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Home My WebLink About4.a. Muller Family Theaters, Inc. Development Contract CITY OF ROSEMOUNT EXECUTIQE SIIMMARY FOR ACTION PORT AUTHORITY MEETING DATE: AUGUST 17, 1993 AGENDA ITEM: MULLER THEATER PROPOSAL AGENDA. SECTION: DEVELOPMENT CONTRACT OLD BUSINESS PREPAREI) BY: STEPHAN JILK AGENDA �� # ATTACHMENTS: DRAFT AGREEMENT, MEMO APP D : Attached for review and discussion is a memarandum from City Attorney Mike Miles and a draft agreement for development of the theater. RECOMMENDED ACTION: MOTION TO APPROVE THE DRAFT AGREEMENT BETWEEN THE PORT AUTHORITY AND MULLER FAMILY THEATERS FOR THE DEVELOPMENT OF THE PROPOSED THEATER COMPLEX ON TEN ACRES OF LAND IN THE PROPOSED ROSEMOUNT BUSINESS PARK COIINCIL ACTION: , FLU,EGEL MOYNIHRN TEL No . 1612�38�?77 Rug 13 �03 15 �42 No .016 P .D1 M E M O ft A N D U M TO: Rasemount Port Attthoxity , � FROM: Mike M�le llr�-� DATE: August I3, 1993 RE: Muller Theater Comp3.ex Proj�ct At tihe August 3 , 1993 meeting of the Rosemoun� Poxt A.uthority, you adopted a Resalutian directing the preparat�.an and �x�cut�S.on of a Development Agreement b�tw�en �he Port Authority and th� Mullers and required tha'� �his be acccamp.LS.sh�d by August 17 , �993. Rccording].y, attacheci is a proposed Developmeni: Agr�ement w}�ich the Mullex' s caunsel, Dan Tyson, and I hav� negatiated �or your review and po�ential approval at your August ii , 1993 meeting. Please not� that �he exhibits alluded �o zn the �evelopment Agr�ement have not been attach�d to it. Unfortunately, this i� th� case because the exhibits ar� not yet available frbm 'Ghe variaus resource persons who are put�ing t�hem togeth�r. Far example, Exhibit H is a description o� the precise tract of land to be occupied in �he Business Park by t11� Mullers anti, un�i]. we receive a survey from th� surveyor undertaking this tiask pursuant tr� the Purchase Agr�ement between the RPA ancl zhe .�,.bbotts , this exhibit will not be available. similarly, the precis� na�.uxe and cc.»t r�f the infrastructure has not been finally decided and so forth . The proposed Development Agreement is fairly straSghtforwarci, and I would ask that you please x-eview it priar to our TueSday meeting. I will be p�eased to answer any questians you may have either priar to or at the me�tinc� . JMM:gmo DEVELOPMENT AGREEMENT THIS AGREEMENT, dated , 1993, is between the Port Authority of the City of Rosemount, Minnesota, a body corporate and politic, called herein the "RPA" and Muller Family Theatre, a Minnesota general partnership, called herein "Muller, " RECITALS • Pursuant to Minnesota Statutes, Section 469 . 0813, the City of Rosemount, Minnesota, is empowered to and has established a Port Authority to serve as the principal economic development entity in the City of Rosemount; • The RPA is empowered to acquire land, issue bonds saith the approval of th� City of Rosemount and provide land and bond proceeds to persons and entities in order to foster economic develapment within the City of Rosemount, Minnesota; • Consistent with its powers, the RPA is in the process of acquiring land for a municipal busin8ss park, called herein, "Business Park, " and is desirous of identifying an anchor business for the Business Park; • The RPA has been approached by several businesses seeking to construct and operate a movie theater camplex as the anchor business in the Business Park, called herein , "Project,, � • The RPA established criteria relative to the construction and operation of the Project, submitted the criteria to - the businesses expressing an interest in the Project and received proposals from said businesses ; • On August 3, 1993, the RpA considered the proposals submitted and, by Resolution, which is attached and incorpora�.ed by reference as Exhibit A, selected the Muller proposal; • Through this Agreement, the RPA and Muller wish to establish the mutual responsibilities and rights of the parties with respect to the construction and operation of the Project; NOW THEREFORE, the RPA and Muller hereby mutually represent, covenant and agree as follows : ARTICLE I GENERAL PROJECT DESCRIPTION/DUTIES Subject to the terms and conditions set forth hereinafter, Muller, as developer, shall construct and operate the Project. The Project shall bs located on the site described in Article II . Muller shall be responsible for all costs associated with the construction and operation of the Project, including, but not limited to, the following: land acquisition, utilities and other infrastructure, construction and equipment, financing and operations . . The RPA, upon approval of the Rosemount City Council, shall issue bonds described in Article V(C) for: { 1 ) partial construction of the Project, ( 2) purchase of necessary land and { 3 } utilities and infrastructure for the Project, provided that Muller shall be responsible for a11 debt service on all bonds issued. The Project' s construction shall be substantially completed and 2 , FLUE�EL MC�Y'NIHR�d TEL Ido . 1b12�13�y777 Rug 13 ,03 15 �02 No .016 P .02 , !_ \ operatian commenc�ed no� ��z� than 36d t2ays aftex availat3il.ity t;�� bond proceeds for the �ro��c�t, ca��.ed herein, �t�Fie—' � � �•ivn D�ate. ,� 1�RTICZ.E II THEATER SITElLAND AC(�UYSXTYON A. Sl`i'�;. The Project shall be iocaCed on approximately ten acr�s o� �.and, the specific description af which is attached and incaa;poxated by re:�erence as Exhibit B. f3. UAND ACQUISITIQN. The RPA intends to acc�uir.� L?�e praperty des�ribed in Exhibit B and oth�r ].ands wl�ich, collectively, shall consti�u�C� the Business Pa�'k pursuant to a Purchase Agr��menti da�ed �1uly 28, 1993, be�:ween tri� RPA and Roy E. PibboCt, called h�rein, �he ��.�.bbott Properey. �� The RPA shall �cguire and l�ase, pursuant to the Lease d�scra.bed in Axticle VI , to Muller, the prope�ty described in Exha.bi.t B. ARTICLE III LiTILITIES �D INr'1tAS`l'ltUCTURE A. PRUvISTQN QF U'rYLY�I'Y�'$�INFRASTRI7CTURE. The RPA sha7.],, i� c+�njunction with �he Gity o� Rosemount, eause the utilities and in�rastru��ure im�rovements, call�d herein, ��proj�et Utiili�i�s , " which are intended to Y�en�fit the �raject� anrl specifically described in �xhibit C, which is attached hereta and incorporated by reference herein, to be undertaken and Gamp�.�ted in a mannex wha.ch will facili�a�.e Completion vf ttle Project, by not later than the dat� se� for�h in Arta.c3.e I . H. PAYMENT. Mu11�r �l�all pay fax all casts assoca.ated wxth 3 pravision of the Project Utilities in the manner provided in Article V, the cost of whieh is $ ARTICLE IV PROJECT SPECIFICATIQNS AND DEVELOPMENT TIME LINE A. PR�JECT SPECIFICATIONS . Muller shall cause to be constructed on the property described in Exhibit B, a ten- screen movie theater complex, called herein, the "Minimum Improvements , ° substantially in conformance with the preliminary plans and drawings set forth in Exhibit D, whieh is attached and incorporated by reference herein. B. PROJECT MANAGEMENT. At all times during the canstruction of the Project, Muller shall serve as the developer and be solely responsible for a11 aspects of the undertaking of the Project, including, but not limited ta: Project oversight, supervision of the contractors and material suppliers, the securing of all necessary authorizations and permits from the City of Rosemount, Dakota County and the State 'of Minnesota and the meeting of all relevant Project time lines . C. PROJECT CHANGES . No changes in the Project description and materials contained in Exhibit D, nor in any subsequently approved plans and specifications for the Pxoject shall be authorized without the written approval of the RPA, which approval shall not be unreasonably withheld or delayed. 4 ARTICLE V PROJECT FINANCING A. THEATER PROJECT COSTS . The total cost of the Project is appzoximately $ A breakdown of Project costs is set forth in Exhibit E, which is attached and incorporated by reference herein. B. FINANCIAI, RESPONSIBILITIES OF MULLER. 1 . Cash Contribution/Escrow. By not later than September 7 , 1993, Muller shall have placed in an escrow account, with an Escrow Agent approved by the parties, exclusively for use in construction of the Project, the sum of One Million Dollars, called herein, "Developer' s Equity. ° 2 . Debt Service on Bonds . Muller shall also be responsible for the timely payment of any and all bonds �,�ssued by the RPA as described in Article V($) . - \-3,! Bond Reserve Fund. To facilitate and ensure the � Muller' s payment of debt service on the bonds described in Article V{B) , a band reserve fund in the amoun�. of $250, 000 . 00, shall be created and funded by Muller on the date of execution of the Lease described in articie VI . 4 . Personal Guarantees/Additional Collateral . As additional security for payment of the bonds described in Article V(C) , Muller shall deZiver to the RPA on the date of execution of the Lease described in Articie VI , the � following: 5 r�UE�EL tiuYNIHHI�I TEL I�lo . 1b124�8y777 Aug 13 , G3 15 �02 No .016 P .G3 a. The personal guaxantees of Rabert J. Mu].l�r and Michae]. S. Muller, jointly and severally pledga.ng thQ fvll. paymen't of t}�e b�nds; and b. Suoh additi.onal collateral, agreed to and valued l�y the part�.es �3t $45Q, 000, which is descxibed in Exhibit F, which is atitiached and incorporated by r�L•erence herein. TIYe parties agree that, at the sole discr�t.i.on of the RPA, Muller may substitu�Ce collateral other than �.hat described in Exhibit F, pxovidsd such other callateral is of the same charact�r and value as that initia�,].y provided . C . ISSUANCE AND USE OF BONDS . Upor� approval of the Rosemount Ci.ty Council , �he Rp� sha�l issue bonds in an amoun�. sufiicient tio pay for thE property described �.n Exhibit 8 and the Project U�ilities and shal�. issue bonds in the amaunt of - _ Two Million Dollars fox _the purposes o� const�uctiory ai th� __ Pxoj�ct and the cost ot issuance o� the bonds and capitalized interest . Upon approval a� the Rosemount Ca�ty Council, the RPA shall issue the bonds described in_ �his Artic;�e by November 1 , 1993, ax, in an�+ event, not lat�r than March 1 , 1994 , . ARTICLE VI LEASE .�L. AGREEMENT TO LEAS� THE PR�JF.CT. As consi�erai.ion far the RPA' s issuanc� af bonds for the Projec�, the parLie� agree ta 5 enter into a Lease as described below, called herein, the ��Lease. " B. TERMS OF LEASE. The Lease between Muller and the RPA shall include, but not be limited to, the following general provisions : 1 . The RPA will lease the Project to Muller for a Lease term coterminous with the term of the general obligation bonds issued by the RFA for financing of a portion of the Project cost . 2 . The rent to be paid by Muller will be payable at the times and in the amounts sufficient to provide adequate funds to the RPA �o pay the principal and interest on the bonds issued under Article V(B) . 3 . Muller will have the option to terminate the Lease or purchase the Project at any time, by paying an amount sufficient to discharge the outstanding bonds , plus all attorney` s fees and other customary expenses incurred by the RPA in connection with the termination of the Lease and discharge of the bonds . 4 . Muller will pay, as additional charges under the . , Lease, amang other things, any taxes, special assessments , insurance premiums and al1 bond registrar and paying agency fees for the bonds . 5 . In the event the costs of the Project exceed the bond proceeds and the Developer' s Equity, Muller will pay all excess costs . 7 6 . Upon the occurrence of an "event of default" under the Lease, the RPA may exercise any remedies available to it under law, including, but not limited to, terminatinq the Lease and taking possession of the Project. C . FdRM OF LEASE. The Lease enter�d into between Muller and the RPA, which shall be executed not later than September 3, 1993, shall be substantially in the farm of the Lease attached as Exhibit G and incorporated by reference herein. ARTICLE VII TERMINATION OF AGREEMENT/WAIVER OF CLAIMS It is agreed that this Agreement is subject to the approval of the Rosemount City Council, and tihat neither party may proceed with the fulfillment of its abligations without said approval. Therefore, if the Ros�mount City Council shall at any time and for any reason, whether for just cause or otherwise, determine not ta allow the RPA to proceed with this Agreement, this Agreement shall terminate and be- of no effect whatsoever, except that this provision shall survive any such termination and remain of full force and effect. In such event, the RPA and Muller agree„to waive any and all claims of whatsoever nature arising from their communications , actions , negotiations or other work, one with the other, including this Agreement, regarding development of the Project; provided that the RPA shall reimburse Muller the full amount of the security submitted with the Muller' s Proposal to the RPA on July 28 , 1993 . 8 ARTICLE VIII MISCELLAI�IEOUS PROVISIONS A. ENTIRE AGREEMENT/AMENDMENTS . This Agreement consti�tutes the full and complete understanding of the City and Muller regarding the subject matter thereof . Any amendments to this Agreement must be in writing and must be executed by the parties to this Agreement or their succes5ors in interest. B. SURVIVAL OF COVENANTS . The promises made in this Agreement shall remain in effect until all such promises have been fulfilled. C. DEFAULT/REMEDIES . The failure of a party to fulfill a11 of the terms and conditions of this Agreement shall constitute an event of default by that party and, upon such occurrence, shall entitle the other party to seek specific performance of the provisions of this Agreement and recover any costs _ _ ___ ___ - -incurred in obt�ining t�at remedy, incltrding- reasonable --____ attorney's fees . D. GOVERNING LAW. This Agreemen� shall be govern�d by the laws of the State of Minnesota . 9 . IN WITNESS WHEREOF, the City and Muller have executed this Agreement intending to be bound thereby. Dated: CITY OF ROSEMOUNT PORT AUTHORITY By: Its : By: Its : Dated: MULLER FAMILY THE�TRES By: Its: By: Its : 10