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HomeMy WebLinkAboutFrontage Road Issues .‘ - - TO: Mayor Peterson and Council Members FROM: Ron Moorse, City Administrator / DATE: November 10, 2005 SUBJECT: Senior Housing/Office Condo Access/Frontage Road Issue Some residents of the Orono Woods senior housing complex have expressed concern about the proposed Amber Woods office condo development gaining access from Brown Road through the senior housing property. When the Orono Woods development was planned, the property included the land currently planned for the Amber Woods office condo development. At that time, the developer of Orono Woods planned to build an office building on the land currently being developed as Amber Woods. The access to the office building was planned to be via a right-in, right-out access at Highway 12, and via a frontage road/driveway through the Orono Woods property to Brown Road. The frontage road/driveway system through the Orono Woods property includes two one-way traffic lanes. One of the traffic lanes is a driving lane on the south side of the Orono Woods parking area for eastbound traffic. The other is the driveway through the Orono Woods parking area for westbound traffic. The attached map shows the plan for the two traffic lanes and how they relate to the Orono Woods parking area. At the time of the Orono Woods development, there was significant review of the frontage road/driveway concept. It was determined that, due to relatively low traffic volumes, and relatively low usage of the Orono Woods' at-grade parking area, the concept was an acceptable access solution. The concern of the residents is that mixing the commercial traffic with the Orono Woods resident traffic will be unsafe, particularly where the commercial traffic is using the driveway through the Orono Woods parking area, and where the frontage road intersects with the entrance/exit for the underground garage area. Staff has visited the site to review the safety concerns. It appears that the placement of stop signs at key intersection areas would substantially address the safety concerns. A related concern is the use of the frontage road by construction equipment during the construction of the Amber Woods office condo development. Staff agrees that construction equipment, particularly trucks hauling dirt from the site, need to access the site from Highway 12, rather than through the frontage road. There is a right-in/right-out access from Highway 12 at the east side of the Amber Woods property, and a left turn access from Highway 12 at the west side of the Amber Woods property. In addition to the safety issue, a question has also been raised regarding whether the city has the legal right to create a public roadway through the Orono Woods property. While it was initially Planned that the City would obtain an easement from the property owner for the public roadway, the City actually became the owner of the property as part of the development financing process. To obtain the greatest amount of control over the use of the property, the City acquired title to the property, and granted a ground lease to the owner of the Orono Woods development. The City attorney has reviewed the relevant documents, and has determined the City does have the legal right to create a public roadway through the Orono Woods property. Former Mayor Ed Callahan, a resident of Orono Woods, is planning to attend the November 14 Council meeting to express his concerns regarding this issue. 4, -0'47. 0 0 CITY of ORONO �►, ,` ti � �A, Municipal Offices P _, G Street Address: Mailing Address: IA-Zs-a& 2750 Kelley Parkway P.O. Box 66 ` Orono, MN 55356 Crystal Bay, MN 55323-0066 November 3, 2005 Thomas Barrett Hinshaw& Culbertson Piper Jaffray Tower, Suite 3100 222 South Ninth Street Minneapolis,MN 55402 Re: Orono Senior Housing - Driveway Easements and Public Easements Dear Tom: Enclosed please find the following documents: 1) Copy of PUD No. 2A Agreement (Original Dunbar medical office approval) 2) Copy of PUD No. 2B Agreement (Senior Housing) 3) Copy of ALTA Survey provided at/after closing describing the proposed ingress/egress easements 4) Ground lease between Orono HRA and Orono Senior Housing LLC The relevant issues brought up by Ed Callahan and others this week include: -why weren't the tenants at senior housing notified of the hearings and review process for the Interspace West project (A.: because only the Orono HRA shows up as property owner on Hennepin County tax records, and it never occurred to staff to send a special notice to the senior housing group)... did we have some unknown legal obligation to notify the senior housing people of the project next door? - if HRA leased the entire Lot 2 to Orono Senior Housing LLC (ground lease appears to be for all of Lot 2), does the City have the right to create access easements if they don't exist (A.: ?do such easements exist? They were clearly spelled out in the PUD 2A and 2B Agreements; we have an ALTA survey with proposed description for such easements; but I don't have a copy of an actual easement document if one exists...) Telephone(952)249-4600 • Fax(952)249-4616 www.ci.orono.mn.us November 3, 2005 Page 2 - if there is going to be office use traffic through the senior housing site permanently, can't the City at least limit the construction traffic through the site? (A.: I think we need to have a discussion with Phil and Gina about this...) My own question to add to the mix is to what rights the City or the Senior Housing management have with regards to traffic control on the senior housing site. Can we or they unilaterally choose to post speed limits, add speed bumps, limit what type of traffic accesses the site, etc.? I'll be in the office Friday - let's discuss. Thanks! Sincerely, Michael P. Gaffron Planning Director Encl. 6- /VUL /�UC1 84,04 R —.52°19'00"Wd �� r•-- ---� _ �.-.�......, . 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" .`\\ ?�GBQ • c��w •�% 1-4, • .t} f o GROUND LEASE between ORONO : ()USING ANI REDEVELOPMENT AUTHORITY, as Landlord and ORONO SENIOR HOUSING, LLC, as Te s ant Dated as ©f November 1, 2001 TABLE OF CONTENTS ARTICLE 1 DEFINITIONS 3 1.1 Definitions. 3 1.2 Exhibits. 4 ARTICLE 2 - LEASE AND PERM 5 2.1 Grant 5 2.2 Covenants. 5 2.3 Quiet Enjoyment. 5 2.4 Term. 5 2.5 Purchase of Development Property 5 2.6 Title to Improvements 6 ARTICLE 3 - RENT 6 3.1 Rent. 6 3.2 Net Lease 6 3.3 Manner of Payment. 6 ARTICLE 4 - TENANT'S COVENANTS 7 4.1 Tenant's Equipment. 7 4.2 Maintenance. 7 4.3 Repairs 7 4.4 Nondiscrimination; Restrictions on Use. 7 ARTICLE 5 - FINANCING 8 5.1 Mortgages 8 5.2 Notice. 8 5.3 Performance. 8 5.4 New Lease. 8 5.5 Further Assurances 9 5.6 Termination of Lease. 10 ARTICLE 6 - ASSIGNMENT AND SUBLETTING 10 6.1 Assi .ents. 10 6,2 Subleases10 6.3 Other Agreements. 10 ARTICLE7 END OF TERM10 7.1 Surrender. 10 7.2 Vesting. 10 7.3 Tenant's Equipment. 11 7.4 Acceptance. 11 7.5 Merger. 11 ARTICLE 8 - NOTICES AND ESTOPPELS 11 8.1 Notices 11 8.2 Estoppels. 12 ARTICLE 9 - DEFAULT 12 9.1 Events of Default 12 9.2 Termination. 13 9.3 Payments. 13 9.4 Injunctive Relief 13 9.5 Forbearance. 14 9.6 Costs. 14 9.7 Waiver of Default 14 9.8 Tenant's Liability 14 ARTICLE 10 - MISCELLANEOUS 14 10.1 Relationship 14 10.2 Number and Gender. 15 10.3 Captions 15 10.4 Time. 15 10.5 Construction. 15 11.6 Law 15 10.7 Binding. 15 10.8 Short Form. 15 10.9 Severability. 15 10.10 Counterparts. 15 10.11 Interest Rate. 15 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 30th day of November, 2001, by and between ORONO HOUSING AND REDEVELOPMENT AUTHORITY, a 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 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 30, 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: Indenture of Trust dated as of November 1, 2001 between the City and U.S. Bank Trust National Association, Loan Agreement dated as of November 1, 2001 between the Developer and the City, Combination Mortgage, Security Agreement, Fixture Financing Statement and Assignment of Leases and Rents and Subordinate Combination Mortgage, Security Agreement, Fixture Financing Statement and Assignment of Leases and Rents from the Developer to the City and Bond Purchase Agreement between the City, the Developer and the Purchaser of the Housing Bonds and Subordinate Bonds. "Holder" means the holder of any Mortgage. -3- • "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, as it may at any time exist. "Landlord" means the Authority, its successors and assigns. "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 November 1, 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. Capitalized terms not otherwise defined herein shall have the meanings given to them in the Development Agreement. 1.2 Exhibits. The following exhibits are attached to and by this reference made a part of this Lease: -4- (1) "Exhibit A" - Legal Description of the Development Property (2) "Exhibit B" - Permitted Encumbrances 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 Proper ty 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 -5- 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 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 November 1 of each calendar year until the Termination Date in the amount of$1. All Rent due over the Term of this Lease has been prepaid as of the date of this Lease. 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; provided, however, that Rent may be prepaid in whole or in part on any date at the Tenant's option. 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. -6- 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 byLandlord's wrongful act or negligence. Equipment except to the extent caused g 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, it 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, Tenant 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, (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. Subject to the foregoing use restriction andcompliance with legal requirements the Tenant may alter or remove all or any portion of the Improvements. Any use not authorized by this Section 4.4 shall be subject to written approval of the Board of Commissioners, which it may deny in its absolute discretion. -7- 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. -8- (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. 5.5 Further Assurances. Landlord agrees to execute such amendments to this Lease and farther agreements as may reasonably be requested by any Holder, provided such mya 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 o,- 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. 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 -10- 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: Orono HRA 2750 Kelley Parkway Orono, WEN 55356 Attention: City Administrator if to Tenant: Orono Senior Housing, LLC c/o Wedum Foundation 3191 Shorewood Drive Arden Hills, MN 55112 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 Tenant's receipt of written notice from Landlord stating that such payment was not made; or -12- (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 (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 -13- 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. 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. g 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 shallnot 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. -15- • 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: Barbara Peterson Its: Chair And By: Name: Robert K. Sanse ere Its: Secretary STATE OF MINNESOTA ) ) ss COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this,T; day of November, 2001, by Barbara Peterson and Robert K. Sansevere, the Chair and Secretary of the Orono Housing and Redevelopment Authority, a public body corporate and politic, on behalf of the HRA. L RACHEL DODGE JJ NOTARY PUBLIC-MMNF-^OTA Notary Public My Commission Expires Jan.31,2005 [SIGNATURE PAGE TO LEASE (DEVELOPMENT PROPERTY)] -16- TENANT ORONO SENIOR HOUSING, LLC, a Minnesota limited liability company By: Its Ciiiof Manager [SIGNATURE PAGE TO LEASE (DEVELOPMENT PROPERTY)] M 1:819614.01 -i 7- EXHIBIT A LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY Lot 2, Block 1, Orono Ambar, according to the recorded plat thereof, Hennepin County, Minnesota. A-1