities was 8.3%. This was a reduction of 1.39% from the previous year and is the lowest rate over the past five years. Vacancy rates by property type were: 1993 1994 Neighborhood 11.9% 11.2% Community 9.0% 7.4% Regionals - 4.0% The gross leasable area (TGLA) in 1994 stood at 40,033,142 and is expected to increase to 41,033,142 as seven new power centers are proposed to come on line in 1995. We estimate that the present vacancy rate will decline to the low 7% range in 1995 due to the following factors: Franchise expansion Strength of the economy Interest in the Twin Cities market by national retailers, both large and small Lack of development in the traditional community -size shopping center area 150,000 to 399,000 sq. ft.) Re -use of non-performing centers Improved financing opportunities for landlords and tenants Lease Rates The declining vacancy rates will swing the supply and demand pendulum in the landlord's favor. Anticipate seeing net rental rates rise from $ .50 to $1.00 with fewer buildout allowances and minimal free rent, if any. with some newer properties in the 15.00 range. Space Availability Quality locations in well positioned centers with strong anchors will be difficult to find. Retailers and agents should expect to broaden their parameters to find suitable space. Look for smaller neighborhood centers to emerge in the fastest growing communities of Eagan, Apple Valley, Eden Prairie, Plymouth and White Bear Lake. New Construction As previously mentioned, there are seven proposed power centers totaling one million square feet expected to VACANCY RATE BY GEOGRAPHIC SECTOR VACANCY RATE 1990 THROUGH 1994 BY TYPE OF CENTER 10.1% 1994,1993,1992 COMPARED NORTHEAST 12.3% OMNI 11.2% 7.1% 14.0 SOUTHEAST 8.0% 7.4% 10.4% 9.01% 9.6 a.0% SOUTHWEST 8.5 % 10.2°/6 8.3% av NORTHWEST 9.8% 8.3% 3 TOTAL MARKET 10.3% TOTAL MARKET 10.2% u 1994 0.0% 5.0% 1O.D% 15.0% 20.01/6 25.0% 1994 1.0% 4.01/6 8.0% 12.0% PERCENT VACANT 01993 PERCENT VACANT 269 Centers Reporting in 1994 1992 271 Centers Reporting in 1993 BUSS MCGINTY: SALESPERSON OF THE YEAR Griffin Companies' top salesperson in1994wasRussMcGinty, Director ofRetailLeasing. Russ has over nine yearsofcommercialrealestateexperienceandhasbeenworkingexclusivelyinretailleasing, tenant representaforthepastsixyears. tion and sales IDuring 1994, Russ completed leasetransactionsinexcessof250,000 sq. feetinavarietyofretailproperties, such major transactions as five Including completed leases for Office Depot, sale toSlumberlandof4.23 acres of land for anewretailstore, leasing a newSlumberlandClearanceCenter, and aleasewithIndependentSchool6istrict191forthelowerlevelofDiamondheadMall. Expect net rates in the 8.00-$14.00 range, depend- ing upon property type and location come on line in 1995. The majority of these centers are intended for large block users (20,000+ sq. ft.) and are typically pre -leased prior to construction. One or two of these centers will probably be postponed in 1995 due to stalled lease negotiations and rising interest rates. Free Standing Retail Sites The Twin Cities retail market is experiencing a continuing trend with free standing retailers. Expect to see more large block retailers in well located parcels that were too small to support a larger project. Sales Activity The retail market should show a substantial increase in activity during 1995. Interest in land for retail property will also be in strong demand. If interest rates continue to rise, the current retail activity will be affected. Loans are becoming more readily available. However, higher equity will be required to complete financing. Conclusion Expect all areas of the retail market to show improvement in 1995. The economic growth of the country is improving at a moderate rate and will continue to positively influence the retail market. Retailers looking for sites will be surprised at their limited options. They may also find space more limited than anticipated. The lack of available space will put increased pressure on net rent rates and reduce landlords' flexibility in lease negotiations. VACANCY RATE BY TYPE OF CENTER 1994,1993,1992 COMPARED NEIGHBORHOOD 14.0 7.4% COMMUNITY 9.01% 9.6 a.0% REGIONAL 24.0% U CBD: 8.3% TOTAL MARKET 10.3% t 10.2% u 1994 0.0% 5.0% 1O.D% 15.0% 20.01/6 25.0% 01993 PERCENT VACANT 1992 269 Centers Reporting in 1994 271 Centers Reporting in 1993 269 Centers Reporting in 1992 come on line in 1995. The majority of these centers are intended for large block users (20,000+ sq. ft.) and are typically pre -leased prior to construction. One or two of these centers will probably be postponed in 1995 due to stalled lease negotiations and rising interest rates. Free Standing Retail Sites The Twin Cities retail market is experiencing a continuing trend with free standing retailers. Expect to see more large block retailers in well located parcels that were too small to support a larger project. Sales Activity The retail market should show a substantial increase in activity during 1995. Interest in land for retail property will also be in strong demand. If interest rates continue to rise, the current retail activity will be affected. Loans are becoming more readily available. However, higher equity will be required to complete financing. Conclusion Expect all areas of the retail market to show improvement in 1995. The economic growth of the country is improving at a moderate rate and will continue to positively influence the retail market. Retailers looking for sites will be surprised at their limited options. They may also find space more limited than anticipated. The lack of available space will put increased pressure on net rent rates and reduce landlords' flexibility in lease negotiations. 1995.REPORT ON RETAIL REAL ESTATE JA 0 E 171 Is ME MA., 4% 0 A LN 01 1995 MSCA RESEARCH COMMITTEE MEMBERS Eric R. Bjelland, United Properties - Chairperson METRO MEMBERS Christine Bright, Robert Muir Company Craig Estrem - Madison/`laryuette Catherine C. Faegre, Kraus -Anderson Realty Company Richard Sandbag, General Growth Company Sharon Emmons, Papa Johns Alan Bloom, The Ackerberg Group Norm Brody, Target/Mervyn's 0'U TSTATE MEMBERS Myron & Sharon Thomas, Commercial Leasing Services (Rochester) Curtis R. Fisher, Fisher & Lindstrom Commercial Realtors (Mankato) Sanford Hoff, F.I. Salter Company (Duluth) Clarence Reuter, Reuter Real Estate, Inc. (St. Cloud) The RESEARCH REPORT SURVEYS were conducted by Insight, Inc. Property information was provided by the Minnesota Real Estate Journal Statistical Analysis was performed by TheDataLink, Inc. Data in the Retail.Vurvey Report is the property of the Minnesota Shopping Center Association and may not he copied without the prior consent of the Minnesota Sbopping Center Association. For additional copies, please contact the M.SCA offices. 01995 THE Minnesota Shopping Center Association 4248 Park Glen Road, Minneapolis, Minnesota 55416 • (612) 927-9220 I MSCA RETAIL SURVEY REPORT FALL 1995 TABLE OF CONENTS Page 2 Introduction Page 3 Significant Conclusions Page 4 Overview of the Retail Market Page 6 Regional Malls Page 9 Community Centers Page 11 Neighborhood Centers Page 13 Minneapolis Central Business District Page 13 St. Paul Central Business District Page 14 Freestanding Buildings Page 15 Duluth Page 15 Rochester Page 15 Mankato Page 16 St. Cloud Opinion Section Page 17 0 Real Estate Taxes Page 18 0 Rental Rates/Renewals Page 18 a The Investment Market Page 19 0 Sales Performance Page 19 0 Opportunities/ Obstacles Page 20 Supplemental Graphs and Charts Appendix Minnesota Real Estate Journal - Detailed Survey Results INiRODUCTTON e he MSCA Research Committee istoleased resent our seventhpp Retail Survey Report. The report has been modified to allow for easy analysis between the different types of properties. We are confident this report will be valuable as you plan for 1996 and beyond. The MSCA first established a survey and database for retail properties in the Twin Cities Metropolitan Area in 1989. Although the focus of the Research Report continues to be the Twin Cities, we expanded the Research Committee to include "Outstate Members" in the four outstate markets that have been historically covered in the Research Report. We believe this initial step will ultimately lead to statistical property coverage and a broader understanding of the greater Minnesota retail market. The Research Report is divided into two primary sections - property and opinion. The property information was provided to the MSCA Research Committee by the Minnesota Real Estate Journal (MREJ). This year's Survey included 274 centers. The MREJ updates this information on a quarterly basis. A property listing is included in the Appendix, which includes information on the four outstate markets. The MREJ information was analyzed by TheDataLink, and they were a great help to our Committee in creating the Graphs/Tables for the Research Report. The Opinion Section of the Report is a summary of the responses the Research Committee received from surveying owners, service providers and merchants. We used three different databases for the survey. The Ownership database is a proprietary database of the MSCA and is updated annually. The Service Provider database is comprised of the MSCA membership. This year, the MSCA Research Committee started a proprietary Merchant Database for the MSCA. We identified 62 merchants in twenty retail categories to survey and we hope to expand this list over the next few years. For the first time we tried a telemarketing survey as opposed to a written survey. We will improve on this surveying vehicle next year. n SIGNIFICANT CONCLUSIONS Significant New Development Labor is in very short supply We have only seen the first wave of retailer bankruptcies. The apparel industry continues to have poor sales. Interactive/Entertainment retailing is coming to our market. Freestanding buildings are in demand by merchants. Capital is inexpensive and plentiful Rents have increased OVERVIEW The Universe: he total universe of properties in the metro area expanded to 274 centers from 269 centers last year. Although seven new centers have come on line this year. two properties were deleted from the survey because they were fundamentally changed from retail to other uses. As predicted in last yew's report. the metro Gross Leasable Area (GLA) increased by almost one million square feet. We estimate the GLA Will increase next year by another one million square feet as new centers are completed. Information on the new developments can be found thrOUt"llOUt the report. TOTAL GROSS LEASABLE AREA BY TYPE OF CENTER 1995 Regional Community 32% 26% CBDS 5% Neighborhood 37% GRAPH #1 Graph =1 represents a significant statistical change from last year's report. The change was the reclassification of 38 community centers to neighborhood centers. This was done because the "community centers" under 150,000 square feet were included in the Community Center Section. The square footage definitions are outlined in each property type section. To further explain this change, We have outlined below two "Community Centers" that do not meet the square footage definition of a conurltlnky center. Northcourt Commons Shopping Center, Blaine, MN 130,000 GLA Circuit City Plaza, Bloomington, MN 136,000 GLA The net result of the reclassification was it modest increase in the percentage of neighborhood centers in the metro area. As outlined in Graph =2, the SOWIIN—Vest Metro area continues to have the greatest concentration of retail space, however, the Northwest and Southeast markets each gained three percent (3%) market share of the total GLA last year. This trend Will continue through the turn of the century as major malls are planned for these markets. TOTAL GROSS LEASABLE AREA BY GEOGRAPHIC SECTOR 1995 St. Paul CBD Minneapolis C80 1% 410 Northeast Southwest21 % 35% 4=,., rthvjest Southeast 24% 15% GRAPH #2 GROSS LEASABLE AREA BY CENTER TYPE WITHIN GEOGRAPHIC SECTORS 1995 TOTAL GLA - NORTHEAST Regi Community 34% 32% Neighborhood 34% TOTAL GLA - SOUTHEAST Ra°nnYTi Cantu°nqy u•, NeoGahW4 3", TOTAL GLA - NORTHWEST 27%. u'• 45% TOTAL GLA - SOUTHWEST Caanu " lT, Re°anMar. P. VACANCY The following two graphs highlight average vacancy rates by geographic sector and type of center. The average Type of Center Sector Range Midpoint Centers Neighborhood NE 0.41.36% 4.54% 38 NW 0.64.2246 5.0046 58 SE 0-74.56% 8.36% 31 9N 0-62.20410 2.73'6 76 Community NE 0-78.68% 5.14'6 12 NW 0-27.27% 7.60% 10 SE 0-19.86% 1.29% 11 9N 0.35.18% 2.15% 11 Regional NE 6401,55.31% 8.700o 4 NW 2.7041,9.17% 4.954; 3 SE TFC TFC 1 SW 0-14.9406 3.65°'0 5 Neighborhood All 0-74.56% 4.54% 204 Community All 0-78.68% 2.42% 43 Regional All 0-55.3006 3.8741. 13 CBDs All 0.73.13% 12.2006 13 All Types NE 0.78.68% 5.1041. 54 All Types NW 0-64.22% 5.0041. 71 All Types SE 0-74.56% 4.25% 43 All Types 9N 0-62.20% 2.45% 92 All Types MCBD 0-73.13% 8.10% 9 All Types SPC BD 12.2%-34.0% 23.60% 4 All Centers All Markets 0-78.68°6 4.45'6 273 vacancy rate declined from 8.3'y, to 8.011/o. This is the lowest average vacancy rate since the inception of the Annual Research Report in 1959. Because the midpoint vacancy rate decreased significantly, one can assume the number of centers reporting lower vacancy significantly increased over the last year. i If A^—^- r .-I nal rin, n, —.--- TABLE #1 Table =1 identifies the midpoint vacancy rate for centers in the Twin Cities. The overall midpoint vacancy rate for centers significantly decreased from 6.00% to 4.45%. This is in part due to the reclassification that was previously identified. The table below shows the three year trend. TABLE #2 I I a " HBIsNEIG ORHOOD CENTERS In the Twin Cities metropolitan area, neighborhood shopping centers account for 37% of the overall retail GLA. Neighborhood shopping centers historically average 30,000 to 100,000 square feet and have been intended to conveniently service the day-to- day needs of the residential population within a one to two mile radius. With the emergence of value -oriented warehouse supermarkets, free-standing video stores and large discount drug stores drawing traffic from a much larger radius, the neighborhood center has experienced a change from its traditional tenant mix. Coffee shops, bagel bakeries and upscale restaurants have become MON prevalent in today's neighborhood shopping center IN Larger in size (approximately 100,000 to 150,000 square feet) are power centers located close to freeways for maximum exposure. Due to their size these centers are also classified as neighborhood shopping centers. Their tenants, known as category killers, offer a vast selection of goods as well as competitive pricing. Ample parking and visibility are key to their success. The midpoint vacancy rate for neighborhood shopping centers is 4.54% with a range from zero to 74.56%. The table below highlights the historical trend for these centers: Midpoint Year Vacancy Rate 1993 5.70% 1994 6.30% 1995 4.54% Y The midpoint for real estate taxes remained at $2.36 perINsquarefoot. The range of taxes per square foot is from S.30 to $6.50. The midpoint is lower than in 1993, when it was $2.47 per square foot. While the tax expense remained flat. common area maintenance expenses increased slightly from $1.50 to 51.56 per square foot. This is only a modest increase from 51.54 that was reported in 1993. New tenants in the market are competing fiercely with established merchants for prime locations in neighborhood centers. Brueggers now competes with Chesapeake Bagels. Big City Bagels, and Twin City Bagel. Hollywood Video has joined the market in the rush to secure free-standing and end cap locations. Petsmaut is planning to go head-to-head with Pet Food Warehouse. Grow Biz continues to expand heavily into the neighborhood centers with Once Upon A Child. Disc Go Round. Music Go Round. Play It Again Sports. and Computer RenaiSsance. Only Deals. a 510.00 or less value store has repositioned itself from enclosed malls. to 6,000 to 9.000 Square foot neighborhood center locations. There continueS to be significant activity in both large and small neighborhood shopping center categories. Opus Corporation is pre -leasing the long awaited redevelopment of the corner of Winnetka Avenue and State Highway' 55. Golden Valley Commons is a 47.000 square foot center anchored by Snyder Drug and D'Amico & Sons. Also committed are Boston Market and Starbucks. Construction is scheduled for March of 1996. Opus Corporation recently completed a similar project in Highland Park called Highland Crossings Shopping Center. Anchored by a Barnes & Noble. this 44,000 square foot project involved the redevelopment of a former Carson Pirie Scott building. Other tenants include Video update, Boston Market and Old Country Buffet. Higblcnul Crossing is a new neigbborbood center developed by Opiis cit Faa-cl Pcnkui•cip and Clevelcind Avenue. T.F. Janus Company has recently completed West Village Center in Chanhassen. This 110.000 square foot center includes Byerly's. Kinko's. Paper WarehouSe, Premier Video and Century Bank. The Phase 11 project is on a five -acre parcel adjacent to the Byerly's. It est Village Center in 07anbasseu is ancborecl bi, Bvei 1 i' s. This 106, 000 sgiva-efoot ce Ner «'us dere/opal thistear by 777eJames Companies. Reliance Real Estate is under construction with a new 64.380 square foot neighborhood center at 80th Street and Cahill Road in Inver Grove Heights. Signed leases include Stephen's Cahill Market (Super Valu) - 43,930 square feet, Video Update, and Great Clips. The word "neighborhood" can no longer be applied t literally to this category of shopping center, as so much of the development of this size of centers are satellite centers around regional malls. Northtown and Maplewood Mall, Eden Prairie Center and Ridgedale are all examples of areas where neighborhood centers are clustering around regional shopping malls. I OPINIONS IREAL ESTATE TAXES Geographic Sector Range Midpoint Centers Overall 0.30-$17.85 2.70 227 Northeast 0.84-$9.00 2.21 45 Southeast 0.58-$10.00 2.41 34 Southwest 0.66-$17.85 3.00 77 Northwest 0.30-$4.86 2.43 60 Minneapolis CBD 0.30-$7.04 5.87 7 St. Paul CBD 01.20-$4.63 2.00 1 4 Type of Center Range Midpoint Centers Overall 0.30-$17.85 2.70 227 Neighborhood 0.30-$6.50 2.36 169 Community 0.75-$6.75 2.79 40 Regional 0.84-$17.85 4.12 7 CBDs 1.85-$7.04 1 4.63 11 As discussed in past reports, shopping center owners and merchants pay a disproportionate share of the total property tax burden, with a regional center in the survey reporting taxes as high as $17.85 per square foot. Following are several quotes from respondents to the survey summarizing the opinions of most people associated with commercial real estate; Property taxes are outrageous". Real estate taxes are out of control". The most outrageous in the country certainly are in the midwest!" RIDICULOUS!" The high property tax rate for commercial and industrial properties, specifically retail properties in the state of Minnesota, continues to be a significant factor in the profitability of retailers as well as the expansion of existing retailers. Furthermore, there is strong evidence that retailers new to the market sometimes forego opportunities due to the high rate of real estate taxes passed onto retailers. In the survey of merchants, 79% of the respondents said high real estate taxes were a major operational obstacle for them. Also, 55% of the respondents reported that they had been prohibited from entering or expanding in the marketplace due to the onerous real estate tax burden. Without question, the high real estate taxes have a negative impact on the market value of every center in - the state. This is especially critical now because of the continuing downward pressure on margins for retailers, and in turn, their ability to pay a certain percentage of their sales towards rent. Obviously, the thinning margins have a direct impact on the net rents that are achievable for all retail properties. National stores such as the Disney Store, Banana Republic, Williams Sonoma and Ann Taylor generally achieve above average sales for their stores in Minnesota, but tend to be well below average in terms of profitability and return on investment due to the property tax factor. Consequently, national retailers focus their attention on markets that are most profitable, and, therefore, place Minnesota lower on their priority market list. With respect to property tax appeals in the marketplace, many owners continue the trend of appealing property taxes on their respective properties. Last year, over 65% of owners responding to the survey had appealed their real estate taxes. The response for 1995 was not significant enough from property owners to conclude a specific percent of owners who had, in fact, appealed taxes. However, it appears that property tax assessments are coming more into line with appropriate market values, and may have hit the bottom in terms of the declining values of retail properties. Most notable in terms of property tax appeals is the Minnesota Supreme Court's upholding of the property tax refund for Rosedale Shopping Center of $3.1 million related to years 1991 and 1992. While there were special circumstances at Rosedale during this period, specifically the construction of the new Dayton's store and the retrofitting of the old Dayton's store, there is widespread speculation of the precedent this ruling sets for other property tax appeals. The same law firm which represented Rosedale, is currently representing Southdale, Maplewood Mall, Burnsville Center, Brookdale and Ridgedale in similar cases. The Southdale case has been heard and a ruling is expected in November of 1995. The results of these higher profile appeals are much anticipated by both property owners and retailers throughout the market. In conclusion, property taxes continue to be a major business expense for owners and merchants. Because of political issues, the likelihood of any significant reduction in property taxes is generally low. Meanwhile, owners and merchants will continue to have to fight the high tax climate which negatively impacts the valuation of properties and the profitability of the merchants' businesses. The MSCA supports comprehensive reform to the Minnesota property tax system in conjunction with the re w OPINIONS ICSC. The two groups have combined with other commercial and industrial property tax associations in lobbying and working towards true property tax reform. Only with the support of all merchants, property owners and managers throughout Minnesota is there a chance of seeing any meaningful property tax relief. We strongly encourage all retailers and owners to become involved in the efforts for reform. RENTAL RATES/RENEWALS Of the service providers surveyed. 624% have experienced constant rental rates for new and renewal leases in 1994; and 29"u reported increases in rental rates of ten percent or more. In 1994, owners reported 48% achieved increases of ten percent or more: and 48°-i1 experienced constant rental rates. .Merchants overwhelmingly MIMI) thought rental rues stayed flat. The disparity between owners and merchants could be because most of the merchants sun -eyed are locked into long term leases, while owners are dealing with constant lease rollover. RENTAL RATE CHANGE LAST YEAR OWNERS, SERVICE PROVIDERS, MERCHANTS 1995 Increase more than 10% Stayed the Same Decrease more than 10% 70.00°. 0.6 10.1. 20°: 30°. 40% 50% 60'. 70% 0 OWNERS SERVICE PROVIDER o MERCHANTS 54% of the owners thought rental rates would increase nest year. Conversely, only 20% of merchants believed this,will happen. Given that most owners and service providers believe the value of their properties have increased (see The Investment Market Section), merchants can probably expect to pay higher rents in 1996. RENTAL RATE PREDICTION FOR NEXT YEAR OWNERS. SERVICE PROVIDERS. MERCHANTS 1995 Increase more than 53.70•. 101e 35.79°. 20.00°. Stayed the Same 62 11', u:r....................... ................... ...i_e:set:............................. iii 70.00°, Decreasemore than y/fit 1.65°° 10°, 2.10•. 10.00°. 0'e 10°. 20°. 30°. 40°. 50°. 60°. 70°. 9 OWNERS a SERVICE PROVIDER; MERCHANTS THE INVESTMENT MARKET In 1993, 99% of the owners that responded to the survey question "What trends do you see with respect to the value of retail properties?" indicated that values were down. last year 50% had a similar response. This year, the owner's perception of market value has changed as 55% thought their properties had increased in value and 43% answered "stayed the same." The service providers were not quite as optimistic as they answered 35% and 62% respectively. Life insurance companies, pension fund advisors, and REITs are having difficulty finding quality retail property to acquire in the Twin Cities that meets their minimum yield requirements. Most of these investors prefer grocery/drug anchored centers or power centers. The only sale in the past two years that meets this criteria was Mapleridge Shopping Center (582.00/SF). The problem for this group of investors is that demand significantly exceeds the supply. The banks and life companies are clearly back in the mortgage market. Only five owners tried to refinance this year and all were successful. The availability of debt financing has allowed more investors to enter the market. which has increased the perceived value of properties. With all the cash (both equity and debt) chasing retail properties, one would think there would have been numerous transactions in 1995. Although several properties are under contract, only three properties NorthCOUrt Commons. Winnetka Commons. The Crossings at Roseville) have closed this year. Northcourt was acquired by a local investment group. Winnetka Commons was purchased by a local syndicator, and The OPINIONS Crossings by a regional investor. 1996 should be an active year for the investment market. If Congress passes a meaningful capital gains reduction, individual owners may consider selling assets. Owners should consider the befit way to get the top dollar and the buyers (both institutional and local) should be prepared to bid quickly and aggressively for assets. SALES PERFORMANCE The "soft landing" as predicted by the Federal Reserve Board seems to reflect retail sales performance this past year. The majority Of survey respondents indicated sales performance "stayed the same". As outlined in the second graph below, this trend is expected to continue next year. SALES PERFORMANCE CHANGE FROM LAST YEAR OWNERS, SERVICE PROVIDERS, MERCHANTS 1995 Increase more than i5': Stayed the Same Decrease more than 75°: 0% 10% 20% 308 40•. 50% 60% 70% 80.6 O OWNERS SERVICE PROVIDER O MERCHANTS SALES PERFORMANCE PREDICTION FOR NEXT YEAR OWNERS, SERVICE PROVIDERS, MERCHANTS 1995 Increase more than Stayed the Same Decrease more than 15°8 0% 10'. 20°e 30'. 40'. 50°e 60% 70'. 80% OWNERS SERVICE PROVIDERS MERCHANTS OPPORTUNITIES/OBSTACLES There are several obstacles that were noted by both service providers and on•ners of shopping centers that will have a future impact on this business. Owners felt that real estate taxes vvere their biggest obstacle. Nearly 50% of the respondents to the survey indicated their concern for high taxes. They also indicated that new developments and specifically "big boxes" are causing concerns for smaller centers and smaller retailers. Service providers also showed concern over high real estate taxes, but they are more concerned with the effect of the king r retailers. Z'he noted difficulties with Filling space after a large user vacates, finding enough retailers to use the large boxes, the lack of small retailers, the decline in women's apparel sales and the overall increase of competition and saturation of the marketplace. One comment that both owners and service providers mentioned is the increase in crime. This is the first year that such comments have been made, and therefore, deserves noting. While this is not something that was statistically measured in this year's survey, it could become a major concern in the future. Opportunities are being created by some of the same factors that were considered obstacles to some. Namely, the infusion of big box retailers means there can be some wonderful areas to create a niche market, or expand with new and creative ideas. Positive remarks from owners, retailers and service providers indicated the large number of rehabs of older centers and more neighborhood specialty areas were a good way to combat the "power center" and "big box" trend that is driving new development in this market. The loosening of financing requirements was also noted as a positive for further expansion of both centers and retail stores. 6 s* jre4 5 'fig t k 3{.Y•e,''r' r Ca kn.t7R'{^ tC'' . Yt{ SXvh l frtd Stk•} •{k'if Y.y{;N3' n k'.4n. S 9I a ,. r + i r .•7y71 r • t , a"f% • 9 G" 3v:i?SA:'0! t ate' ,rr' -.'!:.J.'C` .,w i.::a'" 1 t 2 3[ ,,tt r t pit C /! i 51 jrr' 5 e" F': y .r 5`ar\'9• c bw o,'r..w..? YI i. °a E?..t3:L+'?!a L" ILltiZrL s rk•'J ? ':1 «" '' 4" 1_, a ti q } _, ,,S.St t Ale y'x kYF+y. Yh£!•'"' dr' la[ }" ° !'' J'' 1'4 Y.7-'+ , - 4 >., si '''i " ii43..y r+'•,4^'cr A f S EWMA RY OF CONTENTS L 1995 Forecast Competition Chairman's Letter II. National and Minnesota Economic Profile III. Retail Forecast Kathleen Nye-Reiling, Towle Real Estate Co. VS. Whitney Peyton, CCIM, CB Commercial Real Estate Group IV. Financial Forecast Curt Glaser, Glaser Financial Group VS. Mike Meents, Towle Financial Services V. Office Forecast Kurt Knoff, CB Commercial -Real Estate Group VS. Steven Chirhart, SIOR, Griffin Companies VI. Industrial Forecast Dennis Panzer, Koll/Shelard vs. Mark Sims, United Properties VI. Multi -family Housing Forecast Kevin Doyle, CCIM, Welsh Companies VS. Bob Fransen, CCIM, CRB, Fransen Real Estate VII. Acknowledgement of Technical Support Lou,Minnesota - South Dakota CCIM Chapter Your Professional Commercial -Investment Real Estate Source September 22, 1995 To All Guests: The Minnesota/South Dakota CCIM Chapter in association with the University of St. Thomas and the Minnesota Real Estate Journal with their corporate sponsor Chicago Title Insurance Company, is pleased to present our First Annual Twin Cities Commercial Forecast Competition. Thanks to our committee members, who donated many hours of their time, we have put together a program that promises to be informative, yet fun! Special thanks should go to the companies that provided technical assistance. The Minnesota Real Estate Journal and Apartment Search. Profiles compiled the base information from which our presenters will make future predictions. The Minnesota/South Dakota Chapter will determine the winners of the competition based on their predictions compared to actual 1996 results. Additional thanks to our sponsor Chicago Title Insurance Company who has contributed their financial resources to help underwrite this program. We sincerely hope that you will enjoy yourself and return for our 1996 Second Annual Competition. Let the competition begin! Sincerely, 5;9 4? Edward T. Rymer, CCIM 1995 Minnesota/South Dakota Chapter President 5750 Lincoln Drive • Edina, Minnesota 55436 • (612) 933-9020 The Designation Certified Commercial Investment Member is Awarded by Election of the Board of Governors of the REALTORS NATIONAL MARKETING INSTITUTE® of the NATIONAL ASSOCIATION OF REALTORS®. 430 Michigan Avenue. Chicano. Illinois 60611 (312) 440-8502 ccim Commercial Forecast Competition 1995 PARTICIPANT PROFILES Retail Market Kathleen Nye-Reiling athleen Nye-Reiling, co-owner of E'WTowle Real Estate Co., hasn't always worked in real estate. In fact, she spent 15 years working in mar- keting. For the first 10 years she worked for Levi Strauss, and then spent five years work- ing for an advertising agency. But I had always dabbled in real estate. I used to restore houses and sell them," Nye- Reiling says. She was licensed in 1985 and started work- ing at Towle where she syndicated and set up partnerships throughout the real estate world. With her strong marketing background, Nye- Reiling soon began using her old contacts to work on retail deals through the late 1980s. She spent four years working at Towle before setting out on her own for four years. She returned to Towle as a co-owner two years ago. Nye-Reiling split her college experience between one year at Drake University and two years at the University of Illinois before grad- uating with a degree in political science. She is the president of the Minnesota Shop- ping Center Association, serves on the board Of directors for the National Association of Industrial and Office Properties, and is a mem- ber of the Minneapolis Board of Realtors for Commercial and Industrial Developments. Reprinted with permission of the Minnesota Real Estate Journal The Minneapolis/St. Paul Retail Market Kathleen Nye-Reiling, Principal Towle Real Estate Company/Colliers International Observations Enormous changes in the consumer world and in the financing markets have created new waves of retail development. Just six years ago, our retail universe was 30 million sq. ft. Today, according to the MREJ survey, it approaches 41 million square feet with 5 million sq. ft. planned for 1995 and 1996. Almost all of the development in the past few years has been in "power centers" - groupings of retailers who share common architecture and access and a common bond of being destination retailers. In spite of huge growth in the market, vacancy levels will decrease slightly because little spec space is coming into the market with the new development. Further, regional malls are finding value retailers to release available spaces. There will be strong absorption of space but older centers will continue to deteriorate. Many should be recycled for education, government or housing. Two things are influencing the health and profitability of retail operations: increased competition, and rising costs for employment, health care insurance, advertising, taxes and CAM costs. Retailing growth may be limited by the unavailability of retail workers. Additional national and regional retailers will come into our market. The Mall of America has called attention to our high spending power and the relative strength of our retail market. Competition between category killers will be fierce. This is a game of survival of the fittest. Landlords accepting long leases with third or fourth string competitors will be looking at vacated space well before the lease expires. In downtown Minneapolis, some retail space in Gaviidae I and in Riverplace was converted to office space to satisfy a hungry office market seeking location and identity. FOUR TRENDS INFLUENCING RETAIL REAL ESTATE: The Four E's" Efficiency: Consumers have less discretionary time. Convenience and access are important. Catalog sales and other types of electronic retailing will continue to grow providing "retailing without the store". Economy: The consumer wants value and has knowledge of the products, brands and prices. Promotional, value oriented retailers are being recruited by regional malls. Price wars will continue. Entertainment: Consumers seek fun environments that are stimulating and offer many activities. Amusement parks, theaters, golf, family parks and other attractions are co -existing and competing with retailers for the consumers time and money. Environment: The consumer wants to feel safe. Security personnel, good lighting and clear signage are important components to providing a safe environment for retailing. d 1 J I `V - PROPOSED SHOPPING CENTERS - 1995 & 1996 [A0 TWIN CITIES METROPOLITAN AREA l - Development Name City Square Footage Roseville Crossings Roseville 31,639 Stillwater Marketplace Stillwater 35,240 Golden Valley Commons Golden Valley 47,000 Westbrook Marketplace Brooklyn Park 95,310 Shops of Lyndale, Phase I1 Richfield 100,000 Hartford Place Eden Prairie 165,000 Northtown Village Blaine 175,000 Maplewood Power Center Maplewood 240,000 Vadnais Square Vadnais Heights 240,000 Boulevard Gardens Minnetonka 250,000 Maple Grove Crossings Maple Grove 267,000 Brooklyn Park Commons Brooklyn Park 331,590 Park Place Plaza St. Louis Park 325,790 Eagan Promenade Eagan - 416,000 The Quarry Minneapolis 430,000 Midway Marketplace St. Paul 486,099 Inver Grove Marketplace Inver Grove Heights 670,000 Tamarack Village Woodbury 749,300 Total 5,054,698 Data compiled by Towle Real Estate Co. as of September 5, 1995. All information furnished to The Towle Real Estate Co. and/or The Towle Company is from sources judged to be reliable, however, no warranty or representation is made as to its accuracy or completeness. Property is subject to price change, prior sale, or lease and withdrawal from market, all without notice. A ccim Commercial Forecast Competition 1995 PARTICIPANT PROFILES Retail Market Whitney Peyton AMinneapolis native, Whitney Peyton joined CB Commercial, then called Coldwell Banker Commercial, in 1977, work- ing with office and retail properties. Before long, he was dealing exclusively with retail properties. He graduated from Minneapolis West High School in 1970. A short stint in the Army reserve was followed by a few years at the University of Minnesota. Peyton left the Uni- versity in 1975 to accept a position with First Bank System, where he wrote residential and real estate loans until 1977, when he joined CB Commercial. After gaining considerable experience in selling retail centers, Peyton was named as a vice president and sales manager in January 1992. He held that position until February 1994, when he was named a senior vice pres- ident and a managing officer. Peyton is a past president and member of the Minnesota/South Dakota CCIM, the first vice president of the Minnesota Shopping Center Association, and a member of the board of directors for the National Association of Industrial and Office Properties. II Reprinted withh perniission of the Minnesota Real Estate Journal I A rd -91C, r=-= 11 -1 tJ " COMMERCIAL TWIN CITIES MARKET OVERVIEW FOR THE MINNESOTA/SOUTH DAKOTA CCIM By: Whitney Peyton, CCIM Sr. V.P./Managing Officer Unlike other specialties, to understand retailers one must understand the consumer. The consumer's wants and needs drive the retailer's decisions. Those needs are as follows: has less time, wants more value and more choices. This equates to value -oriented retailers that are accessible and have the inventory (good, better, and best). In an effort to meet the consumer needs the retailers have segmented themselves into categories (electronics, toys, office products, etc.). The consumer knows that by going to shop at one of these categories they will have the optimum number of choices, in the minimum amount of time, delivered at a reasonable price. Winners: power centers and new power center construction. Losers: specialty stores in regional malls. Retailers need to be the biggest (Toys R Us), cheapest (WalMart), hottest (GAP) or easiest Walgreen), if not, they will die. Demand for retail in the Twin Cities continues to be strong. Currently there are approximately 5 million square feet of shopping centers planned or under construction. Virtually all of this new space is pre -leased to "large box users". This 5 million would be a shade over a 10% increase on the existing base. Some of these properties will not bring space to the market until 1997. It is reasonable to believe some may not be built. Retailers who will be new to the market from July 1, 1995 to June 30,1996 include: Home Depot; PETSmart; Gander Mountain; Warehouse Shoes; Strouds; Today's Man; Lands End; Old Navy; Hollywood Video; Incredible Universe; Baby Superstore; Mervyn's; AMC Theatre; Bed, Bath & Beyond; Media Play and 4-6 new restaurants. Some consolidation in these box users has occurred with the departure of F&M (2-3 other retailers will be on their heels). The large discount drugs were unable to carve out a niche as Target, Cub and Rainbow aggressively priced and strengthened their inventory levels in the health and beauty aids sector. Other categories will also have consolidation in this survival of the fittest" environment. CBCOMMER(lit REAI E.i TEGRntv.I%c•RR(IAERUC •IItE%SEDRE 1 EST ATERRDRER form No 204R•v4r91 Forecast for 1995 through July, 1996 is as follows: 1,620,000 square feet of new construction will come online. Vacancy will be 7.73%. Continued activity among large box users will drive additional development. Landlords will build side shop space cautiously. Side shop rents in new projects will increase. Some older centers will reach functional obsolescence. Our market boasts high household income with well educated consumers. Although they are not trendsetters, they continue to perform well as measured against the rest of the nation. Any discussion of the Twin Cities real estate market would not be complete without focusing on the high commercial real estate tax environment. At 5-6% of market value, Minnesota is one of the leaders in the nation. This makes property ownership a difficult proposition as the real estate taxes can eat into net operating income in a dramatic manner if the space is vacant. In conclusion, there will be additional development into the future. This will create a shakeout among existing properties as well as among retailers as they compete for the consumer dollars. 11 CB COMMERCIAL REAL ESTATE GROUP, INC.. BROKERAGE AND MANAGEMENT • LICENSED REAL ESTATE BROKER Form No. 204.01 Rev 4191 Mery Bj erke 15925 4th Avenue North 11 6 2) 473-1946 Plymouth, MN 55447 C5 March 7, 1996 N Mayor Joy Tierney b 3400 Plymouth Blvd. Plymouth, MN 55447 Dear Mayor Tierney, Thank you for taking the time this morning to meet with Jim Guddal and me to discuss the Plymouth City Center regarding the Westland property. Ruth and I first moved to Plymouth in 1964 and feel this is a wonderful place to live. In 1982 we decided to invest in Plymouth. We become a partner in Westland Equities, which then purchased about three acres in what is now Plymouth City Center. We are seeking your support in zoning this area as retail and not office tech. Property both to the north and south is zoned retail. From our observations it does not appear that any significant research has been done to assess the need for office tech or opposing retail. The type of zoning has a significant impact on the value of our investment. Office tech does not seem very descriptive and is not understood by most potential buyers, thus making the property less attractive. We realize that location is a major factor on the type of development and the ultimate use could be non retail. All we are asking for is the opportunity to maximize our investment, which will also provide the greatest tax benefit to the City and residents of Plymouth. We are confident that the skill and expertise of the city staff planning commission, and council will guide the development of the site to insure consistency with Plymouth standards. Again, thank you for your time. I really appreciate elected officials that take time from their busy schedules to meet with constituents. If you have any questions please feel free to call me at 473-1946 (H) or 790-4704 (B). Sincerely, Mery