Loading...
South View Estates Development Agreement 08-30-2021DEVELOPMENT AGREEMENT SOUTH VIEW ESTATES RURAL HOUSING INCENTIVE DISTRICT THIS DEVELOPMENT AGREEMENT ("Agreement") is entered into effective as of August 30, 2021 (the "Effective Date"), by and between the CITY OF SALINA, KANSAS, a municipal corporation of the State of Kansas ("City"), and SOUTH VIEW ESTATES, LLC, a Kansas limited liability company engaged in the business of development with its principal office located at 1334A North Ohio, Salina, Kansas 67401 ("Developer"). The City and the Developer are each a "Party" and collectively the "Parties." RECITALS A. Developer has acquired real property located within the boundaries of City and described on Exhibit A attached hereto and incorporated herein by reference (the "Property"). B. Developer desires to develop the Property by constructing the "South View Estates" residential development and all related internal infrastructure improvements ("South View Estates Development"), all as more fully described herein. C. City has determined that the construction of South View Estates Development will foster the economic development of City and surrounding area of Saline County, Kansas. D. The Parties are authorized to enter into this Agreement and to complete the responsibilities set forth herein with respect to South View Estates Development. AGREEMENT NOW THEREFORE, in consideration of the premises and promises contained herein and other good and valuable consideration, the adequacy and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows: ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION 1.1 Definitions. As used in this Agreement, the following words and terms have the meaning set forth below: "Agreement" means this Development Agreement, as the same may be from time to time modified, amended or supplemented in writing by the Parties hereto. "City" means the City of Salina, Kansas. "City Expenses" means all legal and professional costs, fees and expenses incurred by City with regard to the preparation of this Agreement, the Funding Agreement, and any and all other Ordinances, Resolutions or other documents necessary for implementation of the District as well as for representation and appearances of legal counsel at any hearings or proceedings required to implement the District. "Concept Site Plan" means the site development plan prepared by a licensed professional engineer, or firm thereof, acceptable to City, depicting the conceptual program for construction of the Development Project and the Internal Infrastructure Improvements. 600596.20000\DEVELOPMENT AGREEMENT v.6 "Construction Plans" means plans, drawings, specifications and related documents, and construction schedules for the construction of the Work, together with all supplements, amendments or corrections. "County" means Saline County, Kansas. "Developer" means South View Estates, LLC, a Kansas limited liability company, or its permitted successors or assigns. "Development Costs" means the total amount spent or expected to be spent by Developer to construct the Work. "Development Plan" means the Development Plan prepared by the City in accordance with the provisions of the Rural Housing Incentive District Act and approved by the Developer, a copy of which is attached hereto at Exhibit H. "Development Project" means single family residential units and auxiliary structures to be constructed on the Property in accordance with the Concept Site Plan. "District" means the South View Estates Rural Housing Incentive District to be established pursuant the Rural Housing Incentive District Act and the RHID Ordinance. "Eligible Costs" means the City Expenses, Property acquisition costs, and that portion of the costs of the Internal Infrastructure Improvements which are reimbursable to the Developer pursuant to the provisions ofK.S.A. 12-5249, including associated legal, engineering and project finance costs, all as more specifically described on Exhibit C attached hereto and incorporated herein by this reference, but excludes costs paid with or reimbursed from direct funds from third parties other than financing institutions (i.e. American Rescue Plan funding from the City or Saline County). "Funding Agreement" means the funding agreement between the City and the Developer, dated July 27, 2021, relating to the Developer providing a source of funds to the City to finance costs incurred by the City for legal, financial, planning, inspection, and other services, or for direct out-of-pocket expenses and other reasonable costs resulting from services rendered to the Developer to review, evaluate, process, and inspect the Project and actions related thereto. "Governing Body" means the City Commission of the City of Salina, Kansas. "Internal Infrastructure Improvements" means the electric, gas, water, sewer, storm sewer, and street improvements necessary for South View Estates Development and located within the boundaries of the Property, including engineering costs, any costs of right-of-way and appurtenances related thereto, as set forth on the approved plat for South View Estates Development, all as more specifically described on Exhibit C attached hereto and incorporated herein by this reference. "Material Change" means any change in the Concept Site Plan that significantly affects the nature of the Internal Infrastructure Improvements, modifies the number of single family residences, or increases/decreases the cost of the Development Project by 10% or more for each change or 20% in the aggregate. "Mayor" means the Mayor of the City of Salina, Kansas or their duly authorized agent. 600596.20000\DEVELOPM ENT AGREEMENT v.6 2 "Plans and Specifications" means the plans and specifications for the Internal Infrastructure Improvements prepared by a licensed professional engineer, or firm thereof, acceptable to City. "Project Milestones" means the performance of the Development Project described on Exhibit F hereto in accordance with the provisions of Section 4.2. "Property" means the real property (including but not limited to fee interests, leasehold interests, tenant-in-common interests, and such other like or similar interests) on which the Development Project will be located, more specifically described in Exhibit A attached hereto and depicted on Exhibit B attached hereto. "Related Party" means any party related to the Developer by one of the relationships described in Section 267(b) of the United States Internal Revenue Code of 1986, as amended and any successor entity in which the principals of the Developer (either individually or collectively) or Developer own or control no less than fifty percent (50%) of the voting interest in such successor entity. "RHID Funds" means those amounts paid from the Saline County Treasurer to the Treasurer of the City pursuant to K.S.A. 12-5250(b)(2)(A) as a result of South View Estates Development. "RHID Ordinance" means the ordinance passed by the Governing Body approving the Development Plan and establishing the District. "Rural Housing Incentive District Act" means K.S.A. 12-5241 et seq., as amended. "Substantial Completion" means the stage in the progress of the Work when the Work or designated portions thereof is sufficiently complete in accordance with the Construction Plans, excepting all punch list items so that Developer can occupy or utilize the Work for its intended purpose. "Work" means all work necessary to prepare the Property and to construct the Development Project and the Internal Infrastructure Improvements, including; (1) demolition and removal of any existing improvements located on the Property, grading and earthwork; (2) construction, reconstruction and/or relocation ofutilities; (3) construction of the single family residences and related structures; (4) construction and installation of site landscaping on the Property, as described in the Concept Site Plan; and (5) all other Work described in the Concept Site Plan, or reasonably necessary to effectuate the intent of this Agreement. 1.2 Rules of Construction. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, the following rules of construction apply in construing the provisions of this Agreement: (a) The terms defined in this Article include the plural as well as the singular. (b) All accounting terms not otherwise defined herein have the meanings assigned to them, and all computations herein provided for will be made, in accordance with generally accepted accounting principles. (c) All references herein to "generally accepted accounting principles" refer to such principles in effect on the date of the determination, certification, computation or other action to be taken hereunder using or involving such terms. 600596.20000\DEVELOPMENT AGREEMENT v.6 3 ( d) All references in this instrument to designated "Articles," "Sections" and other subdivisions are to the designated Articles, Sections and other subdivisions of this instrument as originally executed. (e) The words "herein," "hereof' and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision. (t) The Article and Section headings herein are for convenience only and will not affect the construction hereof. ARTICLE II REPRESENT A TIO NS AND WARRANTIES 2.1 Representations of the City. The City makes the following representations and warranties, which are true and correct on the date hereof, to the best of the City's knowledge: (a) Due Authority. The City has full constitutional and lawful right, power and authority, under current applicable law, to execute and deliver and perform the terms and obligations of this Agreement, and this Agreement has been duly and validly authorized and approved by all necessary City proceedings, findings and actions. Accordingly, this Agreement constitutes the legal valid and binding obligation of the City, enforceable in accordance with its terms. (b) No Defaults or Violation of Law. The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of the terms and conditions hereof do not and will not conflict with or result in a breach of any of the terms or conditions of any agreement or instrument to which it is now a party, and do not and will not constitute a default under any of the foregoing. (c) No Litigation. There is no litigation, proceeding or investigation pending or, to the knowledge of the City, threatened against the City with respect to this Agreement or affecting the Property. In addition, no litigation, proceeding or investigation is pending or, to the knowledge of the City, threatened against the City seeking to restrain, enjoin or in any way limit the approval or issuance and delivery of this Agreement or which would in any manner challenge or adversely affect the existence or powers of the City to enter into and carry out the transactions described in or contemplated by the execution, delivery, validity or performance by the City of the terms and provisions of this Agreement. (d) Governmental or Corporate Consents. No consent or approval is required to be obtained from, and no action need be taken by, or document filed with, any governmental body or corporate entity in connection with the execution and delivery by the City of this Agreement other than as set forth herein. (e) No Default. No default or Event of Default has occurred and is continuing, and no event has occurred and is continuing which with the lapse of time or the giving of notice, or both, would constitute a default or an event of default in any material respect on the part of the City under this Agreement. 2.2 Representations of the Developers. The Developer makes the following representations and warranties, which are true and correct on the date hereof, to the best of the Developer's knowledge: (a) Due Authority. The Developer has all necessary power and authority to execute and deliver and perform the terms and obligations of this Agreement and to execute and deliver the documents required of the Developer herein, and such execution and delivery has been duly and validly authorized and 600596.20000\DEVELOPMENT AGREEMENT v.6 4 approved by all necessary proceedings. Accordingly, this Agreement constitutes the legal valid and binding obligation of the Developer, enforceable in accordance with its terms. (b) No Defaults or Violation of Law. The execution and de! ivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of the terms and conditions hereof do not and will not conflict with or result in a breach of any of the terms or conditions of any corporate or organizational restriction or of any agreement or instrument to which they are now a party, and do not and will not constitute a default under any of the foregoing. (c) No Litigation. No litigation, proceeding or investigation is pending or, to the knowledge of the Developer, threatened against South View Estates Development, the Developer, or any officer, director, member or shareholder of the Developer. In addition, no litigation, proceeding or investigation is pending or, to the knowledge of the Developer, threatened against the Developer seeking to restrain, enjoin or in any way limit the approval or issuance and delivery of this Agreement or which would in any manner challenge or adversely affect the existence or powers of the Developer to enter into and carry out the transactions described in or contemplated by the execution, delivery, validity or performance by the Developer, of the terms and provisions of this Agreement. ( d) No Material Change. (1) The Developer has not incurred any material liabilities or entered into any material transactions other than in the ordinary course of business except for the transactions contemplated by this Agreement and (2) there has been no material adverse change in the business, financial position, prospects or results of operations of the Developer, which could affect the Developer's ability to perform its obligations pursuant to this Agreement from that shown in the financial information provided by the Developer to the City prior to the execution of this Agreement. (e) Governmental or Corporate Consents. No consent or approval is required to be obtained from, and no action need be taken by, or document filed with, any governmental body or corporate entity in connection with the execution, delivery and performance by the Developer of this Agreement other than as set forth herein. (f) No Default. No default or Event of Default has occurred and is continuing, and no event has occurred and is continuing which with the lapse of time or the giving of notice, or both, would constitute a default or an event of default in any material respect on the part of the Developer under this Agreement, or any other material agreement or material instrument to which the Developer is a party or by which Developer is or may be bound. (g) Approvals. The Developer has received and is in good standing with respect to all certificates, licenses, inspections, franchises, consents, immunities, permits, authorizations and approvals, governmental or otherwise, necessary to conduct and to continue to conduct its business as heretofore conducted by it and to own or lease and operate its properties as now owned or leased by it. The Developer has obtained, or reasonably believes it will obtain in due course, all certificates, licenses, inspections, franchises, consents, immunities, permits, authorizations and approvals, governmental or otherwise, necessary to acquire, construct, equip, operate and maintain the Development Project; or reasonably believes that all such certificates, licenses, consents, permits, authorizations or approvals which have not yet been obtained will be obtained in due course. (h) Construction Permits. All governmental permits and licenses required by applicable law to construct, occupy and operate the Development Project have been issued and are in full force and effect or, if the present stage of development does not allow such issuance, the Developer reasonably believes, after due inquiry of the appropriate governmental officials, that such permits and licenses will be issued in a timely manner in order to permit the Development Project to be constructed. 600596.20000\DEVELOPMENT AG REEMENT v.6 5 (i) Compliance with Laws. The Developer is in material compliance with all valid laws, ordinances, orders, decrees, decisions, rules, regulations and requirements of every duly constituted governmental authority, commission and court applicable to any of its affairs, business, operations as contemplated by this Agreement. U) Other Disclosures. The information furnished to the City by the Developer in connection with the matters covered in this Agreement is true and correct and does not contain any untrue statement of any material fact and does not omit to state any material fact required to be stated therein or necessary to make any statement made therein, in the light of the circumstances under which it was made, not misleading. (k) Contractors. All contracts with contractors shall warrant that the work performed or material supplied by that contractor to the Development Project will be free from any defects in materials and workmanship for a period of at least two (2) years from the date of completion, and that such warranty does not restrict or otherwise limit that contractor's obligation to construct the Development Project in a workmanlike manner and in accordance with the Construction Plans and this Agreement as it pertains to that contractor's work. 2.3 Maintenance of Existence. During the term of this Agreement the Developer (including any permitted successors or assigns) will maintain its legal existence, will continue to be in good standing under the laws of the State of Kansas and will not dissolve, consolidate with or merge into another entity or permit one or more other entities to consolidate with or merge into it. 2.4 Conditions to the Effectiveness of this Agreement. Contemporaneously with the execution of this Agreement, and as a precondition to the effectiveness of this Agreement, the Developer will submit the following documents to the City: (a) a copy of the Developer's Articles of Organization and a good standing certificate dated within one month of the date of this Agreement, each certified by the Secretary of State of the State of Kansas; (b) a certified copy of the Operating Agreement of the Developer; (c) a list of each member of the Developer and the associated percentage ownership, and if such member is not an individual, the individual owners and percentage ownership of such member; (d) the Concept Site Plan; (e) an executed copy of the Funding Agreement; and (f) a legal opinion from counsel to the Developer in form and substance acceptable to the City covering: (i) the due organization of the Developer and the power and authority of the Developer to execute this Agreement, and (ii) the enforceability of this Agreement against the Developer. 2.5 Final Approval Required. Notwithstanding anything herein to the contrary, this Agreement will be void: (a) if the City does not finalize all required steps to create the District pursuant to the Rural Housing Incentive District Act by adoption of the RHID Ordinance within 60 days after the Effective Date; or (b) ifthe District is nullified in the manner set forth in K.S.A. 12-5246. Until the passage of the RHID Ordinance, the Governing Body retains sole discretion on the Development Project. In addition, the zoning commission and the City retain full discretion within existing ordinances and policy regarding its zoning, planning, permitting and inspection requirements. 600596.20000\DEVELOPMENT AGREEMENT v.6 6 ARTICLE III RURAL HOUSING INCENTIVE DISTRICT 3.1 Preliminary Resolution. Governing Body has heretofore adopted Resolution No. 21-7955 on May 3, 2021 (the "Preliminary Resolution"), which made certain findings pursuant to the Rural Housing Incentive District Act, relative to the need for housing in the City and declaring an intent to establish rural housing incentive districts within the City. 3.2 Department of Commerce Finding. Pursuant to the Preliminary Resolution, the City caused to be prepared a Housing Needs Analysis and forwarded the same with the Preliminary Resolution, to the Kansas Secretary of Commerce. On May 21 , 2021, the Kansas Secretary of Commerce issued a letter to the City making certain findings required by the Rural Housing Incentive District Act, and approved the City's ability to establish rural housing incentive districts. 3.3 Further Proceedings. City has caused to be prepared the Development Plan in accordance with the provisions of the Rural Housing Incentive District Act, and plans to consider a resolution calling a public hearing relative to the Development Plan, conduct a public hearing, and consider the RHID Ordinance approving the Development Plan and establishing the District. The District will be deemed to be established at the time the RHID Ordinance is passed by the Governing Body and published as required by law. The Parties acknowledge that the creation of the District is subject to nullification in the manner set forth in K.S.A. 12-5246. 4.1 Concept Site Plan. ARTICLE IV CONSTRUCTION (a) Developer, at its cost, has had prepared the Concept Site Plan, which is hereby approved by the Parties. Notwithstanding anything to the contrary herein, the City's acceptance of the Concept Site Plan is not acceptance of the final site plan as required by the City ordinances and the City retains full and complete discretion to review, modify and approve or not approve such final site plan through its normal planning, zoning and permitting process. (b) Developer will promptly notify City in writing of any proposed Material Changes to the Concept Site Plan at least 60 days prior to the implementation of any such Material Change, including a description of the Material Change and reasons therefore, including any supporting documentation requested by the City. The City will respond in writing within 45 days after receipt of the notice and all requested supporting documentation. Developer may implement a proposed Material Change to the Concept Site Plan only with the advance written consent of the City or if such notice is not responded to pursuant to the timelines above. (c) Developer may make changes which are not Material Changes to the Concept Site Plan or any aspect thereof as site conditions or other issues of feasibility may dictate or as may be necessary or desirable in the sole determination of Developer to enhance the economic viability of the Development Project, with approval from the City Manager or the City Manager's designee provided that such approval will not act as a waiver, alteration, or replacement of any required zoning, planning, permitting and inspection requirements. 4.2 Project Milestones and Schedule. The Developer agrees to meet the Project Milestones not later than the times set forth in Exhibit For the Developer will be in material breach of this Agreement. 600596.20000\DEVELOPMENT AGREEMENT v.6 7 4.3 Development Project Construction. (a) Developer will construct the Development Project in a good and workmanlike manner in accordance with the terms of the Development Plan and this Agreement and as set forth in the Construction Plans. Notwithstanding anything to the contrary herein, all work on the Development Project will comply with existing City codes, rules and regulations. If Developer or a Related Party serves as general contractor or a sub-contractor for the Development Project, Developer or such Related Party will not charge more for such services than a third-party contractor would customarily charge for such services, as determined by such documentation that is requested by and acceptable to the City in the City's discretion. All work on the Development Project will be inspected by City staff during construction as if this Agreement did not exist. (b) Developer may enter into one or more construction contracts to compete the Work for the Development Project. Prior to the commencement of construction of the Development Project, Developer will obtain, or will require that any such contractor obtain, the insurance required in Section 6.8 hereof and will deliver evidence of such insurance to City. (c) Promptly after Substantial Completion of the Work with respect to the Development Project in accordance with the provisions of this Agreement, Developer will furnish to City a Certificate of Substantial Completion in the form attached hereto as Exhibit D. The City will, within thirty (30) days following delivery of each Certificate of Substantial Completion, carry out such inspections as it deems necessary to (i) verify reasonable satisfaction with, and the accuracy of, the certifications contained in each Certificate of Substantial Completion, and (ii) verify, in the City's reasonable discretion, that the Development Project have been constructed to meet or exceed City quality standards and comply with all applicable City code and permitting requirements, such verification not to be unreasonably withheld. Each Certificate of Substantial Completion will be accepted or rejected by the City in its discretion, but acceptance will not be unreasonably withheld. If a Certificate of Substantial Completion is rejected by the City, the City will furnish Developer with specific written objections to the status of the Work, describing such objections and the measures required to correct such objections in reasonable detail. 4.4 Internal Infrastructure Improvements Construction. (a) Developer will construct, at its cost, the Internal Infrastructure Improvements in a good and workmanlike manner in accordance with the Plans and Specifications approved by City and in compliance with the Project Milestones. Developer will complete the Internal Infrastructure Improvements prior to commencement of any vertical construction unless Developer complies with a safety plan approved by the Fire Marshall, which will be attached hereto as Exhibit J. If Developer or a Related Party serves as general contractor or sub-contractor for the Internal Infrastructure Improvements, Developer or such Related Party will not charge more for such services than a third-party contractor would customarily charge for such services, as determined by such documentation that is requested by and acceptable to the City in the City's discretion. (b) Developer is responsible for securing any rights-of-way and/or easement rights from private parties necessary to improve or build the Internal Infrastructure Improvements and City will reasonably cooperate with Developer with respect to any such acquisition. All costs associated with the acquisition of rights-of-way and/or easements from third-parties unrelated to Developer will be considered an Eligible Cost. City will reasonably cooperate with Developer in obtaining all necessary permits for construction of the Internal Infrastructure Improvements in accordance with the City's standard permitting process. 600596.20000\DEVELOPMENT AGREEMENT v.6 8 (c) Developer may enter into one or more construction contracts to complete the Work for the Internal Infrastructure Improvements. Prior to the commencement of construction of the Internal Infrastructure Improvements, Developer will obtain or will require that any such contractor obtain, the insurance required by Section 6.8 hereof and will deliver evidence of such insurance to City. (d) Promptly after Substantial Completion of the Work with respect to the Internal Infrastructure Improvements, or a phase thereof, in accordance with the provisions of this Agreement, Developer will furnish to City a Certificate of Substantial Completion in the form attached hereto as Exhibit D. The City will, within thirty (30) days following delivery of each Certificate of Substantial Completion, carry out such inspections as it deems necessary to (i) verify reasonable satisfaction with, and the accuracy of, the certifications contained in each Certificate of Substantial Completion, and (ii) verify, in the City's reasonable discretion, that the Internal Infrastructure Improvements have been constructed to meet or exceed City quality standards and comply with all applicable City code and permitting requirements. Each Certificate of Substantial Completion will be deemed accepted by City unless, prior to the end of such 30-day period after delivery to City of each Certificate of Substantial Completion, City furnishes Developer with specific written objections to the status of the Work, describing such objections and the written objections to the status of the Work, describing such objections and the measures required to correct such objections in reasonable detail. (e) After Substantial Completion of the Internal Infrastructure Improvements and verification by the City, in the City's reasonable discretion, that the Internal Infrastructure Improvements have been constructed to meet or exceed City quality standards and comply with all applicable City code and permitting requirements, Developer will dedicate to the City, and the City will accept, title to the Internal Infrastructure Improvements. Following such dedication, City will be responsible, at its sole cost and expense, for all operating and capital costs for the dedicated Internal Infrastructure Improvements from that date forward, and will maintain the dedicated Internal Infrastructure Improvements in a manner consistent with similar public improvements in the City. Notwithstanding the foregoing, Developer may, at its sole discretion and expense, enhance the maintenance of operation of the Internal Infrastructure Improvements for the betterment of the Development Project with prior consent of the City. 4.5 Construction Permits and Approvals. Before commencement of construction or development of any buildings, structures or other work or improvements, the Developer shall secure or cause to be secured any and all permits and approvals which may be required by the City and any other governmental agency having jurisdiction as to such construction, development or work. Such permits and approvals may be obtained by Developer in phases corresponding to particular stages of construction. 4.6 No Waiver. Nothing in this Agreement shall constitute a waiver of the City's right to consider and approve or deny governmental approvals pursuant to the City's regulatory authority as provided by city building code and applicable State law. The Developer acknowledges that satisfaction of certain conditions contained in this Agreement require the reasonable exercise of the City's discretionary zoning authority by the City's planning commission and governing body in accordance with the City's zoning ordinance, the City building code and applicable State Jaw. 4.7 Land Use Restriction. The Developer agrees that the Property will be utilized for residential purposes only and all other types of land uses are prohibited in the Development Project or on the Property unless approved in writing by the City prior to the execution of a letter of intent, lease or prior to the sale of land. 4.8 Sale of Constructed Homes. The Developer acknowledges that the City is willing to permit the Developer Project to participate in the rural housing incentive program in order to increase the supply of certain types of available homes within the City. Therefore, all residential units constructed as 600596.20000\DEVELOPMENT AGREEMENT v.6 9 part of the Developer Project will meet the requirements set forth on Exhibit G (the "Required Housing Standards"), or the Developer will be in material default of this Agreement. ARTICLEV FINANCING OBLIGATIONS 5.1 Financing of Internal Infrastructure Improvements. (a) The City, in its sole discretion and at any time, may elect to fund a portion of the Eligible Costs of the Internal Infrastructure Improvements through funds other than RHID Funds. The City will be entitled to reimbursement of all Eligible Costs paid by the City on a pro-rata basis from each distribution of RHID Funds. (b) The County, in its sole discretion and at any time, may elect to fund a portion of the Eligible Costs of the Internal Infrastructure Improvements. The County will be entitled to reimbursement of all Eligible Costs paid by the County on a pro-rata basis from each distribution ofRHID Funds in accordance with the terms of the agreement between the City and the County attached as Exhibit K. (c) Unless funded by the City or the County, all costs of the Internal Infrastructure Improvements will be paid in cash, or financed, by Developer. The City will use RHID Funds to reimburse the Developer on a pro-rata basis from each distribution ofRHID Funds for all or a portion of the Eligible Costs paid by the Developer, subject to the terms of this Agreement. Reimbursements for expenses paid or financed by the Developer will be made solely to the Developer. So long as the total amount of Eligible Costs requested for reimbursement by the Developer does not exceed the actual amount expended by the Developer for such use or 110% of the total set forth on Exhibit C, the Developer may seek reimbursement of any particular line item on Exhibit C not exceeding 120% of the amount stated therein. (d) For clarity, and by way of example only, pro-rata distributions ofRHID Funds between the City, the County, and the Developer will be calculated using the following methodology: City County Developer Total Eligible Expenses Paid $ 500,000 1,000,000 6,500,000 $8,000,000 Allocated pro-rata portion of RHJD Funds 6.25% 12.50% 81.25% 100.00% The allocation of RHID Funds will be recalculated when necessitated by a change in submitted Eligible Expenses by a party or a reduction in allowable Developer Eligible Expenses pursuant to this Agreement. Recalculations of the RHID Funds allocation will apply on a prospective basis only. 5.2 Request for Reimbursement. The Developer will certify all costs and expenditures to be made in connection with the Eligible Costs in accordance with the following: (a) The Developer will submit to the City a Request for Reimbursement in the form attached hereto as Exhibit E setting forth the amount for which reimbursement is sought and an itemized listing of the related Internal Infrastructure Improvements. (b) Each Request for Reimbursement will be accompanied by such bills, contracts, invoices, or other evidence reasonably satisfactory to the City to document that payment has been made by the Developer for such Eligible Costs. 600596.20000\DEVELOPMENT AGREEMENT v.6 10 (c) The Developer, at its cost, will engage a licensed appraiser to perform an appraisal of the Property and submit the final report to the City reflecting the market value of the Property. Eligible Costs for property acquisition will be limited to the lesser of(i) the stated market value in the final appraisal report and (ii) the actual purchase price for the Property reflected by documentation reasonably satisfactory to the City. 5.3 Reimbursement. The City will have 30 calendar days after receipt of any Request for Reimbursement to review and respond by written notice to the Developer. If the submitted documentation demonstrates that: (1) the Request for Reimbursement shows payment of the Eligible Costs; (2) the expense was incurred; (3) the Developer is not in default under this Agreement; (4) the costs were not financed with direct funds from third parties other than financing institutions (i.e. American Rescue Plan funding); and (5) the City has not discovered any fraud on the part of the Developer, then the City will approve the Request for Reimbursement and promptly reimburse the Developer for the Eligible Costs pursuant to the terms of this Agreement if sufficient pro-rata RHID Funds are available, and quarterly as funds become available in the event that pro-rata RHID Funds in the City's possession are at that time insufficient. In the event the City does not respond within such 30-day period, the Request for Reimbursement will be deemed approved. If the City reasonably disapproves of the Request for Reimbursement, the Parties will meet to resolve any such differences. If a resolution is not found regarding specific cost(s), the denied cost will not be Eligible Costs unless and until a final order from a court of competent jurisdiction is received by the City requiring the cost to be accepted as an Eligible Cost or other written agreement of the Parties. Reimbursements will cease upon the earlier of (a) such time as the Eligible Costs have been fully reimbursed to Developer, or (b) 25 years after the date of the establishment of the District. The City will have no liability and/or responsibility to Developer for any payment greater than the amounts received from the Saline County Treasurer pursuant to the provisions ofK.S.A. 12-5250(b)(2)(A) as a result of the creation of the District. 5.4 Payment of City Expenses. If the Funding Agreement has not already been entered into between the Developer and the City, then upon execution of this Agreement the Developer and City will enter into a Funding Agreement substantially in the form attached as Exhibit I, requiring the Developer to reimburse the City for City Expenses. All City Expenses paid by the Developer will be Eligible Costs. ARTICLE VI GENERAL PROVISIONS 6.1 City's Right to Terminate. In addition to all other rights of termination as provided herein, City may terminate this Agreement at any time if: (a) Developer defaults in or breaches any material provision of this Agreement and fails to cure such default or breach within thirty (30) days after receipt of written notice from City of such default or breach; or (b) Developer fails to close on the purchase of the Property within 60 days after the creation of the District. 6.2 Developer's Right to Terminate. In addition to all other rights of termination as provided herein, Developer may terminate this Agreement at any time if City defaults in or breaches any material provision of this Agreement (including any City default under Article Vhereof) and fails to cure such default or breach within 30 days after receipt of written notice from Developer of such default or breach. 600596.20000\DEVELOPMENT AGREEMENT v.6 11 6.3 Successors and Assigns. (a) This agreement will be binding on and inure to the benefit of the Parties and their respective heirs, administrators, executors, personal representatives, agents, successors and assigns. (b) Until Substantial Completion of the Development Project has occurred, the obligations of Developer under this Agreement may not be assigned in whole or in part without the prior written approval of City, which approval will not be unreasonably withheld, conditioned, or delayed upon a reasonable demonstration by Developer of the proposed assignee's experience and financial capability to undertake and complete all portions of the Work with respect to the Development Project and the Internal Infrastructure Improvements, all in accordance with this Agreement. Notwithstanding the foregoing, Developer is permitted to subcontract the construction of any portion of the Development Project or Internal Infrastructure Improvements without the consent of City but Developer will remain liable under this Agreement. (c) The City hereby approves, and no prior consent will be required in connection with: (1) the right of Developer to encumber or collaterally assign its interest in the Property or any portion thereof or any interest in the Agreement to secure Joans, advances or extensions of credit to finance or from time to time refinance all or any part of the Eligible Costs, or the right of the holder of any such encumbrance or transferee of any such collateral assignment; (2) the right of Developer to assign Developer's rights, duties and obligations under the Agreement to a Related Party; or (3) the right of Developer to sell or lease individual portions of the Property in the ordinary course of the development of the Development Project; provided that in each such event Developer named herein will remain liable hereunder for the Substantial Completion of the Development Project, and will be released from such liability hereunder only upon Substantial Completion of the Development Project. 6.4 Remedies. (a) If the Developer reasonably believes that it will fail to meet a Project Milestone set forth on Exhibit F, the Developer will give notice to the City summarizing the expected delay and the cause of the expected delay (the "Delay Notice"). Within 60 days following delivery of a Delay Notice to the City, the Developer will appear before the Governing Body to discuss the Delay Notice and Project Milestones. If the Developer fails to meet the Project Milestones set forth on Exhibit F, the Governing Body may reduce the total Eligible Costs to be reimbursed to Developer as set forth on Exhibit F. Notwithstanding the foregoing, if Developer fails to meet a Project Milestone and such failure continues for 6 months after the date set forth on Exhibit F, the City may pursue any remedy available pursuant to Section 6.4(b) or 6.4(d) without the necessity of the applicable notice and cure periods. (b) Except as otherwise provided in this Agreement and subject to Developer's and City's respective rights of termination, in the event of any breach of any term or condition of this Agreement by either Party, or any successor, the breaching Party (or successor) will, upon written notice from the other Party specifying such claimed breach, proceed immediately to cure or remedy such breach, and will, in any event, within 30 days after receipt of notice, cure or remedy such default. If the breach is not cured or remedied, the aggrieved Party may hold the breaching Party in default of this Agreement and there upon may institute such proceedings as may be necessary or desirable in its opinion to cure and remedy such 600596.20000\DEVELOPM ENT AGREEMENT v.6 12 default or breach, including, but not limited to proceedings to compel specific performance by the defaulting or breaching Party, withholding funds received pursuant to K.S.A. 12-5250(b)(2)(A) and/or repeal of the ordinance establishing the District. For purposes of this Section 6.4, no Party may be deemed in default of this Agreement unless and until it has received notice of any claimed breach and has been given an opportunity to cure the same. (c) Notwithstanding any other provision of this Agreement, in no event will the Developer or the City, its Governing Body members, officers, employees, agents or independent contractors ever be liable for any punitive, special, incidental, or consequential damages in connection with this Agreement. For purposes of this Section 6.4, consequential damages include, but are not limited to, lost profits, lost tax revenue, or other similar losses which are not direct out-of-pocket costs incurred by the non-defaulting Party. Any monetary damages owed by the City will be limited to and will only be payable from the Developer's pro-rata portion of RHID Funds actually received by the City as a result of the creation of the District. (d) Notwithstanding any other prov1s1on of this Agreement, if Developer defaults in or breaches any material provision of this Agreement and fails to cure such default or breach within thirty (30) days after receipt of written notice from City of such default or breach, the City may deem Developer's Eligible Expenses to be $0 and continue to collect and distribute RHID Funds on a pro-rata basis between the City and the County until each of the City and the County is fully reimbursed for its Eligible Expenses, after which the City may terminate this Agreement and repeal the Ordinance establishing the District. 6.5 Force Majeure. Neither City nor Developer nor any successor in interests will be considered in breach or default of their respective obligations under this Agreement, and times for performance of obligations hereunder will be extended in the event of any delay caused by force majeure, including, without limitation, damage or destruction by fire or casualty; strike; lockout; civil disorder; act of terror; war; shortage of delay in shipment of material or fuel; acts of God; unusually adverse weather or soil conditions; unforeseen site conditions that render the site economically or physically undevelopable (as a result of additional cost or delay); pandemics, or any other cause or contingency similarly; or other causes beyond the Parties' reasonable control, including but not limited to, any litigation, court order or judgment resulting from any litigation affecting the validity of this Agreement; provided that such event of force majeure will not be deemed to exist as to any matter initiated or unreasonably sustained by Developer, and further provided that Developer notifies city in writing within thirty (30) days of the commencement of such claimed event of force majeure. 6.6 Notices. Any notice, demand or other communication required by this Agreement to be given by either Party hereto to the other will be in writing and will be sufficiently given or delivered if dispatched by certified United State first class mail, postage prepaid, or delivered personally, a. In the case of Developer, to: South View Estates, LLC P.O. Box 542 l 334A North Ohio Salina, Kansas 67401 600596.20000\DEVELOPMENT AGREEMENT v.6 13 b. In the case of City, to: City of Salina, Kansas Attention: City Manager 300 W. Ash Street Salina, Kansas 67401 Email: mike.schrage@salina.org Phone: (785) 309-5700 With a copy to: Clark, Mize & Linville, Chtd. Attn: Greg A. Bengtson, Esq. 129 S. 8th Street Salina, Kansas 67402 Email: gabengtson@cml-law.com Phone: (785) 823-6325 Or to such other address with respect to either Party as that Party may, from time to time, designate in writing and forward to the other as provided in this Section 6.6. 6.7 Conflicts oflnterest. (a) No member of the Governing Body or any branch of City's government who has any power ofreview or approval of any of Developer's undertakings, or of City's contracting for goods or services for South View Estates Development, will participate in any decisions relating thereto which affect that member's personal interests or the interests of any corporation or partnership in which that member is directly or indirectly interested. Any person having such interests will immediately, upon knowledge of such possible conflict, disclose, in writing, to the Governing Body the nature of such interest and seek a determination by the Governing Body with respect to such interest and, in the meantime, will not participate in any actions or discussions relating to the activities herein proscribed. (b) The Developer warrants that it has not paid or given and will not pay or give any officer, employee or agent of the City any money or other consideration for obtaining this Agreement. The Developer further represents that, to its best knowledge and belief, no officer, employee or agent of the City who exercises or has exercised any functions or responsibilities with respect to the project during his or her tenure, or who is in a position to participate in a decision making process or gain insider information with regard to the project, has or will have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be performed in connection with the project, or in any activity, or benefit therefrom, which is part of the project at any time during or after such person's tenure. 6.8 Insurance; Damage or Destruction. (a) Developer will cause there to be insurance coverage as hereinafter set forth at all times during the process of constructing the Work and, from time to time at the request of City, will furnish City with proof of payment of premiums on: (1) Builder's Risk insurance, written on Completed Value Basis, in an amount equal to one hundred percent (100%) of the insurable value of the Work at the date of completion, and with coverage available in non-reporting form on the so called "all risk" form of policy. The interest, ifany, of City will be protected in accordance with a clause in form and content satisfactory to City; and, (2) Commercial general liability insurance (including operations, operations of subcontractors, completed operations and contractual liability insurance) together with an owner's contractor's policy, with limits against bodily injury and property damage of not less than Three Million Dollars ($3,000,000.00) per occurrence (to accomplish the above required limits, an umbrella excess liability policy may be used); and 600596.20000\DEVELOPMENT AGREEMENT v.6 14 (3) Workers Compensation insurance, with statutorily required coverage, including employer's liability of not less than One Million Dollars ($1,000,000). (b) The policies of insurance required pursuant to clauses (1) and (2) above will be in form and content reasonably satisfactory to City and will be placed with financially sound and reputable insurers licensed to transact business in the State of Kansas with general policy holder's rating of not less than A- and a financial rating of A-as rated in the most current available "Best's" insurance reports. The Developer will give not less than 30 days advance written notice to the City in the event of cancellation of such policy or change affecting the coverage thereunder. All policies of insurance required pursuant to this section will name City as an additional insured and/or loss payee. Developer will deliver to City evidence of all insurance to be maintained hereunder, prior to the City signing the Agreement. 6.9 Inspection. Developer will allow City and its employees, agents and representatives to inspect, upon request, all architectural, engineering, demolition, construction and other contracts and documents pertaining to the construction of the Work as City determines is reasonable and necessary to verify Developer's compliance with the terms of this Agreement. 6.10 Choice of Law. This Agreement will be deemed to have been fully executed, made by the Parties in, and governed by the laws of State of Kansas for all purposes and intents. 6.11 Entire Agreement; Amendment. The Parties agree that this Agreement, the Development Plan, and the Funding Agreement, collectively constitute the entire agreement between the Parties and that no other agreements or representations other than those contained in this Agreement have been made by the Parties. This Agreement may be amended only in writing and effective when signed by the authorized agents of the Parties. 6.12 Counterparts. This Agreement is executed in multiple counterparts, each of which constitute one and the same instruments. 6.13 Severability. If any term or provision of this Agreement is held to be unenforceable by a court of competent jurisdiction, the remainder will continue in full force and effect, to the extent the remainder can be given effect without the invalid provision. 6.14 Representatives Not Personally Liable. No elected or appointed official, agent, employee or representative of City will be personally liable to Developer in the event of any default or breach by any Party under this Agreement or for any amount which may become due to any Party or on any obligations under the terms of this Agreement. 6.15 Legal Actions. If a third party brings an action against City, or any officials, agents, employees or representatives thereof contesting the validity or legality of any of the terms of this Agreement, or the ordinance approving this Agreement, Developer may, at Developer's option but only with City's consent, assume the defense of such claim or action (including without limitation, to settle or compromise any claim or action for which Developer has assumed the defense) with counsel of Developer's choosing. The Parties expressly agree that so long as no conflicts of interest exist between them, the same attorney or attorneys may simultaneously represent City and Developer in any such proceeding; provided, Developer and its counsel will consult with City throughout the course of any such action and Developer will pay all reasonable and necessary costs incurred by City in connection with such action. If such defense is assumed by Developer, all costs of any such action incurred by City will be promptly paid by Developer. If City refuses to permit Developer to assume the defense of any action, then costs incurred by City will be paid by City. 600596.20000\DEVELOPMENT AGREEMENT v.6 15 6.16 Release and Indemnification. Notwithstanding the expiration, termination or breach of this Agreement by either Party, the indemnifications and covenants contained in this Section 6.16 will , except as otherwise expressly set forth herein, survive such expiration, termination or breach of this Agreement by Parties hereto. (a) Notwithstanding anything herein to the contrary, City and its Governing Body members, officers, agents, servants, employees and independent contractors will not be liable to Developer for damages or otherwise in the event that any ordinance, order or resolution adopted in connection with this Agreement is declared invalid or unconstitutional in whole or in part by the final (as to which all rights of appeal have expired or have been exhausted) judgment of any court of competent jurisdiction, and by reason thereof either City is prevented from performing any of the covenants and agreements herein or Developer is prevented from enjoying the rights and privileges hereof. (b) Developer releases from, agrees to indemnify and hold harmless City, its Governing Body members, officers, agents, servants and employees against, and covenants and agrees that City and its Governing Body members, officers, agents, servants, employees and independent contractors will not be liable for, any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the acquisition of the Property or construction of the Work including any and all claims arising from the acquisition of the Property, including, but not limited to, location of hazardous wastes, hazardous materials or other environmental contaminants on the Property, including all costs of defense, including attorney's fees, except for those matters rising out of the willful and/or wanton negligence of City and its governing body members, officers, agents, servants, and employees. (c) City and its Governing Body members, officers, agents, servants and employees will not be liable for any damage or injury to the persons or property of Developer or its officers, agents, servants or employees or any other person who may be about the Property or the Work except for matters arising out of the willful and/or wanton negligence of City and its Governing Body members, officers, agents, servants and employees. (d) All covenants, stipulations, promises, agreements and obligations of City contained herein will be deemed to be the covenants, stipulations, promises, agreements and obligations of City and not of any of its Governing Body members, officers, agents, servants or employees in their individual capacities. (e) No official, employee or representative of City will be personally liable to Developer in the event of a default or breach by any Party to this Agreement. (f) Developer releases from and covenants and agrees the City, its Governing Body members, officers, employees, agents and independent contractors will not be liable for, and agrees to indemnify and hold City, its Governing Body, members, officers, employees, agents and independent contractors harmless from and against any and all suits, interest, claims and cost of attorney fees incurred by any of them, resulting from, arising out of, or in any way connected with: (I) the Development Project or its approval, (2) the construction of the Work, (3) the negligence or willful misconduct of Developer, its employees, agents or independent contractors in connection with the management, development, and construction of the Work, (4) the compliance by Developer with all applicable state, federal and local environmental laws, regulations, ordinances and orders, (5) underground storage tanks located on or about the Property, (6) friable asbestos or asbestos-containing materials at, on, or in the Property, (7) the operation of all or any part of the Property, or the condition of the Property, including, without limitation, any environmental cost or liability, or (8) negotiations, inspections, acquisitions, preparations, construction, leasing, operations, and other activities of Developer or its agents in connection with or leading to the Development Project or the Property; except that the foregoing release and indemnification will not apply in the case of such liability arising directly out of the willful and/or wanton negligence of City or its authorized Governing Body 600596.20000\DEVELOPMENT AGREEMENT v.6 16 members, officers, employees and agents or which arises out of matters undertaken by City following termination of this Agreement. 6.17 Tax Impli cations. The Developer acknowledges and represents that (1) neither the City nor any of its officials, employees, consultants, attorneys or other agents has provided to the Developer any advice regarding the federal or State income tax implications or consequences of this Agreement and the transactions contemplated hereby, and (2) the Developer is relying solely upon its own tax advisors in this regard. 6.18 Cash Basis and Bu dget Laws. The Parties acknowledge and agree that the ability of the City to enter into and perform certain financial obligations pursuant to this Agreement are subject to the K.S.A. I 0-110 I et seq. and K.S.A. 79-2935 et seq. 6.19 No Partnership. Nothing contained herein will be construed as creating a partnership between the Parties. 6.20 Term. The term of this Agreement will commence on the Effective Date and, unless terminated earlier as provided in this Agreement, expire on the latest of: (i) the date all Eligible Costs have been reimbursed with RHID Funds, subject to the requirements and limitations set forth in this Agreement; or (ii) 25 years after the date of the RHID Ordinance. 6.21 Authorized Parties. Whenever under the provisions of this Agreement and other related documents, instruments or any supplemental agreement, a request, demand, approval, notice or consent of the Parties are required, or the Parties are required to agree or to take some action at the request of the other Party, such approval or such consent or such request shall be given for the City, unless otherwise provided herein, by the Governing Body and for the Developer by any officer of Developer so authorized; and any person shall be authorized to act on any such agreement, request, demand, approval, notice or consent or other action and neither Party shall have any complaint against the other as a result of any such action taken. [BALANCE OF THIS PAGE LEFT BLANK INTENTIONALLY] 600596.20000\DEVELOPMENT AGREEMENT v.6 17 (SEAL) STA TE OF KANSAS (SEAL) CITY OF SALINA, KANSAS ACKNOWLEDGMENT ASHLEY RUSSELL My Appointment Expires August 30, 2022 600596.20000\DEVELOPMENT AGREEMENT (City Signature Page to Development Agreement) By: Name: Title: ACKNOWLEDGMENT STATE OF KANSAS ) ) SS: COUNTY OF SALINE ) This instrument was acknowledged before me on 10 I &g / , 2021, by Tod Roberg, a duly authorized Member of South View Estates, LLC, a Kansas limited liability company, on behalf of said limited liability compa11y . (SEAL) .. ~,.,, LOUISE A CREAMER ~ Notary Public -State of Kansas My Appl. Expires 0 / / o / d-3 My Appointment Expires: 600596.20000\DEVELOPMENT AGREEMENT l ]){.Use. A . CreDJre.C Typed or Printed Name ofNota.1y Public (Developer Signature Page to Development Agreement)