Loading...
HomeMy WebLinkAboutResolutions 5596 - Approving a Project in the Midtown Urban Renewal District Known as the 7th and Aspen Project RESOLUTION NO. 5596 RESOLUTION APPROVING A PROJECT IN THE BOZEMAN MIDTOWN URBAN RENEWAL DISTRICT AS AN URBAN RENEWAL PROJECT; MAKING FINDINGS WITH RESPECT THERETO AND APPROVING THE USE OF TAX INCREMENT REVENUES TO REIMBURSE ELIGIBLE COSTS THEREOF AND APPROVING A RELATED DEVELOPMENT AGREEMENT BE IT RESOLVED by the City Commission (the “Commission”) of the City of Bozeman, Montana (the “City”), as follows: Section 1 Recitals. 1.01. 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. 1.02. Pursuant to the Act and Ordinance No. 1685 adopted by the Commission on November 27, 2006, as amended by Ordinance No. 1925, adopted by the 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. DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 Resolution 5596, Approving a Project in the Midtown URD Known as the 7th and Aspen Project 2 1.03. Boundary Development, LLC (the “Developer”) or affiliated entities, together with Midtown Aspen, LLC, owns certain property in the District (collectively, the “Land”). The Developer, together with Midtown Aspen, LLC and the Human Resource Development Council (“HRDC”), proposes to undertake a project on the Land in two phases. Phase I is or will be owned by Midtown Aspen LLC, a Delaware limited liability company, or an affiliated entity, and consists of the design, engineering and construction of a four-story apartment building containing 46 residential rental units, 29 of which are expected to be affordable at 60% area median income (“AMI”) and 17 of which are expected to be affordable at 50% AMI, together with residential common space and related improvements (“Phase I of the Project”), which will be located on “Lot 4A”. Phase I of the Project will be financed in part with low income housing tax credits awarded or allocated to Midtown Aspen 4 LLLP, a Montana limited liability limited partnership, and Midtown Aspen 9 LLLP, a Montana limited liability limited partnership, which will each own condominium units comprised of the residential housing units upon which such tax credits were awarded or allocated. Phase I of the Project will be subject to a regulatory agreement or similar instrument restricting the use of Lot 4A to affordable housing meeting certain requirements, and will be owned and operated in partnership with HRDC. The second phase of the project is expected to consist of the design, engineering and construction of a four-story apartment building containing 50 residential rental units, all of which are expected to be workforce housing affordable at 80% AMI, together with residential common areas and related improvements (“Phase II of the Project” and, collectively with Phase I of the Project, the “Project”), which will be located on “Lot 6A.” Phase II of the Project will be owned by Developer or an affiliated entity. The under the Act, permissible uses of tax increment and tax increment financing include the acquisition, construction and improvement of public improvements or infrastructure, with “infrastructure” defined to include “workforce housing.” Although “workforce housing” is not defined in the Act, Section 90-6-143, Montana Code Annotated, defines “attainable workforce housing” as housing of a cost that a household earning between 60% and 140% of median household income would spend no more than 30% of gross monthly income to attain. DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 Resolution 5596, Approving a Project in the Midtown URD Known as the 7th and Aspen Project 3 The Developer has requested that the City use tax increment revenues of the District to reimburse the Developer with respect to certain eligible costs of the Project (the “Eligible Costs”). The Eligible Costs include costs of the demolition of existing structures on the Land, together with the design, engineering and construction of infrastructure, including water, sewer, storm water, streets, sidewalks, curbs and gutters serving the entire Project and certain costs of the workforce housing, and related improvements, as well as certain fees or charges pertaining to the Project. Section 2 Approval of the Project as an Urban Renewal Project. The Commission hereby approves the Project as an urban renewal project under the Act and the Plan. The Project, including the Eligible Costs, is contemplated by and within the scope of the Plan, and the Eligible Costs are eligible for tax increment financing under the Act. Section 3 Findings. The Commission hereby finds with respect to the Project as follows: a. no persons will be displaced from their housing by the Project; b. the Plan and the Project conform to the Bozeman Community Plan or parts thereof for the City as a whole; c. the Plan and the Project will afford maximum opportunity, consistent with the needs of the City as a whole, for the rehabilitation or redevelopment of the District by private enterprise; d. taking into account the use of tax increment revenues to reimburse the Developer for all or a portion of the Eligible Costs, there is expected to be a sound and adequate financial program for the financing of the Project; DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 Resolution 5596, Approving a Project in the Midtown URD Known as the 7th and Aspen Project 4 e. the Project constitutes an urban renewal project within the meaning of the Act and the Plan; and f. the Project is a means to provide safe, sanitary and healthful workforce housing, which constitutes a public purpose and a public use for which tax increment funds may be spent. Section 4 Development Agreement; Use of Tax Increment. 4.01. Staff of the City’s Economic Development Department and the Developer have negotiated a Development Agreement, the form of which is attached hereto as Exhibit A. The Development Agreement is hereby approved in substantially the form attached. The Interim City Manager, or in the event of his absence or disability, his designee, is hereby authorized and directed to finalize, approve, execute and deliver to the Developer the Development Agreement, substantially in the form attached as Exhibit A, with such changes as such officer shall deem necessary or appropriate. The execution and delivery by an appropriate officer of the City of the Development Agreement shall be conclusive as to the approval of such officer of the terms of the Development Agreement. 4.02. The Commission hereby approves the use of tax increment revenues to reimburse the Developer for Eligible Costs of the Project, subject to the terms and conditions of the Development Agreement. PASSED, ADOPTED, AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 21 day of May, 2024. ___________________________________ TERRY CUNNINGHAM Mayor DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 Resolution 5596, Approving a Project in the Midtown URD Known as the 7th and Aspen Project 5 ATTEST: ___________________________________ MICHAEL MAAS City Clerk APPROVED AS TO FORM: ___________________________________ GREG SULLIVAN City Attorney DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 CERTIFICATE AS TO RESOLUTION AND ADOPTING VOTE I, the undersigned, being the duly qualified and acting recording officer of the City of Bozeman, Montana (the “City”), hereby certify that the attached resolution is a true copy of Resolution No. 5596 entitled: “RESOLUTION APPROVING A PROJECT IN THE MIDTOWN URBAN RENEWAL DISTRICT AS AN URBAN RENEWAL PROJECT; MAKING FINDINGS WITH RESPECT THERETO AND APPROVING THE USE OF TAX INCREMENT REVENUES TO REIMBURSE ELIGIBLE COSTS THEREOF AND APPROVING A RELATED DEVELOPMENT AGREEMENT” (the “Resolution”), on file in the original records of the City in my legal custody; that the Resolution was duly adopted by the City Commission of the City at a regular meeting on May 21, 2024, and that the meeting was duly held by the City Commission and was attended throughout by a quorum, pursuant to call and notice of such meeting given as required by law; and that the Resolution has not as of the date hereof been amended or repealed. I further certify that, upon vote being taken on the Resolution at said meeting, the following Commission members voted in favor thereof: ; voted against the same: ; abstained from voting thereon: ; or were absent: . WITNESS my hand and seal officially this [___] day of [___________], 2024. (SEAL) __________________________________ MIKE MAAS City Clerk DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 Morrison Cunningham, Madgic, Fischer none none May21st Resolution 5596, Approving a Project in the Midtown URD Known as the 7th and Aspen Project A-1 EXHIBIT A [Form of Development Agreement] DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 DEVELOPMENT AGREEMENT (7th and Aspen) This DEVELOPMENT AGREEMENT (this “Agreement”) is dated as of May 21, 2024, by and between BOUNDARY DEVELOPMENT, 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; and 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; and WHEREAS, the Developer or affiliated entities, together with Midtown Aspen, LLC, owns certain property in the District, legally described on Exhibit B hereto (collectively, the “Land”), and together with Midtown Aspen, LLC and the Human Resource Development Council (“HRDC”), Developer proposes to undertake a project on the Land in two phases. Phase I is or will be owned by Midtown Aspen LLC, a Delaware limited liability company, or an affiliated entity, and consists of the design, engineering and construction of a four-story apartment building containing 46 residential rental units, 29 of which are expected to be affordable at 60% area median income (“AMI”) and 17 of which are expected to be affordable at 50% AMI, together with residential common space and related improvements (“Phase I of the Project”), which will be located on “Lot 4A”. Phase I of the Project will be financed in part with low income housing tax credits awarded or allocated to Midtown Aspen 4 LLLP, a Montana limited liability limited partnership, and Midtown Aspen 9 LLLP, a Montana limited liability limited partnership, who will each own condominium units comprised of the residential housing units upon which such tax credits were awarded or allocated. Phase I of the Project will be subject to a regulatory agreement or similar instrument restricting the use of Lot 4A to affordable housing meeting certain requirements, and will be owned and operated in partnership with HRDC; and WHEREAS, the second phase of the project is expected to consist of the design, engineering and construction of four-story apartment building containing 50 residential rental units, all of which are expected to be workforce housing affordable at 80% AMI, together with DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 2 residential common areas and related improvements (“Phase II of the Project” and, collectively with Phase I of the Project, the “Project”), which will be located on “Lot 6A”. Phase II of the Project will be owned by Developer or an affiliated entity. The current budget for the Project is set forth on Exhibit A hereto; and WHEREAS, under the Act, permissible uses of tax increment and tax increment financing include the acquisition, construction and improvement of public improvements or infrastructure, with “infrastructure” defined to include “workforce housing;” and WHEREAS, although “workforce housing” is not defined in the Act, Section 90-6-143, Montana Code Annotated, defines “attainable workforce housing” as housing of a cost that a household earning between 60% and 140% of median household income would spend no more than 30% of gross monthly income to attain; and WHEREAS, the Developer has requested tax increment assistance with respect to certain eligible costs of the Project; and WHEREAS, pursuant to Resolution No. 5596 adopted on May 21, 2024, 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 C hereto (the “Eligible Costs”) in the maximum amount of $3,024,061, 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 demolition of existing structures on the Land, together with the design, engineering and construction of infrastructure, including water, sewer, storm water, streets, sidewalks, curbs and gutters serving the entire Project and certain costs of the workforce housing to be provided by Phase II of the Project and related improvements (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 (the “Project Fees and Charges”); and WHEREAS, as a condition to the City’s reimbursing the Developer for Eligible Costs, the Developer will record the Restrictive Covenants (as hereinafter defined) against Lot 6A, which will require the long-term use of that property for workforce housing; and WHEREAS, the City Commission expects to reimburse the Developer for Eligible Costs solely out of Tax Increment, as further described herein; 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 and the Eligible Costs. 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. DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 3 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 May 21, 2024, 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. “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. “Developer” means Boundary Development, LLC, a Montana limited liability company, or affiliated entities, 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. “DOR” 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 Year” 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. DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 4 “Infrastructure Improvements” means the demolition of existing structures on the Land, together with the design, engineering and construction of infrastructure, including water, sewer, storm water, streets, sidewalks, curbs and gutters serving the entire Project and certain costs of the workforce housing, and related improvements. “Land” has the meaning given to it in the recitals. “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. “Lot 4A” means that portion of the Land on which Phase I of the Project will be constructed. “Lot 6A” means that portion of the Land on which Phase II of the Project will be constructed. “Milestone” or “Milestones” has the meaning given in Section 3.4 hereof. “Milestone Date” or “Milestone Dates” has the meaning given in Section 3.4 hereof. “Ordinance” means Ordinance No. 1685 adopted by the City Commission on November 27, 2006, as amended by Ordinance No. 1925, adopted by the City Commission on December 16, 2015. “Original Resolution” means Resolution No. 5131, adopted by the City Commission on July 6, 2020, pursuant to which the City issued the Series 2020 Bonds. “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. “Phase I of the Project” has the meaning given to it in the recitals. “Phase II of the Project” has the meaning given to it in the recitals. “Prevailing Wage Rates” 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 in accordance with this Agreement, as described more particularly in the recitals hereto. “Project Fees and Charges” means those fees and charges pertaining to the Project that form a part of the Eligible Costs, including cash in lieu of water rights and parkland and impact fees. “Restrictive Covenants” has the meaning given to it in Section 3.12 hereof. DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 5 “Series 2020 Bonds” means the Tax Increment Urban Renewal Revenue Bonds (Bozeman Midtown Urban Renewal District), Series 2020, issued in the principal amount of $6,500,000 pursuant to the Original Resolution. “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 any other mills that may hereafter be excluded from the calculation of increment by the Act), 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, pandemics, epidemics, labor shortages, unusual permitting delays, unusually inclement weather 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. “Workforce Housing Covenants” has the meaning given to it in Section 3.12 hereof. “Workforce Housing Units” has the meaning given to it in Section 3.12 hereof. 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. DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 6 1.3. Exhibits. The following Exhibits are attached to and by reference made a part of this Agreement: Exhibit A: Project Costs Exhibit B: Description of the Land Exhibit C: Eligible Costs Exhibit D: Milestones Exhibit E: Form of Developer Certificate and Request Exhibit F: Nondiscrimination and Equal Pay Affirmation Exhibit G: Form of Restrictive Covenants 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 the Original Resolution, the City has issued and there are outstanding the Series 2020 Bonds. In the Original Resolution, the City reserved the right to issue obligations having a lien on Tax Increment subordinate to the lien of the Series 2020 Bonds (“Subordinate Obligations”). Any obligation of the City to make payments under this Agreement constitutes a Subordinate Obligation under the Original Resolution, subordinate and junior in all respects to the repayment of the Series 2020 Bonds and the replenishment of the debt service reserve account for the Series 2020 Bonds, and subject to all other terms and conditions of the Original Resolution. (c) Pursuant to Resolution No. 5596 of the City Commission, the City Commission authorized the execution and delivery by the City of this Agreement and approved the use of Tax Increment, if available, to reimburse the Eligible Costs in a total amount not to exceed $3,024,061. (d) The City has found and determined that the Project is a means to provide safe, sanitary and healthful workforce housing, which constitutes a public purpose and a public use for which tax increment funds may be spent. 2.2. Developer Representations. The Developer hereby represents as follows: (a) The Developer is a Montana limited liability company, duly formed, validly existing, in good standing and duly qualified to do business in the State of Montana. 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. DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 7 (b) The Developer or its affiliated entities have 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, or such liens and encumbrances that may otherwise be approved by the City in writing. The individual condominium units comprised of the residential housing units in Phase I of the Project are owned by Aspen 4 LLLP, a Montana limited liability limited partnership, and Midtown Aspen 9 LLLP, a Montana limited liability limited partnership, and such condominium units are 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, or such liens and encumbrances that may otherwise be approved by the City in writing. (c) The Developer has the financial capability or commitments to complete the Project. (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. (f) 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. The Developer further acknowledges and agrees the amount of Tax Increment in the District 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, and that the City has no control over such variables. In addition, if Tax Increment in the District decreases, the City may need to use Tax Increment to pay debt service on the Series 2020 Bonds or to replenish the debt service reserve account for the Series 2020 Bonds, and there may not be Tax Increment available to reimburse the Developer for Eligible Costs, despite the Developer having paid all property taxes then due with respect to the Project. The Developer DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 8 agrees that if Tax Increment is not available to reimburse the Developer, the City shall have no 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. In such event, if the Developer has not received any reimbursement but has recorded the Restrictive Covenants described in Section 3.12, upon request of the Developer or subsequent owner of Phase II of the Project, the City agrees to cooperate with the Developer or subsequent owner of Phase II of the Project to remove the Restrictive Covenants from Lot 6A. 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 completed by July 1, 2027, subject to Unavoidable Delays. The total estimated 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. 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 Planning Division, 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. As further described in Section 7.1, the City shall have no liability and the Developer shall hold the City harmless with respect to any increases in costs of the Project related to or arising out of delays resulting from the City’s regulatory actions or approvals. DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 9 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. 3.4. Milestones of the Project. 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 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 Director of Economic Development, with appropriate supporting material, to extend the Milestone Date and, as appropriate, subsequent Milestone Dates. The Director of Economic Development may, in his or her sole discretion, (i) 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 (ii) refer the request to the City Commission to either approve the extension and adjust other Milestone Dates, as appropriate, or, in its sole discretion, terminate this Agreement upon thirty (30) days prior written notice, in which case the City will have no obligation to reimburse the Developer hereunder. If this Agreement is terminated as described in this Section 3.4 and the Developer has not received any reimbursement but has recorded the Restrictive Covenants described in Section 3.12, upon request of the Developer or subsequent owner of Phase II of the Project, the City agrees to cooperate with the Developer or subsequent owner of Phase II of the Project to remove the Restrictive Covenants from Lot 6A. 3.5. Prevailing Wage 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. Without limitation of the foregoing, the Developer agrees that in the awarding of contracts for the Infrastructure Improvements (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 DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 10 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 Infrastructure 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 City and as are reasonably necessary to permit the City to own, operate and maintain the Infrastructure Improvements. 3.9. Nondiscrimination and Equal Pay Affirmation. The Developer agrees to require its contractor(s) to be in compliance with the City’s Nondiscrimination and Equal Pay Affirmation 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 Nondiscrimination and Equal Pay DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 11 Affirmation 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. Walkaway Provision. The Developer shall have the option, in its sole discretion and for any reason, to cease developing the Project and terminate this Agreement without penalty at any time prior to the Developer submitting any request for reimbursement or payment to the City (“walkaway provision”). If the Developer exercises this walkaway provision, this Agreement shall immediately terminate and all rights and obligations of the Parties under this Agreement shall cease, except for those rights and obligations specifically identified in this Agreement as surviving termination. If the Developer exercises this walkaway provision, the Developer automatically waives any and all rights to reimbursement or payment from the City under this Agreement. This walkaway provision shall not limit or prohibit any rights, claims, or recourse that the City may have in connection with the Project. The Parties expect that, if the Developer determines to exercise this walkaway provision, the Restrictive Covenants will not be recorded against Phase II of the Project or Lot 6A. If the Developer records the Restrictive Covenants and, at a later date, determines to exercise the walkaway provision, the City agrees to cooperate with the Developer to remove the Restrictive Covenants from Lot 6A. 3.12. Workforce Housing Covenants. The Developer agrees that, as a condition to receiving any reimbursement under this Agreement, the Developer will file a restrictive covenant on Lot 6A, providing that any residential housing units developed on Lot 6A (the “Workforce Housing Units”) will be restricted for a period not less than 50 years for use as workforce housing affordable to households with incomes equal to 80% area median income (“AMI”). As a condition to reimbursement hereunder, the Developer shall record the restrictive covenants, substantially in the form attached hereto as Exhibit G (the “Restrictive Covenants”) against Lot 6A. The Restrictive Covenants must (i) run with the land, (ii) bind, for a period not less than 50 years from the date of issuance of a certificate of occupancy with respect to Phase II of the Project, the Workforce Housing Units to be used as residential rental units affordable at 80% AMI, with rental prices tied to affordability at 80% AMI, and (iii) provide that a third-party or government entity with experience in managing affordable housing units must manage the rental of the Workforce Housing Units. In addition, the Restrictive Covenants will provide that the Workforce Housing Units are prohibited from being used, rented or made available as short term rentals, as that term is defined in the Bozeman Municipal Code. The affordability requirements in the Restrictive Covenants will be index-based, tied to AMI, and pursuant to the Restrictive Covenants, permissible rental prices of the Workforce Housing Units will be based on the most recent affordability data available through the Housing and Urban Development’s Housing Availability Data System or other similar affordability data that is available at the time of rental. The Developer’s covenants described in this Section 3.12 are referred to herein as the “Workforce Housing Covenants.” The Developer acknowledges and agrees that the Workforce Housing Covenants are fundamental to the City’s agreements hereunder. The Parties acknowledge that, as development proceeds at Lot 6A, it may be necessary or desirable to record DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 12 other instruments to implement the Workforce Housing Covenants and provide for the affordability of the Workforce Housing Units, either in addition to or in replacement of the Restrictive Covenants to be recorded as a condition to reimbursement of the Developer under this Agreement, and the Parties agree to cooperate with respect to recording such other instruments if necessary or desirable. The Developer acknowledges that, as determined by the City, one-person household pricing relates to studios, two-person household pricing relates to one bedroom units, three-person household pricing relates to two bedroom units, and four-person household pricing relates to three bedroom units. Section 4. Housing Choice Vouchers and Phase I of the Project. Five of the residential units developed as Phase I of the Project must accept Housing Choice Vouchers (HCV) as a form of rental payment for those units targeting 50% AMI or below. In connection with the five units accepting HCV as a form of rental payment, the property owner with respect to Phase I of the Project must participate in the HCV program and comply with all program requirements, including but not limited to rent reasonableness standards. In the event that the rent charged to a tenant receiving HCV assistance exceeds the applicable payment standard established by the U.S. Department of Housing and Urban Development (HUD), the rent will be adjusted to the Fair Market Rents (FMRs) or payment standard set by HUD for tenants utilizing the HCV program. City Undertakings. Subject to satisfaction of all conditions in Section 5 below, and solely from Tax Increment, and subject to the prior lien of the Series 2020 Bonds and the debt service reserve account therefor, the City agrees to reimburse the Developer in an amount equal to the amount of the Eligible Costs (not to exceed $3,024,061). Section 5. Reimbursement for the Eligible Costs. Reimbursement of the Developer for Eligible Costs shall be subject to the following conditions and in accordance with the following procedures: 5.1. Conditions and Procedure. (a) The Developer shall complete or satisfy Milestones by the applicable Milestone Dates, as such dates may have been extended pursuant to Section 3.4 hereof. (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) At the time of the Developer’s request for reimbursement (i) all of the Developer’s representations as set forth in Section 2.2 must be true and correct, (ii) the Developer must not be in breach of any covenant or undertaking set forth in Section 3, and (iii) there must be adequate Tax Increment on hand to satisfy all financial obligations related to the Series 2020 Bonds and the debt service reserve account for the Series 2020 Bonds such that Tax Increment is available to reimburse the Developer. (d) The Developer must provide evidence satisfactory to the City that the Restrictive Covenants have been recorded with the Gallatin County Clerk and Recorder’s Office with DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 13 respect to Lot 6A and have not been modified, amended or rescinded other than with the prior written consent of the City. (e) The Developer must provide evidence satisfactory to the City that a regulatory agreement or similar instrument restricting the use of Lot 4A to affordable housing has been recorded with the Gallatin County Clerk and Recorder’s Office. (f) The Developer shall have been issued a certificate of occupancy for the Project. (g) When the above conditions have been met, the Developer shall submit to the Director of Economic Development a certificate substantially in the form attached hereto as Exhibit E, together with such supporting documentation as may be requested by the City. 5.2. Failure to Satisfy Conditions. If any of the conditions described in Section 5.1 are not satisfied in the determination of the City, the City shall have no obligation to reimburse the Developer, and the City’s determination to refrain from reimbursing, or its inability to reimburse, any of the Eligible Costs shall not be or result in a default of this Agreement. Section 6. Covenants to Pay Taxes. 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 Project and any improvements thereto or extension thereof. 6.2. Maintenance of Land and Project. The Developer, for itself and its successors and assigns, agrees to use its commercially reasonable best efforts to maintain and operate the Project so as to be able at all times to pay promptly and when due all property taxes levied with respect to the Project. 6.3. Injunction; 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, without limitation, 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 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 construction 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 DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 14 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: 1. 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 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 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 DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 15 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; City’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. 8.3. Term of Agreement. (a) This Agreement shall remain in effect until the earlier of (i) the date that is 10 days after the date the City reimburses the Developer in full hereunder, or (ii) the termination of this Agreement pursuant to Sections 5.2 or 3.11; provided that this Agreement may be earlier terminated by the City in its sole discretion at any time after failure by the Developer to complete or satisfy a Milestone by the applicable Milestone Payment Date (as such date may be extended as described in Section 3.4). (b) Notwithstanding the foregoing provisions of this Section 8.3, (i) Sections 6, 7, and 8 of this Agreement shall in all events survive the termination of this Agreement, and (ii) if the Developer is reimbursed under this Agreement, Section 3.12 shall survive the termination of this Agreement. DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 16 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 term, 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 among the City and the 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, which consent shall not be unreasonably withheld, conditioned, or delayed. Notwithstanding the foregoing or any other provision herein, the Parties acknowledge and agree that the investor limited partner with respect to Phase I of the Project may require certain amendments or modifications to this Agreement, which may include the assignment by Developer of this Agreement to Midtown Aspen LLC, a Delaware limited liability company, or another affiliate of Developer in relation to the tax credit financing for Phase I of the Project. 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 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 DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 17 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 the Developer will be in writing and will be delivered to such Party either: (i) by personal hand-delivery; (ii) by depositing the same in the United States mail, certified mail with return receipt requested; (iii) by depositing the same with a nationally recognized overnight delivery service; or (iv) with respect to notice to the Developer, by email (in which case the notice shall be effective as of the date of confirmed delivery). Notice will be deemed complete upon receipt of the notice pursuant to any of the foregoing methods of notice. Notices and communications to the parties must be addressed to and delivered at the following addresses: If to City: City of Bozeman Attention: Bozeman City Manager 121 N. Rouse Ave. P.O. Box 1230 Bozeman, MT 59771 If to Developer: Boundary Development, LLC Attention: Joseph Walsh 233 E. Main Street, Suite 404 Bozeman, MT 59715 Email: joe@boundarydev.com 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. DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 18 8.13. 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. Dispute 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 Parties 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. The Developer agrees to develop and/or provide documentation as requested by the City demonstrating the Developer’s compliance with the requirements of this Agreement. The 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 monies reimbursed to the Developer pursuant to this Agreement were used in compliance with this Agreement and all applicable provisions of federal, state, and 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. DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 19 IN WITNESS WHEREOF, the Parties hereto have caused this Development Agreement to be executed as of the date first set forth above. CITY OF BOZEMAN, MONTANA By: _______________________________________ Printed Name: ______________________________ Title: City Manager [Signature Page to Development Agreement] DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 20 BOUNDARY DEVELOPMENT, LLC, a Montana limited liability company By: Name: Joseph Walsh Title: Authorized Signatory [Signature Page to Development Agreement] DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 A-1 EXHIBIT A PROJECT COSTS DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 B-1 EXHIBIT B LEGAL DESCRIPTION OF THE LAND DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 C-1 EXHIBIT C ELIGIBLE COSTS DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 D-1 EXHIBIT D MILESTONES MILESTONE MILESTONE DATE PHASE I OF THE PROJECT: Site Plan Submittal to the City Complete Development Building Permit Submittal 7/1/2025 Start of Development Construction 12/31/2025 Completion of Development Construction (occupancy) 7/1/2027 PHASE II OF THE PROJECT: Site Plan Submittal to the City Complete Development Building Permit Submittal 7/1/2025 Start of Development Construction 12/31/2025 Completion of Development Construction (occupancy) 7/1/2027 DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 E-1 EXHIBIT E FORM OF DEVELOPER CERTIFICATE AND REQUEST TO: City of Bozeman, Montana FROM: Boundary Development, LLC (the “Developer”) SUBJECT: Request for Reimbursement This Developer Certificate is delivered in accordance with the Development Agreement between the Developer and the City of Bozeman, Montana, dated as of May 21, 2024 (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 5.1 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) 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 (f) 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. DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 E-2 Based on the attached invoices, the Developer hereby requests reimbursement for the Eligible Costs in the amount of $[_______].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__ Boundary Development, LLC By: Authorized Developer Representative 1 Lesser of $3,024,061 or total cost. DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 F-1 EXHIBIT F DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 G-1 EXHIBIT G [Form of Affordable Housing Restrictive Covenant and Agreement] DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 Declaration of Restrictive Covenants 1 Original to: City of Bozeman Attn: City Clerk PO Box 1230 Bozeman, MT 59771-1230 DECLARATION OF RESTRICTIVE COVENANTS This Declaration is made this _____ day of ______________, 20__ by BOUNDARY DEVELOPMENT, LLC [address] (“Declarant”). RECITALS A. Declarant owns certain real property described as follows (the “Property”): [legal description] B. It is the intent of Declarant to meet the conditions of the Development Agreement (the “Agreement”), dated as of [________], by and between Declarant and the City of Bozeman, Montana (the “City”); and C. Declarant agrees that it receives a significant benefit from the Agreement; and D. To satisfy the requirements of the Agreement, Declarant desires to place covenants, conditions and restrictions upon the Property for the use and benefit of Declarant and the City. NOW, THEREFORE, Declarant hereby declares: 1. Provision of Income Restricted Housing. a. Declarant agrees that all of the residential rental units developed as part of Phase II of the Project (as defined in the Agreement) (the “Units”) will be restricted for a period not less than 50 years for use as housing affordable to households with incomes equal to 80% of the area DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 Declaration of Restrictive Covenants 2 median income (“AMI”), as reported annually for single persons and households of various sizes by the United States Department of Housing and Urban Development, or by any successor United States Government department, agency, or instrumentality, for the Primary Metropolitan Statistical Area which includes the City. b. The sale and management of the Units shall be administered by a third-party or government entity with experience in managing affordable housing units, or other entity acceptable to the City. c. Throughout the term of this Declaration, the Units must be affordable to households with income no greater than 80% of the AMI. All rental prices for the Units must be based on the most recent affordability data available through the Housing and Urban Development’s Affordability Data System for the City or similar affordability data available at the time of rental. 2. Prohibition on Use as Short Term Rentals. The Units are prohibited from being used, rented, or made available as short term rentals, as the term is defined in the Bozeman Municipal Code. 3. Term. This Declaration shall remain in place and be enforceable for a term of 50 years from the date of the issuance of a certificate of occupancy with respect to the Units and shall inure to the benefit of Declarant, each owner of property, the City, and their respective legal representatives, heirs, successors, or assigns, subject to the right of amendment provided in this Article. 4. Amendment. This Declaration may not be amended without the prior written consent of the Bozeman City Commission. Any amendment shall become effective only upon the filing of such amendment in the records of the Clerk and Recorder of Gallatin County, Montana. 5. Enforcement. The Declarant, the City, or any owner of real property within the Property may take action to enforce the provisions of this Declaration. Enforcement may be by injunction, declaratory judgment, action for damages, or any other legal claims, all of which shall be cumulative and non-exclusive. The prevailing party in any action shall be entitled to recover, in addition to other damages, its reasonable litigation expenses, including attorney’s fees, as may be awarded in the judgment of the court. 6. Covenants to Run with the Land. The Declarant intends that the terms of this Declaration shall with the land and shall continue in effect with respect to the entire Property notwithstanding any partition or division of the Property. 7. Severability. Invalidation of any one of these covenants or restrictions by judgment or court order shall in no way affect any other provisions, which shall remain in full force and effect. 8. Choice of Law and Venue. This Declaration of Covenants, Conditions, and Restrictions shall be governed by the laws of Montana and venue shall be in Gallatin County, Montana. DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 Declaration of Restrictive Covenants 3 IN WITNESS WHEREOF the DECLARANT has signed this instrument and arranged for its recordation in the real property records of Gallatin County, Montana. BOUNDARY DEVELOPMENT, LLC By:_______________________________________ Title:_____________________________________ STATE OF ____________ ) :ss COUNTY OF __________ ) This instrument was signed or acknowledged before me on _________________ by ___________, as ______________ of ____________________. ____________________________________ (NOTARIAL SEAL) Printed Name:________________________ Notary Public for the State of ___________ Residing at __________________________ My commission expires ________________ DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 Declaration of Restrictive Covenants - 4 - Acknowledged by: CITY OF BOZEMAN ____________________________________ By: City Manager ATTEST: ________________________________ Mike Maas, City Clerk STATE OF MONTANA ) :ss COUNTY OF GALLATIN ) This instrument was signed or acknowleged before me on _______________ by ______________ and Mike Maas, acting in the capacities of City Manager and City Clerk, respectively, of the City of Bozeman, Montana. . ____________________________________ (NOTARIAL SEAL) Printed Name:________________________ Notary Public for the State of ___________ Residing at __________________________ My commission expires ________________ DocuSign Envelope ID: A0B94729-911F-48F3-9E36-FC4CBA0BB478 Certificate Of Completion Envelope Id: A0B94729911F48F39E36FC4CBA0BB478 Status: Completed Subject: Complete with DocuSign: K.3 Res 5596 7th and Aspen project.pdf Source Envelope: Document Pages: 39 Signatures: 4 Envelope Originator: Certificate Pages: 5 Initials: 0 Mike Maas AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-07:00) Mountain Time (US & Canada) Stamps: 2 PO Box 1230 Bozeman, MT 59771 Mmaas@bozeman.net IP Address: 69.145.83.100 Record Tracking Status: Original 5/22/2024 9:27:07 AM Holder: Mike Maas Mmaas@bozeman.net Location: DocuSign Security Appliance Status: Connected Pool: StateLocal Storage Appliance Status: Connected Pool: City of Bozeman Location: DocuSign Signer Events Signature Timestamp Terry Cunningham tcunningham@bozeman.net Mayor City of Bozeman Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 174.231.88.45 Signed using mobile Sent: 5/22/2024 9:31:22 AM Resent: 5/28/2024 8:09:19 AM Viewed: 5/28/2024 8:53:24 AM Signed: 5/28/2024 8:53:32 AM Electronic Record and Signature Disclosure: Accepted: 6/29/2021 4:59:06 PM ID: 47eea7cb-ba9e-4f63-bb08-c11196c7c534 Greg Sullivan gsullivan@bozeman.net Bozeman City Attorney City of Bozeman, Montana Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 69.145.83.100 Sent: 5/28/2024 8:53:33 AM Viewed: 5/28/2024 8:57:22 AM Signed: 5/28/2024 8:57:30 AM Electronic Record and Signature Disclosure: Accepted: 5/28/2024 8:57:22 AM ID: 85127d33-40b5-4dc5-b352-bfd64ed6d960 Mike Maas mmaas@bozeman.net City Clerk City of Bozeman Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 69.145.83.100 Sent: 5/28/2024 8:57:32 AM Viewed: 5/28/2024 9:18:19 AM Signed: 5/28/2024 9:18:32 AM Electronic Record and Signature Disclosure: Accepted: 1/6/2020 4:08:14 PM ID: 79370d6f-72a4-4837-866f-9ec31f00062f In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp David Fine dfine@bozeman.net Urban Renewal Program Manager Security Level: Email, Account Authentication (None) Sent: 5/28/2024 9:18:35 AM Electronic Record and Signature Disclosure: Accepted: 8/21/2018 6:01:11 PM ID: 62dd404e-fe1b-420e-a30a-e5423a6b956d Jesse DiTommaso jditommaso@bozeman.net Economic Development Specialist City of Bozeman Security Level: Email, Account Authentication (None) Sent: 5/28/2024 9:18:36 AM Electronic Record and Signature Disclosure: Accepted: 3/25/2022 2:34:30 PM ID: 46577c8a-5eb2-4ca4-bc57-d65950eb4b8f Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 5/22/2024 9:31:22 AM Certified Delivered Security Checked 5/28/2024 9:18:19 AM Signing Complete Security Checked 5/28/2024 9:18:32 AM Completed Security Checked 5/28/2024 9:18:36 AM Payment Events Status Timestamps Electronic Record and Signature Disclosure CONSUMER DISCLOSURE From time to time, City of Bozeman (we, us or Company) may be required by law to provide to you certain written notices or disclosures. Described below are the terms and conditions for providing to you such notices and disclosures electronically through the DocuSign, Inc. (DocuSign) electronic signing system. Please read the information below carefully and thoroughly, and if you can access this information electronically to your satisfaction and agree to these terms and conditions, please confirm your agreement by clicking the ‘I agree’ button at the bottom of this document. Getting paper copies At any time, you may request from us a paper copy of any record provided or made available electronically to you by us. You will have the ability to download and print documents we send to you through the DocuSign system during and immediately after signing session and, if you elect to create a DocuSign signer account, you may access them for a limited period of time (usually 30 days) after such documents are first sent to you. After such time, if you wish for us to send you paper copies of any such documents from our office to you, you will be charged a $0.00 per-page fee. You may request delivery of such paper copies from us by following the procedure described below. Withdrawing your consent If you decide to receive notices and disclosures from us electronically, you may at any time change your mind and tell us that thereafter you want to receive required notices and disclosures only in paper format. How you must inform us of your decision to receive future notices and disclosure in paper format and withdraw your consent to receive notices and disclosures electronically is described below. Consequences of changing your mind If you elect to receive required notices and disclosures only in paper format, it will slow the speed at which we can complete certain steps in transactions with you and delivering services to you because we will need first to send the required notices or disclosures to you in paper format, and then wait until we receive back from you your acknowledgment of your receipt of such paper notices or disclosures. To indicate to us that you are changing your mind, you must withdraw your consent using the DocuSign ‘Withdraw Consent’ form on the signing page of a DocuSign envelope instead of signing it. This will indicate to us that you have withdrawn your consent to receive required notices and disclosures electronically from us and you will no longer be able to use the DocuSign system to receive required notices and consents electronically from us or to sign electronically documents from us. All notices and disclosures will be sent to you electronically Unless you tell us otherwise in accordance with the procedures described herein, we will provide electronically to you through the DocuSign system all required notices, disclosures, authorizations, acknowledgements, and other documents that are required to be provided or made available to you during the course of our relationship with you. To reduce the chance of you inadvertently not receiving any notice or disclosure, we prefer to provide all of the required notices and disclosures to you by the same method and to the same address that you have given us. Thus, you can receive all the disclosures and notices electronically or in paper format through the paper mail delivery system. If you do not agree with this process, please let us know as described below. Please also see the paragraph immediately above that describes the consequences of your electing not to receive delivery of the notices and disclosures electronically from us. Electronic Record and Signature Disclosure created on: 7/9/2018 4:06:02 PM Parties agreed to: Terry Cunningham, Greg Sullivan, Mike Maas, David Fine, Jesse DiTommaso How to contact City of Bozeman: You may contact us to let us know of your changes as to how we may contact you electronically, to request paper copies of certain information from us, and to withdraw your prior consent to receive notices and disclosures electronically as follows: To contact us by email send messages to: jolson@bozeman.net To advise City of Bozeman of your new e-mail address To let us know of a change in your e-mail address where we should send notices and disclosures electronically to you, you must send an email message to us at jolson@bozeman.net and in the body of such request you must state: your previous e-mail address, your new e-mail address. We do not require any other information from you to change your email address.. In addition, you must notify DocuSign, Inc. to arrange for your new email address to be reflected in your DocuSign account by following the process for changing e-mail in the DocuSign system. To request paper copies from City of Bozeman To request delivery from us of paper copies of the notices and disclosures previously provided by us to you electronically, you must send us an e-mail to jolson@bozeman.net and in the body of such request you must state your e-mail address, full name, US Postal address, and telephone number. We will bill you for any fees at that time, if any. To withdraw your consent with City of Bozeman To inform us that you no longer want to receive future notices and disclosures in electronic format you may: i. decline to sign a document from within your DocuSign session, and on the subsequent page, select the check-box indicating you wish to withdraw your consent, or you may; ii. send us an e-mail to jolson@bozeman.net and in the body of such request you must state your e-mail, full name, US Postal Address, and telephone number. We do not need any other information from you to withdraw consent.. The consequences of your withdrawing consent for online documents will be that transactions may take a longer time to process.. Required hardware and software Operating Systems: Windows® 2000, Windows® XP, Windows Vista®; Mac OS® X Browsers: Final release versions of Internet Explorer® 6.0 or above (Windows only); Mozilla Firefox 2.0 or above (Windows and Mac); Safari™ 3.0 or above (Mac only) PDF Reader: Acrobat® or similar software may be required to view and print PDF files Screen Resolution: 800 x 600 minimum Enabled Security Settings: Allow per session cookies ** These minimum requirements are subject to change. If these requirements change, you will be asked to re-accept the disclosure. Pre-release (e.g. beta) versions of operating systems and browsers are not supported. Acknowledging your access and consent to receive materials electronically To confirm to us that you can access this information electronically, which will be similar to other electronic notices and disclosures that we will provide to you, please verify that you were able to read this electronic disclosure and that you also were able to print on paper or electronically save this page for your future reference and access or that you were able to e-mail this disclosure and consent to an address where you will be able to print on paper or save it for your future reference and access. Further, if you consent to receiving notices and disclosures exclusively in electronic format on the terms and conditions described above, please let us know by clicking the ‘I agree’ button below. By checking the ‘I agree’ box, I confirm that:  I can access and read this Electronic CONSENT TO ELECTRONIC RECEIPT OF ELECTRONIC CONSUMER DISCLOSURES document; and  I can print on paper the disclosure or save or send the disclosure to a place where I can print it, for future reference and access; and  Until or unless I notify City of Bozeman as described above, I consent to receive from exclusively through electronic means all notices, disclosures, authorizations, acknowledgements, and other documents that are required to be provided or made available to me by City of Bozeman during the course of my relationship with you.