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HomeMy WebLinkAbout3034Transfer Entered Dec 2, 2019 2:47 PM Hennepin County, Minnesota Mark Chapin County Auditor and Treasurer Deputy 98 Doc No T05666328 Certified, filed and/or recorded on Dec 2, 2019 2:47 PM Office of the Registrar of Titles Hennepin County, Minnesota Martin McCormick, Registrar of Titles Mark Chapin, County Auditor and Treasurer Pkg ID 1913317C Document Recording Fee $46,00 Document Total $46,00 Existing Certs 1457559 This cover sheet is now a permanent part of the recorded document. Transfer Entered Dec 2, 2019 2:47 PM Hennepin County, Minnesota Mark Chapin County Auditor and Treasurer Deputy 98 Document Recording Fee Doc No A10730265 Certified, filed and/or recorded on Dec 2, 2019 2:47 PM Office of the County Recorder Hennepin County, Minnesota Martin McCormick, County Recorder Mark Chapin, County Auditor and Treasurer Pkg ID1913317C $46.00 Document Total $46.00 This cover sheet is now a permanent part of the recorded document. EASEMENT AND MAINTENANCE AGREEMENT (Market Street Underground Parking) THIS EASEMENT AND MAINTENANCE AGREEMENT (this “Agreement”! is made and entered into November 1, 2019 (“Effective Date”!, by and between the CITY OF EDINA, MINNESOTA, a Minnesota statutory city (the “City”!, and EDINA MARKET STREET EEC, a Minnesota limited liability company (the “Developer”!. RECITALS WHEREAS, the Housing and Redevelopment Authority of the City of Edina, Minnesota, a public body corporate and politic organized and existing under the laws of the State of Minnesota (the “Authority”!, the City, and Developer have entered into a Redevelopment Agreement (the “Contract”! dated June 27, 2017, as amended; and WHEREAS, such Contract is intended to provide for the redevelopment of certain land within the City’s 50th & France District located on Market Street (formerly known as 49 1/2 Street) by the Developer in coordination with the Authority and with the cooperation and assistance of City, including that certain land legally described on Exhibit A attached hereto (referred to herein and in the Contract as the “South Site”); and WHEREAS, the Contract provides for assistance with the construction of certain improvements to the South Site (referred to herein and in the Contract as the “South Site Vertical Improvements”!; and WHEREAS, the South Site Vertical Improvements include two levels of underground parking which contain approximately 270 parking stalls (referred to herein and in the Contract as the “UG Parking Element”!, and the top level below grade of the UG Parking Element (“Public Parking Eevel”! contains approximately 128 parking stalls and the lower level below grade of the UG Parking Element (the “Private Parking Eevel”! contains approximately 142 parking stalls; and WHEREAS, the City and the Developer have agreed in the Contract that the Developer will grant an easement to the City pursuant to which the Public Parking Eevel will be permanently open and accessible to the general public for its use and enjoyment pursuant to the terms of this Agreement; and WHEREAS, the City and the Developer have agreed that the City will operate and manage the Public Parking Eevel, the Developer will operate and manage the Private Parking Eevel, and the Developer will maintain the entire UG Parking Element (including both the Public Parking Eevel and the Private Parking Eevel), all pursuant and subject to the terms and conditions of this Agreement, and WHEREAS, the City and Developer deem it to be in their interest and in furtherance of the economic development and redevelopment plan for the South Site to enter into this this Agreement with respect to the UG Parking Element; and WHEREAS, all capitalized terms used herein without definition shall have the respective meanings ascribed to them in the Contract. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the others as follows: 4851-6641-3640\10 5^^ Ccmmercia! Parirteru Titia, LEG 200 South Gixih Street •Sun-e 1300 hJ L ^ ') Minnoapafis, MM 5.5402 c/~ ARTICLE I. GRANT OF EASEMENTS Section 1.1. Easement Premises. Developer hereby grants and conveys to the City, for the benefit of the City (a) an exclusive, perpetual public easement over and across those portions of the real property depicted on Exhibit B attached hereto and referred to thereon as the “Parking Premises” situate in the City of Edina, County of Hennepin, State of Minnesota (collectively, the “Parking Premises”) for the purposes of utilizing the Public Parking Level for the parking, passage, and accommodation of motor vehicles and passage and accommodation of pedestrians and (b) a non-exclusive, perpetual public easement over, across, upon and through all means of vehicular and pedestrian access to and from public rights of way, streets, alleys, public spaces, and easements appurtenant and/or used in connection with the Parking Premises (including easements held by the City in connection with the Shared Plaza Element) immediately adjoining or contiguous to the Parking Premises, including but not limited to all atria, lobbies, concourses, passageways, hallways, corridors, stairways, and elevators providing such means of access and intended for use by the public (but excluding all such areas or means of access intended to serve as private access to the South Site Vertical Improvements other than the Public Parking Level), all as depicted on Exhibit B attached hereto and referred to thereon as the “Access Premises” (collectively, the “Access Premises”, and together with the Parking Premises, collectively the “Easement Premises”), all in accordance with and subject to the terms and conditions of this Agreement. The Easement Premises include only those portions of the South Site Vertical Improvements necessary to utilize the Public Parking Level for public parking purposes and access thereto as described above. The Easement Premises do not include any right to use, alter or affect the walls or structural components of the South Site Vertical Improvements. Section 1.2. Breakthrough Panels. Developer has constructed the Public Parking Level with one (1) breakthrough panel, which breakthrough panel designed to accommodate, in aggregate, two standard drive lanes (approximately twelve (12) to fifteen (15) feet in width) (“Breakthrough Panels”), in the location depicted on Exhibit B attached hereto, to facilitate potential future access from the Public Parking Level to a public or private underground parking facility constructed on property adjacent to the South Site (“Adjacent Parcel”) and accessible to the locations of the breakthrough panels (such facility is referred to herein as the “Adjacent Parcel Parking Facility”). The Developer and the City agree to negotiate in good faith with the Adjacent Parcel owner regarding an easement agreement to provide access to and through the South Site and Public Parking Level, provided that terms of such an easement agreement, include specifically, but are not limited to, the Adjacent Parcel owner (a) assuming costs for (1) removing the breakthrough panel(s), (2) designing and constructing all connections to and through the Adjacent Parcel, including the relocation of utilities located between the UG Parking Element and the Adjacent Property; and (3) restoring any portions of the South Site, UG Parking Element or Shared Plaza Element disturbed by the construction or operation of the Adjacent Parcel Parking Facility; and (b) participating in the Maintenance Costs of the UG Parking Element (including specifically the street level vehicle ingress and egress system). Any such easement agreement shall be on terms acceptable to Developer and City, in each of their commercially reasonable discretion, with respect to the following: grant of easement(s) (including term thereof and consideration therefor, if any), maximum capacity of the Adjacent Parcel Parking Facility and related traffic volumes and wait times in the UG Parking Element, construction and operation of the Adjacent Parcel Parking Facility, insurance and indemnity requirements, casualty, and rules and regulations for each of the Adjacent Parcel Parking Facility and the UG Parking Element. 4851-6641-3640\10 ARTICLE 11. TERM Section 2.1. Term. The easements granted hereby, and each reservation, covenant, condition and restriction contained in this Agreement, shall be effective as of the date hereof, shall be perpetual, and shall remain in effect until affirmatively released by the City. Such release shall be evidenced by the recording of a release or termination of this Agreement in the real estate records of Hennepin County, Minnesota, at which time this Agreement shall tenuinate, subject to reconciliation of expenses and obligations incurred through the date of release or termination and the continuation of those provisions that specifically survive termination of this Agreement, and the Public Parking Level and any other areas of the Easement Premises shall thereafter belong to and be under the sole control of Developer. ARTICLE III. USE OF EASEMENT PREMISES Section 3.1. General. During the term of this Agreement, the City shall operate the Public Parking Level, and the Developer shall operate the Private Parking Level, each in accordance with this Agreement and all applicable governmental laws, ordinances, regulations and orders, each at its own cost and subject to the reimbursement provisions contained herein. Subject to the terms of this Agreement, the City shall have full authority and control over the management, operation, and use of the Public Parking Level. The Developer shall have full authority and control over the management, operation, and use of the Private Parking Level. Except as specifically set forth herein, each party shall be entitled to make all decisions and to execute all agreements, in its sole discretion, with respect to its respective portion of the UG Parking Element {i.e., the City with respect to the Public Parking Level and the Developer with respect to the Private Parking Level) so long as such decisions and agreements do not violate the provisions of this Agreement, the Contract, the approved Final Development Plan, or any applicable governmental laws, ordinances, regulations or orders, as each of the foregoing may be amended and so long as each of the foregoing remains in effect. Notwithstanding the separate management and control of the Public Parking Level and Private Parking Level by the City and the Developer respectively, or anything else to the contrary in the Agreement, the parties covenant that they will cooperate and coordinate in good faith to establish operational and management procedures such that neither party’s normal use and enjoyment of its respective portion of the UG Parking Element is unreasonably diminished or impaired by the other party’s normal use and enjoyment of its respeetive portion of the UG Parking Element. Furthermore, to the extent access and use of the UG Parking Element is eontrolled by an automated payment processing and compliance enforcement system (an “Automated Parking System”), the parties will cooperate to cause any such Automated Parking System to be designed and programmed in a manner consistent with each party’s desired use and operation of its respective portion of the UG Parking Element. Section 3.2. Operation and Control of the Public Parking Level. Subject to Section 3.1. the City may establish (and modify from time to time) (a) such hours of operation, rules, and regulations as it deems advisable, necessaiy, or appropriate in the City’s reasonable discretion for the safe, efficient, and orderly use and operation of the Public Parking Level and (b) such rates and charges for the use of the Public Parking Level as it deems advisable or desirable in the City’s reasonable discretion. The City shall be entitled to keep and retain as its own property all income and revenue produced from the operation and use of the Public Parking Level during the term of this Agreement and shall have no obligation to report to or account to the Developer for any such income or revenue. Notwithstanding anything in this Agreement to the contrary, the Public Parking Level shall be open to the public; provided, however, the City may designate certain parking spots for certain specific uses (e.g., handicap parking, ride share, etc.) and enter into contracts for parking licenses for spots within the Public Parking Level in a manner consistent with 4851-6641-3640\10 policies that the City may establish (and modify from time to time), including monthly contracts for overnight parking by residents of the Apartment Element, so long all of the foregoing activities do not unreasonably impair the public’s use and access to the Public Parking Level for purposes of patronizing the businesses, events, and amenities located in the 50th & France District. Section 3.3. Operation and Control of the Private Parking Level. Subject to Section 3.1. Developer may establish (and modify from time to time) (a) such hours of operation, rules, and regulations as it deems advisable, necessary, or appropriate in the Developer’s reasonable discretion for the safe, efficient, and orderly use and operation of the Private Parking Level and (b) such rates and charges for the use of the Private Parking Level as it deems advisable or desirable in the Developer’s reasonable discretion. The Developer shall be entitled to keep and retain as its own property all income and revenue produced from the operation and use of the Private Parking Level during the term of this Agreement and shall have no obligation to report to or account to the City for any such income or revenue. Section 3.4. Waste; Nuisance. Neither the City nor the Developer shall knowingly or willfully commit or suffer to be committed any waste or damage in or upon the Easement Premises, or any disfigurement or injury to any improvements hereafter erected or located upon the Easement Premises, or any part thereof, or the fixtures and/or equipment thereof The City in its use and occupancy of the Easement Premises, shall not knowingly and willfully commit or suffer to be committed any act or thing which constitutes a nuisance. Usual and normal wear and tear, damage by the elements, unavoidable casualty or depreciation and diminution over time shall not be considered “waste,” “nuisance,” “damage,” “disfigurement,” or “injury.” ARTICLE IV. MAINTENANCE OF THE EASEMENT PREMISES Section 4.1. Maintenance. Subject to cost reimbursement by the City as provided in Section 4.4 below, and subject further to the City’s right to exclusively control and operate the Public Parking Level, Developer shall, at all times during the term hereof, at its initial cost and expense, keep, maintain, and repair the UG Parking Element in good condition and repair in a first-class manner, similar to that of other underground parking facilities located within other first-class, multi-use projects in the Minneapolis-St. Paul metropolitan area. Such maintenance and repair work (collectively “Maintenance Work”) shall include, without limitation, the following: (a) all repairs, replacements, renewals, alterations, additions and betterments thereto, interior and exterior, structural and non-structural, ordinary and extraordinary, and foreseen and unforeseen, all as may be necessary to keep the UG Parking Element in the condition and repair required by this Agreement; (b) maintaining all drive and parking surfaces in a smooth and evenly covered condition, which maintenance work shall include cleaning, sweeping, restriping, repairing and resurfacing the same; (c) maintaining in good working order (including cleaning and painting as necessary), repairing, and replacing as necessary the Access Premises; (d) maintaining in good working order, repairing, and replacing as necessary all ventilation and mechanical systems (“Mechanical Systems”'): 4851-6641-3640\10 (e) maintaining in good working order, repairing, and replacing as necessary any Automated Parking System; (f) maintaining in good working order, repairing, and replacing as necessary all domestic water, sewer, storm water, gas, electricity, power, heat, telephone, other communications service and any and all other utility or similar services used, rendered, or supplied, upon, at, from, or in connection with the UG Parking Element (collectively “Utilities”): (g) periodic removal of all papers, debris, filth, refuse, ice and snow, including without limitation sweeping to the extent necessary to keep the UG Parking Element in a first-class, clean and orderly condition; provided all sweeping shall be at appropriate intervals during such times as shall not unreasonably interfere with the use of the UG Parking Element; (h) placing, keeping in repair, replacing and repainting any appropriate directional signs or markers, within or associated with the UG Parking Element; and (i) operating, keeping in repair, cleaning and replacing when necessaiy such UG Parking Element lighting facilities as may be reasonably required, including without limitation all lighting necessary or appropriate for UG Parking Element security. Section 4.2. Manner of Performance. All Maintenance Work shall be done; (i) in such manner as to not unreasonably interfere with the normal use and enjoyment of the area on which such work is being done; (ii) in full compliance with the provisions of this Agreement and the Contract; (iv) in full compliance with all applicable statutes, codes, ordinances, rules and regulations; (v) with respect to reconstruction, maintenance, repair, alterations or modifications, the Maintenance Work shall use materials, equipment and design and engineering standards, equal to or better than those originally used; (vi) in a good and workmanlike manner; (vii) in such manner as not to unreasonably adversely affect, impair or destroy the structural soundness or integrity, aesthetic appearance or functional utility of the UG Parking Element; (viii) with all due diligence; and (ix) in such a manner so as to clean the area and restore the affected portion of the area on which the Maintenance Work was done to a condition equal to or better, to the extent practical, than the condition which existed prior to the commencement of such Maintenance Work. Section 4.3. Third Party Maintenance Providers. The Developer shall have the right, from time to time, to select and hire a third party to perform the Maintenance Work, provided that the Developer shall remain responsible at all times for the performance of the Maintenance Work. If the Developer selects such third party to perform, supervise or coordinate the Maintenance Work (the “Property Manager”), such Property Manager must be a recognized professional commercial property management company. The Developer may hire companies affiliated with it to perform the Maintenance Work, but only if the rates charged by such companies are competitive with those of other companies furnishing similar service in the Minneapolis-St. Paul metropolitan area, it being agreed that this provision regarding affiliated companies shall be construed strictly against the Developer. Any contract with a Property Manager, and the amounts to be paid such Property Manager under such contract, shall be subject to the City’s prior review and approval, which approval shall not be unreasonably withheld, conditioned or delayed. All such contracts shall be no longer than one (1) year in duration (but may provide for automatic renewal). Section 4.4. Maintenance Costs. (a) Subject to the Excluded Costs set forth in Section 4.6 below, all costs and expenses in connection with the maintenance and repair of the UG Parking Element, (“Maintenance Costs”) shall be the shared responsibility of the City and the Developer on a pro rata share basis (as defined below). Maintenance Costs shall include, without limitation, the following costs: 4851-6641-3640\10 (i) all third party costs of performing any maintenance of the UG Parking Element, including repairs and necessary replacements of all or components of the Access Premises, the Mechanical Systems and the Automatic Parking System; (ii) wages of on-site supervisory personnel, attendants and cashiers, janitorial, maintenance, clerical and audit staff attributable to the UG Parking Element, and a charge from the Developer or the Property Manager, as the case may be, for employee benefits including, but not limited to, monetary fringe benefits such as workers’ compensation insurance, unemployment insurance, social security, group health and dental insurance, retirement benefits; provided, however, in the event an employee does not devote his or her full working time to the UG Parking Element, then all of the foregoing charges pertaining to such employee shall be appropriately prorated to the UG Parking Element in a manner reasonably acceptable to the City; provided further, in no event shall the compensation (direct or indirect) of any off-site management personnel be included in Maintenance Cost Expenses, the same being borne solely by the Developer or the Property Manager, as the case may be; provided further, that notwithstanding the provisions of this subsection to the contrary, the parties acknowledge and agree that the UG Parking Element will likely utilize an Automated Parking System and, therefore, the need for on-site attendants and cashiers will likely be minimal; (iii) costs of Utilities used, rendered, supplied, or consumed in, upon, at, from, or in connection with the UG Parking Element and Access Premises (“Utilities Costs”); and (iv) an administrative or overhead fee of the Developer or the Property Manager (if applicable), but not both (“Administrative Fee”) to cover arranging such maintenance and billing, but such Administrative Fee shall not exceed three percent (3%) of the Maintenance Costs exclusive of such Administrative Fee. (b) The City’s “pro rata share” of Maintenance Costs shall be fifty percent (50%) and the Developer’s “pro rata share” of Maintenance Costs shall be fifty percent (50%). In addition to the City’s pro rata share of Maintenance Costs, the City shall pay (i) the cost of all Maintenance Work which exclusively benefits or serves the Public Parking Level and those portions of the Access Premises, including the public elevator, solely serving the Public Parking Level and the cost of the repair of any damage caused by the City or the public and (ii) all Utilities Costs which exclusively serve the Public Parking Level and Access Premises or are separately metered. (c) Unless the parties agree to a different budgeting process, no later than September 1 of each year, the Developer shall submit to the City an estimated annual budget of the Maintenance Costs for the following calendar year, and the parties will cooperate in good faith to finalize such budget no later than October 1 of each year (“Annual Budget”). The Developer shall submit the first Annual Budget to the City, covering the initial partial year of operation of the Public Parking Level, no later than sixty (60) days prior to the anticipated date the Public Parking Level will open to the public. With the first Annual Budget, the Developer shall prepare, in consultation with a qualified professional engineer with experience and knowledge about Industiy best practices for proper maintenance of an underground parking facility (“Qualified Engineer”'), a proposed operation manual and maintenance schedule for the UG Parking Element (“O&M Plan”) which shall identify the nature and frequency of all recommended routine and preventative Maintenance Work for the UG Parking Element. The Developer shall cause the O&M Plan to be reviewed and updated by a Qualified Engineer at least once every five (5) years and submitted to the City with the subsequent year’s proposed Annual Budget. Each Annual Budget and O&M Plan shall be 4851-664I-3640\10 subject to the City’s review and prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed. City and Developer agree that Maintenance Work that is included in the applicable Annual Budget, including any allowances therein, and any Maintenance Work that is presented as “critical”, “required”, “recommended”, or similarly categorized in the O&M Plan, or is otherwise considered necessary or prudent under industiy standards for the safe operation and long-term preservation of underground parking facilities (collectively “Nondiscretionai-y Maintenance Work”) shall be performed by Developer in accordance with the tenns hereof and the cost thereof included in Maintenance Costs. All Maintenance Work other than Nondiscretionaiy Maintenance Work is referred to herein as “Discretionary Maintenance Work”. The City shall be entitled to reject or approve, in whole or in part (if partial rejection is feasible in Developer’s reasonable opinion), in its sole and absolute discretion, any Discretionaiy Maintenance Work that will affect or is proposed to be performed with respect to the Public Parking Level, and the City may modify the Annual Budget to account for any Discretionary Maintenance Work so rejected by the City. The Developer will cause any Discretionaiy Maintenance Work with respect to the Public Parking Level to be completed only if approved by the City. (d) The Developer shall endeavor to use its commercially reasonable efforts, where practical, to obtain multiple bids (ideally three) from reputable vendors for the Maintenance Costs to ensure the expenditures are incurred at market rates in arms-length transactions most beneficial to the parties hereto. (e) Unless the parties agree to a different payment and reimbursement process, the City shall pay to the Developer one twelfth (1/12) of the City’s pro rata share of Maintenance Costs as set forth in the approved Annual Budget in monthly installments no later than thirty (30) days following invoice thereof from the Developer (and paid in arrears if required by City policy). If the Effective Date is a day other than the first day of a calendar month, the City’s share of the costs for this month shall be a prorated portion of the monthly estimation, based upon a thirty (30) day month, and shall be due and payable on the Effective Date. Any payment not received when due hereunder shall accrue interest at a rate of twelve percent (12%) per annum. (f) Within sixty (60) days after the end of each calendar year, the Developer shall provide the City with a certified statement, together with supporting material upon request of the City, as to the actual Maintenance Costs paid by it during the preceding calendar year, together with an accounting of the Administrative Fee. If the amount paid by City for such calendar year shall have exceeded its share, the Developer shall promptly refund the excess to the City at the time such certified statement is delivered, or if the amount paid by the City for such calendar year is less than its share, the City shall pay the balance of its share to Developer within sixty (60) days after receipt of such certified statement. (g) Within one (1) year after receipt of any such certified statement, the City shall have the right to inspect the Developer’s books and records pertaining to Maintenance Costs for the calendar year covered by such statement. The Developer shall provide a complete copy of such books and records to the City in electronic form In the event that such inspection shall disclose any error in the determination of Maintenance Costs or in calculating the City’s share of such costs, an appropriate adjustment shall be made forthwith. Alternatively, the City may cause a third-party auditor to conduct such inspection, provided as a condition of any third-party audit. City and Developer agree that only auditors compensated on an hourly or fixed fee basis (expressly excluding any auditors compensated on a contingent basis) shall be permitted and prior to any such audit City shall provide evidence of same by delivery to Developer of a copy of the City’s engagement letter with the auditor. In the event that such audit shall disclose any error in the determination of Maintenance Costs or in calculating the City’s share of such costs, an appropriate 4851-6641-3640\10 adjustment shall be made forthwith. The cost of any such audit shall be assumed by the City unless the City shall be entitled to a refund in excess of ten (10%) percent of the amount calculated by the Developer as its share of such costs for such calendar year, in which case the Developer shall pay the cost of such audit, without reimbursement, not to exceed $2,000.00. The Developer shall keep, and present, upon request, all invoices, bills or statements of costs or expenses incurred in connection with the Maintenance Costs for a period of two (2) years. Section 4.5. 50th & France District Maintenance Assessments. The Developer acknowledges and agrees that nothing in this Agreement will be deemed to limit the City’s right to recoup its payments for its pro rata share of the Maintenance Costs hereunder by including such costs in the 50th & France District commercial area maintenance assessments, including assessments levied upon property owned by the Developer, all as specified and in accordance with the City Code. Section 4.6. Exclusions to Maintenance Costs. Notwithstanding anything in this Agreement to the contrary, the City shall not be obligated to pay any portion of Maintenance Costs expended by Developer with respect to the following items, which such Maintenance Costs shall be the Developer’s sole cost and expense and not subject to reimbursement from the City (collectively “Excluded Costs”): (a) repair or replacement of any structural element of the UG Parking Element, including the foundation, foundation walls, parking decks, floor slabs, exterior walls, and waterproofing systems related to the foregoing; (b) replacement, repair, or correction of any structural or other construction defect; (c) Taxes, except Separate Taxes, if any, pursuant to Section 5.1 below; (d) Policies of insurance required to be carried by the Developer pursuant to Article VI, except the City’s Property Insurance Contribution pursuant to Section 6.1 below; (e) Maintenance Work which exclusively benefits or serves the Private Parking Level and the cost of repair of any damage caused by the Developer, its contractors and agents, or such damage to the Access Premises caused by residents of the Apartment Element while using the Access Premises to access the Private Parking Level (provided, however, the City will pay one hundred percent (100%) of such Maintenance Costs which exclusively benefit or serve the Public Parking Level and the cost of repair of any damage caused by the City or the public, as provided in Section d.dlbl above); (f) With respect to Maintenance Work performed by a party related to Developer, then any cost therefor in excess of what would be chargeable in an arms-length transaction; (g) Utilities Costs which exclusively benefit or serve the Private Parking Level or are separately metered (it being agreed that the user of such Utilities shall be solely responsible for payment based on actual metered usage); (h) Discretionary Maintenance Costs not approved by the City in writing; and (i) Maintenance Costs which are extraordinary costs and which are not reasonably necessaiy for the operation, maintenance and insurance of the UG Parking Element, including, without limitation, (i) any late charges or fees; (ii) any entertainment, transportation, meals or lodging charges, of anyone; or (iii) any profit, administrative and overhead costs (other than the 4851-6641-3 640\ 10 Administrative Fee), such as rent, legal, supplies, utilities and wages or salaries paid to management or supervisory personnel, except as otherwise provided in this Agreement. Section 4.7. Liens. The Developer will not permit any mechanic’s or materialmen’s liens to stand against the Easement Premises on account of improvements authorized by Developer (and will promptly discharge (by payment, bonding over or otherwise) the same upon their occurrence); provided, however, the Developer may in good faith and at its expense contest any such lien in which event such lien may remain undischarged and unsatisfied during the contest and any appeal, provided the Developer shall file a bond or deposit cash or other reasonable security in the amount of such lien with the court or with a luortgagee of the UG Parking Element to secure the payment of such lien if finally determined to be valid. ARTICLE V. TAXES AND ASSESSMENTS Section 5.1. Payment of Taxes and Assessments. Developer shall pay, or cause to be paid, before becoming delinquent, all real estate taxes, charges, assessments, and levies (collectively “Taxes”), assessed and levied by any governmental taxing authority during the term of this Agreement against the UG Parking Element. Notwithstanding the foregoing, if (i) the Public Parking Level is ever subdivided such that it becomes a separate tax parcel and such parcel is deemed to be subject to Taxes, or (ii) records of the tax assessor provide reasonable evidence that the Public Parking Level is deemed to be subject to Taxes, the City shall pay directly to the relevant taxing authority any such Taxes (“Separate Taxes”). ARTICLE VI. INDEMNIFICATION, INSURANCE, IMMUNITIES Section 6.1. Property Insurance. At all times during the term hereof, the Developer shall keep the South Site Vertical Improvements (including the UG Parking Element), and all alterations, extensions, and improvements thereto and replacements thereof, insured, in the amount of the full replacement cost thereof and with such deductibles as the Developer deems appropriate, against loss or damage by fire and against those casualties covered by extended coverage insurance and against vandalism and malicious mischief and against such other risks, of a similar or dissimilar nature, as are eustomarily covered with respect to buildings and improvements similar in construction, general location, use, and occupancy to the South Site Vertical Improvements. The City shall pay with its first monthly installment of its pro rata share of Maintenance Costs following the approval of each Annual Budget an amount equal to the cost of such insurance which is directly attributable to the Public Parking Level, taking into account the use, nature, and/or value of the Public Parking Level (and not merely as a percentage of the total of such insurance costs) as reasonably determined by the parties and the applicable insurer prior to the City’s approval of each Annual Budget (the “City’s Property Insurance Contribution”). Section 6.2. Indemnification of Developer. Except to the extent caused by the willful misconduct or negligence of the Developer or its employees or agents, or caused by the willful misconduct or negligence of residents of the Apartment Element while using the Access Premises to access the Private Parking Level, or arising out of the default by Developer of its obligations hereunder, the City hereby eovenants and agrees to assume and to permanently indemnify and save harmless Developer and its employees and agents, from, and against any and all claims, demands, actions, damages, costs, expenses, attorneys’ fees, and liability in connection with the loss of life, personal injury and/or damage to property arising from or out of any occurrence in, at, upon, or from the use or occupancy of the Easement Premises by any party other than Developer and its employees or agents. 4851-6641-3640\10 Section 6.3. Indemnification of the City. Except to the extent caused by the willful misconduct or negligence of the City, its employees or agents or the general public or arising out of the default by the City and its officers, employees or agents of obligations made pursuant to a contract with Developer, including this Agreement, Developer hereby covenants and agrees to assume and to permanently indemnify and save harmless the City and its employees and agents from and against any and all claims, demands, actions, damages, costs, expenses, attorneys’ fees, and liability in connection with the loss of life, personal injury and/or damage to propeiiy arising from or out of any occurrence in, at, upon, or from the Private Parking Level or to the extent arising from or out of the design, construction, maintenance and operation of the UG Parking Element by the Developer, or in connection with the use or occupancy of the UG Parking Element, or any part thereof, by the Developer, or to the extent arising out of the breach of Developer’s obligations hereunder Section 6.4. Liability Insurance. The Developer and the City shall procure and maintain continuously in effect (or shall cause the same to occur), policies of insurance of the kind and minimum amounts as are customarily maintained with respect to underground parking facilities, to be reviewed from time to time by the parties and adjusted in accordance with the requirements of Minnesota Statutes Section 466.04, as follows: (a) Insurance against liability (including passenger elevator liability) for injuries to or death of any person or damage to or loss of property arising out of or in any way relating to the condition of the UG Parking Element. Developer (and Developer’s lender and property manager) shall be named as additional insureds on the City’s such policy of insurance and the City shall be named as additional insured on the Developer’s such policy of insurance. (b) Liability insurance including coverage for: (i) fire and explosion; (ii) theft (of entire vehicle); and (hi) riot, civil commotion, malicious mischief, and vandalism. (c) To the extent reasonably available, insuring the indemnifications expressed in 6.2 and 6.3 hereof (as applicable). Section 6.5. General Insurance Requirement. All insurance required in this Agreement shall be placed with financially sound and reputable insurers licensed to transact business in the State of Minnesota. The Developer shall, within a commercially reasonable time following the City’s request therefor, furnish the City with copies of policies evidencing all such insurance or a certificate or certificates of the respective insurers stating that such insurance is in force and effect. Each policy of insurance herein required shall contain a provision that the insurer shall not cancel it without giving written notice to the City at least thirty (30) days before the cancellation becomes effective. The insurance coverage herein required may be provided by a blanket insurance policy or policies. Section 6.6. Immunities. Nothing herein shall be deemed or constitute a waiver by the City of any statutory limitations on liability, statutory or common law immunities or any defenses that would otherwise be available to it in claims by third parties, including specifically the maximum liability amount contained in Minnesota Statutes Section 466.04. To the extent that the Developer performs construction, operation, maintenance, repair, or replacement of any part of the UG Parking Element, pursuant to the terms of this Agreement, it is the intention of the parties that the Developer is entitled to the immunities provided pursuant to Minnesota Statutes Section 466.03, or any successor statute. 10 4851-664I-3640\10 ARTICLE VIL ASSIGNMENT Section 7.1. General. Due to the public nature of the easement granted herein, the City may not assign or transfer its interest under this Agreement without the prior written consent of Developer, which consent shall be granted, conditioned or withheld in Developer’s sole discretion. During the term of the Contract, the Developer may not assign or otherwise transfer its interest under this Agreement, except as provided in the Contract. The City shall recognize and approve any successors or assigns of Developer in accordance with the terms and provisions of the Contract. Following the expiration or earlier termination of the Contract, Developer may freely assign or transfer its interest under this Agreement without the consent of the City. Notwithstanding anything to the contrary contained herein, the parties acknowledge and agree that the rights and easements established, granted, conveyed, reserved and consented to by this Agreement will run with the land and will inure to the benefit of and be binding on all present and future owners of any applicable portion of the South Site and their respective successors and assigns. ARTICLE VIII. CASUALTY Section 8.1. Destruction. Promptly upon any casualty loss or damage to all or any part of the UG Parking Element, the Developer shall proceed with diligence to restore the UG Parking Element to the condition prior to the casualty with the insurance proceeds obtained with respect to the loss or damage to the extent the insurance proceeds recovered allow for such rebuilding; provided, however, the Developer shall not be obligated to rebuild the UG Parking Element if any of the Developer’s lenders or loan agreements (whether executed before or after the date hereof) do not permit such rebuilding or require that insurance amounts recovered with respect to any loss or damage to the UG Parking Element be paid directly to the lender. ARTICLE IX. EMINENT DOMAIN Section 9.1. Major Condemnation. If all of the UG Parking Element shall be taken, acquired, or condemned by eminent domain for any public or quasi-public use or purpose, this Agreement shall terminate as of the date of vesting of title in the condemning authority. Each party shall make its own claim in the condemnation proceeding based upon the value of its respective interest in the UG Parking Element. Section 9.2. Partial Condemnation. If any portion of the UG Parking Element shall be taken, acquired, or condemned by eminent domain for any public or quasi-public use or purpose, the absence of which materially and adversely affects the conduct of business by the City or the Developer, then either the City or the Developer, at any time within sixty (60) days after it has actual notice of such proposed acquisition or condemnation, shall have the option to cancel and terminate this Agreement as of the date of vesting of title in the condemning authority of the acquired or condemned property; provided, if neither paity so terminates the Agreement will continue as to the remaining part of the Easement Premises not so taken or threatened to be taken. The terminating party, if any, shall exercise its termination option by giving the other party written notice of the exercise thereof within the foregoing sixty (60) days’ period, and in the event neither party furnishes the other paity written notice of the exercise thereof within the time and in the manner herein provided, then this Agreement shall continue in full force and effect. Each party shall make its own claim in the condemnation proceeding based upon the value of its respective interest in that part of the UG Parking Element subject to the acquisition or condemnation, provided, however, that no award to 11 4851-6641-3640\10 the City based on its easement interest shall be permitted to the extent such award reduces Developer’s award based on its fee interest. ARTICLE X. DEFAULT AND REMEDIES Section 10.1. General. It shall be an “Event of Default” hereunder if (a) either paity defaults in any obligation of this Agreement requiring the payment of money and fails to cure such default within ten (10) days after receipt of written notice of such default from the other party or (b) if a party defaults in any of its other obligations under this Agreement and fails to cure such default within thirty (30) days after receipt of written notice of such default from the other party (or, if such default reasonably requires more than thiity (30) days to cure, fails to commence such action as is necessary to cure such default within such 30-day period and to proceed diligently thereafter to cure such default). Section 10.2. Remedies. Following an Event of Default hereunder, the non-defaulting paidy may: (a) exercise its self-help rights in accordance with Section 10.3 with respect to a default in the performance of Maintenance Work; (b) pay all or any part of such obligations and charge the amount of such payment, together with reasonable attorneys’ fees and interest at a rate of twelve percent (12%) per annum, to the defaulting party; (c) bring an action for injunctive relief; or (d) enforce the obligations of the defaulting party by an action at law or in equity. In an emergency, any such payment or performance may be undertaken or action brought by the non-defaulting party prior to the giving of any notice or expiration of any notice period, but the party curing the default will provide such notice as soon as may be reasonable under the circumstances. If the Developer has failed to cure a default requiring the payment of money in accordance this section, the City shall have the right to assess the costs incurred by the City to all or any portion of the South Site as a service charge pursuant to Minnesota Statutes, Section 429.101, or any successor statute. Section 10.3. Self Help; Failure to Maintain. In the event the Developer defaults in its obligation to perform the Maintenance Work as required by this Agreement, then the City, after compliance with the notice provisions of Section 10.1 (except in an emergency, in which case the applicable Maintenance Work may be initiated with whatever notice is reasonable under the circumstances), shall have the right to enter any portion of the Easement Premises (including subsurface structural support elements) and perform such Maintenance Work as required herein and charge the costs of such performance plus ten percent (10%) of such costs for overhead, together with reasonable attorneys’ fees, to the Developer. The Developer shall promptly pay to the City any and all such costs as are due and owing on account thereof The City shall submit a statement to the Developer evidencing the costs incurred for such Maintenance Work. If the Developer has failed to make payment in accordance with the statement within sixty (60) days after receipt thereof, the City shall have the right to assess the costs incurred by the City to all or any portion of the South Site as a service charge pursuant to Minnesota Statutes, Section 429.101, or any successor statute. The Developer hereby agrees to such an assessment for maintenance and repair costs, agrees that the South Site assessed for such service charges is benefited thereby, and waives any rights the Developer or a third party may have to object to an assessment of such service charges, including any rights of appeal under Minnesota Statutes, Chapter 429. Notwithstanding anything to the contrary contained herein, the City shall have no obligation of any kind, expressed or implied, to perform the Maintenance Work or any part thereof Section 10.4. Remedies Cumulative. Each right, power and remedy provided under this Agreement will be cumulative and concurrent and will be in addition to every other right, power or remedy 12 4851-6641-3640\10 provided for under this Agreement or at law or in equity. The exercise or beginning of exercise of any one or more rights, powers or remedies will not preclude the concurrent or later exercise of any other rights, powers or remedies. Failure to enforce any covenant under this Agreement will not be deemed a waiver of the right to do so thereafter. Section 10.5. Easements Survive. The Developer may not terminate any of the easements created by this Agreement or discontinue performance of its obligations with respect to maintenance, repair or replacement of any easement due to a default by the City under this Agreement. ARTICLE XL MISCELLANEOUS Section 11.1. Titles of Articles and Sections. Any titles of the several parts, Articles and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 11.2. Amendments. Except as otherwise herein provided, and not otherwise, no subsequent alteration, amendment, change, waiver, discharge, termination, deletion, or addition to this Agreement shall be binding upon the parties to this Agreement unless in writing and signed by such parties. Developer and the City agree to join in and consent to amendments to this Agreement, to the extent such amendments are reasonably required by the Developer’s construction lender and/or permanent lender for the South Site, provided, however, that the Developer and the City shall not be required to enter into, such amendments if the amendments are not consistent with the approved Final Development Plan, as the same may be amended and so long as the same remains in effect, or materially and adversely affect the interest and security of the City with respect to the South Site, including any increase in obligations or diminution of rights hereunder. Section 11.3. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand or other communication under this Agreement by any party to any other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally, and in the case of the Developer, is addressed to or delivered personally to the Developer at: Edina Market Street EEC Attention: Peter Deanovic 5100 Eden Ave., Suite 317 Edina, MN 55424 with a copy to: with a copy to: Brent Rogers Saturday Properties 1400 Van Buren St. NE, Suite 200 Minneapolis, MN 55413 Daniel J. Van Dyk Briggs and Morgan, P.A. 2200 IDS Center 80 South Eighth Street Minneapolis, MN 55402 485]-6641-3640\10 13 In the case of the City, is addressed to or delivered personally to the City at: City of Edina Attention: City Manager 4801 W. 50th St. Edina, MN 55424 with a copy to: with a copy to: Housing and Redevelopment Authority of Edina, Minnesota Attention: Executive Director 4801 W. 50th St. Edina, MN 55424 Jay R. Lindgren Dorsey & Whitney LLP 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402 or at such other address with respect to any such party as that party may, from time to time, designate in writing and forward to the other, as provided in this Section. Section 11.4. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 11.5. Law Governing. This Agreement will be governed and construed in accordance with the laws of the State of Minnesota. Section 11.6. Consents and Approvals. In all cases where consents or approvals are required hereunder, such consents or approvals shall not be unreasonably conditioned, delayed or withheld. All consents or approvals shall be in writing in order to be effective. Section 11.7. No Additional Waiver Implied by One Waiver. If any agreement contained in this Agreement should be breached by any party and thereafter waived by another party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. Section 11.8. Joinder; Permitted Encumbrance. Except for the consent attached hereto, this Agreement does not require the joinder or approval of any other person and each of the parties respectfully has the full, unrestricted and exclusive legal right and power to enter into this Agreement for the term and upon the provisions herein recited and for the use and purposes hereinabove set forth. This Agreement shall constitute a permitted encumbrance under any loan agreement heretofore or hereafter entered into between the Developer and any construction lender or permanent lender. Section 11.9. Survival. The easements granted hereby and each reservation, covenant, condition and restriction contained in this Agreement will run with the land and will be binding upon, and inure to the benefit of, as the case may be, the Developer and the City and their respective successors and assigns. Section 11.10. Estoppel Certificate. Each party shall, within fifteen (15) days after request from the other party hereto, deliver a written statement which may be relied upon by the requesting party, or any lender or transferee of the requesting party, setting forth (a) whether the requesting party has fully complied with the provisions hereof, and if not, setting forth in reasonable detail the nature of any violations; and (b) any other matter reasonably requested by the requesting paity- 14 4851-6641-3640\10 [SIGNATURES APPEAR ON FOLLOWING PAGES] 15 485I-6641-3640\10 COUNTY OF HENNEPIN ) ss. ) The foregoing instrument was acknowledged before me this dayis / of 2019, by James B. Hovland and Scott Neal, the Mayor and City Manager respectively, of the City of Edina, Minnesota, on behalf of the City of Edina. ^SHARON M. ALLISON. Notary Public-Minnesota , Commission Expires Jan 31,2020 ;MyC 485I-6641-3640\9 [Signature Page to Easement and Maintenance Agreement (Market Street Underground Parking)] EDINA MARKET STREET EEC, a Minnesota limited liability company By;EDINA MARKET STREET MANAGER EEC, a Minnesota limited liability company, its Managing Member Name: Its: __________________ STATE OF MINNESOTA ) )SS. COUNTY OF HENNEPDl ) This iT £rinstrument was acknowledged before me as of this Q day of Y "S^^VAO v/ tC__, the __QcO Am otarTPublic 2019, by of Edina Market Street Manager EEC, a Minnesota limited liability company, the Managing Member of Edina Market Street EEC, a Minnesota limited liability company, on behalf of sucA limited liability company. THIS DOCUMENT WAS DRAFTED BY: Dorsey & Whitney LLP 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402-1498 JANE M. TIMM COMM. #20117396 Notary Public State of Minnesota My Commission Expires 1/31/2020 [Signature Page to Easement and Maintenance Agreement (Market Street Underground Parking)] 4851-6641-3640\9 EXHIBIT A LEGAL DESCRIPTION OF THE SOUTH SITE Lot 1, Block 2, Edina Market Street, Hennepin County, Minnesota [Exhibit A to Easement and Maintenance Agreement (Market Street Underground Parking)] 485I-6641-3640\10 EXHIBIT B DEPICTION OF THE PARKING PREMISES, ACCESS PREMISES, AND LOCATION OF BREAKTHROUGH PANELS LEGEND B-1 [Exhibit B to Easement and Maintenance Agreement (Market Street Underground Parking)] 4851-6641-3640\10 fVte A aw AVlaW®'*”"' .•3640^^° CONSENT AND SUBORDINATION BY MORTGAGEE (Great Western Bank) Great Western Bank, a national banking association, the holder of that certain Combination Construction Mortgage, Assignment of Rents, Security Agreement and Fixture Financing Statement dated January 11, 2018, and filed with Hennepin County on January 12, 2018, as Document No. A10519040 (Abstract) and Document No. T05504632 (Torrens) (the “Mortgage”) hereby (i) consents to the foregoing Easement and Maintenance Agreement (Market Street Underground Parking) and (ii) subordinates the lien of the Mortgage to said Easement and Maintenance Agreement (Market Street Underground Parking). Dated this Z^dav of k1 ., 2019. Great Western Bank, a national banking association N^me: Steve Block IIb: Marl^t President STATE OF MINNESOTA ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this 2-7^ day of Klni)^.lvJoAV^, 2019, by Steve Block, the Market President, of Great Western Bank, a national banking association, on behalf of the association. JENNIFER R CARLSON Notary Public Minnesota My Commission Expires Jan 31, 2023 Cula/iA tary Putmc 12136846vl CONSENT AND SUBORDINATION BY MORTGAGEE (Bridgewater Bank) Bridgewater Bank, a Minnesota banking corporation, the holder of that certain Second Combination Mortgage, Security Agreement, Fixture Filing and Assignment of Leases and Rents dated January 11, 2018, and filed with Hennepin County on January 12, 2018, as Document No. A10519041 (Abstract) and Document No. T05504633 (Torrens) (the “Mortgage”) hereby (i) consents to the foregoing Easement and Maintenance Agreement (Market Street Underground Parking) and (ii) subordinates the lien of the Mortgage to said Easement and Maintenance Agreement (Market Street Underground Parking). Dated this _|_ day of AJ2019. Bridgewater B£ a Minnesotaybsffiking coi/bration Name: Mannin, Its: V ca Presideint STATE OF MINNESOTA ) COUNTY OF ) ) ss. MAHLET K ASCHENAKI s NOTARY PUBLIC - MINNESOTA MY COMMISSION EXPIRES 01/31/2022? AThe foregoing instrument was acknowledged before me this J— day of . 2019, by Tyler Manning, the Vice President, of Bridgewater Bank, a Minnesota banking corporation, on behalf of the corporat/on.i Notary 12137053vl CONSENT AND SUBORDINATION BY MORTGAGEE (Housing and Redevelopment Authority of Edina, Minnesota) Housing and Redevelopment Authority of Edina, Minnesota, a public body corporate and politic organized and existing under the laws of the State of Minnesota, the holder of that certain Mortgage, Assignment of Rents, Security Agreement, and Fixture Financing Statement dated January 11, 2018, and filed with Hennepin County on January 12, 2018, as Document No. A10519042 (Abstract) and T05504634 (Torrens) (the “Mortgage”) hereby (i) consents to the foregoing Easement and Maintenance Agreement (Market Street Underground Parking) and (ii) subordinates the lien of the Mortgage to said Easement and Maintenance Agreement (Market Street Underground Parking). Dated this Jv day of ^’ay of 2019. [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK] 12137192vl HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA a public body, \ corporate and politic organized and lexisting under the laws of the State of Minriesjpta oviand, Chair By: Michael Fischer, Secretary STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) . The foregoing instrument was acknowledged before me this day of 2019, by James B. Hovland the Chair and Michael Fischer the Secretary of Housing and Redevelopment Authority of Edina, Minnesota, a public body corporate and politic organized and existing under the laws of the State of Minnesota. JANE M. TIMM COMM. #20117396 Notary Public State of Minnesota My Commission Expires 1/31/2020 12137192vl