Cross Access Plans Arna11
Golden Direct phone: 404.873.8642
G reg o ry LLP Direct fax: 404.873.8643
E-mail:jonathan.neville @agg.com
www.agg.com
October 9, 2008
VIA ELECTRONIC MAIL AND FEDERAL EXPRESS
Mr. Jason Gage
City Manager, City of Salina
300 West Ash Street
Salina, Kansas 67401
Re: Cross-Access Plans/ Salina Partners, LLC (Kohl's)
Client-Matter No. 23625-20
Dear Jason:
Pursuant to our multiple e-mail exchanges between Thursday, September 18th and
today (Thursday, October 91h), this purpose of this letter is to articulate the joint agreement
of the City of Salina (the "City") and Salina Partners, LLC (the "Developer") as relates to
cross access arrangements between property owned by the Developer at or near the
intersection of 91h and Key Streets in Salina (the "Property"), on the one hand, and adjacent
property to the north of the Property owned by Gateway Adams, Inc. and managed by
Emmes Asset Management Company, LLC, commonly referred to as "Mid-States Plaza" (the
"Mid-States Property", with the owner of such property being referred to herein as "Mid-
States").
BACKGROUND
Pursuant to Section 4.08 of that certain "Lambertz Addition Tax Increment
Financing District Development Agreement" by and between the Developer and the City
dated as of March 17, 2008 and recorded in Saline County records at Deed Book 1171,
Page 1553 (the "Developers' Agreement"), a traffic study was commissioned pertaining to
the necessity for installation of a traffic signal at the intersection of Key and 9th Streets in
connection with the development of a Kohl's Illinois, LLC ("Kohl's") and other retail
development on the Property. The conclusion of such traffic study was that no traffic signal
is recommended at this time at such intersection; accordingly, Section 4.08(C) governs the
appropriate procedures with which to proceed with cross-access agreements between the
Property and the Mid-States Property (in lieu of installing a traffic signal). Of additional
2466736v8
171 17th Street, NW I Suite 2100 1 Atlanta, GA 30363-1031 1 404.873.8500 1 Fax: 404.873.8501 1 www.agg.com
Arnall Mr. Jason Gage
Golden October 9, 2008
Gregory LLP
Page 2
relevance, Section 6.04(A)(10) of the Developers' Agreement requires approval by the City
of a cross-access plan between the Property and the Mid-States Property as a condition
precedent to release of Tax Increment Financing ("TIF") funds to the Developer, and
further, pursuant to Mr. Mike Schage's site plan approval letter issued May 2, 2008 (the
"Approval Letter"), site plan approval and also the ability of Kohl's to secure a permanent
certificate of occupancy for its operations on the Property is tied to development of a cross-
access plan acceptable to both the City and the Developer.
Certain cross-access agreements between Developer and Mid-States, including a
certain "Cross Access Agreement" and a "Temporary Grading and Construction Easement"
(collectively, the "Easements") which allow for cross-access between the Property and the
Mid-States Property, which cross-access is acceptable to Kohl's, were obtained by
Developer prior to finalization of the Developers' Agreement. Following the
determination that a traffic signal was not warranted, the City and the Developer
collaborated to develop a "Mid State Access Plan" in accordance with Section 4.08.C.1. of
the Developers' Agreement. As part of the Mid State Access Plan, the City and the
Developer agreed that it would be beneficial to install additional curbing on the Mid-States
Property so as to further facilitate traffic flow to and from the Property across the Mid-States
Property. The specific plans for such curbing (as approved by the Developer and the City)
are attached to this letter as Exhibit "A" (such plans being referred to herein as the "Plans"),
and the budget for such Plans being attached hereto as Exhibit "B" (the "Budget").
However, implementation of the Plans requires consent of Mid-States, and to date, both the
City and the Developer have been unsuccessful in securing approval of Mid-States for the
Plans.
In an effort to proceed with the development and opening of Kohl's, as well as to
allow for the timely release of TIF funds without unnecessary delay, the Developer and the
City have agreed to enter into this letter agreement (this "Agreement") for purposes of
clarifying the joint agreement of the City and the Developer as relates to the cross-access
requirements of Section 4.08(C) of the Developers' Agreement. This Agreement does not
constitute an amendment in any way of the Developers' Agreement, nor does this
Agreement constitute an amendment to the Approval Letter.
Successful implementation by the Developer of the terms of this Agreement shall
result in the City (i) acknowledging Developer's compliance with Section 4.08(C) and
Section 6.04(A)(10) of the Developers' Agreement, and (ii) agreement to not withhold site
plan approval and/or a final certificate of occupancy for Kohl's based upon the cross-access
arrangements constructed on the Property and the Mid-States Property.
AGREEMENT
2466736v8
Arnall Mr. Jason Gage
Golden October 9, 2008
Gregory LLP
Page 3
1. Prior to issuance of a final certificate of occupancy for Kohl's, the Developer
shall install a curb cut at the location indicated on the site plan attached as Exhibit "C" so
as to connect the Property with the Mid-States Property. No other curb cuts shall be
required at this time.
2. Prior to issuance of a final.certificate of occupancy for Kohl's, the Developer
shall install striping within the easement area as shown on Exhibit "C" so as to allow for
the orderly flow of traffic between the Property and the Mid-States Property consistent with
the.Easements. The City agrees that Exhibit "C" is an "acceptable cross-access plan" as
referenced in Section 4.08(C) of the Developers' Agreement, and that no further cross-
easements are needed at this time.
3. Developer's completion of the improvements identified in paragraphs 1 and
2 of this Agreement immediately above shall be sufficient so as to satisfy any cross-access
requirements the City may have as relates to (i) the issuance of a final certificate of
occupancy to Kohl's and (ii) compliance with the Approval Letter.
4. Immediately upon joint execution of this Agreement, the City shall deem the
requirements of Section 6.04(A)(10) of the Developers' Agreement have been met for
purposes of allowing bonds to be issued so as to enable TIF funds to be paid to Developer
without further delay.
5. The Developer and the City shall continue to work in cooperation so as to
encourage MidStates to approve the Plans. In the event MidStates approves the Plans (or
any variation thereof acceptable to the Developer and the City), the Developer agrees to
construct the improvements set forth in the Plans (or any variation thereof or substitute
therefor as approved by the City and the Developer in such party's respective sole and
absolute discretion) (the "Plan Improvements") at Developer's sole cost and expense, not to
exceed in any event 150% of the Budget.
6. Provided that the Plan Improvements have not been implemented by the
date when not less than $3 million in TIF funds are released to the Developer (the "TIF
Release Date"), note less than twenty-four (24) hours prior to the TIF Release Date, the
Developer shall post an amount equal to 150% of the Budget as a security deposit for
Developer's payment for the Plan Improvements. Such deposit (the "Deposit") shall be
posted with Central National Bank in Salina, Kansas or at such other location as agreed
between the Developer and the City.
7. The Deposit shall be released: (i) to the City, in the event the Plans (or a
variation thereof approved by the Developer and the City) are approved by Mid-States
within eighteen (18) months of the date of this Agreement and the Plan Improvements are
2466736v8
Mr. Jason Gage
October 9, 2008
Page 4
not completed within one hundred twenty (120) days of the date of Mid-States
unconditional approval of such Plans; or (ii) to the Developer, in the event of either (a)
completion of the construction of the Plan Improvements, with the Deposit to be permitted
to be reduced and utilized to pay for the costs and expenses of such Plan Improvements; or
(b) Mid-States' failure to agree to the Plans (or a variation thereof accepted by the
Developer and the City) within eighteen (18) months of the date of this Agreement. In the
event the Deposit is released to the City pursuant to the terms of this paragraph 5, the City
shall be permitted to utilize such funds exclusively for completion of Plan Improvements,
and for no other purpose of any nature. Upon the later to occur of (x) the Deposit being
released to the Developer pursuant to subsection (b) of the Developer release provisions
contained in this paragraph 5, or (y) the release by the City of the letter of credit from the
Developer which it is currently holding pursuant to the express terms of the Developers'
Agreement, the Developer agrees to simultaneously post a letter of credit for the sole and
exclusive benefit of the City, at a financial institution of the Developer's choosing, in an
amount equal to the Deposit as the same exists upon the expiration of the 18-month period
(the "Letter of Credit"), which Letter of Credit shall be maintained by the Developer for a
period not to exceed five (5) years for purposes of evidencing the Developer's continued
commitment to funding the Plan Improvements. Funds from the Letter of Credit shall be
utilized exclusively for purposes of constructing the Plan Improvements unless otherwise
agreed by the Developer, and shall not be accessed by the City unless the Developer
otherwise refuses to fund such construction following expiration of a reasonable notice and
cure period. In the event the Plan Improvements are constructed, the aforementioned
requirement of the letter of credit shall be immediately released by the City. In no event
shall the Developer be responsible for costs of construction of the Plan Improvements in
excess of the amount of the Deposit and/or Letter of Credit.
8. In the event the Developer transfers title to the Property prior to the
scheduled release of the Deposit pursuant to this paragraph, the Deposit shall, at the
election of the Developer, either transfer to the subsequent owner (in which event the
subsequent owner shall reimburse Developer for the Deposit), or be returned to Developer
and be replaced with equivalent funds from such subsequent owner simultaneous with
release. In the event the Developer transfers title to the Property while the Letter of Credit
exists, the subsequent owner shall be responsible for posting a substitute letter of credit,
and upon such posting, the Letter of Credit posted by the Developer shall be
simultaneously released.
CONCLUSION
In summary, the Developer and the City agree that cross-access between the
Property and the Mid-States Property is acceptable as no traffic signal is recommended at
the intersection of 91h and Key Streets. Implementation of the plans attached as Exhibit "C"
2466736v8
Arnall Mr. Jason Gage
Golden October 9, 2008
Gregory LLP
Page 5
will sufficiently address various concerns of the City and the Developer, and will comply
with the requirements of the Developers' Agreement and the Approval Letter. This said,
both the Developer and the City recognize the value of construction of the Plans, and the
Developer and the City remain ready, willing and able to cooperate in implementation of
the Plans and construction of the Plan Improvements in accordance with the terms of this
Agreement.
Sincerely,
ARN OLDEN GREGORY LLP
J ath n L. Neville
2466736v8
Arnall Mr. Jason Gage
Golden October 9, 2008
Gregory L-L-P
Page 6
Agreed and Acknowledged:
CITY OF SALINA, KANSAS SALINA PARTNERS, LLC
By: (�[. By: V Land Salina, LLC, its aging Member
Y _.
Printed Name: Jasen A. ('saga- BY'
Printed Title: C:++J tAAA , #- Steve Panko, its Managing Member
cc: Mr. Greg Bengston, City of Salina (via e-mail only)
Mr. Mike Schrage, City of Salina (via e-mail only)
Mr. Steve Panko, Salina Partners, LLC (via e-mail only)
Mr. Christian Ablah, Salina Partners, LLC (via e-mail only)
Mr. Paul Gawley, Gawley Inc., Engineer and Consultant (via e-mail only)
Mr. Jason Mohler, Crafton Tull Sparks, Project Engineer (via e-mail only)
2466736v8
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Golden
Gragory LLP
Crafton Tull Sparks July 1,2008
6200 E.34th Street N.,Suite 1603,Wichita,KS 67226 Lembertz Addition-Salina,KS
Phone:316.634.6776 Salina Partners,LLC
8
CONCEPTUAL Midstates Cross Access OPC-Lambertz Addition-Kohl's
EXHIBIT B
Quantity Unit Unit Cost Total
CROSS-ACCESS IMPROVEMENTS
Pavement Removal(+Striping Removal) 1,020 S.Y. $10.00 $10,200
Heavy Duty Asphalt Pavement 540 S.Y. $26.00 $14,040
Reinf.Crushed Rock Base and/or chemical stabilization 932 S.Y. $9.00 $8,388
Curb and Gutter 1,278 L.F. $15.00 $19,170
Heavy Duty Concrete Pavement - S.Y. $48.00 $0
Sidewalks 125 S.F. $4.20 $525
Sidewalk Ramps w/Detectable Warning 2 EACH $750.00 $1,500
Powerpole Relocation(Wester @$9k and Cox @$3k) 1 L.S. $12,000.00 $12,000
Signage,Striping,Etc. 1 L.S. $3,000.00 $3,000
Landscaping(No Irrigation) 1 L.S. $5,000.00 $5,000
Brick Pavers 650 S.F. $12.00 $7,800
15"Storm Sewer 25 L.F. $42.00
Inlets&Junction Boxes 2 EACH $4,000.00
Slotted Drain(15"ALT@ Variable Height)???TBD 270 L.F. $180.00
Additional Survey 1 L.S. $2,000.00
Sub-total $81,623
10%Contingency $8,162
11CROSS ACCESS TOTAL $89,789
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