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Declaration of Restricitive Covenants
DECLARATION OF RESTRICTIVE COVENANTS This Declaration of Restrictive Covenants (the "Declaration") is made and executed as of , 2017 (the "Effective Date"), by , LLC, a Minnesota limited liability company ("Declarant"), to and in favor of the Orono Housing and Redevelopment Authority, a politic subdivision under the laws of the State of Minnesota(the "HRA"). BACKGROUND The HRA was previously the owner of fee title to certain real property located in the City of Orono, Hennepin County, Minnesota, as legally described on Exhibit A (the "Property"). The HRA, and the City of Orono, a Minnesota municipal corporation (the "City"), entered into a Development Agreement dated November 30, 2001 (as amended to date, the "Development Agreement"), with Orono Senior Housing, LLC, a Minnesota limited liability company (the "Original Developer"). The HRA and the Original Developer also entered into a 99-year Ground Lease of the Property dated November 30, 2001, filed December 4, 2001, as Document No. 3466808, as amended by First Amendment to Ground Lease dated December 1, 2006, filed December 29, 2006, as Document No. 4342059, (collectively, the "Ground Lease"). The transactions contemplated under the Development Agreement and the Ground Lease involve the construction by the Original Developer of a 62-unit senior rental apartment development, parking facilities and related improvements on the Property (collectively, the "Project"). The Project was financed, in part, pursuant to the proceeds of the bonds issued by the City as its Senior Housing Revenue Bonds (Orono Woods Apartment Project) Series 2001A, its Senior Housing Revenue Bonds (Orono Woods Apartment Project) Taxable Series 2001B, and its Senior Housing Revenue Note (Orono Woods Apartment Project) Subordinate Series 2001C (together the "Housing Bonds"). The Project is subject to certain tax increment financing as more particularly set forth in the Development Agreement. Pursuant to the terms of the Ground Lease, the Original Developer closed on the mortgage financing made available through the proceeds of the Housing Bonds, constructed the Project, leased the rental housing units to senior residents, and has managed and operated the {00350591 } Project up until the date hereof, all in compliance with the terms of the Development Agreement and the Ground Lease. With the approval of the City and the HRA, the Original Developer has, effective as of the date of this document, sold and transferred its interest in the Project and under the Ground Lease to the Declarant named above. In connection with the closing of the sale transaction, the mortgage financing encumbering the Property and the Project securing the Housing Bonds has \ been paid and satisfied in full, and of record. In addition, as part of the sale transaction, pursuant -� to separate instruments, the HRA has simultaneously conveyed fee title to the Project and the Property to Declarant, subject to the Development Agreement, and pursuant to separate instruments, the parties have terminated and released the Ground Lease of record. Pursuant to a separate instrument, the parties have amended the Development Agreement to delete any reference to the Ground Lease, but the Development Agreement otherwise remains in full force and effect, and as an encumbrance against the Property and the Project. Even though the Ground Lease has been terminated, the parties intend that certain of the covenants and restrictions previously contained in the Ground Lease will continue to encumber the Property and the Project. Accordingly, the parties have entered into this Declaration for such purposes. NOW, THEREFORE, for One Dollar ($1.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree that the following restrictions and covenants will be deemed to be imposed on the Project and the Property: 1. Recitals. The above "Background" recitals are expressly incorporated in this Declaration by reference as if fully stated as additional terms and conditions of this Declaration. 2. Submission of Property to Declaration. This Declaration will be recorded against the Property. The Property is hereby subjected to the provisions of this instrument, and the Property will be owned, occupied, leased, sold, conveyed, mortgaged or otherwise transferred subject to covenants of this instrument. 3. Covenants. The Declarant covenants that during the "Term" (as defined below): a. The rental housing units in the Project will be rented only to persons fifty- five (55) years of age or older (the "Senior Housing Restriction"). The Senior Housing Restriction will be deemed satisfied if a married couple rents a rental housing unit in the Project and one of the spouses is 55 years of age or older, even though one spouse is younger than 55 years of age. Moreover, if a housing unit is leased to a married couple, one of whom is 55 years of age or older, and one of whom is less than 55 years of age, and if the older spouse dies, or due to health reasons must relocate to a nursing home or similar facility, then the younger spouse remaining in the housing unit will continue to be deemed to meet and satisfy the Senior Housing Restriction, even if he/she is less than 55 years of age. vtce is cl 01-11"'7 7 {00350591 } 2 b. To the extent permitted by law, Declarant will give preference in the rental of rental housing units in the Project which become vacant in the following order of priority (the "Orono Preference Requirement"): i. To persons who are residents or former residents of the City; ii. To persons who have a child who is a resident of the City; iii. Persons who have at any time been full time employees of the City or an agency or department of the City; and iv. Persons who are residents or former residence of the City of Long Lake. The Orono Preference Requirement will apply only if there is a waiting list for available housing units. /y Li eq F g u vtaul 7 Except for the Senior Housing Restriction and the Orono Preference Requirement Declarant will not discriminate upon the basis of race, color, creed, religion, ancestry, national origin or sex, affectional preference, disability, marital status or status with regard to public assistance, in the lease, or rental or in the use or occupancy of the Project. Any use of the Project not authorized by this Section will be subject to the prior written approval of the HRA, which it may deny in its absolute discretion. 4. Term. The restrictions and covenants of this Declaration will remain in effect beginning on the Effective Date, and ending on the earliest of (i) February 1, 2024; or (ii) termination of the Tax Increment Financing District No. 1-1 as described in the Development Agreement; or (iii) the loss or destruction of the Property caused by fire, windstorm, tornado, flood or other casualty (the "Term"). At the expiration of the Term, this Declaration will be null, void and of no further force or affect without any further action, instrument or acknowledgment by the parties. 5. Covenants Running With the Land. Declarant hereby agrees that it is the express intent that each of the affirmative and negative covenants and restrictions set forth above shall be construed to be, deemed, and is hereby declared to be a covenant running with the Property and that the benefit and burden of such covenants and restrictions shall pass to, and be binding upon Declarant's successors and assigns and shall be perpetual during the Term, unless terminated or deleted as hereinafter provided. Each and every contract, lease, conveyance, agreement or other instrument hereafter executed covering or conveying the Property or any part or portion thereof shall conclusively be held to have acquired such interest in the Property or any portion thereof subject to the encumbrance of this instrument, regardless of whether or not such instrument is set forth or referred to, or specifically agreed to be performed by any such transferee, in any such contract, lease, conveyance, agreement or other such instrument. 6. Remedies, Enforceability. In the event of a violation, or attempted violation of any of the covenants or restrictions above, the HRA may institute and prosecute any proceeding {00350591 } 3 at law or in equity to abate, prevent or enjoin any such violation or to specifically enforce the covenants therein set forth. Notwithstanding any other provision hereof, enforcement of these covenants and restrictions shall not result in any claim against the Project, or against the rents or other income from the property. Until terminated or deleted as hereinafter provided, the provisions hereof are imposed upon and made applicable to the Property and the Project and shall be enforceable against the Declarant, each purchaser, grantee, owner or lessee of the Project and the respective heirs, legal representatives, successors and assigns of each. No delay in enforcing the provisions of said covenants and restrictions as to any breach or violation shall impair, damage or waive the right to enforce the same or to obtain relief against or recover for the continuation or repetition of such breach or violation or any similar breach or violation thereof at any later time or times. 7. Attorneys' Fees to Prevailing Party. In the event of any litigation between the parties under any of the provisions of this instrument, the non-prevailing party to such litigation agrees to pay to the prevailing party all costs and expenses (including, without limitation, expert fees, costs of investigation, deposition costs, travel costs and reasonable attorneys' fees) incurred by the prevailing party in such litigation. The determination of whether a party is a "prevailing party," and the reasonable amount of attorneys' fees and other costs recoverable, will all be reserved to and decided by the Judge presiding over such litigation. The parties agree that the amount of attorneys' fees and other costs which may be awarded must bear a reasonable relationship to, and must be limited by the Judge to a reasonable amount in view of, the amount recovered or the relief obtained by the prevailing party. 8. Estoppel Certificate. Within fifteen (15) days after written request by any party to this instrument, the other party will provide a certificate confirming (to the extent accurate) that this instrument remains in full force and effect at such time, that there are no defaults or claimed defaults by any party under this instrument, and providing such further factual assurances as may be reasonably requested. 9. Notices. Any notice or election herein required or permitted to be given or serviced by any party hereto upon the other will be in writing and delivered in person, by email, by electronic pdf, or recognized overnight delivery service (i.e., Federal Express, UPS, etc.), addressed as follows: If to Declarant: , LLC Email: With a Copy to: David E. Kirkman Ravich Meyer Kirkman McGrath Nauman & Tansey, A Professional Association 150 South Fifth Street, #3450 Minneapolis, MN 55402 Email: dekirkman@ravichmeyer.corn {00350591 } 4 If to HRA: Orono Housing and Redevelopment Authority Attn: Email: With a Copy to: Email: Any such communication, if mailed as provided herein, will be deemed to have been received on the expiration of four (4) business days after mailing. Any such communication, if sent by recognized overnight delivery service (i.e., Federal Express, UPS, etc.) will be deemed to have been received on the first business day after the communication is sent by such means. Any communication personally delivered or sent by email or electronic pdf will be deemed to have been given upon delivery thereof in the manner above provided on the date delivered. If the last day of a period within which either party is required or allowed to provide a notice, demand, offer, election, acceptance or other communication hereunder should fall upon a Saturday, Sunday or legal holiday then, the next full business day will be included in such period and such notice, offer, demand, request or communication may be made and given on such next full business day. 10. Governing Law. This Declaration will be governed by and construed in accordance with the laws of the State of Minnesota. [SEPARATE SIGNATURE PAGE ATTACHED] (00350591 } 5 IN WITNESS WHEREOF, the undersigned has executed this instrument as of the day and year first indicated above. , LLC, a Minnesota limited liability company By: Francis W. Lang Its: STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of , 2017, by Francis W. Lang, the of , LLC, a Minnesota limited liability company, on behalf of said company. Notary Public {00350591 } 6 ORONO HOUSING AND REDEVELOPMENT AUTHORITY, a politic subdivision under the laws of the State of Minnesota By: Its: STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of 2017, by , the of the Orono Housing and Redevelopment Authority, a politic subdivision under the laws of the State of Minnesota. Notary Public THIS INSTRUMENT WAS DRAFTED BY: Ravich Meyer Kirkman McGrath Nauman & Tansey, A Professional Association 150 South Fifth Street, Suite 3450 Minneapolis, MN 55402 {00350591 7 EXHIBIT A TO DECLARATION OF RESTRICTIVE COVENANT LEGAL DESCRIPTION OF THE PROPERTY Parcel 1: Lot 2, Block 1, Orono Ambar, according to the recorded plat. Hennepin County, Minnesota Torrens Property Parcel 2: Together with an easement for ponding purposes over part of the land depicted as Parcel 242A on Minnesota Department of Transportation Right of Way Plat No. 27-56, filed August 23, 1994, as Document No. 2544283, and taken by the State of Minnesota in Amended Final Certificate dated December 17, 1998, filed January 7, 1999, as Document No. 3106315, as created and described in Easement Agreement dated March 16, 1998, filed May 22, 1998, as Document No. 3017952. {00350591 } EXHIBIT B GROUND LEASE between ORONO HOUSING AND REDEVELOPMENT AUTHORITY, as Landlord and ORONO SENIOR HOUSING, LLC, as Tenant Dated as of , 2001 TABLE OF CONTENTS ARTICLE 1 DEFINITIONS 1.1 Definitions. 1.2 Exhibits 2 ARTICLE 2-LEASE AND TERM 3 2.1 Grant 3 2.2 Covenants. 3 2.3 Quiet Enjoyment. 3 2.4 Term. 3 2.5 Purchase of Development Property 3 2.6 Title to Improvements 4 ARTICLE 3-RENT 4 3.1 Rent. 4 3.2 Net Lease. 4 3.3 Manner of Payment. 4 ARTICLE 4-TENANT'S COVENANTS 4 4.1 Tenant's Equipment. 4 4.2 Maintenance. 5 4.3 Repairs. 5 4.4 Nondiscrimination; Restrictions on Use. 5 ARTICLE 5-FINANCING 5 5.1 Mortgages 5 5.2 Notice. 5 5.3 Performance. 6 6.4 New Lease. 6 5.5 Further Assurances. 7 5.6 Termination of Lease. 7 ARTICLE 6-ASSIGNMENT AND SUBLETTING 8 6.1 Assignments. 8 6.2 Subleases. 8 6.3 Other Agreements 8 ARTICLE 7-END OF TERM 8 7.1 Surrender. 8 7.2 Vesting. 8 7.3 Tenant's Equipment. 8 7.4 Acceptance. 8 7.5 Merger. 9 -i- ARTICLE 8-NOTICES AND ESTOPPELS 9 8.1 Notices. 9 8.2 Estoppels. 9 ARTICLE 9-DEFAULT 10 9.1 Events of Default. 10 9.2 Termination. 10 9.3 Payments. 11 9.4 Injunctive Relief 11 9.5 Forbearance. 11 9.6 Costs. 12 9.7 Waiver of Default 12 9.8 Tenant's Liability 12 ARTICLE 10-MISCELLANEOUS 12 10.1 Relationship. 12 10.2 Number and Gender. 12 10.3 captions. 12 10.4 Time. 12 10.5 Construction. 12 11.6 Law. 13 10.7 Binding. 13 10.8 Short Form. 13 10.9 Severability. 13 10.10 Counterparts 13 10.11 Interest Rate. 13 EXHIBIT A Legal Description of the Development Property A-1 EXHIBIT B Permitted Encumbrances B-1 -ii- THIS GROUND LEASE, made on or as of the day of November, 2001, by and between ORONO HOUSING AND REDEVELOPMENT AUTHORITY, a public body corporate and politic and a governmental subdivision under Minnesota law, and ORONO SENIOR HOUSING,LLC("ORONO SENIOR HOUSING,LLC"),a Minnesota limited liability company. The Authority and Orono Senior Housing,LLC,in consideration of the covenants herein contained, hereby agree as follows: ARTICLE l DEFINITIONS 1.1 Definitions. In this Lease: "City" means the City of Orono, Minnesota. "Commencement Date" means that date upon which all of the parties hereto have executed this Lease. "Development" means the Development Property and the Improvements to be constructed pursuant to the Development Agreement. "Development Agreement" means the Development Agreement dated as of November_, 2001 between the City, the Landlord and the Tenant. "Development Property" means the real property that is the subject of the Development Agreement, which is legally described in Exhibit A. "Event of Default" means any one or more of the events listed under Section 10.2 of this Lease. "Financing Documents" means any of the following documents to be executed and delivered in connection with the issuance and sale of the Housing Bonds and the Subordinate Housing Note: "Holder" means the holder of any Mortgage. "Improvements" means the 62-unit senior housing apartment building to be constructed by Tenant upon and within the Development Property pursuant to the Development Agreement. "Landlord" means the Authority, its successors and assigns. -1- "Lease" means this lease agreement for the Development Property entered into pursuant to the Development Agreement. "Mortgage" means any mortgage or deed of trust on Tenant's interest in this Lease, the Development Property and the Improvements permitted under Article 5 of this Lease. "Permitted Encumbrances" means the matters described in Exhibit C. "Rent" means any amounts due from Tenant to Landlord under the terms of this Lease. "Tenant" means Orono Senior Housing, LLC and its permitted successors and assigns. "Tenant's Equipment" means all movable equipment, furniture and other trade fixtures installed or placed in the Development by or for the account of Tenant or any occupant of the Development. "Term" means the period of time set out in Section 2.4 of this Lease. "Termination Date" means , 2100. "Unrelated Third Party" means an individual or entity that is not(i) an individual ("Related Individual") who is an owner or officer of Tenant or a Related Company, (ii) any subsidiary or parent of Tenant (each of which is a "Related Company"), or(iii) a general partnership, limited partnership or limited liability partnership ("Related Partnership") in which a Related Individual or Related Company is a partner, or (iv) a corporation or limited liability corporation in which a Related Individual, Related Company or Related Partnership is an owner, shareholder, officer, member or manager. 1.2 Exhibits. The following exhibits are attached to and by this reference made a part of this Lease: (1) "Exhibit A" - Legal Description of the Development Property (2) "Exhibit B" - Permitted Encumbrances -2- ARTICLE 2 LEASE AND TERM 2.1 Grant. Upon the terms and conditions of this Lease, Landlord demises and leases the Development Property to Tenant and Tenant leases and accepts the Development Property from Landlord subject to the Permitted Encumbrances. 2.2 Covenants. Landlord covenants to observe and perform all of the covenants and conditions to be observed and performed by Landlord under this Lease. Tenant covenants to pay the Rent when due under this Lease and to observe and perform all of the terms and conditions and covenants to be observed and performed by Tenant under this Lease. 2.3 Quiet Enjoyment. Landlord covenants that Tenant, on paying the Rent, shall peacefully have, hold and enjoy the Development Property subject to the terms of this Lease, subject only to the Permitted Encumbrances. 2.4 Term. The term of this Lease commences on the Commencement Date and expires at 11:59 p.m. on the Termination Date, unless terminated earlier as provided in this Lease. 2.5 Purchase of Development Property. On the Termination Date, if there is no uncured Event of Default by Tenant under this Lease at the time of exercise, Tenant may purchase the Landlord's entire interest in the Development Property on the following conditions: (1) Tenant shall give Landlord not less than thirty(30) days prior written notice exercising its right to purchase the Development Property, (2) the closing shall take place on a mutually convenient date at the principal office of Landlord or such other location as the parties agree, (3) the purchase price for the Landlord's entire interest in the Development Property shall be One Dollar($1.00), (4) at closing, Landlord shall convey fee title in the Development Property to Tenant by quit claim deed, assignments and other appropriate instruments of conveyance, such conveyance to be subject only to (i)the Permitted Encumbrances, (ii) at Landlord's option, a restriction running with the land for such period as the Landlord may specify to the effect that the Development may be used only for residential housing purposes available for occupancy by persons 62 years of age and older, and (iii) any liens and encumbrances created -3- or consented to by Tenant or arising from the failure of Tenant to perform or observe by its agreements under this Lease, (5) this Lease shall automatically terminate on closing, (6) Tenant shall reimburse Landlord for all reasonable out of pocket costs and expenses incurred by Landlord in connection with the conveyance. 2.6 Title to Improvements. Title to the Improvements hereafter erected or located on the Development Property by or on behalf of the Tenant shall remain the property of Tenant, except that if(1) Tenant does not purchase the Development Property pursuant to Section 2.5 of this Lease, all Improvements located on the Development Property on the Termination Date shall become the property of Landlord, or (2) Landlord terminates this Lease pursuant to Section 9.2(1) hereof, then Landlord may repossess the Development, as provided in said Section 9.2(1). ARTICLE 3 RENT 3.1 Rent. Tenant shall pay Rent to Landlord on of each calendar year until the Termination Date in the amount of$1. 3.2 Net Lease. It is the intention and purpose of Landlord and Tenant that this Lease shall be a "Net Lease" to Landlord. All costs and expenses of whatever character or kind, general and special, ordinary and extraordinary, foreseeable or unforeseeable, and of every kind and nature whatsoever that may be necessary in or about the operation of the Improvements shall be the responsibility of Tenant. 3.3 Manner of Payment. Rent payable to Landlord shall be paid to Landlord in immediately available funds of the United States of America at the office of Landlord set out in Section 9.1 or at such place and to such party as Landlord may from time to time designate. Except as otherwise provided, Rent that has accrued prior to the expiration or earlier termination of this Lease shall be absolutely net to Landlord throughout the Term without offset or deduction. Tenant's obligation to pay Rent that has accrued prior to the expiration or earlier termination of this Lease shall survive the expiration or earlier termination of this Lease. -4- ARTICLE 4 TENANT'S COVENANTS 4.1 Tenant's Equipment. All Tenant's Equipment shall be the property of Tenant, Tenant's tenants or any lessor of such equipment. Landlord shall have no interest in Tenant's Equipment. Landlord shall not be responsible for any loss or damage to Tenant's Equipment except to the extent caused by Landlord's wrongful act or negligence. 4.2 Maintenance. Tenant shall at Tenant's expense maintain the Improvements and,to the extent imposed by law on adjacent property owners, the adjacent sidewalks and curbs in good order and condition, ordinary wear excepted, and in compliance with legal requirements. 4.3 Repairs. Tenant shall make all necessary or appropriate capital and operating repairs and replacements and renewals to the Improvements, interior and exterior, structural and non-structural, ordinary and extraordinary, and foreseen and unforeseen sufficient for proper operation thereof using materials of good quality. The need for or appropriateness of such repairs, replacements and renewals and the quality of the materials used in accomplishing the same shall be in accordance with the reasonable standards of prudent operators of similar facilities. 4.4 Nondiscrimination: Restrictions on Use. Tenant covenants that during the Term,(-Wit shall permit the Development to be used only for residential rental housing and may rent units in the Development only to persons who are 62 years of age or older(the "Senior Housing Restriction"). In addition, the Developer shall to the extent permitted by law give preference in the rental of units in the following order of priority: (i)to persons who are residents or former residents of the City, (ii)persons who have a child who is a resident of the City-end, (iii)persons who have at any time been full time employees of the City or an agency or department of the City and(iv)persons who are residents or former residents of the City of Long Lake(the "Orono Preference Requirement"). The Senior Housing Restriction shall apply to all units. The Orono Preference Requirement shall apply only if there is a waiting list for available units. Except for the Senior Housing Restriction and the Orono Preference Requirement it shall not discriminate upon the basis of race, color, creed, religion, ancestry, national origin or sex, affectional preference, disability, marital status or status with regard to public assistance, in the sale, lease, or rental or in the use or occupancy of the Development Property or any improvements erected or to be erected thereon, or any part thereof. 470 (k2 oks q&tie& -5- ARTICLE 5 FINANCING 5.1 Mortgages. Tenant's interest in this Lease, the Development Property, the Improvements, or any combination thereof may be encumbered only as provided by the Financing Documents and the Development Agreement. 5.2 Notice. If any Holder registers with Landlord its name and address in writing by registered or certified mail, Landlord shall by registered or certified mail, return receipt requested, addressed as registered with Landlord, give such Holder a copy of any notice or other communication with respect to any claim that a default exists or is about to exist under this Lease and a copy of any notice changing Landlord's address. Any notice given to a Holder shall be deemed duly served when personally delivered to an officer of Holder or mailed in accordance with Section 8.1 of this Lease. 5.3 Performance. If Tenant fails to make any payment or perform any act required of Tenant under this Lease, then any Holder may (but shall not be obligated to), to the extent permitted under its Mortgage, make such payment or perform such act with the same effect as if made or performed by Tenant. Entry by a Holder upon the Development for such purpose or partial performance of the Mortgage shall not waive or release Tenant from any obligation or default under this Lease except for an obligation or default fully performed or cured by Holder. 5.4 New Lease. (a) If(i)this Lease is rejected or disaffirmed pursuant to bankruptcy law or other law affecting creditor's rights, (ii)Holder gives written request to Landlord not later than thirty (30) days after the effective date of such rejection or disaffirmance, (iii) Holder pays to Landlord all of Landlord's expenses (including reasonable attorneys' fees) incidental thereto, and(iv) Holder pays all Rent accrued as of the date of rejection or disaffirmance, then Landlord shall execute and deliver a new lease with Holder or its nominee, purchaser, assignee or transferee, as the case may be, for the remainder of the Term with the same terms as are contained herein except for charges and encumbrances caused or suffered by Tenant. (b) Any new lease entered into pursuant to this Section 5.4 shall be superior to all rights, liens and interest intervening between the date of this Lease and the date of such new lease. Upon the request of the new tenant, Landlord shall execute and deliver a memorandum of the new lease in recordable form so that notice of the new lease may be placed of record by the new tenant. -6- (c) The rights hereunder of Holders shall be exercisable by such Holders in the order of the priority of lien or other security interest of their respective Mortgages. (d) At Tenant's expense, upon written request of Tenant, any Holder, or any prospective Holder, Landlord shall deliver to them or any of them a separate written instrument signed and acknowledged by Landlord setting forth and confirming the provisions of this Section 5.4, and acknowledging to them or any of them in writing the receipt by Landlord of any notice or instrument given, sent or delivered to Landlord pursuant to the provisions of this Section 5.4. (e) When a new lease is entered into such Holder or(if reasonably approved by Landlord pursuant to the Development Agreement) its designee (such holder or designee the "Acquiring Holder," and the Mortgage of such Acquiring Holder the "Acquiring Holder's Leasehold Mortgage"), the liens on and estates and other interests in the Development Property or this Lease of all persons holding directly or indirectly under or through Tenant(including the Acquiring Holder's Leasehold Mortgage), other than liens, estates and interests which are subordinate to the Acquiring Holder's Leasehold Mortgage, shall immediately and without documentation continue in effect, attach to the new lease and be reinstated as to each other to the same extent, and in the same manner, order and priority, as if(i) the new lease were this Lease, (ii) this Lease had not been terminated, and (iii) the Acquiring Holder had acquired the leasehold estate under this Lease by assignment on the date the term of the new lease commences. Each lien, estate or interest which could have been extinguished by the foreclosure of the Acquiring Holder's Leasehold Mortgage shall be deemed to be subordinate to the Acquiring Holder's Leasehold Mortgage. (f) Notwithstanding any provision of this Section 5.4 apparently to the contrary,Landlord shall not be required to provide any notice to any Holder under this Section 5.4 unless such Holder has provided Landlord written notice of its existence in accordance with Section 5.2 hereof (g) Upon request of a Holder, Landlord will enter into an agreement with such Holder confirming the provisions of this Section 5.4 for the benefit of such Holder and acknowledging the Holder's Mortgage and the assignments made therein. -7- 5.5 Further Assurances. Landlord agrees to execute such amendments to this Lease and further agreements as may reasonably be requested by any Holder, provided such amendments and further agreements do not impose any material obligations or liabilities upon Landlord, or affect the rights of Landlord hereunder in any material respect. 5.6 Termination of Lease. No cancellation, surrender, abandonment, acceptance of surrender or modification or amendment of this Lease shall be binding upon any Holder or affect the lien of any Mortgage if done without the prior written consent of said Holder (provided (x) that no consent shall be required to a surrender on the Termination Date or earlier termination hereof, and (y) consents to any modification or amendment to this Lease shall not be unreasonably withheld or delayed by such Holder). ARTICLE 6 ASSIGNMENT AND SUBLETTING 6.1 Assignments. Tenant and its successors and assigns shall not assign or sublet all or substantially all of Tenant's interest in this Lease or the Development without the prior written consent of Landlord, except as otherwise provided in(a) the Development Agreement, (b) Article 5 hereof, or(c) Section 6.2 hereof. 6.2 Subleases. (a) Tenant may enter into subleases of the housing in the Improvements as provided in the Development Agreement without the need for Landlord consent. (b) Units in the Development may be subleased only for purposes of residential housing and no unit may be subleased to a person under 62 years of age. 6.3 Other Agreements. Tenant may enter into the Financing Documents and such other agreements affecting the Development Property as are contemplated by the Development Agreement. ARTICLE 7 END OF TERM 7.1 Surrender. Upon termination of this Lease or of Tenant's right of possession of the Development Property, Tenant shall immediately quit and surrender possession of the Development to Landlord in its then condition. -8- 7.2 Vesting. Upon termination of this Lease, if Tenant does not exercise Tenant's option to purchase under Section 2.5 of this Lease, all right,title and interest of Tenant in the Development shall automatically vest in Landlord without the necessity of confirmation by any other document. However, upon the request of Landlord, such vesting shall be confirmed in separate recordable instruments in form and substance acceptable to Landlord. 7.3 Tenant's Equipment. Any of Tenant's Equipment remaining in the Development after termination of this Lease or of Tenant's right of possession of the Development Property shall be deemed conclusively to have been abandoned by Tenant and, after notice to Tenant and Tenant's failure to respond within twenty(20) business days after service thereof, may be appropriated, sold, destroyed, or disposed of by Landlord without further notice or obligation to compensate Tenant or account therefor. 7.4 Acceptance. No modification, termination or surrender of this Lease or surrender of the Development Property or any part thereof or any interest therein by Tenant shall be valid or effective unless agreed to and accepted in writing by Landlord and any Holders, and no act by any representative or agent of Landlord or any Holder other than such written agreement and acceptance shall constitute acceptance thereof. 7.5 Merger. There shall be no merger of the leasehold estate created by this Lease with the fee estate in the Development Property by reason of the same party owning or holding any interest in such leasehold estate and any interest in such fee estate. No merger of the leasehold estate and fee estate shall occur unless and until all parties (including any Holder) having any interest in the leasehold estate created by this Lease and the fee estate in the Development Property shall join in and duly record a written instrument effecting such merger. ARTICLE 8 NOTICES AND ESTOPPELS 8.1 Notices. All notices and other communications from Landlord to Tenant or from Tenant to Landlord under this Lease shall be in writing and shall be deemed duly served if delivered personally to an officer of the party being served or if mailed by registered or certified mail, postage prepaid, addressed if to Landlord: -9- if to Tenant: or such other address or addresses as Landlord or Tenant shall have designated in writing to the other. Notices which are mailed shall be deemed to have been given on the date received as evidenced by the customary registered or certified mail receipt. 8.2 Estoppels. Landlord or Tenant shall at any time and from time to time upon not less than thirty (30) days prior notice from the other execute, acknowledge and deliver a written statement certifying (1) that this Lease is in full force and effect, subject only to such modification (if any) as may be set out therein, (2) the dates (if any) to which Rent is paid in advance, (3) that there are not, to such party's knowledge, any uncured defaults on the part of the other party, or specifying such defaults if any are claimed, and (4) such other matters as may be reasonably required by the requesting party. Any such statement may be relied upon by any prospective transferee or encumbrancer of all or any portion of the Development or any interest therein or any assignee of any such persons. If any party fails to timely deliver such statement, such party shall be deemed to have acknowledged that this Lease is in full force and effect, without modification except as may be represented by the other, and that there are no uncured defaults in the other's performance. ARTICLE 9 DEFAULT 9.1 Events of Default. Any one or more of the following events constitutes an Event of Default: (1) If Tenant shall have failed to pay when due Rent or any other amount payable by Tenant pursuant to this Lease within ten (10) days following -10- Tenant's receipt of written notice from Landlord stating that such payment was not made; or (2) If Tenant shall have failed to perform any of the other covenants, terms, conditions or provisions of this Lease or any of its obligations under the Development Agreement within sixty (60) days after Tenant's receipt of written notice specifying such failure; provided, however, with respect to those failures which cannot with due diligence be cured within said 60-day period, Tenant shall not be deemed to be in default hereunder if Tenant commences to cure such default within such 60-day period and thereafter continues the curing of such default with all due diligence; 9.2 Termination. If an uncured Event of Default exists under this Lease, then Landlord may, subject to Section 9.5 hereof, exercise one or more of the following remedies in addition to any other rights and remedies provided at law or in equity: (1) Landlord may terminate this Lease by written notice to Tenant and may forthwith repossess the Development and recover as damages the amounts provided in Section 9.3 hereof, or (2) Landlord may terminate Tenant's right of possession and repossess the Development without demand or notice of any kind and without terminating this Lease, in which event Landlord may(but will not be obligated to) relet all or any part of the Development or any part thereof for the account of Tenant for such rent and upon such terms as Landlord deems advisable and may make any changes, additions, improvements, redecorations and repairs to the Development as Landlord deems advisable without affecting Tenant's liability under this Lease. 9.3 Payments. If pursuant to Section 9.2 this Lease is terminated or Landlord terminates Tenant's right of possession and repossesses the Development, Tenant shall pay to Landlord on demand the sum of: (1) all unpaid Rent owing at the time of termination or repossession, as the case may be, (2) all expenses (together with interest thereon at a rate of twelve percent (12%) per annum from the date paid by Landlord) incurred by Landlord in terminating, repossessing and reletting including but not limited to costs of changes, additions, improvements, redecorations and repairs, brokerage and legal fees, and the collection of Rent, and -11- (3) any deficiency between the Rent, when due in accordance with this Lease, for the remainder of the Term and the payments, if any, received by Landlord from any reletting of the Development or portions thereof. 9.4 Injunctive Relief. If an uncured Event of Default exists under this Lease, Landlord shall have the right, in addition to any remedy available to Landlord under Section 9.2 of this Lease, to institute from time to time an action or actions for injunctive and/or other equitable relief. 9.5 Forbearance. If there is a Mortgage on Tenant's interest in this Lease or the Development Property, Landlord will not terminate this Lease or Tenant's right of possession of the Development Property pursuant to Section 9.2 of this Lease, if Holder or any purchaser or transferee of Tenant's interest in this Lease or the Development by reason of foreclosure or other proceedings or by deed or assignment in lieu of such proceedings(or an assignee of Holder or such purchaser or transferee) shall, within one hundred eighty(180) days after acquiring Tenant's interest in this Lease or the Development, cure all defaults susceptible of being cured by such entity (or, if such cure would reasonably require more than one hundred eighty(180) days and thereafter promptly, effectively and continuously proceed to cure such default). Nothing in this Section shall affect Landlord's right to enforce any remedy under this Lease for an Event of Default except, so long as Holder is in the process of curing such Event of Default or foreclosing its Mortgage under this Section,the right to terminate this Lease or Tenant's right of possession of the Development. 9.6 Costs. Tenant shall indemnify Landlord against all costs and charges (including reasonable legal fees) lawfully and reasonably incurred in enforcing payment of Rent, and in obtaining possession of the Development after an Event of Default of Tenant or upon expiration or earlier termination of this Lease, or in enforcing any covenant, proviso or agreement of Tenant contained in this Lease. Landlord shall indemnify Tenant against all costs and charges (including legal fees) lawfully and reasonably incurred in enforcing any covenant, proviso or agreement of Landlord contained in this Lease. 9.7 Waiver of Default. No failure or delay by Landlord or Tenant to insist on strict performance of any term of this Lease or to exercise any right, power, or remedy upon a breach of this Lease shall constitute a waiver of such term or such breach. 9.8 Tenant's Liability. Notwithstanding anything to the contrary provided in this Lease, it is specifically understood and agreed, such agreement being a primary consideration for the execution of this Lease by Tenant, that (i) there shall be absolutely no personal liability on the part of Tenant, or its officers, directors, members, employees and agents, to Landlord with respect to any of the terms, covenants and conditions of this Lease, and (ii) Landlord shall look solely to recovering possession of the Development Property in the event of any breach by Tenant of any of the terms, covenants and conditions of this Lease to be performed by Tenant. -12- ARTICLE 10 MISCELLANEOUS 10.1 Relationship. Nothing contained in this Lease shall create any relationship between the parties hereto other than that of lessor and lessee. Landlord and Tenant disclaim any intention to create a joint venture, partnership or agency relationship. 10.2 Number and Gender. The words "Landlord" and "Tenant" as used herein includes the plural as well as the singular. The use of specific gender includes any other gender as applicable. 10.3 Captions. The captions in this Lease are for convenience only and shall have no effect on the construction or interpretation of this Lease. 10.4 Time. Time is of the essence of this Lease and each of its provisions. 10.5 Construction. The provisions of this Lease shall be construed as a whole according to their common meaning, and not strictly for or against Landlord or Tenant. 10.6 Law. This Lease shall be governed by and construed under the laws of Minnesota. 10.7 Binding. This Lease is binding upon and inures to the benefit of Landlord and Tenant and their respective successors and assigns and shall not be for the benefit of any third parties other than such successors and assigns. 10.8 Short Form. Landlord and Tenant agree upon request of the other to execute a Short Form of this Lease suitable for recording. 10.9 Severability. If any term of this Lease or application of it to any person or circumstance is invalid or unenforceable,the remainder of this Lease or the application of it to other persons or circumstances shall not be affected, and each provision of this Lease shall be valid and enforceable to the extent permitted by law. 10.10 Counterparts. This Lease may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 10.11 Interest Rate. Any interest due from one party to another hereunder shall be at the interest rate specified herein or the maximum rate permitted by applicable law, if less. -13- IIT WITNESS OF THIS LEASE, Landlord and Tenant have properly executed it as of the date set out at its head. LANDLORD ORONO HOUSING AND REDEVELOPMENT AUTHORITY By: Name: Its: Executive Director [SIGNATURE PAGE TO LEASE (DEVELOPMENT PROPERTY)] -14- TENANT ORONO SENIOR HOUSING, LLC, a Minnesota limited liability company By: Wedum Foundation, its Manager Member By: Name: Its: [SIGNATURE PAGE TO LEASE (DEVELOPMENT PROPERTY)] -15- EXHIBIT A LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY M I:996288-93-796288 04 A-1 ORONO CITY COUNCIL MEETING MONDAY, MARCH 12,2001 • PARK COMMISSION COMMENTS—PAULINE BOUCHARD, REPRESENTATIVE—Continued Nygard asked about the cost of the benches. Gappa stated they would run about $400 each. PLANNING COMMISSION COMMENTS None. PUBLIC COMMENTS None. ZONING ADMINISTRATOR'S REPORT 4. #2640/2641 Orono Ambar, LLC,2060 Wayzata Boulevard 1. General Concept Plan Approval—Resolution No. 4619 • Michael Pahg of Great Lakes Management Company was present representing Mr. Dunbar. Weinberger stated that the applicant reduced the size of the retaining wall to about 75 feet long with an average height of about 2 feet. The primary change in the plans was to separate the outgoing traffic from the incoming traffic and parking lot area in front of the senior building. They angled the parking and made the traffic lane one way to reduce the width of the lot. The service road was made one way and exit only. The City's traffic engineer requested the following additional items: • Restriping for a right turn lane and acceleration lane on Highway 12 • A 14 foot width for each lane of traffic on the service drives • A 90 degree access to the underground parking to improve site lines • "One way—do not enter" signs at the west end of the parking area and east end of the service road, and stop signs at intersections within the service drive area • Snow storage areas. Weinberger stated that there would be more screening in front of the office building's underground parking access. Some day the service road may connect to Brimhall Avenue. He stated the current resolution does not approve rezoning at this time, but does list the rationale behind approving the rezoning when the final site plan approval is given. • Staff recommended approval of the resolution. 3 ORONO CITY COUNCIL MEETING • MONDAY, MARCH 12,2001 • 4. #2640/2641 Orono Ambar, LLC, 2060 Wayzata Boulevard 1. General Concept Plan Approval—Resolution No. 4619—Continued Sansevere thanked the applicant for addressing the City's concerns. Barrett suggested that on page 12 of the resolution, item 5, the word "granted" should be changed to "considered" in: Such approvals shall only be considered when the City Council finds that... White moved, and Sansevere seconded, to adopt Resolution No. 4619 as amended, approving the General Concept Plan for development of a 62 unit building for senior housing use and 23,000 s.f. general office building on property located at 2060 Wayzata Boulevard. Vote: Ayes 4, Nays 0. 2. Fees Gaffron stated that the Council had considered deferring certain up-front charges and development fees for the Dunbar senior housing project in exchange for guarantees that the use of the site and building would remain as senior housing for as long as possible. The deferred amounts plus interest would have to be paid back to the City if the use • becomes other than senior housing. Gaffron suggested that total park fees for the senior housing would be $192,200, with $31,000 paid up-front, and $161,200 deferred. The total sewer and water connection charge would be deferred at an amount of$40,838. Barrett stated that Gaffron was looking for conceptual approval and his report would still have to be reduced to contractual terms. Mayor Peterson questioned the 20 year affordable rental rates. Moorse explained that the affordable rental rates would be in place for 20 years (the TIF period), but the property would have to be maintained as senior housing for 40 years (the life of the HUD bond guarantee). Mayor Peterson asked about Mr. Dunbar's position in regards to the deferral. Gaffron stated he was in favor of the deferral. Barrett suggested Council grant conceptual approval for the proposal subject to the final agreement. White moved, and Sansevere seconded, to grant conceptual approval to the Sewer and Water Connection Charges and Park Fees. Vote: Ayes 4,Nays 0. S 4 EXHIBIT B GROUND LEASE between ORONO HOUSING AND REDEVELOPMENT AUTHORITY, as Landlord and ORONO SENIOR HOUSING, LLC, as Tenant Dated as of , 2001 '1‘ TABLE OF CONTENTS ARTICLE 1 DEFINITIONS 1 1.1 Definitions. 1 1.2 Exhibits 2 ARTICLE 2-LEASE AND TERM 3 2.1 Grant 3 2.2 Covenants. 3 2.3 Quiet Enjoyment. 3 2.4 Term. 3 2.5 Purchase of Development Property 3 2.6 Title to Improvements 4 ARTICLE 3-RENT 4 3.1 Rent. 4 3.2 Net Lease. 4 3.3 Manner of Payment. 4 ARTICLE 4-TENANT'S COVENANTS 4 4.1 Tenant's Equipment. 4 4.2 Maintenance. 5 4.3 Repairs. 5 4.4 Nondiscrimination; Restrictions on Use. 5 ARTICLE 5-FINANCING 5 5.1 Mortgages 5 5.2 Notice. 5 5.3 Performance. 6 6.4 New Lease. 6 5.5 Further Assurances 7 5.6 Termination of Lease. 7 ARTICLE 6-ASSIGNMENT AND SUBLETTING 8 6.1 Assignments. 8 6.2 Subleases. 8 6.3 Other Agreements 8 ARTICLE 7-END OF TERM 8 7.1 Surrender. 8 7.2 Vesting. 8 7.3 Tenant's Equipment. 8 7.4 Acceptance. 8 7.5 Merger. 9 -i- 4 ARTICLE 8-NOTICES AND ESTOPPELS 9 8.1 Notices. 9 8.2 Estoppels. 9 ARTICLE 9-DEFAULT 10 9.1 Events of Default. 10 9.2 Termination. 10 9.3 Payments. 11 9.4 Injunctive Relief 11 9.5 Forbearance. 11 9.6 Costs. 12 9.7 Waiver of Default 12 9.8 Tenant's Liability 12 ARTICLE 10-MISCELLANEOUS 12 10.1 Relationship. 12 10.2 Number and Gender. 12 10.3 Captions. 12 10.4 Time. 12 10.5 Construction. 12 11.6 Law. 13 10.7 Binding. 13 10.8 Short Form. 13 10.9 Severability. 13 10.10 Counterparts 13 10.11 Interest Rate. 13 EXHIBIT A Legal Description of the Development Property A-1 EXHIBIT B Permitted Encumbrances B-1 -ii- THIS GROUND LEASE, made on or as of the day of November, 2001, by and between ORONO HOUSING AND REDEVELOPMENT AUTHORITY, a public body corporate and politic and a governmental subdivision under Minnesota law, and ORONO SENIOR HOUSING,LLC("ORONO SENIOR HOUSING,LLC"),aMinnesota limited liability company. The Authority and Orono Senior Housing,LLC,in consideration of the covenants herein contained, hereby agree as follows: ARTICLE 1 DEFINITIONS 1.1 Definitions. In this Lease: "City" means the City of Orono, Minnesota. "Commencement Date" means that date upon which all of the parties hereto have executed this Lease. "Development" means the Development Property and the Improvements to be constructed pursuant to the Development Agreement. "Development Agreement" means the Development Agreement dated as of November , 2001 between the City, the Landlord and the Tenant. "Development Property" means the real property that is the subject of the Development Agreement, which is legally described in Exhibit A. "Event of Default" means any one or more of the events listed under Section 10.2 of this Lease. "Financing Documents" means any of the following documents to be executed and delivered in connection with the issuance and sale of the Housing Bonds and the Subordinate Housing Note: "Holder" means the holder of any Mortgage. "Improvements" means the 62-unit senior housing apartment building to be constructed by Tenant upon and within the Development Property pursuant to the Development Agreement. "Landlord" means the Authority, its successors and assigns. -1- "Lease" means this lease agreement for the Development Property entered into pursuant to the Development Agreement. "Mortgage" means any mortgage or deed of trust on Tenant's interest in this Lease, the Development Property and the Improvements permitted under Article 5 of this Lease. "Permitted Encumbrances" means the matters described in Exhibit C. "Rent" means any amounts due from Tenant to Landlord under the terms of this Lease. "Tenant" means Orono Senior Housing, LLC and its permitted successors and assigns. "Tenant's Equipment" means all movable equipment, furniture and other trade fixtures installed or placed in the Development by or for the account of Tenant or any occupant of the Development. "Term" means the period of time set out in Section 2.4 of this Lease. "Termination Date" means , 2100. "Unrelated Third Party" means an individual or entity that is not (i) an individual ("Related Individual") who is an owner or officer of Tenant or a Related Company, (ii) any subsidiary or parent of Tenant (each of which is a "Related Company"), or (iii) a general partnership, limited partnership or limited liability partnership ("Related Partnership") in which a Related Individual or Related Company is a partner, or (iv) a corporation or limited liability corporation in which a Related Individual, Related Company or Related Partnership is an owner, shareholder, officer, member or manager. 1.2 Exhibits. The following exhibits are attached to and by this reference made a part of this Lease: (1) "Exhibit A" - Legal Description of the Development Property (2) "Exhibit B" - Permitted Encumbrances -2- ARTICLE 2 LEASE AND TERM 2.1 Grant. Upon the terms and conditions of this Lease, Landlord demises and leases the Development Property to Tenant and Tenant leases and accepts the Development Property from Landlord subject to the Permitted Encumbrances. 2.2 Covenants. Landlord covenants to observe and perform all of the covenants and conditions to be observed and performed by Landlord under this Lease. Tenant covenants to pay the Rent when due under this Lease and to observe and perform all of the terms and conditions and covenants to be observed and performed by Tenant under this Lease. 2.3 Quiet Enjoyment. Landlord covenants that Tenant, on paying the Rent, shall peacefully have, hold and enjoy the Development Property subject to the terms of this Lease, subject only to the Permitted Encumbrances. 2.4 Term. The term of this Lease commences on the Commencement Date and expires at 11:59 p.m. on the Termination Date, unless terminated earlier as provided in this Lease. 2.5 Purchase of Development Property. On the Termination Date, if there is no uncured Event of Default by Tenant under this Lease at the time of exercise, Tenant may purchase the Landlord's entire interest in the Development Property on the following conditions: (1) Tenant shall give Landlord not less than thirty (30) days prior written notice exercising its right to purchase the Development Property, (2) the closing shall take place on a mutually convenient date at the principal office of Landlord or such other location as the parties agree, (3) the purchase price for the Landlord's entire interest in the Development Property shall be One Dollar($1.00), (4) at closing, Landlord shall convey fee title in the Development Property to Tenant by quit claim deed, assignments and other appropriate instruments of conveyance, such conveyance to be subject only to (i) the Permitted Encumbrances, (ii) at Landlord's option, a restriction running with the land for such period as the Landlord may specify to the effect that the Development may be used only for residential housing purposes available for occupancy by persons 62 years of age and older, and(iii) any liens and encumbrances created -3- or consented to by Tenant or arising from the failure of Tenant to perform or observe by its agreements under this Lease, (5) this Lease shall automatically terminate on closing, (6) Tenant shall reimburse Landlord for all reasonable out of pocket costs and expenses incurred by Landlord in connection with the conveyance. 2.6 Title to Improvements. Title to the Improvements hereafter erected or located on the Development Property by or on behalf of the Tenant shall remain the property of Tenant, except that if(1) Tenant does not purchase the Development Property pursuant to Section 2.5 of this Lease, all Improvements located on the Development Property on the Termination Date shall become the property of Landlord, or (2) Landlord terminates this Lease pursuant to Section 9.2(1) hereof, then Landlord may repossess the Development, as provided in said Section 9.2(1). ARTICLE 3 RENT 3.1 Rent. Tenant shall pay Rent to Landlord on of each calendar year until the Termination Date in the amount of$1. 3.2 Net Lease. It is the intention and purpose of Landlord and Tenant that this Lease shall be a "Net Lease" to Landlord. All costs and expenses of whatever character or kind, general and special, ordinary and extraordinary, foreseeable or unforeseeable, and of every kind and nature whatsoever that may be necessary in or about the operation of the Improvements shall be the responsibility of Tenant. 3.3 Manner of Payment. Rent payable to Landlord shall be paid to Landlord in immediately available funds of the United States of America at the office of Landlord set out in Section 9.1 or at such place and to such party as Landlord may from time to time designate. Except as otherwise provided, Rent that has accrued prior to the expiration or earlier termination of this Lease shall be absolutely net to Landlord throughout the Term without offset or deduction. Tenant's obligation to pay Rent that has accrued prior to the expiration or earlier termination of this Lease shall survive the expiration or earlier termination of this Lease. -4- ARTICLE 4 TENANT'S COVENANTS 4.1 Tenant's Equipment. All Tenant's Equipment shall be the property of Tenant, Tenant's tenants or any lessor of such equipment. Landlord shall have no interest in Tenant's Equipment. Landlord shall not be responsible for any loss or damage to Tenant's Equipment except to the extent caused by Landlord's wrongful act or negligence. 4.2 Maintenance. Tenant shall at Tenant's expense maintain the Improvements and, to the extent imposed by law on adjacent property owners, the adjacent sidewalks and curbs in good order and condition, ordinary wear excepted, and in compliance with legal requirements. 4.3 Repairs. Tenant shall make all necessary or appropriate capital and operating repairs and replacements and renewals to the Improvements, interior and exterior, structural and non-structural, ordinary and extraordinary, and foreseen and unforeseen sufficient for proper operation thereof using materials of good quality. The need for or appropriateness of such repairs, replacements and renewals and the quality of the materials used in accomplishing the same shall be in accordance with the reasonable standards of prudent operators of similar facilities. 4.4 Nondiscrimination; Restrictions on Use. Tenant covenants that during the Term, {reit shall permit the Development to be used only for residential rental housing and may rent units in the Development only to persons who are 62 years of age or older (the "Senior Housing Restriction"). In addition,the Developer shall to the extent permitted by law give preference in the rental of units in the following order of priority: (i)to persons who are residents or former residents of the City, (ii)persons who have a child who is a resident of the City-and, (iii) persons who have at any time been full time employees of the City or an agency or department of the City and (iv) persons who are residents or former residents of the City of Long Lake (the "Orono Preference Requirement"). The Senior Housing Restriction shall apply to all units. The Orono Preference Requirement shall apply only if there is a waiting list for available units. Except for the Senior Housing Restriction and the Orono Preference Requirement it shall not discriminate upon the basis of race, color, creed, religion, ancestry, national origin or sex, affectional preference, disability, marital status or status with regard to public assistance, in the sale, lease, or rental or in the use or occupancy of the Development Property or any improvements erected or to be erected thereon, or any part thereof. 9 /(0 k(26 tc(leAcevr°,,,,i S R 11=(Z `� -5- ARTICLE 5 FINANCING 5.1 Mortgages. Tenant's interest in this Lease, the Development Property, the Improvements, or any combination thereof may be encumbered only as provided by the Financing Documents and the Development Agreement. 5.2 Notice. If any Holder registers with Landlord its name and address in writing by registered or certified mail, Landlord shall by registered or certified mail, return receipt p requested, addressed as registered with Landlord, give such Holder a copy of any notice or other communication with respect to any claim that a default exists or is about to exist under this Lease and a copy of any notice changing Landlord's address. Any notice given to a Holder shall be deemed duly served when personally delivered to an officer of Holder or mailed in accordance with Section 8.1 of this Lease. 5.3 Performance. If Tenant fails to make any payment or perform any act required of Tenant under this Lease, then any Holder may(but shall not be obligated to), to the extent permitted under its Mortgage, make such payment or perform such act with the same effect as if made or performed by Tenant. Entry by a Holder upon the Development for such purpose or partial performance of the Mortgage shall not waive or release Tenant from any obligation or default under this Lease except for an obligation or default fully performed or cured by Holder. 5.4 New Lease. (a) If(i)this Lease is rejected or disaffirmed pursuant to bankruptcy law or other law affecting creditor's rights, (ii) Holder gives written request to Landlord not later than thirty(30) days after the effective date of such rejection or disaffirmance, (iii) Holder pays to Landlord all of Landlord's expenses (including reasonable attorneys' fees) incidental thereto, and (iv) Holder pays all Rent accrued as of the date of rejection or disaffirmance, then Landlord shall execute and deliver a new lease with Holder or its nominee, purchaser, assignee or transferee, as the case may be, for the remainder of the Term with the same terms as are contained herein except for charges and encumbrances caused or suffered by Tenant. (b) Any new lease entered into pursuant to this Section 5.4 shall be superior to all rights, liens and interest intervening between the date of this Lease and the date of such new lease. Upon the request of the new tenant, Landlord shall execute and deliver a memorandum of the new lease in recordable form so that notice of the new lease may be placed of record by the new tenant. -6- (c) The rights hereunder of Holders shall be exercisable by such Holders in the order of the priority of lien or other security interest of their respective Mortgages. (d) At Tenant's expense, upon written request of Tenant, any Holder, or any prospective Holder, Landlord shall deliver to them or any of them a separate written instrument signed and acknowledged by Landlord setting forth and confirming the provisions of this Section 5.4, and acknowledging to them or any of them in writing the receipt by Landlord of any notice or instrument given, sent or delivered to Landlord pursuant to the provisions of this Section 5.4. (e) When a new lease is entered into such Holder or (if reasonably approved by Landlord pursuant to the Development Agreement) its designee (such holder or designee the "Acquiring Holder," and the Mortgage of such Acquiring Holder the "Acquiring Holder's Leasehold Mortgage"), the liens on and estates and other interests in the Development Property or this Lease of all persons holding directly or indirectly under or through Tenant (including the Acquiring Holder's Leasehold Mortgage), other than liens, estates and interests which are subordinate to the Acquiring Holder's Leasehold Mortgage, shall immediately and without documentation continue in effect, attach to the new lease and be reinstated as to each other to the same extent, and in the same manner, order and priority, as if(i) the new lease were this Lease, (ii)this Lease had not been terminated, and (iii)the Acquiring Holder had acquired the leasehold estate under this Lease by assignment on the date the term of the new lease commences. Each lien, estate or interest which could have been extinguished by the foreclosure of the Acquiring Holder's Leasehold Mortgage shall be deemed to be subordinate to the Acquiring Holder's Leasehold Mortgage. (f) Notwithstanding any provision of this Section 5.4 apparently to the contrary, Landlord shall not be required to provide any notice to any Holder under this Section 5.4 unless such Holder has provided Landlord written notice of its existence in accordance with Section 5.2 hereof (g) Upon request of a Holder, Landlord will enter into an agreement with such Holder confirming the provisions of this Section 5.4 for the benefit of such Holder and acknowledging the Holder's Mortgage and the assignments made therein. -7- 5.5 Further Assurances. Landlord agrees to execute such amendments to this Lease and further agreements as may reasonably be requested by any Holder, provided such amendments and further agreements do not impose any material obligations or liabilities upon Landlord, or affect the rights of Landlord hereunder in any material respect. 5.6 Termination of Lease. No cancellation, surrender, abandonment, acceptance of surrender or modification or amendment of this Lease shall be binding upon any Holder or affect the lien of any Mortgage if done without the prior written consent of said Holder (provided (x) that no consent shall be required to a surrender on the Termination Date or earlier termination hereof, and (y) consents to any modification or amendment to this Lease shall not be unreasonably withheld or delayed by such Holder). ARTICLE 6 ASSIGNMENT AND SUBLETTING 6.1 Assignments. Tenant and its successors and assigns shall not assign or sublet all or substantially all of Tenant's interest in this Lease or the Development without the prior written consent of Landlord, except as otherwise provided in (a)the Development Agreement, (b) Article 5 hereof, or (c) Section 6.2 hereof. 6.2 Subleases. (a) Tenant may enter into subleases of the housing in the Improvements as provided in the Development Agreement without the need for Landlord consent. (b) Units in the Development may be subleased only for purposes of residential housing and no unit may be subleased to a person under 62 years of age. 6.3 Other Agreements. Tenant may enter into the Financing Documents and such other agreements affecting the Development Property as are contemplated by the Development Agreement. ARTICLE 7 END OF TERM 7.1 Surrender. Upon termination of this Lease or of Tenant's right of possession of the Development Property, Tenant shall immediately quit and surrender possession of the Development to Landlord in its then condition. -8- 7.2 Vesting. Upon termination of this Lease, if Tenant does not exercise Tenant's option to purchase under Section 2.5 of this Lease, all right, title and interest of Tenant in the Development shall automatically vest in Landlord without the necessity of confirmation by any other document. However, upon the request of Landlord, such vesting shall be confirmed in separate recordable instruments in form and substance acceptable to Landlord. 7.3 Tenant's Equipment. Any of Tenant's Equipment remaining in the Development after termination of this Lease or of Tenant's right of possession of the Development Property shall be deemed conclusively to have been abandoned by Tenant and, after notice to Tenant and Tenant's failure to respond within twenty (20) business days after service thereof, may be appropriated, sold, destroyed, or disposed of by Landlord without further notice or obligation to compensate Tenant or account therefor. 7.4 Acceptance. No modification, termination or surrender of this Lease or surrender of the Development Property or any part thereof or any interest therein by Tenant shall be valid or effective unless agreed to and accepted in writing by Landlord and any Holders, and no act by any representative or agent of Landlord or any Holder other than such written agreement and acceptance shall constitute acceptance thereof. 7.5 Merger. There shall be no merger of the leasehold estate created by this Lease with the fee estate in the Development Property by reason of the same party owning or holding any interest in such leasehold estate and any interest in such fee estate. No merger of the leasehold estate and fee estate shall occur unless and until all parties (including any Holder) having any interest in the leasehold estate created by this Lease and the fee estate in the Development Property shall join in and duly record a written instrument effecting such merger. ARTICLE 8 NOTICES AND ESTOPPELS 8.1 Notices. All notices and other communications from Landlord to Tenant or from Tenant to Landlord under this Lease shall be in writing and shall be deemed duly served if delivered personally to an officer of the party being served or if mailed by registered or certified mail, postage prepaid, addressed if to Landlord: -9- if to Tenant: or such other address or addresses as Landlord or Tenant shall have designated in writing to the other. Notices which are mailed shall be deemed to have been given on the date received as evidenced by the customary registered or certified mail receipt. 8.2 Estoppels. Landlord or Tenant shall at any time and from time to time upon not less than thirty(30) days prior notice from the other execute, acknowledge and deliver a written statement certifying (1) that this Lease is in full force and effect, subject only to such modification (if any) as may be set out therein, (2) the dates (if any) to which Rent is paid in advance, (3) that there are not, to such party's knowledge, any uncured defaults on the part of the other party, or specifying such defaults if any are claimed, and (4) such other matters as may be reasonably required by the requesting party. Any such statement may be relied upon by any prospective transferee or encumbrancer of all or any portion of the Development or any interest therein or any assignee of any such persons. If any party fails to timely deliver such statement, such party shall be deemed to have acknowledged that this Lease is in full force and effect, without modification except as may be represented by the other, and that there are no uncured defaults in the other's performance. ARTICLE 9 DEFAULT 9.1 Events of Default. Any one or more of the following events constitutes an Event of Default: (1) If Tenant shall have failed to pay when due Rent or any other amount payable by Tenant pursuant to this Lease within ten (10) days following -10- Tenant's receipt of written notice from Landlord stating that such payment was not made; or (2) If Tenant shall have failed to perform any of the other covenants, terms, conditions or provisions of this Lease or any of its obligations under the Development Agreement within sixty (60) days after Tenant's receipt of written notice specifying such failure; provided, however, with respect to those failures which cannot with due diligence be cured within said 60-day period, Tenant shall not be deemed to be in default hereunder if Tenant commences to cure such default within such 60-day period and thereafter continues the curing of such default with all due diligence; 9.2 Termination. If an uncured Event of Default exists under this Lease, then Landlord may, subject to Section 9.5 hereof, exercise one or more of the following remedies in addition to any other rights and remedies provided at law or in equity: (1) Landlord may terminate this Lease by written notice to Tenant and may forthwith repossess the Development and recover as damages the amounts provided in Section 9.3 hereof, or (2) Landlord may terminate Tenant's right of possession and repossess the Development without demand or notice of any kind and without terminating this Lease, in which event Landlord may(but will not be obligated to) relet all or any part of the Development or any part thereof for the account of Tenant for such rent and upon such terms as Landlord deems advisable and may make any changes, additions, improvements, redecorations and repairs to the Development as Landlord deems advisable without affecting Tenant's liability under this Lease. 9.3 Payments. If pursuant to Section 9.2 this Lease is terminated or Landlord terminates Tenant's right of possession and repossesses the Development, Tenant shall pay to Landlord on demand the sum of: (1) all unpaid Rent owing at the time of termination or repossession, as the case may be, (2) all expenses (together with interest thereon at a rate of twelve percent (12%) per annum from the date paid by Landlord) incurred by Landlord in terminating, repossessing and reletting including but not limited to costs of changes, additions, improvements, redecorations and repairs, brokerage and legal fees, and the collection of Rent, and -11- (3) any deficiency between the Rent, when due in accordance with this Lease, for the remainder of the Term and the payments, if any, received by Landlord from any reletting of the Development or portions thereof. 9.4 Injunctive Relief. If an uncured Event of Default exists under this Lease, Landlord shall have the right, in addition to any remedy available to Landlord under Section 9.2 of this Lease, to institute from time to time an action or actions for injunctive and/or other equitable relief. 9.5 Forbearance. If there is a Mortgage on Tenant's interest in this Lease or the Development Property, Landlord will not terminate this Lease or Tenant's right of possession of the Development Property pursuant to Section 9.2 of this Lease, if Holder or any purchaser or transferee of Tenant's interest in this Lease or the Development by reason of foreclosure or other proceedings or by deed or assignment in lieu of such proceedings (or an assignee of Holder or such purchaser or transferee) shall, within one hundred eighty(180) days after acquiring Tenant's interest in this Lease or the Development, cure all defaults susceptible of being cured by such entity (or, if such cure would reasonably require more than one hundred eighty(180) days and thereafter promptly, effectively and continuously proceed to cure such default). Nothing in this Section shall affect Landlord's right to enforce any remedy under this Lease for an Event of Default except, so long as Holder is in the process of curing such Event of Default or foreclosing its Mortgage under this Section, the right to terminate this Lease or Tenant's right of possession of the Development. 9.6 Costs. Tenant shall indemnify Landlord against all costs and charges (including reasonable legal fees) lawfully and reasonably incurred in enforcing payment of Rent, and in obtaining possession of the Development after an Event of Default of Tenant or upon expiration or earlier termination of this Lease, or in enforcing any covenant, proviso or agreement of Tenant contained in this Lease. Landlord shall indemnify Tenant against all costs and charges (including legal fees) lawfully and reasonably incurred in enforcing any covenant, proviso or agreement of Landlord contained in this Lease. 9.7 Waiver of Default. No failure or delay by Landlord or Tenant to insist on strict performance of any term of this Lease or to exercise any right, power, or remedy upon a breach of this Lease shall constitute a waiver of such term or such breach. 9.8 Tenant's Liability. Notwithstanding anything to the contrary provided in this Lease, it is specifically understood and agreed, such agreement being a primary consideration for the execution of this Lease by Tenant, that (i) there shall be absolutely no personal liability on the part of Tenant, or its officers, directors, members, employees and agents, to Landlord with respect to any of the terms, covenants and conditions of this Lease, and (ii) Landlord shall look solely to recovering possession of the Development Property in the event of any breach by Tenant of any of the terms, covenants and conditions of this Lease to be performed by Tenant. -12- • ARTICLE 10 MISCELLANEOUS 10.1 Relationship. Nothing contained in this Lease shall create any relationship between the parties hereto other than that of lessor and lessee. Landlord and Tenant disclaim any intention to create a joint venture, partnership or agency relationship. 10.2 Number and Gender. The words "Landlord" and "Tenant" as used herein includes the plural as well as the singular. The use of specific gender includes any other gender as applicable. 10.3 Captions. The captions in this Lease are for convenience only and shall have no effect on the construction or interpretation of this Lease. 10.4 Time. Time is of the essence of this Lease and each of its provisions. 10.5 Construction. The provisions of this Lease shall be construed as a whole according to their common meaning, and not strictly for or against Landlord or Tenant. 10.6 Law. This Lease shall be governed by and construed under the laws of Minnesota. 10.7 Binding. This Lease is binding upon and inures to the benefit of Landlord and Tenant and their respective successors and assigns and shall not be for the benefit of any third parties other than such successors and assigns. 10.8 Short Form. Landlord and Tenant agree upon request of the other to execute a Short Form of this Lease suitable for recording. 10.9 Severability. If any term of this Lease or application of it to any person or circumstance is invalid or unenforceable, the remainder of this Lease or the application of it to other persons or circumstances shall not be affected, and each provision of this Lease shall be valid and enforceable to the extent permitted by law. 10.10 Counterparts. This Lease may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 10.11 Interest Rate. Any interest due from one party to another hereunder shall be at the interest rate specified herein or the maximum rate permitted by applicable law, if less. -13- • • L IN WITNESS OF THIS LEASE, Landlord and Tenant have properly executed it as of the date set out at its head. LANDLORD ORONO HOUSING AND REDEVELOPMENT AUTHORITY By: Name: Its: Executive Director [SIGNATURE PAGE TO LEASE (DEVELOPMENT PROPERTY)] -14- • 1 TENANT ORONO SENIOR HOUSING, LLC. a Minnesota limited liability company By: Wedum Foundation, its Manager Member By: Name: Its: [SIGNATURE PAGE TO LEASE (DEVELOPMENT PROPERTY)] -15- EXHIBIT A LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY MI:796288.03 796288 04 A-1 Draft: 10/17/0 1 EXHIBIT B PERMITTED ENCUMBRANCES M l:796288.03 796288.04 A-1 REQUEST FOR COUNCIL ACTION Date: October 4, 2001 Item No.: Department Approval: Administrator Approval: Agenda Section: Zoning Name: Michael P. Gaffron Title: Planning Director Item Description: #2640/2641 Dunbar Development Corp., 2060 Wayzata Blvd. - Status Update (Final Council Approvals Scheduled for Oct. 22) - Review Senior Housing Final Building/Site/Landscaping Plans The Dunbar senior housing / office building project approval process is nearly complete, and final Council actions are tentatively scheduled for the October 22 meeting. In order that Council have as much time as possible to review the final documents, plans and conditions of approval, this item is placed on Council's agenda for discussion October 8 to identify any remaining issues or concerns. This will allow staff 2 weeks to address any outstanding items so that final approvals can be efficiently handled on October 22. List of Exhibits A - Draft Development Agreement B - Draft PUD 2A (Office) Developers Agreement C - Draft PUD 2B (Senior Housing) Developers Agreement D - Draft Preliminary Plat Approval Resolution E - Draft Final Plat Approval and General Development Plan Approval Resolution F - Draft Rezoning and PUD No. 2 Ordinance G- Miller Johnson Steichen Kinnard - Housing revenue Bonds Summary of Terms H - Senior Housing Building Floor Plans and Elevations I - Site Plan, Grading& Erosion Control Plan, Utility Plan J - Senior Housing Landscape Plan Project Staging Planned. Dunbar has had difficulty finding tenants for the office building. As a result, he is splitting the project into 2 phases: Phase 1, the senior housing building, will be commenced late this fall. Phase 2, the office building, will not commence until at least sometime in 2002. Most site work for the office will be delayed as well. Dunbar is also looking at other potential options for the office site. HUD Financing No Longer Proposed. Although Dunbar originally planned to use HUD financing for this project, he concluded that the anticipated delays in completing the HUD process would adversely affect the project schedule. Instead, he has obtained private financing through Miller Johnson Steichen Kinnard, Inc. for underwriting the $8 million Senior Housing Revenue Bonds. Their summary of terms is attached as Exhibit G. #2640/2641 Dunbar Dev. Corp. October 4, 2001 Page 2 Ground Lease. At the time HUD was still the funding source, Dunbar's consultants advised that City ownership of the senior housing land was not feasible based on HUD regulations and policies. Once HUD was no longer in the picture, the City's bond consultants pursued the ground lease option with the new underwriters and were successful in bringing the ground lease back. As currently proposed, the developer will sell Lot 2 to the City for $1, and the City will lease the land back to the developer for 99 years at $1 per year. The lease language will include conditions ensuring the site will be used for senior housing for the term of the lease. Deferral of Park and S & W Connection Fees. A question raised by the developer, especially now that the City will have ownership of the land, is whether the City will 'sunset' the deferred sewer & water fees (±$40,000) and deferred Park fees (+$160,000) at the end of the lease, rather than making them due and payable with 99 years of interest at 7% per year. Mr. Dunbar has indicated it has been his understanding throughout the process that the fees would be deferred for as long as the use of the property remained senior housing. Since the development agreement now includes a 99-year ground lease that requires the use to remain senior housing, he believes the fees should not have to be repaid. If the City now requires the fees to be repaid over a shorter time frame, and with interest, this is a substantial change to the initial agreement, and adversely affects his financing package, as well as the project's cash flow and rental rates. If the fees do not 'sunset', the deferred amount due with interest at the end of 99 years would be $162 million. Options the Council may want to consider include a long-term deferral without interest; a shorter term deferral without interest, say 10-15 years, at which time the fees become immediately due; and a short term deferral followed by a 5-10 year payment plan. If the fees were forgiven, the City could repay itself with a portion of the final 5 years of the tax increment revenue generated by the development. Senior Housing Building Plans Finalized. The senior housing floor plans and elevation views have been included in your packet for your final review and approval. Building materials include a rockface CMU along the exposed foundation, brick exterior for the lower levels of the front facade (2 levels of 3-story segment, 1 level of 2-story segment), and lap siding for the front upper story as well as for the side and rear facades (see plans, Exhibits H-I-J). Also included are the landscaping plan as well as grading, road, drainage and utility plans. A signage plan including the design of the entrance monuments has been submitted. An exterior lighting plan has yet to be submitted. Wally Case of DSU will be reviewing the landscape plan to confirm its conformity with the landscaping standards of the RPUD District. The Fire Marshal and the Long Lake Fire Chief have also reviewed the final plans and no site plan or building layout changes are anticipated as a result of their review. No detailed plans have been submitted for the office building. If the office eventually is built per the originally approved concept plan, a simple plan review/approval by Council would be necessary before a building permit could be issued. If something other than the office is ultimately proposed, this would require an amendment to the PUD, a more extensive review process. #2640/2641 Dunbar Dev. Corp. October 4, 2001 Page 3 Watershed District Approval Pending. The applicant has submitted stormwater management plans to the Minnehaha Creek Watershed District for approval. As of this writing it is anticipated the MCWD will act on the application on October 25. This is after the anticipated City final approval date of October 22, which obviously presents a timing problem unless Council wants to grant a conditional approval. The only risk in granting conditional approval is that the MCWD could potentially require stormwater plan changes that affect the site layout, in which case the Council would have to review and approve the changes. This appears to be a minimal risk, although we are still waiting for confirmation that the existing pond will handle this development proposal. Comprehensive Plan Approval Set for October 24. Met Council staff are nearing completion of their review of Orono's 2000-2020 CMP (including the Senior Housing amendment) and intend to place the Plan on the Met Council's October 24 Consent Agenda for approval. Again, this is after the October 22 anticipated City approvals; however, we should have a copy of the Met Council final staff report by October 22, which should indicate whether there are any last minute problems. Mn/DOT Plat Review Raises Minor Issues. In a letter received September 28, Mn/DOT has raised a few issues regarding access location and design, drainage, noise impacts on residential uses from Wayzata Boulevard, and the need for temporary easements for reconstruction of the Brown/12 intersection. Staff and the developer are working with Mn/DOT to resolve these minor issues. City Responsible for Certain Off-site Improvements. As part of the TIF financing, the City has agreed to be responsible for certain off-site improvements related to this project. These include: Street lighting along Wayzata Boulevard matching Long Lake's existing lights Burial of power lines along Wayzata Boulevard Sidewalks adjacent to Wayzata Boulevard Turn-lane improvements as may be required by Mn/DOT - Installation of semaphore at intersection of Brown Road North and Wayzata Blvd. Minor upgrade to sewer lift station These City expenditures are expected to occur mostly in 2002 and are expected to be paid back from TIF proceeds. DOCUMENTS Following is a brief review of each of the (attached) draft documents Council will be presented with for action on October 22: Resolution: Preliminary Plat Approval (Exhibit D). It has been the Council's intent to not grant any final approvals until the end of the review process, and since preliminary plat approval is functionally a commitment to plat acceptance, we have yet to grant preliminary plat approval. Council will be asked to adopt this resolution prior to the Final Plat approval resolution. Resolution: Approval of General Development Plan & Final Plat (Exhibit E). This Resolution documents the process and agreements that have resulted General Development Plan approval and Final Plat approval, and grants those approvals subject to the referenced agreements. #2640/2641 Dunbar Dev. Corp. October 4, 2001 Page 4 PUD 2A Agreement (Office) (Exhibit B). This Agreement documents the conditions of approval for development of the Office site (Phase 2). It establishes approval conditions for the specific site plans, approved uses, nature of the building and site improvements including access, parking, utilities, etc. It requires that the developer or his contractor provide financial security (Letter of Credit) prior to issuance of building permits for construction of site improvements or building construction. Because development of the Office site will be delayed, it requires that Council must approve the final building plans before permits can be issued. It also defines what development aspects are the responsibility of the City and which are the responsibility of the Developer. PUD 2B Agreement (Senior Housing) (Exhibit C). This Agreement documents the conditions of approval for development of the Senior Housing site (Phase 1). It establishes approval conditions for the specific site plans, building plans, landscaping, grading, access, lighting & signage, etc. It also documents the use of TIF funding and the City's intent and conditions regarding the duration of the Senior Housing use. The agreement establishes City or Developer responsibility for various aspects of the development, and requires a Letter of Credit prior to issuance of building permits. Development Agreement Relating To Orono Woods Apartments (Exhibit A). This is the primary agreement between the City, the HRA and Orono Senior Housing LLC that establishes and documents the various financing arrangements including TIF financing, Housing Bonds, etc. This document was prepared by the City's financial consultants, Steve Rosholt of Faegre & Benson LLP and includes the various representations and covenants; details the City obligations for housing bonds and subordinated housing note, deferment of fees, acquisition of the property, and construction of public improvements; establishes limitations on encumbrance, prohibitions against assignment and transfer; establishes conditions of the TIF Note and remedies in the event of default. Attached to this document is the ground lease between the HRA and Orono Senior Housing LLC with appropriate terms and conditions. Additional miscellaneous documents relating to the TIF financing, certificate of completion and partial release format, income certification form, etc. Ordinance: Rezoning, PUD Documentation (Add 10.53 Subd. 9) (Exhibit F). This Ordinance accomplishes the rezoning of Lot 1 from B-1 to B-6, and Lot 2 from B-1 to RPUD, with a concurrent additional section added to the Zoning Code formally establishing the zoning for "Planned Unit Development No. 2 - Dunbar PUD". The allowable uses within Lots 1 and 2 are individually established by ordinance, with development standards as documented in the General Development Plan Approval resolution. COUNCIL ACTION REQUESTED 1. Staff requests that Council review the site plan, landscaping, signage and building plans for the Senior Housing site (Phase 1) attached as Exhibits H-I-J, and advise staff and/or the developer of any issues that need to be addressed before the October 22nd meeting. #2640/2641 Dunbar Dev. Corp. October 4, 2001 Page 5 2. Council is asked to review the various attached approval documents and advise staff of any specific issues, apparent discrepancies or unclear language that should be addressed prior to the October 22 meeting. 3. Council is asked to specifically address the issue of deferred fees. 4. Council should determine whether final approvals will be granted on October 22 if neither Comp Plan approval nor Watershed District approval are finalized by that date. � w ESCROW AGREEMENT AGREEMENT made this O day of 1vtulc, , 20j, by and between the CiTY OF ORONO,a Minnesota municipal —_corporation("City'_')and . d-' wz7 5 , ..A;434. ;�._ A.4"Applicant(s)„)_. ._ — RECITALS (} A. Applicant has: (check one) o Filed a zoning application • • © Filed an application for a Buiiding/Zoning Permit# 0 Agreed to comply with Orono City Code Section 78-1432 regarding accessory structures. ID Filed an Individual Sewer Treatment System(ISTS)permit application. • ❑ Requested to do work within public Right-of-Way O Filed a request for a Temporary Certificate of Occupancy X Other:_Requested consideration of a land sale relative to Orono Woods ("Application")on land situated in the City and located at 2040 Wayzata Blvd(the"Subject Property")as legally described, Lot 2,Block 1,Orono Ambar B. The City Is willing to review or monitor the Application only if the Applicant agrees to reimburse the City for the actual costs expended by the City on behalf of,or on account of,the Applicant. C. Applicant hereby agrees to and consent to the terms and conditions of this Escrow Agreement. I NOW THEREFORE,THE PARTIES AGREE AS FOLLOWS: 1. DEPOSIT REQUIRED. Contemporaneously with the execution of this Escrow Agreement, the Applicant shall deposit$5,000("Escrow")with the City necessary to secure coverage of the total costs associated with review, approval,and monitoring of the Application. Any Escrow shall be held in a special escrow account and shall be credited to the Applicant. 2. PURPOSE OF ESCROW. ■ The purpose of the Escrow is to guarantee reimbursement to the City for expenditures Including but not be limited to engineering,Financial,and legal consultant expenses incurred by the City in reviewing and approving the Application 1 MONTHLY BILLING. The City will monthly forward to the Applicant a statement and bill for the expenditures incurred by the City for staff and consultant services. Such statements shall be due and payable within 15 days . for receipt by the Applicant. No statement will be sent if there are no expenses incurred in the period since the most recent statement. The City shall itemize all time,services, and materials billed to any Applicant and said time, services, and materials shall be in accordance with the rules, regulations, and fees as promulgated and adopted by the City Council. r5 4. DISBURSEMENT FROM ESCROW ACCOUNT. In the event the Applicant does not make payment the City as required under paragraph 3,the City may draw from the Escrow without further approval of the Applicant to reimburse the City for eligible expenses the City has incurred. The City shall periodically notify the Applicant of the draws the City has made and the nature of the expense for which the reimbursement is being made. • S. REIMBURSEMENT OF ESCROW. The Applicant shall reimburse the Escrow fund for any deficits caused if the • amount actually expended by,or billed to,the City exceeds the escrow fund balance. IIII 6. RiGHT OF ENTRY. N This section is not applicable, December2016 1 • a 7. NO INTEREST PAID. All accrued interest, if any,shall be paid to the City to reimburse the City for its cost in administering the Escrow account. 8. CLOSING ESCROW. When the review has been completed or the project has been completed,the balance of the Escrow,If any,shall be returned to(check ore): • owner.......__...........-,p'Applicant..... G • Other ...._._. _... ......... 1 V Name: c2..L bz'-*, X.4 Street Address/PO Box: '76-30 11kctP iV City/State/ZIP: rt/ENA- �Ltw�-� J )24 • -r3`'y IN WITNESS WHEREOF,the undersigned have executed this Agreement as of the day and year first above written. CITY OF ORONO: APPLICANT(s): y . BY: '. Arl.Y1 6iL f/te-f BY: D .. AI •, ..01411i441 C"' T rte.. • • • • • December 2016 2 4...,y uv.1.c+oU F.Y..1"!,‘,......,1 iyu i.,..,J I�!J Y Q O 0 ? ,__I N O O O r. o o 0 -o Z o .--i Q ,i in O m a O o J CliciW I- .",.; J a) I- ca O Q O Z C N U 6 ® (1 f— z 1- .--i U o w O O U co u_ �J 0 J u., cc igg '_ L. a 0 c_o . . ........ ,_ ..., cs ora.., U o......., ........ g_f ogi alU, ru re d c am 1.-a .4 < ,_a, rn O oY "f v J u. 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U) a f 1 I I CITY OF ORONO 111111113111 11111I11111I1311 * 2750 KELLEY PARKWAY * 2017 - 005 9 DATE ISSUED: 05/30/22 017 ORONO,MN 55356- (952)249-4600 FAX: (952)249-4616 ADDRESS : 2040 WAYZATA BLVD W PIN : 34-118-23-21-0036 LEGAL DESC : ORONO AMBAR : LOT 002 BLOCK 001 PERMIT TYPE : ESCROW FEE-APPLICANT PROPERTY TYPE : RESIDENTIAL CONSTRUCTION TYPE : ESCROW FEE-APPLICANT NOTE: THIS$5000 ESCROW IS TIED TO THE NON LAND USE APPLICATION FOR ORONO SENIOR HOUSING PAID BY VOLUNTEERS OF AMERICAN APPLICANT ESCROW FEE-APPLICANT 5,000.00 Orono Housing&Redevelop Authority TOTAL 5,000.00 Payment(s) 2750 KELLEY PKWY CRYSTAL BAY,MN 55356- CHECK 511161 5,000.00 OWNER Orono Housing&Redevelop Authority 2750 KELLEY PKWY CRYSTAL BAY,MN 55356- AGREEMENT AND SWORN STATEMENT The work for which this permit is issued shall be performed according to the approved plans and specifications,applicable City approvals,and the State Building Code. This permit is for only the work described and does not grant permission for additional or related work which requires separate permits. All provisions of laws and ordinances governing this type of work shall be compied with whether or not specified herein.This permit will expire and become null and void if construction authorized is not commenced within 180 days of the date of issuance,or if construction is suspended for a period of 180 days at any time after work has commenced. The applicant is responsible for assuring all required inspections are requested in conformance with the State Building Code.This permit may be revoked at any time for due cause. Applicant Permitee Signature Date Issued By Signature Date hI\ BOLTON Client Page Of & M E N K Project No. Date By Real People.Real Solutions. Project Task 2i-e2 ✓N. s ViQz Vito, (/1/tv�to/ •, rbc.ef f a 1 alvve �A �(L F(Q,ue vuBY/ V cea.. c(QvAaies#i AvtAyo,d if;) 7 7, r = oitt ad kVpieH y l� q✓d✓vzJ (eos ►s 29rxoh bUeck q v?"(<j of" 1)4 /'t0 (peA I vat' /ease D'wec' Pa/K-/ LI Co) pia1141 i ? 7 WIC tJ �o�e�� ✓s afrtsef ►y5vtl' -7 dc17 ) {A- Cu,fi 14 iticolVe4or b 15(,(10(7 Cc /1 BOLTON Client Page Of & M E N K Project No. Date By Real People.Real Solutions. Project • Task 4 , Pe E�Y — 3to,, C760(��,c/,.� 7 — lewd 7 /e4 /I i Orovii wcn� � ZOO ill Q gra Wed) , IL vvria ilpv.A *Fee, V( `Ya 18 ( 7 e N Ir y • •