Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
19- Development Agreement - Life Style Solutions Real Estate, LLC - The Ruh Building
DEVELOPMENT AGREEMENT (Ruh Building) This DEVELOPMENT AGREEMENT(this"Agreement") is dated as of February 11, 2019 by and between LIFE STYLE SOLUTIONS REAL ESTATE, LLC (the"Developer"), and the CITY OF BOZEMAN, MONTANA, 121 N. Rouse Ave., Bozeman, Montana 59771 (the "City"). The Developer and the City are each individually referred to herein as a"Party"and collectively as the"Parties." RECITALS: WHEREAS, under the provisions of Montana Code Annotated, Title 7, Chapter• 15, Parts 42 and 43, as amended (the"Act"),the City is authorized to create urban renewal areas,prepare and adopt an urban renewal plan therefor and amendments thereto, undertake urban renewal projects therein,provide for the segregation and collection of tax increment with respect to property taxes collected in such areas, and apply tax increment revenues derived from projects undertaken within the urban renewal area to pay eligible costs; WHEREAS,pursuant to the Act and Ordinance No. 1685 adopted by the City Commission of the City(the"City Commission") on November 27, 2006, as amended by Ordinance No. 1925, adopted by the City Commission on December 16, 2015 (collectively, the "Ordinance"), the City has created the Bozeman Midtown Urban Renewal District(the "District") as an urban renewal district and has approved the Bozeman Midtown Urban Renewal Plan (the"Plan") as an urban renewal plan in accordance with the Act, which Plan provides for the segregation and collection of tax increment revenues with respect to the District; WHEREAS,the Developer proposes to undertake the construction of the Ruh Building, as described more particularly on Exhibit A hereto (the"Project"), on land located in the District at 605 N. 7th. Ave. Bozeman, MT 59715, Bozeman, Montana, which is legally described on Exhibit B hereto (the"Land"); WHEREAS, the Developer submitted to the Midtown Urban Renewal Board of the City (the"Board") an application for tax increment assistance with respect to certain eligible costs of the Project; WHEREAS, by resolution adopted on January 3, 2019, the Board approved and recommended that the City Commission approve, subject to the terms and conditions of this Agreement, the application of tax increment assistance in the amount of$650,000 with respect to certain eligible costs of the Project,which amount was based on estimated Project costs available at that time; WHEREAS,the Parties recognize that costs of construction in the City continue to rise, and the Parties expect that the actual costs of the Project, including such eligible costs, are likely to continue to rise; WHEREAS,the City Commission approved the application for tax increment assistance with respect to certain eligible costs of the Project; WHEREAS, pursuant to Resolution No. 4991 adopted on February 11,2019, after a duly called and noticed public hearing,the city Commission approved the Project as an urban renewal project under the Plan and the Act and authorized the use of tax increment revenue of the District to reimburse the Developer for certain eligible costs of the Project described more particularly on Exhibit Q hereto(the"Eligible Costs") in the maximum amount of$747,500 (reflecting$650,000 originally approved by the Board,plus a 15% contingency to take into account rising construction prices), subject to the terms and conditions of this Agreement; and WHEREAS,certain of the Eligible Costs are costs paid by the Developer in connection with the design, engineering,work, construction, materials, equipment,and other improvements eligible to be reimbursed by Tax Increment,which improvements are identified as such on Exhibit Q hereto (the"Infrastructure Improvements"),and certain of the Eligible Costs are costs to be paid by the Developer as fees or charges pertaining to the Project, which fees and charges are identified as such on Exhibit Q hereto (the"Project Fees and Charges"); and WHEREAS, the city Commission may determine in its sole discretion to issue tax increment urban renewal revenue bonds in one or more series(the"Bonds")to finance all or a portion of the Eligible Costs to be reimbursed to the Developer in the maximum amount of $747,500 and pay associated costs of the financing; and WHEREAS,the Parties desire to enter into this Agreement which sets forth the obligations and commitments of the Parties with respect to the Project, including the Eligible Costs consisting of the costs of the Infrastructure Improvements and of the Project Fees and Charges. NOW, THEREFORE,the City and the Developer, pursuant to the Act, each in consideration of the representations, covenants and agreements of the other, as set forth herein, mutually represent, covenant and agree as follows: Section 1. Definitions;.Rules of Interpretation; Exhibits. 1.1. Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context clearly requires otherwise,the following terms have the meanings assigned to them, respectively: "Act" means Montana Code Annotated, Title 7, Chapter 15, Parts 42 and 43, as amended or supplemented. "Agreement"means this Development Agreement, dated as of February 11, 2019, by and between the City and the Developer, as it may be amended or supplemented from time to time in accordance with the terms hereof. "Bonds"has the meaning given in the Recitals above. "City"means the City of Bozeman,Montana, or any successors to its functions under this Agreement. -City commission" means the governing body of the City. 2 "Costs of Issuance"means, if the City issues Bonds,the following costs but only to the extent incurred in connection with, and allocable to the Bonds: underwriter's spread, counsel fees, financial advisor fees, rating agency fees,trustee fees, paying agent fees, bond registrar, certificate, and authentication fees, accounting fees, printing costs for bonds and offering documents, public approval process costs, feasibility study costs, guarantee fees, other than for qualified guarantees; and similar costs. "Developer" means Life Style Solutions Real Estate, LLC, a Montana limited liability company, and its successors and assigns in accordance with and as permitted under this Agreement. "Developer Certificate" means the certificate attached hereto as Exhibit E. "District" means the Bozeman Midtown Urban Renewal District, an urban renewal district created by the Ordinance pursuant to the Act,as such may be enlarged or reduced from time to time in accordance with the Act. "DOIZ"means the State of Montana Department of Revenue. "Eligible Costs"means the costs identified as such on the attached Exhibit C. "Environmental Laws and Regulations" means and includes the Federal Comprehensive Environmental Compensation Response and Liability Act("CERCLA" or the "Federal Superfund Act") as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"),42 U.S.C. §§ 9601 et seq.;the Federal Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. §§ 6901 et seq.;the Clean Water Act, 33 U.S.C. § 1321 et seq.; and the Clean Air Act, 42 U.S.C. §§ 7401 et seq., all as the same may be from time to time amended,and any other federal, state, county, municipal, local or other statute, code, law, ordinance, regulation, requirement or rule which may relate to or deal with human health or the environment including without limitation all land use,zoning,and stormwater control regulations as well as all regulations promulgated by a regulatory body pursuant to any statute, code, law, ordinance, regulation, requirement or rule. "Fiscal 'Fear" means the period commencing on the first day of July of any year and ending on the last day of June of the next calendar year,or any other twelve-month period authorized by law and specified by the Commission as the City's fiscal year. "Indemnified Parties" has the meaning given to it in Section 7.1. "Infrastructure Improvements" means the design, engineering, work,construction, materials, equipment,and the other improvements,the costs of which form a part of the Eligible Costs described as such in Exhibit C hereto, as the same may be amended or supplemented from time to time, in accordance with the terms hereof. "Land" has the meaning given to it in the recitals hereof. "Land Use Regulations"means all federal, state and local laws, rules, regulations, ordinances and plans relating to or governing the development or use of the Land or the Project. 3 "Milestone" of"Milestones"has the meaning given in Section 3.4 hereof. "Milestone hate"or"Milestone Dates"has the meaning given in Section 3.4 hereof. "Ordinance"has the meaning given to it in the recitals hereof. "Person"means any individual, corporation, limited liability company, partnership, limited liability partnership,joint venture, association,joint-stock company, trust,unincorporated organization or government or any agency or political subdivision thereof. "Prevailing'Wage Dates"means the Montana Prevailing Wage Rate for public works projects as published from time to time by and available from the Montana Department of Labor and Industry, Research and Analysis Bureau, P.O. Box 1728, Helena, Montana 59624, telephone number(800) 541-3904. "Project"means the facilities to be constructed by the Developer on the Land pursuant to this Agreement, as described more particularly on the attached Exhibit A. "Project Fees and Charges"means those fees and charges pertaining to the Project that form a part of the Eligible Costs described as such in Exhibit C hereto, as the same may be amended or supplemented from time to time, in accordance with the terms hereof. "State"means the State of Montana. "'Tax Increment" means the amount received by the City pursuant to the Act from the extension of levies of Taxes (expressed in mills) against the incremental taxable value(as defined in the Act)of all Taxable Property, and shall include all payments in lieu of Taxes attributable to the incremental taxable value and all payments received by the City designated as replacement revenues for lost Tax Increment. "Taxable Property"means all real and personal property located in the District and subject to Taxes, including land, improvements and equipment. "Taxes" means all taxes levied on an ad valorem basis by any Taxing Body against the Taxable Property (exclusive of the six mill levy for university purposes levied by the State), and shall include all payments in lieu of taxes received by the City with respect to Taxable Property. "Taxing Body"means the City;the County of Gallatin, Montana; High School District No. 7 (Bozeman), Gallatin County, Montana; Elementary School District No. 7 (Bozeman), Gallatin County, Montana;the State; and any other political subdivision or governmental unit that levies or may hereafter levy or cause to be levied Taxes against property within the District. "Unavoidable Delay" means a delay resulting from a cause over which the Party required to perform does not have control and which cannot or could not have been avoided by the exercise of reasonable care, including but not limited to, acts of God, accidents, war,civil unrest, embargoes, strikes,unavailability of raw materials or manufactured goods, litigation,and the delays of the other Party or its contractors, agents or employees in the performance of their duties under or incident to this Agreement. 4 1.2. Rules of Interpretation. (a) The words"herein,""hereof" and words of similar import, without reference to any particular section or subdivision, refer to this Agreement as a whole rather than to any of its particular sections or subdivisions. (b) References to any particular section or subdivision hereof are to the section or subdivision of this Agreement in its original signed form,unless otherwise indicated. (c) The word "or" is not exclusive but is intended to contemplate or encompass one, more or all of the alternatives conjoined. 1.3. Exhibits. The following Exhibits are attached to and by reference made a part of this Agreement: Exhibit A: Project and Project Costs Exhibit B: Description of the Land Exhibit C: Eligible Costs; Infrastructure Improvements and Project Fees and Charges Exhibit D: Milestones Exhibit E: Form of Developer Certificate Exhibit F: City's Statement of Non-Discrimination Section 2. Representations. 2.1. City Representations. The City hereby represents as follows: (a) Pursuant to the Act, and after a public hearing duly called and held, the City by the Ordinance has duly created the District. (b) Pursuant to Resolution No. 4991 of the City Commission, the City approved the use of Tax Increment, if available,to reimburse or, as appropriate, pay the Eligible Costs in a total amount not to exceed$747,500. Subject to the terms and conditions of this Agreement,the City intends to reimburse the Developer for the Eligible Costs in an amount not to exceed $747,500. (c) The DOR has advised the City that, as of January 1, 2019,the base taxable value (as defined in the Act) of the District is $3,507,723. (d) Based on the representations of the Developer, beginning in the fiscal year ending June 30, 2020,the completed Project is expected to have a market value of at least$5,643,334. (e) The City Commission has duly authorized the execution and delivery of this Agreement. 5 2.2. Developer Representations. The Developer hereby represents as follows: (a) The Developer is a Montana limited liability company, duly formed,validly existing and in good standing under the laws of the State and is duly qualified to do business in the State. The Developer has the power to enter into this Agreement and by all necessary corporate action has duly authorized the execution and delivery of this Agreement. (b) Life Style Solutions Real Estate, LLC has good marketable title to the Land, free and clear of all liens, encumbrances and defects except such as do not materially affect the value of the Land or materially interfere with the use made and proposed to be made of the Land by the Developer. (c) The Developer has the financial capability or commitments to complete the Project at a cost not less than $6,676,666.90 (d) The Developer is not aware of any facts the existence of which would cause the Developer to be in violation in any material respect of any Environmental Laws and Regulations applicable to the Project or the Infrastructure Improvements. The Developer has not received from any local, state or federal official any notice or communication indicating that the activities of the Developer have been, may be or will be in violation of any Environmental Laws and Regulations applicable to the Project or the Infrastructure Improvements. (e) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby,nor the fulfillment of or compliance with the terms and conditions hereof is prohibited or limited by, conflicts with or results in a breach of the terms, conditions or provisions of the certificate of formation,partnership agreement or operating agreement of the Developer or any evidence of indebtedness, agreement or instrument of whatever nature to which the Developer is now a party or by which it is bound, or constitutes a default under any of the foregoing. (0 There is no action, suit, investigation or proceeding now pending or,to the knowledge of the Developer, threatened against or affecting the Developer or its business, operations,properties or condition(financial or otherwise)before or by any governmental department, commission, board, authority or agency, or any court, arbitrator, mediator or grand jury,that could, individually or in the aggregate, materially and adversely affect the ability of the Developer to complete the Project. (g) The Developer acknowledges and agrees that the sole source of funds for reimbursing the Developer under this Agreement is Tax Increment and/or proceeds of the Bonds, which would be paid from Tax Increment. The Developer further acknowledges and agrees the amount of Tax Increment is dependent upon a number of variables, including,without limitation, the taxable value of the Project,the number of mills levied by Taxing Bodies, and then- prevailing state laws regarding computation of Tax Increment. The Developer agrees that if Tax Increment in the amount of$747,500 is not available to the City to reimburse the Developer and/or, if the City, in its sole discretion, determines that it cannot reasonably sell the Bonds, whether due to lack of Tax Increment, market conditions, or otherwise,the City shall have no 6 obligation to pay to the Developer the amount of reimbursement described in Section 4. The Developer agrees that such event shall not constitute a default by the City hereunder. (h) The Developer acknowledges and agrees that the estimates of assessed(market) and taxable values set forth in this Agreement(and any resulting estimates of Tax Increment) are estimates only and are based on information provided by the Developer to the City and various assumptions that the City believes are reasonable. Actual assessed(market) and taxable values of the Project and actual Tax Increment generated by the Project or in the District may vary significantly based on variables over which the City has no control. (i) The Developer acknowledges and agrees that the Bonds, if authorized and issued, are special, limited obligations of the City and shall not be paid from any funds of the City other than Tax Increment. The Developer understands and agrees the Bonds, if authorized and issued, will be subject to all the terms and conditions of the bond resolution authorizing their issuance (the"Bond Resolution"), including, without limitation, if the City determines in its sole discretion, a requirement that the Developer make up any shortfalls in the Tax Increment available to pay the debt service on the Bonds, and that, if the Bonds are draw-down bonds,the City may be prohibited from making future draws on the Bonds if all the conditions applicable to a draw are not satisfied. The Developer acknowledges and agrees that an event of default or default under the Bonds or the Bond Resolution does not constitute a default under this Agreement, unless the event of default or default is a result of the failure by the Developer to perform an obligation of the Developer identified in the Bond Resolution. Section 3. Developer Undertakings. 3.1. Construction and Maintenance of Project. The Developer hereby agrees and commits to the City that it will diligently prosecute to completion the construction of the Project in accordance with this Agreement,the site plan submitted to the City and all applicable federal, State and local laws, rules,regulations, ordinances and plans relating to or governing the development or use of the Project, including applicable Land Use Regulations and Environmental Laws and Regulations. The Developer agrees and commits to the City that construction of the Project shall be complete and a certificate of occupancy issued no later than September 1, 2020, subject to Unavoidable Delays. The total costs of the Project are shown on Exhibit A hereto. The Developer has the financial capacity to complete the Project, and the Developer agrees to pay all costs thereof. If there is an increase in the costs of the Project from that shown on Exhibit A hereto that cannot be covered by the contingency amount,the Developer shall notify the City of the increase and submit additional evidence in a form acceptable to the City that the Developer has the financial capacity to cover such additional costs and complete the Project. At all times during the term of this Agreement,the Developer will operate and maintain,preserve and keep the Project or cause the Project to be operated, maintained,preserved and kept for the purposes for which it was constructed, and with the appurtenances and every part and parcel thereof, in good repair and condition. The Developer agrees to permit the City and any of its officers, employees or agents access to the Land for the purpose of inspection of all work being performed in connection with the Project; provided, however, that the City shall have no obligation to inspect such work. 7 3.2. Preparation,.Review and Approval of Construction Plans. In connection with the Project,the Developer, at its sole expense, shall prepare and submit construction plans,drawings, and related documents for each portion of the Project to the appropriate City officials for architectural, engineering or land use review and written approval or permits. The Developer acknowledges that no review or approval by City officials hereunder may be in any way construed by the Developer to replace,override or be in lieu of any required review, inspection, or approval by the City or any other building construction official review or approvals required by any State laws or local ordinances or regulations. Nothing contained in this Agreement indicates or evidences that the City has approved or will approve the Project or any portion thereof. This Agreement does not affect or limit the City's regulatory powers with regard to the Project, including,without limitation,those relating to building permits or other permits or the payment of fees. 3.3. Construction of the Infrastructure Improvements. The Developer shall acquire, install, construct or otherwise provide the Infrastructure Improvements. The Developer acknowledges and agrees that the City is not responsible for acquiring, installing,constructing or otherwise providing the Infrastructure Improvements. The estimated costs of the Infrastructure Improvements, which form a part of the Eligible Costs, are shown on Exhibit C hereto. Developer may not seek approval of an improvements agreement or seek to secure the completion of any Infrastructure Improvements after certificate of occupancy. 3.4. Milestones of the Proiect. Certain steps in the development of the Project are listed on Exhibit D attached hereto (collectively, the"Milestones"; each a"Milestone"), together with the dates by which the Developer is obligated to complete the Milestones (collectively,the"Milestone Dates"; each as it relates to a particular Milestone,the"Milestone Date"). The Developer acknowledges and agrees that the City in reserving or offering to make available Tax Increment to pay or reimburse the Eligible Costs necessarily means that certain Tax Increment is not available to pay or reimburse other undertakings or costs for the benefit of the District and that the City reasonably expects additional Tax Increment as a result of completion of the Project. The Developer acknowledges and agrees that conditioning the availability of Tax Increment or proceeds of Bonds to pay or reimburse the Eligible Costs on completion or satisfaction of the Milestones by the corresponding Milestone Dates is reasonable. If the Developer is unable to complete or satisfy a Milestone by the corresponding Milestone Date, the Developer shall make a formal written request to the City Commission, with appropriate supporting material,to extend the Milestone Date and, as appropriate, subsequent Milestone Dates. The City Commission may, in its sole discretion, determine whether such extension is appropriate and, if so, fix a new and superseding Milestone Date and also adjust other subsequent Milestone Dates, along with any other terms or conditions, or it may, in its sole discretion, elect to terminate this Agreement, in which case the City will have no obligation to reimburse or pay the Developer hereunder. 3.5. Prevailing Wye Rates;-Competitive Bidding. The Developer understands that the City is obligated to follow certain laws with respect to the expenditure of public funds,which includes Tax Increment. The Developer agrees to comply with laws that govern City contracting obligations, including public procurement laws relating to all of the Infrastructure Improvements, such as,without limitation, laws and rules regarding prevailing wage and solicitation of work on a competitive basis. 8 Without limitation of the foregoing,the Developer agrees that in the awarding of contracts for the Infrastructure hnprovements(i) it will, and it will cause its contractor to, publicly bid competitively contracts for each component of the Infrastructure Improvements,and (ii)through its contract with its contractor, it will, in addition to the requirements of Sections 3.9 and 3.10, require its contractor to,pay the Prevailing Wage Rates on such contracts related to the Infrastructure Improvements. The Developer will provide to the City all documentation requested to verify the compliance of the Developer and its contractor with the foregoing requirements. Failure of the Developer or its contractor to bid competitively contracts for each component of the Infrastructure Improvements or to require contracts entered into directly with contractors or sub-contractors to include provisions requiring the contractor or sub-contractor to pay the Prevailing Wage Rates on the work related to the Infrastructure Improvements will be considered a breach of this Agreement and the City will be entitled, at its discretion and without obligation, to exercise any and all measures to assure compliance and retroactive compensation plus interest to workers not paid in accordance with this Agreement, and recovery of any penalty or fine assessed by the State attributed to any failure to pay the Prevailing Wage Rates. Additionally, the Developer acknowledges that a violation of these requirements may,in the City's sole discretion, cause the Infrastructure Improvements to be ineligible for the application of Tax Increment, in which case the City will have no obligation to reimburse or pay the Developer hereunder. 3.6. Utilities. The Developer shall not interfere with, or construct any improvements over, any public street or utility easement without the prior written approval of the City. All connections to public utility lines and facilities shall be subject to approval of the City and any private utility company involved. The Developer at its own expense shall replace any public facilities or utilities damaged during the Project by the Developer or its agents or by others acting on behalf of or under their direction or control of the Developer. 3.7. Permits and Compliance With Laws. The Developer will obtain, in a timely manner, all required permits, licenses and approvals, and will meet all requirements of all local, state and federal laws, rules and regulations which must be obtained or met in connection with the acquisition and construction of the Project, including the Infrastructure Improvements. Without limiting the foregoing, the Developer will request and seek to obtain from the City or other appropriate governmental authority all necessary land use,zoning, and building permits. The Developer will comply in all material respects with all Environmental Laws and Regulations applicable to the construction, acquisition,and operation of the Project, including the hnfrastructure Improvements,will obtain any and all necessary environmental reviews, licenses or clearances under, and will comply in all material respects with, Environmental Laws and Regulations. In addition, the Developer shall comply fully with all applicable state and federal laws, regulations, and municipal ordinances related to worker safety including but not limited to the Occupational Safety and Health Act(OSHA), the safety rules, codes, and provisions of the Montana Safety Act in Title 50, Chapter 71,MCA, all applicable City, County, and State building and electrical codes, and the Americans with Disabilities Act. 3.8. Easements. To the extent that the Infrastructure Improvements are to be located on the Land,the Developer hereby agrees to grant to the City and applicable utility companies from time to time such easements, rights-of-way and similar licenses in a form required by the 9 -� __._ City and as are reasonably necessary to permit the City to own, operate and maintain the Infrastructure Improvements. 3.9. Non-Discrimination Statement. The Developer agrees to require its contractor(s) to be in compliance with the City's Statement ofNon-Discrimination attached hereto as Exhibit F, as well as Title 49, Montana Code Annotated,regarding activities related to the Project, including the Infrastructure Improvements. The Developer agrees that in its contracts with its contractors the Developer's contractor will be required to require its subcontractors to comply with the City's Statement of Non-Discrimination attached hereto as Exhibit F, as well as Title 49,Montana Code Annotated,regarding activities related to the Project. The Developer agrees to provide copies of all such contracts upon request by the City. 3.10. Worker's Compensation Insurance. The Developer shall provide in its construction contracts related to the Project with all of its respective contractors that such contractors are to be covered by a Worker's Compensation insurance program with the State, a private insurance carrier, or an approved self-insurance plan in accordance with State law. 3.11. Cooperation with City and DOR. The Developer agrees to provide to the City and, as requested,the DOR information that may be required by the City and/or the DOR to determine, or make reasonable projections regarding,the amount and timing of receipt of Tax Increment resulting from the Project. Such information may include, but is not limited to timing of construction and estimated completion dates of all or portions of the Project,costs of construction, materials used in construction, uses of the Project or any portion thereof, allocations of uses to spaces and square feet of spaces included in the Project, and any other information that may be relevant. The Developer understands and agrees that the City will rely on such information from the Developer in making determinations regarding the amount of Tax Increment resulting from the Project that may be available and the timing of the availability of Tax Increment resulting from the Project, and that such information may be a critical factor in the City's determination regarding whether to issue and the sizing and other features of the Bonds. 3.12. Project Fees and Charges. The Developer reasonably expects that it will capitalize the Project Fees and Charges (other than Costs of Issuance, if any) into the costs of the Project,and treat such fees and charges as capital expenditures. Section 4. City Undertakings. Subject to satisfaction of all conditions in Section 5 below, and solely from Tax Increment on hand or proceeds of the Bonds,the City agrees to reimburse the Developer for, or, as applicable,pay the Eligible Costs in an amount not to exceed $747,500. The Parties acknowledge and agree that, subject to the terms and conditions of this Agreement, (i)the actual sum of all Eligible Costs may exceed $747,500, but$747,500 is the maximum amount that the City will reimburse the Developer for Eligible Costs; and (ii) if the actual sum of all Eligible Costs exceeds $747,500, the City has discretion to allocate the reimbursable amount among the Eligible Costs. The City may issue the Bonds in its sole discretion to pay or reimburse all or a portion of the Eligible Costs to be paid or reimbursed. The Bonds, if authorized and issued,will have such terms and conditions as are approved by the City Commission. This Agreement does not require or imply that the City has any obligation to issue the Bonds. 10 Section 5. Payment of Reimbursement Amount for the Eligible Costs. Payment of the amount of reimbursement described in Section 4 by the City to the Developer for Eligible Costs paid by the Developer shall be subject to the following conditions and in accordance with the following procedures: 5.1. Conditions to Payment or Reimbursement. (a) (i)The Developer must have completed or satisfied each of the Milestones by the applicable Milestone Date, as such date may have been extended by the City Commission pursuant to Section 3.4 hereof, (ii) the City must have issued a certificate of occupancy for the Project, (iii)the Infrastructure Improvements must have been completed in their entirety and the City must have delivered to the Developer written acceptance of the Infrastructure Improvements (which may be in the form of a Certificate of Completion or such other format as required by the City),and (iv)the Developer must demonstrate to the City's satisfaction,by a title report or other means acceptable to the City,that the Infrastructure Improvements are free of financial liens and any encumbrances affecting the Infrastructure Improvements must be acceptable to the City. (b) Reimbursement by the City for costs of the Infrastructure Improvements must be based on paid invoices for costs incurred by the Developer, its contractors and subcontractors or utility companies, which the Developer must supply to the City. The City may reject, in its sole discretion, any invoice related to the Infrastructure Improvements. The City will notify the Developer of any rejected invoice and the reason it was rejected. (c) The Parties agree that the City will have no obligation to pay or reimburse any of the Eligible Costs unless at the time of such request(i) all of the Developer's representations as set forth in Section 2.2 are true and correct, (ii)the Developer is not in breach of any covenant or undertaking as set forth in Section 3, and (iii) unless and to the extent the City issues the Bonds, there shall be adequate Tax Increment on hand to pay the amount of the reimbursement or cost or expense and satisfy all other financial obligations related to the District. (d) If some or all of the Eligible Costs are to be paid with the proceeds of the Bonds, the City shall have determined, in its sole discretion,but with the cooperation of the Developer, th at the Tax Increment is sufficient to pay the debt service on the Bonds as and when due and, as applicable, to satisfy other requirements under the Bond Resolution, such as funding an adequate reserve, meeting applicable debt service coverage requirements, and paying costs of issuance, and to satisfy all other financial obligations related to the District. The Developer understands and agrees the City shall have no obligation to and may not issue the Bonds if the City is unable to find and determine that the Tax Increment is sufficient to pay the Bonds timely, to satisfy the requirements of the Bond Resolution, and to satisfy all other financial obligations related to the District. If any of the above conditions are not satisfied in the determination of the City,the City shall have no obligation to pay or reimburse any of the Eligible Costs and the City's determination to refrain from paying or reimbursing, or its inability to pay or reimburse, any of the Eligible Costs shall not be or result in a default of this Agreement. 5.2. Process for Payment or Reimbursement. 11 (a) By the date that is 90 days before the date the Developer estimates the Project will be first placed in service, the Developer shall notify the City in writing of the components of the Project remaining to be completed before it expects the City will issue the certificate of occupancy for the Project. The Developer shall provide a further update to the City when it reasonably expects that the Project will be placed in service in roughly 30 days. (b) After receiving a certificate of occupancy for the Project,the Developer shall provide to the City a signed request for reimbursement substantially in a form attached as Exhibit E hereto and acceptable to the City, accompanied by the invoices and lien waivers from the contractors or subcontractors performing or that have performed the work to be reimbursed. In addition,the Developer agrees to provide to the City any additional information requested by the City for the City to determine whether the Developer's request for reimbursement complies with this Agreement. (c) By the date that is five months after the submission by the Developer of a complete and acceptable request for reimbursement, as determined by the City,the City,subject to the terms and conditions of this Agreement, shall reimburse to the Developer such Eligible Costs, in an amount not to exceed $747,500,either directly from Tax Increment or from proceeds of Tax Increment Bonds; provided, however, if the City shall earlier determine that the Tax Increment is not sufficient to reimburse the Developer for the Eligible Costs it has paid, either because there is insufficient Tax Increment then available or the City determines there is insufficient Tax Increment to permit the issuance of Bonds, then the City shall so inform the Developer in writing and this Agreement shall thereupon terminate and neither Party will have any further rights or obligations hereunder, except as set forth in those provisions that expressly survive termination of this Agreement. Section 6. Sources of Repayment;_Covenants to Pa T� axes. 6.1. Taxes. The Developer shall pay or cause to be paid when due and prior to the imposition of penalty all Taxes and all installments of any special assessments payable with respect to the Land and the Project and any improvements thereto or extension thereof. 6.2. Maintenance of Land and Project. The Developer agrees to use its commercially reasonable best efforts to maintain and operate the Land and the Project so as to be able at all times to pay promptly and when due all property taxes levied with respect to the Land and the Project. 6.3. In junction; Specific Performance. The Parties agree that, in the event of a breach of this Section 6 by the Developer or its successors or assigns,the City would suffer irreparable harm. Therefore, in the event the Developer or its successors or assigns fails to comply with the provisions of this Section 6,the Developer agrees that the City may pursue any remedy at law or in equity, including the remedies of injunction and specific performance. Section 7. Indemnification and Insurance. 7.1. Indemnification. The Developer releases the City and all City Commission members, board members, officers, agents, servants and employees of the City (the "Indemnified Parties") from, and covenants and agrees that the Indemnified Parties shall not be 12 liable for, and agrees to indemnify; defend and hold harmless the Indemnified Parties against, any loss, damage, cost(including reasonable attorneys' fees),claim, demand, suit, action or other proceeding whatsoever(i)arising or purportedly arising out of, or resulting or purportedly resulting from, the acquisition and constRICtion of the Project, including the Infrastructure Improvements, any violation by the Developer of any agreement, condition or covenant of this Agreement,the ownership, maintenance and operation of the Project,or the presence on any portion of the Land, of any dangerous,toxic or hazardous pollutants, contaminants, chemicals, waste, materials or substances; or(ii) which is proximately caused by the Developer or its officers, agents,contractors, consultants or employees. 7.2. Insurance. Developer shall keep and maintain the Project at all times insured against such risks and in such amounts, with such deductible provisions, as are customary in connection with facilities of the type and size comparable to the Project, and the Developer shall carry and maintain, or cause to be carried and maintained, and pay or cause to be paid timely the premiums for direct damage insurance covering all risks of loss, including, but not limited to,the following: I. fire 2. extended coverage perils 3. vandalism and malicious mischief 4. boiler explosion(but only if steam boilers are present) 5. collapse on a replacement cost basis in an amount equivalent to the Full Insurable Value thereof. "Full Insurable Value" shall include the actual replacement cost of the Project,exclusive of foundations and footings, without deduction for architectural, engineering, legal or administrative fees or for depreciation. The policies required by this Section 7.2 shall be subject to a no coinsurance clause or contain an agreed amount clause, and must contain a deductibility provision not exceeding$100,000. Subject to the terms of any mortgage relating to the Project,policies of insurance required by this Section 7.2 shall insure and be payable to Developer, and shall provide for release of insurance proceeds to Developer for restoration of loss. The City shall be furnished certificates showing the existence of such insurance. In case of loss,Developer is hereby authorized to adjust the loss and execute proof thereof in the name of all parties in interest. During construction of the Project,any and all of the foregoing insurance policies may be maintained by the Developer's contractor;provided that once the Project is placed into service, Developer shall maintain all of the foregoing insurance policies. In addition, as a condition to placing the Project in service,the City may require that the Developer or owner of the Project obtain additional insurance that would protect the City or the City's interest in the Infrastructure Improvements. In addition to and independent of the above,the Developer shall at the Developer's expense secure liability insurance through an insurance company or companies duly licensed and authorized to conduct insurance business in Montana. The insurance shall not contain any exclusion for liabilities specifically assumed by the Developer in this Section. The insurance 13 shall cover and apply to all claims, demands, suits, damages, losses,and expenses that may be asserted or claimed against,recovered from,or suffered by the City in relation to construction of the Project and the Infrastructure Improvements without limit and without regard to the cause therefore. The Developer must furnish to the City an accompanying certificate of insurance and accompanying endorsements in amounts not less than as follows: Commercial General Liability -$1,000,000 per occurrence; $2,000,000 annual aggregate The above amounts shall be exclusive of defense costs. The City, its officers, agents,and employees, shall be endorsed as an additional or named insured on a primary non-contributory basis on the Commercial General Liability policy. The insurance and required endorsements must be in a form suitable to City and shall include no less than a thirty(30) day notice of cancellation or non-renewal.The City must approve all insurance coverage and endorsements prior to the Developer commencing work on Project or Infrastructure Improvements. Developer must notify the City within two (2)business days of Developer's receipt of notice that any required insurance coverage will be terminated or Developer's decision to terminate any required insurance coverage for any reason. Section 8. General Provisions. 8.1. Conflicts of Interest; Ci 's Representatives Not Individually.Liable. The Developer represents that it does not employ, retain, or contract with an officer or employee of the City and that no member, officer or employee of the City has a personal or financial interest, direct or indirect, in this Agreement or in the Project, or a financial interest in the Infrastructure Improvements. No member,officer or employee of the City shall be personally liable to Developer in the event of any default under or breach of this Agreement by the City,or for any amount that may become due to Developer for any obligation issued under or arising from the terms of this Agreement. 8.2. Rights Cumulative. The rights and remedies of the Parties of this Agreement, whether provided by law or by this Agreement, shall be cumulative, and the exercise by any Party hereto of any one or more of such remedies shall not preclude the exercise by such Party, at the same or different times, of any other remedy for the same default or breach or of any of its remedies for any other default or breach of the Party subject to the limitation of remedies provided herein. No waiver made by such Party with respect to the performance or the manner or time thereof,of any obligation under this Agreement, shall be considered a waiver with respect to the particular obligation of the other Party or a condition to its own obligation beyond those expressly waived in writing and to the extent thereof, or a waiver in any respect in regard to any other rights of the Party making the waiver of any obligations of the other Party. Delay by a Party hereto instituting or prosecuting any cause of action or claim hereunder shall not be deemed a waiver of any rights hereunder. 83. Term of Agreement. This Agreement shall remain in effect until the date that it terminates or is terminated by the City, as follows: 14 (a) If payment or reimbursement of Eligible Costs is made directly from Tax Increment and not proceeds of Bonds, this Agreement will terminate on the date that is 10 days after the date the City makes the final payment or reimbursement of Eligible Costs to the Developer hereunder. (b) if the City issues Bonds, this Agreement will remain in effect until the final maturity or payment date of the Bonds or such earlier date that the Bonds are prepaid in full, discharged, and no longer outstanding. (c) This Agreement may be terminated by the City in its sole discretion on a date earlier than described in(a) or(b) above at any time after failure by the Developer to complete or satisfy a Milestone by the applicable Milestone Payment Date. (d) If the City has determined Tax Increment is insufficient under Section 5.2(c) above,this Agreement shall terminate in the manner and on the date described in Section 5.2(c) above. (e) Notwithstanding the foregoing provisions of this Section, Sections 6, 7, and 8 of this Agreement shall in all events survive the termination of this Agreement. 8.4. Limitation on City Liability. No agreements or provisions contained in this Agreement nor any agreement, covenant or undertaking by the City contained in any document in connection with the Project, including the Infrastructure Improvements, or the Eligible Costs shall give rise to any pecuniary liability of the City or a charge against its general credit or taxing powers, or shall obligate the City financially in any way except with respect to then-available Tax Increment. No failure of the City to comply with any term,condition, covenant or agreement herein shall subject the City to liability for any claim for damages, costs or other financial or pecuniary charge except to the extent that the same can be paid or recovered from then-available Tax Increment; and no execution on any claim, demand, cause of action or judgment shall be levied upon or collected from the general credit, general funds or taxing powers of the City(except as such constitute then-available Tax Increment). Nothing herein shall preclude a proper party in interest from seeking and obtaining specific performance against the City for any failure to comply with any tetm, condition,covenant or agreement herein; provided that no costs, expenses or other monetary relief shall be recoverable from the City except as may be payable from the Tax Increment. This Agreement shall not constitute or be construed to give rise to a debt of the City. 8.5. Assignment. This Agreement is unique between the City and Developer and no Party may assign any rights or privileges, or delegate any duties or obligations under this Agreement,without first obtaining the written consent of the other Party. 8.6. Successors Bound By Agreement; No Third Party Beneficiary;No Property Interest. Subject to compliance with Section 8.5, this Agreement will inure to the benefit of and be binding,upon the Parties to this Agreement and their respective successors in interest and permitted assignees. This Agreement is for the exclusive benefit of the Parties, does not constitute a third-party beneficiary agreement, and may not be relied upon or enforced by a third 15 party. This Agreement, by itself, does not create or give rise to a property interest in the Land or the Project. 8.7. Prior Agreements. This Agreement supersedes, merges and voids any and all prior discussions, negotiations, agreements and undertakings between the Parties with respect to the subject matter of this Agreement. The Parties waive and release each other from any claims, actions, or causes of action that relate in any manner to any prior discussions,negotiations, agreements and undertakings between the Parties with respect to the subject matter of this Agreement. 8.8. Entire Agreement. This Agreement, including any exhibits and attachments hereto,embodies the entire agreement and understanding of the Parties with respect to its subject matter. All Parties shall be prohibited from offering into evidence in any arbitration or civil action any terms, conditions,understandings,warranties, statements or representations,whether oral or written, with respect to the subject matter of this Agreement and that are not contained in this Agreement. 8.9. Amendments Changes and Modifications. This Agreement may be amended and any of its terms may be modified only by written amendment authorized and signed by the Parties hereto. 8.10. Headings. The headings of articles and sections in this Agreement are inserted for convenience of reference only and do not limit or amplify the terms and provisions of the Agreement in any manner. The headings will be ignored and will not affect the construction of any provisions of this Agreement. 8.11. Notice. Any formal notice, demand or communication required or permitted by the terms of this Agreement to be given to the City or Developer will be in writing and will be delivered to such Party either: (i) by personal hand-delivery; or(ii) by depositing the same in the United States mail, certified mail with return receipt requested, addressed to such Party at the address named below, with postage prepaid thereon. Notice will be deemed complete upon receipt of the notice pursuant to any of the foregoing methods of notice. If to City: City of Bozeman Attention: Bozeman City Manager 121 N. Rouse Ave. P.O. Box 1230 Bozeman, MT 59771 With a copy to: Greg Sullivan, City Attorney If to Developer: 16 Life Style Solutions Real Estate, LLC Attention: Colin Ruh 2415 San Ramon Valley Blvd., Suite 4200 San Ramon, California, 94583 The City and the Developer, by notice given hereunder,may designate different addresses to which subsequent notices, certificates or other communications should be sent. 8.12. Severability. If any provision of this Agreement is declared void or held invalid, such provision will be deemed severed from this Agreement and the remaining provisions of this Agreement will otherwise remain in full force and effect. 8.I3. Duplicate Originals or Counterparts. This Agreement may be executed in two or more counterparts,each of which will be deemed to be an original copy of this Agreement and all of which,when taken together, will be deemed to constitute one and the same agreement. 8.14. Place of Performance. The place of performance of this Agreement will be in the City of Bozeman, Gallatin County,Montana. 8.15. Governing Law. This agreement and the legal relations between the Parties hereto will be governed by and construed in accordance with the laws of the State of Montana, without giving effect to any choice of law statutes, rules, or principles. 8.16. Dilute Resolution. (a) Any claim, controversy, or dispute between the Parties, their agents, employees, or representatives shall be resolved first by negotiation between senior-level personnel from each Party duly authorized to execute settlement agreements. Upon mutual agreement of the Parties, the Patties may invite an independent, disinterested mediator acceptable to the Parties to assist in the negotiated settlement discussions. (b) If the Parties are unable to resolve the dispute within thirty(30) days from the date the dispute was first raised, then such dispute may only be resolved in a court of competent jurisdiction in compliance with the applicable law and the provisions of this Agreement. 8.17. Further Assurances and Corrective Instruments. The Parties agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Project, including the Infrastructure Improvements, or the Eligible Costs or for carrying out the expressed intention of this Agreement. 8.18. Reports/Accountability/Public Information. Developer agrees to develop and/or provide documentation as requested by the City demonstrating the Developer's compliance with the requirements of this Agreement. Developer shall allow the City, its auditors, and other persons authorized by the City to inspect and copy its books and records for the purpose of verifying that the reimbursement of monies distributed to Developer pursuant to this Agreement was used in compliance with this Agreement and all applicable provisions of federal, state, and 17 local law. The Developer shall not issue any statements, releases or information for public dissemination regarding this Agreement or the work contemplated hereunder without prior written approval of the City. [Balance of page intentionally left blank] 18 IN WITNESS WHEREOF,the Parties hereto have caused this Development Agreement to be executed as of the l l day of February,2019. CITY OF BOZEMAN, MONTANA B Printed Name: Andrea Surr Title: City Manager [Signature Page to Development Agreement] 19 LIFE STYLE SOLUTIONS REAL ESTATE, LLC Name. , 1! -µ �' � k"' I �l l t 4 Title: [Signature Page to Development Agreement] 20 EXHIBIT PROJECT AND PROJECT COSTS SUMMARY DESCRIPTION OF PROJECT: The Ruh Building, n3-xtory structure with u rcstaun/ot/rotui\ ground floor and residential units on floors 2 and 3. PROJECT COSTS: Land (Fair Market Value) ......—.---.---.—..----~.....------'....—.$95O,OUO.0O Soft Costs —.-----.--.--------.~------------..—_.--..$A95,200.65 HardCosts ...............................................................................................................$4]9| 40h.25 Extra Costs not iu construction Estimate(e.g. alley behind .....................$40,000.00 � TotalProject Cwats.---,....-..-...-...--^'^..^~^~~~.~-^^.,.,^.,,^~..~^,,'^',..^- EXHIBIT B LEGAL DESCRIPTION OF THE LAND DURSTON 2ND SUB, 501, T02 S, R05 E, BLOCK 1, LOT 1 -2, ACRES .653, PLAT E- 33 B-1 EXHIBIT C The Parties acknowledge and agree that, subject to the terms and conditions of this Agreement, (i)the actual sum of all Eligible Costs may exceed $747,500, but$747,500 is the maximum amount that the City will reimburse the Developer for Eligible Costs; and(ii) if the actual sum of all Eligible Costs exceeds$747,500, the City has discretion to allocate the reimbursable amount among the Eligible Costs. Summary Description of the Infrastructure Improvements: Streetscape Improvements on N. 7`h Ave and Durston Rd., including i sidewalks, street trees and tree vaults, landscaping and street furniture in the public right-of-way. $235,000.00 Service lines, including the City of Bozeman fiber-optic conduit installation,Northwestern Energy relocation of services, and a street cutting to move the service lines as well as traffic management while moving the lines. $98,000.00 Northwestern Energy relocation of services,Northwestern Energy primary, new transformer, and gas and electric services. $45,000.00 Paving and stormwater facilities in the public alley $40,000.00 Engineering and design fees for Infrastructure Improvements $80,000.00 Demolition of structures $48,000.00 Contingency $20,833.10 Total Costs of Infrastructure Improvements $566,833.10 Summary Description of the Project Fees and Charges: City of Bozeman Impact Fees $143,319.34 City of Bozeman Cash In Lieu of Park Land $15,289.56 City of Bozeman Cash In Lieu of Water Rights $22,058.00 Total Project Fees and Charges $180,666.90 Total Eligible Costs $747,500.00 Total Reimbursable Value of Eligible Costs $747,500.00 C-1 EXHIBIT D MILESTONES MILESTONE MILESTONE DATE Site Plan Approval May 1, 2019 Infrastructure Plans Approved June 1, 2019 Building Permit Issued July 1,2019 Foundation Inspection Complete May 1, 2020 Issuance of Certificate of Occupancy September 1,2020 D-1 EXHIBIT E FORM OF DEVELOPER CERTIFICATE TO: City of Bozeman, Montana FROM: Life Style Solutions Real Estate, LLC (the"Developer") SUBJECT: Reimbursement for Eligible Costs _cam This Developer Certificate requests$ l 0' ©for reimbursement of Eligible Costs, as defined in the Development Agreement between Life Style Solutions Real Estate, LLC and the City of Bozeman, Montana, dated as of February 11,2019 (the"Development Agreement"). Capitalized terms used but not otherwise defined herein shall have the respective meanings given such terms in the Development Agreement. Pursuant to Section 5(d) of the Development Agreement,the undersigned hereby certifies on behalf of the Developer that: (a) the expenditures for which reimbursement is requested are listed in summary form in the attached schedule headed"Project Expenditures;" (b) invoices paid by the Developer corresponding to the expenditures set forth on the attached Project Expenditures Schedule are appended to the attached schedule headed "Project Invoices;" (c) the amounts for which reimbursement is requested have been paid by the Developer to the [City] for Project Fees and Charges or to contractors, subcontractors, materialmen, engineers, architects or other persons who or that have performed necessary or appropriate services or supplied necessary or appropriate materials for the acquisition, construction, renovation, equipping, and installation of the Infrastructure Improvements; (d) with respect to the Infrastructure Improvements,the contractor and subcontractors were solicited and retained competitively and all persons performing work on the Infrastructure Improvements were paid the Montana prevailing wage for such work; (e) no part of the several amounts requested to be paid, as stated in such certificate, has been or is the basis for the payment of any money in any previous request; (f) the reimbursement of the amounts requested will not result in a breach of any of the covenants of the Developer contained in the Development Agreement; and (g) no litigation has been instituted or is threatened with regard to any amounts sought to be reimbursed, and binding and enforceable lien waivers have been obtained from all contractors, subcontractors, materialmen, and others with regard to all work related to any amounts for which reimbursement is requested. E-1 The Developer represents that all of the representations of the Developer in Section 2.2 of the Development Agreement are true and correct as of the date hereof and the Developer is not in default of the performance of any of its undertakings or obligations under Section 3 of the Development Agreement as of the date hereof. ' ' .` Dated: , 20� By: Authorize Developer Representative E-2 EXHIBIT F CITY'S STATEMENT OF NON-DISCRIMINATION Statement of Non-Discrimination LS '1 (name of entity submitting)hereby affirms it will not discriminate on the basis of race, color, religion, creed, sex, age, marital status, national origin, or because of actual or perceived sexual orientation, gender identity or disability and acknowledges and understands the eventual contract will contain a provision prohibiting discrimination as described above and this prohibition on discrimination shall apply to the hiring and treatmenfi or pr s employees and to all subcontracts. and title ap orrzed to sign on behalf of submitter F-1