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City Council - 09/05/2006 (4)
AGENDA EDEN PRAIRIE CITY COUNCIL MEETING TUESDAY,SEPTEMBER 5,2006 7:00 PM, CITY CENTER Council Chamber 8080 Mitchell Road CITY COUNCIL: Mayor Nancy Tyra-Lukens, Councilmembers Brad Aho, Sherry Butcher, Ron Case, and Philip Young CITY STAFF: City Manager Scott Neal, Parks &Recreation Director Bob Lambert,Public Works Director Eugene Dietz, City Planner Michael Franzen, Community Development Director Janet Jeremiah, City Attorney Ric Rosow and Council Recorder Deb Sweeny I. ROLL CALL/CALL THE MEETING TO ORDER II. PLEDGE OF ALLEGIANCE III. COUNCIL FORUM INVITATION IV. PROCLAMATIONS/PRESENTATIONS V. APPROVAL OF AGENDA AND OTHER ITEMS OF BUSINESS VI. MINUTES A. COUNCIL WORKSHOP HELD TUESDAY,AUGUST 15,2006 B. CITY COUNCIL MEETING HELD TUESDAY,AUGUST 15,2006 VII. CONSENT CALENDAR A. APPROVE RELEASE OF LAND FROM SPECIAL ASSESSMENT FOR LOTS 1 THROUGH 8,BLOCK 1; LOTS 1 THROUGH 4,BLOCK 2; LOTS 1 THROUGH 3,BLOCK 3; LOTS 1 THROUGH 4,BLOCK 4; AND OUTLOT B,COUNTRY GLEN B. APPROVE AGREEMENT WITH HENNEPIN COUNTY FOR INTERSECTION IMPROVEMENTS AT CRESTWOOD TERRACE AND PIONEER TRAIL,I.C. 06-5684 C. ADOPT RESOLUTION APPROVING PLANS AND SPECIFICATIONS AND ORDER ADVERTISEMENT FOR BIDS FOR THE LONE OAK CENTER TRAFFIC SIGNAL,I.C. 06-5675 D. APPROVE BID FROM ODESSA II FOR CONSTRUCTION OF EDENBROOK NATURE TRAIL AND BOARDWALK PROJECT E. AUTHORIZE SUBMISSION OF PERMIT APPLICATION FOR 2006-2007 WINTER SEASON USE OF THE LRT TRAIL CITY COUNCIL AGENDA September 5, 2006 Page 2 F. AWARD BID FOR CARMEL PARK TENNIS COURT RESURFACING TO DERMCO-LAVINE CONSTRUCTION G. DUNN BROS. SUBLEASE/SMITH DOUGLAS MORE PROPERTY— 8107 EDEN PRAIRIE ROAD VIII. PUBLIC HEARINGS/MEETINGS A. ESTABLISHMENT OF TIF REDEVELOPMENT DISTRICT—SUPERIOR OFFICE CENTER PROJECT (FORMER PHYSICAL ELECTRONICS SITE) (RESOLUTION) B. SUPERIOR OFFICE CENTER by United Properties. Request for: Guide Plan Change from Industrial to Office on 10.36 acres, Planned Unit Development Concept Review on 10.36 acres, Planned Unit District Review with waivers on 10.36 acres, Zoning District Change from I-2 to Office on 10.36 acres, Site Plan Review on 10.36 acres and Preliminary Plat of 10.36 acres into one lot. Location: 6509 Flying Cloud Drive. (Resolution for Guide Plan Change; Resolution for PUD Concept Review; Ordinance for PUD District Review and Zoning District Change; Resolution for Preliminary Plat) C. MITCHELL CROSSING by Henry Lazniarz. Request for: Planned Unit Development Concept Review on 3.098 acres, Planned Unit Development District Review with waivers on 3.098 acres, Zoning District Amendment within the Community Commercial Zoning District on 3.098 acres, Site Plan Review on 3.098 acres and Preliminary Plat of 3.098 acres into one lot and one outlot. Location: Highway 5 and Mitchell Road. (Resolution for PUD Concept Review, Ordinance for PUD District Review and Zoning District Amendment, Resolution for Preliminary Plat) D. McDONALD'S RESTAURANT by Wilkus Architects. Request for: Planned Unit Development Concept Review on 1.07 acres, Planned Unit Development District Review with waivers on 1.07 acres,Zoning District Amendment in the C- Regional Service zoning district on 1.07 acres, Site Plan Review on 1.07 acres. Location: 598 Prairie Center Drive. (Resolution for PUD Concept Review, Ordinance for PUD District Review) IX. PAYMENT OF CLAIMS X. ORDINANCES AND RESOLUTIONS XI. PETITIONS,REQUESTS AND COMMUNICATIONS A. 18650 DUCK LAKE TRAIL APPEAL XII. REPORTS OF ADVISORY BOARDS & COMMISSIONS A. MEETING SCHEDULE FOR FLYING CLOUD AIRPORT ADVISORY COMMISSION CITY COUNCIL AGENDA September 5, 2006 Page 3 XIII. APPOINTMENTS XIV. REPORTS OF OFFICERS A. REPORTS OF COUNCILMEMBERS B. REPORT OF CITY MANAGER Tag Le n 1. Certification of Proposed Levy 2. Establishment of the City Manager's Business Advisory Committee C. REPORT OF THE COMMUNITY DEVELOPMENT DIRECTOR D. REPORT OF PARKS AND RECREATION DIRECTOR 1. Birch Island Park Plan E. REPORT OF PUBLIC WORKS DIRECTOR F. REPORT OF POLICE CHIEF G. REPORT OF FIRE CHIEF H. REPORT OF CITY ATTORNEY XV. OTHER BUSINESS XVI. ADJOURNMENT AGENDA CITY COUNCIL WORKSHOP & OPEN FORUM/OPEN PODIUM TUESDAY,SEPTEMBER 5,2006 CITY CENTER 5:00—6:25 PM,HERITAGE ROOM II 6:30—7:00 PM, COUNCIL CHAMBER CITY COUNCIL: Mayor Nancy Tyra-Lukens, Councilmembers Brad Aho, Sherry Butcher, Ron Case, and Philip Young CITY STAFF: City Manager Scott Neal,Police Chief Dan Carlson, Fire Chief George Esbensen,Public Works Director Eugene Dietz,Parks and Recreation Director Bob Lambert, Community Development Director Janet Jeremiah, Communications Manager Pat Brink, Assistant to the City Manager Michael Barone, City Attorney Ric Rosow, and Recorder Lorene McWaters Heritage Room H I. STORM WATER POND AND LAKE MANAGEMENT Council Chamber II. OPEN FOR UM A. VIEWING OF DVD ON EDEN PRAIRIE VETERANS' MEMORIAL III. OPEN PODIUM IV. ADJOURNMENT UNAPPROVED MINUTES ITEM NO.: VLA. CITY COUNCIL WORKSHOP & OPEN FORUNVOPEN PODIUM TUESDAY,AUGUST 15,2006 CITY CENTER 5:00—6:25 PM,HERITAGE ROOM II 6:30—7:00 PM,COUNCIL CHAMBER CITY COUNCIL: Mayor Nancy Tyra-Lukens, Councilmembers Brad Aho, Sherry Butcher, Ron Case, and Philip Young CITY STAFF: City Manager Scott Neal, Police Chief Dan Carlson, Fire Chief George Esbensen, Public Works Director Eugene Dietz,Parks and Recreation Director Bob Lambert, Community Development Director Janet Jeremiah, Communications Manager Pat Brink, Assistant to the City Manager Michael Barone, City Attorney Ric Rosow, and Recorder Lorene McWaters Heritage Room H I. PARTNERSHIP FOR EMERGENCY RESPONSE PROGRAM Fire Chief P George Esbensen resented a PowerPoint on the City's newly formed Partnership for Emergency Response (PER)Program. Esbensen introduced Michael Laden,principal of Trade Innovations,who worked with the City to develop the program. Laden has a broad background in the international trade industry,and he is a member of the Secretary of the Treasury's 20-member advisory group called Commercial Operations of the US Customs Service. Esbensen said PER is an incentive-based public-private partnership designed to create a safer and more secure community. The impetus for PER grew out of lessons learned from the September 11 and Katrina emergencies. . A charter member advisory group representing a cross-section of Eden Prairie businesses was formed early this year. The charter members are Cima Labs, Community Banks, Department 56,Digital River, GE Capital Services,Master Craft Labels, SuperValu, and Wooddale Church. The group has met twice, and is scheduled to meet again in September. Esbensen said the goals for the charter member group are as follows: • Match first responder needs of the City of Eden Prairie • Educate the business community and advocate for program participation • Create an action plan to coordinate emergency response • Facilitate information sharing between stakeholders • Determine funding sources for continued operations • Encourage participation in programs such as CERT and C-TPAT The group has approved a web-based data collection concept; approved security and safety audits; and outlined a notification process for emergencies. Esbensen said the group will continue to hold bi-monthly meetings and expects to roll out program to the entire Eden Prairie business community in early 2007. Council Chamber II. OPEN FORUM No one requested to speak at Open Forum. III. OPEN PODIUM No one requested to speak at Open Podium. IV. ADJOURNMENT UNAPPROVED MINUTES ITEM NO. EDEN PRAIRIE CITY COUNCIL MEETING TUESDAY,AUGUST 15,2006 7:00 PM,CITY CENTER Council Chamber 8080 Mitchell Road CITY COUNCIL: Mayor Nancy Tyra-Lukens, Councilmembers Brad Aho, Sherry Butcher, Ron Case, and Philip Young CITY STAFF: City Manager Scott Neal, Parks&Recreation Director Bob Lambert,Public Works Director Eugene Dietz, City Planner Michael Franzen, City Attorney Ric Rosow and Council Recorder Deb Sweeney I. ROLL CALL/CALL THE MEETING TO ORDER Mayor Tyra-Lukens called the meeting to order at 7:05 p.m. II. PLEDGE OF ALLEGIANCE III. COUNCIL FORUM INVITATION IV. PROCLAMATIONS/PRESENTATIONS Tyra-Lukens thanked the police and fire departments for coordinating a food drive during National Night Out. Over 4,000 pounds of food plus cash donations were collected for PROP. V. APPROVAL OF AGENDA AND OTHER ITEMS OF BUSINESS MOTION: Young moved, seconded by Butcher,to approve the agenda as published. Motion carried 5-0. VI. MINUTES A. CITY COUNCIL MEETING HELD TUESDAY,AUGUST 1,2006 MOTION: Aho moved, seconded by Young,to approve the City Council minutes as published. Motion carried 4-0-1 with Tyra-Lukens abstaining. VII. CONSENT CALENDAR A. CLERK'S LICENSE LIST CITY COUNCIL MINUTES August 15,2006 Page 2 B. BROOKVIEW RIDGE by David and Patricia Smith. Second Reading of the Ordinance for Planned Unit Development District Review with waivers and Zoning District Change from Rural to R-22 on 4.56 acres. Location: 9780 Brookview Circle. (Ordinance No. 20-2006 for PUD-14-2006 District Review with waivers and ZoningDistrict Change) g ) C. APPROVE SECOND READING OF ORDINANCE NO.21-2006 AMENDING SECTION 9.07 OF THE CITY CODE,RELATING TO DANGEROUS DOGS AND ADOPT RESOLUTION NO. 2006-97 APPROVING SUMMARY ORDINANCE D. ADOPT RESOLUTION NO. 2006-98 AUTHORIZING ISSUANCE OF $1,080,000 GENERAL OBLIGATION EQUIPMENT CERTIFICATES, SERIES 2006C E. ADOPT RESOLUTION NO.2006-99 APPROVING PROFESSIONAL AND TECHNICAL SERVICES CONTRACT AGREEMENT WITH THE STATE OF MINNESOTA AND ALBECK GERKEN,INC.,FOR EDEN PRAIRIE SIGNAL OPTIMIZATION PROJECT,I.C. 06-5666 F. APPROVE PROFESSIONAL SERVICES AGREEMENT WITH SEH FOR CONSTRUCTION STAGE SERVICES OF HILLTOP ROAD IMPROVEMENT PROJECT,I.C. 05-5642 G. APPROVE BID FROM TRAILSOURCE LLC FOR CONSTRUCTION OF THE RILEY CREEK NATURE TRAIL H. APPROVE BID FROM QUIRING CONSTRUCTION FOR CONSTRUCTION OF THE EDENBROOK TRAILHEAD AND PARKING LOT IN EDENBROOK CONSERVATION AREA I. ADOPT RESOLUTION NO.2006-100 APPROVING APPOINTMENT OF ELECTION JUDGES FOR THE 2006 PRIMARY AND GENERAL ELECTIONS J. AWARD BID FOR COMPACT UTILITY LOADER AND ATTACHMENTS TO SCHARBER AND SONS K. PURCHASE OF AIRPORT CRASH RESCUE TRUCK FROM MINNEAPOLIS AIRPORT FIRE DEPARTMENT L. APPROVE TEMPORARY RIGHT OF ENTRY AND UTILITY EASEMENT AGREEMENT WITH MAC MOTION: Young moved, seconded by Case,to approve Items A-L on the Consent Calendar. Motion carried 5-0. CITY COUNCIL MINUTES August 15,2006 Page 3 VIII. PUBLIC HEARINGS/MEETINGS A. THREE RIVERS OFF LEASH DOG PARK by Three Rivers Park District. Request for: Off leash dog park.Location: Bryant Lake Regional Park. Rosow clarified this is not a public hearing, since this is a County project. The City's ability to intervene in the project is limited. Three Rivers Park District staff presented an overview of the plan. The dog park would consist of 9.3 acres(out of 170 in the park) surrounded by a five-foot farm field style fence, with wooden posts and galvanized metal stays and a double- gated entry. A separate fenced pond area would allow dogs to swim. A small latrine building,picnic tables,trash cans, dog mitt dispenser, and 24-car parking lot would complete the project. Parking lot access would be via an existing secondary access road to the International School. Three Rivers has four current dog parks at Elm Creek, Cleary Lake, Crow- Hassan, and Lake Sarah, most in the 40-acre range. Users must display an annual permit($30)to use the dog parks. All parks are regularly maintained and ordinances are enforced by public safety. Due to the popularity of the parks, Three Rivers is adding three additional 10 to 30-acre parks at French, Carver, and Bryant Lake. The site within Bryant Lake was chosen as the best to promote natural resource management. Aho asked about landscape screening for the fence and parking area.Three Rivers staff said they would present a plan to City Staff but had not yet done so. Native vegetation is typically used, and Three Rivers tends to do more than the City requires, as it did with the park entrance. Case asked if neighbors could have input into screening, and Three Rivers staff said yes. However, steep slopes will limit the size of plantings as well as their screening ability, and safety concerns prohibit over-screening. Aho asked if using the main entrance were an option.Parks staff said the former route from the main lot is now a trail and has steep slopes. Users would need to walk'/z mile from the parking. The current plan uses existing roadbed for access to minimize grading. Aho asked about usage estimates and patterns. Three Rivers staff said peak usage occurs after work hours. The 24-car lot was chosen based on the maximum usage at the most heavily used dog park, Elm Creek,which has a 22-car-per-hour maximum. The dog parks draw regionally as well as locally, so there is some traffic. The daily maximum would be about 100 cars per day. Young asked what authority the City has to deny or alter the project. Rosow said in cases where two different governmental entities are regulating each other,the court applies a standard of balancing the interests. In this case the Parks District's interest in establishing parks on their own property would likely prevail. In CITY COUNCIL MINUTES August 15,2006 Page 4 regard to aesthetics such as screening,the City might prevail. History suggests the Parks District will take such suggestions in good faith and work with the City for an agreeable solution. Neal said the City's authority would be limited to setbacks, dimensions, physical attributes, and similar matters and noted both the Parks Commission and the Planning Commission have already reviewed the project. Franzen reported the Planning Commission public hearing resulted in a 7-0 approval, subject to storm water management and screening plans. The fence falls within City ordinance of six-foot maximum height. Lambert said the Parks .Commission approved the project 7-1,with the dissenter saying residents should have had more notice. Eden Prairie's one-acre dog park near Best Buy, its new 5.5-acre park in Staring Lake Park, and its summer hockey rink dog parks were supported by a 1600-signature petition and are all heavily used. A new dog park at Bryant Lake would relieve some of the pressure on Eden Prairie's system and help prevent the dog parks from being overused. Karen Popovich of 6661 Cherokee Trail said she had no notice of the project until a resident canvassed the neighborhood three days ago. She opposed the dog park, saying 19 of her 25 neighbors are opposed. The neighborhood has already had to deal with increased traffic due to the disc golf course and other park improvements. The speed limit is rarely followed and safety is an issue. If the dog park must be built,the current placement and access are favored to help distribute traffic. There should be screening from Rowland Road and speed limits should be enforced. Joy Shakin of Raspberry Hill Road presented a 30-signature petition against the dog park. Another dog park is only 1.5 miles away. There was not enough resident input. If the dog park goes through,the current plan should not be modified. Landscaping should be added as was done with the main park entrance to reduce visual pollution. Dan Enebo of 6301 Rowland Road said neighbors to the east of the park would be most impacted regardless of where the entrance is located. The topography makes driving dangerous. There is no passing lane and traffic is fast, making it difficult to enter and exit. Trees will do little to screen the project as neighbors look down from above. The dog park should be moved to a southern site where there is pre-existing forest cover for screening, and where the main entrance and bathrooms could be used. If the dog park stays in its current site, it should have a crushed stone parking lot instead of asphalt for aesthetic reasons, or use the main entrance for access. Enebo disputed the %2 mile figure, saying if a new gate is added,the walk is only 225 yards. Kathy Levine of 12213 Orchard Hill said the road near her home is very steep and there have been accidents. Ms.LaScoret of 11612 Raspberry Hill Road said her son bikes to the International School and is concerned about traffic. CITY COUNCIL MINUTES August 15,2006 Page 5 Cheryl Hoos of 12623 Sunnybrook Dr. supported the dog park, saying she drives 35 miles to Cleary Lake about four times a week. All the City's hockey rink dog areas are closed five months a year, and a one-acre park is not really adequate. Larger parks are quieter because dogs have more space, and there seems to be new construction near the other dog parks, indicating they are not a nuisance. The Three Rivers project will have no tax impact on residents. Ms. Bassett of 11611 Raspberry Hill Road said her dog-owning neighbors agreed they would rather drive to a dog park than have one in the neighborhood. A resident from 6295 Chasewood Drive said traffic on Rowland Road would increase regardless of where the entrance is placed. A traffic impact study should be done. Tom Popovich of 6661 Cherokee Trail said a 225-yard walk would exclude disabled persons such as himself from using the dog park. Case asked if accessibility were an issue prompting pavement instead of crushed limestone. Three Rivers staff said crushed limestone is considered an accessible surface. Popovich said although his land abuts the park,he was never notified of any meetings. Tyra-Lukens asked about the notification process. Three Rivers staff said they are not required to do notifications, but the City puts out notifications for its public hearings. Three Rivers did have a meeting with neighbors to respond to their concerns. Case noted the City generally notifies residents within 500 feet of a project,but this is sometimes adjusted to meet conditions. Perhaps more notification was needed in this case. Case said he had visited about 150 homes in the neighborhood to seek input, spoken to about 30 or 40 people, and found residents opposed the park about 60%to 40%. However,the City's power to act is limited. Case suggested requiring a screening plan with input from neighbors to the north and requiring a storm water runoff plan to protect lake water quality. The City could also look at traffic safety on Rowland Road and consider whether adding a stop sign, removing vegetation from speed limit signs, adding a turn lane to make the hill safer, or stepping up police enforcement might make the road safer. Tyra-Lukens asked whether a traffic study had been done, and both Three Rivers staff and City Staff said no. Tyra-Lukens asked whether traffic counts on Rowland Road are currently at a maximum. Dietz said no. Traffic counts are in the City records. He estimated the road handles 1500—2000 trips per day and has more capacity beyond that, so 100 additional cars is not a big increase. Case asked if a stop sign could be used to slow traffic. Dietz said stop signs are typically not used for that purpose,but to clarify who has the right of way. Butcher asked for a clearer explanation of how the City notified neighbors, and how the City might ensure residents have input on the landscaping and storm water runoff plans. CITY COUNCIL MI NUTES August 15,2006 Page 6 Regarding notification,Franzen said the City exceeded the normal notification by taking the house farthest from the northern end of the dog park(about 800—1200 feet away), and then mirroring that on the south. A map of the notification area is in the packet. Butcher asked why Cherokee Trail was not included, and why only half of Raspberry Hill was. Franzen said the City notified residents within 1000 feet of the dog park, not of the Bryant Lake Park boundary. Aho said the neighborhood is a compact area and it would not have posed an undue burden to notify more widely. Butcher said a whole street should be notified rather than creating an artificial boundary. It creates bad feeling if some neighbors on a street receive notice and others do not. Regarding collecting neighborhood input on landscaping and runoff plans, Three Rivers staff said they would prefer to work with City Staff to present a plan, and let City Staff collect whatever neighborhood input they wish. Franzen said City Staff could work with the neighbors. Aho asked if evergreens could be used for year-round coverage. Three Rivers staff said they could be, but their preference is for red cedars,which are native vegetation. The park's position at the bottom of a bowl limits the effect of screening. Tyra-Lukens clarified the Council does not have the power to deny this use of the land, but can make suggestions about screening, runoff plans and parking. Case asked about the advantages and disadvantages of asphalt vs. crushed rock parking, including the ability to use a NURP pond for runoff. Three Rivers said the nearby pond was not designed as a NURP pond but could be used for that purpose. Three Rivers selected gravel because the area has natural vegetation and felt it would be a better choice for water quality. The City,however, required a paved lot with a curving gutter and infiltration system. Dietz said asphalt lots are the City standard, chiefly for convenience. Even a class 5 gravel lot will have some runoff so an infiltration system would be desirable in any case. MOTION: Butcher moved, seconded by Aho, to approve the revision of the Bryant Lake Regional Park plan to include an off-leash dog park, and a parking area to accommodate that use, as proposed by the Three Rivers Park District;to include neighbor input on the landscaping plan; and to direct Staff to work with Three Rivers on the drainage plan. Motion carried 5-0. A resident asked how neighbors would be notified about any changes to the entrance location. Dietz said the plan was just approved and would not change. The resident asked if a traffic study would be done regarding the entrance, calling it a legitimate safety issue. Case said the issue of Rowland Road safety was separate and should be addressed by Staff. Dietz said Staff would look at the site entrance,but said if distances from other streets were a safety problem,the issue would have already been flagged. MOTION: Butcher moved, seconded by Case,to amend the motion to read: "to approve the revision of the Bryant Lake Regional Park plan to include an off-leash CITY COUNCIL MINUTES August 15,2006 Page 7 dog park, and a parking area to accommodate that use, as proposed by the Three Rivers Park District;to include neighbor input on the landscaping plan,to direct Staff to work with Three Rivers on the drainage plan, and to direct Staff to review traffic safety at the entrance." Motion carried 5-0. The resident asked Council to also direct Staff to make the parking lot crushed rock. Since houses overlook the site from above, asphalt will be a visual blemish, and Three Rivers also prefers rock. Butcher noted asphalt is the City standard, and Tyra- Lukens said the community has made it clear asphalt is preferred for convenience. Case said asphalt would capture salt and runoff better as well. Council declined the request. B. KLUGE RESIDENCE by Richard and Kelsey Kluge.Request for: Zoning District Change from Rural to R1-22 on 1.98 acres. Location: 7260 Willow Creek Road. (Ordinance for Zoning District Change) Neal stated this is a rezoning of a single-family lot from Rural to R1-22. The owners would like to rebuild on the site. The zoning for this site does not allow new construction on a Rural lot with less than 10 acres. The proposed house pad meets the zoning requirements for the proposed R1-22 Zoning District, which is consistent with adjacent zoning. The cottage structure was reviewed for historic significance. The structure is not identified on any historic inventory. The structure should be photo documented. The Planning Commission voted 6-0 to recommend approval of the project to the City Council at the July 10, 2006 meeting. MOTION: Case moved, seconded by Butcher,to close the Public Hearing; approve 1 st Reading of the Ordinance for Zoning District Change from Rural to R1-22 on 1.98 acres; and direct staff to prepare a Development Agreement incorporating Staff and Commission recommendations and Council conditions. Motion carried 5-0. C. SOUTHWEST METRO TRANSIT BUS GARAGE ADDITION by Southwest Metro Transit Commission. Request for: Planned Unit Development Concept Review on 10.1 acres,Planned Unit Development District Review with waivers on 10.1 acres,Zoning District Amendment within the I-2 Zoning District on 10.1 acres and Site Plan Review on 10.1 acres. Location: 14405 62°d Street West. (Resolution No.2006-101 for PUD Concept Review, Ordinance for PUD District Review with waivers and Zoning District Amendment) Neal said Southwest Metro has revised the plans by making the detached building attached to the existing facility. The revised plan conforms to the setbacks and parking requirements of the 1-2 Zoning District. The exiting building is 83,400 square feet. The building addition is 14,500 square feet and will be used for additional bus storage. CITY COUNCIL MINUTES August 15,2006 Page 8 The portion of the site within the shoreland area contains 42.2%impervious surface area. The existing facility was constructed prior to the impervious surface limitation of 30%and will require a waiver.A portion of the proposed NURP pond will be constructed in a shore impact zone requiring a waiver. The waivers may have merit since the impervious surface percentage is a pre-existing condition, and the NURP pond helps improves water quality. Franzen said the Planning Commission voted 7-0 to recommend approval of the revised plan at the August 14, 2006 meeting. MOTION: Aho moved, seconded by Young,to close the Public Hearing; adopt Resolution No. 2006-101 for Planned Unit Development Concept Review on 10.01 acres; approve 1 st Reading of the Ordinance for Planned Unit Development District Review with waivers, and Zoning District Amendment in the I-2 Zoning District on 10.01 acres; and direct Staff to prepare a Development Agreement incorporating Staff and Commission recommendations and Council conditions. Motion carried 5-0. D. AMENDMENT TO CHAPTER 2 AND 3 OF THE GUIDE PLAN DESIGNATING A TOWN CENTER(Resolution No. 2006-102 for Comprehensive Guide Plan Amendment) Franzen said there are two reasons to amend the guide plan now rather than waiting for the complete review—to apply for a Livable Communities grant, and to show a strong commitment to the Town Center concept,which is generating substantial interest from developers. The Planning Commission voted 7-0 to recommend p g approval of the amendment to the Comprehensive Guide Plan at the July 24, 2006 meeting. MOTION: Butcher moved, seconded by Case,to close the Public Hearing and adopt Resolution No. 2006-102 for amending the Comprehensive Plan. Motion carried 5-0. IX. PAYMENT OF CLAIMS MOTION: Young moved, seconded by Case,to approve Payment of Claims as submitted. The motion carried on a roll call vote with Aho,Butcher, Case,Young and Tyra-Lukens voting "aye." X. ORDINANCES AND RESOLUTIONS XI. PETITIONS,REQUESTS AND COMMUNICATIONS A. REQUEST TO APPEAL ORDER FOR ABATEMENT OF TALL GRASS AND WEEDS CITY COUNCIL MINUTES August 15,2006 Page 9 Neal recommended the Council postpone action on the motion in order to view the site. Council directed Staff to set two alternative times during the last week in August. Resident Roger Maunders of 16850 Duck Lake Trail presented photos of his property, stating it is native prairie planting,that other homes in the area also have prairie plantings, and that City environmental staff have looked at the project. MOTION: Aho moved, seconded by Butcher,to table action on the appeal filed by K. Dawn Anson and Roger Maunders,pursuant to Chapter 2 of the Eden Prairie City Code,to the September 5, 2005 City Council meeting. Motion carried 5-0. XIL REPORTS OF ADVISORY BOARDS & COMMISSIONS XIIL APPOINTMENTS XIV. REPORTS OF OFFICERS A. REPORTS OF COUNCILMEMBERS 1. City of Minnetonka's 50th Anniversary(Resolution No. 2006-103) The resolution is intended as an expression of friendship and support from City officials in Eden Prairie to colleagues in Minnetonka. MOTION: Case moved, seconded by Butcher,to adopt Resolution No. 2006-103 congratulating the City of Minnetonka on their 50'h year as an incorporated city. Motion carried 5-0. B. REPORT OF CITY MANAGER 1. Den Road Liquor Store A major update of the Den Road Liquor Store has been postponed until January. 2. New Assistant Fire Chief Steve Coring has been hired to fill the new position of Assistant Fire Chief. 3. Community Center Staff Offices Removed from Plan After review, Staff has decided not to include additional office space for Parks staff at the community center. Instead, a defined Community Center Manager position has been created,using the current head count. CITY COUNCIL MINUTES August 15,2006 Page 10 4. Hennepin South Services Collaborative Neal will serve as Vice Chair. 5. Southwest Metro Public Safety Facility The facility is undertaking strategic planning to ensure it remains an excellent training facility for public safety staff. 6. Minutes Standards Neal said the Council had examples of both traditional and abbreviated minutes and could take whatever action it desired. Tyra-Lukens said she found the abbreviated minutes too brief and that attribution is important. Young concurred. Attribution reflects the deliberation and thought process of the Council as a body. Amendments to the minutes have worked fine to correct errors. Case agreed it is important to show where individuals stand. Casual comments or irrelevant remarks should be omitted, however. Aho agreed recording who said what is helpful to recall and review the meeting, and provides the public with the most open process. Butcher agreed. The minutes should not be verbatim or colloquial,but capture the essence. Everyone should be paraphrased equally. Tyra-Lukens directed Staff to keep the minutes in the traditional form. C. REPORT OF THE COMMUNITY DEVELOPMENT DIRECTOR D. REPORT OF PARKS AND RECREATION DIRECTOR 1. Veterans Memorial Concept Plan Lambert noted the Council had approved a citizens committee to choose a site and design for a veterans memorial, and approved hiring a planner to assist them. After six months' work,the design has been completed and approved by both the Parks and Recreation Commission and the Arts and Culture Commission. Citizens' committee representative John Mallo, of 14000 Forest Hills Road, explained the process. The committee included about 20 diverse members, including veterans from World War II, Vietnam, and Iraq, and their wives, mothers, and daughters. The group went through a process to consider what it meant by"veteran" and"service"and to develop ideas for the memorial. After reviewing the consultant's proposals, 100%of the committee agreed Purgatory Creek would be the best site, and 100%agreed the chosen design was the best one. CITY COUNCIL MINUTES August 15,2006 Page 11 The consultant presented the plan. The site would be south and west of the pavilion. One section of the memorial would honor the six service branches,with a place for a sculpture in the center. This format allows the memorial to honor past, present, and future veterans. The other section would center on a second sculpture and honor the ideals of peace, democracy and freedom. The entire site would have a garden feel where people could linger. Total cost would be $200,000 for the landscaping and paving, and an additional $100,000 for sculpture ($50,000 for each). Tyra-Lukens praised the plan and asked Lambert to clarify the funding. Lambert said the Council is being asked to approve the design and preserve the spot until the committee has raised$300,000 in donations for the project. The committee will work with the Eden Prairie Foundation to hold the funds. Case asked if the City could help facilitate donations. Neal said it would be better to work through the Foundation,but the City will accommodate the Foundation as it normally does,perhaps providing a mailbox, for example. Young noted using the Foundation makes donations tax-deductible. MOTION: Case moved, seconded by Young,to approve the concept plan recommended by the Veterans Memorial Committee and preserve the portion of the Purgatory Creek Recreation Area planned for the Veterans Memorial until sufficient funds are raised to construct the project. Motion carried 5-0. 2. County Road 4 Bike Trail Plans Lambert said Council is being asked to approve a change in the plan for the trail. The referendum provided$2 million for trails, and the hope was to use $1 million to finish this section of trail. However,the estimate on the concept plan that included trails on both sides of County Road 4 was $2 million, so an alternative plan is recommended. Two sections,the railroad bridge and a south side retaining wall, generated much of the cost. The new plan proposes to eliminate the trail on that portion by adding a crosswalk at Duck Lake Trail,where there are good sight lines. A flasher could be added if the County approves. Lambert said the plan is not what he would like,but$2 million is just too expensive. If Council approves the plan,the next step is to seek County approval and then talk to neighbors. Lambert anticipated minimal issues as only about one foot of property is impacted outside the right of way. Case noted there are steep slopes on both sides of the road and asked why one side was chosen over the other. Lambert said the choices were made based on the safest spot for a pedestrian crossing. MOTION: Butcher moved, seconded by Case,to approve the completion of final plans and specifications for bid of the bicycle trail plans on the west CITY COUNCIL MINUTES August 15,2006 Page 12 side of County Road 4 from Mere Drive north to County Road 62 and on the east side of County Road 4 from Baywood Lane to Rainbow Drive, and from Park Terrace Drive north through Birch Island Park to County Road 62. Furthermore, request Hennepin County to approve a pedestrian at-grade crossing at Duck Lake Trail. Motion carried 5-0. 3. Baseball Association Request Retarding Park Hours Lambert said the Baseball Association is requesting extending the curfew for lights until 10:30 when necessary for the 2007 and 2008 seasons. The Association will lose a field at the Community Center in 2007 and a field at Staring Lake in 2008, so space is at a premium. If games are called due to the light curfew,the Association will have a difficult time even finishing them the next day. Residents living 2000 feet from the field were notified, and one resident said the light in his windows at night was bothersome. The Parks Commission approved the request. Young noted the memo said a 1000-foot notification was used, and Lambert said the notification went well beyond that, as complete streets were notified—over 600 people. MOTION: Case moved, seconded by Young,to approve the request of the Eden Prairie Baseball Association for the extension of the curfew for lights at Miller#8 baseball field until 10:30 p.m. for the 2007 and 2008 seasons. Motion carried 5-0. 4. Purgatory Creek Recreation Area Boardwalk Plans Lambert said part of the fourth phase for development of the park is a major promenade from the area of the Flagship office building to a pier extending out over the water. This improvement was budgeted at $85,000 in the cash parks fees,with a current estimate of$89,000. If approved, construction of the walk would begin this fall, with the pier construction taking place on winter ice. The architect presented the plan. The eight-foot-wide pier would be about four feet above the water and extend 65 feet from the shore to a 24 by 24 foot deck with picnic tables and bench seating. The structure would be built to accommodate the addition of shade structures later if funds allow. Wood posts and steel cable railings would give an open feel. MOTION: Aho moved, seconded by Young,to approve the plans for the boardwalk design and access path within the Purgatory Creek Recreation Area. Motion carried 5-0. 5. Senior Center Advisory Council Request for Irrigation of Pioneer Park Gardens CITY COUNCIL MINUTES August 15,2006 Page 13 Lambert noted this request seemed simple, but actually raised many issues as the process collected input from other cities and from gardeners. Providing hoses can create problems, including lack of equal access to the water if people are already hooked up to the hose when gardeners visit their plots and wasted water. At Pioneer Park(behind the Senior Center), the Parks Commission recommends extending the existing system so that there would be push-button, on-demand taps at the west end,middle, and east end. This would shorten the potential walk from 300 feet to 75 feet. If the work is approved,the new system would be available for next summer. The City's other garden site, located on MAC land off Pioneer Trail, presents a different problem. Water is currently hauled to the site,which is quite expensive. The Commission recommends installing piping if MAC will give the City a five-year agreement(the amount of time needed to achieve a payback vs. hauling water). However,the current agreement only gives the City 90 days to vacate the land, and current trends suggest MAC is looking for lease money and may wish to develop the property. The Commission also recommends raising the price of plots from 4 cents per square foot to 9 cents per square foot(7 cents for seniors)to better cover the costs of providing gardens. Young asked if seniors attended the Parks Commission public hearing. Lambert said there were about six in the audience but he did not recall whether they had commented. Young said he had gotten calls from seniors unhappy with the push button spigot. It is important to make sure seniors think the new water is an improvement. Lambert said he had spent a couple of hours in the garden and talked to about six seniors. They seemed to think the spigot idea was reasonable and expressed concerns about hoses tying up the water. Young said the concern seemed to be the mechanics of the button, and Aho wondered if a timed twist handle might be easier to operate. Lambert said the button is easy to push. Case said the five seniors he talked to favored having more water available but wanted to be fiscally responsible as well. Case supported regularly meeting with seniors at the Center as the project develops to make sure it is meeting their needs. MOTION: Case moved, seconded by Butcher,to approve the request for water to be extended at the Pioneer Park garden site to two locations(middle and east end) and that the spigots be push button `demand' style; approve the rental rate for garden plots be raised to 9¢ per square foot at both Community Garden locations, and 7¢per square foot for senior citizens; and direct staff to discuss long term lease options with the Metropolitan Airports Commission prior to installing any water piping at the Pioneer Trail CITY COUNCIL MINUTES August 15,2006 Page 14 Gardens, and approve installation of water if we can get a five year option. Motion carried 5-0. 6. Birch Island Woods Acquisition (Resolution No.2006-104) Lambert noted the City Council authorized acquisition of Birch Island Woods,but requested to use that acquisition for LAWCON conversion of the Cummins-Grill historic site. That conversion is still probably a year away because the impacts of the Pioneer Trail project and the national historic site designation complicate the process. However,the City has until September 2007 to utilize the Picha property for LAWCON. The Picha family has already kept the land off the market for three years. Lambert recommended going ahead with the acquisition now for $830,000. Both sides of Picha family still agree to the sale and the price. They are requesting an,extension of their time to reinvest the money to three years rather than 45 days.Young asked about this condition and Rosow said this is common in eminent domain situations. It is not for economic development purposes. MOTION: Case moved,seconded by Young,to approve proceeding with the acquisition of the Picha property to complete parcel acquisition for Birch Island Woods; and adopt Resolution No.2006-104 authorizing the acquisition of certain real property by negotiation or eminent domain proceedings.Motion carried 5-0. 7. Third Rink Fundraising Update Lambert said the Hockey Association's efforts to raise money from businesses have been promising. However,many businesses and civic groups have wanted to make a broader donation to the Community Center as a whole rather than just the third rink. They are interested in naming rights or other recognitions within the entire building. Lambert recommended offering naming rights (for meeting rooms, the child care center, gym, etc.)throughout the facility. It could generate significant funds and also demonstrate community support. Lambert presented a list of prices for the Hockey Association to use. Rosow said he would develop a naming rights agreement. MOTION: Young moved, seconded by Butcher,to authorize providing naming rights to the main rink, the gymnasium and the fitness center for a minimum donation of$100,000; and the naming rights for the Olympic rink, the third rink and the childcare area for a minimum donation of$50,000; and the naming rights to the multi-purpose room for a minimum donation of $25,000; and for all of the other meeting rooms a minimum donation of $10,000;with all donations received going to the third rink fund until the one million dollar commitment is met, and with any excess going to the Community Center funding. Motion carried 5-0. CITY COUNCIL MINUTES August 15,2006 Page 15 E. REPORT OF PUBLIC WORKS DIRECTOR F. REPORT OF POLICE CHIEF G. REPORT OF FIRE CHIEF H. REPORT OF CITY ATTORNEY XV. OTHER BUSINESS XVI. ADJOURNMENT MOTION: Butcher moved, seconded by Case,to adjourn the meeting. Motion carried 5-0. The meeting adjourned at 9:55 p.m. CITY COUNCIL AGENDA DATE: SECTION: Consent Agenda September 5,2006 DEPARTMENT/DIVISION: ITEM DESCRIPTION: ITEM NO.: VII.A. Jim Richardson Release of Land from Special Public Works/Engineering Assessment Requested Action Move to: Approve the Release of Land from Special Assessment Agreement for Lots I through 8,Block 1,Lots 1 through 4,Block 2, Lots I through 3, Block 3,Lots 1 through 4,Block 4, and Outlot B, Country Glen,Hennepin County, Minnesota. Synopsis In September, 1989, the City of Eden Prairie entered into a Special Assessment Agreement with Coffman Development Company, a Minnesota corporation, regarding the levying of special assessments for the construction of Country Road and Claycross Way including sanitary sewer, watermain and other utility and street improvements. Background Information The improvements contemplated by the Agreement have been paid, therefore, the property should be released from the Special Assessment Agreement. Attachments • Release of Land from Special Assessment Agreement RELEASE OF LAND This Release of Land is executed by the City of Eden Prairie,a Minnesota municipal corporation ("City"),and is dated as of September 5,2006. FACTS 1. A certain Agreement Regarding Special Assessments ("Agreement') dated September 1, 1989 was executed by and between the City and Coffman Development Company, which Agreement was filed as Document No. 2040681 with the Registrar of Titles on September 21, 1989. 2. Said agreement pertains to the property described as: Lots 1 through 8, Block 1, Lots I through 4, Block 2, Lots 1 through 3, Block 3, Lots 1 through 4, Block 4, and Outlot B, Country Glen,Hennepin County,Minnesota. 3. The assessments levied as contemplated by the Agreement have been paid in full. THEREFORE,the City of Eden Prairie,a Minnesota municipal corporation,hereby releases the Property described above from all obligations and conditions set forth in the Agreement Regarding Special Assessments dated September 1, 1989, filed as Document No. 2040681 with the Registrar of Titles on September 21, 1989. This Release of Land shall not release or discharge the Property from the lien of any special assessments levied by the City other than the assessment referred to in the Agreement. IN WITNESS WHEREOF,the City of Eden Prairie has executed the foregoing instrument. CITY OF EDEN PRAIRIE A Municipal Corporation BY: BY: Nancy Tyra-Lukens Scott H.Neal Its Mayor Its City Manager STATE OF MINNESOTA) )ss HENNEPIN COUNTY ) The foregoing instrument was acknowledged before me this day of 2006, by Nancy Tyra-Lukens and Scott H. Neal, the Mayor and City Manager of the City of Eden Prairie,a rP municipal corporation under the laws of the State of Minnesota,on behalf of said P corporation. Notary Public THIS INSTRUMENT WAS DRAFTED BY: City of Eden Prairie 8080 Mitchell Road Eden Prairie,MN 55344 CITY COUNCIL AGENDA DATE: SECTION: Consent Calendar September 5, 2006 DEPARTMENT/DIVISION: ITEM DESCRIPTION: I.C. 06-5684 ITEM NO.: VII.B. Al Gray Approve Agreement with Hennepin Public Works/Engineering County for Intersection Improvements Requested Action Move to: Approve Agreement No.PW 30-40-06 with Hennepin County for intersection improvements at Crestwood Terrace and Pioneer Trail. Synopsis Hennepin County has proposed safety improvements at the intersection of Crestwood Terrace and Pioneer Trail, consisting of a left-turn lane and grading to improve site distance. The City share of the cost will be 50%of right-of-way, not to exceed $35,000. The County will be responsible for the remaining right-of-way cost and all construction costs. Background Information The existing intersection of Crestwood Terrace and Pioneer Trail was constructed over thirty years ago. The profile of Pioneer Trail limits site distance. The County proposes grading in the southeast quadrant to improve the entering site distance and widening of the pavement to provide a westbound left-turn lane onto Crestwood Terrace. Full reconstruction of this segment of Pioneer Trail may be ten years away. Attachments • Right-of-Way Acquisition Agreement • Layout C.P. 0419 Agreement No.PW 30-49-06 County Project No.0419 County State Aid Highway No. 1 City of Eden Prairie County of Hennepin AGREEMENT FOR RIGHT OF WAY ACQUISITION THIS AGREEMENT,Made and entered into this day of ,20 ,by and between the County of Hennepin, a body politic and corporate under the laws of the State of Minnesota,hereinafter referred to as the "County", and the City of Eden Prairie,a body politic and corporate under the laws of the State of Minnesota,hereinafter referred to as the "City". WITNESSETH: WHEREAS,the County and the-City have been negotiating to bring about the improvement of that portion of County State Aid Highway No. (CSAH) 1 (a.k.a. Pioneer Trail) between 350 feet west and 550 feet east of Crestwood Terrace which improvements contemplate and includes grading,bituminous surfacing,pavement markings and turf establishment; and WHEREAS,the aforedescribed roadway improvements will be accomplished by County forces under Hennepin County Project No. 0419,hereinafter referred to as the"Project"; and WHEREAS,the City has approved the plans for the Project; and WHEREAS,the County anticipates starting construction of the Project during the fall of calendar year 2006;and WHEREAS,construction of the Project requires the acquisition of the new right of way, permanent easements,and temporary easements;and WHEREAS,the County has acquired the necessary new right of way,permanent easements;and temporary easements necessary to construct the Project;and WHEREAS,the City and the County desire to set forth the division of costs for the right of way and easements acquired by the County for construction of the Project; and WHEREAS,it is contemplated that said work be carried out by the parties hereto under the provisions of Minnesota Statutes 2005,Section 162.17, Subdivision 1 and Section 471.59. NOW THEREFORE,IT IS HEREBY AGREED: - 1 - � Agreement No.PW 30-49-06 CSAH 1; C.P. 0419 I The.County, with its own forces,will construct the Project at an estimated cost to the County of$95,129.95. II The County will be responsible for the acquisition of all new right of way,permanent easements,and temporary easements required to construct the Project,and to maintain the new CSAH 1 roadway and associated appurtenances upon completion of the Project. It is hereby understood that the phrase"responsible for the acquisition of as used in this Agreement shall be construed to mean the performance of all tasks and duties necessary and legally required to obtain the right to use the subject properties for the purposes set forth in this Agreement. Said rights may be obtained by,but are not limited to,direct purchase,dedication, donation,or eminent domain. M The City agrees to grant easements to the County over those lands that are dedicated to the public or City for the purpose of streets and utilities and are a part of the required right of way and easements for the Project. Said easements shall be granted at no cost to the County. IV The estimated cost to acquire the right of way and easements for the construction of the Project is Fifty Eight Thousand Three Hundred Dollars and No Cents($58,300.00). The City hereby agrees to reimburse the County fifty(50)percent of all acquisition costs incurred by the County for the right of way and easements acquired for the Project under this Agreement. It is further understood and agreed that the City's costs for the right of way and easements acquired for the Project by the County will not exceed$35,000.00 without an amendment to this Agreement. V All payments to the County must be postmarked by the date due or a late penalty of one(1) percent per month,or fraction thereof,on the unpaid balance will be charged to the City. The City shall pay the amount due as stated on the statement,notwithstanding any dispute of such amount. Should a disputed amount be resolved in favor of the City,the County shall reimburse the disputed amount plus daily interest thereon calculated from the date such disputed amount -2 - L. Agreement No.PW 30-49-06 CSAH 1; C.P. 0419 was received by the County. Daily interest shall be at the rate of one(1%)percent per month on the disputed amount. VI All records kept by the City and the County with respect to this Project shall be subject to examination by the representatives of each party hereto. VII The City agrees to defend,indemnify and hold harmless the County,its officials,officers, agents,volunteers and employees,from any liabilities, claims,causes of action,judgments, damages,losses,costs or expenses, including,reasonable attorneys' fees,resulting directly or indirectly from any act or omission of the City, its contractors, anyone directly or indirectly employed by them,and/or anyone for whose acts and/or omissions they may be liable thereof. The City's liability shall be governed by the provisions of Minnesota Statutes, Chapter 466 or other applicable law. The County agrees to defend,indemnify, and hold harmless the City,its officials,officers, agents,volunteers,and employees from any liability, claims,causes of action,judgments, damages,losses, costs, or expenses,including reasonable attorneys' fees,resulting directly or indirectly from any act or omission of the County,its contractors,anyone directly or indirectly employed by them,and/or anyone for whose acts and/or omissions they may be liable thereof. The County's liability shall be governed by the provisions of Minnesota Statutes, Chapter 466 or other applicable law. The County and the City each warrant that they are able to comply with the aforementioned indemnity requirements through an insurance or self-insurance program. VIII It is further agreed that any and all employees of the City and all other persons engaged by the City in the performance of any work or services required or provided for herein to be performed by the City shall not be considered employees of the County,and that any and all claims that may or might arise under the Workers'Compensation Act or theMinnesota Economic Security Law on behalf of said employees while so engaged and any and all claims made by any third parties as a consequence of any act or omission on the part of said employees while so engaged on any of the work or services provided to be rendered herein shall in no way be the obligation or responsibility of the County. Also, any and all employees of the County and all other persons engaged by the County in the performance of any work or services required or provided for herein to be performed by the County shall not be considered employees of the City,and that any and all claims that may or -3 - `- Agreement No.PW 30-49-06 CSAH 1;C.P. 0419 might arise under the Workers' Compensation Act or the Minnesota Economic Security Law on behalf of said employees while so engaged and any and all claims made by any third parties as a consequence of any act or omission on the part of said employees while so engaged on any of the work or services provided to be rendered herein shall in no way be the obligation or responsibility of the City. IX In order to coordinate the services of the County with the activities of the City so as to accomplish the purposes of this Agreement,the Hennepin County Engineer or a designated representative shall manage this Agreement on behalf of the County and serve as liaison between the County and the City. In order to coordinate the services of the City with the activities of the County so as to accomplish the purposes of this Agreement,the City Engineer or a designated representative shall manage this Agreement on behalf of the City and serve as liaison between the City and the County. X It is understood and agreed that the entire agreement between the parties regarding the acquisition of right of way and easements for the Project is contained herein and that this Agreement supersedes all oral agreements and negotiations between the parties relating to the subject matter hereof. All items referred to in this Agreement are incorporated or attached and are deemed to be part of this Agreement. Any alterations,variations,modifications,or waivers of provisions of this Agreement shall only be valid when they have been reduced to writing as an amendment to this Agreement. XI The provisions of Minnesota Statutes Section 181.59 and of any applicable local ordinance relating to civil rights and discrimination and the Affirmative Action Policy statement of Hennepin County shall be considered a part of this Agreement as though fully set forth herein. The parties shall at all times abide by the Minnesota Government Data Practices Act, Minn. Statue 1301,et seq.,to the extent that the Act is applicable to data and documents in possession of either party. The books,records,documents, and accounting procedures and practices of either parry relevant to this Agreement are subject to examination by either the Legislative Auditor or the State Auditor for a period of six years after the effective date of this Agreement. XII The matters set forth in the "whereas" clauses at the beginning of this Agreement are incorporated into and made a part hereof by this reference. -4- WL_ Agreement No.PW 30-49-06 CSAH 1;C.P. 0419 IN TESTIMONY WHEREOF,The parties hereto have caused this Agreement to be executed by their respective duly authorized officers as of the day and year first above written. CITY OF EDEN PRAIRIE (Seal) By: Mayor Date: And: Manager Date: COUNTY OF HENNEPIN ATTEST: By: By: Deputy/Clerk of the County Board Chair of its County Board Date: Date: APPROVED AS TO FORM: And: Assistant/Deputy/County Administrator B Date: As is t County Attorney V1-7/0 G And: Date: Assistant County Administrator,Public Service Date: APPROVED AS TO EXECUTION: RECOMMENDED FOR APPROVAL: By: By: Assistant County Attorney Director,Transportation Department and County Engineer Date: Date: i i i ,:U • LU e G . S ey at u , Itl f cI.- LLJ8 �.. ----------- m i F-CL N z .. 7 - ft is LU �'+�� a Jr= � ��� •r.. 'J � °I ram. ti Y, 1 x CITY COUNCIL AGENDA DATE: SECTION: Consent Calendar September 5, 2006 DEPARTMENT/DIVISION: ITEM DESCRIPTION: I.C. 06-5675 ITEM NO.: VII.C. Randy Newton Approve Plans and Specifications and Public Works/Engineering Order Advertisement for Bids for the Lone Oak Center Traffic Signal. Requested Action Move to: Adopt resolution approving plans and specifications and ordering advertisement for bids for I.C. 06-5675,Lone Oak Center Traffic Signal. Synopsis With the assistance of SRF Consulting Group, Inc., the Engineering Division has prepared plans and specifications for a new traffic control signal system at the intersection of Mitchell Road and Lone Oak Road. Background Information The Lone Oak Center Developer's Agreement requires the installation of the Mitchell Road/ Lone Oak Road traffic signal concurrent with the development of the property. The Developer requested, and the City Council approved,that this obligation be converted to a Special Assessment Agreement against the property with the City implementing the project. The project should begin in earl October and the traffic signal is anticipated to be read for P J g Y lm p Y turn-on in early December. The actual turn-on will be determined by staff and will be coordinated with the occupancy of the Lone Oak Center development. The traffic signal improvements will also include implementing a coordinated traffic signal timing plan for Mitchell Road. The plan will be implemented concurrent with the traffic signal turn-on. Financial Implications The anticipated construction cost for the project is$175,000. The Lone Oak Center Developer (Lone Oak Center,LLC) is responsible, on an assessment basis, for all costs associated with the project. Attachments • Resolution • Legal Notice CITY OF EDEN PRAIRIE HENNEPIN COUNTY,MINNESOTA RESOLUTION NO. 2006- A RESOLUTION APPROVING PLANS AND SPECIFICATIONS AND ORDERING ADVERTISEMENT FOR BIDS LONE OAK CENTER TRAFFIC SIGNAL I.C.06-5675 WHEREAS, the City Engineer, with the assistance of SRF Consulting Group, has prepared plans and specifications for the following improvements to wit: I.C.06-5675—Lone Oak Center Traffic Signal and has presented such plans and specifications to the Council for approval. NOW,THEREFORE,BE IT RESOLVED by the Eden Prairie City Council: 1) That said plans and specifications,a copy of which is on file for public inspection in the City Engineer's Office,are hereby approved. 2) That the City Clerk shall prepare and cause to be inserted in the official paper and in the Construction Bulletin an advertisement for bids upon the making of such improvement under such approved plans and specifications. The advertisement shall be published for three weeks, shall specify the work to be done, shall state the date and time that the bids will be publicly opened and the City Council meeting at which they will be considered. No bids will be considered unless sealed and filed with the Engineering Division and accompanied by a cash deposit, cashier's check, bid bond or certified check payable to the City of Eden Prairie for 5%(percent)of the amount of such bid. ADOPTED by the Eden Prairie City Council on September 5,2006. Nancy Tyra-Lukens,Mayor ATTEST: SEAL Kathleen Porta,City Clerk NOTICE TO CONTRACTORS IMPROVEMENT CONTRACT NO.06-5675 CITY OF EDEN PRAIRIE BID REQUEST FOR: LONE OAK CENTER TRAFFIC SIGNAL BID CLOSE: 10:00 A.M., THURSDAY, SEPTEMBER 28, 2006 EDEN PRAIRIE CITY HALL 8080 MITCHELL ROAD EDEN PRAIRIE,MN 55344 PHONE: 952-949-8300 Notice is hereby given that sealed bids will be received, opened and read aloud at 10:00 a.m., Thursday, September 28, 2006, in the presence of the City Engineer or the designated representative at the Eden Prairie City Hall, 8080 Mitchell Road, Eden Prairie, Minnesota, 55344, for the furnishing of all labor and materials and all else necessary for the following: Approximate quantities are as follows: 1 Signal System Full-Traffic-Actuated Traffic Control Signal System 1 Lump Sum Traffic Control Interconnection Plans and specifications, proposal forms and contract documents may be seen at the office of the City Engineer, Eden Prairie, Minnesota, and at the office of SRF Consulting Group, Inc., One Carlson Parkway North, Suite 150, Minneapolis,Minnesota 55447. A list of Plan Holders can be viewed on line at SRF Consulting Group's website: http://www.srfconsulting.com/plans No bids will be considered unless sealed and accompanied by a bidder's bond naming the City of Eden Prairie as obligee, certified check payable to the City Clerk of the City of Eden Prairie, or a cash deposit equal to at least five percent (5%) of the total amount of the bid, which shall be forfeited to the City in the event that the bidder fails to enter into a contract. NC- 1 The City Council reserves the right to retain the deposits of the three lowest bidders for a period not to exceed sixty (60) days after the date and time set for the opening of bids. No bids will be withdrawn for a period of sixty (60) days after the date and time set for the opening bids. Payment for the work will be by cash or check. Contractors desiring a copy of the plans, specifications and proposal forms may purchase them from the office of SRF Consulting Group, Inc., One Carlson Parkway North, Suite 150, Minneapolis,Minnesota 55447,upon payment of$25.00,which is nonrefundable. The Council reserves the right to reject any and all bids, to waive irregularities and informalities therein and further reserves the right to award the contract(s) to the best interests of the City. All proposals must be addressed to: City Engineer,Engineering Division City of Eden Prairie 8080 Mitchell Road Eden Prairie,MN 55344 and shall be endorsed thereon: LONE OAK CENTER TRAFFIC SIGNAL I.C.NO. 06-5675 Bids close 10:00 a.m., September 28, 2006 Addendum No.(s) acknowledged B Order of the City Council Y tY City of EDEN PRAIRIE Published in the Sun Current September 7, 2006 Published in the Construction Bulletin September 8, 2006 and September 15, 2006 NC-2 CITY COUNCIL AGENDA DATE: SECTION: Consent Calendar September 5, 2006 DEPARTMENUDIVISION: ITEM DESCRIPTION: ITEM NO.: VILD. Stuart A.Fox, Manager of Edenbrook Nature Trail and Boardwalk Parks and Natural Resources Project Bids Requested Action Move to: Approve the bid from Odessa II in the amount of$88,800 for the construction of the Edenbrook nature trail and boardwalk project. Synopsis In 2005 thedevelop plans City of Eden Prairie retained Brauer and Associates, LTD to de p master for the Edenbrook, Riley Creek and Lower Purgatory Creek Conservation Areas. The plan was adopted by the City Council in December of 2005.Money has been budgeted for Phase I portions of each of these Conservation Area plans with construction taking place in the Fall of 2006. Staff has utilized Brauer and Associates to prepare plans and specifications for Phase I of the Edenbrook Conservation Area trail project. Bid packages were prepared and five bids were received for construction of the nature trail and boardwalk in the Conservation Area. The bids were as follows: Company Base Bid Odessa 11 $88,800 Quiring Trucking $93,568 Veit Construction $114,080 Jay Brothers Construction $118,280 Sunram Construction $154,215 Environmental Associates $182,220 The plans and specifications for this project were for the construction of an estimated 6,000 lineal feet of forty-eight inch wide natural surface trail and approximately 1,100 lineal feet of elevated wood surface boardwalk. The project will connect with trailhead project that is being constructed along Dell Road and extend easterly to connect with Rustic Hills neighborhood park on the north-east side of the Conservation Area.The consultants estimate for this particular phase of the project was$110,000. Staff recommends awarding the bid to Odessa II in the amount of$88,800. Odessa II has done projects of similar composition and scope in other communities and therefore met the requirements of similar project construction stipulated in the bid specifications. Edenbrook Nature Trail and Boardwalk Project Bids September 5, 2006 Page 2 Background This project will complete the Phase I project for the Edenbrook Conservation Area. Last month a contract was awarded to another contractor for construction of the access point,parking lot, landscaping and restoration as well as installation of a small picnic gazebo area. There was a total of$250,000 earmarked for Phase I construction of the Edenbrook Conservation Area trail project. The total for the two projects that have been bid out is $260,000 or$10,000 over what is currently budgeted;however,the trail project for Phase I of Lower Purgatory Creek and Riley Creek Conservation Areas have come in considerably lower than what was estimated and therefore we will have enough money in our conservation area trail development fund for Phase I development of these three areas.Edenbrook area represents the highest challenge area due to the lack of parking and considerable wetland complex;however, with the completion of this phase it is believed it will serve the adjoining neighborhoods as well as the residents of Eden Prairie quite nicely for several years. CITY COUNCIL AGENDA DATE: SECTION: Consent Calendar September 5, 2006 DEPARTMENT/DIVISION: ITEM DESCRIPTION: ITEM NO.: VII.E. Stuart A.Fox, Manager of Permit for Winter Use of the LRT Trail Parks and Natural Resources Requested Action Move to: Authorize staff to submit a permit for the 2006-2007 winter season for usage of the LRT trail.The winter use permit will run from November 15,2006 to March 31, 2007. Synopsis Currently, Three Rivers Park District does not provide use or maintenance of the LRT trail between November 15 and March 31 of each year;therefore, it is up to the City to request permitted use of the trail during this time. The City has entered into a permit agreement for the past several winters allowing hiking and cross-country skiing by the public on the LRT corridor trail. Without the City applying for this winter use permit,the trail would be signed as closed and unavailable to the public. Attachment 2006-2007 Winter Trail Activities Permit Application e i' THREE RIVERS PARK DISTRICT REGIONAL TRAIL SYSTEM 2006-2007 WINTER USE PERMIT Name of City (5WP7 NA4 RIi; City Hall Phone 9S2-J94,9—8 30D Contact Person S-tV ftr—T f 'o Phone 915`Z.-949—"57 Regional Trail From 'D Et,.{_R-0- to CJZ'6 S5-M uJ r'1 Authorized 2006-2007 Winter Activities 41XI CS ,, S Ki ir,s RuntNj n1 t. Regional Trail From to Authorized 2006-2007 Winter Activities Regional Trail From to. Authorized 2006-2007 Winter Activities Regional Trail From to Authorized 2006-2007 Winter Activities Authorization is hereby requested from the Park District Board of Commissioners to use portions of the Regional Trail Corridor for winter use activities between November 15,2006 and March 31, 2007, as determined by each municipality within guidelines set forth herein on District property located within individual City boundaries. It is understood and agreed that approval from the Park District Board of Commissioners is contingent upon the following conditions: The City agrees to defend, indemnify, and hold harmless the Park District, its officials, officers, agents, volunteers, and employees from any liability, claims, causes of action, judgments, damages, losses, costs or expenses, including reasonable attorney's fees,resulting directly or indirectly from any act or omission of the City, its respective contractors, anyone directly or indirectly employed by the, and/or anyone for whose acts and/or omissions they may be liable for related to the winter use of the Regional Trail Corridor. If City maintains general liability insurance at the time this permit is issued, City shall provide the Park District with a Certificate of Insurance, naming Three Rivers Park District as an additional named insured. The City agrees to maintain the trail, including, but not limited to, any plowing, sweeping, sanding,packing, trash pick-up, and sign replacement,between November 15,2006-March 31, 2007. The City further agrees to immediately address all safety issues on or adjacent to trails. c • The City will provide signage at locations approved by the Park District,notifying the public of authorized winter activities within its city limits; activities may include,but are not limited to, hiking, biking, snowmobiling, cross-country skiing, snowshoeing, or pet walking. .Winter use signs must be installed by the City at designated locations prior to November 15, 2006 and removed by the City no later than April 15,2007. These signs are totally the responsibility of each municipality. • Snowmobiling is not allowed on asphalt trails. Permitted use for snowmobiles will be limited to direct crossing and/or in areas where the snowmobile trail is kept from running on paved trails and bridges. If snowmobiling is permitted, cities must take steps to keep snowmobiles from damaging paved trails,bridges and other property. • The City agrees to enforce rules and regulations established by the municipality as part of its request for a Winter Use Permit. The City agrees to repair all trail surface damage that occurs as a result of winter trail activities and/or maintenance, including, but not limited to, bituminoustconcrete repair, bridge deck repair,grading or adding aggregate pursuant to guidelines established by the Park District. • The City agrees that winter trail use will be available to all persons,regardless of residence. Each City is required to submit its annual permit requests, including proposed rules and regulations,by September 22,2006, after which the Park District may take up to 45 business days to process. Each permit request must be submitted as a result of formal City Council action,with accompanying verification, agreeing to the terms and conditions outlined by the Park District's Winter Use Permit. It should be further understood that no winter activity will be allowed on segments of the Regional Trail Corridor where municipalities do not request and receive permits. The Park District reserves the right to terminate a permit at any time, if the conditions set forth herein are not followed. Signed: Date: Title: (Authorized Representative of the City) CITY COUNCIL AGENDA DATE: SECTION: Consent Calendar September 5, 2006 DEPARTMENT/DIVISION: ITEM DESCRIPTION: ITEM NO.: VILF. Stuart A.Fox,Manager of Award Bid for Carmel Park Tennis Court Parks and Natural Resources Resurfacing Requested Action Move to: Award the contract to Dermco-LaVine Construction in the amount$40,889 for the resurfacing of Carmel Park Tennis Court. Synopsis A portion of the bond referendum monies was for the restoration of several tennis courts within the City. Currently Homeward Hills and Prairie East parks are under total reconstruction of the tennis court surfaces.The tennis court at Carmel represents an intermediate type need in terms of restoration and the staff is recommending use of a plastic mat surface that would be installed over the existing tennis court surface.Plans and specifications were prepared and three quotes for this surface treatment of Carmel Park were received. The quotes are as follows: Dermco-LaVine Construction $40,889 Sport Court $42,120 McBroom Construction Co. $49,819 Staff has consulted with other communities that have used similar products and have found all of the submissions to be acceptable;however,we are recommending the low quote of$40,889 by Dermco-LaVine for this particular tennis court project. Background The situation with the Carmel Park tennis court is that the soils in that area are some what elastic and results in quite a bit of surface cracking that affects the playability of the courts. In researching the tennis court restoration issue,we discovered that several communities have utilized a plastic tile surface rather than go to a complete rebuild of their tennis courts.These sport court type areas tend to play somewhat slower; however, for recreational type play,they have been found to be quite acceptable to people using the neighborhood parks. We are pursuing this type of product at this court for Carmel;however,we would not use this at some of the more competitive courts, such as Round Lake or Holasek Hills tennis courts.Essentially the court surfaces are prepped with crack fillers, and then the plastic mat surface is installed over the existing asphalt and attached at the exterior to prevent it from being peeled up.The court will have a similar red/green color as is currently being used. The courts will tend to dry faster, since Award Bid for Carmel Park Tennis Court Resurfacing September 5, 2006 Page 2 rain water would drain through the plastic grid surface. The life expectancy and warranty on this particular product are very similar to what you can expect with a conventional color coat resurface application, approximately ten years. The price for this resurfacing treatment is approximately one-half the normal reconstruction cost for the two tennis courts. There are two additional neighborhood tennis courts that will be evaluated as to the suitability for this type of product following installation,use and feedback from the Carmel court users. CITY COUNCIL AGENDA DATE: SECTION: Consent September 5,2006 DEPARTMENT/DIVISION: ITEM DESCRIPTION: ITEM NO.VII.G. Community Development: Dunn Bros Sublease/Smith Douglas More Janet Jeremiah/David Lindahl Property 8107 Eden Prairie Road Requested Council Action: Move to: ■ Approve sublease between Dunn Bros and franchisee PureGrace,LLC and waive the 90 day notification requirement required by Lease. Synopsis: The Smith Douglas More property is one of only two stores operated by the Dunn Bros, all other stores are franchised. Dunn Bros is proposing to sublease the Smith Douglas More property(and equipment)to a new franchise called PureGrace,LLC—which are two Eden Prairie residents—for one dollar($1.00)plus utilities beginning October 1, 2006 through the term of their current lease which set to expire December 31, 2007 (15 months).Dunn Bros would continue to be obligated to all terms of the current lease though that date, at which time a new lease would be negotiated with the franchisee. Dunn notified staff of their intent to sublease July 17, 2006,which is less than the required 90 day notification to the proposed start of the sublease,but staff as had ample time to review the details of the proposal and supports the waiver. Background: The Smith Douglas More property was purchased by the City in1981for the purpose of preserving it as a historical structure and life estate was granted to its sellers,Earl and Helen More.Helen died in 1993 and Earl in 1999, after which the City began planning for the reuse of the property. In 2000,the City Council directed staff to work with the Heritage Preservation and Parks, Recreation Commissions on developing recommendations for the reuse of City historic sites. In June, 2000,the HPC completed an adaptive reuse proposal for the property,which the City Council approved and directed staff to develop a RFP for professional services to examine the market feasibility of leasing the home and property.In November of the same year the City Council accepted a petition from local citizens supporting continued City ownership of the Smith-Douglas-More House. After inspecting the house and property, Dunn Bros Coffee submitted a letter to the City in August 2001expressing a desire to lease and renovate the property for a new coffee store. The Council soon directed staff to negotiate a lease with Dunn Bros for the reuse of the property and in December of 2001,the City retained the architectural services of MacDonald and Mack Architects, Ltd.to design and prepare construction documents for rehabilitation of the house. A lease between the City and Dunn Bros was approved by the City Council June 4, 2002. The general provision of the lease as follows: ■ Leasable area 3,207 Sqaure Feet ■ Commencement date: November 1, 2002 ■ Termination date: December 31, 2007 ■ Term of lease: 5 years ■ Renewal term: Subject to two(2) five (5)-year renewal terms ■ initial annual rent: $60,558 ■ current annual rent $66,500 ■ Maintenance/Insurance Dunn Bros reponsibility Construction for the project was completed in early December 2003 and Dunn Bros were open for business December 30, 2003. Attachments: Sublease Lease LEASE Landlord City of Eden Prairie Tenant CeefaY Leasing, LLC TABLE OF CONTENTS ARTICLE PAGE REFERENCE PAGE i 1. TERM...............................................................................................1 2. RENT................................................................................................2 3. INTENTIONALLY OMMITTED................ ...3 .. ................... 4. ADDITIONAL RENT...................................................... 5. USE OF PREMISES; TENANT COVENANTS.............................................4 6. ALTERATIONS...................................................................................5 7. REPAIR..... ............................................................ 8. LIENS...............................................................................................6 9. ASSIGNMENT AND SUBLETTING................................ 10. INDEMNIFICATION........................................................... 11. INSURANCE...................................................................................... 10 12. SERVICES AND UTILITIES......................... ..11 ........................................ 13. HOLDING OVER.................................................................................11 14. SUBORDINATION.............. ............. ..... 11 15. REENTRY BY LANDLORD................ ................. .....12 .. ........................... 16. DEFAULT..........................................................................................12 17. REMEDIES....................... ............................................ ..............13 18. TENANT'S BANKRUPTCYOR INSOLVENCY............................ ......17 19. QUIET ENJOYMENT........................................................................... 18 20. DAMAGE BY FIRE,ETC.......................................................................18 21. EMINENT DOMAIN.............................................................................20 22. SALE BY LANDLORD......................................................................... 21 23. ESTOPPEL CERTIFICATES...................................................................21 24. SURRENDER OF PREMISES.............. ............21 ................................ 25. NOTICES............. ..........................................................22 26. TAXES PAYABLE BY TENANT.............................................................23 ......................... 27. DEFINED TERMS AND HEADINGS.........................................................23 28. TENANT'S AUTHORITY......................................................................24 29. TIME AND APPLICABLE LAW.............................................................. 24 30. SUCCESSORS AND ASSIGNS............................................................... 24 ..................... ..... 31. ENTIRE AGREEMENT.............. .............. .....24 .... ......... .... 25 32. EXAMINATION NOT OPTION............................................................... 33. RECORDATION.................................................................................25 34. LIMITATION OF LIABILITY..................................................................25 EXHIBIT A-PREMISES LEGAL DESCRIPTION...................................................26 I,I EXHIBIT B-PLANS FOR IMPROVEMENTS.........................................................27 EXHIBIT C-RULES AND REGULATIONS................................... EXHIBIT D-MUNICIPAL CONTRACT PROVISIONS.............................................31 ii SMITH, DOUGLAS, MORE HOUSE LEASE REFERENCE PAGE PREMISES: Smith,Douglas More House Eden Prairie,Minnesota 55344 LANDLORD City of Eden Prairie LANDLORD'S ADDRESS: 8080 Mitchell Road Eden Prairie,Minnesota 55344 LEASE REFERENCE DATE: , 2002 TENANT: Ceefay Leasing, LLC TENANT'S ADDRESS: 111 Third Avenue South Suite 160 Minneapolis,MN 55401 PREMISES AREA: Approximately 3,327 square feet, of which 2,274 square feet is on the main floor and 1,053 square feet is on the second floor USE: Coffee Shop and Bakery TENANT'S TRADE NAMES: Dunn Bros. Coffee TENDER DATE: September 15, 2002 COMMENCEMENT DATE: November 1, 2002 TERMINATION DATE: December 31, 2007 TERM OF LEASE: Approximately 5 years, Beginning on the Commencement Date and ending on the Termination Date (unless sooner terminated pursuant to the Lease) RENEWAL TERM: Lease is subject to two (2) five (5)-year renewal Terms, which may be exercised pursuant to the Lease. ii INITIAL ANNUAL RENT: $ 60,558.00 INITIAL MONTHLY INSTALLMENT OF ANNUAL RENT(Article 2): $ 5,046.50 SECURITY DEPOSIT: $ 5,046.50 ASSIGNMENT/SUBLETTING FEE: None The Reference Page information is incorporated into and made a part of the Lease. In the event of any conflict between any Reference Page information and the Lease, the Lease shall control. This Lease includes Exhibits A through D, all of which are made a part of this Lease. LANDLORD: TENANT: CITY OF EDEN PRAIRIE CEEFAY LEASING,LLC By: By: Nancy Tyra-Lukens, Its Mayor Its: By: Carl Jullie, Its City Manager Dated: Dated: iii LEASE By this Lease Landlord leases to Tenant and Tenant leases from Landlord the Premises as set forth and described on the Reference Page. The Reference Page, including all terms defined thereon, is incorporated as part of this Lease. 1. TERM. 1.1 Landlord shall tender possession of the Premises on or before September 15, 2002 ("Tender Date") with all the work to be performed by Landlord pursuant to Exhibit B to this Lease substantially completed. This Lease shall begin on November 1, 2002 ("Commencement Date"). 1.2 This Lease shall have a term of approximately five (5) years, beginning on the Commencement Date and ending on December 31, 2007 ("Termination Date"). 1.3 Subject to the terms provided herein, and provided Tenant is not in default as provided in this Lease, Tenant shall have two (2) options to extend the term of this Lease for a period of five (5)years ("First Option Term" and"Second Option Term," or collectively "Option Terms") immediately following the initial term ("Options"). The Options granted to Tenant in this Lease are personal to the original Tenant and may be exercised only by the original Tenant, or Franchisee who this Lease has been assigned to pursuant to section 9.1.1 of the Lease, while occupying the Premises, who does so without the intent of thereafter assigning this Lease or subletting the Premises or any portion thereof, and may not be exercised or be assigned,voluntarily or involuntarily, by or to any person or entity other than Tenant. The Options herein granted to Tenant are not assignable, except to a Franchisee under Section 9.1.1 of this Lease, separate and apart from this Lease, nor may the Options be separated from this Lease in any manner, whether by reservation or otherwise. 1.3.1 The First Option Term shall be exercised, if at all, by written notice delivered by Tenant to Landlord not later than six (6) months prior to the end of the initial term of this Lease. Provided Tenant has properly and timely exercised the First Option, the initial term of this Lease shall be extended by the First Option Term, and all terms, covenants and conditions of the Lease shall remain unmodified and in full force and effect, except for the Rent, which shall be adjusted pursuant to Paragraph 2.3 below. 1.3.2 The Second Option Term shall be exercised, if at all, by written request delivered by Tenant to Landlord not later than six (6) months prior to the iv end of the initial term of this Lease. In the event that Tenant delivers a request to exercise the Second Option Term, Landlord shall have ninety (90) to reject the Second Option Term by written notice to the Tenant. 2 Provided Tenant has properly and timely exercised the Second Option and the Landlord has not exercised its right to reject the Second Option Term, the term of this Lease shall be extended by the Second Option Term, and all terms, covenants and conditions of the Lease shall remain unmodified and in full force and effect, except for the Rent, which shall be adjusted pursuant to Paragraph 2.3 below. 2. RENT. 2.1. Tenant agrees to pay to Landlord the Annual Rent as provided in Section 2.2, by paying the Monthly Installment of Rent then in effect on or before the first day of each full calendar month during the Term, except that the first month's payable rent shall be paid on the Tender Date. The Monthly Installment of Rent in effect at any time shall be one-twelfth of the Annual Rent in effect at such time. Rent for any period during the Term which is less than a full month shall be a prorated portion of the Monthly Installment of Rent based upon a thirty (30) day month. Said rent shall be paid to Landlord, without deduction or offset and without notice or demand, at the Landlord's address, as set forth on the Reference Page, or to such other person or at such other place as Landlord may from time to time designate in writing. 2.2. The Annual Rent for this lease shall be as follows: Year 1 Annual Rent $60,558.00. (Based on a blended rate of$18.20 per square foot based on 3,327 square feet. The blended i calculated based upon 22.00 per square foot for q ded rates bas p $ p q the 2,154 square feet on the main floor and $10.00 per square foot for the 1,053 square feet on the second floor). Year 2 (commencing January 1, 2004) and each subsequent year thereafter the Annual Rent payable shall be the product obtained by muliplying the previous year's Annual Rent by a fraction, the numerator of which is the Consumer Price Index All Urban Consumers, U.S. City Average — All Items, Base 1982-1984 equals 100, as published by the U.S. Department of Labor Statistics ("CPI-U") for the month that is three (3) months preceding the first day of the current year of this Lease, and the denominator of which is the CPI-U for the month one year prior to the month in the numerator. If the CPI-U is discontinued, comparable statistics on the purchasing power of the consumer dollar published by the U.S. Department of Labor or its successors as designated by Landlord shall be used for making the computations in this paragraph. In the event that the base period(1982-1984 equals 100) used in computing the CPI-U is changed, the figures used in making the adjustment shall accordingly be changed so that changes in the CPI-U are taken into account with the same mathematical results notwithstanding any such change in the base period. In the event of any other changes to the CPI-U, the Landlord shall designate, a comparable calculation to be used for the calculations of this paragraph. 2 2.3. If Tenant, or a Franchisee who has been assigned this Lease pursuant to section 9.1.1 of this Lease, exercises its option to renew the Lease pursuant to Section 1.3 above, the Annual Rent for the option period shall calculated using the same formula as set forth in Section 2.2 of this Lease. 2.4. Tenant recognizes that late payment of any rent or other sum due under this Lease will result in administrative expense to Landlord, the extent of which additional expense is extremely difficult and economically impractical to ascertain. Tenant therefore agrees that if rent or any other sum is not paid within ten(10) days of its due date and payable pursuant to this Lease, a late charge shall be imposed in an amount equal to the greater of(a) Fifty Dollars ($50.00), or (b) a sum equal to five percent (5%) per month of the unpaid rent or other payment. The amount of the late charge to be paid by Tenant shall be reassessed and added to Tenant's obligation for each successive monthly period until paid. The provisions of this Section 2.4 in no way relieve Tenant of the obligation to pay rent or other payments on or before the date on which they are due, nor do the terms of this Section 2.4 in any way affect Landlord's remedies pursuant to Article 17 of this Lease in the event said rent or other payment is unpaid after date due. 2.5 In order to perform this Lease Tenant will be required to perform certain work on the Premises prior to the Commencement Date of this Lease ("Tenant Imporvements"). The Original Tenant, and not any assignee whether the assignee be a Franchisee or not, may finance the Tenant Improvements as Additional Rent under this Lease. In the event that Tenant exercises this option Landlord shall pay for the Tenant Improvements, up to $90,000.00. Tenant shall repay Landlord all sums advanced for Tenant Improvements as Additional Rent amortized over a period of three (3) years at the Prime Rate of interest. Tenant shall sign any additional documents evidencing and securing the debt, reasonably requested by Landlord, including but not limited to promissory notes, security agreements, financing statements, or mortgages. 3. INTENTIONALLY OMITTED. 4. ADDITIONAL RENT Any money or sums, other than Annual Rent, due under this Lease shall be considered additional rent and be due with the next Monthly Installment of Rent, unless otherwise indicated in this Lease. 3 5. USE OF PREMISES; TENANT COVENANTS. 5.1. Tenant shall in good faith continuously throughout the Term of this lease conduct and carry on in the entire Premises under Tenant's Trade Names the type of business described on the Reference Page and shall not conduct or carry on any other business without the prior express written consent of Landlord. 5.2. Tenant shall comply with all governmental laws, ordinances and regulations applicable to the use of the Premises and its occupancy and shall promptly comply with all governmental orders and directions for the correction, preven tion and abatement of any violations in or upon, or in connection with, the Premises, all at Tenant's sole expense. 5.3. Tenant shall operate its business in a dignified manner and in accordance with high standards of a store operation and shall, at all times when the Premises are open for business to the public, keep the Premises properly equipped with fixtures, stocked with an adequate supply of merchandise and attended by adequate personnel. 5.4. Tenant agrees to comply with and observe the rules and regulations shown on Exhibit C. Tenant's failure to keep and observe said rules and regulations shall constitute a breach of the terms of this Lease as if the same were contained herein as covenants following the notice and/or cure periods set forth in Section 16.1.2 hereof. Landlord reserves the right from time to time to amend or supplement said rules nd regulations. Notice of such amendments and supplements shall be given to Tenant and Tenant agrees to comply with and observe all such rules and regulations, as revised, to the extent the amendments and supplements are not inconsistent with the rules contained in Exhibit C or any other provision of this Lease. 5.5. Tenant shall at all times herein maintain the Premises. Tenant's maintenance obligations shall include, but are not limited to, lawn care, snow plowing, snow shoveling, garbage removal, painting, cleaning, upkeep, and other similar obligations. In the event that Tenant fails to adequately maintain the Premises, Landlord reserves the right to perform any and all maintenance on the Premises. In the event that Landlord performs any such maintenance, Tenant shall reimburse Landlord upon demand, as additional rent, for any and all costs incurred by Landlord as a result of performing said maintenance with its next installment of rent due pursuant to this Lease following submission to Tenant of an invoice thereof and reasonable documentation relating thereto. 5.6. Tenant acknowledges that the Premises has been designated as an Historic House. Tenant's use of the Premises, including maintenance of the Premises, shall at all 4 times comply with all laws, rules, and regulations related to the Historic House designation. 5.7. Tenant shall not, and shall not direct, suffer or permit any of its agents, contractors, employees, licensees or invitees to at any time handle, use, manufacture, store or dispose of in or about the Premises any (collectively "Hazardous Materials") flammables, explosives, radioactive materials, hazardous wastes or materials, toxic wastes or materials, or other similar substances, petroleum products or derivatives or any substance subject to regulation by or under any federal, state and local laws and ordinances relating to the protection of the environment or the keeping, use or disposition of environmentally hazardous materials, substances, or wastes, presently in effect or hereafter adopted, all amendments to any of them, and all rules and regulations issued pursuant to any of such laws or ordinances (collectively "Environmental Laws"), nor shall Tenant suffer or permit any Hazardous Materials to be used in any manner not fully in compliance with all Environmental Laws, in the Premises and appurtenant land or allow the Premises to become contaminated with any Hazardous Materials. Notwithstanding the foregoing, Tenant may handle, store, use or dispose of products containing small quantities of Hazardous Materials (such as aerosol cans containing insecticides,toner for copiers,paints, paint remover and the like)to the extent customary and necessary for the use of the Premises for the purposes permitted hereunder; provided that Tenant shall always handle, store, use, and dispose of any such Hazardous Materials in a safe and lawful manner and never allow such Hazardous Materials to contaminate the Premises and appurtenant land or the environment. Tenant shall protect, defend, indemnify and hold the Landlord harmless from and against any and all loss, claims, liability or costs (including court costs and attorney's fees) incurred by reason of any actual or asserted failure of Tenant to fully comply with all applicable Environmental Laws, or the presence, handling, use or disposition in or from the Premises of any Hazardous Materials(even though permissible under all applicable Environmental Laws or the provisions of this Lease), or by reason of any actual or asserted failure of Tenant to keep, observe, or perform any provision of this Section 5.7. 5.8. Any signs used on the Premises shall comply with the Eden Prairie City Code then in effect and must be approved by the Eden Prairie Historic Preservation Commission. 5.9 Tenant shall not allow any smoking, or other use of tobacco products, by Tenant or any guest, invitee, or other person on the Premises, in any building located on the Premises. 6. ALTERATIONS. 6.1. Tenant shall not make or suffer to be made any alterations or improvements, including but not limited to, the attachment of any fixtures or equipment in, on, or 5 to the Premises or any part thereof without prior written consent of Landlord and the Eden Prairie Historic Preservation Commission. 6.2. All alterations, additions or improvements proposed by Tenant shall be constructed in accordance with all government laws, ordinances, rules and regulations and Tenant shall, prior to construction, provide the additional insurance required under Article 11 in such case, and also all such assurances to Landlord, including but not limited to, waivers of liens and surety company performance bonds, as Landlord shall require to assure payment of the costs thereof and to protect Landlord and the Premises and appurtenant land against any loss from any mechanic's, materialmen's or other liens. Tenant shall pay in addition to any sums due pursuant to Article 4, any increase in real estate taxes directly attributed to any such alteration, addition or improvement for so long, during the Term, as such increase is ascertainable; said sums shall be paid in the same way as sums due under Article 4. 6.3. All alterations, additions, and improvements in, on, or to the Premises made or installed by Tenant, including carpeting, shall be and remain the property of Tenant during the Term. All such alterations, additions, and improvements, except furniture, furnishings, movable partitions of less than full height from floor to ceiling and other trade fixtures shall become a part of the realty and belong to Landlord without compensation to Tenant upon the expiration or sooner termination of the Term, at which time title shall pass to Landlord under this Lease as by a bill of sale, unless Landlord elects otherwise. Upon such election by Landlord, Tenant shall upon demand by Landlord, at Tenant's sole cost and expense, forthwith and with all due diligence remove any such alterations, additions or improvements which are designated by Landlord to be removed, and Tenant shall forthwith and with all due diligence, at its sole cost and expense, repair and restore the Premises to their original condition, reasonable wear and tear and damage by fire or other casualty excepted. 6. REPAIR. 7.1. Landlord shall have no obligation to alter, remodel, improve, repair, decorate or paint the Premises, except as specified in Exhibit B. It is hereby understood and agreed that no representations respecting the condition of the Premises have been made by Landlord to Tenant, except as specifically set forth in this Lease. Landlord shall not be liable for any failure to make any repairs or to perform any maintenance unless such failure shall persist for forty-eight (48) hours after written notice of the need of such repairs or maintenance is given to Landlord by Tenant. If the repair cannot be completed within forty-eight (48) hours, Landlord shall not be liable for the failure to complete the repair so long as Landlord has begun repair and is using its best efforts to complete the repair. 6 7.2. Tenant shall, at all times during the Term, keep the Premises in good condition and repair, including windows, glass and plate glass, doors, skylights and special store entries, interior walls and finish work, floors and floor coverings, electrical systems and fixtures located within and/or serving the Premises, plumbing work and fixtures and heating, ventilating and air conditioning equipment located within and/or serving the Premises, excepting damage by fire, or other casualty, and in compliance with all applicable governmental laws, ordinances and regulations, promptly complying with all governmental orders and directives for the correction, prevention and abatement of any violations or nuisances in or upon, or connected with, the Premises, all at Tenant's sole expense. Tenant shall, at its own cost and expense, enter into a regularly scheduled preventive maintenance/service contract with a maintenance contractor approved by Landlord for servicing all heating and air conditioning systems and equipment serving the Premises (and a copy thereof shall be furnished to Landlord). The service contract must include all services suggested by the equipment manufacturer in the operation/maintenance manual and must become effective within thirty (30) days of the date Tenant takes possession of the Premises. Landlord may, upon notice to Tenant, enter into such a maintenance/service contract on behalf of Tenant or perform the work and in either case, charge Tenant the cost thereof along with a reasonable amount for Landlord's overhead. 8. LIENS. Tenant shall keep the Premises and appurtenant land and Tenant's leasehold interest in the Premises free from any liens arising out of any services, work or materials performed, furnished, or contracted for by Tenant, or obligations incurred by Tenant. In the event that Tenant shall not, within ten (10) days following the imposition of any such lien, either cause the same to be released of record or provide Landlord with insurance against the same issued by a major title insurance company or such other protection against the same as Landlord shall accept, Landlord shall have the right to cause the same to be released by such means as it shall deem proper, including payment of the claim giving rise to such lien. All such sums paid by Landlord and all expenses incurred by it in connection therewith shall be considered additional rent and shall be payable to it by Tenant on demand. 9. ASSIGNMENT AND SUBLETTING.IO.ASSIGNMENT AND SUBLETTING. 9.1. Tenant shall not have the right to assign or pledge this Lease, except to a Franchisee as specified in Section 9.1.1 of this Lease, or to sublet the whole or any part of the Premises whether voluntarily or by operation of law, or permit the use or occupancy of the Premises by anyone other than Tenant, and shall not make, suffer or permit such assignment, subleasing or occupancy, without the prior written consent of Landlord. Said restrictions shall be binding upon any and all assignees of the Lease and subtenants of the Premises. In the event Tenant desires to sublet, or permit such occupancy of, the Premises, or any portion thereof, or assign this Lease, Tenant shall give written notice thereof to Landlord 7 at least ninety (90) days but no more than one hundred eighty (180) days prior to the proposed commencement date of such subletting or assignment, which notice shall set forth the name of the proposed subtenant or assignee, the relevant terms of any sublease or assignment and copies of financial reports and other relevant financial reports and other relevant financial information of the proposed subtenant or assignee. 9.1.1 Prior to the Commercement Date of the Lease, Tenant shall have the option to assign this Lease to a Franchisee of Tenant. Tenant shall give Landlord thirty (30) days notice of any such request to assign this Lease and shall provide Landlord with any franchise documents and finacial reports requested by Landlord. Landlord shall have the right to reject any Franchisee if the fincial or franchise documents are unacceptable to Landlord. Landlords consent to an assignment to a Franchisee will not be unreasonably withheld. For the purposes of this Lease the term Franchisee shall mean a company, corporation, or individual who is an approved Franchisee of Dunn Bros. Coffee. 9.2. Notwithstanding any assignment or subletting, permitted or otherwise, Tenant shall at all times remain directly, primarily and fully responsible and liable for the payment of the rent specified in this Lease and for compliance with all of its other obligations under the terms, provisions and covenants of this Lease. Upon the occurrence of an Event of Default, if the Premises or any part of them are then assigned or sublet, Landlord, in addition to any other remedies provided in this Lease or provided by law, may, at its option, collect directly from such assignee or subtenant all rents due and becoming due to Tenant under such assignment or sublease and apply such rent against any sums due to Landlord from Tenant under this Lease, and no such collection shall be construed to constitute a release of Tenant from the further performance of Tenant's obligations under this Lease. 9.3. In addition to Landlord's right to approve of an subtenant or assignee, Landlord g pp Y shall have the option, in its sole discretion, in the event of any proposed subletting or assignment, to terminate this Lease, or in the case of a proposed subletting of less than the entire Premises, to recapture the portion of the Premises to be sublet, as of the date the subletting or assignment is to be effective. The option shall be exercised, if at all, by Landlord giving Tenant written notice within sixty (60) days following Landlord's receipt of Tenant's written notice as required above. If this Lease shall be terminated with respect to the entire Premises pursuant to this Section, the Term of this Lease shall end on the date stated in Tenant's notice as the effective date of the sublease or assignment as if that date had been originally fixed in this Lease for the expiration of the Term. If Landlord recaptures under this Section only a portion of the Premises, the rent to be paid from time to time during the unexpired Term shall abate proportionately based on the proportion by which the approximate square footage of the remaining portion of the Premises 8 shall be less than that of the Premises as of the date immediately prior to such recapture. 9.4. In the event that Tenant sells, sublets, assigns, or transfers this Lease and the amount of rent and/or additional rent paid pursuant to the sale, sublease, assignment, or transfer is greater than the amount of the rent and additional rent payable under this Lease, Landlord shall have the right to terminate this Lease as of the effective date of the sale, sublease, assignment, or transfer and enter a new lease with the purchaser, sublessor, assignee, or transferee under the same terms and conditions as the sale, sublease, assignment, or transfer. Such termination shall release Tenant from any and all liability under this Lease. 9.5. Notwithstanding any other provision hereof, Tenant shall have no right to make (and Landlord shall have the absolute right to refuse consent to) any assignment of this Lease or sublease of any portion of the Premises if at the time of either Tenant's notice of the proposed assignment or sublease or the proposed commencement date thereof, there shall exist any uncured default of Tenant or matter which will become a default of Tenant with passage of time unless cured, or if the proposed assignee or sublessee is an entity: (a) which Landlord is already in negotiation as evidenced by the issuance of a written proposal; (b) is incompatible with the character of occupancy of the Premises; or (c) would subject the Premises to a use which would: (i) involve materially increased personnel or wear upon the Premises; (ii) require any addition to or modification of the Premises or the Premises in order to comply with building code or other governmental requirements; or, (iii) involve violation of Section 5.7. Tenant expressly agrees that Landlord shall have the absolute right to refuse consent to any such assignment or sublease and that for the purposes of any statutory or other requirement of reasonableness on the part of Landlord such refusal shall be reasonable. 10. INDEMNIFICATION. The Landlord shall not be liable and Tenant hereby waives all claims against Landlord for any damage to any property or any injury to any person in or about the Premises by or from any cause whatsoever (including without limiting the foregoing, rain or water leakage of any character from the roof, windows,walls, basement,pipes,plumbing works or appliances, the Premises not being in good condition or repair, gas, fire, oil, electricit y or theft), except to the extent caused by or arising from the negligence or intentional act of Landlord or its agents, employees or contractors. Tenant shall protect, indemnify and hold the Landlord harmless from and against any and all loss, claims, liability or costs (including court costs and attorney's fees) incurred by reason of(a) any damage to any property (including but not limited to property of Landlord) or any injury (including but not limited to death) to any person occurring in, on or about the Premises to the extent that such injury or damage shall be caused by or arise from any act, neglect, fault, or omission by or of Tenant, its agents, servants, employees, invitees, or visitors to meet any 9 standards imposed by any duty with respect to the injury or damage; (b) the conduct or management of any work or thing whatsoever done by the Tenant in or about the Premises or from transactions of the Tenant concerning the Premises; (c) Tenant's failure to comply with any and all govenmental laws, ordinances and regulations applicable to the condition or use of the Premises or its occupancy; or (d) any breach or default on the part of Tenant in the performance of any covenant or agreement on the part of the Tenant to be performed pursuant to this Lease. The provisions of this Article shall survive the termination of this Lease with respect to any claims or liability accruing prior to such termination. 11. INSURANCE. 11.1. Tenant shall keep in force throughout the Term: (a) a Commercial General Liability insurance policy or policies to protect the Landlord against any liability to the public or to any invitee of Tenant or Landlord incidental to the use of or resulting from any accident occurring in or upon the Premises with a limit of not less than $1,000,000.00 per occurrence and not less than $2,000,000.00 in the annual aggregate, or such larger amount as Landlord may prudently require from time to time, covering bodily injury and property damage liability and $1,000,000 products/completed operations aggregate; (b) Business Auto Liability covering owned, non-owned and hired vehicles with a limit of not less than $1,000,000 per accident; (c) insurance protecting against liability under Worker's Compensation Laws with limits at least as required by statute; (d) Employers Liability with limits of $500,000 each accident, $500,000 disease policy limit, $500,000 disease--each employee; (e) All Risk or Special Form coverage protecting Tenant against loss of or damage to Tenant's alterations, additions, improvements, carpeting, floor coverings, panelings, decorations, fixtures, inventory, plate glass and other business personal property situated in or about the Premises to the full replacement value of the property so insured; and, (f) Business Interruption Insurance with limit of liability representing loss of at least approximately six months of income. 11.2. Each of the aforesaid policies shall (a) be provided at Tenant's expense; (b)name the Landlord as an additional insured; (c)be issued by an insurance company with a minimum Best's rating of "A:VII" during the Term; and (d) provide that an insurance company with said insurance shall not be canceled unless thirty (30) days prior written notice (ten days for non-payment of premium) shall have been given to Landlord; and said policy or policies or certificates thereof shall be delivered to Landlord by Tenant upon the Commencement Date and at least thirty (30)days prior to each renewal of said insurance. 11.3. Whenever Tenant shall undertake any alterations, additions or improvements in, to or about the Premises ("Work") the aforesaid insurance protection must extend to and include injuries to persons and damage to property arising in connection with such Work, without limitation including liability under any applicable 10 structural work act, and such other insurance as Landlord shall reasonably require; and the policies of or certificates evidencing such insurance must be delivered to Landlord prior to the commencement of any such Work. Tenant shall also require surety payment and performance bonds, or other similar security approved by Landlord for any Work done on the Premises. 12. SERVICES AND UTILITIES. Tenant shall pay for all water, gas, heat, light, power, telephone, sewer, sprinkler system charges and other utilities and services used on or from the Premises, together with any taxes, penalties and surcharges or the like pertaining thereto and any maintenance charges for such utilities. If any such services are not separately metered to Tenant, Tenant shall pay all such charges determined by Landlord, in its sole discretion,to be reasonable. Any such charges paid by Landlord and assessed against Tenant shall be immediately payable to Landlord on demand and shall be additional rent hereunder. Landlord shall not be liable for any interruption or failure of utility services on or to the Premises unless the interruption or failure of service is caused by the negligence or intentional act of Landlord or any of Landlord's officers, directors, employees, or agents. 13. HOLDING OVER. Tenant shall pay Landlord for each day Tenant retains possession of the Premises or part thereof after termination of this Lease by lapse of time or otherwise at the then market rental value of the Premises as determined by Landlord assuming a new lease of the Premises of the then usual duration and other terms, prorated on a daily basis ("Holdover Rate"), and also pay all damages sustained by Landlord by reason of such retention. If Landlord gives notice to Tenant of Landlord's election to that effect, such holding over shall constitute renewal of this Lease for a period from month to month at the Holdover Rate, but if the Landlord does not so elect, no such renewal shall result notwithstanding acceptance by Landlord of any sums due hereunder after such termination; and instead, a tenancy at sufferance at the Holdover Rate shall be deemed to have been created. In any event, no provision of this Article 13 shall be deemed to waive Landlord's right of reentry or any other right under this Lease or at law. 14. SUBORDINATION. Without the necessity of any additional document being executed by Tenant for the purpose of effecting a subordination, this Lease shall be subject and subordinate at all times to ground or underlying leases and to the lien of any mortgages or deeds of trust now or hereafter placed on, against or affecting the Premises, Landlord's interest or estate in the Premises, or any ground or underlying lease, provided, however, that; (i) if the lessor, mortgagee,trustee, or holder of any such mortgage or deed of trust agrees not to materially disturb Tenant or Tenants use of the Premises or Tenant's rights hereunder and so long as no event of Default has occurred and is continuing, and (ii) if the lessor, mortgagee, trustee, or holder of any such mortgage or deed of trust elects to have Tenant's interest in I this Lease be superior to any such instrument, then, by notice to Tenant, this Lease shall be deemed superior, whether this Lease was executed before or after said instrument. Notwithstanding the foregoing, Tenant covenants and agrees to execute and deliver upon demand such further instruments evidencing such subordination or superiority of this Lease as may be required by Landlord. 15. REENTRY BY LANDLORD. Landlord reserves and shall at all times have the right to re-enter the Premises, upon twenty-four (24) hours notice, to inspect the same, to supply any service to be provided by Landlord to Tenant under this Lease, to show said Premises to prospective purchasers, mortgagees or tenants, and to alter, improve or repair the Premises and any portion of the Premises, without abatement of rent, and may for that purpose erect, use and maintain scaffolding, pipes, conduits and other necessary structures and open any wall, ceiling or floor in and through the Premises where reasonably required by the character of the work to be performed. Landlord may enter the Premises without notice in the event of a burglary, fire, medical emergency, natural disaster, or other similar emergency. Tenant hereby waives any claim for damages for any injury or inconvenience to or interference with Tenant's business, any loss of occupancy or quiet enjoyment of the Premises, and any other loss occasioned by any action of Landlord authorized by this Article 15. Nothing in this Article 15 waives or shall be construed as waiving any claim by Tenant for any negligent or intentional act of Landlord or any employee, contractor, or agent of Landlord which in any way damages Tenant or Tenant's rights under this Lease. In the event that Landlord discovers a defect or other problem with the premises during such re- entry, Landlord may correct the defect or problem and Tenant shall reimburse Landlord on demand, as additional rent, for any expenses which Landlord may incur in correcting the defect or problem provided that Tenant was responsible for the repair of the defect or problem pursuant to Article 7.2 of this Lease. 16. DEFAULT. 16.1 Except as otherwise provided in Article 18, the following events shall be deemed to be Events of Default under this Lease: 16.1.1. Tenant shall fail to pay when due any sum of money becoming due to be paid to Landlord under this Lease, whether such sum be any installment of the rent reserved by this Lease, any other amount treated as additional rent under this Lease, or any other payment or reimbursement to Landlord required by this Lease, whether or not treated as additional rent under this Lease, and such failure shall continue for a period of five days after written notice that such payment was not made when due, but if any such notice shall be given, for the twelve month period commencing with the date of such notice, the failure to pay within five days after due any 12 additional sum of money becoming due to be paid to Landlord under this Lease during such period shall be an Event of Default,without notice. 16.1.2. Tenant shall fail to comply with any term, provision or covenant of this Lease which is not provided for in another Section of this Article and shall not cure such failure within twenty (20) days (forthwith, if the failure involves a hazardous condition) after written notice of such failure to Tenant, or if such failure cannot reasonably be cured with such twenty (20) days, Tenant shall fail to commence such cure within such twenty (20)day period and diligently pursue the same to completion. 16.1.3.Tenant shall abandon or vacate any substantial portion of the Premises or cease continuously operating its business therein. 16.1.4.Tenant shall fall to vacate the Premises immediately upon termination of this Lease, by lapse of time or otherwise, or upon termination of Tenant's right to possession only. 16.1.5. Tenant shall become insolvent, admit in writing its inability to pay its debts generally as they become due, file a petition in bankruptcy or a petition to take advantage of any insolvency statute, make an assignment for the benefit of creditors, make a transfer in fraud of creditors, apply for or consent to the appointment of a receiver of itself or of the whole or any substantial part of its property, or file a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws, as now in effect or hereafter amended, or any other applicable law or statute of the United States or any state thereof. 16.1.6.A court of competent jurisdiction shall enter an order,judgment or decree adjudicating Tenant bankrupt, or appointing a receiver of Tenant, or of the whole or any substantial part of its property, without the consent of Tenant, or approving a petition filed against Tenant seeking reorganization or arrangement of Tenant under the bankruptcy laws of the United States, as now,in effect or hereafter amended, or any state thereof, and such order, judgment or decree shall not be vacated or set aside or stayed within sixty (60) days from the date of entry thereof 17. REMEDIES. 17.1. Except as otherwise provided in Article 18, upon the occurrence of any of the Events of Default described or referred to in Article 16, Landlord shall have the option to pursue any one or more of the following remedies without any notice or demand whatsoever, concurrently or consecutively and not alternatively: 13 17.1.1. Landlord may, at its election, terminate this Lease or terminate Tenant's right to possession only,without terminating the Lease. 17.1.2. Upon any termination of this Lease,whether by lapse of time or otherwise, or upon any termination of Tenant's right to possession without termination of the Lease, Tenant shall surrender possession and vacate the Premises immediately, and deliver possession thereof to Landlord, and Tenant hereby grants to Landlord full and free license to enter into and upon the Premises in such event and to repossess Landlord of the Premises as of Landlord's former estate and to expel or remove Tenant and any others who may be occupying or be within the Premises and to remove Tenant's signs and other evidence of tenancy and all other property of Tenant therefrom without being deemed in any manner guilty of trespass, eviction or forcible entry or detainer, and without incurring any liability for any damage resulting therefrom, Tenant waiving any right to claim damages for such reentry and expulsion, and without relinquishing Landlord's right to rent or any other right given to Landlord under this Lease or by operation of law. 17.1.3.Upon any termination of this Lease, whether by lapse of time or otherwise, Landlord shall be entitled to recover as damages, all rent, including any amounts treated as additional rent under this Lease, and other sums due and payable by Tenant on the date of termination, plus as liquidated damages and not as a penalty, an amount equal to the sum of (a) an amount equal to the then present value of the rent reserved in this Lease for the residue of the stated Term of this Lease including any amounts treated as additional rent under this Lease and all other sums provided in this Lease to be paid by Tenant,minus the fair rental value of the Premises for such residue; (b) the value of the time and expense necessary to obtain a replacement tenant or tenants, and the estimated expenses described in Section 16.1.4. relating to recovery of the Premises, preparation for reletting and for reletting itself, and (c) the cost of performing any other covenants which would have otherwise been performed by Tenant. 17.1.4. Upon any termination of Tenant's right to possession only without termination of the Lease: 17.1.4.1 Neither such termination of Tenant's right to possession nor Landlord's taking and holding possession thereof as provided in Section 17.1.2 shall terminate the Lease or release Tenant, in whole or in part, from any obligation, including Tenant's obligation to pay the rent, including any amounts treated as additional rent, under this Lease for the full Term, and if Landlord so elects Tenant shall pay forthwith to Landlord the sum equal to the entire amount of 14 the rent, including any amounts treated as additional rent under this Lease, for the remainder of the Term plus any other sums provided in this Lease to be paid by Tenant for the remainder of the Term. 17.1.4.2 Landlord shall use its best efforts to relet the Premises or any part thereof for such rent and upon such terms as Landlord, in its sole discretion, shall determine (including the right to relet the premises for a greater or lesser term than that remaining under this Lease, the right to relet the Premises as a part of a larger area, and the right to change the character or use made of the Premises). In connection with or in preparation for any reletting, Landlord may, but shall not be required to, make repairs, alterations and additions in or to the Premises and redecorate the same to the extent Landlord deems necessary or desirable, and Tenant shall, upon demand, pay the cost thereof, together with Landlord's expenses of reletting, including, without limitation, any commission incurred by Landlord. Landlord and Tenant agree that nevertheless Landlord shall at most be required to use only the same efforts Landlord then uses to lease remises generallyand that in an case p Y that Landlord shall not be required to give any preference or priority to the showing or leasing of the Premises over any other space that Landlord may be leasing or have available and may place a suitable prospective tenant in any such other space regardless of when such other space becomes available. Landlord shall not be required to observe any instruction given by Tenant about any reletting or accept any tenant offered by Tenant unless such offered tenant has a credit worthiness acceptable to Landlord and leases the entire Premises upon terms and conditions including a rate of rent (after giving effect to all expenditures by Landlord for tenant improvements, broker's commissions and other leasing costs) all no less favorable to Landlord than as called for in this Lease, nor shall Landlord be required to make or permit any assignment or sub lease for more than the current term or which Landlord would not be required to permit under the provisions of Article 9. 17.1.4.3 Until such time as Landlord shall elect to terminate the Lease and shall thereupon be entitled to recover the amounts specified in such case in Section 17.1.3, Tenant shall pay to Landlord upon demand the full amount of all 15 rent, including any amounts treated as additional rent under this Lease and other sums reserved in this Lease for the remaining Term, together with the costs of repairs, alterations additions redecorating and Landlord's expenses of reletting and the collection of the rent accruing therefrom (including attorney's fees and broker's commissions), as the same shall then be due or become due from time to time pursuant to the terms of this Lease, less only such consideration as Landlord may have received from any reletting of the Premises; and Tenant agrees that Landlord may file suits from time to time to recover any sums falling due under this Article 17 as they become due. Any proceeds of reletting by Landlord in excess of the amount then owed by Tenant to Landlord from time to time shall be credited against Tenant's future obligations under this Lease but shall not otherwise be refunded to Tenant or inure to Tenant's benefit. 17.2. Landlord may, at Landlord's option, enter into and upon the Premises without notice, if Landlord determines in its sole discretion that Tenant is not acting within a commercially reasonable time to maintain, repair or replace anything for which Tenant is responsible under this Lease and correct the same, without being deemed in any manner guilty of trespass, eviction or forcible entry and detainer and without incurring any liability for any damage or interruption of Tenant's business resulting therefrom. If Tenant shall have vacated the Premises, Landlord may at Landlord's option re-enter the Premises at any time during the last six months of the then current Term of this Lease and make any and all such changes, alterations, revisions, additions and tenant and other improvements in or about the Premises as Landlord shall elect, all without any abatement of any of the rent otherwise to be paid by Tenant under this Lease. 17.3. If, on account of any Event of Default by Tenant under the terms and conditions of this Lease, it becomes necessary or appropriate for Landlord to employ or consult with an attorney concerning or to enforce or defend any of the Landlord's rights or remedies arising under this Lease, the Tenant agrees to pay all attorney's fees so incurred by the Landlord. 17.4. Pursuit of any of the foregoing remedies shall not preclude pursuit of any of the other remedies provided in this Lease or any other remedies provided by law (all such remedies being cumulative), nor shall pursuit of any remedy provided in this Lease constitute a forfeiture or waiver of any rent due to Landlord under this Lease or of any damages accruing to Landlord by reason of the violation of any of the terms,provisions and covenants contained in this Lease. 16 17.5. No act or thing done by Landlord or its agents during the Term shall be deemed a termination of this Lease or an acceptance of the surrender of the and no agreement to terminate this Lease or to accept a surrender of said Premises shall be valid, unless in writing signed by Landlord. No waiver by Landlord of any violation or Event of Default of any of the terms, provisions and covenants contained in this Lease shall be deemed or construed to constitute a waiver of any other violation or breach of any of the terms, provisions and covenants contained in this Lease. Landlord's acceptance of the payment of rental or other payments after the occurrence of an Event of Default shall not be construed as a waiver of such Event of Default, unless Landlord so notifies Tenant in writing. Forbearance by Landlord in enforcing one or more of the remedies provided in this Lease upon an Event of Default shall not be deemed or construed to constitute a waiver of such Event of Default or of Landlord's right to enforce any such remedies with an respect to such Event of Default or subsequent Event of Default. p Y 18. TENANT'S BANKRUPTCY OR INSOLVENCY 18.1. If at any time and for so long as Tenant shall be subjected to the provisions of the United States Bankruptcy Code or other law of the United States or any state thereof for the protection of debtors as in effect at such time (each a "Debtor's Law"): 18.1.1. Tenant, Tenant as debtor-in-possession, and any trustee or receiver of Tenant's assets (each a "Tenant's Representative") shall have no greater right to assume or assign this Lease or any interest in this Lease, or to sub lease any of the Premises than accorded to Tenant in Article 9, except to the extent Landlord shall be required to permit such assumption, assignment or sublease by the provisions of such Debtor's Law. Without limitation of the generality of the foregoing, any right of any Tenant's Representative to assume or assign this Lease or to sublease any of the Premises shall be subject to the conditions that: 18.1.1.1. Such Debtor's Law shall provide to Tenant's Representative a right of assumption of this Lease which Tenant's Representative shall have timely exercised and Tenant's Representative shall have fully cured any default of Tenant under this Lease. 18.1.1.2. Tenant's Representative or the proposed assignee, as the case shall be, shall have deposited with Landlord as security for the timely payment of rent an amount equal to three months' rent and other monetary charges accruing under this Lease; and shall have provided Landlord with adequate other assurance of the future performance of the obligations of the Tenant under this Lease. Without 17 limitation, such assurances shall include, at least, in the case of assumption of this Lease, demonstration to the satisfaction of the Landlord that Tenant's Representative has and will continue, to have sufficient unencumbered assets after the payment of all secured obligations and administrative expenses to assure Landlord that Tenant's Representative will have sufficient funds to fulfill the obligations of Tenant under this Lease; and, in the case of assignment, submission of current financial statements of the proposed assignee, audited by an independent certified public accountant reasonably acceptable to Landlord and showing a net worth and working capital in amounts determined by Landlord to be sufficient to assure the future performance by such assignee of all of the Tenant's obligations under this Lease. 18.1.1.3. The assumption or any contemplated assignment of this Lease or subleasing of any part of the Premises, as shall be the case, will not breach any provision in any other lease, mortgage, financing agreement or other agreement by which Landlord is bound. 18.1.1.4. Landlord shall have no right under Article 9 to refuse consent to the proposed assignment or sublease by reason of the identity or nature of the proposed assignee or sublessee or the proposed use of the Premises concerned. 19. QUIET ENJOYMENT. Landlord represents and warrants that it has full right and authority to enter into this Lease and that Tenant, while paying the rental and performing its other covenants and agreements contained in this Lease, shall peaceably and quietly have, hold and enjoy the Premises for the Term without hindrance or molestation from Landlord subject to the terms and provisions of this Lease. Landlord shall not be liable for any interference or disturbance by other tenants or third persons, nor shall Tenant be released from any of the obligations of this Lease because of such interference or disturbance. 20. DAMAGE BY FIRE, ETC. 20.1. In the event that the Premises is damaged by fire or other cause Landlord shall have the option of either terminating the Lease immediately and be under no obligation to rebuild the Premises or continue the Lease and rebuild the Premises. Within forty-five (45) days from the date of such damage, Landlord shall notify Tenant, in writing, of Landlord's decision to rebuild the Premises or terminate the Lease. If Landlord decides to rebuild the Premises, Landlord shall within forty- 18 five (45) days,notify Tenant of Landlord's reasonable estimation of the length of time within which material restoration can be made, and Landlord's determination shall be binding on Tenant. For purposes of this Lease, the Premises shall be deemed"materially restored" if they are in such condition as would not prevent or materially interfere with Tenant's use of the Premises for the purpose for which it was being used immediately before such damage. 20.2. If the Premises can be materially restored within ninety days (90), in Landlord's reasonable estimation, this Lease shall remain in full force and effect, except that Tenant shall be entitled to a proportionate abatement in rent, including any taxes or any other Additional Rent under this Lease, from the date of such damage. Such abatement of rent shall be made pro rata in accordance with the extent to which the damage and the making of such repairs shall interfere with the use and occupancy by Tenant of the Premises from time to time. 20.3. If the Premises cannot be repaired within ninety (90) days, in Landlord's reasonable estimation, Tenant shall have the option of giving the Landlord, at any time within sixty (60) days after such damage, notice terminating this Lease as of the date of such damage. In the event of the giving of such notice, this Lease shall expire and all interest of the Tenant in the Premises shall terminate as of the date of such damage as if such date had been originally fixed in this Lease for the expiration of the Term. 20.4. In the event that neither Landlord nor Tenant exercises its option to terminate this Lease, then Landlord shall repair or restore such damage, this Lease continuing in full force and effect, and the rent hereunder shall be proportionately abated as provided in Section 20.2. 20.5. Landlord shall not be required to repair or replace any damage or loss by or from fire or other cause to any panelings, decorations, partitions, additions, railings, ceilings, floor coverings, office fixtures or any other property or improvements installed on the Premises or belonging to Tenant. If any damage by fire or other cause is the result of the intentional act, or negligence of Tenant, Landlord shall be under no obligation to repair the Premises and Tenant shall be liable for any such damages. Any insurance which may be carried by Landlord or Tenant against loss or damage to the Premises shall be for the sole benefit of the party carrying such insurance and under its sole control. 20.6. In the event that Landlord should fail to complete such repairs and material restoration within thirty(30) days after the date estimated by Landlord pursuant to Section 20.1, Tenant may at its option and as its sole remedy terminate this Lease by delivering written notice to Landlord, within thirty (30) days after the expiration of said period of time, whereupon the Lease shall end on the date of such notice or such later date fixed in such notice as if the date of such notice was the date originally fixed in this Lease for the expiration of the Term; provided, 19 however, that if construction is delayed because of changes, deletions or additions in construction requested by Tenant, strikes, lockouts, casualties, Acts of God, war, material or labor shortages, government regulation or control or other causes beyond the reasonable control of Landlord, the period for restoration, repair or rebuilding shall be extended for the amount of time Landlord is so delayed. 20.7. Notwithstanding anything to the contrary contained in this Article: (a) Landlord shall not have any obligation whatsoever to repair, reconstruct, or restore the Premises when the damages resulting from any casualty covered by the provisions of this Article 20 occur during the last twelve (12) months of the Term or any extension thereof, but if Landlord determines not to repair such damages Landlord shall notify Tenant and if such damages shall render any material portion of the Premises untenantable Tenant shall have the right to terminate this Lease by notice to Landlord within thirty (30) days after receipt of Landlord's ` notice; and (b) in the event the holder of any indebtedness secured by a mortgage or deed of trust covering the Premises requires that any insurance proceeds be applied to such indebtedness, then Landlord shall have the right to terminate this Lease by delivering written notice of termination to Tenant within thirty (30) days after such requirement is made by any such holder, whereupon this Lease shall end on the date of such damage as if the date of such damage were the date originally fixed in this Lease for the expiration of the term. 20.8. In the event of any damage or destruction to the Premises by any peril covered by the provisions of this Article 20, it shall be Tenant's responsibility to properly secure the Premises and upon notice from Landlord to remove forthwith, at its sole cost and expense, such portion of all of the property belonging to Tenant or its licensees from such portion or all of the Premises as Landlord shall request. 21. EMINENT DOMAIN. If all or any substantial part of the Premises shall be taken or appropriated by any public or quasi-public authority under the power of eminent domain, or conveyance in lieu of such appropriation, either party to this Lease shall have the right, at its option, of giving the other, at any time within thirty (30) days after such taking, notice terminating this Lease, except that Tenant may only terminate this Lease by reason of taking or appropriation, if such taking or appropriation shall be so substantial as to interfere with Tenant's use and occupancy of the Premises. If neither party to this Lease shall so elect to terminate this Lease, the rental thereafter to be paid shall be adjusted on a fair and equitable basis under the circumstances. In addition to the rights of Landlord above, if any substantial part of the Premises shall be taken or appropriated by any public or quasi-public authority under the power of eminent domain or conveyance in lieu thereof, and regardless of whether the Premises or any part thereof are so taken or appropriated, Landlord shall have the right, at its sole option, to terminate this Lease. Landlord shall be entitled to any and all income, rent, award, or any interest whatsoever in or upon any such sum, which may be paid or made in connection with any such public or quasi-public use or purpose, and Tenant 20 hereby assigns to Landlord any interest it may have in or claim to all or any part of such sums, other than any separate award which may be made with respect to Tenant's trade fixtures and moving expenses; Tenant shall make no claim for the value of any unexpired Term. 22. SALE BY LANDLORD. In event of a sale or conveyance by Landlord of the Premises, the same shall operate to release Landlord from any future liability upon any of the covenants or conditions, expressed or implied, contained in this Lease in favor of Tenant, and in such event Tenant agrees to look solely to the ability of the successor interest of Landlord in and to this Lease. Except as set forth in this Article 22, this Lease shall not be affected by any such sale and Tenant agrees to attorn to the purchaser or assignee. If any security has been given by Tenant to secure the faithful performance of any of the covenants of this Lease, Landlord may transfer or deliver said security, as such, to Landlord's successor in interest and thereupon Landlord shall be discharged from any further liability with regard to said security. 23. ESTOPPEL CERTIFICATES. Within ten (10) business days following any written request which Landlord may make from time to time, Tenant shall execute and deliver to Landlord or mortgagee or prospective mortgagee a sworn statement certifying: (a) the date of commencement of this Lease; (b) the fact that this Lease is unmodified and in full force and effect (or, if there have been modifications to this Lease, that this lease is in full force and effect, as modified, and stating the date and nature of such modifications); (c)the date to which the rent and other sums payable under this Lease have been paid; (d)the fact that there are no known, current defaults under this Lease by either Landlord or Tenant except as specified in Tenant's statement; and (e) such other matters as may be reasonably requested by Landlord. Landlord and Tenant intend that any statement delivered pursuant to this Article 23 may be relied upon by any mortgagee, beneficiary or purchaser and Tenant shall be liable for all loss, cost or expense resulting from the failure of any sale or funding of any loan caused by any material misstatement contained in such estoppel certificate. Tenant irrevocably agrees that if Tenant fails to execute and deliver such certificate within such ten (10) day period Landlord or Landlord's beneficiary or agent may execute and deliver such certificate on Tenant's behalf, and that such certificate shall be fully binding on Tenant. 24. SURRENDER OF PREMISES. 24.1. Tenant shall, at least thirty (30) days before the last day of the Term, arrange to meet Landlord for a joint inspection of the Premises. In the event of Tenant's failure to arrange such joint inspection to be held prior to vacating the Premises, Landlord's inspection at or after Tenant's vacating the Premises shall be 21 conclusively deemed correct for purposes of determining Tenant's responsibility for repairs and restoration. 24.2. At the end of the Term or any renewal of the Term or other sooner termination of this Lease, Tenant will peaceably deliver up to Landlord possession of the Premises, together with all improvements or additions upon or belonging to the same, by whom so ever made, in the same conditions received or first installed, broom clean and free of all debris, excepting only ordinary wear and tear and damage by fire or other casualty. Tenant may, and at Landlord's request shall, at Tenant's sole cost, remove upon termination of this Lease, any and all furniture, furnishings, movable partitions of less than full height from floor to ceiling, trade fixtures and other property installed by Tenant, title to which shall not be in or pass automatically to Landlord upon such termination, repairing all damage caused by such removal. Property not so removed shall, unless requested to be removed, be deemed abandoned by the Tenant and title to the same shall thereupon pass to Landlord under this Lease as by a bill of sale. All other alterations, additions and improvements in, on or to the Premises shall be dealt with and disposed of as provided in Article 6 hereof. 24.3. All obligations of Tenant under this Lease not fully performed as of the expiration or earlier termination of the Term shall survive the expiration or earlier termination of the Term. In the event that Tenant's failure to perform prevents Landlord from releasing the Premises, Tenant shall continue to pay rent pursuant to the provisions of Article 13 until such performance is complete. Upon the expiration or earlier termination of the Term, Tenant shall pay to Landlord the amount, as estimated by Landlord, necessary to repair and restore the Premises as provided in this Lease and/or to discharge Tenant's obligation for unpaid amounts due or to become due to Landlord. All such amounts shall be used and held by Landlord for payment of such obligations of Tenant, with Tenant being liable for any additional costs upon demand by Landlord, or with any excess to be returned to Tenant after all such obligations have been determined and satisfied. Any otherwise unused Security Deposit shall be credited against the amount payable by Tenant under this Lease. 25. NOTICES. Any notice or document required or permitted to be delivered under this Lease shall be addressed to the intended recipient, shall be transmitted personally, by fully prepaid registered or certified United States Mail return receipt requested, or by reputable independent contract delivery service furnishing a written record of attempted or actual delivery, and shall be deemed to be delivered when tendered for delivery to the addressee at its address set forth on the Reference Page, or at such other address as it has then last specified by written notice delivered in accordance with this Article 25. 22 26. TAXES PAYABLE BY TENANT. 26.1 Tenant shall be responsible for payment of all Taxes as defined in Section 26.1.1. Tenant shall inform all taxing authority's of Tenant's obligation for the Taxes and request any notice for Taxes be sent directly to Tenant with a copy to Landlord. Tenant shall pay Taxes directly to the taxing authority without any further request from Landlord. Tenant shall notify Landlord of all payment of Taxes made by Tenant. In the event that Tenant does not pay any of the Taxes, Landlord shall have the right to pay the Taxes. In the event that Landlord pays any Taxes, Tenant shall, upon demand, reimburse Landlord for any Taxes paid and any additional costs incurred by Landlord as a result of making such payments. 26.1.1 "Taxes" shall be defined as: Real estate taxes and any other taxes, charges and assessments which are levied with respect to the Premises or the land appurtenant to the Premises, or with respect to any improvements, fixtures and equipment or other property of Landlord, real or personal, located in the Premises and used in connection with the operation of the Premises and said land, any payments to any ground lessor in reimbursement of tax payments made by such lessor; and all fees, expenses and costs incurred by Landlord in Investigating, protesting, contesting or in any way seeking to reduce or avoid increase in any assessments, levies or the tax rate pertaining to any Taxes to be paid by Landlord in any Lease Year. Taxes shall not include any corporate franchise, or estate, inheritance or net income tax, or tax imposed upon any transfer by Landlord of its interest in this Lease or the Premises. 26.2 In addition to Rent, Taxes, and other charges to be paid by Tenant under this Lease, Tenant shall reimburse to Landlord, upon demand, any new taxes imposed by a federal, state, or local government upon Landlord that Landlord is obligated to pay as a result of Tenant's use of the premises under this Lease. 26.3 If the Commencement Date is other than January 1 or if the Termination Date is other than December 31, Tenant's liability for Taxes for the Lease Year in which said Date occurs shall be prorated based upon a three-hundred sixty-five (365) day year. 27. DEFINED TERMS AND HEADINGS. The Article headings shown in this Lease are for convenience of reference and shall in no way define, increase, limit or describe the scope or intent of any provision of this Lease. Any indemnification or insurance of Landlord shall apply to and inure to the benefit of Landlord and any of its elected or appointed officials, employees, officers, directors, and agents. Any option granted to Landlord shall also include or be exercisable by Landlord's trustee, beneficiary, agents and employees, as the case may be. In any case where this Lease is signed by more than one person,the obligations under this Lease shall 23 be joint and several. The terms "Tenant" and "Landlord" or any pronoun used in place thereof shall indicate and include the masculine or feminine, the singular or plural number, individuals, firms or corporations, and each of their respective successors, executors, administrators and permitted assigns, according to the context hereof Tenant hereby accepts and agrees to be bound by the figures for the space footage of the Premises shown on the Reference Page. 28. TENANT'S AUTHORITY. If Tenant signs as a corporation Tenant represents and warrants that Tenant has been and is qualified to do business in the state in which the Premises is located, that the corporation has full right and authority to enter into this Lease, and that all persons signing on behalf of the corporation were authorized to do so by appropriate corporate actions. If Tenant signs as a partnership, trust or other legal entity, each of the persons executing this Lease on behalf of Tenant represents and warrants that Tenant has complied with all applicable laws, rules and governmental regulations relative to its right to do business in the state and that such entity on behalf of the Tenant was authorized to do so by any and all appropriate partnership, trust or other actions. Tenant shall furnish to Landlord prior to execution of this Lease, a corporate resolution, proof of due authorization by partners, or other appropriate documentation evidencing the due authorization of Tenant to enter into this Lease. 29. TIME AND APPLICABLE LAW. Time is of the essence of this Lease and all of its provisions. This Lease shall in all respects be Governed by the laws of the State of Minnesota and Tenant acknowledges that the exclusive venue for any action arising out of or related to this Lease shall be the Hennepin County District Court for the State of Minnesota. 30. SUCCESSORS AND ASSIGNS. Subject to the provisions of Article 10, the terms, covenants and conditions contained in this Lease shall be binding upon and inure to the benefit of the heirs, successors, executors, administrators and assigns of the parties to this Lease. 31. ENTIRE AGREEMENT. This Lease, together with its exhibits, contains all agreements of the parties to this Lease and supersedes and replaces any previous negotiations and leases. There have been no representations made by the Landlord or understandings made between the parties other than those set forth in this Lease and its exhibits. This Lease may not be modified except by a written instrument duly executed by the parties to this Lease. 24 32. EXAMINATION NOT OPTION. Submission of this Lease shall not be deemed to be a reservation of the Premises. Landlord shall not be bound by this Lease until it has received a copy of this Lease duly executed by Tenant and has delivered to Tenant a copy of this Lease duly executed by Landlord, and until such delivery Landlord reserves the right to exhibit and lease the Premises to other prospective tenants. Notwithstanding anything contained in this Lease to the contrary, Landlord may withhold delivery of possession of the Premises from Tenant until such time as Tenant has paid to Landlord the first month's rent required by Article 2 and any other sum owed pursuant to this Lease. 33. RECORDATION. Tenant shall not record or register this Lease or a short form memorandum hereof without the prior written consent of Landlord, and then shall pay all charges and taxes incident such recording or registration. 34. LIMITATION OF LIABILITY. Redress for any claim against Landlord under this Lease shall be limited to and enforceable only against and to the extent of Landlord's interest in the Premises. The obligations of Landlord under this Lease are not intended to and shall not be personally binding on, nor shall any resort be had to the private properties of any of the elected or appointed officials, employees, officers, directors,or agents of Tenant. LANDLORD: TENANT: CITY OF EDEN PRAIRIE CEEFAY LEASING, LLC By: By: Nancy Tyra-Lukens, Its Mayor Its: By: Carl Jullie,Its City Manager Dated: Dated: 25 EXHIBIT A attached to and made a part of Lease bearing the Lease Reference Date of 92002 Between, City of Eden Prairie, as Landlord and Ceefay Leasing,LLC, as Tenant PREMISES LEGAL DESCRIPTION 26 EXHIBIT B attached to and made a part of Lease bearing the Lease Reference Date of , 2002 Between, City of Eden Prairie, as Landlord and Ceefay Leasing, LLC, as Tenant PLANS FOR IMPROVEMENTS 27 EXHIBIT C attached to and made a part of Lease bearing the Lease Reference Date of 92002 Between, City of Eden Prairie, as Landlord and Ceefay Leasing,LLC, as Tenant RULES AND REGULATIONS 1. Tenant shall not (i) conduct or permit any fire, bankruptcy or auction sale (whether real or fictitious) unless directed by order of a court of competent jurisdiction, or conduct or permit any legitimate or fictitious "Going Out of Business" sale nor represent or advertise that it regularly or customarily sells merchandise at" « "manufacturer's, " "distributor's, " or wholesale, warehouse, or similar prices or other than at off price" «or at retail prices; (ii) use, or permit to be used,the malls or sidewalks adjacent to such Premises, or any other area outside the Premises for solicitation or for the sale or display of any merchandise or for any other business, occupation or undertaking, or for outdoor public meetings, circus or other entertainment (except for promotional activities in cooperation with the management of the Premises or an association of merchants within the Premises); (iii) use or permit to be used any flickering lights or any sound broadcasting or amplifying device which can be heard outside of the Premises; (iv) operate or cause to be operated any "elephant trains" or similar transportation devices; or (v) use or permit to be used any portion of the Premises for any unlawful purpose or use or permit the use of any portion of the Premises as regular living quarters, sleeping apartments or lodging rooms or for the conduct of any manufacturing business. 2. Tenant shall at all times keep the Premises at a temperature sufficiently high to prevent freezing of water pipes and fixtures. Tenant shall not, nor shall Tenant at any time permit, any occupant of the Premises to: (1) use, operate or maintain the Premises in such manner that any rates for any insurance carried by Landlord, or the occupant of any premises within the Premises, shall thereby be increased; or (ii) commit waste, perform any acts or carry on any practices which may injure the Premises or be a nuisance or menace to other tenants in the Premises. 3. Tenant shall not obstruct any sidewalks, passages, exits, entrances, truck ways, loading docks, package pick-up stations, pedestrian sidewalk and ramps, first aid and comfort stations, or stairways of the Premises. No Tenant and no employee or invitee of any Tenant shall go upon the roof of the Premises. 4. If Tenant requires telegraphic, telephonic, burglar alarm or similar services, it shall first obtain, and comply with Landlord's instructions in their installation. Landlord shall furnish any such instructions within five (5) business days after request from Tenant. 5. Tenant shall not place a load upon any floor which exceeds the designed load per square foot or the load permitted by law. Landlord shall have the right to prescribe the weight, 28 size and position of all equipment, materials, furniture or oth er property 3brought into the Premises. Heavy objects shall stand on such platforms as determined by Landlord to be necessary to properly distribute the weight. Business machines and mechanical equipment belonging to Tenant which cause noise or vibration that may be transmitted to the structure of Tenant's store or to any other space to such a degree as to be objectionable to Landlord or to any tenants shall be placed and maintained by Tenant, at Tenant's expense, on vibration eliminators or other similar devices. The persons employed to move equipment in or out of Tenant's store must be acceptable to Landlord. Landlord will not be responsible for loss of, or damage to, any equipment or other property from any cause, and all damage done to the Premises by maintaining or moving such equipment or other property shall be repaired at the expense of Tenant. 6. The toilet rooms,toilets,urinals,wash bowls and other apparatus shall not be used for any purpose other than that for which they were constructed, no foreign substance of any kind whatsoever shall be thrown therein, and the expense of any breakage, stoppage or damage resulting from the violation of this rule shall be borne by the Tenant who, or whose employees or invitees, shall have caused it. 7. Tenant shall not install any radio or television antenna, loudspeaker or other device on the roof or exterior walls of Tenant's store except the satellite dish currently being used by Tenant without the prior written consent of Landlord, which shall not be unreasonably withheld. Tenant shall not interfere with radio or television broadcasting or reception from or in the Premises or elsewhere. 8. Tenant shall not install, maintain or operate upon the Premises or in any Common Areas under the exclusive control of Tenant any vending machine or video game without Landlord's prior written consent. 9. Tenant shall store all of its trash and garbage in containers within the Premises. Tenant shall not place in any trash box or receptacle any material which cannot be disposed of in the ordinary and customary manner of trash and garbage disposal. All garbage and refuse disposal shall be made in accordance with directions issued from time to time by Landlord. 10. Tenant shall not use in any space any hand trucks except those equipped with the rubber tires and side guards or such other material handling equipment as Landlord may approve. Tenant shall not bring any other vehicles of any kind into Tenant's store. 11. Tenn shall Tenant s a 1 repaint the exterior of the Premises at last every five (5) years or inaccordance with manufacturer's recommendations,whichever is shorter. 12. Landlord may waive any one or more of these Rules and Regulations, but no such waiver by Landlord shall prevent Landlord from thereafter enforcing any such Rules and Regulations of the Premises. 29 13. These Rules and Regulations are in addition to, and shall not be construed to in any way modify or amend, in whole or in part, the terms, covenants, agreements and conditions of any lease of premises in the Premises. 14. Tenant shall be responsible for the observance of all of the foregoing rules by Tenant's employees, agents, clients, customers, invitees and guests. 30 EXHIBIT D attached to and made a part of Lease bearing the Lease Reference Date of ,2002 Between, City of Eden Prairie, as Landlord and Ceefay Leasing, LLC, as Tenant MUNICIPAL CONTRACT PROVISIONS 1. Definitions. The following definitions apply to this Appendix. 1.1 "City"means the City of Eden Prairie. 1.2 "Contracting Parry"means Ceefay Leasing,LLC. 1.3 "Contract" means Lease bearing the reference date of , 2002 (City of Eden Prairie as Landlord and Ceefay Leasing, LLC as Tenant). 2. Data Practices Act. The Contracting Party shall at all times abide by the Minnesota Government Data Practices Act, Minn. Stat. § 1301, et seq., to the extent that the Act is applicable to data and documents in the hands of the Contracting Party. 3. Audits. The books, records, documents, and accounting procedures and practices of the Contracting Party or other parties relevant to this agreement are subject to examination by the City and either Legislative Auditor or the State Auditor for a period of six years after the effective date of this Contract. 4. Worker's Compensation. Contracting Party represents and warrants that it has and will maintain during the performance of this agreement worker's compensation insurance coverage required pursuant to Minn. Stat. § 176.181, subd. 2 and that the certificate of insurance or the written order of the Commissioner of Commerce permitting self insurance of worker's compensation insurance coverage provided to the City prior to execution of this agreement is current and in force and effect. 5. Discrimination. In performance of this contract, the Contracting Parry shall not discriminate on the grounds of or because of race, color, creed, religion, national origin, sex, marital status, status with regards to public assistance, disability, sexual orientation, or age against any employee of the Contracting Party, any subcontractor of the Contracting Party, or any applicant for employment. The Contracting Party shall include a similar provision in all contracts with subcontractors to this contract. The Contracting Party further agrees to comply with all aspects of the Minnesota Human Rights Act, Minn. Stat. § 363.01, et seq., Title VI of the Civil Rights Act of 1964, and the Americans with Disabilities Act of 1990. 31 6. Conflicts. No salaried officer or employee of the City and no member of the Board of the City shall have a financial interest, direct or indirect, in this contract. The violation of this provision renders the Contract void. Any federal regulations and applicable state statutes shall not be violated. 7. Limitation of Remedies In the event of a breach of the Contract by City,the Contracting Parry shall not be entitled to recover punitive, special or consequential damages or damages for loss of business. ep\parks\more house\lease 32 SUBLEASE AGREEMENT THIS SUBLEASE AGREEMENT (this "Sublease"), is made as of the day of , 2006,by and between CEEFAY Leasing, LLC, a Minnesota limited liability company ("Sublandlord"), and PureGrace, LLC, a Minnesota limited liability company("Subtenant"). WITNESSETH: WHEREAS, Sublandlord, as tenant, and the City of Eden Prairie, as landlord, ("Landlord") entered into that certain Lease dated November 1, 2002 (the "Prime Lease"), pursuant to which Sublandlord leased certain space known as Smith Douglas Moore House, Eden Prairie, Minnesota containing approximately 3,327 square feet of space (the "Premises") at 8107 Eden Prairie Road (the "Building"), a true and correct copy of which Prime Lease is attached hereto as Exhibit A and made a part hereof; WHEREAS, the parties hereto have agreed that Sublandlord shall sublet to Subtenant the entire Premises leased by Sublandlord pursuant to the Prime Lease; WHEREAS, the parties hereto have agreed that Sublandlord shall not remove the furniture, fixtures, and equipment from the Premises required for Subtenant to operate the store as a Dunn Bros Coffee shop, a list of the furniture, fixtures, and equipment owned by the Sublandlord is attached hereto as Exhibit B (the"FF&E"); WHEREAS, the parties hereto have agreed that Subtenant shall continue to operate the shop as a Dunn Bros Coffee shop under the terms of the Franchise Agreement dated July 10, 2006 between Dunn Bros Coffee Franchising Inc., a Minnesota company (the "Franchisor"), and the Subtenant, as successor-in-interest to Ann W. Schuster, Paul J. Schuster, Kathy Lynn Washburn and Andrew O. Washburn (the "Franchise Agreement"). NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is hereby agreed by and between the parties hereto as follows: 1. SUBLEASED PREMISES AND TERM. Sublandlord hereby subleases to Subtenant the entire Premises leased to Sublandlord pursuant to the Prime Lease, consisting of approximately 3,327 square feet of space in the Building, as depicted on Exhibit C attached hereto and made a part hereof(the "Subleased Premises"), in its "AS IS" condition, for the term beginning October 1, 2006 (the "Commencement Date") and ending one day prior to the expiration of the initial term of the Prime Lease. 2. RENT. Subtenant agrees to pay to Sublandlord monthly minimum rent at the rate of one dollar($1.00)per month,which shall be referred to herein as"Rent." Sublandlord shall remain responsible for paying Landlord all "Annual Rent"as provided in ARTICLE 2 of the Prime Lease. Subtenant shall pay monthly Rent in advance on the first day of 1 MPLS-Word 137785.5 each and every month beginning with the Commencement Date through the end of the Term at the following address: I I I Third Avenue South, Suite 220 Minneapolis,MN 55401 3. PERMITTED USE. The Subleased Premises shall be used for the purpose of operating a Dunn Bros Coffee shop and for no other purpose. 4. ASSIGNMENT AND SUBLETTING. Subtenant shall not assign its interest in this Sublease nor further sublet the Subleased Premises in whole or in part. 5. ASSUMPTION OF OBLIGATIONS. 5.1 Subtenant agrees to assume and perform, according to the terms of the Prime Lease, all of the duties, covenants, agreements, obligations and limitations of Sublandlord under the Prime Lease accruing from and after the Commencement Date, including, but not limited to, those contained in ARTICLES 10 and 11 of the Prime Lease, all as if Subtenant were the tenant under Prime Lease, except for those duties, covenants, agreements, obligations and limitations which Sublandlord expressly agrees to perform hereunder. Subtenant further agrees to keep and obey, according to the terms of the Prime Lease, all of the restrictions, conditions and provisions which pertain to the Subleased Premises and are imposed by the terms of the Prime Lease upon Sublandlord or upon the use of the Subleased Premises. In addition to the obligations of repair imposed upon the Sublandlord under the Prime Lease, Subtenant agrees that it will take good care of the Premises, and will commit no waste, and will do no harm, suffer or permit to be done any injury to the same,reasonable and ordinary wear and tear excepted. It is hereby understood and agreed that Subtenant's rights to use, possess and enjoy the Subleased Premises are subject to the terms and conditions of the Prime Lease and the rights and remedies of Landlord thereunder. Subtenant agrees to indemnify Sublandlord against, and to hold Sublandlord harmless from, any liability, damages, costs or expenses of any kind or nature, including court costs and reasonable attorneys' fees, resulting from any failure by Subtenant to perform, keep and obey the obligations imposed upon Sublandlord under the Prime Lease, from and after the Commencement Date, except for those duties, covenants, agreements, obligations and limitations which Sublandlord agrees to perform under this Sublease. 5.2 Subtenant agrees hereunder, for the benefit of Landlord under the Prime Lease, to protect and indemnify Landlord against, and to hold Landlord harmless from, any and all liability, damages, costs or expenses of any kind or nature, including court costs and reasonable attorneys' fees, resulting from any failure by Subtenant to perform, keep and obey the 2 MPLS-Word 137785.5 obligations imposed upon Sublandlord under the Prime Lease from and after the Commencement Date and assumed by Subtenant pursuant to this Sublease. Notwithstanding anything to the contrary in this Section 5.2, Subtenant shall have no obligation to protect and indemnify Landlord against, or to hold Landlord harmless from, those duties, covenants, agreements, obligations and limitations which Sublandlord agrees to perform under this Sublease. 5.3 Sublandlord agrees hereunder, for the benefit of Landlord under the Prime Lease, to protect and indemnify Landlord against, and to hold Landlord harmless from, any and all liability, damages, costs or expenses of any kind or nature, including court costs and attorney's fees resulting from any failure by Subtenant to perform, keep and obey any obligation imposed upon Subtenant under the Prime Lease or this Sublease. Sublandlord further agrees hereunder, for the benefit of Landlord under the Prime Lease, to protect and indemnify Landlord against, and to hold Landlord harmless from and against any and all loss, claims, liability or costs or expenses of any kind or nature, including court costs and attorney's fees incurred by reason of any damage to any property, including but not limited to property of the Landlord, or injury, including but not limited to death, to any person occurring in, on, or about the Subleased Premises to the extent that such damage or injury shall be caused by or arise out of any act, neglect, fault, error, or omission by Subtenant, its agents, servants, employees, invitees, or visitors with respect to any duty to any person, failure to comply with any law or government regulation, or any breach or default on the part of Subtenant in the performance of this Sublease. The provisions of this Section 5 shall survive the termination of this Sublease with respect to any claims or liability accruing prior to such termination. 6. ADDITIONAL RENT. Subtenant acknowledges that Sublandlord is responsible for payment of a number of charges, sums, expenses and other amounts imposed upon it under the Prime Lease (collectively referred to as "Additional Rent"), including without limitation charges and expenses imposed under ARTICLE 4, ARTICLE 5.5, ARTICLE 12, and ARTICLE 26 thereof. Subtenant agrees it shall only be liable to reimburse Sublandlord for utilities, such as water, gas, heat, light, power, telephone, sewer, sprinkler systems, and other utilities and services used on or from the Premises and those obligations described in ARTICLE 5.5, with the exception of exterior painting. All other Additional Rent of any kind or nature for which Sublandlord is responsible under the Prime Lease shall remain the responsibility of the Sublandlord, including, without limitation, all Taxes (as defined in the Prime Lease). If Subtenant shall make any Alterations, as described in ARTICLE 6 of the Prime Lease, Subtenant shall be responsible for the payment of such alterations. 3 MPLS-Word 137785.5 7. PRIME LEASE. This Sublease is subject and subordinate to the Prime Lease and to all liens or ground leases to which the Prime Lease is subordinate. Except as may be inconsistent with the terms hereof, all the terms, covenants and conditions contained in the Prime Lease shall be applicable to this Sublease with the same force and effect as if Sublandlord were the landlord under the Prime Lease and Subtenant were the tenant thereunder, and in case of any breach hereof by Subtenant, Sublandlord shall have all the rights against Subtenant as would be available to the landlord against the tenant under the Prime Lease if such breach were by the tenant thereunder. It is understood and agreed by and between the parties hereto that the existence of this Sublease is dependent and conditioned upon the continued existence of the Prime Lease, and in the event of the cancellation or termination of the Prime Lease, this Sublease automatically shall be terminated; provided, however that this provision shall not be deemed to release Sublandlord from liability if the Prime Lease is canceled or terminated by reason of a default by Sublandlord as tenant under the Prime Lease, which default did not result, in whole or in part, from a default by Subtenant hereunder. Subtenant shall have no recourse against Sublandlord if the Prime lease is canceled or terminated by reason of a default by Subtenant hereunder, or by any reason other than a default by Sublandlord under the Prime Lease. 8. TERMINATION OF SUBLEASE. Notwithstanding anything in the Prime Lease or this Sublease to the contrary, if at any time the Prime Lease shall be terminated by the Landlord thereunder for any reason other than default of Sublandlord or Subtenant, this Sublease shall automatically terminate effective as of the date of such termination of the Prime Lease. In the event of any such termination, Sublandlord and Subtenant shall have no further rights or obligations under this Sublease, except as otherwise specifically set forth herein. 9. SERVICES. Notwithstanding anything to the contrary herein set forth, the only services or rights to which Subtenant may be entitled hereunder are those to which Sublandlord may be entitled under the Prime Lease. Sublandlord shall have no responsibilities for the provision of such services or right or liability if not provided. 10. INSURANCE. Recognizing that Sublandlord owns the FF&E, Sublandlord shall provide the insurance described in Section 11.1(e) of the Prime Lease at its cost. Subtenant shall only be required to carry the Business Auto Liability coverage described in Section 11.1(b) of the Prime Lease at such time as it uses one or more vehicles in the operation of Subtenant's business. Landlord shall insure the building in which the Premises are located. Any insurance policy which Subtenant is required to carry or maintain by operation of the Prime Lease and/or this Sublease shall provide that the Subtenant's coverage shall be the primary coverage in the event of any loss. Any such policy shall also insure the indemnification obligation(s) contained in ARTICLE 10 of the Prime Lease and this Section 5 of the Sublease. A Certificate or Certificates evidencing all insurance that Subtenant is required to maintain pursuant to this Sublease, together with an endorsement that names Landlord as an additional insured under the liability policies that Subtenant is required to maintain pursuant to this Sublease, must be provided to the Landlord before Subtenant, or any party acting on Subtenant's behalf or at Subtenant's behest, enters the Subleased Premises for the purpose of using the 4 MPLS-Word 137785.5 Subleased Premises for the use described in Section 3, above. The Certificate(s) shall also provide that the coverage(s) may not be canceled, non-renewed, or materially changed without thirty(30)days prior written notice to Landlord. 11. NOTICE. Except as otherwise provided herein, any notice or demand which either party may or must give to the other hereunder shall be in writing and delivered personally or sent by certified mail, return receipt requested, addressed if to Sublandlord as follows: CEEFAY Leasing, LLC 111 Third Avenue South, Suite 220 Minneapolis,MN 55401 Attn: Dave Osdoba with a copy thereof to the Landlord in the manner and at the place designated in the Prime Lease, and if to Subtenant as follows: PureGrace, LLC 11572 Landing Road Eden Prairie,MN 55347 Attn: Ann Schuster and Kathy Washburn with a copy thereof to the Landlord under the Prime Lease in the manner and at the place designated in the Prime Lease. Either party may, by notice in writing, direct that future notices or demands be sent to a different address. 12. DAMAGE,DESTRUCTION OR CONDEMNATION. In the event of damage or destruction of the Subleased Premises or the taking of all or any part thereof under the power of eminent domain, this Sublease shall terminate if the Prime Lease is terminated as a result thereof, and the Rent payable hereunder shall abate for as long as and in the same proportion as the Rent due from Sublandlord to Landlord under the Prime Lease abates as a result thereof. All damages awarded for any taking under the power of eminent domain shall belong to and be the property of Sublandlord, if any, in said award. Additionally, Subtenant shall have the right to prove in any condemnation proceedings and to receive any separate award which may be made for damages to or condemnation of movable trade fixtures and equipment owned by the Subtenant and for moving expenses; provided, however, Subtenant shall in no event have the right to receive any award for its interest in this Sublease or for loss of leasehold from Sublandlord in the event of a taking under the power of eminent domain. 13. ALTERATIONS. Any alterations, additions and improvements in or upon the Subleased Premises shall be made by Subtenant only after prior written consent by Landlord and Sublandlord, which consent of Sublandlord shall not be withheld if Landlord consents thereto. Upon the termination of the term hereof, all such alternations, additions and improvements (except personal property, business and trade fixtures, machinery and equipment, furniture and movable partitions owned by Subtenant) shall be and remain part of the Subleased Premises and shall not be removed by Subtenant unless 5 MPLS-Word 137785.5 such removal is required or consented to by Landlord or Sublandlord, in which case Subtenant shall remove the same and restore the Subleased Premises to the same condition in which they were on the date hereof, reasonable and ordinary wear and tear excepted. Personal property, business and trade fixtures, machinery and equipment, furniture and movable partitions owned by Subtenant shall be and remain the property of Subtenant and may be removed by Subtenant at any time during the term hereof. Subtenant covenants and agrees to indemnify Sublandlord and Landlord against, and hold Sublandlord and Landlord harmless from, all liens, whether for labor or materials arising as the result of alternations, additions,repairs, or improvements to the subleased Premises made by Subtenant during the term of this Sublease. 14. SURRENDER OF SUBLEASED PREMISES. Upon the expiration of the term of this Sublease, or upon any earlier termination of this Sublease, Subtenant shall quit and surrender possession of the Subleased Premises to Sublandlord in as good order and condition as the same are now or hereafter may be improved by Landlord, Sublandlord or Subtenant, reasonable wear and tear and repairs which are Landlord's obligation excepted, and shall, without expense to Sublandlord, remove or cause to be removed from the Subleased Premises all debris and rubbish, all furniture, equipment, business and trade fixtures, movable partitioning and other articles of personal property owned by Subtenant or installed or placed by Subtenant at its expense in the Subleased Premises, and all similar articles of any other persons claiming under Subtenant, and Subtenant shall repair all damage to the Subleased Premises resulting from such removal. 15. ADDITIONAL TERMS. Sublandlord agrees that the FF&E shall remain in the Premises during the term of this Sublease, and Subtenant shall be permitted to use such FF&E in the operation of its business. Sublandlord agrees to replace at its expense any of the FF&E that is damaged or destroyed by an insured casualty during the term of this Sublease. Prior to expiration of the term of this Sublease, Subtenant shall have the option, in its sole discretion, to (a) negotiate with Landlord to secure a lease of the Premises on such terms and conditions as may be mutually acceptable to Landlord and Subtenant; (b) relocate Subtenant's business from the Premises to another location within the territory described in the Franchise Agreement; (c) amend the Franchise Agreement Appendix A to any other open territory; or (d) walk away from the Premises upon expiration of this Sublease with no further obligation to Sublandlord or Franchisor, subject to compliance with all post-termination obligations under the Franchise Agreement. If Subtenant exercises option (a), (b) or (c) above, Sublandlord and Subtenant shall enter into a mutually acceptable asset purchase agreement, pursuant to which Sublandlord shall sell to Subtenant the FF&E for the purchase price of$75,000, payable, at Subtenant's option, either at closing or in installments under a five year promissory note bearing interest at the rate of ten percent(101/6)per annum. 16. LANDLORD CONSENT. This Sublease is contingent upon approval by Landlord. Unless and until Landlord approves this Sublease, this Sublease shall be of no force or effect, and the parties hereto shall have no liability or obligation to each other. Said consent is memorialized in Exhibit D, attached hereto. 6 MPLS-Word 137785.5 17. DEFAULT. If the Rent, or any part thereof, whether the same be demanded or not, shall remain unpaid for a period of ten (10) days after the date due, or if any other term, condition or covenant of this Sublease, express or implied on the part of Subtenant to be kept or performed shall be violated or neglected, and if Subtenant shall fail to cure the same within the allowable grace period set forth in the Prime Lease, or if the Subleased Premises or Subtenant's interest therein shall be taken on execution or other process of law, or if Subtenant shall petition to be or shall be declared bankrupt or insolvent according to law or shall enter an assignment for the benefits of creditors, or if any default under the Prime Lease shall occur with respect to Subtenant or the performance by Subtenant of any of its covenants and obligations under this Sublease, then and in any of said cases, Subtenant shall be deemed in default, and Sublandlord shall have all of the rights and remedies against Subtenant which would be available to Landlord against Sublandlord in the event of a default by Sublandlord under the Prime Lease. 18. HOLDING OVER Subtenant shall have no right to hold over after the expiration or earlier termination of the term hereof. Subtenant shall indemnify Sublandlord for any costs incurred by Sublandlord as a result of its failure to deliver the Premises to Landlord upon the expiration of the term of the Prime Lease and Subtenant shall also be liable to Sublandlord for Rent during such hold over at the rate of 150% of the Rent in effect as of the expiration date of this Sublease. Acceptance by Sublandlord of Rent after such expiration or earlier termination shall not constitute consent to a holdover hereunder or result in a renewal. The foregoing provisions of this section are in addition to, and shall not limit, Sublandlord's right of re-entry or any other rights of Sublandlord hereunder or as otherwise provided by law. 19. MISCELLANEOUS. Subtenant represents that it has read and is familiar with the terms of the Prime Lease. All prior understandings and agreements between the parties are merged within this Sublease, which alone fully and completely sets forth the understanding of the parties; and this Sublease may not be changed or terminated orally or in any manner other than by an agreement in writing to which the written consent of Landlord shall have been obtained. In the event of any litigation between Subtenant and Sublandlord or Landlord to enforce any provision of this Sublease or the Prime Lease in which the Sublandlord or the Landlord is the prevailing party, the Subtenant shall pay upon demand all of the Sublandlord's and/or Landlord's costs and expenses, including reasonable attorneys' fees, agents and others retained by Sublandlord or Landlord, incurred in enforcing Subtenant's obligations hereunder or incurred by Sublandlord or Landlord in any litigation, negotiation or transaction in which Subtenant cause Sublandlord or Landlord, without default on the part of Sublandlord or Landlord under this Sublease, to become involved or concerned. In the event of any litigation between Subtenant and Sublandlord or Landlord to enforce any provision of this Sublease or the Prime Lease in which the Subtenant is the prevailing party, the Sublandlord shall pay upon demand all of the Subtenant's costs and expenses, including reasonable attorneys' fees, agents and others retained by Subtenant, incurred in enforcing Subtenant's obligations hereunder or incurred by Subtenant in any litigation, negotiation or transaction in which Sublandlord causes Subtenant, without default on the part of Subtenant under this Sublease, to become involved or concerned. The covenants and 7 MPLS-Word 137785.5 agreements herein contained shall bind and inure to the benefit of Sublandlord, Subtenant, and their respective heirs, executors, administrators, successors and assigns. A waiver by Sublandlord of any default, subsequent under this Sublease shall not be construed as a waiver of any subsequent or different default, breach or failure. Sublandlord reserves the right at all reasonable times during the term of this Sublease for Sublandlord or Sublandlord's agents to enter the Subleased Premises for the purpose of inspecting and examining the same, and for all other reasonable purposes in each case upon twenty-four hours prior oral notice to Subtenant, except that in cases of emergency, Sublandlord shall give Subtenant such notice is as is practicable under the circumstances, if any. IN WITNESS WHEREOF, the parties hereto have caused this Sublease Agreement to be executed the date and year first above written. SUBLANDLORD: SUBTENANT: CEEFAY LEASING,LLC PUREGRACE,LLC By: By: Its: Its: 8 MPLS-Word 137785.5 LIST OF EXHIBITS EXHIBIT A Prime Lease EXHIBIT B—Furniture, Fixtures, and Equipment owned by Sublandlord EXHIBIT C—Subleased Premises EXHIBIT D—Landlord's Consent to Sublease 9 MPLS-Word 137785.5 EXHIBIT A PRIME LEASE BETWEEN City of Eden Prairie and CEEFAY Leasing, LLC 10 MPLS-Word 137785.5 EXHIBIT B FURNITURE,FIXTURES, and EQUIPMENT OWNED BY SUBLANDLORD 11 MPLS-Word 137785.5 EXHIBIT C SUBLEASED PREMISES 12 MPLS-Word 137785.5 EXHIBIT D Landlord's Consent to Sublease Landlord, City of Eden Prairie, does hereby memorialize its consent to the Sublease executed by and between CEEFAY Leasing,LLC, and PureGrace,LLC, dated_ . 2006. City of Eden Prairie By: Date: Its: Mayor By: Date: Its: City Manager 13 MPLS-Word 137785.5 CITY COUNCIL AGENDA DATE: SECTION: Public Hearing September 5,2006 DEPARTMENT/DIVISION: ITEM DESCRIPTION: ITEM NO. CC VIII..A. Community Development: Establish TIF Redevelopment District- Janet Jeremiah/David Lindahl Superior Office Center Project(former Physical Electronics site) Requested Action: Move to: • Close the City Council Public Hearing: and • Adopt a Resolution relating to Redevelopment Project Area No. 6 and Tax Increment Financing (Redevelopment)District No. 20;and approving a Project Plan and Tax Increment Financing Plan therefore Synopsis: This public hearing is continued from the August 1, 2006, Council meeting. The purpose of establishing a Redevelopment District is to help defray costs associated with the redevelopment of the former Physical Electronics site in the Golden Triangle Area. If the TIF Plan is approved, a total of$728,204 in pay-as-you-go TIF would be provided to United Properties over a fifteen year term. Twenty percent of the total increment expected to be generated, or approximately$400,000, will be pooled by the City and used to help pay for future road improvements in the GTA. Background: United Properties purchased the 15-acre former Physical Electronics headquarters site in June 2003.At the time of the acquisition the 200,000 square foot building was largely vacant due to a significant downsizing at Physical Electronics. United Properties purchased the building with intentions of leasing it or possibly redeveloping the site but were unable to secure tenants for the building, so have instead decided to redevelop a 10-acre portion of the site into a new 90,000 square foot office building called Superior Tech Center. The remaining 5 acres and a portion of the existing building were sold to Mount Properties for a new Foss swim club. The remaining 137,000 square feet of building was razed and United Properties is asking the City to consider providing Tax Increment Financing to assist in paying for the demolition costs. An inspection of the existing building was completed by LHB September 28,2005. The TIF Plan calls for a fifteen year Pay-As-You-Go Redevelopment District with up to 80%of the increment or no more than$728,204 provided to offset qualified costs(demolition) and the balance will be pooled by the City to help pay for future transportation improvements in the Golden Triangle. A similar pooling arrangement was approved by the City Council for the TIF district created for the Bluffs at Nine Mile Creek apartment project located on Flying Cloud Drive in the GTA in 2002. The building was inspected by the architectural firm of LHB Inc. and was found to be structurally substandard and qualified as a Redevelopment District. Springsted,the City's financial advisor, was retained by the City to analyze the redevelopment pro-forma to verify that financial gaps do indeed exists due to the demolition and other redevelopment related costs. The attached memo from Springsted summarizes the analysis and suggests that a subsidy is needed to achieve the desired redevelopment results. The attached development agreement details the terms of the TIF proposal and includes two key terms that were negotiated by staff: 1. When the project is 95%leased or in 18 months from time of completion the project will be reevaluated(at the developers cost)to determine if it is leased at higher rents then projected in the pro-forma. If the rents are high enough to negate the need for public assistance,the developer/owner is required to reimburse the City for all TIF received to date. 2. If the developer/owner sells the project anytime prior within the term of the TIF district,they are required to reimburse the City for all TIF received to date. Attachments: Resolution TIF Plan Development Agreement Springsted Memos Redevelopment Plan United Properties Letter dated June 29, 2006 CITY OF EDEN PRAIRIE HENNEPIN COUNTY,NIINNESOTA RESOLUTION NO.2006- A RESOLUTION RELATING TO REDEVELOPMENT PROJECT AREA NO. 6 AND TAX INCREMENT FINANCING(REDEVELOPMENT)DISTRICT NO.20; APPROVING A PROJECT PLAN AND TAX INCREMENT FINANCING PLAN THEREFOR BE IT RESOLVED by the City Council (the"Council")of the City of Eden Prairie, Minnesota(the"City"), as follows: Section 1. Recitals. 1.01.The Housing and Redevelopment Authority in and for the City of Eden Prairie(the "Authority"),pursuant to Minnesota Statutes, Sections 469.001 to 469.047, all inclusive, as amended, has established Redevelopment Project Area No. 6 and has adopted a Project Plan(the "Project Plan")therefor; 1.02. The Authority, pursuant to Minnesota Statutes, Sections 469.174 to 469.1799, all inclusive, as amended, has established Tax Increment Financing District No. 20 (the"TIF District")and has adopted a Tax Increment Financing Plan(the"TIF Plan") (the Project Plan and TIF Plans are referred to collectively herein as the Plans); 1.03. The Plans are now before this Council for approval. The TIF Plan is the proposed method for financing the public redevelopment costs of certain of the redevelopment activities to be undertaken pursuant to the Project Plan. The proposed Tax Increment Financing (Redevelopment)District No.20 (the"District") comprises a single tax parcel within Redevelopment Project Area No. 6 as described in the TIF Plan. 1.04. Members of the Board of County Commissioners of Hennepin County(the "County")and of the Board of Education of Independent School District No. 272 (the"School District")have been given an opportunity to meet with the Authority and the City and comment on the TIF Plan. Pursuant to Minnesota Statutes, Section 469.175, subdivision 3,this Council on August 1, 2006, conducted a public hearing on the desirability of approving the Plans. Notice of the public hearing was duly published as required by law in the Eden Prairie Sun Current,the official newspaper of the City, on July 20, 2006. The City has received verbal comments on the TIF Plan from the School District and written comments on the TIF Plan from the County after providing the School District and County boards with information on the fiscal and economic implications of the TIF Plan not less than 30 days before the date of the public hearing. Section 2. Approval of Project Plan. On the basis of the proposed Project Plan adopted by the Authority and the information elicited at the public hearing referred to in Section 1.04, it is hereby found, determined and declared that the development activities proposed by the Project Plan are consistent with the City's redevelopment and development goals,which are also set forth in the City's comprehensive plan, and it is in the best interests of the City to approve the Project Plan. Therefore,this Council hereby approves the Project Plan. Section 3. Approval of TIF Plan. On the basis of the TIF Plan and the information elicited at the public hearing referred to in Section 1.04, it is hereby found, determined and declared: 3.01. The TIF Plan provides the means to finance certain public redevelopment costs of the Redevelopment Project that benefits the City. The TIF Plan contains a statement of objectives for the Redevelopment Project that benefits the TIF District, a statement as to the development program for the TIF District and a statement of the property within the Redevelopment Project which the City intends to acquire. The TIF Plan also estimates the public redevelopment costs of the Redevelopment Project, the amount of bonded indebtedness to be incurred,the sources of revenues to finance or otherwise pay public costs of the TIF District,the most recent net tax capacity of taxable real property within the TIF District,the estimated captured net tax capacity of the TIF District at completion, and the duration of the TIF District. The TIF Plan also describes and identifies the redevelopment activities to be undertaken or expected to be undertaken in the TIF District. The TIF Plan further contains alternative estimates of the impact of the proposed tax increment financing on the net tax capacities of all taxing jurisdictions in which the TIF District is located. All the captured tax capacity is necessary for the objectives of the TIF District. 3.02. This Council hereby finds that the TIF District consists of a"project"as defined in Minnesota Statutes, Section 469.174, subdivision 8, and is a proper tax increment financing district within the meaning of Section 469.174, subdivision 10. 3.03. This Council hereby finds that the private development proposed, in the opinion of this Council,would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and,therefore,the use of tax increment financing is deemed necessary since private developers could not economically develop the project without the proposed assistance. 3.04. This Council hereby finds that the TIF Plan conforms to the general plan for the development of the City as a whole. The development is compatible with the City's zoning ordinances and other related regulations and encourages efficient use of existing infrastructure as set forth in the City's Land Use Plan. 3.05. This Council hereby finds that the TIF Plan will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development of the TIF District by private enterprise. The development activities contemplated in the Project Plan would provide an increase in employment opportunities in the City, enhance the tax base of the City and improve the general economy of the City and the State of Minnesota 3.06. Upon review of the TIF Plan,the information elicited at the public hearing and on the basis of the findings in Sections 3.01 to 3.05,this Council hereby approves the establishment -2- of the TIF District as a tax increment financing district in the City,to be denominated"Tax Increment Financing(Redevelopment)District No.20"and the TIF Plan therefor. Adopted by the City Council this 5t'day of September,2006. Nancy Tyra Lukens, Mayor ATTEST: Kathleen A. Porta, City Clerk -3- Housing and Redevelopment Authority in and for the City of Eden Prairie City of Eden Prairie, Minnesota Tax Increment Financing Plan for Tax Increment Financing (Redevelopment) District No. 20 Within Redevelopment Project Area No. 6 (Superior Office Center Project) Dated: July 26, 2006 (DRAFT) Approved: Prepared by: SPRINGSTED INCORPORATED 380 Jackson Street,Suite 300 St. Paul, MN 55101-2887 (651)223-3000 WWW.SPRINGSTED.COM TABLE OF CONTENTS Section Pa e s A. Definitions.....................................................................................................................................................................1 B. Statutory Authorization.................................................................................................................................................1 C. Statement of Need and Public Purpose......................................................................................................................1 D. Statement of Objectives...............................................................................................................................................1 E. Designation of Tax Increment Financing District as a Redevelopment District........................................................1 F. Duration of the TIF District...........................................................................................................................................3 G. Property to be Included in the TIF District...................................................................................................................3 H. Property to be Acquired in the TIF District..................................................................................................................3 I. Specific Development Expected to Occur Within the TIF District..............................................................................3 J. Findings and Need for Tax Increment Financing.......................................................................................................4 K. Estimated Public Costs................................................................................................................................................6 L. Estimated Sources of Revenue...................................................................................................................................7 M. Estimated Amount of Bonded Indebtedness..............................................................................................................7 N. Original Net Tax Capacity............................................................................................................................................7 O. Original Tax Capacity Rate..........................................................................................................................................8 P. Projected Retained Captured Net Tax Capacity and Projected Tax Increment.......................................................8 Q. Use of Tax Increment...................................................................................................................................................9 R. Excess Tax Increment...............................................................................................................................................10 S. Tax Increment Pooling and the Five Year Rule................:.......................................................................................10 T. Limitation on Administrative Expenses.....................................................................................................................11 U. Limitation on Property Not Subject to Improvements-Four Year Rule..................................................................11 V. Estimated Impact on Other Taxing Jurisdictions......................................................................................................11 W. Prior Planned Improvements.....................................................................................................................................12 X. Development Agreements.........................................................................................................................................12 Y. Assessment Agreements...........................................................................................................................................13 Z. Modifications of the Tax Increment Financing Plan..................................................................................................13 AA. Administration of the Tax Increment Financing Plan................................................................................................13 AB. Filing TIF Plan,Financial Reporting and Disclosure Requirements........................................................................14 Map of the Tax Increment Financing District................................................................................................EXHIBIT I AssumptionsReport......................................................................................................................................EXHIBIT II Projected Tax Increment Report.................................................................................................................EXHIBIT III Estimated Impact on Other Taxing Jurisdictions Report............................................................................EXHIBIT IV Market Value Analysis Report......................................................................................................................EXHIBIT V Projected Pay-As-You-Go Note Report......................................................................................................EXHIBIT VI Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota Section A Definitions The terms defined in this section have the meanings given herein,unless the context in which they are used indicates a different meaning: "Authori "means the Housing and Redevelopment Authority in and for the City of Eden Prairie. "Cy means the City of Eden Prairie,Minnesota;also referred to as a"Municipality". "City Council"means the City Council of the City. "County"means Hennepin County,Minnesota. "Redevelopment Project Area" means Redevelopment Project Area No.6 in the City, which is described in the corresponding Redevelopment Plan. "Redevelopment Plan"means the Redevelopment Plan for the Redevelopment Project Area. "Project Area"means the geographic area of the Redevelopment Project Area. "School District"means Independent School District No.272,Minnesota. "State"means the State of Minnesota. "TIF Act"means Minnesota Statutes,Sections 469.174 through 469.1799,all inclusive. "TIF District"means Tax Increment Financing(Redevelopment)District No.20. "TIF Plan"means the tax increment financingplan for the TIF District this document). P f ) Section B Statutory Authorization See Section B of the Redevelopment Plan for the Redevelopment Project Area. Section C Statement of Need and Public Purpose See Section C of the Redevelopment Plan for the Redevelopment Project Area. Section D Statement of Objectives See Section D of the Redevelopment Plan for the Redevelopment Project Area. Section E Designation of Tax Increment Financing District as a Redevelopment District Redevelopment districts are a type of tax increment financing district in which one or more of the following conditions exi sts sts and is reasonably distributed throughout the district: (1) parcels comprising at least 70%of the area of the district are occupied by buildings,streets, utilities, paved or gravel parking lots, or other similar structures and more than 50% of the buildings, not including SPRINGSTED Page 1 Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota outbuildings, are structurally substandard requiring substantial renovation or clearance. A parcel is deemed "occupied" if at least 15% of the area of the parcel contains buildings, streets, utilities, paved or gravel parking lots;or other similar structures. (2) the property consists of vacant, unused,underused,inappropriately used,or infrequently used railyards, rail storage facilities,or excessive or vacated railroad right-of-ways;or (3) tank facilities, or property whose immediately previous use was for tank facilities, as defined in section 115C.02,subdivision 15,if the tank facilities: W have or had a capacity of more than 1,000,000 gallons; (ii) are located adjacent to rail facilities;and (iii) have been removed or are unused,underused,inappropriately used,or infrequently used. For districts consisting of two more noncontiguous areas, each area must individually qualify under the provisions listed above,as well as the entire area must also qualify as a whole. The TIF District qualifies as a redevelopment district in that it meets all of the criteria listed in (1) above. LHB was hired in 2005 to inspect and evaluate the property within proposed TIF District No.20 to determine qualification as a redevelopment district. A report of inspection procedures and results for determining qualifications of a tax increment financing district as a redevelopment district dated September 28, 2005 was prepared. This report and additional supporting facts and documentation will be retained by the Authority for the life of the TIF District and are available to the public upon request. "Structurally substandard" is defined as buildings containing defects or deficiencies in structural elements, essential utilities and facilities, light and ventilation,fire protection (including egress), layout and condition of interior partitions, or similar factors. Generally, a building is not structurally substandard if it is in compliance with the building code applicable to a new building,or could be modified to satisfy the existing code at a cost of less than 15%of the cost of constructing a new structure of the same size and type. A city may not find that a building is structurally substandard without an interior inspection, unless it can not gain access to the property and there exists evidence which supports the structurally substandard finding. Such evidence includes recent fire or police inspections, on-site property tax appraisals or housing inspections,exterior evidence of deterioration, or other similar reliable evidence. Written documentation of the findings and reasons why an interior inspection was not conducted must be made and retained. A parcel is deemed to be occupied by a structurally substandard building if the following conditions are met: (1) the parcel was occupied by a substandard building within three years of the filing of the request for certification of the parcel as part of the district; (2) the demolition or removal of the substandard building was performed by a developer under a development agreement with the authority,approved in conjunction with the TIF Plan dated August 1,2006, (3) the authority found by resolution V16's` on fro,:] before such demolition or removal occurred that the building was structurally substandard and that the authority intended to include the parcel in the TIF district,and (4) the authority notifies the county auditor that the original tax capacity of the parcel must be adjusted upon filing the request for certification of the tax capacity of the parcel as part of a district. In the case of(4)above,the County Auditor shall certify the original net tax capacity of the parcel to be the greater of (a)the current tax capacity of the parcel, or (b)a computed tax capacity of the parcel using the estimated market value of the parcel for the year in which the demolition or removal occurred,and the appropriate classification rate(s) for the current year. SPRINGSTED Page 2 Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota At least 90 percent of the tax increment from a redevelopment district must be used to finance the cost of correcting conditions that allow designation as a redevelopment district. These costs include, but are not limited to, acquiring properties containing structurally substandard buildings or improvements or hazardous substances, pollution, or contaminants, acquiring adjacent parcels necessary to provide a site of sufficient size to permit development, demolition and rehabilitation of structures, clearing of land, removal of hazardous substances or remediation necessary to develop the land, and installation of utilities, roads, sidewalks, and parking facilities for the site. The allocated administrative expenses of the Authority may be included in the qualifying costs. Section F Duration of the TIF District Redevelopment districts may remain in existence 25 years from the date of receipt by the Authority of the first tax increment. Modifications of this plan(see Section Z)shall not extend these limitations. The Authority reserves the right to allow the TIF District to remain in existence the maximum duration allowed by law (projected to be through the year 2033), but anticipates that the TIF District will be decertified prior to that time(see Section P)to coincide with the City's current TIF policy[dot J of 15 years. All tax increments from taxes payable in the year the TIF District is decertified shall be paid to the Authority. Section G Property to be Included in the TIF District The TIF District is an approximate 10.36-acre area of land located within the Project Area. A map showing the location of the TIF District is shown in Exhibit I. The boundaries and area encompassed by the TIF District are described below: Parcel ID Number Legal Description 01-116-22-13-0037 Lot 1, Block 1. Superior Office 6509 Flying Cloud Dr. Center. Eden Prairie,MN The parcel ID number and legal description listed above reflects the new ID for the portion of the property that will be included in the TIF District. The original property was 15.42 acres and had a parcel ID of 01-116-22-13-0034. A portion of the original property was sold and the entire property replatted to become two parcels, one of which is included in the district and listed above. The area encompassed by the TIF District shall also include all street or utility right-of-ways located upon or adjacent to the property described above. Section H Property to be Acquired in the TIF District The Authority may acquire and sell any or all of the property located within the TIF District; however does not anticipate acquiring property at this time. Section I Specific Development Expected to Occur Within the TIF District The proposed project includes the redevelopment of a portion of the former Physical Electronics building in the City of Eden Prairie. The redevelopment project includes demolition, including asbestos abatement, of an existing building and construction of a new one-story office building of approximately 91,000 square feet. The existing building has been inspected and found to be substandard by resolution in 2005[Resolbon°No1 j. The Authority anticipates using tax increment to finance a portion of the extraordinary site improvement, demolition and asbestos abatement costs, and any related administrative costs. The Authority anticipates reserving 20%of the annual increment for pooling for SPRINGSTED Page 3 Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota affordable housing and/or transportation needs within the project area. The remaining 80%of annual increment will be available for reimbursement to the developer of eligible tax increment costs. The proposed project is expected to be fully constructed in 2007 and be 100%assessed and on the tax rolls as of January 2,2008 for taxes payable in 2009. At the time this document was prepared there were no signed construction contracts with regards to the above described development. Section J Findings and Need for Tax increment Financing In establishing the TIF District,the City makes the following findings: (1) The TIF District qualifies as a redevelopment district; The City of Eden Prairie hired LHB to inspect and evaluate property within the proposed Tax Increment Financing District No. 20 to be established by the Authority. The property is located at 6509 Flying Cloud Drive. The site consisted of an interconnected building "complex"originally built in 1974 with a major addition in 1978. The building consisted of multiple occupancy types for a single tenant including office, warehouse, manufacturing, assembly and athletic facilities. The purpose of the evaluation was to determine if the proposed district met the statutory requirements for coverage and if this building complex met the qualifications required for a Redevelopment District. The final report prepared by LHB for the City, and kept on file in the City offices for public inspection, contains the details of the findings summarized below regarding the substandard qualifications: • parcels consisting of 100 percent of the area of the proposed TIF District were occupied,exceeding the 70 percent coverage test; • 100 percent of the buildings in the proposed District contained code deficiencies exceeding the 15 percent threshold. A complete Building Code and Condition Report was completed for the one building in the District; • 100 percent of the buildings are structurally substandard to a degree requiring substantial renovation or clearance, because of defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance, exceeding the more than 50 percent substandard test;and • the substandard building is reasonably distributed throughout the geographic area of the proposed TIF District. (2) The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the district permitted by the TIF Plan. Factual basis: Proposed development not expected to occur.• SPRINGSTED Page 4 Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota The proposed development consists of the construction of an approximate 91,000 square foot office building in the City of Eden Prairie on the site that housed the former Physical Electronics building. The structure was found to be substandard by the Authority by resolution in 2005 after a detailed inspection and evaluation by LHB with planned demolition shortly thereafter. The developer has provided detailed information to the City demonstrating that the redevelopment of this site is not financially feasible without the assistance provided in this TIF Plan,based on the extraordinary costs associated with redevelopment of the site including site improvements,demolition,and asbestos abatement costs. No higher market value expected. The unique characteristics of the land within TIF District No. 20 require additional redevelopment expenditures related to site preparation, grading, and landscaping. In order to commence building the new structure,the site required demolition of the existing structure, site improvements, and asbestos abatement, and various other redevelopment activities. The financial assistance provided under this TIF Plan will help offset the costs of these corrections. Given the unique nature of this property, there is no reasonable expectation of any development occurring that would generate as much market value increase as is estimated to be generated by the proposed development. To summarize the basis for the City's findings regarding alternative market value, in accordance with Minnesota Statutes,Section 469.175,Subd.3(d),the City makes the following determinations: a. The City's estimate of the amount by which the market value of the site will increase without the use of tax increment financing is$3,112,819 (current land value of$1,998,000 with 3%annual market value inflator applied for 15 years to coincide with term of the district). b. If the proposed development to be assisted with tax increment occurs in the District,the total increase in market value would be approximately$12,160,768, including the value of the building (See Exhibit II). C. The present value of tax increments from the District for the maximum duration of the district permitted by the TIF Plan is estimated to be$1,161,369(See Exhibit V). d. Even if some development other than the proposed development were to occur,the Council finds that no alternative would occur that would produce a market value increase greater than $10,999,399(the amount in clause b less the amount in clause c)without tax increment assistance. A comparative analysis of estimated market values both with and without establishment of the TIF District and the use of tax increments assumes no development of this type and nature will occur on the site due to the condition of the existing building (i.e. vacant, obsolescent structure requiring asbestos removal and high cost upgrades). We assume the estimated market value without creation of the district would only increase at most by an incremental inflationary amount. The increase in estimated market value of the proposed development (less the indicated subtractions) exceeds the estimated market value of the site absent the establishment of the TIF District and the use of tax increments. (3) The TIF Plan will afford maximum opportunity, consistent with the sound needs of the City as a whole,for development of the Project Area by private enterprise. Factual basis: The proposed development is the construction of a commercial building with approximately 91,000 square feet of office space,in the Project Area that is expected to create substantial new tax base for the City and SPRINGSTED Page 5 Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota the state, as well as expected future private development. The development clearly meets the City's redevelopment objectives contained in Section D of the Redevelopment Plan. (4) The TIF Plan conforms to general plans for development of the City as a whole. Factual basis: The City Planning Commission has determined that the development proposed in the TIF Plan conforms to the City comprehensive plan. (5) The Authority elects the method of tax increment computation set forth in Minnesota Statutes, Section 469.177,Subdivision 3(b)(see method(b)in Section P). Section K Estimated Public Costs The estimated public costs of the TIF District are listed below. Such costs are eligible for reimbursement from tax increments of the TIF District. Land/Building acquisition 0 Site Improvements/Preparation costs 728,204 Installation of public utilities 0 Parking facilities 0 Streets and sidewalks 0 Public park facilities 0 Bond principal payments 0 Bond interest payments 0 Loan Principal payments 728,204 Loan Interest payments 342,188 Capitalized Interest payments 100,985 Administrative expenses (1% of projected tax increment) 20,557 Other—redevelopment costs within district(19%of projected tax increment) 390,590 Other— pooling outside district (surplus increment after projected payment of TIF Note) 473,213 Total $2,783,941 The Authority anticipates reserving 20% of the annual increment for administrative expenses and pooling for affordable housing and/or transportation needs within the District and Project Area. Based on the assumptions listed in this TIF Plan,that amount is estimated to be$411,147. The remaining 80%is expected to be available for payment of the developer TIF Note, which is estimated to be $728,204 of principal, $342,188 of interest and $100,985 of capitalized interest costs. Approximately$473,213 is expected to be surplus increment that may be used for qualified project expenditures within the district or project area, pending eligibility. The Authority reserves the right to administratively adjust the amount of any of the items listed above or to incorporate additional eligible items,so long as the total estimated public cost is not increased. SPRINGSTED Page 6 Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota Section L Estimated Sources of Revenue Tax Increment revenue $2,055,737 Interest on invested funds 0 Bond proceeds 0 Loan proceeds 728,204 Real estate sales 0 Special assessments 0 Rent/Lease revenue 0 Grants 0 Other 0 Total $2,783,941 The Authority anticipates providing financial assistance to the proposed development through the use of a pay-as- you-go technique. As tax increments are collected from the TIF District in future years,a portion of these taxes will be distributed to the developer/owner as reimbursement for public costs incurred(see Section K). The Authority reserves the right to finance any or all public costs of the TIF District using pay-as-you-go assistance, internal funding, general obligation or revenue debt, or any other financing mechanism authorized by law. The Authority also reserves the right to use other sources of revenue legally applicable to the Project Area to pay for such costs including, but not limited to, special assessments, utility revenues, federal or state funds, and investment income. Section M Estimated Amount of Bonded Indebtedness The Authority does not anticipate issuing tax increment bonds to finance the estimated public costs of the TIF District, but reserves the right to issue such bonds in an amount not to exceed$728,204. Section N Original Net Tax Capacity The County Auditor shall certify the original net tax capacity of the TIF District. This value will be equal to the total net tax capacity of all property in the TIF District as certified by the State Commissioner of Revenue. For districts certified between January 1 and June 30, inclusive, this value is based on the previous assessment year. For districts certified between July 1 and December 31,inclusive,this value is based on the current assessment year. The Estimated Market Value of all property with the original parcel ID of 01-116-22-13-0034 comprising of 15.42 acres as of January 2, 2005, for taxes payable in 2006, is $3,133,000. The area within the proposed TIF District boundaries is 10.36 acres,therefore we assume the value of the portion within the boundaries of the TIF District to be $2,104,921 and the current net tax capacity of the property is$41,348. The original parcel was replatted to reflect the subdivision of property to be contained within the boundaries of the proposed TIF district and a current market value of$1,998,000 was applied as of January 2,2005 for taxes payable in 2006 to the new parcel 01-116-22-13-0037. The portion of the parcel within the boundaries of the district contained a substandard building that was demolished in late 2005. The greater of the current net tax capacity or the estimated market value of the parcel for the year in which the building was removed, applying class rates for the current year must be used to calculate the original net tax capacity. Therefore, upon establishment of the TIF District, and subsequent reclassification of property, it is estimated that the original net tax capacity of the TIF District will be approximately$41,348. SPRINGSTED Page 7 Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota Each year the County Auditor shall certify the amount that the original net tax capacity has increased or decreased as a result of: (1) changes in the tax-exempt status of property; (2) reductions or enlargements of the geographic area of the TIF District; (3) changes due to stipulation agreements or abatements;or (4) changes in property classification rates. Section 0 Original Tax Capacity Rate The County Auditor shall also certify the original tax capacity rate of the TIF District. This rate shall be the sum of all local tax rates that apply to property in the TIF District. This rate shall be for the same taxes payable year as the original net tax capacity. In future years,the amount of tax increment generated by the TIF District will be calculated using the lesser of(a)the sum of the current local tax rates at that time or(b)the original tax capacity rate of the TIF District. At the time this in the TDistrict, for his document was prepared, the sum of all local tax rates that apply to property IF taxes levied in 2006 and payable in 2007, was not yet available. When this total becomes available, the County Auditor shall certify this amount as the original tax capacity rate of the TIF District. For purposes of estimating the tax increment generated by the TIF District,the sum of the local tax rates for taxes levied in 2005 and payable in 2006,is 101.089%as shown below. 2005/2006 Taxing Jurisdiction Local Tax Rate City of Eden Prairie 28.782% Hennepin County 41.016% ISD#272 23.187% Other 8.104% Total 101.089% Section P Projected Retained Captured Net Tax Capacity and Projected Tax Increment The Authority anticipates that the redevelopment will be completed by December 31, 2007, creating a total tax capacity for TIF District No. 20 of $252,164 as of January 2, 2008. The captured tax capacity as of that date is estimated to be $134,724 and the first full year of tax increment is estimated to be $136,191 payable in 2009. A complete schedule of estimated tax increment from the TIF District is shown in Exhibit III. The estimates shown in this TIF Plan assume that commercial class rates remain at 2.0% of the estimated market value over$150,000 and assume 1%annual increase in market values. Each year the County Auditor shall determine the current net tax capacity of all property in the TIF District. To the extent that this total exceeds the original net tax capacity, the difference shall be known as the captured net tax capacity of the TIF District. SPRINGSTED Page 8 Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota For communities affected by the fiscal disparity provisions of Minnesota Statutes, Chapter 473F and Chapter 276A, the original net tax capacity of the TIF District shall be determined before the application of fiscal disparity. In subsequent years,the current net tax capacity shall either(a)be determined before the application of fiscal disparity or (b)exclude the product of any fiscal disparity increase in the TIF District(since the original net tax capacity was certified)times the appropriate fiscal disparity ratio. The method the Authority elects shall remain the same for the life of the TIF District,except that a single change may be made at any time from method(a)to method(b)above. The Authority elects method(b),or M.S.Section 469.177,Subdivision 3(b). The County Auditor shall certify to the Authority the amount of captured net tax capacity each year. The Authority may choose to retain any or all of this amount. It is the Authority's intention to retain 100%of the captured net tax capacity of the TIF District. Such amount shall be known as the retained captured net tax capacity of the TIF District. Exhibit II gives a listing of the various information and assumptions used in preparing a number of the exhibits contained in this TIF Plan, including Exhibit III which shows the projected tax increment generated over the anticipated life of the TIF District. Exhibit VI shows the projected pay-as-you-go note with the maximum amount of $728,204 associated with reimbursement of TIF eligible redevelopment costs. Section Q Use of Tax Increment Each year the County Treasurer shall deduct 0.36%of the annual tax increment generated by the TIF District and pay such amount to the State's General Fund. Such amounts will be appropriated to the State Auditor for the cost of financial reporting and auditing of tax increment financing information throughout the state. Exhibit III shows the projected deduction for this purpose over the anticipated life of the TIF District. The Authority has determined that it will use 100% of the remaining tax increment generated by the TIF District for any of the following purposes: (1) pay for the estimated public costs of the TIF District (see Section K) and County administrative costs associated with the TIF District(see Section T); (2) pay principal and interest on tax increment bonds or other bonds issued to finance the estimated public costs of the TIF District; (3) accumulate a reserve securing the payment of tax increment bonds or other bonds issued to finance the estimated public costs of the TIF District; (4) pay all or a portion of the county road costs as may be required by the County Board under M.S. Section 469.175,Subdivision 1 a;or (5) return excess tax increments to the County Auditor for redistribution to the City,County and School District. Tax increments from property located in one county must be expended for the direct and primary benefit of a project located within that county, unless both county boards involved waive this requirement. Tax increments shall not be used to circumvent levy limitations applicable to the City. Tax increment shall not be used to finance the acquisition, construction, renovation, operation, or maintenance of a building to be used primarily and regularly for conducting the business of a municipality,county,school district,or any other local unit of government or the State or federal government,or for a commons area used as a public park,or a facility used for social, recreational, or conference purposes. This prohibition does not apply to the construction or renovation of a parking structure or of a privately owned facility for conference purposes. SPRINGSTED Page 9 Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota If there exists any type of agreement or arrangement providing for the developer,or other beneficiary of assistance,to repay all or a portion of the assistance that was paid or financed with tax increments,such payments shall be subject to all of the restrictions imposed on the use of tax increments. Assistance includes sale of property at less than the cost of acquisition or fair market value, grants, ground or other leases at less then fair market rent, interest rate subsidies, utility service connections, roads, or other similar assistance that would otherwise be paid for by the developer or beneficiary. Section R Excess Tax Increment In any year in which the tax increments from the TIF District exceed the amount necessary to pay the estimated public costs authorized by the TIF Plan,the Authority shall use the excess tax increments to: (1) prepay any outstanding tax increment bonds; (2) discharge the pledge of tax increments thereof; (3) pay amounts into an escrow account dedicated to the payment of the tax increment bonds;or (4) return excess tax increments to the County Auditor for redistribution to the City,County and School District. The County Auditor must report to the Commissioner of Education the amount of any excess tax increment redistributed to the School District within 30 days of such redistribution. Section S Tax Increment Pooling and the Five Year Rule At least 75%of the tax increments from the TIF District must be expended on activities within the district or to pay for bonds used to finance the estimated public costs of the TIF District (see Section E for additional restrictions). No more than 25%of the tax increments may be spent on costs outside of the TIF District but within the boundaries of the Project Area, except to pay debt service on credit enhanced bonds. All administrative expenses are considered to have been spent outside of the TIF District. Tax increments are considered to have been spent within the TIF District if such amounts are:[M.S.Section 469.1763,Subdivisions 2-4] (1) actually paid to a third parry for activities performed within the TIF District within five years after certification of the district; (2) used to pay bonds that were issued and sold to a third party,the proceeds of which are reasonably expected on the date of issuance to be spent within the later of the five-year period or a reasonable temporary period or are deposited in a reasonably required reserve or replacement fund. (3) used to make payments or reimbursements to a third party under binding contracts for activities performed within the TIF District, which were entered into within five years after certification of the district;or (4) used to reimburse a party for payment of eligible costs(including interest)incurred within five years from certification of the district. Beginning with the sixth year following certification of the TIF District,at least 75%of the tax increments must be used to pay outstanding bonds or make contractual payments obligated within the first five years. When outstanding bonds have been defeased and sufficient money has been set aside to pay for such contractual obligations,the TIF District must be decertified. SPRINGSTED Page 10 Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota The Authority anticipates that tax increments will be spent outside of the TIF District(including a portion for allowable administrative expenses) for transportation, redevelopment and affordable housing qualified pooling expenditures. The Authority anticipates reserving 20%of the annual increment for pooling expenditures. Section T Limitation on Administrative Expenses Administrative expenses are defined as all costs of the Authority other than: (1) amounts paid for the purchase of land; (2) amounts paid for materials and services, including architectural and engineering services directly connected with the physical development of the real property in the project; (3) relocation benefits paid to, or services provided for, persons residing or businesses located in the project; (4) amounts used to pay principal or interest on,fund a reserve for, or sell at a discount bonds issued pursuant to section 469.178;or (5) amounts used to pay other financial obligations to the extent those obligations were used to finance costs described in clause(1)to(3). Administrative expenses include amounts paid for services provided by bond counsel,fiscal consultants,planning or economic development consultants, City staff time, and actual costs incurred by the County in administering the TIF District.Tax increments may be used to pay administrative expenses of the TIF District up to the lesser of(a) 10%of the total estimated public costs authorized by the TIF Plan or(b) 10%of the total tax increment expenditures for the project.[M.S.Section 469.176,Subdivision 3] Section U Limitation on Property Not Subject to Improvements-Four Year Rule If after four years from certification of the TIF District no demolition,rehabilitation,renovation,or qualified improvement of an adjacent street has commenced on a parcel located within the TIF District, then that parcel shall be excluded from the TIF District and the original net tax capacity shall be adjusted accordingly. Qualified improvements of a street are limited to construction or opening of a new street, relocation of a street, or substantial reconstruction or rebuilding of an existing street. The Authority must submit to the County Auditor, by February 1 of the fifth year, evidence that the required activity has taken place for each parcel in the TIF District. If a parcel is excluded from the TIF District and the Authority or owner of the parcel subsequently commences any of the above activities,the Authority shall certify to the County Auditor that such activity has commenced and the parcel shall once again be included in the TIF District. The County Auditor shall certify the net tax capacity of the parcel,as most recently certified by the Commissioner of Revenue, and add such amount to the original net tax capacity of the TIF District.[M.S.Section 469.176,Subdivision 6] Section V Estimated Impact on Other Taxing Jurisdictions Exhibit IV shows the estimated impact on other taxing jurisdictions if the maximum projected retained captured net tax capacity of the TIF District was hypothetically available to the other taxing jurisdictions. The Authority believes that there will be no adverse impact on other taxing jurisdictions during the life of the TIF District, since the proposed development would not have occurred without the establishment of the TIF District and the provision of public assistance. A positive impact on other taxing jurisdictions will occur when the TIF District is decertified and the development therein becomes part of the general tax base. SPRINGSTED Page 11 Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota The fiscal and economic implications of the proposed tax increment financing district, as pursuant to Minnesota Statutes,Section 469.175,Subdivision 2,are listed below. 1. The total amount of tax increment that will be generated over the life of the district is estimated to be $2,063,163. 2. To the extent the project in TIF District 20 generates any public cost impacts on city-provided services such as police and fire protection, public infrastructure, and borrowing costs attributable to the district,such costs will be levied upon the taxable net tax capacity of the City,excluding that portion captured by the District. 3. The amount of tax increments over the life of the district that would be attributable to school district levies, assuming the school district's share of the total local tax rate for all taxing jurisdictions remained the same,is estimated to be$473,231. 4. The amount of tax increments over the life of the district that would be attributable to county levies,assuming the county's share of the total local tax rate for all taxing jurisdictions remained the same is estimated to be $837,112. 5. The amount of tax increments over the life of the district that would be attributable to city levies, assuming the city's share of the total local tax rate for all taxing jurisdictions remained the same is estimated to be $587,421. 6. No additional information has been requested by the county or school district that would enable it to determine additional costs that will accrue to it due to the development proposed for the district. Section W Prior Planned Improvements The Authority shall accompany its request for certification to the County Auditor (or notice of district enlargement), with a listing of all properties within the TIF District for which building permits have been issued during the 18 months immediately preceding approval of the TIF Plan. The County Auditor shall increase the original net tax capacity of the TIF District by the net tax capacity of each improvement for which a building permit was issued. [M.S. Section 469.177,Subdivision 4] There have been no building permits issued in the last 18 months in conjunction with any of the properties within the TIF District. Section X Development Agreements If within a project containing a redevelopment district,more than 25%of the acreage of the property to be acquired by the Authority is purchased with tax increment bonds proceeds(to which tax increment from the property is pledged), then prior to such acquisition,the Authority must enter into an agreement for the development of the property. Such agreement must provide recourse for the Authority should the development not be completed.[M.S.Section 469.176, Subdivision 5] The Authority anticipates entering into an agreement for development,but does not anticipate acquiring any property located within the TIF District, SPRINGSTED Page 12 Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota Section Y Assessment Agreements The Authority may, upon entering into a development agreement, also enter into an assessment agreement with the developer,which establishes a minimum market value of the land and improvements for each year during the life of the TIF District. The assessment agreement shall be presented to the County or City Assessor who shall review the plans and specifications for the improvements to be constructed, review the market value previously assigned to the land,and so long as the minimum market value contained in the assessment agreement appears to be an accurate estimate, shall certify the assessment agreement as reasonable. The assessment agreement shall be filed for record in the office of the County Recorder of each county where the property is located. Any modification or premature termination of this agreement must first be approved by the City,County and School District. [M.S. Section 469.177, Subdivision 8] The Authority anticipates entering into an assessment agreement. Section Z Modifications of the Tax Increment Financing Plan Any reduction or enlargement in the geographic area of the Project Area or the TIF District;increase in the amount of bonded indebtedness to be incurred; a determination to capitalize interest on the debt if that determination was not part of the original TIF Plan; increase in the portion of the captured net tax capacity to be retained.by the Authority; increase in the total estimated public costs;or designation of additional property to be acquired by the Authority shall be approved only after satisfying all the necessary requirements for approval of the original TIF Plan. This paragraph does not apply if:[M.S.Section 469.175,Subdivision 4] (1) the only modification is elimination of parcels from the TIF District;and (2) the current net tax capacity of the parcels eliminated equals or exceeds the net tax capacity of those parcels in the TIF District's original net tax capacity, or the Authority agrees that the TIF District's original net tax capacity will be reduced by no more than the current net tax capacity of the parcels eliminated. The Authority must notify the County Auditor of any modification that reduces or enlarges the geographic area of the TIF District. The geographic area of the TIF District may be reduced but not enlarged after five years following the date of certification. Section AA Administration of the Tax Increment Financing Plan Upon adoption of the TIF Plan,the Authority shall submit a copy of such plan to the Commissioner of Revenue and the Office of the State Auditor. The Authority shall also request that the County Auditor certify the original net tax capacity and net tax capacity rate of the TIF District. To assist the County Auditor in this process,the Authority shall submit copies of the TIF Plan, the resolution establishing the TIF District end adopting the TIF Plan, and a listing of any prior planned improvements. The Authority shall also send the County Assessor any assessment agreement establishing the minimum market value of land and improvements in the TIF District,and shall request that the County Assessor review and certify this assessment agreement as reasonable. The County shall distribute to the Authority the amount of tax increment as it becomes available. The amount of tax increment in any year represents the applicable property taxes generated by the retained captured net tax capacity of the TIF District. The amount of tax increment may change due to development anticipated by the TIF Plan, other development, inflation of property values,or changes in property classification rates or formulas. In administering and implementing the TIF Plan,the following actions should occur on an annual basis: SPRINGSTED Page 13 Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota (1) prior to July 1, the Authority shall notify the County Assessor of any new development that has occurred in the TIF District during the past year to insure that the new value will be recorded in a timely manner. (2) if the County Auditor receives the request for certification of a new TIF District,or for modification of an existing TIF District,before July 1,the request shall be recognized in determining local tax rates for the current and subsequent levy years. Requests received on or after July 1 shall be used to determine local tax rates in subsequent years. (3) each year the County Auditor shall certify the amount of the original net tax capacity of the TIF District. The amount certified shall reflect any changes that occur as a result of the following: (a) the value of property that changes from tax-exempt to taxable shall be added to the original net tax capacity of the TIF District. The reverse shall also apply; (b) the original net tax capacity may be modified by any approved enlargement or reduction of the TIF District; (c) if laws governing the classification of real property cause changes to the percentage of estimated market value to be applied for property tax purposes,then the resulting increase or decrease in net tax capacity shall be applied proportionately to the original net tax capacity and the retained captured net tax capacity of the TIF District. The County Auditor shall notify the Authority of all changes made to the original net tax capacity of the TIF District. Section AB Filing TIF Plan,Financial Reporting and Disclosure Requirements The Authority will file the TIF Plan,and any subsequent amendments thereto,with the Commissioner of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes,Section 469.175,subdivision 4A. The Authority will comply with all reporting requirements for the TIF District under Minnesota Statutes,Section 469.175,subdivisions 5 and 6. SPRINGSTED Page 14 Exhibit I MAP OF TAX INCREMENT FINANCING(REDEVELOPMENT)DISTRICT NO. 20 IH ri Tax In I 9 i •, \ Redevelopment District#20 \ Superior Tech Center �n United Properties City of Eden Prairie Tax Increment Redevelopment District#20 Y�Q , Superior Tech Center SPRINGSTED Page 15 Exhibit MAP OF REDEVELOPMENT PROJECT AREA NO.6 -rrOJCUL \\01 �R ........... 7, City of Eden Prairie Tax Increment Redevelopment Project Area#6 SPRINGSTED Page 16 Exhibit 11 Assumptions Report City of Eden Prairie, Minnesota Tax Increment Financing (Redevelopment) District No.20 Superior Tech Center Project Scenario 1 -15 yr term -20%Admin/Pooling-June 2006 Type of Tax Increment Financing District Redevelopment Maximum Duration of TIF District 25 years from 1st increment Projected Certification Request Date 09/01/06 Decertification Date 12/31/22 (15 Years of Increment) 2006/2007 Base Estimated Market Value $2,104,921 Original Net Tax Capacity $41,348 Assessment/Collection Year 2006/2007 2007/2008 2008/2009 2009/2010 Base Estimated Market Value $2,104,921 $2,104,921 $2,104,921 $2,104,921 Less: EMV of Existing Bldg&Land Value ($106,921) ($106,921) ($106,921) ($106,921) Increase in EMV of New Bldg 0 2,132,777 10,685,212 10,792,064 Total Estimated Market Value 1,998,000 4,130,777 12,683,212 12,790,064 Total Net Tax Capacity $39,210 $81,116 $252,164 $254,301 City of Eden Prairie 28.782% Hennepin County 41.016% ISD#272 23.187% Other 8.104% Local Tax Capacity Rate 101.089% 2005/2006 Fiscal Disparities Contribution From TIF District 36.0941% Administrative Retainage Percent(maximum= 10%) 1.00% Pooling Percent 19.00% Bonds Note(Pay-As-You-Go) Bonds Dated NA Note Dated 09/01/06 Bond Issue @ 6.00%(NIC) NA Note Rate 6.50% Eligible Project Costs NA Note Amount $728,204 Present Value Date&Rate 09/01/06 6.50% Notes *Value of the land&building prior to demolition(2005/06 valuation)must be used according to state law. PID 01-116-22-13-0034: prior to building demolition,total EMV, including land &bldg is$3,133,000 for 2005/06, For purposes of estimating base EMV of District,assume allocation based on acreage(10.36/15.42 acres). PID 01-116-22-13-0037: replatted after building demo, EMV, land only$1,998,000 for 2006/07. No assumptions made regarding future changes to class rates and tax capacity rates. Includes 1%annual market value inflator. Estimated value of new building is approximately 75%of estimated cost of construction, estimated cost/square(loot is approx.$156,therefore value/square foot is approx. $117. Assume construction 20%complete by 12/31/06 and 100%complete by 12/31/07. SPRINGSTED Page 17 Exhibit 111 Projected Tax Increment Report City of Eden Prairie,Minnesota Tax Increment Financing(Redevelopment)District No.20 Superior Tech Center Project Scenario 1-15 yr term-20%Admin/Pooling-June 2006 Less: Less: Retained Times: Less: Less: P.V. P.V. Annual Total Original Fiscal Captured Tax Annual State Aud. Adm./Pooling Annual Annual Annual Period Net Tax Net Tax Disp.C- Net Tax Capacity Gross Tax Deduction Retainage Net Net Rev.To Retainage To Ending Capacity Capacity 36.0941% Capacity Rate Increment 0.360% 20.00% Revenue 09/01/06 09/01/06 1 3 4 5 6 7 8 9 10 6.50% 6.50 12/31/06 41,348 41,348 0 0 101.089% 0 0 0 0 0 0 12/31/07 39,210 41,348 0 0 101.089% 0 0 0 0 0 0 12/31/08 81,116 41,348 14,354 25,413 101.089% 25,690 92 5,120 20,478 17,960 4,490 12/31/09 252,164 41,348 76,092 134,724 101.089% 136,191 490 27,140 108,561 89,402 22,350 12/31/10 254,301 41,348 76,863 136,090 101.089% 137,572 495 27,415 109,662 84,797 21,199 12/31/11 256,460 41,348 77,642 137,469 101.089% 138,966 500 27,693 110,773 80,428 20,107 12/31/12 258,640 41,348 78,429 138,862 101.089% 140,374 505 27,974 111,895 76,284 19,071 12/31/13 260,841 41,348 79,224 140,269 101.089% 141,797 510 28,257 113,030 72,355 18,088 12/31/14 263,065 41,348 80,027 141,690 101.089% 143,233 516 28,543 114,174 68,626 17,156 12/31/15 265,311 41,348 80,837 143,126 101.089% 144,685 521 28,833 115.331 65,091 16,273 12/31/16 267,580 41,348 81,656 144,575 101.089% 146,150 526 29,125 116,499 61,737 15,434 12/31/17 269,871 41,348 82,483 146,040 101.089% 147,630 531 29,420 117,679 58,556 14,639 12/31/18 272,185 41,348 83,318 147,519 101.089% 149,125 537 29,718 118,870 55,539 13,885 12/31/19 274,522 41,348 84,162 149,012 101.089% 150,635 542 30,019 120,074 52,677 13,170 12/31/20 276,883 41,348 85,014 150,521 101.089% 152,160 548 30,322 121,290 49,963 12,491 12/31/21 279.267 41,348 85,875 152,044 101.089% 153,700 553 30,629 122,518 47,389 11,847 12/31/22 281,675 41,348 86,744 153,583 101.089% 155,255 559 30,939 123,757 44,947 11,237 12/31/23 0 0 0 0 101.089% 0 0 0 0 0 0 12/31/24 0 0 0 0 101.089% _ 0 0 0 0 0 0 12/31/25 0 0 0 0 101.089% 0 0 0 0 0 0 12/31/26 0 0 0 0 101.089% 0 0 0 0 0 0 12/31/27 0 0 0 0 101.089% 0 0 0 0 0 0 12/31/28 0 0 0 0 101.089% 0 0 0 0 0 0 12/31/29 0 0 0 0 101.089% 0 0 0 0 0 0 12/31/30 0 0 0 0 101.089% 0 0 0 0 0 0 12/31/31 0 0 0 0 101.089% 0 0 0 0 0 0 12/31/32 0 0 0 0 101.089% 0 0 0 0 0 0 12/31/33 0 0 0 0 101.089% 0 0 0 0 0 0 12/31/34 0 0 0 0 101.089% 0 0 01 01 0 2063163 $7,425 $411,1471 $1,644,591 $925,751 $231,437 SPRINGSTED Page 18 Exhibit IV Estimated Impact on Other Taxing Jurisdictions Report City of Eden Prairie,Minnesota Tax Increment Financing(Redevelopment)District No.20 Superior Tech Center Project Scenario 1 -15 yr term-20%Admin/Pooling-Total EMV$12.2M-June 2006 Without Project or TIF District With Project and TIF District Projected Hypothetical 2005/2006 2005/2006 Retained New Hypothetical Hypothetical Tax Generated Taxable 2005/2006 Taxable Captured Taxable Adjusted Decrease In by Retained Taxing Net Tax Local Net Tax Net Tax Net Tax Local Local Captured Jurisdiction Capacity(1) Tax Rate Capacity(1) + Capacity = Capacity Tax Rate(*) Tax Rate(*) N.T.C.(*) City of Eden Prairie 90,698,663 28.782% 90,698,663 $153,583 90,852,246 28.733% 0.049% 44,130 Hennepin County 1,229,390,982 41.016% 1,229,390,982 153,583 1,229,544,565 41.011% 0.005% 62,986 ISD#272 87,090,651 23.187% 87,090,651 153,583 87,244,234 23.146% 0.041% 35,549 Other(2) --- 8.104% --- 153,583 --- 8.104% Totals 101.089% 100.994% 0.095% * Statement 1: If the projected Retained Captured Net Tax Capacity of the TIF District was hypothetically available to each of the taxing jurisdictions above,the result would be a lower local tax rate(see Hypothetical Adjusted Tax Rate above) which would produce the same amount of taxes for each taxing jurisdiction. In such a case,the total local tax rate would decrease by 0.095%(see Hypothetical Decrease in Local Tax Rate above). The hypothetical tax that the Retained Captured Net Tax Capacity of the TIF District would generate is also shown above. Statement 2: Since the projected Retained Captured Net Tax Capacity of the TIF District is not available to the taxing jurisdictions, then there is no impact on taxes levied or local tax rates. (1) Taxable net tax capacity=total net tax capacity-captured TIF-fiscal disparity contribution,if applicable. (2) The impact on these taxing jurisdictions is negligible since they represent only 8.02%of the total tax rate. SPRINGSTED Page 19 Exhibit V Market Value Analysis Report City of Eden Prairie, Minnesota Tax Increment Financing (Redevelopment) District No. 20 Superior Tech Center Project Scenario 1 - 15 yr term -20%Admin/Pooling -June 2006 Assumptions Present Value Date 09/01/06 P.V. Rate- Gross T.I. 6.50% Increase in EMV With TIF District $12,160,768 Less: P.V of Gross Tax Increment 1,161,369 Subtotal $10,999,399 Less: Increase in EMV Without TIF 0 Difference $10,999,399 Annual Present Gross Tax Value @ Year Increment 6,50% 1 2008 25,690 22,531 2 2009 136,191 112,155 3 _ 2010 137,572 106,378 4 2011 138,966 100,898 5 2012 140,374 95,700 6 2013 141,797 90,770 7 2014 143,233 86,093 8 2015 144,685 81,658 9 2016 146,150 77,450 10 2017 147,630 73,460 11 2018 149,125 69,675 12 2019 150,635 66,085 13 2020 152,160 62,680 14 2021 153,700 59,450 15 2022 155,255 56,386 16 2023 0 0 17 2024 0 0 18 2025 0 0 19 2026 0 0 20 2027 0 0 21 2028 0 0 22 2029 0 0 23 2030 0 0 24 2031 0 0 25 2032 0 0 26 2033 0 0 $2,063,163 $1,161,369 SPRINGSTED Exhibit Vl Projected Pay-As-You-Go Note Report City of Eden Prairie,Minnesota Tax Increment Financing(Redevelopment)District No.20 Superior Tech Center Project Scenario 1 -15 yr term-20%Admin/Pooling-Total EMV$12.2M-June 2006 Note Date: 09/01/06 Note Rate: 6.50% Amount: $728,204 Semi-Annual Loan Net Capitalized Balance Date Principal Interest P&I Revenue' Interest Outstanding (1) (2) (3) (4) (5) (6) (7) 728,204.00 02/01/07 0.00 0.00 0.00 0.00 19,722.19 747,926.19 08/01/07 0.00 0.00 0.00 0.00 24,307.60 772,233.79 02/01/08 0.00 0.00 0.00 0.00 25,097.60 797,331.39 08/01/08 0.00 10,236.00 10,239.00 10,239.00 15,674.27 813,005.66 02/01/09 0.00 10,239.00 10,239.00 10,239.00 16,183.68 829,189.34 08/01/09 27,331.85 26,948.65 54,280.50 54,280.50 0.00 801,857.49 02/01/10 28,220.13 26,060.37 54,280.50 54,280.50 0.00 773,637.36 08/01/10 29,687.79 25,143.21 54,831.00 54,831.00 0.00 743,949.57 02/01/11 30,652.64 24,178.36 54,831.00 54,831.00 0.00 713,296.93 08/01/11 32,204.35 23,182.15 55,386.50 55,386.50 0.00 681,092.58 02/01/12 33,250.99 22,135.51 55,386.50 55,386.50 0.00 647,841.59 08/01/12 34,892.65 21,054.85 55,947.50 55,947.50 0.00 612,948.94 02/01/13 36,026.66 19,920.84 55,947.50 55,947.50 0.00 576,922.28 08/01/13 37,765.03 18,749.97 66,515.00 56,515.00 0.00 539,157.25 02/01/14 38,992.39 17,522.61 56,515.00 56,515.00 0.00 500,164.86 08/01/14 40,831.64 16,255.36 57,087.00 57,087.00 0.00 459,333.22 02/01/15 42,158.67 14,928.33 57,087.00 57,087.00 0.00 417,174.55 08/01/15 44,107.33 13,558.17 57,665.50 57,665.50 0.00 373,067.22 02/01/16 45,540.82 12,124.68 57,665.50 57,665.50 0.00 327,526.40 08/01/16 47,604.89 10,644.61 58,249.50 58,249.50 0.00 279,921.51 02/01/17 49,152.05 9,097.45 58,249.50 58,249.50 0.00 230,769.46 08/01/17 51,339.49 7,500.01 58,839.50 58,839.50 0.00 179,429.97 02/01/18 53,008.03 5,831.47 58,839.50 58,839.50 0.00 126,421.94 08/01/18 55,326.29 4,108.71 59,435.00 59,435.00 0.00 71,095.65 02/01/19 57,124.39 2,310.61 59,435.00 59,435.00 0.00 13,971.26 08/01/19 13,971.26 454.07 14,425.33 14,425.33 0.00 0.00 02/01/20 0.00 0.00 0.00 0.00 0.00 0.00 08/01/20 0.00 0.00 0.00 0.00 0.00 0.00 02/01/21 0.00 0.00 0.00 0.00 0.00 0.00 08/01/21 0.00 0.00 0.00 0.00 0.00 0.00 02/01/22 0.00 0.00 0.00 0.00 0.00 0.00 08/01/22 0.00 0.00 0.00 0.00 0.00 0.00 02/01/23 0.00 0.00 0.00 0.00 0.00 0.00 08/01/23 0.00 0.00 0.00 0.00 0.00 0.00 02/01/24 0.00 0.00 0.00 0.00 0.00 0.00 08/01/24 0.00 0.00 0.00 0.00 0.00 0.00 02/01/25 0.00 0.00 0.00 0.00 0.00 0.00 08/01/25 0.00 0.00 0.00 0.00 0.00 0.00 02/01/26 0.00 0.00 0.00 0.00 0.00 0.00 08/01/26 0.00 0.00 0.00 0.00 0.00 0.00 02/01/27 0.00 0.00 0.00 0.00 0.00 0.00 08/01/27 0.00 0.00 0.00 0.00 0.00 0.00 02/01/28 0.00 0.00 0.00 0.00 0.00 0.00 08/01/28 0.00 0.00 0.00 0.00 0.00 0.00 02/01/29 0.00 0.00 0.00 0.00 0.00 0.00 08/01/29 0.00 0.00 0.00 0.00 0.00 0.00 02/01/30 0.00 0.00 0.00 0.00 0.00 0.00 08/01/30 0.00 0.00 0.00 0.00 0.00 0.00 02/01/31 0.00 0.00 0.00 0.00 0.00 0.00 08/01/31 0.00 0.00 0.00 0.00 0.00 0.00 02/01/32 0.00 0.00 0.00 0.00 0.00 0.00 08/01/32 0.00 0.00 0.00 0.00 0.00 0.00 02/01/33 0.00 0.00 0.00 0.00 0.00 0.00 08/01/33 0.00 0.00 0.00 0.00 0.00 0.00 02/01/34 0.00 0.00 0.00 0.00 0.00 0.00 $829,189 $342,187.99 $1,171,377.33 $1,171,377.33 $100,985.34 Surplus Tax Increment 473,213.67 Total Net Revenue $1,644,591.00 *Semi-annual net revenue is estimated to be 80%of the projected annual tax increment. The remaining 20%will be retained by the City for eligible affordable housing and/or transportion pooling expenditures,and adminstrative expenses. SPRINGSTED ORAFT725-6 DEVELOPMENT A \ E T ~\» BY AND B »»m THE HOUSING AND : LOPME\T \<v RITY IN AND FOR T3£CITY ~ :� IRIE \2 SOTA , y\ A > » : © 92006 �. TABLE OF CONTENTS ARTICLE I DEFINITIONS ........................................................................................................... 1 SectionI.I. Definitions.................................................................................................... 1 ARTICLE II REPRESENTATIONS AND WARRANTIES.........................................................3 Section 2.1. Representations and Warranties of the Authority ..................3 Section 2.2. Representations and Warranties of the Develo- ..............................4 ARTICLE III UNDERTAKINGS BY DEVELOPER AND A Y ................................. 5 Section 3.1. Project; Site Improvements/Preparatio - ................................5 Section 3.2. Intentionally left blank Section 3.3. Tax Increment Note;Reimburse ht to eveloper ...........6 Section 3.4. Compliance With Income an , ent Requirements....... :. y; ............7 Section 3.5. Business Subsidies Act. ........ .. ................ .... . ................7 Section 3.6. Assessment Agreement..... � ......... ....... .....................7 ARTICLE IV EVENTS OF DEFAULT. .................... ................................................ 8 Section 4.1. Events of Default , ................................ 8 Section 4.2. Remedies on Default ...................................... 8 Section 4.3. No Remedy Exclusive, ...........................................9 Section 4.4. No Implied Waiver Section 4.5. Agr o Pay Attorn Fees an penses.......................................9 Section 4.6. I mni of Authors"' ...............:.......................................................9 ARTICLE V ADDTI PRE,, SIONS ...... 10 Section 5.L Res ctio 'Use.............................................................. 10 Sect' ` onflic nteres :....................................................................... 10 011 S , on 5.3." of A s and Sections ction 5.4. and on5.5. Coin .. arts... ..................................................................................... 11 Se5.6. Law -' min g........................................................................................... I I SectiExpirat .................................................................................................. II Section Provis'' s Surviving Rescission or Expiration.......................................... 11 SIGNATURES.......... ........................................................................................................ 12 & 13 EXHIBIT A: LEGAL DESCRIPTION.....................................................................................A-1 EXHIBIT B: FORM OF TAX INCREMENT NOTE...............................................................B-1 EXHIBIT C: COMPLIANCE CERTIFICATION.....................................................................C-I EXHIBIT D: ASSESSMENT AGREEMENT.........................................................................D-1: i DEVELOPMENT AGREEMENT THIS AGREEMENT, made as of the I"day of August, 2006, by and between the Housing and Redevelopment Authority in and for the City of Eden Prairie,Minnesota(the "Authority"), a public body corporate and politic organized and existing under the laws of the State of Minnesota, and , a Minnesota "Developer"). (the WITNESSETH: WHEREAS,pursuant to Minnesota Statutes, Section 46 - rough 469.047,the Authority has formed Redevelopment Project Area No. 6(th, < roje ea") and has adopted a Redevelopment Plan therefor(the"Redevelopment Plan')•AW n WHEREAS, pursuant to the provisions of M• sota Statutes, Sectio : .174 through 469.1799, as amended(hereinafter the"Tax Incre Act"),the Authority has within the Project Area, Tax Increment Financing(Redevel t)D• 4 t No. 20 (the k Increment District"),the legal description of which is attached her i6 A, and has adopted a tax increment financing plan, dated August 1, 2006,therefor( ax Increment Plan"),which provides for the use of tax increment fin in connection_r certain development within the Project Area; and WHEREAS, in order to achieve the ectiv ede to ment Plan and particularly to make the lands the Project Ar` i able elopment in conformance with the Redevelopment Plante ity has dete ined to as t the Developer with the financing of certain costs of a P,k--"c (ash afterdefine ° to be constructed within the Tax Increment District as more paret fob in this Agree and WHE the Au development and construction of the Project, and fulfill reem e vital antre in the best interests of the Authority and meet the red , �opment go� ,he co hensive plan of the City of Eden Prairie and are in accor with the pubs"' ;A" ose ovisions of the applicable state and local laws and requirem nder which t \;roject :as been undertaken and is being assisted. NOW, REFORE consideration of the premises and the mutual obligations of the parties hereto, ea themes hereby covenant and agree with the other as follows: ARTICLE I DEFINITIONS Section 1.1. Definitions. All capitalized terms used and not otherwise defined herein shall have the following meanings unless a different meaning clearly appears from the context: Agreement means this Agreement, as the same may be from time to time modified, amended or supplemented; Assessment Agreement means the Assessment Agreement between the Authority and the Developer in the form set forth as Exhibit D hereto; Authorijy means the Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota; Board of Commissioners means the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Eden Prairie,Minnesota; Business Day means any day except a Saturday, Sunday or a oliday or a day on which banking institutions in the State are authorized by law or ex ive order to close; City means the City of Eden Prairie, Minnesota; Compliance Certificate means the Compliance '` at in subst ly the form attached hereto as Exhibit C; Coun1y means Hennepin County, Minne ta, "= Developer means , a Minnesota its successors a ssigns; K Development Property means the re legally des' in Exhibit A attached to YN this Agreement,which is the same real prop as s the Increment District; 1 Event of Default ' of the even ascribed i - ection 4.1 hereof, Land Ac uis' eans t cquisition o e Development Property as described in the Tax Increment Financm Leaa Ministra xperi5 Les and expenses incurred in connection with the 6"ptiori o Inc F t Financing Plan;the preparation of this Agreement,the Asses Agreement, �,a11 otli l,tad documents; the making of the Loan(as defined in Sectors and the issua f the T ncrement Note; 1 . Note °.agent Amou A% eans the amounts due under the Tax Increment Note; Note Pay ate moans August 1, 2008, and each February 1 and August 1 of each year thereafter to an 0 ng February 1, 2023;provided,that if any such Note Payment Date should not be a Busin Day,the Note Payment Date shall be the next succeeding Business Day; Prime Rate means the rate of interest from time to time publicly announced by U.S. Bank National Association in Minneapolis,Minnesota, as its"reference rate"or any successor rate, which rate shall change as and when that prime rate or successor rate changes; Project means the Superior Office Center to be constructed on the Development Property; 2 t Project Area means the geographic area of Redevelopment Project Area No. 6 as provided in the Redevelopment Plan for Redevelopment Project Area No. 6, dated August 1, 2006, and approved by the Authority on August 1, 2006; Redevelopment Plan means the Redevelopment Plan approved in connection with the Project Area; Site Improvements means the site improvements described in the Tax Increment Financing Plan, specifically including demolition/environmental(asbes s abatement); State means the State of Minnesota; Tax Increments means the tax increments derived se ' i nua om the Tax Increment District which have been received and retained by the Aut, ,_ri in acco e with the provisions of Minnesota Statutes, Section 469.177, less " hority adm 3 ative/pooling retainage of 20%; Tax Increment Act means Minnesota Statutes; tion s 174 through 4 799, as amended; Tax Increment District means Tacrement Financi °. edevelopment)District No. 20 located within the Project Area,the legal on of which is` orth on Exhibit A attached hereto, which is a redevelopment district u er ncrement � F Tax Increment Financing Plan means to t cre ancing plan approved for the Tax Increment District b Council and , Board of, ommissioners of the Authority dated August 1, 2006 Tax Increment I� ean, Tax Increm u evenue Note (Superior Office Center Project)to be ex cuted by t ed to the Developer pursuant to Article III hereof,th is a d hereto ibit B; and avoidable DeI eans outside the control of the party claiming its occrre hich are the t resul strikes, other labor troubles, unusually severe or prolonged weather, acts _ od, fire or other casualty to the Project, litigation commenced b anti ch y third p �'�, 'by inj tion or other similar judicial action or by the exercise of reasonable discr directesults in delays, or acts of any federal, state or local governmental unit ' the Authority)which directly result in delays. ARTICLE II REPRESENTATIONS AND WARRANTIES Section 2.1. Representations and Warranties of the Authority. The Authority makes the following representations and warranties: 3 (a) The Authority is a housing and redevelopment authority duly organized and existing under the laws of the State of Minnesota and has the power to enter into this Agreement and carry out its obligations hereunder. (b) The Tax Increment District is a"redevelopment district"within the meaning of Minnesota Statutes, Section 469.174, subdivision 10, and was created, adopted and approved in accordance with the terms of the Tax Increment Act. (c) The development contemplated by this Agreement is in conformance with the development objectives set forth in the Redevelopment Plan. (d) To finance certain costs within the Tax Increme t,the Authority proposes, subject to the further provisions of this Agreement, appl Increments to reimburse the Developer and to reimburse the Authority f fu s adva o the Developer for certain of the costs of the Site Improvements/Preparati ed in cone with the Project as further provided in this Agreement. (e) The execution, delivery, and per,orma f thi eement, and a„ other documents or instruments required pursuant to this Agr y the Authority does not, and ;. consummation of the transactions contemplated therein an d° lfillment of the terms thereof will not, conflict with or constitute on they of the Authori each of or default under any existing(i) agreement or instrument to wh thority is a y which the Authority or any of its property is or may be bound, o ii) a act, con tion or other proceeding establishing or related to the, establishment o he Ea fficers or its resolutions. (f) There is nor to the "` t of the A ority's knowledge is there threatened, any suit, p or pr _` ing against e Authority before any court, arbitrator, administrative age "y' er go ;` mental auth m, "hat materially and adversely affects the validity of any of the tran" ns lated he Wy,the ability of the Authority to perform its obligations hq or as mpa k r thereby, or the validity or enforceability of this Agre ' No member= ' the Bo' Commissioners or officer of the Authority has either a direct o rect financia rest in is Agreement within the meaning of Minnesota Statutes, Sections 41 and 471.87 ' : (h) Th `" thorit ill reasonably cooperate with the Developer with respect to any litigation commence rd parties with respect to the Development. Se ion 2.2. Representations and Warranties of the Developer. The Developer makes the following representations and warranties: (a) The Developer has the power to enter into this Agreement and to perform its obligations hereunder. (b) The Developer will cause the Project to be constructed substantially in accordance with the terms of this Agreement,the Redevelopment Plan, and all local, state and federal laws 4 and regulations(including,but not limited to, environmental,zoning, energy conservation, building code and public health laws and regulations). (c) The construction of the Project would not be undertaken by the Developer, and in the opinion of the Developer would not be economically feasible within the reasonably foreseeable future,without the assistance and benefit to the Developer provided for in this Agreement. (d) The construction of the Project will commence on or before September 1, 2006, and,barring Unavoidable Delays,the Project will be substantially co-' , by December 31, 2007. (e) The Developer will use commercially reasonla obtain, or cause to be obtained, in a timely manner, all required permits, license n prova will meet, in a timely manner, all requirements of all applicable local, . ' , - d federal la d regulations which must be obtained or met before the balance o e Project may be law W, nstructed. ),O (f) Neither the execution and delivery of gree the consum ion of the transactions contemplated hereby,nor the fulfillment o �` liance with the terms and conditions of this Agreement is prevented, limited by or co s with or results in a breach of, the terms, conditions or provision of any actual restrictio ` 'dence of indebtedness, agreement or instrument of whatever natu" the Develo w a party or by which it is bound, or constitutes a default under any tfic g. W, (g) The Develo q ,. '11 cooperate fl ith the rity with respect to any litigation commenced w' o the Project R ARTIC ot ERT'' iC1�OPER AND AUTHORITY 4 , Al SectJ`6M., ct• Site Improvements/Preparations. The total cost of the Pro estimated to be =i 034,1 and includes Site Improvements/Preparations, additio struction co nd le development, architectural, engineering, and other costs. The '' , *es agree tha`fie Site Improvements/Preparations to be constructed by the Developer are� ntial to th uccessful completion of the Project. The costs of the Site Improvements/P' ation hich shall include engineering and all other costs directly related to the Site Improve reparations, are estimated to be at least$728,204. The costs of the Site Improvements/Prarations shall be paid by the Developer. Subject to the terms hereof and the Tax Increment Nite,the Authority shall reimburse the Developer up to $728,204,plus interest, for costs of Site Improvements/Preparations actually incurred and paid by the Developer as further provided in Section 3.3 hereof. The Developer shall pay all Legal and Administrative Expenses. Section 3.2. Reimbursement. a.) Reimbursement Upon Sale. Should the Developer sell the Project at any time prior to February 1, 2023 the Developer shall immediately 5 repay to the Authority the total amount of principal and interest paid to the Developer under the Tax Increment Note. In addition the Tax Increment Note shall be cancelled and no payments shall thereafter he due by the Authority under the Tax Increment Note and this Agreement shall terminate. b.) Reimbursement Based on Project Leases. Atsuch time as the rental space of the Project is 95% leased or 18 mont completion of construction,whichever first occurs,Devel shall submit an executed copy of each lease to the Authority for r he Authority shall conduct a review of the leases to dete e if t oject, as leased, continues to qualify for Tax Incre a istance' e aggregate square footage of the leases on a triple a ; varies less-""" 1.25 from $14.50 psf,then the Note Pa 'nt Amount shall not b ' ted. If the variation is greater than$1 above 4.50 psf,then a =' rnal Rate of Return(IRR) analysis will b le 'lizing the th current project information including ac `" s and lease rates(rather than estimates) and a %capitalization W the sale of the building in the I II year. If such 6W is results in an with assistance of less than 15%then the Project'? to qualify ncrement assistance and the Note Paymen,111 o 1not be jested. If the analysis results in an IRR with istian 15%,then the Note Pa , ount shall creased u the IRR is not greater than 15%. Section 3.3 Increm ` Note Reim rsement to Developer. Provided that the Developer has subl"' idenc the Authori ` " t costs of the Site Improvements/Preparatiolhi v ed a paid by the Developer,the Authority shall reimburse t s ma the e Winder Section 3.1 in accordance with the Authors ax n' t Not ubstantially the form attached to this Agreement as Exhibit B su t to the follo onditi (a), The Tax Incr "5nt Node shall be dated, issued and delivered on August 1, 2006. (b) El. rincipal ount of$728,204 and interest on the Tax Increment Note, at an annual rate of six nt( 6), shall be payable solely from eighty percent(80%) of the Tax Increments. Interest W ax Increment Note will compound semi-annually, except that the total amount of capital., interest that shall be payable by the Authority under the Tax Increment Note is limited to, shall not exceed,and shall not be less than, $100,985, as provided in the Tax Increment District's Tax Increment Financing Plan. (c) On each Note Payment Date and subject to the provisions of the Tax Increment Note,the Authority shall pay against the outstanding principal balance of and accrued interest on the Tax Increment Note, eighty percent(80%) of the Tax Increments received by the Authority from the Tax Increment District since the preceding Note Payment Date or, in the case of the first Note Payment Date,prior to such first Note Payment Date. All payments shall be first 6 applied to interest accrued on the Tax Increment Note and then to the unpaid principal of the Tax Increment Note.The Authority shall not be required to make any payments on the Tax Increment Note subsequent to February 1,2023, and any balance of principal and interest remaining unpaid subsequent to the payment made on February 1, 2023 shall be deemed forgiven by the Developer. In no event shall the total principal Note Payment Amounts paid under the Tax Increment Note exceed the maximum amount of$728,204.00. (d) Any interest accruing on Tax Increments held by the Authority pending the Note Payment Dates shall accrue to the benefit of the Authority. 4-16 (e) The Tax Increment Note shall be a special and limiWeVbrligation of the Authority and not a general obligation of the Authority or the City, and o ncrements shall be used to pay the principal of and interest on the Tax Increment Not (f) The Authority's obligation to make pay, tihe Tax In "' nt Note on any Note Payment Date or any date thereafter shall be c itioned upon the requi t that(A) there shall not at that time be an Event of Default s occu` , d and is contin der this Agreement and(B)this Agreement shall not have be cind ,rsuant to Sect; 4.2(a) hereof. (g) The Tax Increment Note e governed by ayable pursuant to the additional terms thereof, as set forth in E - ` he issuance Increment Note pursuant and subject to the terms of this Agiem ere by aut zed and approved by the Authority. -_ (h) The Dev of assign t 'Tax Incre nt Note without the Authority's consent,which conse all not nreasonabl ithheld. Section ale s Subsidi Act. The Loan and tax increment financing assistance pro the pity ' " - Bess subsidy"because it is"assistance P. redevelop '' ollut contammAts"and"assistance for redevelopment when the recipie investmentyel? urch f the site and in site preparation is 70 percent or more of the s current imateet value as such terms are defined in Minnesota Statutes, on 116J.9 , ivisis 3 and 3(4)and 3(17).Applying that formula results in the followin rchase of$ 25,208 plus Site Preparation Costs of$728,204, divided by Assessors Cu n , arket V of$1,998,000= 158%. Therefore,the provisions of Minnesota Statutes, Sections 993 1 ough 116J.995 are not applicable. Se .4. Assessment Agreement. The Assessment Agreement shall be executed by the Dev , per and the Authority as of the date hereof, and the Developer shall cause the Assessment Agreement and an executed Assessor's Certificate, in the form attached thereto,to be recorded against the Development Property. 7 ARTICLE IV EVENTS OF DEFAULT Section 4.1. Events of Default Defined. The following shall be"Events of Default"under this Agreement and the term"Event of Default"shall mean whenever it is used in this Agreement any one or more of the following events: (a) Failure by the Developer to cause the construction of the',froject to be substantially completed pursuant to the terms, conditions and limitat " this Agreement; (b) Failure of the Developer to observe or perform a covenant, condition, obligation or agreement on its part to be observed or performunde Agreement; (c) A proceeding under any bankruptcy,reo ion, arrangd- t of debt, insolvency, readjustment of debt or receivership law. , statute is filed(i)aga a Developer and an adjudication or appointment is made or Or ; relief i .-ntered, or suc ding remains undismissed for a period in excess of sixty( ys, by the Devel ` @r; or the Developer makes an assignment for the benefit of credi e Developer takes any corporate action to authorize any of the foregoing;, d The Developer becomes in fails enera its debts as the ( ) p s g Y become due; �1 (e) The Develo oluntarily or i arily es or is dissolved, or terminates or is terminated; or q (f) A re ustee iquidator of Developer, or of the Project, or part thereof, shall be appointed in any` eed F rought againhe Developer, and shall not be discharged within sixty(6 s after the Developer consents to or acquiesces in such appo' f referred echo` Whenever an Event of Default refe S R" n Default. ene o Wh ' Y An'- to m Se 4.1 occurs an contra. g,the Authority, as specified below,may take any one or more o following ac s after the giving of thirty (30)days' written notice to the Developer, b if the Eft of Default has not been cured within said thirty(30) days or such longer erl _. time s reasonably necessary to cure the default not to exceed 120 g P Y rY days, provided that eloper commences the cure with the 30-day period and diligently pursues the same to c letion: (a) The Authority may cancel and rescind the Agreement. b The Authority under he Tax Increment Note ri may withhold an and all payments u er t ( ) h' Y Y p Y and may terminate the Tax Increment Note. (c) The Authority may suspend its performance under this Agreement until it receives assurances from the Developer, deemed adequate by the Authority,that the Developer will cure its default and continue its performance under this Agreement. 8 (d) The Authority may take any action, including legal or administrative action, in law or equity,which may appear necessary or desirable to enforce performance and observance of any obligation, agreement, or covenant of the Developer under this Agreement. Section 4.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing , on any default shall impair any such right or power or shall be construed to be a waiver but any such right and power may be exercised from time to time and as often as m e deemed expedient. Section 4.4. No Implied Waiver. In the ,^ent a eement contained in this Agreement should be breached by any party and the a vwaived . other party, such waiver shall be limited to the particular breach so wa'v and shall not be y,ed to waive any other concurrent,previous or subsequent breach h nder. Section 4.5. Agreement to Pa A. evs)6s and Ex ense enever any Event of Default occurs and the Authority shall em omeys or incur otter expenses for the collection of payments due or t ecome due or for` nforcement or performance or observance of any obligation or agreem' the part of the oper herein contained,the erarees y Develop g that it shall, on demand a to the A ' , the reasonable fees of ,. such attorneys and such other expenses so i urr Authori `. Section Indemnificat , Autho (a) The D oper re s from and °venants and agrees that the Authority, its governing body in fficers agents, include independent contractors, consultants and legal counsel, servan e thereof reinafter, for purposes of this Section, collectively th, ifie ies ) liable for and agrees to indemnify and hold harmless ".0 11 artie inst any loss or damage to property or any injury to or death of any son occurring \_ abou eslting from any defect in,the Project provided, how, - e Developers ` of be red to indemnify any Indemnified Party or be liable for any claim h results fro e neg ' ence or malfeasance of such Indemnified Party. (b) Develope f"grees to protect and defend the Indemnified Parties, and further agrees to hold the said_ rmless, from any claim, demand, suit, action or other proceeding whatsoever by any p ' r entity arising or purportedly arising from the actions or inactions of the Developer(or othe ersons acting on its behalf or under its direction or control)under this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Project;provided,that this indemnification shall not apply to the warranties made or obligations undertaken by the Authority in this Agreement or to any actions undertaken by the Authority which are not contemplated by this Agreement but shall, in any event, apply to any pecuniary loss or penalty(including interest thereon from the date the loss is incurred or penalty is paid by the Authority at a rate equal to the Prime Rate) as a result of the Project, as constructed and operated by the Developer, causing the Tax Increment District to not qualify or cease to qualify as a"redevelopment district"under Section 469.174, subdivision 10, 9 of the Tax Increment Act, or to violate limitations as to the use of Tax Increments as set forth in Section 469.176, subdivision 4j, of the Tax Increment Act. (c) All covenants, stipulations,promises, agreements and obligations of the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and not of any governing body member, officer, agent, servant or employee of the Authority, as the case may be. ARTICLE V ADDITIONAL PROVISIONS Section 5.1. Restrictions on Constructio se. eveloper agrees for itself, its successors and assigns and every successor in ire to the pment Property, or any part thereof,that the Developer and such success an I signs shal a te, or cause to be operated,the Project as provided in Section 3.4 of and shall devote th elopment Property to, and in accordance with,the uses sperm in this : reement. The per further agrees for itself, its successors and assigns,t ac on, construct and operation of the Development will be carried out in acc y _ with all applicable federal, state and local laws. Section 5.2. ConflicN5,1kem- st. No mem governing body or other official of the Authority shall have a4 fi* terest, dir` or indirect, in this Agreement,the Development Property or th e ct, agreement or other transaction contemplated r or be unde' thereu- 'r with respect thereto, nor shall any such member of body or oth' "official p icipate in any decision relating to the Agreement whi A ects his er personal terests or the interests of any corporation, partnership or ass dca whi e or she is di or indirectly interested. No member, official or employee of tfi t be per, ally liable to the Authority in the event of any default ,by the dope or or on any obligations under the terms of this Agr ent Section' Tit\ Articles and Sections. Any titles of the several parts, articles a" ctions of the' eemest are inserted for convenience of reference only and shall be disregar 11construin . interpreting any of its provisions. ion 5 . Notices and Demands. Except as otherwise expressly provided in this Agreement, , demand or other communication under this Agreement by any party to any other shall be s Iiiciently given or delivered if it is dispatched by registered or certified mail,postage prepai return receipt requested, or delivered personally, and (a) in the case of the Developer is addressed to or delivered personally to: (b) in the case of the Authority is addressed to or delivered personally to the Authority at: 10 Housing and Redevelopment Authority 8080 Mitchell Road Eden Prairie,Minnesota 55347 Attention: Executive Director of HRA or at such other address with respect to any such party as that party t om time to time, designate in writing and forward to the other, as provided in this 5,,;,:; ion Section 5.5. Counterparts. This Agree \,; ma xecuted in any number of counterparts, each of which shall constitute one and th sa' , mstru Section 5.6. Law Governing. T Agreement will be ed and construed in accordance with the laws of the Stat Section 5.7. Expiration. This Agr a expire on February 1, 2023, unless earlier terminated or rescinded in accordance with rms. Section 5.8. Provislahurviving Rescisst. Ex iration. Sections 4.5 and 4.6 and the Developer's payment obli t ' ftic Section 3VS9 survive any rescission, termination or expiration of this Agreemen x ith or arout of any event, occurrence or circumstance existing prior to d the � .� 11 IN WITNESS WHEREOF,the Authority has caused this Agreement to be duly executed in its name and on its behalf and its seal to be hereunto duly affixed, and the Developer has caused this Agreement to be duly executed in its name and on its behalf, on or as of the date first above written. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EDEN PRAIRIE By Its Chair By I '. tive Di -ctor ti [This is a signature page to the Development Agreement by and between the Housing and Redevelopment Authority in and for the City of Eden Prairie and 1 12 By Its �u tl 1 a F: ^r [This is a signature page to the Development Agreement by and between the Housing and Redevelopment Authority in and for the City of Eden Prairie and 1 13 EXHIBIT A LEGAL DESCRIPTION �\ . �« . � � �» » » A-! EXHIBIT B FORM OF TAX INCREMENT NOTE No. R-1 UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF EDEN PRAIRIE HOUSING AND REDEVELOPMENT TT TY IN AND FOR-THE CITY OF E RAI TAX INCREMENT REV E NOTE OF 2006 ( JECT PRINCIPAL AMOUNT: $728,204 INTEREST RATE: 6.5% The Housing and Redevelopme ty in and City of Eden Prairie, Minnesota (the "Authority"), hereby acknoIedc <° to be ind ed and, for value received, hereby promises to pay to , or its registered assigns (the "Registered Owner"), but - the manner', a times; Yn the sources of revenue, and to the extent hereinafter 1 principal a` ount stated above with interest, from the date hereof, at the rate per, um stat ove. This Tax Increm Iev,y' l to of 2 ( Project) (or "Note") is issued pursu\t" e, rovi oft 1 d (the Agreement, dated as of August 1, p g 2006, as dame am e from time to time the "Development Agreement"), by and �betwe �the Housing� _ Rede t Authority in and for the City of Eden Prairie, Minn` the"Author in d (the"Developer"). Pro v " ,that the De per has submitted evidence to the Authority that costs of the Site Improvement sh ' rations , defined in the Development Agreement) have been incurred and paid by the Deve as vided in the Development Agreement, the principal and interest amounts due under t" `e (the"Note Payment Amounts") shall be payable on August 1,2008, and on each February nd August 1 thereafter to and including Februaryl, 2023, or, if the first should not be a Business Day (as defined in the Development Agreement) the next succeeding Business Day (the"Note Payment Dates"). On each Note Payment Date the Authority shall pay, by check or draft mailed to the person that was the Registered Owner of this Note at the close of the last Business Day preceding such Note Payment Date, eighty percent (80%) of the Tax Increments(as hereinafter defined)received by the Authority from the Tax Increment District(as hereinafter defined) since the preceding Note Payment Date or, in the case of the first Note Payment Date, prior to such first Note Payment Date, as provided in the Development Agreement. All payments shall be first applied to interest accrued on the Note and then to the B-1 unpaid principal of the Note. The Authority shall not be required to make any payments on the Note subsequent to February 1, 2023, and any balance of principal and interest remaining unpaid subsequent to the payment made on February 1, 2023 shall be deemed forgiven by the Developer. In no event shall the total Note Payment Amounts paid under this Note exceed the maximum amount of$1,171,377. Interest on this Note will compound semi-annually. Notwithstanding the interest rate provided herein, the total amount of capitalized interest that shall be payable by the Authority under this Note is limited to, shall not exceed, and shall not be less tha • $100,985 as provided in the Tax Increment Financing Plan for Tax Increment Financing(Re "" anent) District No. 20 (Superior Office Center Project), dated August 1,2006. The Note Payment Amounts due hereon shall be a e so] m a portion of the tax Y pay. -. increments, less twenty percent (20%), from the Devel e Prope hin the Authority's Tax Increment Financing (Redevelopment) District Na " "Tax Incre" District") within its Redevelopment Project Area No. 6, which are p to the Authority and the Authority is entitled to retain pursuant to the provisions o sota S , utes, Sections 4 through 469.1799, as the same may be amended or sup me `" time to tine (the "Tax Increments"). This Note shall terminate and be of no orce and effect following the last Note Payment Date defined above, on date upon whi` Authority shall have cancelled and rescinded the Development Agree ursuant to S 4.2(a) thereof or the Note pursuant to Section 4.2(b) of said Develo "° Bement, or o Adate that all principal and interest shall have been paid in full, wh"_ eve earlier; The Authority makes no representation or covenant, express or impliAth ° "ig t (80%) of the Tax Increments will be sufficient to pay, a or in part,°"amounts ich are or may become due and payable hereunder. The Authority' ent igations here Q shall be further conditioned on the fact that no Event of Defau to r t Agreement shall have occurred and be continuing pay .is of ue hereunder, but such unpaid amounts shall become , Viable i vent efault shall thereafter have been cured; and, further, if pursu,r `to the occurs of an ": _of Default under the Development Agreement the Author w cts to cancel" rescin a Development Agreement, the Authority shall have no further de " obligation u this Tote whatsoever. Reference is hereby made to all of the provisions o evelopme. _," greement, including without limitation Section 3.3 thereof, for a fuller statement a rights d obligations of the Authority to pay the principal of and interest on this Note, and to ons are hereby incorporated into this Note as though set out in full aw herein. This Note is a special, limited revenue obligation and not a general obligation of the Authority and is payable by the Authority only from the sources and subject to the qualifications stated or referenced herein. This Note is not a general obligation of the Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota, and neither the full faith and credit nor the taxing powers of the City are pledged to the payment of the principal of and interest on this Note and no property or other asset of the Authority, save and except eighty percent (80%) of the above-referenced Tax Increments, is or shall be a source of payment of the Authority's obligations hereunder. B-2 This Note is issued by the Authority in aid of financing a project pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 through 469.1799. This Note may be assigned only with the consent of the Authority, which consent must not be unreasonably withheld. In order to assign the Note, the assignee shall surrender the same to the Authority either in exchange for a new fully registered note or for transfer of this Note on the registration records for the Note maintained by the Authority. Each permitted assignee shall take this Note subject to the foregoing conditions and subject to,, 11 provisions stated or referenced herein. IT IS HEREBY CERTIFIED AND RECITED that conditions, and things required by the Constitution and laws of the State of Minn 4 to ` _ne, to have happened, and to be performed precedent to and in the issuance f is Not a been done, have happened, and have been performed in regular and d- , o time, and r as required by law; and that this Note, together with all other ind " dness of the Authority° m_ andng on the date hereof and on the date of its actual issuance ivery, s not cause th . tedness of the Authority to exceed any constitutional or statutory ti eon. IN WITNESS WHEREOF, the Jousing and Re ment Authority in and for the City of Eden Prairie, Minnesota, by it „ d of Commissi s, has caused this Note to be executed by the manual signatures of its xecutive D and has caused this Note to be issued on and dated as of August 1, 2 Executive Director - fir B-3 r£RTIICATION OF REGISTRATION It is hereby certified that the foregoing Note, a originally issued on , 20, was on said date registered in the name o , and that, at the request o the ReiSJe Owner o this Note, the udrlsgnehas this day registered the Note in thename of such Registered owner, m indicated in the registration blank below, on the books kept by the undersigned for such purposes. NAME AND ADDRESS OF DATE OF SIGNATURE OF REGISTERED OWNER REGITRATION eN© £rRETARY , 20 6 \> % :�: \« e� �w . B4 EXHIBIT C COMPLIANCE CERTIFICATE The undersigned officer of , does hereby certify that during the calendar year ending on the December 31 preceding the date of this Certificate, the Project(as defined in the Development Agreement, dated as of , 2006, between the Housing and Redevelopment Authority in and for the City of Eden P airie and )was operated in complianc ie provisions of Section 3.4 of said Development Agreement.Attached hereto is mg, as of the end of said calendar year, of the units in the Project which are designated w Income Units,which listing sets forth, for each such Low Income Unit, (i)the mo ` rren " 'fied income for the individual or family occupying(or most recently occupyi si Low e Unit and(ii)the current rent charged for such Low Income Unit. Dated this day of , �tsr C-1 EXHIBIT D FORM OF ASSESSMENT AGREEMENT THIS AGREEMENT is dated as of August 1,2006 and is between the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EDEN PRAIRIE, MINNESOTA, a public body corporate and politic organized and existing under the laws of the State of Minnesota(the"Authority"),and , a Minnesota (the"Developer"). " IN CONSIDERATION OF the mutual covenant nefits herein described, the Authority and the Developer recite and agree as follows. Section 1. Recitals. 1.01. Project Plan. The Authority eretofo" developed a RY ment Plan (the"Project Plan") outlining certain devel 'in £ tiviti be undertaken d has adopted a Redevelopment Plan therefor(the"Redevelo an" which includes the construction of a (the "Project") and related site improvements", other improvem ` f a public nature. The Project is to be owned by the Developer. K 1.02. Tax Increment Financi Distri "N` ant t the Minnesota Tax Increment Financing Act, esota Statutes, s 4' o 469.1799, as amended(the "TIF Act"),the City and ty have ap` " ved a tax ' rement financing plan (the "Financing Plan"),w is the sed metho r financing the development activities currently proposed ` dertak' ursuant to th eject Plan relating to the Project. Pursuant to the Financing Plan, Ta " e _ ancing(R T`evelopment)District No. 20 (the"District") has been esta s a "re p� der the TIF Act. 1.03. "1 enta „ The Authority and the City of Eden Prairie,Minnesota (the" _ ,have each artzed art ""cted their respective officers to take all actions necessa " plement an out e Project Plan and the Financing Plan. The Project Plan and the Fin�t ; " Plan prop that the Authority finance certain costs of or related to the Project, payab in tax inc ent(as defined in the TIF Act)derived from the District("Tax Increment"). 1.04. DIopment Agreement. The Authority and the Developer have entered into a Development A "reement, dated as of August 1,2006 (the"Development Agreement"), which provides that the Developer will improve the real property described in Exhibit A hereto (the"Land")by the construction of the Project thereon. The Development Agreement provides that upon the execution and delivery of the Development Agreement,the Authority and Developer are to enter into this Assessment Agreement. D-1 Section 2. Minimum Market Value. 2.01. Agreed Upon Minimum. The Developer agrees that the minimum market value of the Land and the Project for ad valorem tax purposes, for the assessment made as of January 2, 2007, shall be not less than $4,100.000.00, and for the assessment made as of January 2, 2008, and continuing throughout the term of this Assessment Agreement, shall be not less than $12,600,000.00, and shall not be reduced by any action taken by the Developer(other than a deed in lieu of, or under threat of, condemnation by the City of Eden Prairie,Hennepin County or other condemning authority),to less than the said amount, and that d ing the term of this Assessment Agreement no reduction of the market value therefor be minimum market value shall be sought by the Developer or granted by any public o ial or court except in accordance with Minnesota Statutes, Section 469.177, subdivi -his minimum market value shall apply only to the Land,the Project and any other rc` ilities ted on the Land. In the event of involuntary conversion of the Land and the P c r any r (other than condemnation b entity), "y a public ty),the minimum mark ue all not be re , �' d to an amount less than said minimum market value. The Developer acknowledges and agre t t d and the Pro'. ct are subject to ad valorem property taxation and that such property t nstitute taxes on"real property" (as provided in Section 469.174, subdivisions 4 and 7(d) o IF Act)and,to the extent reflecting net tax capacity rates of taxing - 'ctions levied a "` the captured net tax capacity of the District,tax increment. e 2.02. Higher Market Value tl m, ment Agreement shall limit the discretion of the count or of the Cit b den Prai or any other public official or body having the duty t��erxn e market v e of the Land,the Project and other facilities on the Land for ad v tax p ses,to assigI o the Land,the Project or to any other improvements con' uc the " d, on a nondi i inatory basis and treated fairly and equally with all other prop s din the . 'pective counties,a market value in excess of the mini °' value i ie 2.01. The Developer shall have the normal remedies `mailable a la ontest any estimated assessor's estimated value in excess of said um market v but o e extent of the excess. 2.03. Substa 1 Come"'letion. For purposes of this Assessment Agreement and the determine of the mar value of the Land and the Project for ad valorem tax purposes, the Developer a that the oject shall be deemed to be completed in accordance with the Development Agr t AY' August 1, 2006 (the required date of completion),whether in fact completed or not. Section 3. Filing and Certification. 3.01. Assessor Certification. The Authority shall present this Assessment Agreement to the city assessor of the City of Eden Prairie and request such assessor to execute the certification attached hereto as Exhibit C. The Developer shall provide to the assessor all information relating to the Land and the Project requested by the assessor for the purposes of discharging the assessor's duties with respect to the certification. D-2 3.02. Filing. Prior to the recording of any mortgage, security agreement or other instrument creating a lien on the Land and in any event not less than 30 days after the execution of this Assessment Agreement,the Developer shall cause this Assessment Agreement and a copy of Minnesota Statutes, Section 469.177, subdivision 8, attached hereto as Exhibit B, to be recorded in the office of the County Recorder or Registrar of Titles of Hennepin County, and shall pay all costs of such recording. Section 4. Relation to Development Agreement. The covenants and agreements made by the Developer in this Assessment Agreement are separate fro nd in addition to the covenants and agreements made by the Developer in the Developing, ement and nothing contained herein shall in any way alter, diminish or supersede the ies and obligations of the Developer under the Development Agreement. Section 5. Miscellaneous Provisions. 5.01. BindingEffect.ffect. This Assessm Agreement shall inure e benefit of and shall be binding upon the Authority and the er an eir respective s `' ors and assigns, and upon all subsequent owners of the Land e Pr 5.02. Severability. In the,event any provisi` this Assessment Agreement shall be held invalid or unenforceable b \ .:,court of compet indiction, such holding shall not invalidate or render unenforceable an vision hereo 5.03. Amendments Chan es y'' d Mom cept as provided in Section 5.04, this Assessm, eement may ,e Mended ��y of its terms modified only by written amendment aut "" executed by _e AuthorityPand the Developer and otherwise in compliance with S n 469 subdivision of the Act. 5.04. Fu ss and Corre'"° a Instruments. The Authority and the Developer a Axecute, acknowledge and deliver, or cause to be executes `: d or red, such supplements hereto and such further instruments as may\ sonably, be d for` acting any inadequate or incorrect description of the Land or tl a ct, or for carr ut thessed intention of this Assessment Agreement. 05. Executi" Counterparts. This Assessment Agreement may be simultaneousl uted in s " " ral counterparts, each of which shall be an original and all of which shall cons t ,but o "hand the same instrument. 5.06. icable Law. This Assessment Agreement shall be governed by and construed in accordance with the internal laws of the State of Minnesota. 5.07. Captions. The captions or headings in this Assessment Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or Sections of this Assessment Agreement. 5.08. Effective Date. This Assessment Agreement shall be effective as of August 1, 2006. D-3 5.09. Termination Date. This Assessment Agreement shall terminate upon the termination of the District in accordance with Minnesota Statutes, Section 469.176, subdivision 1. 5.10. Definitions. Terms used with initial capital letters but not defined herein shall have the meanings given such terms in the Development Agreement,unless the context hereof clearly requires otherwise. Nl D-4 IN WITNESS WHEREOF,the Authority has caused this Assessment Agreement to be executed in its name by its duly authorized officers and the Developer has caused this Assessment Agreement to be executed in its corporate name. HOUSING AND REDEVELOPMENT IN AND FOR THE CITY OF EDEN PRAIRIE, MINNESOTA By Its Chair By Its Executive I3t` r STATE OF MINNESOTA ) COUNTY OF HENN The fore instr" ent was ackn edged before me this day of 2006, the Chair and Exec'u "' ctor respectively of the Housing and Redevel ent AuL11 an he City of Eden Prairie, Minnesota, a public body corporate and p organized an ting a laws of the State of Minnesota, on behalf of the public Notary Public D-5 By Its STATE OF MINNESOTA ) ) ss. COUNTY OF ) The foregoing instrument was ac \ged bee me this ' 20_by of , a Minnesota , on behalf of the frr s blic vr z � r U, 4 4 D-6 £\/II A DESCRIPTION OF LAND 2. \ , ~ \<f - ��« D- EXHIBIT B COPY OF MINNESOTA STATUTES, SECTION 469.177, SUBDIVISION 8 Assessment agreements. An authority may enter into a written assessment agreement with any person establishing a minimum market value of land, existing improvements, or improvements to be constructed in a district, if the property is owned or will be owned by the person. The minimum market value established by an assessment agreement may be fixed, or increase or decrease in later years from the initial minimum market value. If an a r ement is fully executed before July 1 of an assessment year,the market value as provided un", Wagreement must be used by the county or local assessor as the taxable market value o property for that assessment. Agreements executed on or after July 1 of an asse ar become effective for assessment purposes in the following assessment year. An a smen 4 ement terminates on the earliest of the date on which conditions in the assess a ement rmination are satisfied,the termination date specified in the agreem or t date when ' crement is no longer paid to the authority under section 469.176, divisio 1. The assess re ment shall be resented to the county assessor, or city havm a powers of thk'°. `"n p ty ty P ty �R assessor, of the jurisdiction in which the tax incremen ci ict and the perty that is the subject of the agreement is located. The assessor sha ew the plans and specifications for the improvements to be constructed,revig, the market valu iously assigned to the land upon which the improvements are to be c ted and, so lori he minimum market value P p �. 1 : , contained in the assessment agreement app udgment o r, ssessor,to be a reasonable estimate, shall execute the follo g ce upon e agreement: The under" - lessor, bein ally respo le for the assess of the £ , .ve described roperty, certifies that the mar le ;. es assi to the land d improvements are reasonabl ' The assess nt sha filed for rd and recorded in the office of the county recorder, the regis- :,'tles h county where the real estate or any part thereof is situa , fter the agree beconi fictive for assessment purposes,the assessor shall value the erty under se 273 ) except that the market value assigned shall not be less than the mI in market va established by the assessment agreement. The assessor may assign a mark ue to the perty in excess of the minimum market value established by the assessment agree The ner of the property may seek,through the exercise of administrative and A111 ies, a reduction in market value for property tax purposes, but no city assessor, county a sor, county auditor, board of review, board of equalization, commissioner of reveh e, or court of this state shall grant a reduction of the market value below the minimum market value established by the assessment agreement during the term of the agreement filed of record regardless of actual market values which may result from incomplete construction of improvements, destruction, or diminution by any cause, insured or uninsured, except in the case of acquisition or reacquisition of the property by a public entity. Recording an assessment agreement constitutes notice of the agreement to anyone who acquires any interest in the land or improvements that is subject to the assessment agreement, and the agreement is binding upon them. D-8 An assessment agreement may be modified or terminated by mutual consent of the current parties to the agreement. Modification or termination of an assessment agreement must be approved by the governing body of the municipality. If the estimated market value for the property for the most recently available assessment is less than the minimum market value established by the assessment agreement for that or any later year and if bond counsel does not conclude that termination of the agreement is necessary to preserve the tax exempt status of outstanding bonds or refunding bonds to be issued,the modification or termination of the assessment agreement also must be approved by the governing bodies of the county and the school district. A document modifying or terminating an agreement, iZN-.The ding records of the municipality, county, and school district approval, must be filed for r assessor's review and certification is not required if the document terminate, agreement. A change to an agreement not fully executed before July 1 of an assessment y „ \s ffective for assessment purposes for that assessment year. If an assessment agreeme as be " dified or prematurely terminated, a person may seek a reduction in market val tathrough ' xercise of any administrative or legal remedy. The remedy may not vide for reduction market value below the minimum provided under a modified ass.,, ent agr ement that rem n ect. In no event may a reduction be sought for a year otlr the c A taxes payabl N m D-9 EXHIBIT C ASSESSOR'S CERTIFICATE The undersigned, being the duly qualified and acting assessor of the City of Eden Prairie, Minnesota,hereby certifies that. 1. I am the assessor responsible for the assessment of the Land described in the foregoing Exhibit A; 2. I have read the foregoing Assessment Agree m ed as of August 1, 2006; 3. I have received and read a duplicate origins f the pment Agreement referred to in the Assessment Agreement; 4. 1 have received and reviewed th hitectura, and engineerin n nd specifications for the Project agreed to be construe e M the La ursuant to the elopment Agreement; 5. I have received and r wed an estimate ed by the Developer of the cost of the Land and the Project to be co ri thereon; 6. I have reviewed the mar alu sly assihed to the Land on which the Project is to be constructed, and the mimmu ar va ssigned to the Land and the Project by the Assessmenlxh ent is a reas a estima ; and 7. 1 t the market ° lue assigned to the Land and the Project described on the forego by the Asses t Agreement is reasonable and the market value assigned to the Lan t for th sessment January 2, 2007, shall be not less than$4,100 c'Jor t essme`T' as of January 2, 2008, and continuing through z , a term `' . Asse t Agreement, shall be not less than$12,600,000.00. Dated City Assessor, City of Eden Prairie,Minnesota D-10 Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul,MN 55101-2887 .. a '' Tel: 651-223.3000 Fax: 651-223-3002 mm.springsted.com MEMORANDUM TO: David Lindahl, Manager of Economic Development Janet Jeremiah,Community Development Director FROM: Mikaela Huot,Assistant Vice President/Consultant Paul Steinman,Vice President/Consultant DATE: July 25,2006 SUBJECT: United Properties Tax Increment Financing and Development Agreement The purpose of this memo is to provide information related to the Housing and Redevelopment Authority in and for the City of Eden Prairie (HRA) and City Council approval of a Tax Increment Financing Plan and Redevelopment Plan and Development Agreement with United Properties for the redevelopment of the former Physical Electronics building located at 6509 Flying Cloud Drive. When Tax Increment Financing is involved in a redevelopment project,actions by the public entity(HRA and/or City Council)will have two primary parts: • Consideration of the Tax Increment Financing(TIF)Plan and Redevelopment Plan ■ Gives the HRA/City authority to utilize the Tax Increment Financing tool and to provide a TIF subsidy to a Developer/project • Consideration of the Development Agreement ■ Specifies the mechanics of providing a subsidy and the amount of such subsidy 1)Consideration of a Tax Increment Financing(TIF)Plan and Redevelopment Plan The Tax Increment Financing Plan for Tax Increment Financing District No.20 is a newly proposed redevelopment district that is anticipated to be adopted on August 1,2006. The Redevelopment Plan for Redevelopment Project Area No.6 is a newly proposed project plan that is also anticipated to be adopted on August 1,which provides the underlying statutory authority for a public body to create a Tax Increment Financing Plan. The TIF Project includes the acquisition and demolition of an existing building complex that was found to be substandard in 2005. The ub0c Sector Aft!sors City of Eden Prairie, Minnesota Summary Memo, TIF 20 and Development Agreement July 25, 2006 Page 2 developer is proposing to construct a 91,000 square foot office building called Superior Office Center. It is proposed that tax increment will be used to reimburse the developer for a portion of the site improvements/preparations associated with redevelopment of the site. The HRA will be the authority of the district and asked to approve the creation of the TIF Plan and Redevelopment Plan on August 1. MN Statute requires the City Council to hold the public hearing and pass a resolution approving creation even though the approving body is the HRA. LHB, a local planning/architectural firm,was hired in 2005 to inspect and evaluate the property within the proposed TIF(Redevelopment)District No.20. The building was determined to have met the statutory requirements necessary to be found substandard as described in the Tax Increment Financing law. The HRA passed a resolution on November 1, 2005 which found the building to be substandard, prior to its demolition late in 2005. A final building analysis report has been completed and is kept on file in the City offices. The term of TIF District No. 20 is estimated to be 15 years. The budget contained in the plan is $2,783,941 and includes the following public costs: ➢ Site Improvement/Preparation Costs of$728,204 ➢ Loan principal and interest payments,including capitalized interest,of$1,171,377 ➢ Administrative expenses(1%)of$20,557 ➢ Pooling for redevelopmenUtransportation/affordable housing(19%)of 863,803 The revenues of the district total$2,783,941 and are as follows: ➢ Projected tax increment of$2,055,737 ➢ Loan proceeds of$728,204 Approval of the TIF and Redevelopment plans does not constitute an agreement between the HRA and United Properties to provide a subsidy to the project rather, it provides the mechanism to collect tax increment due to an increase in value of the redevelopment property. 2)Consideration of the Development Agreement between the HRA and United Properties The Development Agreement between United Properties and the HRA contains the provisions of the proposed development and specifies the amount of the subsidy and how it is to be provided. The development agreement contains the following primary points related to how much subsidy is to be provided and the provisions under which such subsidy is provided: • The principal amount of subsidy is$728,204. • The principal amount will be paid to the Developer by the City over a term of 15 years and will include interest at 6.5%. City of Eden Prairie, Minnesota Summary Memo, TIF 20 and Development Agreement July 25, 2006 Page 3 • The maximum Note payment amounts over the term are$1,171,377. • Should the Developer sell the project anytime prior to February 1, 2023, the Developer will repay to the Authority the total amount of principal and interest paid to the Developer. • When the rental space is 95% leased, or 18 months passes from completion of construction, the leases shall be provided to the Authority and a re-examination of the lease rates will be undertaken. If there is greater than$1.25 psf variation above an average triple net lease rate of$14.50,then an IRR analysis shall be completed using current project information, including actual costs. If the analysis results in an IRR with assistance of less than 15%,then the project will continue to qualify for the same TIF subsidy,and if greater than 15%with assistance, such assistance shall be adjusted accordingly so that the IRR does not exceed 15%. • The principal amount plus interest shall be solely payable to the Developer from 80% of Tax Increments received. • The Business Subsidy law does not apply because of the provision stating such assistance is not a business subsidy if it is "assistance for redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value". As stated in the development agreement,the Developer's acquisition and site preparation is 158% of the assessor's current year's estimated market value. Springsted completed an analysis of the project's sources and uses, including an internal rate of return analysis, as part of the detailed project review. The results of that analysis are included in a memo to City Staff dated July 25, 2006 entitled"United Properties Request for Financial Assistance—Final Internal Rate of Return Analysis". I Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul,MN 55101-2887 j• sv, r� Tel: 651-223-3000 Fax: 651.223-3002 www.spdngsted.com MEMORANDUM TO : David Lindahl Manager of Economic Development g P Janet Jeremiah,Community Development Director FROM: Mikaela Huot Assistant Vice President/Consultant Paul Steinman,Vice President/Consultant DATE: July 25,2006 SUBJECT: United Properties Request for Financial Assistance—Final Internal Rate of Return Analysis The purpose of this memo is to outline the financial components of the United Properties proposal to construct an office building on approximately 10.36 acres within the proposed Tax Increment Financing District No.20. The developer estimates the total cost of the project to be$14,034,837. The developer's request for tax increment financing assistance is$1,044,244. City staff will recommend to Council/HRA that the developer be reimbursed solely for demolition and asbestos removal costs,which the developer estimates to be$728,204. The annual amount of gross tax increment based upon a final market value of$12,683,000(land-$1,998,000,building- $10,685,000)as estimated for taxes payable 2009 is approximately$136,191. We recommend the City retain 20%of the tax increment for pooling for affordable housing,redevelopment and transportation costs and related administrative expenses,with the remaining 80%pledged for payment to the developer. Assuming a present value rate of 6.50%we estimate it will take approximately 12 years to pay off a TIF Note of$728,204,including capitalized interest. The City's current Tax Increment Policy limits the amount of assistance to 15 years. Our assumptions also include a 0%annual market value inflator. But-For Analysis The but-for test is used to determine whether or not a project will proceed as proposed without the use of public dollars. To complete this analysis we examined two 10-year commercial project pro-formas,one showing a result if the developer receives the subsidy and one showing a result if the developer does not receive a subsidy. The following assumptions and parameters were used in the proformas: r Revenues and expenses provided by developer o Total acquisition costs were reduced by the amount of accrued interest,$280,460,since the time the property was purchased,subsequently increasing the amount of equity required. o Total acquisition costs were reduced by the amount of real estate taxes paid,$75,101,since the property was purchased,subsequently increasing the amount of equity required. o Total acquisition costs used in our analysis did not include$60,000 of additional other costs indicated by the developer as acquisition costs. Lease rates provided by developer o $14.50 per square foot for office space Pub"c Scar AdWsors City of Eden Prairie, Minnesota Final IRR Analysis,TIF 20 July 25,2006 Page 2 ➢ Vacancy rates provided by developer o 5% Equity investment of$3,119,276 without assistance(estimated) `i- Equity investment of$2,391,276 with assistance(estimated) ➢ Annual inflation rates as provided by developer applied to rental incomes ➢ 3%inflation rates applied to expenditures ➢ Present value rate equal to 6.50%(developer financing) Developer provided financing terms of 6.50%,$10.5 million,30 year term—paid in full at time of sale Springsted has reviewed the developer's projected lease rates and finds them to be within a reasonable range of rates in the Eden Prairie and surrounding area market. Springsted performed an industry standard analysis using the Internal Rate of Return mechanism to estimate the proposed project's rate of return. ♦ Internal Rate of Return(IRR) o measures the average annual yield on an investment The following table summarizes the results of the IRR analysis: Without Assistance With Assistance Internal Rate of Return(year 11) 9.12% 12.79% Calculated Sale $11,980,291 $13,123,038 Developers are typically interested in the cash on cash rate of return and return on investment to determine the profitability of income producing properties. The cash on cash method is an annual test and considers the before-tax cash flow as a measure of the equity invested to determine the developer's cash return. An investor is typically interested in the internal rate of return of the project to determine the return on their initial investment,generally over a longer period. It is our understanding that in this case United Properties holds the position as both developer and investor. The internal rate of return measurement is typically what is used by public agencies to determine the need for a subsidy. Our methodology is to estimate the calculations to help measure the project's financial performance with and without the assistance in order to meet the but-for analysis,which tests whether the project will proceed'but-for"the subsidy. Should the IRR lie below a reasonable range without a subsidy, we can assume the project will not move forward without such subsidy. Should the IRR lie within a reasonable range with a subsidy, we can assume the amount of subsidy tested is appropriate for the project. All such estimates should be viewed as general indicators of performance and not exact forecasts. The number of current and future variables affecting these estimates and actual results are great. Tenant improvement costs and lease commissions will occur at the start of the project before the rental incomes and potential tax increment revenues are fully realized. We estimate the overall cumulative cash flow of the project in the early years will be poor because of the upfront costs. Cash flow is not covered in the initial years but proves solid and growing through 10 years in both scenarios. Debt service coverage is estimated to be 151%without assistance and 164% with assistance in year three. The developer uses a 5% vacancy rate which is also a reasonable assumption for this type of product given the current market. City of Eden Prairie, Minnesota Final IRR Analysis,TIF 20 July 25,2006 Page 3 Without assistance this project is expected to generate an internal rate of return of 9.12%in 2017. The calculation of the internal rate of return includes a hypothetical sale of the building in year 11 (2017). Using the Net Operating Income of year 11 and a capitalization rate of 9.5%, the estimated sales price would be$11,980,291. Using those same assumptions, with the TIF assistance we calculated the project would generate an IRR of 12.79%, with a calculated sales price of$13,123,038. ♦ Capitalization Rate(Cap Rate) o a ratio used to estimate the value of income producing properties United Properties has submitted an updated request for TIF assistance dated June 29,2006 for a total amount of $1,044,244. This includes the following project costs: Demolition and Asbestos Removal 728,204 Earthwork excess fill removal) 141,300 Retaining Wall 86,040 Storm Water Ponds 47,500 TIF Support Fees 16,200 Related Engineering Fees 25,000 Total $1,044,244 United Properties also provided the following updated estimated sources and uses of funds related specifically to the proposed redevelopment parcel: Sources of Funds Total Uses of Funds Total First Mortgage Amount 10,500,000 Land Acquisition 2,425,208 Equity 2,806,837 Construction/Demo Costs 9,054,144 TIF 728,000 Soft Costs 1,955,485 Development Fee 600,000 Total 14,034,837 Total 14,034,837 Conclusion The developer indicates in the request that assistance is necessary due to unusual land costs, including demolition of the existing blighted building,asbestos abatement and extensive site work including grading and removal of excess fill,retaining wall and storm water pond construction,and that TIF assistance will help to offset these unusual costs and make the project more feasible. In our analysis we used a land acquisition cost of$2,009,647,and an equity amount(with assistance)of$2,391,276 vs.what is shown above on the developers'sources and uses. The differential between the land acquisition cost we used and the developer's,is$280,460 in accrued interest,$75,101 in real estate taxes paid since purchase,and$60,000 of other additional costs borne by the developer. The calculated internal rate of return supports the fact that a subsidy may be necessary to provide a return adequate to complete the project as proposed. Without the assistance the timeline and type of project ultimately constructed may be adversely impacted. In conclusion,it appears such assistance is necessary to obtain the redevelopment results the City desires on the proposed site. Thank you for the opportunity to be of assistance to the City of Eden Prairie. Please contact us at(651)223-3000 or mhuot@sprin stg ed.com and psteinman@springsted.com with any questions or comments. Housing and Redevelopment Authority in and for the City of Eden Prairie fE City o den Prairie Minnesota Redevelopment Plan for Redevelopment Project Area No. 6 Dated: July 26, 2006 (DRAFT) Approved: Prepared by: SPRINGSTED INCORPORATED 380 Jackson Street,Suite 300 St. Paul, MN 55101-2887 (651)223-3000 WWW.SPRINGSTED.COM TABLE OF CONTENTS Section P aes ADefinitions............................................................................................................................... 1 BStatutory Authorization .......................................................................................................... 2 C Statement of Need and Public Purpose ............................................................................... 2 DStatement of Objectives ........................................................................................................ 2 E Boundaries of the Project Area ............................................................................................. 3 FProperty Acquisition ............................................................................................................ 3 GPayment of Public Costs ....................................................................................................... 3 H Environmental Controls;Land Use Regulations .................................................................. 3 1 Park and open Space to be Created .................................................................................... 3 J Property Acquisition and Proposed Reuse .......................................................................... 4 K Administration and Maintenance........................................................................................... 4 LRelocation .......................................................................................................................... 4 MAmendments .......................................................................................................................... 4 Mapof the Project Area............................................................................................................................. EXHIBIT I Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota Section A Definitions The terms defined in this section have the meanings given herein,unless the context in which they are used indicates. a different meaning: "Authori "means the Housing and Redevelopment Authority in and for the City of Eden Prairie. y means the City of Eden Prairie, Minnesota, a municipal corporation and political subdivision of the State of Minnesota. "City Council"means the City Council of the City. "Coun "means Hennepin County,Minnesota. "Governing Body"means the Board of Commissioners of the Authority. "HRA Act" means the Minnesota Municipal Housing and Redevelopment Act, Minnesota Statutes, Sections 469.001 through 469.047,both inclusive. "Land Use Regulations"tions"means all federal,state and local laws, rules, regulations,ordinances and plans relating to or governing the use or development of land in the Project Area, including but not limited to environmental, platting, zoning and building code laws,regulations and ordinances. "Project Area"means the geographic area of Redevelopment Project Area No.6. "Public Costs" means the costs of land acquisition, public and site improvements, repayment of debt service on tax increment bonds, and other eligible costs as set forth in the Redevelopment Plan and Tax Increment Financing Plan(s). "Redevelopment Plan"means the Redevelopment Plan for the Project Area. "State"means the State of Minnesota. "TIF Act"means Minnesota Statutes,Sections 469.174 through 469.1799,all inclusive. "TIF District"means any tax increment financing district presently established or to be established in the future in the Project Area. "TIF Plan"means the respective tax increment financing plan for each TIF district located within the Project Area. SPRINGSTED Page 1 Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota Section B Statutory Authorization The HRA Act authorizes the Authority to exercise all the powers relating to a housing and redevelopment authority granted under Minnesota Statutes,Sections 469.001 to 469.047,or other law. It is the intention of the Governing Body, notwithstanding the enumeration of specific goals and objectives in the Redevelopment Plan,that the Authority shall have and enjoy with respect to the Project Area the full range of powers and duties conferred upon the Authority pursuant to the HRA Act,the TIF Act, municipal housing and redevelopment authority laws,and such other legal authority as the Authority may have or enjoy from time to time. Section C Statement of Need and Public Purpose The Authority finds that there is a need for redevelopment within the City and the Project Area in order to provide employment and housing opportunities,to improve the local tax base,and to improve the general economy of the City and the State. The economic security of the people in the City depends upon proper development of property that meets any one of a number of conditions,including properties whose values are too low to pay for the public services required or rendered and properties whose lack of use or improper use has resulted in stagnant or unproductive land that could otherwise contribute to the public health,safety,and welfare. The Authority finds that in many cases such property cannot be developed without public participation and assistance in various forms including property acquisition and/or write-down,proper planning,the financing of development costs associated with clearance, grading and soils correction, and the making of various other public and private improvements necessary for development. In cases where the development of property cannot be done by private enterprise alone,the Authority believes it to be in the public interest to consider the exercise of its powers,to advance and spend public money,and to provide the means and impetus for such development. The Authority finds that in certain cases property within the Project Area would or may not be available for development without the specific financial aid to be sought, that the Redevelopment Plan will afford maximum opportunity, consistent with the needs of the City as a whole, for the development of the Project Area by private enterprise,and that the Redevelopment Plan conforms to the general plan for the development of the City as a whole. The Authority further finds that the Project is a"redevelopment project'within the meaning of Minnesota Statutes, Section 469.002,subd.14 of the HRA Act. Section D Statement of Objectives The Authority seeks to achieve one or more of the following objectives with respect to the Project Area, as the Authority may deem appropriate and necessary. (1) To promote and secure the prompt development of property within the Project Area,such property which is not now in its most productive use,in a manner consistent with the Comprehensive Plan of the City,thus realizing Comprehensive Plan,land use,and tax base goals. (2) To assist development in the Project Area through the acquisition or write-down of certain interests in property which is not now in productive use or in its highest and best use,to make or defray the cost of soil corrections or site improvements on said property,and to construct or reimburse for the construction of public improvements and other facilities on or for the benefit of said property, thereby promoting and securing the development of other land within the Project Area. (3) To secure the increase of industrial and commercial property subject to taxation within the Project Area. SPRINGSTED Page 2 Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota (4) To promote and secure additional employment opportunities within the City and to prevent the loss of existing employment opportunities,thereby preventing the loss of valuable human resources. (5) To provide funding for an ongoing development strategy and to prioritize the use of available resources. (6) To implement and revise from time to time, as may be deemed necessary or desirable, a consolidated and unified Redevelopment Plan and to finance the associated development costs on an area-wide basis. (7) To employ any of the powers of the Authority for the benefit of the Project Area in such cases and upon such terms as the Authority may deem appropriate. (8) To construct or acquire facilities deemed desirable for the development of the Project Area. Section E Boundaries of the Project Area The property within the City which constitutes the Project Area includes the property as illustrated on the map attached as Exhibit I. The City reserves the right to expand the boundaries of the Project Area in the future. Section F Property Acquisition The Authority may acquire property, or appropriate interest therein,within the Project Area as it deems necessary or desirable to assist in the implementation of the Redevelopment Plan. Section G Payment of Public Costs It is anticipated that the Public Costs of the Project Area will be paid primarily from tax increments or proceeds of tax increment bonds. Such costs are identified in the TIF Plan(s)for the corresponding TIF District(s) located within the Project Area. The Authority reserves the right to use other sources of revenue legally applicable to the Project Area to pay for such Public Costs including,but not limited to,special assessments,federal or state funds,and investment income. Section H Environmental Controls; Land Use Regulations All authority actions, public improvements and private development shall be carried out in a manner consistent with existing environmental controls and all applicable Land Use Regulations. Section I Park and Open Space to be Created Park and open space created within the Project Area will be done so in accordance with the zoning and platting ordinances of the City. SPRINGSTED Page 3 Housing and Redevelopment Authority in and for the City of Eden Prairie, Minnesota Section J Property Acquisition and Proposed Reuse The Redevelopment Plan contemplates that the Authority may acquire property and reconvey the same to another entity. Prior to formal consideration of the acquisition of any property,the Governing Body will require the execution of a binding development agreement with respect thereto and evidence that tax increments or other funds will be available to repay the Public Costs associated with the proposed acquisition. It is the intent of the Authority to negotiate the acquisition of property whenever possible. Appropriate restrictions regarding the reuse and redevelopment of property shall be incorporated into any development agreement to which the Authority is a party. Section K Administration and Maintenance Maintenance and operation of the Project Area will be the responsibility of the Community Development Director who shall serve as administrator of the Project Area. Each year the administrator will submit to the Governing Body the maintenance and operation budget for the following year. The administrator will administer the Redevelopment Plan pursuant to the provisions of the HRA Act; provided, however, that such powers may only be exercised at the direction of the Governing Body. No action taken by the administrator pursuant to the above-mentioned powers shall be effective without authorization by the Governing Body. Section L Relocation Any person or business that is displaced as a result of the Redevelopment Plan will be relocated in accordance with the provisions of the HRA Act and other applicable state law. Section M Amendments The Authority reserves the right to alter and amend the Redevelopment Plan subject to the provisions of state law regulating such action. SPRINGSTED Page 1 Exhibit Map of Redevelopment Project Area No.6 w roject re 6 3T ml \,W MIN E \0 M MEN N, I IINITE0 PROPERTIES June 29,2006 Ms.Mikaela Huot Springsted, Inc 380 Jackson Street, Suite 300 St.Paul, MN 55101-2887 RE: 6609 Flying Cloud Drive Eden Prairie,MN Dear Ms.Huot: United Properties has submitted a TIF application to the City of Eden Prairie requesting TIF support in the amount of$1,044,244. United Properties recently demolished an obsolescent structure that had been formally determined to be blighted. The decision to demolish was made by United Properties because we had no interest by prospective tenants in the existing building because it had an inflexible space plan due to multiple phased expansions with a lot of structural bearing walls, various ceiling heights, a partial basement level and older architectural design,in addition to asbestos materials throughout the older structure_ United Properties decided to demolish the obsolescent structure and replace it with a new single-story office building that would be more attractive to current tenants in the marketplace. The decision to construct a one-story office building is also dictated by the marketplace_ The site does not have freeway visibility and is surrounded by similar one-story office and industrial properties. The marketplace will only pay a rent that supports one-story construction,which is less than for multi-story buildings. United Properties anticipates starting construction in September 2007 on a new one-story speculative office building containing 91,000 square feet. The costs to construct this project are too high due to unusual land costs,including demolition of the existing blighted building, asbestos abatement,and extensive site work including grading and removal of excess fill,retaining wall and stormwater pond construction. Obtaining TIF support to offset these unusual land costs will help make the project financially feasible and put it on an equal playing field with competitive properties. The project is not feasible without this assistance. The following is a cost breakdown for the amount of the TIF request: Demolition and Asbestos $728,204 Removal Earth Work(excess fill removal) $141,300 Retaining Wall $86,040 Stormwater Ponds $47,500 TIF Support Fee $16,200 Related Engineering Fees $25,000 Total $1,044,244 3500 American Blvd.W.Minneapolis.MN 55431 • 952.831.1000 0 fax 952.8918206 www uproperties.com Ms.Mikaela Huot June 29,2006 Page 2 Please call me if you have any questions. We respectfully request approval by the City of Eden Prairie for tax increment financing in the amount of$1,044,244. Very truly yours, L'�-.`C Dale J. Glowa Senior Vice President Development DJG/jlk I CITY COUNCIL AGENDA DATE: September 5, 2006 SECTION: Public Hearings DEPARTMENT/DIVISION: ITEM DESCRIPTION: ITEM NO.: VIII.B. Community Superior Office Center Development/Planning Janet Jeremiah Michael Franzen Requested Action Move to: • Close the Public Hearing; and • Adopt the Resolution for Guide Plan Change from Industrial to Office on 10.36 acres; and • Adopt the Resolution for Planned Unit Development Concept Review on 10.36 acres; and • Approve 1st Reading of the Ordinance for Planned Unit Development District Review and Zoning District Change from I-2 to Office on 10.36 acres; and • Adopt the Resolution for Preliminary Plat on 10.36 acres into one lot; and • Direct Staff to prepare a Development Agreement incorporating Staff and Board recommendations and Council conditions. • Approve and Authorize Issuance of a Grading Permit for Superior Office, subject to release by the City Engineer upon determination that the final contract documents conform to plans stamp dated September 5, as approved by the City Council. Synopsis This is a continued item from the August 1 2006 City Council meeting. g h' g The Comprehensive Guide Plan shows this 10.36 acre site for industrial use.The area surrounding the site is a mix of office and industrial uses.An office use of the site would be compatible with the uses in the area. This site is also part of the Golden Triangle Study. That study suggested a flex use or a 75%minimum office use. The site plan for the 93,000 square foot building conforms to the requirements for the office zoning district for setbacks, base area, floor area, and parking. Background Information The 120-Day Review Period Expires on October 20, 2006. Planning Commission Recommendation The Planning Commission Voted 5-2 to recommend approval of the project at the July 24, 2006 meeting with a condition that the plans use more rainwater gardens-infiltration basins.The Commissioners voting against the project indicated the architecture should be more detailed and that industrial should be retained as a land use to help balance traffic. The plans have not been revised to include rainwater gardens. Attachments 1. Resolution-Amending Comp Plan 2. Resolution-PUD Concept 3. Resolution-Preliminary Plat 4. Staff Report 5. Location Map 6. Land Use &Zoning Map 7. Planning Commission Minutes OFFICE SUPERIOR OF E CENTER C CITY OF EDEN PRAIRIE HENNEPIN COUNTY,MINNESOTA RESOLUTION NO. 2006- A RESOLUTION AMENDING THE COMPREHENSIVE MUNICIPAL PLAN WHEREAS,the City of Eden Prairie has prepared and adopted the Comprehensive Municipal Plan("Plan"); and WHEREAS,the Plan has been submitted to the Metropolitan Council for review and comment; and WHEREAS,the proposal of Superior Office Center, by United Properties is for a 93,000 square foot office building; NOW, THEREFORE,BE IT RESOLVED that the City Council of the City of Eden Prairie,Minnesota, hereby adopts the amendment of the Plan from Industrial to Office subject to Metropolitan Council approval as follows: ADOPTED by the City Council of the City of Eden Prairie this 5t' day of September, 2006. Nancy Tyra-Lukens, Mayor ATTEST: Kathleen Porta, City Clerk SUPERIOR OFFICE CENTER CITY OF EDEN PRAIRIE HENNEPIN COUNTY,MINNESOTA RESOLUTION NO.2006- A RESOLUTION APPROVING THE PLANNED UNIT DEVELOPMENT CONCEPT OF SUPERIOR OFFICE CENTER FOR UNITED PROPERTIES WHEREAS,the City of Eden Prairie has by virtue of City Code provided for the Planned Unit Development(PUD) Concept of certain areas located within the City; and WHEREAS, the Planning Commission did,conduct a public hearing on July 24,2006, on Superior Office Center by United Properties and considered their request for approval of the PUD Concept plan and recommended approval of the request to the City Council; and WHEREAS,the City Council did consider the request on September 5, 2006. NOW,THEREFORE,BE IT RESOLVED by the City Council of Eden Prairie, Minnesota, as follows: 1. Superior Office Center, in Hennepin County,Minnesota legally described as outlined in Exhibit A, is attached hereto and made a part hereof. 2. That the City Council does grant PUD Concept approval as outlined in the plans stamp dated September 5, 2006. 3. That the PUD Concept meets the recommendations of the Planning Commission July 24,2006. ADOPTED by the City Council of the City of Eden Prairie this 5 day of September, 2006. Nancy Tyra-Lukens, Mayor ATTEST: Kathleen A. Porta, City Clerk EXHIBIT A PUD Concept- Legal Description: Existing Legal Description: Outlot A, Aqua Addition, Hennepin County, Minnesota To Be Platted: Lot 1 Block 1 Superior Office Center, Hennepin County, Minnesota SUPERIOR OFFICE CENTER CITY OF EDEN PRAIRIE HENNEPIN COUNTY,MINNESOTA RESOLUTION NO.2006- RESOLUTION APPROVING THE PRELIMINARY PLAT OF SUPERIOR OFFICE CENTER FOR UNITED PROPERTIES BE IT RESOLVED, by the Eden Prairie City Council as follows: That the preliminary plat of Superior Office Center for United Properties stamp dated September 5, 2006, and consisting of 10.36 acres into one lot, a copy of which is on file at the City Hall, is found to be in conformance with the provisions of the Eden Prairie Zoning and Platting ordinances, and amendments thereto, and is herein approved. ADOPTED by the Eden Prairie City Council on the 5 h day of September, 2006. Nancy Tyra-Lukens,Mayor ATTEST: Kathleen Porta, City Clerk STAFF REPORT TO: Planning Commission FROM: Michael D.Franzen, City Planner DATE: July 21, 2006 PROJECT: Superior Office Building LOCATION: Flying Cloud Drive and Shady Oak Road APPLICANT United Properties OWNERS: United Properties 120 DAY REVIEW: Expires October 21, 2006 REQUEST: 1. Comprehensive Guide Plan Change from Industrial to Office on 10.36 acres 2. Planned Unit Development Concept Amendment Review on 10.36 acres 3. Planned Unit Development District Review with waivers on 10.36 acres 4. Zoning District Change from I-5 to Office on 10.36 acres 5. Site Plan Review on 10.36 acres 6. Preliminary Plat of 10.36 acres into one lot Staff Report—Superior Office Building July 24,2006 Page 2 BACKGROUND In October 2005 the City approved a concept plan for a 91,000 square foot office building on this site. GUIDE PLAN CHANGE The Comprehensive Guide Plan shows this 10.36 acre site for industrial use. The area surrounding the site is a mix of office and industrial uses.An office use of the site would be compatible with the uses in the area. This site is also part of the Golden Triangle Study. That study suggested a flex use or a 75%minimum office use. SITE PLAN The site plan for the 93,000 square foot building conforms to the requirements for the office zoning district for setbacks, base area, floor area, and parking. DRAINAGE All storm water will be treated to NURP standards. UTILITES The buildings will be connected to City sewer and water. LANDSCAPING The amount of landscaping required is based on the square footage and tree replacement. Landscaping based on building square footage is 290 inches. There are 71 diameter inches of significant trees.A total of 71 inches will be lost due to construction. The required tree replacement is 94 inches. The landscape plan meets the landscaping and tree replacement requirements. ARCHITECTURE The building conforms to the exterior material requirements for office zoning district for 75% face brick, glass, or natural stone. STAFF RECOMMENDATIONS Recommend approval of the following request: Staff Report—Superior Office Building July 24,2006 Page 3 • Guide Plan Change from Industrial to Office on 10.36 acres • Planned Unit Development Concept Review on 10.36 acres. • Planned Unit Development District Review on 10.36 acres. • Zoning District Change from I-2 to Office on 10.36 acres • Preliminary Plat of 10.36 acres into 1 lot • Site Plan Review on 10.36 acres. This is based on plans stamped dated July 21, 2006 and the following conditions: 1. Prior to City Council Review,the proponent shall: 2. Prior to release of the final plat,the proponent shall submit detailed storm water runoff, utility, and erosion control plans for review and approval by the City Engineer and Watershed District. 3. Prior to grading permit issuance,the proponent shall: A. Notify the City and Watershed District 48 hours in advance of grading. B. Install erosion control at the grading limits. 4. Prior to building permit issuance for the property,the proponent shall: A. Provide a landscaping/tree replacement surety equivalent to 150%of the cost of the landscaping/tree replacement plan for 384 inches. B. Review the plans with the Fire Marshal C. Provide a rooftop mechanical equipment screening plan for existing and proposed units. Area Location Map - Superior Office Center Address: 6509 Flying Cloud Drive Crosstown Circle Highway SITE Hamilton Road Flying Cloud Drive 1 r� Shady Oak Road ~� \ No Scale Guide Plan Map Superior Office Center 5509 Flying Cloud Drive, Eden Prairie, Minnesota ;r 1 Crosstown Circle s f 3 z 'jVj1 S e Highway 212 i i Flying Cloud Drive Hamilton Road i Z 1 k f r > Shady Oak Road 1 i i ,t f t t t f i 'It i Low Density Residential 0-2,5 UnitsfAcre Neighborhood Commercial Principal Arterial �Low Densityipublic!Open Space Community Commercial —w—A Minor Arterial f f� l,4edium Density residential 2.5-10 Units/Acre Regional Commercial --W—B lAinorArteriai traUivm Density Residential/Office ParPJOpen Space Major Collector r High Density Residential 40-40 UnitsiAcre PubliclQuasi-Public Minor Collector Office Church/Cemetery Officelindustriai Open Water cA'rV.npp« A W-1e.133 t>7� :)ATE:RtV-dat,9T-0E �f�d officeipubiicropan space {—�Right-Of 1>�ay Industrial F latropolitan Urban Service line(MUSA) Creeks, f Zoning Maps Superior Office Center 6509 Flying Cloud Drive, Eden Prairie, Minnesota Crosstown Circle Highway 212 ,. fT s =� Flying Cloud Drive Hamilton Road ' i A"I�a� � 46 _m k boa y zaa � 3�i Fr Shady Oak Road Rural one Family-10 acre tin Highway Commercial Shoreland Management Classifications Rl-44 One Family-44,000 sf.min. Regional Ser0ceCommercat l Natural.Environment Waters RI-22 One Fam3y-22,,000 sf min, Regional Commercial E0 Recreational Development Platers � R.1-13.5 one Family-13,500 at min. Industrial Park-2Acre Min. General Development Waters(Greeks Only) Imo?R1-9.5 One Family-9,50-3 at min ',�'`- tndusthal Park-5 Acre Min. 100- Year Pioodptatn RM-6.5 Multi-Family-6.7 U:P_A,max. EM General Industrial•1 Arse t1in.�i h eay 4312 West of Couniy Road 14 is proposed,not canstnided at this time. RPA-2.5 Multi-Family-I 7.4 U.P.A.max. Pabllc Up dak+p through{3:d;aanceY03.20z'15 Ord nine k..4 2001:(BR Addaion)approved,bU#no:c,h0.M pn l^fis map.edtEon �Office v"ater Dale:June 24,205 ► i ` Neighborhood Commercial Right-of-klty Community Commercial Chanhassen City limits APPROVED MINUTES EDEN PRAIRIE PLANNING COMMISSION MONDAY,JULY 24,2006 7:00 P.M., CITY CENTER Council Chambers 8080 Mitchell Road BOARD MEMBERS: Jon Duckstad, John Kirk, Vicki Koenig, Jerry Pitzrick, Frank Powell,Peter Rocheford, Fred Seymour,Ray Stoelting,Jon Stoltz STAFF MEMBERS: Stu Fox,Manager of Parks and Natural Resources Al Gray, City Engineer Mike Franzen, City Planner Julie Krull, Recording Secretary I. PLEDGE OF ALLEGIANCE—ROLL CALL Chair Stoelting called the meeting to order at 7:00 p.m. Absent: Kirk, and Rocheford. IL APPROVAL OF AGENDA MOTION by Koenig, seconded by Seymour,to approve the agenda. Motion carried 7-0. III. MINUTES PLANNING COMMISSION MEETING HELD ON JUNE 19,2006 MOTION by Koenig, seconded by Seymour,to approve the minutes. Motion carried 5-0. Duckstad and Pitzrick abstained. IV. PUBLIC MEETING A. THREE RIVERS PARK DISTRICT OFF LEASH DOG PARK AT BRYANT LAKE REGIONAL PARK by Alex Meyer,Three Rivers Park District. Three Rivers Park District wants to construct a fenced off leash dog park area and a parking lot at Bryant Lake Regional Park. This is a public meeting for presentation by Three Rivers and for public comment. Alex Meyer,of the Three Rivers District, presented the proposal. He stated that they are proposing to construct an off leash dog park and a 24 car parking lot. He Planning Commission Minutes July 24, 2006 Page 2 utilized the overhead projector to illustrate the proposal. He pointed out that this area was once the old Hennepin Technical College Equestrian Area. Mr. Meyer stated that this area is approximately 9.73 acres and that they are planning on constructing a 5'1"fence surrounding the area. Within this area,permit holders would have the ability to take their dogs off their leashes. The cost of the permit would be$30 annually. He also pointed out that the entry way would be double gated. Some of the other amenities in the area would include picnic tables, a feces disposal station,trash receptacles, and a unisex vault latrine. Mr. Meyer stated that Three Rivers Park District also operates existing dog off-leash exercise areas at Crow Hassan Park Reserve, Elm Creek Park Reserve, Cleary Lake Regional Park and Lake Sara Regional Park. New construction areas will also occur at Clifton E. French Park and Carver Park Reserve in 2006. Powell asked Mr.Meyer where the children's playground area would be located. Mr. Meyer stated that it would be located right across the picnic pavilion area. He illustrated this using the overhead projector. Pitzrick asked what height the fence would be along the roadway. Mr. Meyer stated that the roadway is sitting away from the park and would be about 20' higher than the area. Stoelting asked Franzen to review the staff report. Franzen stated that the Staff recommends approval of the project based on recommendations listed on page one of the staff report. Stoelting opened the meeting up for public input. Scott Connell, of 11732 Boulder Bay Road, stated that he has lived in this area for a very long time and he is opposed to this park. He believes that it is not a prudent expenditure of tax money and believes the run-off that goes into Nine Mile Creek is pollution causing. He also stated that there is the concern of visual pollution;that there would be no way to visually screen this area from the road. Mr. Connell is also concerned with who will be policing the area for people who are utilizing the park without permits. Libby Heargrove, of 12640 Sunnybrook Road, pointed out that she has lived here since 1962. She stated that she is a representative of a group of residents founded by the City in 2002 to find an area to form an off-leash dog park. She pointed out that in 2004 they found a 1 acre park,which is Flying Cloud She stated that even though this is a nice area for an off-leash dog park it is quite small and in the winter time this area is also shared by cross country skiers. She feels that if the new park was granted for the City it would be a wonderful gift for dog owners. Cheryl Loose, of 12623 Sunnybrook Road, stated that she has been a resident of Eden Prairie for 27 years. She also stated that she is a permit user of the off-leash park at Flying Cloud. Ms. Loose pointed out that across the street from the Planning Commission Minutes July 24, 2006 Page 3 proposed park are large homes that are being built and given the fact that a dog park could be across the street from these grand homes it is not affecting the establishment process. She also stated that she has received over 1600 signatures of residents that were in favor of the dog park. Powell asked her what her experience is with people that are not picking up after their dogs. She stated that there are a few people that do not pick up after their dogs but that can be typical if it is in a off-leash park or just taking the dog for a walk. Robert Withers, of 6295 Chasewood Drive, stated that he lives in a surrounding neighborhood of the proposed park. He stated that he is concerned with the storm water run-off of fecal matter. He feels that the City and Three Rivers Park District should re-evaluate this project and the use of the tax-payers money. He also stated that it is not possible to burm this area off and that is could have a visual impact on the neighborhood. His others concerns were the dogs barking and questioned the hours of the park, people not paying for permits and utilizing the park, and parking in surrounding neighborhoods versus the parking lot. Trent Mahr, of 6385 Beach Road, stated that he is a representative of the International School of Minnesota. He stated that their position of this project is neutral but he does have a question. He would like to know if the path connecting Rowland Road and the school will be eliminated and asked that if the path was not blocked off in that area,would there be a roll-off area onto the school property. Stewart Stender, of 12221 Chadwick Lane, stated that he wanted Mr.Meyer to address the issues of his letter that was included with the packet. These issues include trees and landscaping, hours of operation of the park,run-off issues, parking, and user permits. Catherine Levine, of 12213 Orchard, stated that she is the closest house to the proposed park. She is concerned with security and kids in the area. Greg Bently, of 11636 Roseberry Road, does not understand why the City is considering building this park so close to the other park at Flying Cloud Dog Park. He pointed out that they are only one mile away from each other. Resident at 7978 Island Road, stated that he is not close to the proposed area but is still in favor of the park and believes that this would be a tremendous asset for the City. Stoelting summarized the issues as follows: 1. Financial issues—is there a demand for another park since there is one a mile away from the proposed park. Is it a good investment for the Park District. 2. Is there a pollution issue, whether it be visual, or the issue of fecal matter. 3. The issue of water run-off. 4. What types of visual screening would be used. Planning Commission Minutes July 24, 2006 Page 4 5. Hours of operation for the park. 6. Is the parking lot area large enough to accommodate the users of the park. 7. Will this project cut off the path to the school or have impact on the school. 8. Address the letter submitted by Mr. Stender. Stoelting asked Mr. Meyer to address some of these issues. Mr. Meyer stated that this land was previously used as a horse farm. It was taken out because in the winter the trucks that would haul the manure could not make it back into this area,therefore the manure would have to be stored all winter long, which caused some pollution and run-off issues. He pointed out that this problem would not exist with the dog park because the issue of manure would not exist because there would not be the quantity that existed with the horse farm. They would be able to maintain it in the winter months. He also stated that if the feces were not being picked up, post cards could be mailed out to all permit holders to address this issue. Mr.Meyer also said that the user permit is enforced by the Park Police and that they will be patrolling the area. He also addressed the issue of road access to the International School of Minnesota and stated that the paved portion would be left open but a gate could be set up to hinder people from going onto this private property. Tom McDowell, Director for Programs and Facilities for Three Rivers Parks, addressed some of the issues of the new proposed dog park. He stated that this project has been in the works for a very long time and pointed out that dog ownership in Hennepin County is 37 percent and homeowners are requesting more of these areas for their pets. In regards to the issue of storm water run-off, he said that each person using the park must pick up after their dogs. They have found that dog owners are in much more of compliance to this rule than trail users. He also said that they will be monitoring the water run-off in this area. In regards to fencing, he pointed out that they will be using a woven wire fence which would make it less visible. He said that the vegetation is the same,both inside and outside of the fence. He pointed out that the only visible aspect would be the wooden posts on the fence and the parking lot. Mr.McDowell stated that the hours of operation for the park would be 6 a.m. to sunset. Stoelting asked Mr. McDowell to address the issue of trees. Mr. McDowell stated that the Three Rivers Park District Forester will supply plants and shrubs for screening. He also said that they will modify the landscape plans to comply with the City, if need be. Stoltz made the comment that he works close to Flying Cloud dog park and has not seen a lot of people in the area and therefore does not see this as a concern. He did question why the proposed park is so close to this park. He also asked what would happen to someone utilizing the park without a permit. Mr. McDowell stated that they would initially warn the individual and if it happened again,they would ticket them. Fox stated that the reason that these two areas are so close together is that there was no other area that offered the acreage that this area does. He stated that off-leash parks are becoming more popular for the Planning Commission Minutes July 24, 2006 Page 5 residents of Eden Prairie, hence an area with more acreage. Fox pointed out that it was just a matter of chance that they happened to be so close to each other. Stoelting asked Mr. McDowell to show where the leashed trail would hook up to the off-leashed area. Mr. McDowell used the overhead projector to show where they would connect. He also showed additional areas of parking in the park if the 24 unit area were to become full. Mr.McDowell pointed out that this project is not funded by the City but rather by Three Rivers Park District. Powell asked if there would be any lights in this area. Mr. McDowell stated that there would not be any at this time. Public Meeting. Motion MOTION b Powell, seconded b Koenig,to close the Pub c Meet g Y Y g carried 7-0. MOTION Koenig, seconded by Stoltz,to approve the plans by Three Rivers Park district for an off leash dog park based on plans stamped dated July 12, 2006, and the staff report dated July 21, 2006. Motion carried 6-0. Seymour abstained. Stoelting asked Franzen what the next step for this proposal would be. Franzen said that on August 7t', 2006, it would go before the Parks commission Meeting and then from there it would go to the Council Meeting. V. INFORMATIONAL MEETING VI. PUBLIC HEARINGS A. VARIANCE#2006-08 by Michael and Kelly Beck. Request: To permit a deck addition 17' from the front lot line. City code requires a minimum 30' front yard setback. Location is at 8969 Knollwood Drive. Kelly Beck,the resident at 8969 Knollwood Drive, presented the proposal. She stated that she and her husband had purchased their current home in 2003. She stated that since then, they have made many improvements to their home and also wanted to add a deck onto their home. Mrs.Beck pointed out that they do have a fence in their back yard along with four trees separating their home from their neighbors and Cumberland Road. She pointed out that the back of their house is actually their front yard and that is the reason for the request tonight. She stated that they built the deck behind the pine trees in the backyard and did not know at the time that it was actually the front yard. She stated that if the deck had been built on the side of the home it would have overlooked the neighbors yard. Stoelting asked Franzen to review the staff report. Franzen stated that at the time this home was built, Centex had built a cluster of these homes, including this one, on smaller lots,which doesn't leave much room for a larger deck on the lot. This Planning Commission Minutes July 24,2006 Page 6 particular lot is a 7000 sq. ft. lot with a double frontage. If the Commission is to approve this variance,the City would like to make sure that the deck complies with the Building Code requirements. Stoelting opened the meeting up for public input. Beti Jo Aichner, of 8965 Knollwood Drive, said that she lives in the home that is adjacent to this proposal. She also stated that she and her husband approve of the plans for the deck. She said that the deck is not visible to them unless they look out of their two-story windows. Seymour asked the Staff to clarify if there was a small deck built on this home in 1998. Franzen stated that there was a small deck built onto the home but it was torn down and was unsure when that took place. Seymour asked if they applied for a permit in 2004 and if so,was it denied. Franzen confirmed that they did apply for a permit and it was denied because the deck did not conform to the 30' yard setback. Powell asked if the 4ft. deck is still on the house coming down to the new deck. Mrs. Beck confirmed that it was. Stoltz stated that he is concerned that the residents went ahead with the project after their permit was denied. He asked the project proponent if she asked her homeowner's association for their approval for this project. Mrs. Beck stated that they did have their association's approval. Stoltz pointed out that the By-Laws would state that they would need approval from the City. Mrs.Beck said that they were under the understanding that if it was a free-standing deck then they would not need a permit. She stated that is was all a misunderstanding on their part. Powell asked Franzen if the stairway between two decks is a connection. Franzen pointed out that if a deck is built to a house it requires footings. Powell stated that the only thing that attached this deck to the house is the stairway. Koenig asked if the City had given variance requests to other homes in the neighborhood. Franzen stated that he was not aware of variances on other lots. Powell stated that in the future the City should consider a change to this type of variance request and approval should be made to apply a reasonable size deck to a residence. Franzen stated that all of the lots in the neighborhood should be looked at and determine what policy should be for people applying for variances. Koenig stated that she would be more comfortable looking at variances on an individual basis. Powell asked if the Commission approves this variance, is the City setting precedence for other homeowners to build decks without permits. Seymour asked Planning Commission Minutes July 24, 2006 Page 7 Franzen how many decks were built in the City without permits. Franzen stated that back in the 1970's, numerous decks were built without permits. Stoltz stated that his major concern is that the deck was built after the permit was denied. Seymour stated that it probably is not a reason for denial because if it did come before the Commission prior, it would have been approved. Powell asked if there was a fine for building the deck without a permit. Franzen stated that he is unaware of any fines and that it is up to the Building Department to issue those. MOTION by Duckstad, seconded by Koenig,to close the public hearing. Motion carried 7-0. MOTION by Powell, seconded by Koenig,to approve the deck addition based on plans stamped dated June 27,2006, and the staff report dated July 7, 2006. With an additional comment going on record stating that the Commission does not want to set a precedent with the approval of this variance. Motion carried 7-0. B. VARIANCE#2006-09 by Moiz Akhtar. Request: To permit a shoreland setback variance from 150 feet to 100 feet at the northeast corner of the proposed structure. Location is at 7887 Shamrock Trail. Paul Vogstrom presented the proposal. He stated that in 1993,the City approved a subdivision of 3.6 acres into 3 lots for the previous owner. No home was ever built on lot 3; which made the approval of the variance null and void. The current owners are applying for the same 100 foot setback in order to build a house. The plan is different from the 1993 plan in that the house and garage are larger with a 10 foot setback from the west property line. Stoelting stated that the original plan that was approved in 1993 was for a 30' setback from the west property line. Stoelting asked Franzen to review the staff report. Franzen stated that the request is for setback of 100 feet. He pointed out that the only reason the setback was 30' previously was because that is what the applicant originally proposed. He stated that recommended Commission action is listed on page 3 of the staff report. Pitzrick asked if the neighbors in the backyard have been contacted about the proposed change. Franzen stated that neighbors that are 500 feet from the project have been notified and that there has been no response. Koenig asked the project proponent if he had discussions with the neighbor. Mr. Vogstrom stated he did not. Planning Commission Minutes July 24, 2006 Page 8 Powell asked Franzen if he knew who owned the lot to the north of the property. Franzen stated that the lot goes up to Highway 5. Fox stated that the City owns the outlot to this area surrounding Highway 5. Powell stated that he is concerned by the extending garage and that it could be infringing on the neighbors. Stoelting stated that was not the issue,rather the shoreland setback was the issue. Franzen stated that the Planning Commission can modify the original approval of the variance. Stoelting asked if the 30' side yard setback could be brought up again since the request is being modified. He pointed out that since the variance was made in 1993 and not acted upon, it can be considered a new request. Koenig stated that she was not comfortable with the 10' side yard setback. Mr. Vogstrom stated that it would be aesthetically unappealing to change the outlot of the house. Stoelting opened the meeting up for public input. The neighbor at 7975 Highland, which is located on the east side of this development, stated that he used to be on the homeowners association and pointed out that when the project proponent stated that the neighbors were not concerned with the proposal, it was an untrue statement. He said that because the building would be 10' away from the path it would be unappealing. Koenig asked Mr. Vogstrom if he considered the alternatives that Staff brought forward in their report. Mr. Vogstrom stated that he did not consider the alternatives at this time. He did not feel that it was a problem since the proposal was approved in 1993. Koenig asked if there is a need for more of a setback than what is proposed. Powell said that if the Commission is asking for two 100' setback than we should be able to ask for a 30' setback. Powell asked Mr. Vogstrom if he would be willing to continue the proposal. Mr. Vogstrom said if he had to he would continue the proposal. Koenig asked if he would look into the alternatives that were addressed by Staff. Fox stated, for the record,that the area north of this area is a storm water pond. He illustrated the pond using the overhead projector. Stoelting asked Mr.Vogstrom if he would continue his proposal to the August 28th, 2006, meeting. Mr.Vogstrom stated he would like to request a continuance to the August 28�' Planning Commission Meeting and the October I'City Council Meeting. MOTION by Koenig, seconded by Stoltz,to recommend a continuance to the August 28, 2006 meeting and to revise the development plans according to the Planning Commission Minutes July 24, 2006 Page 9 staff report and other requirements as identified by the Commission.. Motion carried 7-0. C. SUPERIOR OFFICE CENTER by United Properties. Request for: Guide Plan Change from Industrial to Office on 10.36 acres; Planned Unit Development Concept Review on 10.36 acres;Planned Unit Development District Review on 10.36 acres; Zoning District Change from I-2 to Office on 10.36 acres; Preliminary Plat of 10.36 acres into one lot; Site Plan Review on 10.36 acres. The project proponent from United Properties presented the proposal. He gave a brief history of the project. He stated that in October of 2005,the City approved a concept plan for a 91,000 square foot office building on this site. He stated that the Comprehensive Guide Plan shows this 10.36 acre site for industrial use and the area surrounding the site is a mix of office and industrial uses. He pointed out that an office use of the site would be compatible with the uses in the area. He also said that this site is part of the Golden Triangle Study. Stoelting asked Franzen to review the staff report. Franzen stated that Staff recommends approval based on page 3 of the staff report. Stoelting opened the meeting up for public input. There was no input. Powell stated that he is concerned with the industrial aspect of this site. Franzen stated that it is a good idea to mix up office and industrial and that there is real no way to hide the industrial buildings in the City. Powell asked if the industries would be phased out in 20 years. Franzen stated that the City does not have that many industries currently and that the majority of them are high-tech industries. Stoltz said that he would like to see an architectural plan of the building and that he is not happy with the current architectural structure. Steve Irwin, of Architectural Associates, said that the materials for this project do exceed the 75% requirements set by the City. He used the overhead projector to illustrate the architectural structure. The project proponent for United Properties stated that they have done this same design before and that what they are trying to do is create more open space,hence the reason for this plan. Franzen stated that the Commission can ask for the architectural changes as a condition of guide plan approval. Pitzrick stated that in dealing with a one story building, it would be very difficult to be creative. Koenig asked the project proponent if they considered water ponds instead of NURP ponds. The project proponent stated that he did not. Steve Hurber said that the northwest pond is an infiltration pond and a NURP pond. Powell said that rain gardens could be utilized by slopping the parking lots. Koenig stated that Planning Commission Minutes July 24, 2006 Page 10 rain gardens have many other different functions. An example of this would be a picnic area. MOTION by Seymour, seconded by Koenig,to close the public hearing. Motion carried 7-0. MOTION by Koenig, seconded by Stoltz,to approve the Guide Plan Change from Industrial to Office on 10.36 acres;Planned Unit Development Concept Review on 10.36 acres; Planned Unit Development District Review on 10.36 acres; Zoning District Change from 1-2 to Office on 10.36 acres;Preliminary Plat of 10.36 acres into one lot and site Plan Review on 10.36 acres based on plans stamped dated July 21, 2006, and the staff report dated July 21, 2006,with the stipulation that the project proponent and the City look into the issue of water run- off and consider the possibility of rain garden use. Motion carried 5-2. D. AMENDMENT TO CHAPTER 2 AND 3 OF THE GUIDE PLAN DESIGNATING A TOWN CENTER. Franzen stated that there have been changes to the Guide Plan and that Staff recommends approval to Chapter 2 and 3 of the Guide Plan Change regarding a Town Center. Stoelting opened the meeting up for public input. There was no input. MOTION by Powell, seconded by Koenig, to close the public hearing. Motion carried 7-0. MOTION by Powell, seconded by Koenig,to approve the Town Center Amendment to the Comprehensive plans based on the staff report dated July 21, 2006. Motion carried 7-0. VII. PLANNERS' REPORTS A. TAX INCREMENT FINANCING PLAN—SUPERIOR TECH CENTER The TIF proposal is for the office project reviewed earlier in the agenda. Franzen stated that the Planning Commission has to pass a motion that is consistent with the Guide Plan. MOTION by Koenig, seconded by Seymour,to move to find the use of pay-as- you-go Tax Increment Financing for the proposed Superior Tech Center redevelopment project consistent with the goals of the City's Comprehensive Plan. Motion carried 7-0. VHL 2008 COMPREHENSIVE GUIDE PLAN UPDATE DISCUSSION Planning Commission Minutes July 24, 2006 Page 11 A. Housing and Land Use Monique MacKenzie presented the Guide Plan Update. She discussed the Plan Update and stated that there were two items on the agenda. 1. Visioning and Objective This references the existing vision statement and references the goals and policies. Examples are the strategic plan for housing and additional task force reports. She pointed out that the Vision Statement influences the Comprehensive Plan in that it guides the City's short and long range planning efforts. She also stated that the Goals and Policies are a detailed expression of a communities aspirations for the future and it can be the heart of the Guide Plan. This plan is striving to preserve Eden Prairie's high quality of life,to deliver high quality public services and to create a positive community. This will be a team approach and everyone will be working together for the betterment of Eden Prairie for future endeavors. Jeff Miller addressed the second item on the agenda,which is Housing. 2. Housing He pointed out some of the steps to this process and the dates they are expected to be completed. 1. Compile housing data and review information(July/Aug) 2. Conduct housing needs assessment(Aug/Sept) 3. Gather community input(Sept/Nov) 4. Draft housing goals(Nov) Mr. Miller stated that the housing project will be concluded in 2008. He also showed numbers for population, and household and employment growth forecasts. He stated that the minimum net density is three units per acre for new development and five units per acre along transit corridors for"developing communities". Mr.Miller also reiterated what affordable housing requirements are. He stated that Eden Prairie's goal for new affordable housing units for 2011- 2020 is 685 units. He said that the affordable housing definition has been changed from households earning 80%of metro median income to 60%; which would be around $150,000 for Eden Prairie. He said the issues that Planning Commission Minutes July 24,2006 Page 12 need to be looked at are; age of houses housing value,physical condition of housing, and ownership vs. rental. The questions that need to be address for the future are: 1. What are housing needs going to be in the future. 2. How to address senior housing needs. 3. How to best connect housing with convenient access to amenities. Koenig stated that she is concerned with too much congestion in one area and affecting character of open areas. She stated she is also concerned with the notion of high rise buildings next to open areas. Pitzrick asked what it means by"vibrant community". Koenig stated a community is vibrant if it has innovation. Koenig also asked how all of these projects will be funded without raising taxes. Ms.MacKenzie said that a trust fund could be set up and have it developed over the next 25 years. She stated the next steps are: 1. PC Work Sessions on July 24,August 28, or September 25. 2. Draft 2030 Housing Plan&Policies—November 3. Community Open House—September or October 4. Housing Focus Group Meetings—September-November IX. MEMBERS REPORTS Koenig asked if someone from the City could talk to developers on Mitchell Road about concrete in the road. She also asked if Staff could form a task force to improve boundaries for wet lands and to educate the public on this issue. Koenig also pointed out that the Natural Resource Workshop was very informative, especially the issue dealing with rain water gardens. She also pointed out that an individual at the workshop stated that NURF ponds are not effective. Stoltz asked if a representative could come and talk to the Commission regarding rain water gardens. X. CONTINUING BUSINESS Pitzrick stated that he would like to have a better understanding for long term plans in Eden Prairie. He stated that he would like more information on the plans for Eden Prairie Road and Dell Road. He also questioned why Prospect Road needs to be put in. Powell said he would also like to know the dollar amount to put in Prospect Road and the dollar figure for lot values. Koenig stated that she would like more information on the new proposed art center. Planning Commission Minutes July 24, 2006 Page 13 Stoelting stated that on July 29�h there will be another tour of the Hennepin village. XI. NEW BUSINESS XII. ADJOURNMENT MOTION by Stoltz, seconded by Seymour,to adjourn the meeting. Motion carried 7-0. There being no further business,the meeting adjourned at 11:40 p.m. CITY COUNCIL AGENDA DATE: September 5, 2006 SECTION: Public Hearings DEPARTMENT/DIVISION: ITEM DESCRIPTION: ITEM NO.: VIII.C. Community Mitchell Crossing Development/Planning Janet Jeremiah Michael Franzen Requested Action Move to: • Close the Public Hearing; and • Adopt the Resolution for Planned Unit Development Concept Review on 3.098 acres; and • Approve 1st Reading of the Ordinance for Planned Unit Development District Review with waivers, and Zoning District Amendment in the Community Commercial Zoning District on 3.098 acres; and • Adopt the Resolution for Preliminary Plat on 3.098 acres into 1 lot and 1 outlot.; and • Direct Staff to prepare a Development Agreement incorporating Staff and Commission recommendations and Council conditions. • Approve and Authorize Issuance of a Grading Permit for Mitchell Crossing, subject to release by the City Engineer upon determination that the final contract documents conform to plans stamp dated September 5, 2006, as approved by the City Council. Synopsis The site is currently guided Community Commercial.The site is zoned Community Commercial In 1986 the City approved a plan called Edenvale Crossings for 34,900 square feet of retail. The plan included a 23 9000 square foot retail center,a 2 story 10 000 square foot office building p q g q rY and a convenience gas store. Residential uses are allowed in commercial buildings if part of a planned unit development in a Community Commercial Zoning District. The proposed plan includes two buildings. Building one is four stories with 7,000square feet of retail on the first floor and 27 units above.Building 2 is four stories and 32 units. Background Information The following waivers are requested through the Planned Unit Development. 1. Floor area ratio from .40 to.58. This waiver has been granted for other projects zoned Community Commercial;Lincoln Parc (1.17—39 units per acre)and Water Tower(1.12—38 units per acre).The density of Mitchell Crossings is 19 units per acre. If consideration is given for 2 acres of open space g p previously dedicated to the City eat of Cochran Road than the floor area is reduced to.36 and the density is reduced to 11.8 units per acre.Twenty seven of the proposed units will be affordable units 2. Front yard parking setback along Mitchell Road from 35 feet to 10 feet. The parking is 40 feet away from the pavement due to the right of way which exceeds the 35 foot minimum green space. 3. Front yard structure setback from 35 feet to 17.5 feet along Cochran Road. The reason for the waiver is to provide a better internal green space. 4. Building height from 40 feet to 56 feet. The height of the building could be reduced by 7 feet by removing the rooftop elements. The architectural features add to the design of the building. The 120-Day Review Period Expires on October 20, 2006. Planning Commission Recommendation The planning Commission voted 7-0 to recommend approval of the project at the August 14, 2006 meeting. Attachments 1. Resolution—PUD Concept 2. Resolution—Preliminary Plat 3. Staff Report 4. Location Map 5. Land Use&Zoning Maps 6. Planning Commission Minutes MITCHELL CROSSING CITY OF EDEN PRAIRIE HENNEPIN COUNTY,MINNESOTA RESOLUTION NO.2006- A RESOLUTION APPROVING THE PLANNED UNIT DEVELOPMENT CONCEPT OF MITCHELL CROSSING FOR HENRY LAZNIARZ WHEREAS,the City of Eden Prairie has by virtue of City Code provided for the Planned Unit Development(PUD)Concept of certain areas located within the City; and WHEREAS, the Planning Commission did conduct a public hearing on August 14, 2006, on Mitchell Crossing by Henry Lazmiarz and considered their request for approval of the PUD Concept plan and recommended approval of the request to the City Council; and WHEREAS,the City Council did consider the request on September 5, 2006. NOW,THEREFORE,BE IT RESOLVED by the City Council of Eden Prairie, Minnesota, as follows: 1. Mitchell Crossing, being in Hennepin County, Minnesota, legally described as outlined in Exhibit A, is attached hereto and made a part hereof. 2. That the City Council does grant PUD Concept approval as outlined in the plans stamp dated September 5, 2006. 3. That the PUD Concept meets the recommendations of the Planning Commission August 14,2006. ADOPTED by the City Council of the City of Eden Prairie this 5th day of September, 2006. Nancy Tyra-Lukens,Mayor ATTEST: Kathleen Porta, City Clerk EXHIBIT A PUD Concept- Legal Description: Parcel 1: Outlot A,Mitchell Crossing 2nd Addition,Hennepin County,Minnesota . Parcel 2: Outlot B, Mitchell Crossing, Hennepin County,Minnesota. Parcel 3: Lot 1,Block 1,Edenvale Recreation Center 2nd addition,Hennepin County,Minnesota,Excepting therefrom,that part of Lot 1,Block 1 lying Southerly of the Easterly extension of the North line of Lot 2,Block 1,the Northerly line of Lot 2,Block 1 extended easterly to a point of intersection with the Easterly line of Lot 2, Block 1, extended Northerly all in Edenvale Recreation Center 2nd addition; And excepting therefrom that part of Lot 1,Block 1,lying Easterly ofthe Northerly extension of the West line of Lot 3,Block 1,and Southerly of a line parallel with and ten(10')feet Northerly of the North line of Lot 3,Block 1,and Westerly of a line parallel with and thirty(30')feet Easterly of the Northerly extension of the West line of Lot 3, Block 1, and Northerly of the north line of Lot 3, Block 1, all in Edenvale Recreation Center 2nd addition; And excepting therefrom that part shown as Parcel 93 on Minnesota Department of Transportation right of way plat number 27-91, filed in the office of the Hennepiin County Recorder,on April 29, 1999, as Document No. 6888395. MITCHELL CROSSING CITY OF EDEN PRAIRIE HENNEPIN COUNTY,MINNESOTA RESOLUTION NO.2006- RESOLUTION APPROVING THE PRELIMINARY PLAT OF MITHCELL CROSSING FOR HENRY LAZNIARZ BE IT RESOLVED,by the Eden Prairie City Council as follows: That the preliminary plat of Mitchell Crossing for Henry Lazniarz stamp dated September 5, 2006, and consisting of 3.098 acres into one lot and one outlot, a copy of which is on file at the City Hall, is found to be in conformance with the provisions of the Eden Prairie Zoning and Platting ordinances, and amendments thereto, and is herein approved. ADOPTED by the Eden Prairie City Council on the 5th day of September, 2006. Nancy Tyra-Lukens,Mayor ATTEST: Kathleen Porta, City Clerk STAFF REPORT TO: Planning Commission FROM: Michael D.Franzen, City Planner DATE: August 11, 2006 PROJECT: Mitchell Crossings LOCATION: East of Mitchell Road and North of Highway 5 APPLICANT Henry Lazniarz OWNER: Mitchell 5 Inc. 120 DAY REVIEW: Expires October 20, 2006 REQUEST: 1. Planned Unit Development Concept Review on 3.098 acres 2. Planned Unit Development District Review with waivers on 3.098 acres 3. Zoning District Change Amendment in the Community Commercial Zoning District on 3.098 acres. 4. Site Plan Review on 3.098 acres 5. Preliminary Plat of 3.098 acres into 1 lot and 1 outlot Staff Report—Mitchell Crossings August 11,2006 Page 2 BACKGROUND The site is currently guided Community Commercial. The site is zoned Community Commercial In 1986 the City approved a plan called Edenvale Crossings for 34,900 square feet of retail.The plan included a 23, 9000 square foot retail center, a 2 story 10,000 square foot office building and a convenience gas store.. PLANNED UNIT DEVELOPMENT Residential uses are allowed in commercial buildings if part of a planned unit development in a Community Commercial Zoning District. The proposed plan includes two buildings. Building one is four stories with 7,OOOsquare feet of retail on the first floor and 27 units above. Building 2 is four stories and 32 units. SITE PLAN The buildings total 79,128 square feet and the floor area ratio is .58.The code permits up to a.40 floor area ratio. The required commercial parking is 42 spaces. The plan shows 53 spaces. The required residential parking is 2 per unit with one enclosed or 118 spaces.The plan shows 112 spaces underground. Six of the commercial parking spacers in excess of the code could be used as residential spaces and the project would meet the 118 space requirement.. PLANNED UNIT DEVELOPMENT WAIVERS The following waivers are requested through the Planned Unit Development. 1. Floor area ratio from .40 to .58. This waiver has been granted for other projects zoned Community Commercial;Lincoln Parc (1.17—39 units per acre)and Water Tower(1.12—38 units per acre). The density of Mitchell Crossings is 19 units per acre. If consideration is given for 2 acres of open space previously dedicated to the City eat of Cochran Road than the floor area is reduced to.36 and the density is reduced to 11.8 units per acre. Twenty seven of the proposed units will be affordable units 2. Front yard parking setback along Mitchell Road from 35 feet to 10 feet. The parking is 40 feet away from the pavement due to the right of way which exceeds the 35 foot minimum green space. 3. Front yard structure setback from 35 feet to 17.5 feet along Cochran Road.The reason for the waiver is to provide a better internal green space. Staff Report—Mitchell Crossings August 11,2006 Page 3 4. Building height from 40 feet to 56 feet. The height of the building could be reduced by 7 feet by removing the rooftop elements. The architectural features add to the design of the building. DRAINAGE All storm water will be treated to NURP standards. The plan also includes a rainwater garden LANDSCAPING The amount of landscaping required is based on the square footage of the buildings or a total of 242 inches. The plan meets this requirement. ARCHITECTURE The project meets the required exterior material requirement for 75%face brick, glass, or natural stone. STAFF RECOMMENDATIONS Recommend approval of the following request: • Planned Unit Development Concept Review on 3.098 acres. • Planned Unit Development District Review with waivers on 3.098 acres. • Zoning District Amendment in the Community Commercial Zoning District on 3.0987 acres. • Site Plan Review on 3.098 acres. • Preliminary Plat of 3.098 acres into 1 lot and 1 outlot. This is based on plans dated August 11, 2006, and the following conditions: l. Prior to release of the final plat,the proponent shall submit detailed storm water runoff, utility, and erosion control plans for review and approval by the City Engineer and Watershed District. 2. Prior to grading permit issuance,the proponent shall: A. Notify the City and Watershed District 48 hours in advance of grading. B. Install erosion control at the grading limits. 3. Prior to building permit issuance for the property,the proponent shall: A. Provide a landscaping/tree replacement surety equivalent to 150%of the cost of the landscaping/tree replacement plan. Staff Report—Mitchell Crossings August 11,2006 Page 4 B. Review the plans with the Fire Marshal C. Submit building materials and colors for review and approval. 4. The following waivers are granted through the PUD for the project: • Floor area ratio from .40 to .58. • Front yard parking setback along Mitchell Road from 35 feet to 10 feet • Front yard structure setback from 35 feet to 17.5 feet along Cochran Road. • Building height from 40 feet to 56 feet. 5. Dedicate outlot A to the City of Eden Prairie. Area Location Map - Mitchell Crossing Address: NE Corner of Mitchell Road and Highway #5 Mitchell Ro777 d oe �- - SITE Martin Dr. Highway#51312 77 No Scale Zoning Map Mitchell Grossing NE Corner of Mitchell Road and Highway #5 Mitchell Road , 1 IT A �_ — C \iT.a\•, lj lj ti x : �F Martin Drive / Highway#5/312 \ ./ ' a� 11 Me \ r � yyMA WE y 10 IRS \., e 1 Rural One Family-10 acre min. tiighvray Commerc al Shoreland Management Classifications n RI-44 One.Fami£y-44,000 sf.min. Regional Service Commercial AI�F. Natural Environment Waters RI-22 One Family-22,000 at min. .Regional Comaterciai Recreational[Development Waters R1-13 a One(amity-13,500 sf min. industrial Park-2 Acre Min, General Development Waters(Greeks Only) RI-9',5 One Family-9,540 sf min. industrial Park-5Acre(,Ain. � 1 Q0- Year Fioodplain RM-6Z Multi-Fam£ty-6.7 U.P.A.max. General Industrial-5 Acre Min-Highway 9312 West of County Road k4 is proposed,not cons':ructed at fts time.. RM-2.5 Multi-Family-37.4 U.P.A.max. Public Up dated through Ordinance#09 2005 Onfnenze*33-2001(8F1 Add tion)approved,but not shown on this map edition Office iAtater Dew June 24,2005 f 1 t ^_ Neighborhood Commercial Right-of-"* N Community commercial ��,?Chanhassen City limits '-� Guide Plan Map Mitchell Grossing NE Corner of Mitchell Road and Highway #5 ri- q � Mitchell Raad \ a r a � Martin Drive f. Highway#5/312 Lmv Density Residential 0-2.5 Units/Acre - Neighborhood Commercial E�Principal Arterial Lmv DensitylPublic10pen Space Community Commercial —A Minor Arterial j Medium Density residential 2.5-10 Units/Acre Regional Commercial -- B M"snorArterial Medium Density Residential/Office Parkiopen space —Major Collector High Density Residential 10-40 Units/Acre Public/Quasi-Public •-•--Y-Minor Collector Office ME Church/Cemetery Offiael€ndustrial Open Water aarearp—dm sa,aa Office/Public+Open Space i�Right-Of-way DATERe1;sedoi-ax•az Industrial - Metropolitan Urban Service Line(MUSA) ............_Creeks APPROVED MINUTES EDEN PRAIRIE PLANNING COMMISSION MONDAY,AUGUST 14,2006 7:00 P.M.,CITY CENTER Council Chambers 8080 Mitchell Road BOARD MEMBERS: Jon Duckstad, John Kirk, Vicki Koenig, Jerry Pitzrick,Frank Powell, Peter Rocheford, Fred Seymour, Ray Stoelting, Jon Stoltz STAFF MEMBERS: Stu Fox, Manager of Parks and Natural Resources Al Gray, City Engineer Mike Franzen, City Planner Julie Krull, Recording Secretary I. PLEDGE OF ALLEGIANCE—ROLL CALL Chair Stoelting called the meeting to order at 7:00 p.m. Absent: Koenig, Rocheford, and Seymour. II. APPROVAL OF AGENDA MOTION by Stoltz, seconded by Kirk,to approve the agenda. Motion carried 6-0. III. MINUTES PLANNING COMMISSION MEETING HELD ON JULY 24,2006 Powell pointed out that on page 3, paragraph 6, in the first sentence if should be"Flying Cloud Dog Park"and not"the other park at Cleary Lake". He also stated that on page 3, paragraph 8, in the first summarized issue, second sentence, it should read,"Is it a good investment for the Park District". The last change Powell had was on page 8, paragraph 7,the fifth sentence should read, "Powell said that if the Commission is asking for a 100' setback than we should be able to ask for a 30' setback. MOTION by Stoltz, seconded by Pitzrick,to approve the minutes. Motion carried 5-0. Kirk abstained. IV. PUBLIC MEETING V. INFORMATIONAL MEETING Planning Commission Minutes August 14, 2006 Page 2 VI. PUBLIC HEARINGS A. OAK CREEK AT HENNEPIN VILLAGE by Hennepin Village Limited Partnership. Request for: Guide Plan Change from Public Open Space to Medium Density Residential on 3.1 acres and from Medium Density Residential to Public Open Space on 3.2 acres;Planned Unit Development Concept Review on 73.7 acres;Planned Unit Development District Review on 73.7 acres;Zoning District Change from Rural to R1-9.5 on 18.74 acres; Zoning District change from Rural to R1-13.5 on 2.0 acres;Preliminary Plat of 73.7 acres into 96 lots and six outlots. The Developer is requesting a continuance to the October 9,2006 Meeting. MOTION by Stoltz, seconded by Kirk,to continue request to the October 9, 2006 meeting. Motion carried 6-0. B. WILLIAM SMALL PROPERTY b Pemtom Land Company. Request for: Y Zoning District Change from Rural to R1-13.5 on 5.01 acres;Preliminary Plat of 5.01 acres into 9 lots and road right-of-way. The Developer is requesting a continuance to the October 9, 2006 meeting. MOTION by Stoltz, seconded by Pitzrick,to continue request to the October 9, 2006 meeting. Motion carried 6-0. C. VARIANCE#2006-10 by Lecy Brothers Homes. Request for: To permit a front yard setback of 35 feet. Location is at 18146 Bearpath Trail. Mr. Mark Lecy presented the proposal. He stated that they are proposing to build this home in Bearpath, but need the variance request to save a mature tree that is located on the property. He pointed out that this variance request is not atypical; the home to the west of this property has a huge oak tree in front of it and the homeowners were granted a variance request in order to save the tree. Stoelting asked Franzen to review the staff report. Franzen stated that a lot of the homes in Bearpath have various setbacks in order to save the old trees in the area. He pointed out that the granting of a variance request such as this one would not be out of character in the Bearpath area. Stoelting opened the meeting up for public input. There was no input. Powell asked if there were comments from the adjacent neighbors. Mr. Lecy said that the neighbors to the west said they supported this project at the Bearpath Planning Commission Minutes August 14,2006 Page 3 Architectural Meeting. Powell asked if the neighbors to the east had any comments. Mr. Lecy stated that he has not heard of anything from the neighbors to the east. Stoelting asked Fox if he approved of the position of the home in relationship to the tree. Fox stated that he does approve of the position of the home in relationship to the tree. He illustrated the position of the tree in relationship to the home using the overhead projector. He also pointed out that regardless of approval of this variance,the oak tree would need to be trimmed. He pointed out that the tree is on a pedestal and he was unsure how much grading would be done with this project,which, in turn, could affect the health of the tree. Mr.Lecy stated that they do not plan on changing the grade of the home. Stoltz asked Fox if the tree would be okay with any type of grading done to it. Fox stated that the tree is in good condition and can tolerate some grading. He pointed out that what can impact the tree is construction vehicles driving over it or supplies being placed on it. Fox said as long as the contractor follows proper procedure,the tree should be fine. MOTION by Powell, seconded by Stoltz,to close the public hearing. Motion carried 6-0. MOTION by Powell, seconded by Stoltz,to approve the front yard setback of 35 feet based on plans stamped dated July 7, 2006, and the staff report dated August 11, 2006. Motion carried 6-0. D. MITCHELL CROSSING by Henry Lazniarz. Request for: Planned Unit Development Concept Review on 3.098 acres;Planned Unit Development District Review on 3.098 acres;Zoning District Amendment in the Community Commercial Zoning District on 3.098 acres; Site Plan review on 3.098 acres;Preliminary Plat of 3.098 acres into one lot and one outlot. Location is east of Mitchell Road and north of Highway 5. Tom Goodrum, representing Henry Lazniarz,presented the proposal. He started out by stating that this has been a vacant piece of property for many years and that their goal is to bring a residential and a commercial site together in this parcel of land. There would also be an open space between the two buildings that could be utilized by the tenants and commercial guests. He illustrated this project using the overhead projector, and showed where all the waivers would be located. He also pointed out where the parking would be located. There is underground parking in both buildings and parking to the east of this project Mr. Goodrum stated that they could proceed with the project without the waivers but that it would be a very tight fit for both residents and commercial visitors. He felt that the waivers would allow for more room in the project. Planning Commission Minutes August 14, 2006 Page 4 Powell asked if the land on the other side of Cochran Road was swamp land and asked if it will be developed in the future. Fox stated that parcel of land is City owned. Powell asked Mr. Goodrum to describe the sidewalk setback. Mr. Goodrum illustrated the sidewalk setback using the overhead projector. He stated that there is 40 feet of unused right of way by Mitchell Road. Stoelting asked Franzen to review the staff report. Franzen stated that the Staff recommends approval based on conditions listed on page 3 and 4 of the staff report. Powell asked if that large of a right of way on this project is common. Gray stated that this is a larger than normal right of way, but that this project was originally a MNDot project,which allowed for more of a right of way. Stoelting opened the meeting up for public input. There was no input. Pitzrick stated that he liked the design of the project and that it put a lot of value into the land. Kirk asked Mr. Goodrum if he had any pictures illustrating the elevation of the project. Mr. Goodrum showed illustrations of the elevation using the overhead projector. He stated that they are asking for more height to the building for architectural appeal. Kirk stated that the request of the sign on the building is of concern. Franzen stated that the project proponent has been informed that Staff will not support the sign on the building. Kirk asked about the selling prospects of the property. Mr. Goodrum stated that the interest in the property has been very positive. Stoeltz asked who would enforce the movement of trucks into the area. Franzen stated that the owner of the building would enforce the movement of trucks into the area and that is should be clearly laid out to the residents and commercial owners. Mr. Goodrum pointed out where the delivery activity would take place and stated that they would be sensitive to the tenants in regards to delivery. Kirk stated that he is concerned about the hours of delivery. Mr. Goodrum stated that delivery would occur in the mornings before the business's open or in the evenings after they close. He also pointed out that there would be an association to address the needs of the residents. Powell asked if the level of the parking lot will be the same level as the parking lot in the gas station across the street. Mr. Goodrum stated that it would be the same level. Stoelting asked Franzen to address the sign issue if it is as the same level. Franzen stated that there would be a very narrow view shed that can be viewed by cars driving by. He pointed out that the retail area would be lower than Mitchell Road. Stoelting asked if the project proponent would have to come back Planning Commission Minutes August 14, 2006 Page 5 for a variance request for signage. Franzen stated yes. Stoelting stated that the approval would be for the four variances presented this evening and asked if Commission members were comfortable with the requests. Kirk stated that he is marginal on the height issue but that the project has other benefits which he would support. MOTION by Pitzrick, seconded by Stoltz,to close the public hearing. Motion carried 6-0. MOTION by Pitzrick, seconded by Stoltz,to approve the Planned Unit Development Concept Review on 3.098 acres;Planned Unit Development District Review on 3.098 acres;Zoning District Amendment in the Community Commercial Zoning District on 3.098 acres;Preliminary Plat of 3.098 acres into one lot and one outlot and Site Plan Review on 3.098 acres based on plans stamped dated August 11, 2006, and the staff reports dated August 11, 2006. Motion carried 6-0. E. MCDONALD'S RESTAURANT by Wilkus Architects. Request for: Planned Unit Development Concept Review on 1.07 acres; Planned Unit Development District Review on 1.07 acres; Zoning District Change from I-2 to Office on 10.36 acres; Site Plan Review on 1.07 acres. Location is east of Highway 212 and north of Prairie Center Drive. Jeff Rapp, of Wilkus Architects, presented the proposal. He stated that what they are proposing is an upgrade of the existing building. They would like to extensively remodel the exterior of the building and place new signage on the building. Stoelting asked Franzen to review the staff report. Franzen stated the staff recommends approval of this project based on page 2 and 3 of the staff report. Stoelting asked Mr.Rapp to illustrate the signage,utilizing the overhead projector. Mr.Rapp illustrated the signage and.pointed out that the reason it appears so large is due to the arch. Stoelting asked Franzen to explain this concept. Franzen stated that they want to add 138' to the sign and pointed out that it measures larger than it looks visually. Stoelting opened the meeting up for public input. A representative from the Wilkus Architects came forward and stated that they want to use this sign as a signature element versus just signage. Stoelting asked Mr. Rapp if the monument sign would be altered. Mr. Rapp said that it would not. Kirk stated that this is a good usage of the signage variance. Planning Commission Minutes August 14, 2006 Page 6 MOTION by Kirk, seconded by Stoltz,to close the public hearing. Motion carried 6-0. MOTION by Kirk, seconded by Stoltz, to approve Planned Unit Development Concept Review on 1.07 acres;Planned Unit Development District Review on 1.07 acres; and Site Plan Review on 1.07 acres based on plans stamped dated august 11,2006, and the staff report dated August 11, 2006. Motion carried 6-0. VII. PLANNERS' REPORTS A. SOUTHWEST METRO BUS GARAGE UPDATE Franzen reported on the update to the Southwest Metro Bus Garage. He stated that the solution is to expand the western side of the building and that no variances are required to do this. He stated that the proposed changes can be addressed by the representatives of the Southwest Metro Bus Garage. A short presentation was made by the representatives. Powell asked the representative if this was to be the final development to this site. The representative stated that is would probably not be the final development to this site. Powell asked if they were concerned with storm water drainage. The representative stated that they were, and hence the large NURF pond on the area to accommodate storm water. He pointed out that if further expansion is considered,then other storm water designs would have to be implemented. MOTION by Stoltz, seconded by Kirk,to approve the revised Southwest Metro plan for a 14,500 square foot enlargement of the existing building. Motion carried 6-0. IX. MEMBERS REPORTS X. CONTINUING BUSINESS XI. NEW BUSINESS XII. ADJOURNMENT MOTION by Stoltz, seconded by Kirk,to adjourn the meeting. Motion carried 6-0. There being no further business,the meeting adjourned at 8:30 p.m. CITY COUNCIL AGENDA DATE: September 5, 2006 SECTION: Public Hearings DEPARTMENT/DIVISION: ITEM DESCRIPTION: ITEM NO.: VIII.D. Community McDonalds Development/Planning Janet Jeremiah Michael Franzen Requested Action Move to: • Close the Public Hearing; and • Adopt the Resolution for Planned Unit Development Concept Review on 1.07 acres; and • Approve 1 st Reading of the Ordinance for Planned Unit Development District Review with waivers, and Zoning Amendment in the Commercial Regional Service Zoning District on 1.07 acres; and • Direct Staff to prepare a Development Agreement incorporating Staff and Commission recommendations and Council conditions. Synopsis McDonalds wants to change the exterior of the building and build new signs. There are three architectural changes. 1. Change in roof line. 2. Creating a continuous metal canopy around the building. 3. Adding new exterior materials;EFIS, stacked stoned,yellow and gold cloth canopies, two gold metal arches. The building meets the code requirement for 75%face brick, glass, or natural stone. Background Information The total allowable sign area for all walls is 1,175 square feet.McDonald's is proposing 314 square feet. The signs on the north south and east elevations conform to city requirements. The sign on the south wall is 238 square feet. The allowable sign area on this wall is 100 feet. This is a waiver from the City code.Based on wall sign transfer and a total proposed sign area that is less than code permits would be a reason to consider the waiver. The 120-Day Review Period Expires on October 20, 2006. Planning Commission Recommendation The Planning Commission voted 7-0 to recommend approval of the project at the August 14, 2006 meeting. Attachments 1. Resolution 2. Staff Report 3. Location Map 4. Land Use&Zoning Maps 5. Planning Commission Minutes McDONALD'S CITY OF EDEN PRAIRIE HENNEPIN COUNTY,MINNESOTA RESOLUTION NO.2006- A RESOLUTION APPROVING THE PLANNED UNIT DEVELOPMENT CONCEPT OF MCDONALD'S FOR WILKUS ARCHITECTS,INC WHEREAS,the City of Eden Prairie has by virtue of City Code provided for the Planned Unit Development(PUD) Concept of certain areas located within the City; and WHEREAS, the Planning Commission did conduct a public hearing on August 14, 2006, on McDonald's by Wilkus Architects, Inc and considered their request for approval of the PUD Concept plan and recommended approval of the request to the City Council;and WHEREAS,the City Council did consider the request on September 5, 2006. NOW,THEREFORE,BE IT RESOLVED by the City Council of Eden Prairie, Minnesota, as follows: 1. McDonald's, being in Hennepin County, Minnesota, legally described as outlined in Exhibit A, is attached hereto and made a part hereof. 2. That the City Council does grant PUD Concept approval as outlined in the plans stamp dated September 5, 2006. 3. That the PUD Concept meets the recommendations of the Planning Commission August 14, 2006. ADOPTED by the City Council of the City of Eden Prairie this 51'day of September, 2006. Nancy Tyra-Lukens, Mayor ATTEST: Kathleen Porta, City Clerk EXHIBIT A PUD Concept- Legal Description: Lot 1, Block 1,Eden Prairie Center 7"'Addition STAFF REPORT TO: Planning Commission FROM: Michael D. Franzen, City Planner DATE: August 11, 2006 PROJECT: McDonalds LOCATION: East of Highway 212 and North of Prairie Center Drive APPLICANT McDonalds OWNER: McDonalds 120 DAY REVIEW: Expires October 20, 2006 REQUEST: 1. Planned Unit Development Concept Review on 1.07 acres. 2. Planned Unit Development District Review with waivers on 1.07 acres. 3. Site Plan Review on 1.07 acres Staff Report—McDonalds August 11,2006 Page 2 BACKGROUND The site is currently guided Regional Commercial. The site is zoned Commercial Regional Service. The existing 4,500 square foot McDonalds was approved by the City in 1990. ARCHITECTURE McDonalds wants to change the exterior of the building and build new signs. There are three architectural changes. 1. Change in roof line. 2. Creating a continuous metal canopy around the building. 3. Adding new exterior materials;EFIS, stacked stoned,yellow and gold cloth canopies, two gold metal arches. The building meets the code requirement for 75%face brick, glass, or natural stone. SIGNS The total allowable sign area for all walls is 1,175 square feet. McDonald's is proposing 314 square feet. The signs on the north south and east elevations conform to city requirements. The sign on the south wall is 238 square feet.The allowable sign area on this wall is 100 feet. This is a waiver from the City code.Based on wall sign transfer and a total proposed sign area that is less than code permits would be a reason to consider the waiver. STAFF RECOMMENDATIONS Recommend approval of the following request: • Planned Unit Development Concept Review on 1.07 acres. • Planned Unit Development District Review with waivers on 1.07 acres. • Site Plan Review on 1.07 acres. This is based on plans dated August 11, 2006, and the following conditions: 1. Prior to building permit issuance for the property,the proponent shall: A. Review the plans with the Fire Marshal B. Submit building materials and colors for review and approval. Staff Report—McDonalds August 11,2006 Page 3 2. The following waivers are granted through the PUD for the project: • Allowable sign area from 100 square feet to 238 square feet. Area Location Map for - McDonalds's Restaurant Address: 598 Prairie Center Drive Regional Center RX. d j/ Hwy#169/Flying Cloud Dr %. r Prairie Center Drive i Crystal View Ln TUN,--.. Zoning Map cDonald's Restaurant 598 Prairie Center Drive, Eden Prairie, Minnesota �F } Regional Center Road Highway 2121Flying Claud Drive Crystal View Lane F4- P y �s 't e m r.. T�a H� Prairie Center Drlve MW AUDI LR Rural One Family-10 acre min C:. NighWay C9mmerG181 Shoreland Management Classifications n RI-44 One Family-44,000 sf.min. Regional Service Commercial 5ZI Natural Environment Waters Rt-22 One Family-22,000 at mfn. Regional Commercial EiB) Recreational Development Waters RI-13,5 One Fatuity-13,500 sf min. l industrial Park-2Acre Min, (Ea'j General Development Waters(Creeks Only) �1��, RI-9-5 One Family 9 500 sf tutu industrial Park-5 Acre Min. E:g 100- Year Fioodpiain RM 6.5 Multi Family,S 7 U PA max General Industrial-5 Acre Min,t gh'`'ay#312 West of County Road#4 is proposed,not constructed at this lima RM-2-5 Multi-Family-17A U.P.A,max, Pub Or lic dated through Ordnance 909-2005 i _ dated #a3.200i(H,i Adtlirion)approved,but not shown an N's map edition Ofrice !Hater Date:June 24,2005 Neighborhood Commercial Right-of-!Nay aE..n -,r a=•'+ r -.a >. �,<-,tea e. i... j Community Commercial _Clianhassen city limits > Guide Plan Map McDonald's Restaurant 598 Prairie Center Drive, Eden Prairie, Minnesota Regional Center Road HWY 212IFIying Cl©ud Drive A Crystal View Lane r / , \ C a ill ill I dl, Prai rie Ce nter Drive r //{ Low Density Residential 0-2,5 Units/Acre Neighborhood Commercial Principal Arterial Low Density/PubliN,Open Space L.,, .. Community Commercial A Minor Arterial a� f Medium Density residential 2.5-10 UnitslAcre Regional Commercial B M inorArterial Medium Density Residential/Office Parr/Open Space Major Collector Nigh Density Residential 10-40 Units/Acre Public/Quasi-Public Minor Collector Office Church/Cemetery Officellndustrial Open Water DATE Ap,o.eCos,1B-os Once/PubliclOpen Space Right-Of-Way onre se�ucn ai ores Industrial — —Metropolitan Urban Service line(MUSA) Creeks APPROVED MINUTES EDEN PRAIRIE PLANNING COMMISSION MONDAY,AUGUST 14,2006 7:00 P.M.,CITY CENTER Council Chambers 8080 Mitchell Road BOARD MEMBERS: Jon Duckstad,John Kirk, Vicki Koenig, Jerry Pitzrick, Frank Powell,Peter Rocheford, Fred Seymour, Ray Stoelting,Jon Stoltz STAFF MEMBERS: Stu Fox, Manager of Parks and Natural Resources Al Gray, City Engineer Mike Franzen, City Planner Julie Krull, Recording Secretary I. PLEDGE OF ALLEGIANCE—ROLL CALL Chair Stoelting called the meeting to order at 7:00 p.m. Absent: Koenig,Rocheford, and Seymour. II. APPROVAL OF AGENDA MOTION by Stoltz, seconded by Kirk,to approve the agenda. Motion carried 6-0. III. MINUTES PLANNING COMMISSION MEETING HELD ON JULY 24,2006 Powell pointed out that on page 3,paragraph 6, in the first sentence if should be"Flying Cloud Dog Park"and not"the other park at Cleary Lake". He also stated that on page 3, paragraph 8, in the first summarized issue, second sentence, it should read,"Is it a good investment for the Park District". The last change Powell had was on page 8,paragraph 7,the fifth sentence should read, "Powell said that if the Commission is asking for a 100' setback than we should be able to ask for a 30' setback. MOTION by Stoltz, seconded by Pitzrick,to approve the minutes. Motion carried 5-0. Kirk abstained. IV. PUBLIC MEETING V. INFORMATIONAL MEETING Planning Commission Minutes August 14, 2006 Page 2 VI. PUBLIC HEARINGS A. , OAK CREEK AT HENNEPIN VILLAGE by Hennepin Village Limited Partnership. Request for: Guide Plan Change from Public Open Space to Medium.Density Residential on 3.1 acres and from Medium Density Residential to Public Open Space on 3.2 acres; Planned Unit Development Concept Review on 73.7 acres;Planned Unit Development District Review on 73.7 acres; Zoning District Change from Rural to R1-9.5 on 18.74 acres;Zoning District change from Rural to R1-13.5 on 2.0 acres;Preliminary Plat of 73.7 acres into 96 lots and six outlots. The Developer is requesting a continuance to the October 9, 2006 Meeting. MOTION by Stoltz, seconded by Kirk, to continue request to the October 9, 2006 meeting. Motion carried 6-0. B. WILLIAM SMALL PROPERTY by Pemtom Land Company. Request for: Zoning District Change from Rural to R1-13.5 on 5.01 acres; Preliminary Plat of 5.01 acres into 9 lots and road right-of-way. The Developer is requesting a continuance to the October 9,2006 meeting. MOTION by Stoltz, seconded by Pitzrick,to continue request to the October 9, 2006 meeting. Motion carried 6-0. C. VARIANCE#2006-10 by Lecy Brothers Homes. Request for: To permit a front yard setback of 35 feet. Location is at 18146 Bearpath Trail. Mr. Mark Lecy presented the proposal. He stated that they are proposing to build this home in Bearpath, but need the variance request to save a mature tree that is located on the property. He pointed out that this variance request is not atypical; the home to the west of this property has a huge oak tree in front of it and the homeowners were granted a variance request in order to save the tree. Stoelting asked Franzen to review the staff report. Franzen stated that a lot of the homes in Bearpath have various setbacks in order to save the old trees in the area. He pointed out that the granting of a variance request such as this one would not be out of character in the Bearpath area. Stoelting opened the meeting up for public input. There was no input. Powell asked if there were comments from the adjacent neighbors. Mr. Lecy said that the neighbors to the west said they supported this project at the Bearpath Planning Commission Minutes August 14, 2006 Page 3 Architectural Meeting. Powell asked if the neighbors to the east had any comments. Mr.Lecy stated that he has not heard of anything from the neighbors to the east. Stoelting asked Fox if he approved of the position of the home in relationship to the tree. Fox stated that he does approve of the position of the home in relationship to the tree. He illustrated the position of the tree in relationship to the home using the overhead projector. He also pointed out that regardless of approval of this variance,the oak tree would need to be trimmed. He pointed out that the tree is on a pedestal and he was unsure how much grading would be done with this project,which, in turn, could affect the health of the tree. Mr. Lecy stated that they do not plan on changing the grade of the home. Stoltz asked Fox if the tree would be okay with any type of grading done to it. Fox stated that the tree is in good condition and can tolerate some grading. He pointed out that what can impact the tree is construction vehicles driving over it or supplies being placed on it. Fox said as long as the contractor follows proper procedure, the tree should be fine. MOTION by Powell, seconded by Stoltz,to close the public hearing. Motion carried 6-0. MOTION by Powell, seconded by Stoltz,to approve the front yard setback of 35 feet based on plans stamped dated July 7, 2006, and the staff report dated August 11, 2006. Motion carried 6-0. D. MITCHELL CROSSING by Henry Lazniarz. Request for: Planned Unit Development Concept Review on 3.098 acres;Planned Unit Development District Review on 3.098 acres; Zoning District Amendment in the Community Commercial Zoning District on 3.098 acres; Site Plan review on 3.098 acres;Preliminary Plat of 3.098 acres into one lot and one outlot. Location is east of Mitchell Road and north of Highway 5. Tom Goodrum,representing Henry Lazniarz,presented the proposal. He started out by stating that this has been a vacant piece of property for many years and that their goal is to bring a residential and a commercial site together in this parcel of land. There would also be an open space between the two buildings that could be utilized by the tenants and commercial guests. He illustrated this project using the overhead projector, and showed where all the waivers would be located. He also pointed out where the parking would be located. There is underground parking in both buildings and parking to the east of this project Mr. Goodrum stated that they could proceed with the project without the waivers but that it would be a very tight fit for both residents and commercial visitors. He felt that the waivers would allow for more room in the project. Planning Commission Minutes August 14,2006 Page 4 Powell asked if the land on the other side of Cochran Road was swamp land and asked if it will be developed in the future. Fox stated that parcel of land is City owned. Powell asked Mr. Goodrum to describe the sidewalk setback. Mr. Goodrum illustrated the sidewalk setback using the overhead projector. He stated that there is 40 feet of unused right of way by Mitchell Road. Stoelting asked Franzen to review the staff report. Franzen stated that the Staff recommends approval based on conditions listed on page 3 and 4 of the staff report. Powell asked if that large of a right of way on this project is common. Gray stated that this is a larger than normal right of way,but that this project was originally a MNDot project,which allowed for more of a right of way. Stoelting opened the meeting up for public input. There was no input. Pitzrick stated that he liked the design of the project and that it put a lot of value into the land. Kirk asked Mr. Goodrum if he had any pictures illustrating the elevation of the project. Mr. Goodrum showed illustrations of the elevation using the overhead projector. He stated that they are asking for more height to the building for architectural appeal. Kirk stated that the request of the sign on the building is of concern. Franzen stated that the project proponent has been informed that Staff will not support the sign on the building. Kirk asked about the selling prospects of the property. Mr.Goodrum stated that the interest in the property has been very positive. Stoeltz asked who would enforce the movement of trucks into the area. Franzen stated that the owner of the building would enforce the movement of trucks into the area and that is should be clearly laid out to the residents and commercial owners. Mr. Goodrum pointed out where the delivery activity would take place and stated that they would be sensitive to the tenants in regards to delivery. Kirk stated that he is concerned about the hours of delivery. Mr. Goodrum stated that delivery would occur in the mornings before the business's open or in the evenings after they close. He also pointed out that there would be an association to address the needs of the residents. Powell asked if the level of the parking lot will be the same level as the parking lot in the gas station across the street. Mr. Goodrum stated that it would be the same level. Stoelting asked Franzen to address the sign issue if it is as the same level. Franzen stated that there would be a very narrow view shed that can be viewed by cars driving by. He pointed out that the retail area would be lower than Mitchell Road. Stoelting asked if the project proponent would have to come back Planning Commission Minutes August 14, 2006 Page 5 for a variance request for signage. Franzen stated yes. Stoelting stated that the approval would be for the four variances presented this evening and asked if Commission members were comfortable with the requests. Kirk stated that he is marginal on the height issue but that the project has other benefits which he would support. MOTION by Pitzrick, seconded by Stoltz,to close the public hearing. Motion carried 6-0. MOTION by Pitzrick, seconded by Stoltz,to approve the Planned Unit Development Concept Review on 3.098 acres; Planned Unit Development District Review on 3.098 acres;Zoning District Amendment in the Community Commercial Zoning District on 3.098 acres;Preliminary Plat of 3.098 acres into one lot and one outlot and Site Plan Review on 3.098 acres based on plans stamped dated August 11, 2006, and the staff reports dated August 11, 2006. Motion carried 6-0. E. MCDONALD'S RESTAURANT by Wilkus Architects. Request for: Planned Unit Development Concept Review on 1.07 acres;Planned Unit Development District Review on 1.07 acres;Zoning District Change from I-2 to Office on 10.36 acres; Site Plan Review on 1.07 acres. Location is east of Highway 212 and north of Prairie Center Drive. Jeff Rapp, of Wilkus Architects, presented the proposal. He stated that what they are proposing is an upgrade of the existing building. They would like to extensively remodel the exterior of the building and place new signage on the building. Stoelting asked Franzen to review the staff report. Franzen stated the staff recommends approval of this project based on page 2 and 3 of the staff report. Stoelting asked Mr. Rapp to illustrate the signage, utilizing the overhead projector. Mr. Rapp illustrated the signage and pointed out that the reason it appears so large is due to the arch. Stoelting asked Franzen to explain this concept. Franzen stated that they want to add 138' to the sign and pointed out that it measures larger than it looks visually. Stoelting opened the meeting up for public input. A representative from the Wilkus Architects came forward and stated that they want to use this sign as a signature element versus just signage. Stoelting asked Mr.Rapp if the monument sign would be altered. Mr. Rapp said that it would not. Kirk stated that this is a good usage of the signage variance. Planning Commission Minutes August 14, 2006 Page 6 MOTION by Kirk, seconded by Stoltz,to close the public hearing. Motion carried 6-0. MOTION by Kirk, seconded by Stoltz,to approve Planned Unit Development Concept Review on 1.07 acres; Planned Unit Development District Review on 1.07 acres; and Site Plan Review on 1.07 acres based on plans stamped dated P p august 11, 2006, and the staff report dated August 11, 2006. Motion carried 6-0. VII. PLANNERS' REPORTS A. SOUTHWEST METRO BUS GARAGE UPDATE Franzen reported on the update to the Southwest Metro Bus Garage. He stated that the solution is to expand the western side of the building and that no variances are required to do this. He stated that the proposed changes can be addressed by the representatives of the Southwest Metro Bus Garage. A short presentation was made by the representatives. Powell asked the representative if this was to be the final development to this site. The representative stated that is would probably not be the final development to this site. Powell asked if they were concerned with storm water drainage. The representative stated that they were, and hence the large NURF pond on the area to accommodate storm water. He pointed out that if further expansion is considered,then other storm water designs would have to be implemented. MOTION by Stoltz, seconded by Kirk,to approve the revised Southwest Metro plan for a 14,500 square foot enlargement of the existing building. Motion carried 6-0. IX. MEMBERS REPORTS X. CONTINUING BUSINESS XI. NEW BUSINESS XII. ADJOURNMENT MOTION by Stoltz, seconded by Kirk,to adjourn the meeting. Motion carried 6-0. There being no further business,the meeting adjourned at 8:30 p.m. CITY COUNCIL AGENDA DATE: SECTION: Payment of Claims September 5, 2006 DEPARTMENT/DIVISION: ITEM DESCRIPTION: ITEM NO.: IX. Sue Kotchevar, Office of the Payment of Claims City Manager/Finance Requested Action Move to: Approve the Payment of Claims as submitted(roll call vote) Synopsis Checks 155717- 156292 Wire Transfers 2518 -2524 City of Eden Prairie Council Check Summary 9/5/2006 Division Amount Division Amount General 57,812 522 IMPROVMENT PROJECTS 2006 7,118 100 City Manager 562 601 Prairie Village Liquor 199,286 101 Legislative 593 602 Den Road Liquor 293,528 110 City Clerk 1,566 603 Prairie View Liquor 168,813 III Customer Service 14,207 605 Den Road Building 1,281 112 Human Resources 286 701 Water Fund 259,816 113 Communication Services 3,295 702 Sewer Fund 15,067 114 Benefits&Training 1,547 703 Storm Drainage Fund 14,871 115 Risk Management 99,587 803 Escrow Fund 6,981 116 Facilities 44,458 806 SAC Agency Fund 21,700 117 City Center 51,216 807 Benefits Fund 454,860 130 Assessing 1,900 131 Finance 6,038 Report Totals 2,633,491 132 Social Services 6,875 133 Planning 8,033 135 Information Technology 49,768 136 Wireless Communication 4,277 137 Economic Development 51 150 Park Administration 737 151 Park Maintenance 26,509 153 Organized Athletics 7,771 154 Community Center 3,401 156 Youth Programs 26,126 157 Special Events 4,618 158 Adult Recreation 6,392 159 Recreation Administration 8,595 160 Therapeutic Recreation 780 161 Oak Point Pool 8,730 162 Arts 2,796 163 Outdoor Center 3,653 164 Park Rental Facilities 479 180 Police 7,733 184 Fire 35,498 200 Engineering 306 201 Street Maintenance 9,553 202 Street Lighting 1,558 203 Fleet Services 15,980 301 CDBG 61,890 304 Senior Board 507 308 E-911 1,481 312 Recycle Rebate 7 315 Economic Development 8,008 316 WAFTA 26,725 502 Park Development 17,216 503 Utility Improvement 57,644 506 Improvment Bonds 1996 9,890 509 CIP Fund 23,845 511 Construction Fund 22,534 512 CIP Trails 43,476 515 Fire Station#4 338,786 516 ADC PROJECT 46,943 517 212/Charlson Intersection 523 520 Parks Referendum 7,410 City of Eden Prairie Council Check Register 9/5/2006 Check# Amount Vendor/Explanation Account Description Business Unit 2518 11,361 ICMA RETIREMENT TRUST-457 Deferred Compensation General Fund 2519 16,556 ORCHARD TRUST CO AS TRUSTEE/CU Deferred Compensation General Fund 2520 88,359 PUBLIC EMPLOYEES RETIREMENT AS PERA Health and Benefits 2521 29,850 MINNESOTA DEPT OF REVENUE State Taxes Withheld Health and Benefits 2522 154,093 WELLS FARGO MINNESOTA N A SS&Medicare Health and Benefits 2523 460 MINNESOTA DEPT OF REVENUE Motor Fuels Fleet Services 2524 90,570 MINNESOTA DEPT OF REVENUE Cash Over/Short General Fund 155717 30 BARTNIK,AARON B Other Contracted Services Teen Work Program 155718 56 BARTNIK,ADAM B Other Contracted Services Teen Work Program 155719 45 BRIDENSTEINE,CHELSEA Other Contracted Services Teen Work Program 155720 33 CARLSTEDT,ANNIE Other Contracted Services Teen Work Program 155721 32 CARROLL,MEGAN M Other Contracted Services Teen Work Program 155722 26 CRAMPTON,KELLY A Other Contracted Services Teen Work Program 155723 130 CRUTCHER,CHELSEA Y Other Contracted Services Teen Work Program 155724 26 FETTER,PAIGE A Other Contracted Services Teen Work Program 155725 56 FINNEY,THOMAS P Other Contracted Services Teen Work Program 155726 20 FISCHER,BRENNA K Other Contracted Services Teen Work Program 155727 137 GLEDHILL,JENNIFER Other Contracted Services Teen Work Program 155728 21 HANSON,AUDREY N Other Contracted Services Teen Work Program 155729 61 HANSON,NOEL P Other Contracted Services Teen Work Program 155730 70 JASKULKE,TAYLOR A Other Contracted Services Teen Work Program 155731 7 JOHNSON,MARINA N Other Contracted Services Teen Work Program 155732 58 KIERSTEAD,CRUSTY Other Contracted Services Teen Work Program 155733 118 KISSINGER,SAMANTHA Other Contracted Services Teen Work Program 155734 47 MORIYAMA,LAUREN M Other Contracted Services Teen Work Program 155735 39 NEILSON,KEVIN Other Contracted Services Teen Work Program 155736 60 NORTON,LEIGHA N Other Contracted Services Teen Work Program 155737 55 O'CONNELL,LUXMI Other Contracted Services Teen Work Program 155738 141 REED,CARL E Other Contracted Services Teen Work Program 155739 135 SHAH,RAOUL Other Contracted Services Teen Work Program 155740 36 SHAWD,ANDREW Other Contracted Services Teen Work Program 155741 63 SKOBOV,MIKHAIL Other Contracted Services Teen Work Program 155742 120 WARD,ANDREA L Other Contracted Services Teen Work Program 155743 27 YEAROUS,NICHOLAS S Other Contracted Services Teen Work Program 155744 125 AMERIPRIDE LINEN&APPAREL SER Repair&Maint.Supplies Prairie Village Liquor Store 155745 255 ARCTIC GLACIER INC Misc Non-Taxable Prairie Village Liquor Store 155746 8,734 BELLBOY CORPORATION Liquor Den Road Liquor Store 155747 8,968 DAY DISTRIBUTING Beer Den Road Liquor Store 155748 870 EAGLE WINE COMPANY Wine Domestic Den Road Liquor Store 155749 492 EXTREME BEVERAGE Misc Taxable Den Road Liquor Store 155750 728 GETTMAN COMPANY Misc Taxable Prairie View Liquor Store 155751 232 GRAPE BEGINNINGS Wine Domestic Prairie View Liquor Store 155752 9,218 GRIGGS COOPER&CO Transportation Prairie View Liquor Store 155754 26,770 JOHNSON BROTHERS LIQUOR CO Wine Imported Den Road Liquor Store 155755 469 M.AMUNDSON LLP Misc Non-Taxable Den Road Liquor Store 155756 12,695 MARK VII Misc Taxable Den Road Liquor Store 155757 732 MIDWEST COCA COLA BOTTLING COM Misc Taxable Prairie Village Liquor Store 155758 580 MORAN USA,LLC Misc Taxable Den Road Liquor Store 155759 1,140 NEW FRANCE WINE COMPANY Wine Domestic Den Road Liquor Store 155760 2,384 PAUSTIS&SONS COMPANY Wine Imported Prairie Village Liquor Store 155761 73 PEPSI COLA COMPANY Misc Taxable Prairie Village Liquor Store 155762 12,835 PHILLIPS WINE AND SPIRITS INC Transportation Den Road Liquor Store 155763 1,642 PRIOR WINE COMPANY Wine Domestic Den Road Liquor Store 155764 13,116 QUALITY WINE&SPIRITS CO Wine Domestic Den Road Liquor Store 155765 419 SHAMROCK GROUP,INC-ACE ICE Misc Non-Taxable Prairie View Liquor Store 155766 11,156 TAYLOR DIST CO OF MN INC Beer Prairie View Liquor Store 155767 16,372 THORPE DISTRIBUTING Beer Den Road Liquor Store 155768 510 WINE COMPANY,THE Wine Domestic Den Road Liquor Store 155769 1,220 WINE MERCHANTS INC Wine Imported Den Road Liquor Store 155770 70 WINE SOURCE INTERNATIONAL Liquor Den Road Liquor Store 155771 194 WORLD CLASS WINES INC Wine Domestic Prairie View Liquor Store 155772 105 BLUESTEIN,SUZANNE Program Fee Camps 155773 129 CARLSON,DAN Other Contracted Services Police 155774 3,850 CENTURYTEL Telephone Telephone Check# Amount Vendor/Explanation Account Description Business Unit 155775 6,875 CORNERSTONE Other Contracted Services Housing,Trans,&Human Sery 155776 1,167 COSTCO Video&Photo Supplies Communication Services 155777 357 DOLLERSCHELL,JOHN Operating Supplies Senior Board 155778 240 GE CAPITAL Other Rentals General 155779 17 GILBERT MECHANICAL Cash Over/Short General Fund 155780 113 GIRARD'S BUSINESS SOLUTIONS IN Other Rentals Finance 155781 125 HANSEN,JANE Program Fee Outdoor Center 155782 296 KRAEMERS HARDWARE INC Operating Supplies Utility Operations-General 155783 350 LARSON,LeROY Other Contracted Services International Festival 155784 1,650 MEDICINE LAKE TOURS Special Event Fees Trips 155785 288 MIDWEST DESIGN CO Printing Fire 155786 991 MINN CHILD SUPPORT PAYMENT CTR Garnishment Withheld General Fund 155787 903 MINNESOTA DEPT OF REVENUE Waste Disposal Park Maintenance 155788 60 MINNESTOA PRIMA Dues&Subscriptions Risk Management 155789 50 MOLLDREM,JENEEN Program Fee Playgrounds 155790 400 MU PERFORMING ARTS INC Other Contracted Services International Festival 155791 50 NAIR,ARCHANA Other Contracted Services International Festival 155792 284 OFFICE DEPOT CREDIT PLAN Supplies-Fire/Life/Safety City Hall-CAM 155793 52 PETTY CASH-EPCC Mileage&Parking Community Center Admin 155794 3,000 POSTAGE BY PHONE RESERVE ACCOU Postage General 155795 1,587 QWEST Telephone Sewer Liftstation 155796 6,980 SHANK CONSTRUCTORS INC Other Contracted Services Utility Improvement Fund 155797 1,490 SOUND CLIPS INC Video&Photo Supplies Fire 155799 25 UPS Postage Fire 155800 526 US POSTMASTER-HOPKINS Postage Senior Center Administration 155801 249 WHOLESALE FITNESS INC Workers Comp Insurance Risk Management 155802 3,284 3RD LAIR SKATEBOARDING PARK Instructor Service Camps 155803 384 ABRAKADOODLE Instructor Service Arts&Drama Programs 155804 2,189 ARCH WIRELESS Pager&Cell Phone Wireless Communication 155805 4,254 ASPEN WASTE SYSTEMS INC. Waste Disposal City Hall-CAM 155806 825 BOLD,PAULINE Instructor Service Outdoor Center 155807 120 CAMPOS,LORI Instructor Service Outdoor Center 155808 750 CROW WING COUNTY SHERIFF'S DEP Deposits Escrow 155809 88 CULLIGAN BOTTLED WATER Operating Supplies Fire 155810 79 DEAN, JUSTIN Operating Supplies Summer Skill Development 155811 310 FLYING CLOUD T/S#U70 Waste Disposal Park Maintenance 155812 25 FOLSON HOME SERVICES Office Supplies Senior Center Administration 155813 217 GE CAPITAL Other Rentals General 155814 92 GRAINGER Small Tools Traffic Signals 155815 40 HICKMAN,JON Instructor Service Outdoor Center 155816 400 JANY,PAVEL Other Contracted Services International Festival 155817 519 KORTUM,MICHAEL Mileage&Parking Tree Disease 155818 46 KRUEGER,ALI Operating Supplies Playgrounds 155819 1,300 MAAO Conference Expense Assessing 155820 815 MALONE,TOM Instructor Service Preschool Events 155821 190 METRO DINING CLUB Deposits Escrow 155822 2,016 MINNESOTA VALLEY ELECTRIC COOP Electric Riley Lake 155823 2,423 MUHLHAUSER,WENDY Instructor Service Arts&Drama Programs 155824 69 NORTHERN TOOL Equipment Parts Fleet Services 155825 72 ONCE UPON A STAR Instructor Service Preschool Events 155826 700 OPERATING ENGINEERS TRAINING P Conference Expense Park Maintenance 155827 151 PIONEER DRAMA SERVICE Other Contracted Services Arts Initiative 155828 1,155 PLANET SPIRIT Instructor Service Camps 155829 1,082 QWEST Telephone Water Utility-General 155830 16 R&H THEATRICALS Other Contracted Services Arts Initiative 155831 2,919 SPORTS UNLIMITED Instructor Service Camps 155832 600 SUTTER,ROSS Other Contracted Services Staring Lake Concert 155833 1,963 US POSTMASTER-HOPKINS Postage Water Accounting 155834 51 WEEDMAN,NICOLE Operating Supplies Playgrounds 155835 66 WOLF CAMERA Video&Photo Supplies Playgrounds 155836 20 WORRELL,NATHAN Cash Over/Short Community Center Admin 155837 117 AMERIPRIDE LINEN&APPAREL SER Repair&Maint.Supplies Prairie View Liquor Store 155838 258 ARCTIC GLACIER INC Misc Non-Taxable Prairie Village Liquor Store 155839 4,486 BELLBOY CORPORATION Wine Imported Prairie View Liquor Store 155840 86 BRW ENTERPRISES Wine Domestic Den Road Liquor Store 155841 7,734 DAY DISTRIBUTING Beer Den Road Liquor Store 155842 1,755 EAGLE WINE COMPANY Liquor Den Road Liquor Store 155843 32 EXTREME BEVERAGE Misc Taxable Prairie Village Liquor Store Check# Amount Vendor/Explanation Account Description Business Unit 155844 512 GRAND PERE WINES INC Wine Imported Prairie Village Liquor Store 155845 547 GRAPE BEGINNINGS Wine Imported Prairie Village Liquor Store 155846 10,980 GRIGGS COOPER&CO Liquor Den Road Liquor Store 155847 1,148 HOHENSTEINS INC Beer Prairie Village Liquor Store 155849 25,513 JOHNSON BROTHERS LIQUOR CO Liquor Den Road Liquor Store 155850 103 M.AMUNDSON LLP Operating Supplies Den Road Liquor Store 155851 18,860 MARK VII Beer Prairie View Liquor Store 155852 545 MIDWEST COCA COLA BOTTLING COM Misc Taxable Den Road Liquor Store 155853 2,235 PAUSTIS&SONS COMPANY Wine Domestic Den Road Liquor Store 155854 10,203 PHILLIPS WINE AND SPIRITS INC Transportation Den Road Liquor Store 155855 3,238 PRIOR WINE COMPANY Wine Domestic Prairie View Liquor Store 155856 15,916 QUALITY WINE&SPIRITS CO Wine Domestic Den Road Liquor Store 155857 453 SHAMROCK GROUP,INC-ACE ICE Misc Non-Taxable Den Road Liquor Store 155858 695 SPECIALTY WINES AND BEVERAGES Liquor Den Road Liquor Store 155859 17,243 TAYLOR DIST CO OF MN INC Beer Den Road Liquor Store 155860 14,446 THORPE DISTRIBUTING Beer Prairie Village Liquor Store 155861 102 TRI COUNTY BEVERAGE&SUPPLY Operating Supplies Den Road Liquor Store 155862 420 VINTAGE ONE WINES INC Wine Domestic Prairie Village Liquor Store 155863 1,843 WINE COMPANY,THE Wine Domestic Prairie Village Liquor Store 155864 479 WINE MERCHANTS INC Wine Domestic Den Road Liquor Store 155865 250 AARP 55 ALIVE MATURE DRIVING Other Contracted Services Classes/Programs/Events 155866 231 ASPEN WASTE SYSTEMS INC. Waste Disposal Den Road Liquor Store 155867 488 BERTELSON OFFICE PLUS Office Supplies Utility Operations-General 155868 245 BUCHMAN PLUMBING COMPANY Plumbing Permits General Fund 155869 250 CARLSON,JOHN P Other Contracted Services Safety Camp 155870 110 CONLEY,JOYCE Homeward Hills Bldg Park Facilities 155871 100 EDINA,CITY OF Advertising Communication Services 155872 21 FEDEX KINKO'S OFFICE AND PRINT Operating Supplies Utility Operations-General 155873 95 FIRST SCRIBE INC Org Athletic League Fees Softball 155874 410 FSH COMMUNICATIONS LLC Telephone Miller Park 155875 904 GE CAPITAL Other Rentals General 155876 310 GOFZONE Operating Supplies Summer Skill Development 155877 15 HART,GARY AR Utility Water Enterprise Fund 155878 57 HARTZELL,PAUL Operating Supplies Staring Lake Concert 155879 230 HENNEPIN COUNTY PUBLIC RECORDS Other Contracted Services Engineering 155880 93 HENNEPIN COUNTY TREASURER Operating Supplies Planning 155881 135 HORGAN,KEVIN M Tuition Reimbursement/School Organizational Services 155882 600 IAAO Conference Expense Assessing 155883 4,673 INNOVATIVE GRAPHICS Other Contracted Services Safety Camp 155884 551 ITL PATCH COMPANY INC Operating Supplies Safety Camp 155885 305 KLOECKNER,LINDA Advertising July 4th Celebration 155886 82 PETTY CASH-EPCC Mileage&Parking Community Center Admin 155887 61 PIZZA HUT Operating Supplies Teen Work Program 155888 9 QUICKSILVER EXPRESS COURIER Postage Communication Services 155889 414 SCIENCE MUSEUM OF MINNESOTA Special Event Fees Trips 155890 150 SHAMROCK TOURS Transportation Trips 155891 53 STAR TRIBUNE Dues&Subscriptions Prairie View Liquor Store 155892 100 SWEENEY,J SHAWN Special Event Fees Trips 155893 200 UNIVERSITY OF MINNESOTA Riley-Jacques Bam Park Facilities 155894 91,087 XCEL ENERGY Electric City Hall-CAM 155895 57 AIRCORPS INC LLC Mechanical Permits General Fund 155896 221 BATTERY TECH INC Equipment Parts Fleet Services 155897 87 BRENNAN,JESSICA Miscellaneous Communication Services 155898 68 BUSACK,KAREN Operating Supplies International Festival 155899 1,433 DAHLGREEN GOLF CLUB Special Event Fees Classes/Programs/Events 155900 120 ESTRINE,ROBERT Other Contracted Services Community Band 155901 17 GENZ RYAN PLUMBING&HEATING Cash Over/Short General Fund 155902 51 HANSON,RUSSELL W Mileage&Parking Senior Center Administration 155903 31 HENNEPIN COUNTY TREASURER Operating Supplies Planning 155904 58 KRESS,CARLA Special Event Fees Classes/Programs/Events 155905 93 MENARDS Operating Supplies Street Maintenance 155906 203 MINNESOTA BUREAU OF CRIMINAL A Employment Support Test Fire 155907 400 MINNESOTA GFOA Conference Expense Finance 155908 125 MONACO,STEPHEN AR Utility Water Enterprise Fund 155909 6 NORD,JANNA Abandoned Property General Fund 155910 200 ORTBERG,TODD Other Contracted Services Staring Lake Concert 155911 462 REID,DEVIN M Other Contracted Services Softball 155912 16 ST PAUL PLUMBING&HEATING Cash Over/Short General Fund Check# Amount Vendor/Explanation Account Description Business Unit 155913 223 STAR TRIBUNE Dues&Subscriptions Fire 155914 1,440 TOTAL REGISTER Equipment Repair&Maint Prairie View Liquor Store 155915 73 WISSNER,BASIL Special Event Fees Classes/Programs/Events 155916 160 XCEL ENERGY Electric Den Bldg.-CAM 155917 1,176 A MEYER'S ENTERPRISES INC Instructor Service Outdoor Center 155918 56 AQUAJETS SWIM TEAM Facility Rentals Pool Operations 155919 375 BOLD,PAULINE Instructor Service Outdoor Center 155920 675 CAMPOS,LORI Instructor Service Outdoor Center 155921 5,712 COMMISSIONER OF TRANSPORTATION Improvement Contracts Construction Fund 155922 32 CULLIGAN-METRO Other Contracted Services Outdoor Center 155923 182,558 HEALTHPARTNERS Medical Bills Prepaid Health and Benefits 155924 98,360 LEAGUE MN CITIES INS TRUST Workers Comp Insurance Risk Management 155925 1,481 METRO SALES INCORPORATED* Other Rentals General 155926 373 MINNESOTA HORSE&HUNT CLUB Dues&Subscriptions Police 155927 125 NASLUND,JENNIFER Mileage&Parking Teen Work Program 155928 5,291 NORTHSHORE ADVISORS LLC Audit&Financial Finance 155929 2,999 REBS MARKETING Other Contracted Services Water Accounting 155930 45 TIME WARNER CABLE Dues&Subscriptions City Council 155931 8 VERIZON WIRELESS Pager&Cell Phone Park Maintenance 155932 10 WALKER,SUSAN Program Fee Classes/Programs/Events 155933 1,020 XCEL ENERGY Electric Senior Center 155934 28 AMERICAN MESSAGING Pager&Cell Phone Water System Maintenance 155935 116 ARVOLD,KATIE Mileage&Parking Playgrounds 155936 90 CINGULAR WIRELESS Pager&Cell Phone Water System Maintenance 155937 222 COUNTRY WIDE SUPPLY Small Tools Fire 155938 48 CUB FOODS EDEN PRAIRIE Operating Supplies Fire 155939 4,787 DEPT OF LABOR&INDUSTRY Building Surcharge General Fund 155940 34 DISH NETWORK Cable TV Community Center Admin 155941 258 DUNSMORE,WES Travel Expense Parks Administration 155942 5,956 EMERGENCY APPARATUS MAINTENANC Repair&Maint.Supplies Fire 155943 240 FIRE Tuition Reimbursement/School Fire 155944 91 FERRELLGAS Motor Fuels Fleet Services 155945 167 FIRE SAFETY USA INC Repair&Maint.Supplies Fire 155946 215 FRIENDSHIP VENTURES Special Event Fees Leisure Education 155947 176 GE CAPITAL Other Rentals General 155948 389 GENERAL GROWTH PROPERTIES LP-E Building Rental CDBG Fund 155949 6 GRAVES,MARIAN Program Fee Classes/Programs/Events 155950 12 HECKER,MARGARET Program Fee Red Hat 155951 594 HOME DEPOT CREDIT SERVICES Operating Supplies Park Maintenance 155952 8,840 HOYT PROPERTIES Application Fees General Fund 155953 99 ICAA Dues&Subscriptions Senior Center Administration 155954 668 INNOVATIVE LANDSCAPE SUPPLY IN Landscape Materials/Supp Water Treatment Plant 155955 684 JEFFERSON FIRE&SAFETY INC Small Tools Fire 135,452 Information Technology 55956 LOGIS LOGIS 155957 500 LUSHINE,PEGGY E Other Contracted Services Arts Initiative 155958 47 MERLINS ACE HARDWARE Equipment Parts Fleet Services 155959 2,455 METRO FIRE Conference Expense Fire 155960 1,972 METRO SALES INCORPORATED* Other Rentals General 155961 21,483 METROPOLITAN COUNCIL Due to Other Governments SAC Agency Fund 155962 500 MICHAELSON,LIZ Other Contracted Services Arts Initiative 155963 1,500 MINNESOTA CHIEFS OF POLICE ASS Software Maintenance Information Technology 155964 425 MOBILE RADIO ENGINEERING Equipment Re air&Maint Wireless Communication P 155965 158 MOTOROLA Equipment Repair&Maint Wireless Communication 155966 52 NATIONAL WATERWORKS/HUGHES SUP Repair&Maint.Supplies Water Utility-General 155967 1,466 NORTHERN SAFETY TECHNOLOGY INC Small Tools Fire 155968 40 NORTHERN TOOL Equipment Parts Water Treatment Plant 155969 80 PITKANEN,STEVEN S Mileage&Parking Utility Operations-General 155970 8,713 PRAIRIE PARTNERS SIX LLP Building Rental Prairie Village Liquor Store 155971 7,570 PRAIRIEVIEW RETAIL LLC Building Rental Prairie View Liquor Store 155973 202 STENSGAARD,STEVE Awards Bocce 155974 53 TIME EMERGENCY EQUIPMENT Training Supplies Fire 155975 9 TIME WARNER CABLE Operating Supplies Fire 155976 2,108 TRANSPORT GRAPHICS Repair&Maint.Supplies Fire 155977 556 WEEDMAN,NICOLE Mileage&Parking Youth Programs Administration 155978 510 XCEL ENERGY Principal City Hall-CAM 155979 186 ZIEGLER INC Auto Repair&Maint. Water Utility-General 155980 182 AMERIPRIDE LINEN&APPAREL SER Repair&Maint.Supplies Den Road Liquor Store 155981 285 ARCTIC GLACIER INC Misc Non-Taxable Prairie Village Liquor Store Check# Amount Vendor/Explanation Account Description Business Unit 155982 5,922 BELLBOY CORPORATION Wine Domestic Prairie View Liquor Store 155983 188 CAT&FIDDLE BEVERAGE Wine Domestic Den Road Liquor Store 155984 9,473 DAY DISTRIBUTING Beer Den Road Liquor Store 155985 2,622 EAGLE WINE COMPANY Wine Imported Den Road Liquor Store 155986 473 GETTMAN COMPANY Misc Taxable Prairie Village Liquor Store 155987 1,213 GRAPE BEGINNINGS Wine Domestic Prairie Village Liquor Store 155988 9,033 GRIGGS COOPER&CO Liquor Prairie View Liquor Store 155989 28,047 JOHNSON BROTHERS LIQUOR CO Liquor Den Road Liquor Store 155990 513 M.AMUNDSON LLP Misc Non-Taxable Den Road Liquor Store 155991 12,861 MARK VII Misc Taxable Prairie View Liquor Store 155992 734 MIDWEST COCA COLA BOTTLING COM Misc Taxable Prairie Village Liquor Store 155993 159 NEW FRANCE WINE COMPANY Wine Imported Den Road Liquor Store 155994 4,782 PAUSTIS&SONS COMPANY Transportation Den Road Liquor Store 155995 6,865 PHILLIPS WINE AND SPIRITS INC Wine Domestic Prairie View Liquor Store 155996 1,895 PRIOR WINE COMPANY Wine Domestic Den Road Liquor Store 155997 16,647 QUALITY WINE&SPIRITS CO Transportation Den Road Liquor Store 155998 533 SHAMROCK GROUP,INC-ACE ICE Misc Non-Taxable Prairie View Liquor Store 155999 316 SPECIALTY WINES AND BEVERAGES Liquor Den Road Liquor Store 156000 17,774 TAYLOR DIST CO OF MN INC Beer Den Road Liquor Store 156001 23,236 THORPE DISTRIBUTING Beer Prairie View Liquor Store 156002 369 WINE COMPANY,THE Wine Domestic Den Road Liquor Store 156003 2,653 WINE MERCHANTS INC Wine Domestic Prairie Village Liquor Store 156004 154 WINE SOURCE INTERNATIONAL Wine Imported Den Road Liquor Store 156005 125 BARTNIK,AARON B Other Contracted Services Teen Work Program 156006 56 BARTNIK,ADAM B Other Contracted Services Teen Work Program 156007 199 BRIDENSTEINE,CHELSEA Other Contracted Services Teen Work Program 156008 50 CARLSTEDT,ANNIE Other Contracted Services Teen Work Program 156009 21 CARROLL,MEGAN M Other Contracted Services Teen Work Program 156010 73 CRUTCHER,CHELSEA Y Other Contracted Services Teen Work Program 156011 5 FETTER,PAIGE A Other Contracted Services Teen Work Program 156012 56 FINNEY,THOMAS P Other Contracted Services Teen Work Program 156013 59 FISCHER,BRENNA K Other Contracted Services Teen Work Program 156014 91 GLEDHILL,JENNIFER Other Contracted Services Teen Work Program 156015 66 HANSON,AUDREY N Other Contracted Services Teen Work Program 156016 8 HANSON,NOEL P Other Contracted Services Teen Work Program 156017 40 JASKULKE,TAYLOR A Other Contracted Services Teen Work Program 156018 106 KIERSTEAD,CHRISTY Other Contracted Services Teen Work Program 156019 67 KISSINGER,SAMANTHA Other Contracted Services Teen Work Program 156020 187 MORIYAMA,LAUREN M Other Contracted Services Teen Work Program 156021 32 NEILSON,KEVIN Other Contracted Services Teen Work Program 156022 7 NORTON,LEIGHA N Other Contracted Services Teen Work Program 156023 37 O'CONNELL,LUX II Other Contracted Services Teen Work Program 156024 47 REED,CARL E Other Contracted Services Teen Work Program 156025 38 SHAH RAOUL Other Contracted Services Teen Work Program 156026 8 SKOBOV,MIKHAIL Other Contracted Services Teen Work Program 156027 129 WARD,ANDREA L Other Contracted Services Teen Work Program 156028 22 YEAROUS,NICHOLAS S Other Contracted Services Teen Work Program 156029 7,437 CARDMEMBER SERVICE Conference Expense Police 156030 160 COMMUNITY HEALTH CHARITIES United Way Withheld General Fund 156031 519 DE LAGE LANDEN FINANCIAL SERVI Other Rentals General 156032 4,077 ENSR CORPORATION Other Contracted Services WAFTA 156033 60 HCMC-EMS EDUCATION Tuition Reimbursement/School Police 156034 170 HEARTH&HOME TECHNOLOGIES Building Permits General Fund 156035 484 HENNEPIN COUNTY I/f DEPT Software Maintenance Information Technology 156036 1,590 INTERNATIONAL UNION OF OPERATI Union Dues Withheld General Fund 156037 48 LECY BROS HOMES Cash Over/Short General Fund 156038 5,065 MED COMPASS Employment Support Test Fire 156039 63 MENARDS Recreation Supplies Playgrounds 156040 9,779 METROPOLITAN AIRPORTS COMMISSI Right of Way&Easement Improvement Projects 1996 156041 991 MINN CHILD SUPPORT PAYMENT CTR Garnishment Withheld General Fund 156042 14,614 MINNESOTA STATE RETIREMENT SYS Other Deductions General Fund 156043 857 PETTY CASH Mileage&Parking Water Utility-General 156044 321 PROP United Way Withheld General Fund 156045 1,000 STEARNS COUNTY SHERIFF'S DEPAR Deposits Escrow 156046 50 SWEENEY,J SHAWN Special Event Fees Senior Board 156047 290 UNITED WAY United Way Withheld General Fund 156048 6 UPS Postage Utility Operations-General 156049 100 VERIZON WIRELESS Pager&Cell Phone Sewer Utility-General Check# Amount Vendor/Explanation Account Description Business Unit 156050 70,826 XCEL ENERGY Electric Water Treatment Plant 156051 70 AARP 55 ALIVE MATURE DRIVING Other Contracted Services Classes/Programs/Events 156052 45 AMERICAN WATER WORKS ASSOCIATI Training Supplies Utility Operations-General 156053 188 AQUAJETS SWIM TEAM Facility Rentals Pool Operations 156054 1,620 CHANHASSEN PARK&RECREATION Other Contracted Services Softball 156055 6 CHEN,FRANCES Lessons&Classes Ice Arena 156056 1,165 CLIMB THEATRE Instructor Service Arts&Drama Programs 156057 10 HARRISON,MARY Open Fees Raquetball 156058 290 HULSETHER,SUE C Other Contracted Services Riley-Jacques Barn 156059 254 HYDROLOGIC Repair&Maint.Supplies Park Maintenance 156060 65 ICE SKATING INSTITUTE Licenses&Taxes Ice Arena 156061 185 LAB SAFETY SUPPLY INC Safety Supplies Sewer Utility-General 156062 144 MINER,KRIS Program Fee Outdoor Center 156063 9 MINNESOTA VALLEY ELECTRIC COOP Electric Riley Creek Woods 156064 765 MUHLHAUSER,WENDY Instructor Service Arts&Drama Programs 156065 347 NORTHERN TOOL Small Tools Utility Operations-General 156066 344 PITNEY BOWES INC Other Rentals General 156067 3,000 POSTAGE BY PHONE RESERVE ACCOU Postage General 156068 180 QWEST Telephone Water Utility-General 156069 39 RED HAT SOCIETY Dues&Subscriptions Red Hat 156070 600 REESE,TIMOTHY J Other Contracted Services Riley-Jacques Barn 156071 1,776 SHERBARTH-LYNCH,SANDRA Instructor Service Tennis 156072 350 TAHER INC CATERING Reimbursement Supplement Employment 156073 83 WHITE,NICOLE Mileage&Parking Therapeutic Rec Administration 156074 117 AMERIPRIDE LINEN&APPAREL SER Repair&Maint.Supplies Den Road Liquor Store 156075 164 ARCTIC GLACIER INC Misc Non-Taxable Prairie Village Liquor Store 156076 5,490 BELLBOY CORPORATION Misc Non-Taxable Prairie View Liquor Store 156077 10,947 DAY DISTRIBUTING Beer Prairie View Liquor Store 156078 719 EAGLE WINE COMPANY Wine Imported Prairie Village Liquor Store 156079 600 EXTREME BEVERAGE Misc Taxable Prairie Village Liquor Store 156080 402 GRAPE BEGINNINGS Wine Imported Den Road Liquor Store 156081 6,845 GRIGGS COOPER&CO Liquor Den Road Liquor Store 156082 1,228 HOHENSTEINS INC Beer Den Road Liquor Store 156084 21,431 JOHNSON BROTHERS LIQUOR CO Liquor Prairie View Liquor Store 156085 153 M.AMUNDSON LLP Misc Non-Taxable Den Road Liquor Store 156086 15,681 MARK VII Beer Prairie View Liquor Store 156087 221 MASS BAR-MATE CORP Misc Taxable Den Road Liquor Store 156088 339 MIDWEST COCA COLA BOTTLING COM Misc Taxable Den Road Liquor Store 156089 74 MORAN USA,LLC Misc Taxable Den Road Liquor Store 156090 6,295 PAUSTIS&SONS COMPANY Wine Imported Prairie View Liquor Store 156091 73 PEPSI COLA COMPANY Misc Taxable Prairie Village Liquor Store 156092 14,921 PHILLIPS WINE AND SPIRITS INC Wine Domestic Prairie Village Liquor Store 156093 3,387 PRIOR WINE COMPANY Wine Domestic Prairie Village Liquor Store 156094 15,121 QUALITY WINE&SPIRITS CO Wine Domestic Prairie Village Liquor Store 156095 374 SHAMROCK GROUP,INC-ACE ICE Misc Non-Taxable Prairie View Liquor Store 156096 292 SPECIALTY WINES AND BEVERAGES Liquor Den Road Liquor Store 156097 6,729 TAYLOR DIST CO OF MN INC Beer Prairie Village Liquor Store 156098 18,835 THORPE DISTRIBUTING Beer Prairie View Liquor Store 156099 423 TRUE FABRICATIONS Misc Taxable Den Road Liquor Store 156100 216 VINOCOPIA Wine Imported Prairie Village Liquor Store 156101 1,586 WINE COMPANY,THE Wine Domestic Prairie View Liquor Store 156102 3,790 WINE MERCHANTS INC Wine Imported Prairie Village Liquor Store 156103 140 WINE SOURCE INTERNATIONAL Wine Imported Den Road Liquor Store 156104 2,782 WORLD CLASS WINES INC Wine Imported Prairie Village Liquor Store 156105 331 A TO Z RENTAL CENTER Other Rentals International Festival 156106 195 AAA LAMBERTS LANDSCAPE PRODUCT Landscape Materials/Supp Sewer Utility-General 156107 2,405 ADVANCED ENGINEERING&ENVIRON Design&Engineering Utility Improvement Fund 156108 885 AMSAN BRISSMAN-KENNEDY Cleaning Supplies Community Center Maintenance 156109 726 ANCHOR PAPER COMPANY Office Supplies General 156110 1,496 ANCHOR PRINTING COMPANY Printing Fire 156111 544 APPLIED ECOLOGICAL SERVICES IN Other Contracted Services Storm Drainage 156112 3,825 AUTOMATED ENTRANCE PRODUCTS IN Building Repair&Maint. Prairie Village Liquor Store 156113 1,792 BAUER BUILT TIRE AND BATTERY Tires Fleet Services 156114 46 BECKER ARENA PRODUCTS INC Repair&Maint-Ice Rink Ice Arena Maintenance 156115 550 BERTELSON OFFICE PLUS Office Supplies Utility Operations-General 156116 188 BITUMINOUS ROADWAYS INC Repair&Maint.Supplies Sewer System Maintenance 156117 155 BLACK&DECKER,USPTG Small Tools Sewer Utility-General 156118 8 BLOOMINGTON,CITY OF Operating Supplies Elections Check# Amount Vendor/Explanation Account Description Business Unit 156119 723 BLOOMINGTON,CITY OF Other Contracted Services Park Maintenance 156120 558 BOYER TRUCKS Equipment Parts Fleet Services 156121 4,094 BRYAN ROCK PRODUCTS INC Gravel Sewer System Maintenance 156122 2,025 BUCHMAN PLUMBING COMPANY Other Contracted Services Water Utility-General 156123 280 C&C EMBROIDERY Clothing&Uniforms Fire 156124 1,374 CADAN CORPORATION Process Control Equipment Water Treatment Plant 156125 347 CDW GOVERNMENT INC. Other Hardware Outdoor Center 156126 5,182 CEMSTONE PRODUCTS COMPANY Repair&Maint.Supplies Storm Drainage 156127 212 CHOICE INC Other Contracted Services Prairie Village Liquor Store 156128 200 CHUCK'S EXCAVATING INC Other Contracted Services Park Maintenance 156129 1,334 CLAREYS INC Instructor Service Utility Operations-General 156130 16,442 CLT Other Contracted Services Rehab 156131 302,353 CM CONSTRUCTION COMPANY INC. Building Fire Station#4 156132 700 COMPAR INC Miscellaneous Information Technology 156133 93 CONCRETE CUTTING&CORING INC Equipment Parts Fleet Services 156134 796 CORPORATE EXPRESS Office Supplies General 156135 45,583 CURB MASTERS INC Improvement Contracts CIP Trails 156137 53,684 CUTLER-MAGNER COMPANY Treatment Chemicals Water Treatment Plant 156138 256 DALE GREEN COMPANY,THE Landscape MaterWs/Supp Street Maintenance 156139 5,624 DAYS PLUMBING Other Contracted Services Rehab 156140 5 DEALER AUTOMOTIVE SERVICES INC Equipment Parts Fleet Services 156141 300 DECORATIVE DESIGNS INC Grounds Maintenance Utility Operations-General 156142 100 DELI DOUBLE Special Event Fees Classes/Programs/Events 156143 14,658 DELL Office Supplies General 156144 116 DELUXE BUSINESS CHECKS&SOLUT Operating Supplies Prairie Village Liquor Store 156145 470 DOHERTY,SANDRA L Other Contracted Services Volleyball 156146 270 DRAMATISTS PLAY SERVICE INC Other Contracted Services Arts Initiative 156147 34,125 DRT TRANSPORT Lime Residual Removal Water Treatment Plant 156148 70 EARL F ANDERSEN INC Signs Traffic Signs 156149 2,109 EDEN PRAIRIE APPLIANCE Other Contracted Services Rehab 156150 75 EDEN PRAIRIE CHAMBER OF COMIvIER Miscellaneous Parks Administration 156151 302 EF JOHNSON Equipment Repair&Maint Fire 156152 2,313 EHLERS&ASSOCIATES INC Deposits Escrow 156153 1,537 EMMONS&OLIVIER RESOURCES INC Other Contracted Services Storm Drainage 156154 575 ENERGY MANAGEMENT INC Repair&Maint-Ice Rink Ice Arena Maintenance 156155 375 ENGINEERED ICE SYSTEMS Contract Svcs-Ice Rink Ice Arena Maintenance 156156 21,462 ENSR CORPORATION Other Contracted Services WAFTA 156157 350 EP ABC Other Contracted Services Rehab 156158 122 ERGOMETRICS Employment Support Test Organizational Services 156159 690 ESCHELON TELECOM INC Other Contracted Services Telephone 156160 4,122 ESS BROTHERS&SONS Repair&Maint.Supplies Sewer Utility-General 156161 1,186 EULL'S MANUFACTURING CO INC Repair&Maint.Supplies Sewer Utility-General 156162 572 FALCK,TIMOTHY R Other Contracted Services Softball 156163 504 FELHABER,LARSON,FENLON&VOG Other Contracted Services Organizational Services 156164 205 FLEET MAINTENANCE INC Equipment Repair&Maint Fleet Services 156165 159 G&K SERVICES Clothing&Uniforms Fleet Services 156166 1,303 G&K SERVICES-MPLS INDUSTRIAL Janitor Service Utility Operations-General 156167 1,079 GARTNER REFRIGERATION&MFG IN Contract Svcs-Ice Rink Ice Arena Maintenance 156168 1,185 GEOMATRIXCONSULTANTS INC Other Contracted Services WAFTA 156169 113 GERTENS Chemicals Purgatory Creek Rec Area 156170 113 GIRARD'S BUSINESS SOLUTIONS IN Other Rentals Finance 156171 1,629 GOPHER STATE ONE-CALL INC Other Contracted Services Water System Maintenance 156172 2,266 GRAINGER Supplies-HVAC Community Center Maintenance 156173 134 GRAPHIC SOURCE INC Printing International Festival 156174 371 GREATAMERICA LEASING CORP. Other Rentals General 156175 704 GREENSIDE INC Contract Svcs-Lawn Maint. City Hall-CAM 156176 57 GS DIRECT Operating Supplies Engineering 156177 3,975 GUNNAR ELECTRIC CO INC Building Riley Lake 156178 13,425 HANSEN THORP PELLINEN OLSON Design&Engineering Park Acquisition&Development 156179 24,600 HAUGE CONSTRUCTION COMPANY Other Contracted Services Rehab 156180 14,264 HAWKINS INC Treatment Chemicals Water Treatment Plant 156181 5,668 HEWLETT-PACKARD COMPANY Other Hardware Capital Impr./Maint.Fund 156182 264 HOLMES,JOHN CARTER Other Contracted Services Softball 156183 264 HOLMES,TOM Other Contracted Services Softball 156184 8,567 HOUSE OF PRINT Printing Community Brochure 156185 558 ICI DULUX PAINT CTRS Operating Supplies Utility Operations-General 156186 146 IMAGETECH SERVICES Operating Supplies Park Maintenance 156187 8,840 IND SCHOOL DIST 272 Other Contracted Services Oak Point Operations Check# Amount Vendor/Explanation Account Description Business Unit 156188 1,291 INDUSTRIAL FLOOR MAINTENANCE I Equipment Parts Fleet Services 156189 76 INSIGHT PUBLIC SECTOR Other Hardware Information Technology 156190 1,101 ITRON INC. Maintenance Contracts Water Meter Reading 156191 131 ITS A KEEPER Employee Award Organizational Services 156192 392 JEFFERSON FIRE&SAFETY INC Repair&Maint.Supplies Fire 156193 22,575 JOHN HENRY FOSTER MINNESOTA IN Machinery&Equipment Utility Improvement Fund 156194 1,980 K&H OUTDOORS,INC Other Contracted Services Park Maintenance 156195 4,897 KAMIDA INC Other Assets Park Acquisition&Development 156197 6,750 KEEPERS Clothing&Uniforms Fire 156198 14 KRAEMERS HARDWARE INC Operating Supplies Utility Operations-General 156199 4,635 LAMETTRYS COLLISION Equipment Repair&Maim Fleet Services 156200 5,818 LHB INC Other Contracted Services PROJECT FUND 156201 664 LIGHTNING PRINTING INC Printing International Festival 156202 800 MACQUEEN EQUIPMENT INC Equipment Parts Fleet Services 156203 824 MAPLE GROVE PRINTING Printing Elections 156204 700 MARTIN-MCALLISTER Employment Support Test Fire 156205 528 MCGREGOR,RANDY Other Contracted Services Softball 156207 2,506 MENARDS Building Repair&Maint. Park Maintenance 156208 520 METRO FIRE Operating Supplies Fire 156209 836 METROPOLITAN FORD Equipment Parts Fleet Services 156210 170 METROTECH CORPORATION Equipment Repair&Maint Water Utility-General 156211 23,086 MIDWEST ASPHALT CORPORATION Patching Asphalt Street Maintenance 156212 2,491 MINNESOTA ATHLETIC Fire Prevention Supplies Fire 156213 197 MINNESOTA GLOVE INC Equipment Parts Fleet Services 156214 3,871 MINNESOTA HIGHWAY SAFETY&RES Tuition Reimbursement/School Police 156215 224 MINNESOTA ROADWAYS CO Patching Asphalt Street Maintenance 156216 276 MN MAINTENANCE EQUIPMENT INC Equipment Repair&Maint Park Maintenance 156217 1,021 MTI DISTRIBUTING INC Equipment Parts Fleet Services 156218 2,105 NATIONAL WATERWORKS/HUGHES SUP Repair&Maint.Supplies Water Utility-General 156219 446 NOKOMIS SHOE SHOP Clothing&Uniforms Park Maintenance 156220 223 NORTHERN SAFETY TECHNOLOGY INC Equipment Parts Fleet Services 156221 7,482 NORTHWEST ASPHALT Improvement Contracts CIP Trails 156222 475 NORTHWEST BUSINESS SYSTEMS Building Fire Station#4 156223 80 NORTHWEST RESPIRATORY SERVICE Operating Supplies Fire 156224 2,181 NRG PROCESSING SOLUTIONS Building Materials Street Maintenance 156225 163 NUCO2 INC Chemicals Pool Maintenance 156226 474 OLSEN COMPANIES Repair&Maint.Supplies Water Utility-General 156227 8,695 OWENS SERVICES CORP Other Contracted Services Rehab 156228 37,355 PARK CONSTRUCTION Improvement Contracts ADC PROJECT 156229 838 PARK NICOLLET CLINIC Other Contracted Services Risk Management 156230 210 PIONEER DRAMA SERVICE Other Rentals Arts Initiative 156231 1,930 PRAIRIE ELECTRIC COMPANY Contract Svcs-Electrical Historical Buildings 156232 85 PRINTERS SERVICE INC Contract Svcs-Ice Rink Ice Arena Maintenance 156233 273 QUALITY FLOW SYSTEMS INC Equipment Repair&Maint Sewer Liftstation 156234 489 QUALITY PROPANE Motor Fuels Ice Arena Maintenance 156235 1,125 RAY,LEE Other Contracted Services Softball 156236 252 REED BUSINESS INFORMATION Advertising Park Acquisition&Development 156237 81 RIDGEVIEW MEDICAL CENTER Other Contracted Services Risk Management 156238 301 RMR SERVICES LLC Other Contracted Services Water Meter Reading 156239 395 ROOT 0 MATIC Contract Svcs-General Bldg Community Center Maintenance 156240 2,085 RUMPCA CO INC Waste Disposal Tree Removal 156241 327 SCHONSTEDT INSTRUMENT COMPANY Equipment Repair&Maint Water Utility-General 156242 594 SCHWARTZ,DONALD Other Contracted Services Softball 156243 2,780 SHANNON CHEMICAL CORPORATION Treatment Chemicals Water Treatment Plant 156244 25,684 SHORT ELLIOTT HENDRICKSON INC Improvement Contracts Utility Improvement Fund 156245 61 SHRED-IT Waste Disposal City Center Operations 156246 922 SNAP-ON TOOLS Small Tools Fleet Services 156247 2,217 SOUTHWEST SUBURBAN PUBLISHING- Printing Communication Services 156248 109 SPORTS WORLD USA INC Merchandise for Resale Ice Arena 156249 391 SPS COMPANIES Supplies-Plumbing Park Shelters 156250 21,777 SRF CONSULTING GROUP INC Testing-Soil Boring 212/Charlson Rd.Intersectio 156251 8,945 ST CROIX ENVIRONMENTAL INC Other Contracted Services Well 14 156252 107 STANDARD REGISTER Operating Supplies Finance 156253 284 STERICYCLE INC Other Contracted Services Police 156254 631 STEVENS ENGINEERS Building Capital Impr./Maint.Fund 156255 178 STREICHERS Equipment Parts Fleet Services 156256 462 SUBURBAN CHEVROLET Equipment Parts Fleet Services 156257 753 SUBURBAN TIRE WHOLESALE INC Tires Fleet Services Check# Amount Vendor/Explanation Account Description Business Unit 156258 3,875 SUMMIT ENVIROSOLUTIONS Process Control Services Water Treatment Plant 156259 3,646 SUMMIT HOME CENTER Other Contracted Services Rehab 156260 912 SUN NEWSPAPERS Legal Notices Publishing City Clerk 156261 200 SWEDLUND SEPTIC SERVICES INC Waste Disposal Outdoor Center 156262 150 SWEET OCCASIONS FOR YOU Other Rentals Arts Initiative 156263 97 TAHER INC CATERING Operating Supplies Water Utility-General 156264 99 TIMBERWALL LANDSCAPING INC Building Materials Park Maintenance 156265 440 TIMM,KEVIN Other Contracted Services Softball 156266 11,900 TKDA Other Contracted Services Water System Maintenance 156267 263 TKE CORP Equipment Repair&Maint Water Treatment Plant 156268 366 TOTAL RENTAL Other Rentals International Festival 156269 8 TOWN AND COUNTRY DODGE Equipment Parts Fleet Services 156270 35,958 TRANS ALARM INC Building Fire Station 44 156271 1,128 TUSHIE MONTGOMERY ARCHITECTS Building Den Road Building 156272 329 TWIN CITY FILTER SERVICE INC Operating Supplies Utility Operations-General 156273 182 TWIN CITY OXYGEN CO Repair&Maint.Supplies Sewer Utility-General 156274 2,503 TWIN CITY SEED CO Chemicals Park Maintenance 156275 5,495 VERNCO MAINTENANCE INC Grounds Maintenance Utility Operations-General 156276 1,690 VILLAGE PROFILE Advertising Communication Services 156277 948 VISUAL COMMUNICATIONS Other Contracted Services Economic Development Fund 156278 418 VOIGHT,JEFF Other Contracted Services Softball 156279 287 VWR INTERNATIONAL INC Laboratory Chemicals Water Treatment Plant 156280 704 WATER SPECIALTY OF MN INC Chemicals Pool Maintenance 156281 7,533 WENCK ASSOCIATES INC Other Contracted Services Storm Drainage 156282 14,518 WHEELER HARDWARE COMPANY Building Repair&Maint. Capital Impr./Maint.Fund 156283 3,014 WHEELER LUMBER LLC Building Repair&Maint. Capital Impr./Maint.Fund 156284 1,764 WM MUELLER AND SONS INC Other Assets Park Acquisition&Development 156285 7,783 WORK CONNECTION,THE Other Contracted Services Park Maintenance 156286 112 WORM,SANDY Other Assets Park Acquisition&Development 156287 201 WUOLLET BAKERY INC Employee Award Human Resources 156288 7,380 YALE MECHANICAL INC Equipment Repair&Maint Den Road Liquor Store 156289 2,878 YOCUM OIL COMPANY INC Gas Water Treatment Plant 156290 645 ZAHN,GERALD Other Contracted Services Volleyball 156291 350 ZIEBART OF MINNESOTA INC Equipment Parts Fleet Services 156292 98 ZIEGLER INC Equipment Repair&Maint Water Treatment Plant 2,633,491 Grand Total CITY COUNCIL AGENDA DATE: SECTION: Reports of Advisory Boards and Commissions September 5, 2006 DEPARTMENT/DIVISION: ITEM DESCRIPTION: ITEM NO.: XII.A. Office of City Manager Flying Cloud Airport Advisory Commission Scott H.Neal Meeting Schedule Scott Kipp Requested Action Move to: • Establish a bi-monthly [every two months] meeting schedule for the Flying Cloud Airport Advisory Commission beginning in November 2006. Synopsis This is a change of the meeting schedule from quarterly meetings to bi-monthly meetings for the Flying Cloud Airport Advisory Commission. Background Information The Flying Cloud Airport Advisory Commission was re-established in December of 2005. The meeting schedule established at that time was quarterly beginning in February. The Commission believes that quarterly meetings do not allow for adequate dialogue on issues, especially when each agenda includes educational items on airport history, function, rules and regulations, and relationships with other jurisdictions, etc. Also,the amount of time between quarterly meetings can result in loss of interest and productivity. Bi-monthly meetings will make more efficient use of commission member's time,help the Commission stay on top of issues of importance, and focus on accomplishing its tasks. At its August 10t'meeting the Commission unanimously recommend that the City Council change the frequency of meetings for the Flying Cloud Airports Commission from quarterly meetings to bi-monthly [every two months] meetings. CITY COUNCIL AGENDA DATE: SECTION: Report of the City Manager September 5, 2006 DEPARTMENT/DIVISION: ITEM DESCRIPTION: ITEM NO.: XIV.B.1. Office of the City Manager/ Resolution certifying the proposed 2007 property Finance, Sue Kotchevar tax levy, accepting the proposed 2007 budget, setting date(s) for Truth-in-Taxation hearing(s), and consenting and approving the HRA tax levy Requested Action Move to adopt the resolution that: • Certifies the proposed 2007 property tax levy to be $31,086,333; and • Sets the "Truth-in-Taxation" public hearing for Monday, December 4, 2006 and, if necessary,to reconvene the public hearing on Tuesday, December 11,2006; and • Accepts the proposed 2006 budget of$39,061,316; and • Consents and approves the HRA tax levy of$200,000. Background Info rmation o rmati on Minnesota Law and administration rules prescribe a detailed process for public notification and participation in setting taxes and budgets of local governments. Cities must adopt a proposed net property tax levy by September 15 and certify it to the county auditor.In addition,the City Council must accept a proposed budget for the coming year. The City must also set a date for the"Truth-in-Taxation"hearing and a date to reconvene it(if necessary). These dates may not conflict with the initial hearing dates set by Hennepin County, school districts, or the metropolitan taxing districts. Because they get to set their dates before we do,there are a very limited number of dates available. The dates of December 4 and December 11 are the most feasible for us to be within the schedule established by the Minnesota Department of Revenue. The Council must adopt the final tax levy and budget by December 19. Minnesota Law authorizes the HRA to levy a tax with the consent of the City Council. This resolution gives the consent needed for the HRA. Attachments Resolution Budget Memorandum CITY OF EDEN PRAIRIE HENNEPIN COUNTY,MINNESOTA RESOLUTION NO.2006- A RESOLUTION ADOPTING THE CITY'S PROPOSED 2007 PROPERTY TAX LEVIES,ACCEPTING A PROPOSED BUDGET FOR GENERAL OPERATIONS AND TAX-SUPPORTED OBLIGATIONS FOR 2007,AND CONSENT AND APPROVE THE 2007 HRA LEVY WHEREAS, the City Council of the City of Eden Prairie has reviewed the City Manager's recommended 2007 budget and tax levies; and WHEREAS,the City Council has decided to accept these recommendations at this time. NOW,THEREFORE,BE IT RESOLVED,that the City Council: 1. Establishes the following proposed taxes on real and personal property within the City of Eden Prairie for the 2007 budget. Levy on Tax Capacity $29,364,609 Levy on Market Value 1,721,724 Total LEVY $31,086,333 The proposed total Levy may not be exceeded when the City Council sets the final tax levy for 2007. 2. Accepts the 2007 proposed levy of$31,086,333 and proposed budget totaling$39,061,316 at this time. 3. Consents and approves the 2007 HRA tax levy of$200,000. ADOPTED by the City Council on September 5,2006. Nancy Tyra-Lukens, Mayor ATTEST: Kathleen Porta, City Clerk Memorandum TO: Mayor and City Council FROM: Sue Kotchevar,Finance Manager e DATE: September lst,2006 RE: 2007 Proposed Budget Introduction This memo provides a brief overview of the budget. The 2007 budget is the second year of the 2006/2007 budget process. The tax levy and budget were reviewed during the 2006/2007 budget process in 2005 and also at the March 8`i'2006 and June 20a',2006 workshops. At the September 5' council meeting, the council will be asked to certify the proposed 2007 property tax levy, accept the proposed 2007 budget, set date(s) for the Truth-in-Taxation public hearing(s), and consent and approve the proposed HRA tax levy. There are no recommended changes to the budget since the June 20°i Workshop. Total Budget The total budget change of 6.2%is listed below by fund. 2006 2007 Percent Adopted Proposed Difference Change General Fund $ 32,128,436 $ 33,960,621 $ 1,832,185 5.7% Debt Levy 3,000,724 3,435,724 435,000 14.5% Housing and Redevelopment 200,000 200,000 - 0.00/0 Equipment Revolving Levy 639,392 664,968 25,576 4.00/6 Capital Improvement Plan Levy 1,000,000 1,000,000 - 0.0% Total $ 36,968,552 $ 39,261,313 $ 2,292,761 6.2% General Fund The 2007 proposed budget totals $33,960,621 and is 5.7% more than 2006. As was reviewed at the budget workshop, the most significant changes in the budget include amounts for wages and benefits,facilities,utility costs,public safety communication,and fuel. Debt Debt obligations have increased from$3,000,724 in 2006 to$3,435,724 in 2007. The debt obligation for the police training facility will be paid off in 2006. Debt payments that were added in 2007 include $375,000 for fire station #4 and $255,000 for equipment notes which replaces ladder truck #1, and includes a light rescue truck and a brush truck for the new fire station and the communication room project. Debt levels remain reasonable and are about ten percent of the general fund operating budget which is considered a moderate debt burden. Housing Redevelopment Authority The HRA proposed tax levy and budget is$200,000 which is the same as 2007. Equipment Revolving Fund For 2007, the Equipment Revolving Fund proposed tax levy totals $664,968 and is a 4% increase from 2006. Capital Improvement Fund The Capital Improvement Fund pays for approximately $3,000,000 in capital improvements annually on a pay-as-you go basis. Approximately one-half of the expenditures are for the pavement management program. The proposed budget includes a$1,000,000 tax levy for the fund which is the same as 2007. Tax Impacts The tax levy change of 7.6%is listed below by fund. 2006 2007 Percent Adopted Proposed Difference Change General Fund $ 23,628,715 $ 25,356,612 $ 1,727,897 7.3% Debt Service Tax Capacity 1,289,000 1,714,000 425,000 33.0% Debt Service Market Value 1,711,724 1,721,724 10,000 0.6% Housing and Redevelopment 200,000 200,000 0 0.0% Equipment Revolving 639,392 664,968 25,576 4.0% Market Value Homestead Credit* 629,029 629,029 0 0.0% Capital Improvement/Maintenance 1,000,000 11000,000 0 0.0% Total Tax Levy-Per the County 29,097,860 31,286,333 2,188,473 7.5% Fiscal Disparity Distribution (1,284,921) (1,369,663) (84,742) 6.6% Adjusted Levy $ 27,812,939 $ 29,916,670 $ 2,103,731 7.6% Tax Levy per the County Tax Levy less Market Value Debt $ 27,386,136 $ 29,564,609 Debt Service Market Value Levy 1,711,724 1,721,724 Total Tax Levy $ 29,097,860 $ 31,286,333 *If received,will be used for Capital Improvement and Maintenance i For 2007, the median value home in Eden Prairie is valued at$362,200 reflecting an average taxable value increase of 6%. For commercial/industrial properties, average market values increased 12.5% and for apartments, average market values increased 12.8%. Below summarizes the tax impacts by property type. Pay Pay Percent 2005/06 2006/07 Diff. Change Residential($362,200) $ 1,033 $ 1,067 $ 34 3.29% Apartment($5M) $ 16,830 $ 18,414 $ 1,584 9.41% Commercial($2M) $ 6,763 $ 7,396 $ 633 9.360/6 Staff has calculated that a 1% tax change impacts the levy by$275,000. A 1%change in the tax levy has a$10 impact on the median value residential property. Next Steps The next steps to finalize the 2007 budget include the Truth-in-Taxation hearing scheduled for Monday December 4t' at 7:00 p.m. Also, the City Council will be asked to adopt the final tax levy and budget at the December 19°i, 2006 council meeting. If you have any questions, please let me know. 2007 Proposed Budget General Fund Expenditures 2006 2007 '06 to'07 '06 to'07 Adopted Proposed Dollar Percent Budget Budget Incr/(Derr) Incr/(Decr) General Government $ 8,959,247 $ 9,695,522 $ 736,275 8.2% Community Development 1,869,228 1,960,605 91,377 4.9% Parks and Recreation 4,705,479 4,835,207 129,727 2.8% Police 8,118,661 8,487,101 368,440 4.5% Fire 3,284,215 3,511,700 227,485 6.9% Public Works 5,191,606 5,470,486 278,881 5.4% Total General Fund Expenditures $ 32,128,436 $ 33,960,621 $ 1,832,185 5.7% 2007 Proposed Budget General Fund Revenues 2006 2007 '06 to'07 '06 to'07 t Adopted Proposed Dollar Percent Budget Budget Incr/(Decr) Incr/(Decr) General Property Taxes $ 23,200,839 $ 24.889,480 $ 1.688,641 7.3% Licenses and Permits Building Permits 2,497,677 2,413,844 (83,833) (3.496) Other 485,700 475,700 (10,000) (2.196) Total Licenses and Permits 2,983,377 2,889,544 (93,833) (3.1%) Cable TV 510,000 525,000 15,000 2.9% Intergovernmental Revenue Police Pension Aid 425,000 435,000 10,600 2.4% Fire Relief Association Aid 457,000 453,000 (4,000) (0.9%) School Liaison 105,000 105,000 0.0% Other 140,824 138,824 (2,000) (1.4419) Total Intergovernmental Revenue 1,127,824 1,131,824 4,000 0.4% Charges for Services - General Government 798,360 850,000 51,640 6.5% Public Safety 98,200 98,200 - 0.0% Recreation 1,791,035 1,853,610 62,575 3.5% Total Charges for Services 2,687,595 2,801,810 114,215 4.2% Fines&Penalties 450,000 465,000 15,000 3.3% Investment Earnings 250,000 300,000 50,000 20.0% i Other Revenue 433,801 472,963 39,162 9.0% Other Financing Sources 485,000 485,000 - 0.0% Total General Fund Revenues $ 32,128,436 $ 33,960,621 $ 1,832,185 5.7% CITY COUNCIL AGENDA DATE: SECTION: Reports of the City Manager September 5, 2006 DEPARTMENT/DIVISION: ITEM DESCRIPTION: ITEM NO.: XIV.B.2. Office of the City Manager/ Scott H.Neal, City Manager Establishment of the City Manager's Business Advisory Committee Requested Action Move to approve the establishment of the City Manager's Business Advisory Committee. Synopsis At my 2006 annual performance review in May, I presented the Council with the proposal to establish a Business Advisory Committee. From my post-review discussion with the Mayor, I understood the Council to support the idea. I have reviewed the idea with City staff and included some of their input in the final proposal, which is attached in memorandum format. If approved by the City Council on September 5, I would proceed with recruitment and selection processes this fall with the goal of having the new committee ready to meet in early January 2007. Attachments Memorandum Office Of the City Manager I Memorandum #2006-015 DATE: August 29, 2006 TO: Mayor and City Councilmembers FROM: Scott H.Neal, City Manager RE: City Manager's Business Advisory Committee At my 2006 performance review on June 6,I presented the Council my idea for the creation of a new standing committee within Eden Prairie city government for the purpose of taking advantage of the business operations expertise of our citizenry to assist me with improving the quality and cost-effectiveness of municipal services and operations. After the performance review,I met with the Mayor and was advised that the Council received the idea positively and encouraged me to develop it more fully. That is the purpose of this memorandum. I propose the name of the committee to be the City Manager's Business Advisory Committee. The committee members would be recruited and selected by the City Manager. The committee would be responsible to the City Manager. I propose the use the word"committee"to distinguish this group from groups appointed by the City Council which we organize as either"commissions"or"task forces". The purpose of the committee is to examine selected operations and services of the City in order to provide the City Manager with advice and counsel about how to improve them and make them more cost-effective The committee will be composed of persons who live or work in Eden Prairie. The committee will be 5-7 members with overlapping two year terms for the members. I will seek the advice of the City Council,City staff and the Eden Prairie Chamber of Commerce in both the recruitment and selection of the committee members. Committee members will meet as necessary to complete their appointed tasks. Committee members will be unpaid. The City Manager will determine the committee's scope of work. The City Manager will determine this scope of work in consultation with the City Council and City staff. The committee's work product will be written reports which contain both conclusions and recommendations of the study subject. The reports will be public data and will be shared with the City Council and the City staff. The City Manager will be the chief staff liaison to the committee and will make a available such other staff support and resources as necessary for the committee to carry out its appointed duties. There are two primary challenges in managing a committee like the one described in this memorandum. The first challenge is that it must be able to look into the City's operations and give honest feedback and input without creating negative tension among City staff. I believe that our City staff is mature and professional enough to overcome this challenge. Our staff has a strong results orientation. We will welcome recommendations from the committee can help us produce a better product or service at a lower cost. The other primary challenge in managing a committee like the one I am proposing is deciding where to position it within the organization. The committee should have access to those inside the organization that have the information they need in order to analyze the questions they have been directed to study. However,the committee should not be positioned so that it becomes a proxy City Council when it becomes necessary to deliberate the delicate questions of public policy. I believe that my proposal balances both of these challenges and places this committee in the optimal organizational location to allow it access to information, but not so powerful that it supplants my recommendation authority or the Council's approval authority for the most important budgetary and operating decisions for the City. The Council has had considerable public and private debate about the feasibility and advisability of establishing a citizen committee to review the City's operations and budgeting practices. I believe this proposal establishes a committee which can take advantage of the business expertise of our citizens to improve the City's operations and services,.while not modifying the fundamental government structure of the City. I recommend its approval by the City Council. CITY COUNCIL AGENDA DATE: SECTION: Report of the Parks and Recreation Director September 5, 2006 DEPARTMENT/DIVISION: ITEM DESCRIPTION: ITEM NO.: XIV.D.I. Robert A. Lambert, Director Birch Island Park Plan Parks and Recreation Requested Action Move to: Approve the revised concept plan for Birch Island Park dated August 7, 2006. Synopsis On May 15, 2006,residents were invited to attend a June 12 meeting to provide input on the planning for improvements to Birch Island Park. Based on the input received from that meeting the City developed a concept plan for review and approval by the Parks,Recreation and Natural Resources Commission and City Council. The Parks, Recreation and Natural Resources Commission approved this plan at their August 7 meeting. The estimated cost for development of this park would depend on the improvements approved,but would be funded with cash park fees. The estimated cost of the revised plan is approximately$370,536. Staff would recommend proceeding with the plans and specifications and going to bid on this project in conjunction with the development of the parking lot renovation at the Community Center. Background The City of Eden Prairie purchased the initial seventeen acres of Birch Island Park in 1972. In 1980, the City held a neighborhood meeting asking residents for input on how would like to see Birch Island Park developed.At that meeting,the majority of the residents indicated that their children were grown and did not need to provide any improvement to the park; however, some of the residents who did have small children also supported no improvements at that time, as there is no safe access to the park. Those residents suggested that once the City provides trails adjacent to County Road 4 leading to the park,the City should again ask neighbors if they wanted to see any improvements to the park. In the fall of 2005,the citizens approved a referendum that included money for trail improvements. The first project authorized by the City Council was to extend a trail on both sides of County Road 4, north of Crosstown.Planning for these trails is currently underway with a project proposed for construction to begin sometime in 2007 or 2008, depending on the success for matching grants.As this trail system will provide pedestrian bicycle access to the park,the City staff recommends the development of Birch Island Park coincide with the development of the trail system.This park was acquired mainly to preserve the woods and shoreline of the northeast side of Birch Island Lake.The City does not view this park as a typical neighborhood park where ballfields would be developed;however,the City does want to provide a safe access and bring the parking lot up to standards, and would consider other improvements such as playgrounds,perhaps a park shelter, or court games as appropriate improvements to this park.At Birch Island Park Plan September 5, 2006 Page 2 the neighborhood meeting,residents supported this type of development, although there was not a consensus on whether or not there was a need for tennis courts and volleyball courts. Subsequent to the May 15,meeting, staff met with several residents who live adjacent to the park. They were upset that the concept plan did not address their largest concern,which is the safety of the access. City staff then met with the traffic engineers to discuss the problems of the access related to site line limitations to the south and the fact that the current access is at the start of the on-ramp to County Road 62 (eastbound) and where southbound County Road 4 narrows from two lanes to a single lane.The engineers recommendation is to move the access south as depicted in the revised concept plan. Neighbors were again invited to attend the August 7 meeting to provide input on the concept plan that has been developed based on their input from their June 12 meeting. City staff recommend the Commission make a recommendation to the City Council based on the input the Commission receives from neighborhood reaction to the proposed concept plan. Attachments August 14,2006, Letters to Residents Revised Concept Plan Conceptual Cost Estimate 8-7-06 Minutes from the June 12,2006 meeting with Birch Island Neighborhood PARKS AND RECREATION August 14,2006 ( .' RE:Revised Birch Island Park Plan Approval Dear Resident: On July 19, you were sent a letter with a concept plan for the development of Birch Island Park and were invited to attend a meeting of the Parks,Recreation and Natural Resources Commission on August 7,to comment on that plan. OFc 952 949 8 30 9 FAX 952 949 6390 After the July 19 letter was sent, and prior to the August 7 meeting several residents living TOD 952 949 9399 adjacent to Birch Island Park requested to meet with City staff at Birch Island Park to BOBO Mitchell Rd Eden Prairie,MN discuss the concept plan.All four residents attending the on-site meeting indicated that 55344-4485 their major concern was the safety of the access to the park,rather than what was in the ed81prairle ay park. They pointed out that the access road to the park is at the start of the on-ramp access to County Road 62(eastbound)and is also where the southbound County Road 4 narrows from two lanes to a single lane. They strongly urged the City to consider relocating the access fin ther to the south where there was better sight distance, and a separation from the traffic issues related to the on-ramp and the converging lanes.After meeting with traffic engineers from the City,the engineers recommended moving the access south as depicted in the revised concept plan. At the August 7 meeting, all of the comments from the neighbors supported relocating the access to Birch island Park further to the south as depicted on the plan on the back of this letter. The Parks,Recreation and Natural Resources Commission unanimously approved this revised concept plan and furthermore, did not support any additional development of Birch Island Park,other than the playground area and a small park shelter at this time. The City Council will consider the recommendation of the Parks,Recreation and Natural Resources Commission at their September meeting held on: Tuesday,September 5,7 PM City Center Council Chambers 8080 Mitchell Road You are invited to attend that meeting and provide the City Council with any further comments you may have regarding the proposed concept plan. I look forward to seeing you at the September 5 Council Meeting. Sincerely, Robert A Lambert Director Backside: Birch Island Park Revised Concevt Plan i 7'ASH .24- Rwts�d Bn 7 i �t J "-20 - ' Cam- D+2' r > City of Eden Prairie s=" in f"t Parks & Natural Resources 0 50 100 f50 Birch Island Park Preliminary Grading,Drainage,Pavement and Utilities Conceptual Cost Estimate 8-7-06 Grading and Pavement ITEM DESCRIPTION EST.QTY. UNIT UNIT PRICE TOTAL I Mobilization 1 Lump Sum $5,000.00 $5,000.00 2 Site Grading 1 Lump Sum $10,000.00 $10,000.00 3 Imported Fill 3500 Cu.Yd. $12.00 $42,000.00 4 Fine Grading 2.5 Acres $2,100.00 $5,250.00 5 Clear and Grub 1 Lump Sum $2,500.00 $2,500.00 I 6 2"Bituminous Base 165 Tons $75.00 $12,375.00 7 1.5"Bituminous Wear 125 Tons $80.00 $10,000.00 8 8"Class 5 100%Crushed Quarry Rock(Parking lot) 620 Tons $18.00 $11,160.00 9 Tack Coat 75 Gal. $3.50 $262.50 10 5"Concrete Plaza(Includes 6"Class V) 1350 Sq.Ft. $5.00 $6,750.00 11 Handicap Accessible Parking Signs(R7-8a) 2 Each $200.00 $400.00 12 Pavement Markings(Striping) 1 Lump Sum $500.00 $500.00 13 Seed w/Topsoil 0.8 Acres $4,000.00 $3,200.00 14 Erosion Control(Silt fence) 600 Lin Ft. $2.50 $1,500.00 15 Rock Filter Dike 1 Each $1,000.00 $1,000.00 16 Wood Fiber Blanket 3:1 Slopes and Swales 3430 Sq.Yd. $3.00 $10,290.00 17 Remove Silt Fence 2065 Lin Ft. $0.60 $1,239.00 18 Construction Signing I Lump Sum $2,000.00 $2,000.00 19 4"x 18"Concrete Edging at Playground 300 Lin.Ft. $13.00 $3,900.00 20 Park Shelter(Installed) I Each $26,000.00 $26,000.00 21 Playground Equipment 1 Lump Sum $25,000.00 $25,000.00 22 4"Drain Tile 850 Lin.Ft. $13.00 $11,050.00 23 Topsoil 300 Cu.Yd $15.00 $4,500.00 24 Mn/Dot 3149.211 Coarse Filter Aggregate 68 Ton $40.00 $2,720.00 25 Sod 1100 Sq.Yd $4.25 $4,675.00 26 8'Trail 1200 LF Class V 12" 950 Ton $20.35 $19,332.50 Bituminous 2 1/2" 173 Ton $80.00 $13,840.00 Sand 6" 200 cu.Yd. $15.00 $3,000.00 27 Water Service(Including all appurtenances) 1 Lump Sum $11,000.00 $11,000.00 28 Class V and Fence Removal I Lump Sum $5,000.00 $5,000.00 29 40'Bridge(Including installation) 1 Lump Sum $55,000.00 $55,000.00 30 Rain Garden/Planting 1 Lump Sum $10,000.00 $10,000.00 31 Trees 10 Each $500.00 $5,000.00 32 48"Catch Basin with Frame and Grate 1 Each $2,092.00 $2,092.00 33 12"RCP 160 Lin.Ft. $41.00 $6,560.00 34 12"RCP Apron(FES)with Trash Guard 1 Each $500.00 $500.00 35 Pipe Bedding 90 Ton $20.00 $1,800.00 36 Random Riprap Class IV(Includes Geotextile Fabric) 5 Cu.Yd. $91.00 $455.00 SUBTOTAL $336,851.00 10%Contingencies $33,05.10 TOTAL $370,536.10 UNAPPROVED MINUTES BIRCH ISLAND NEIGHBORHOOD MEETING MONDAY,JUNE 12,2006 7:00 P.M.,CITY CENTER Heritage Room IV 8080 Mitchell Road STAFF: Bob Lambert,Parks&Recreation Director Stuart Fox, Manager of Parks and Natural Resources RECORDING SECRETARY: Allison Burr Lambert called the meeting to order at 7:00 p.m. Lambert explained the history of Birch Island Conservation Area and Park. He noted there is money in the referendum that recently passed to improve the trail system. In 1976,when trails began to be built,the goal was to build trails on both sides of County Road 4 and County Road 1. Those were identified as the high-traffic north/south east/west roads in town. However,the process became very expensive, and trails were stopped until there was further money, which is the situation the City is in now. Lambert explained safe access will be provided to a trail system on either side of the road.He presented aerial photos of what is there today, and he asked for feedback of neighboring residents about what should be done with the park. One resident expressed concern about improving access into the park, as it is very steep. He stated a preference for the way the park looks right now. Lambert stated because this is a small park with unique character,the City will not consider massive grading for active areas such as ballfields. The City does want to fix the parking lot and improve access so there is a level place to wait and view traffic when exiting. This park is really a fragile little park, and there are three different areas designated as archeological sites in the park that the City cannot touch. He noted there are also wetlands that must be protected. Lambert stated the City wants to know if there is a desire for a picnic shelter or a playground for kids. He stated it can be left the way it is, if that is what the neighbors want, but he suspects some people may want more than what is there right now. One resident asked about the camping area. Lambert responded no overnight camping is allowed in any City parks. He said some formal areas can be designated as picnic areas with picnic tables. One resident asked if there are plans to put a sidewalk in. He stated the traffic there goes fast and there is no caution light. Mr. Lambert stated there will be trails on both sides of County Road 4 leading to that park. The trail on the east side of County Road 4 will go down into the BIRCH ISLAND NEIGHBORHOOD MEETING June 12, 2006 Page 2 park well before the entry place because it will follow the terrain down. He stated safe access to the park has been the issue of what has delayed development so far. One resident asked if Hennepin County still owns a piece of property. Mr. Lambert stated the City has talked to them about gifting that to the City, and they have indicated they may do so sometime in the future. Jeff Strate stated he talked to the Nine Mile Creek Watershed District and they intend to raise the level of Birch Island Lake. Things are moving ahead on a procedural and planning basis. He was told possibly as early as this winter,they will begin the tiling for restoration of that. It will likely raise the level of water a foot a year. One resident stated County Road 4 is an official Hennepin County bike trail. He asked if there has been any conversation with them about matching funds to improve their trail. Lambert responded the City has had conversations with them about grants available for matching funds for this trail. The City plans to apply for grants and believes it has a good chance. Fox noted even though it is in County right-of-way,the maintenance and repairs are assigned to the City. If there are problems with trails,the City has to correct them. One resident asked if Minnetonka has any plans to do anything with the trail in their community. Lambert responded their designated trail is still the shoulder of the road. One resident suggested the park should stay the same; another playground is not necessary. She noted there is a nearby school with a playground, and Birch Island Park is so nice because it is natural. Mr. Lambert stated several people have indicated they would like to leave it in its natural condition. One resident suggested a playground area for preschool age kids and a tennis court. One resident indicated she would like the park to remain natural. If anything is done, it should be near the entrance where she would be less concerned with that area developing. Lambert asked how many people would use a picnic shelter. One resident indicated he would use it if it could be reserved. Fox stated a typical shelter would be 20' x 20' shelter that would fit four or five picnic tables under it. He added inmost neighborhood parks the City is putting in a 10' x 10' shelter next to the play area. One resident stated she would like a small play area,though she would like to preserve the natural setting as much as possible. BIRCH ISLAND NEIGHBORHOOD MEETING June 12, 2006 Page 3 One resident stated because there are limited funds, she believes the biggest issue is safe access. She would like to see more funds used on keeping it natural and getting safe access so it can be used. One resident concurred, and suggested the trails be educational in different ways to bring out its natural beauty. One resident asked about the timeline of any changes. Lambert stated the City will be doing the trails next year, and he would recommend doing any development at the same time. One resident asked about widening County Road 4. Lambert responded he is not aware of any of those types of plans within the next 20 years, but the County will provide feedback when plans are submitted. One resident asked if there is enough room to have switchbacks on the trait because the hill is so steep. Mr.Lambert stated the City is not yet into that level of detail yet, but he does not envision that kind of elevation change for the trail. One resident asked if the trail on the west side would go all the way to 62. Lambert responded affirmatively. One resident asked if there are City standards for nighttime use and lights regarding tennis or volleyball courts. Lambert responded there are design standards. But in terms of lights,the City does not like lights in anything other than skating facilities in neighborhood parks. If courts were put in there,they would not be lighted. A security light may be placed in the parking lot. He noted City park hours are 6 a.m.to 10 p.m. Lambert summarized he will direct the planners to show a park plan that depicts an improvement to the parking lot and safer access into the park, and will direct the planners to explore fitting in a small sun shelter with a playground area for young children,with perhaps a tennis court and sand volleyball court. The courts may be shown in a dashed line that may or may not happen, as there are mixed reactions to the need for these at this time. Lambert explained the next steps in the process.The City will send out a letter inviting the same residents to the Parks,Recreation and Natural Resources Commission meeting, including the concept design on the back of the letter. The plan will then go before the Council, which will receive feedback and recommendation from the Parks,Recreation and Natural Resources Commission and residents. The Council will then make a decision. Lambert estimated the concept plan will be before the Park Commission in August, so the letter will be sent out in July with a plan on it. The Council will likely review it in September, and bidding will occur at the end of the year. Lambert expressed appreciation for residents for providing feedback. The meeting adjourned at 7:30 p.m.