Phase I Development Agreement Execution Version
DEVELOPMENT AGREEMENT
(PHASE ONE PROJECT)
DATED NOVEMBER 6,2023
BETWEEN
CITY OF SALINA,KANSAS
AND
SALINA DESTINATION DEVELOPMENT,LLC
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION 1
1.01 Definitions of Words and Terms 1
1.02 Rules of Construction 4
ARTICLE II REPRESENTATIONS AND WARRANTIES 5
2.01 Representations of City 5
2.02 Representations, Warranties and Covenants of the Developer 6
ARTICLE III DEVELOPMENT OF THE PHASE ONE PROJECT 7
3.01 Master Developer. 7
3.02 Scope of the Phase One Project—Concept Plan. 7
3.03 City Obligations. 7
3.04 Scope of Project—Phased Development. 8
3.07 Financing Documents. 12
3.08 Project Zoning, Planning, Platting, and Construction 13
3.09 Rights of Access 14
3.10 Certificates of Substantial Completion 15
ARTICLE IV INSURANCE AND INDEMNIFICATION 15
4.01 Developer Insurance - Commercial General Liability 15
4.02 Developer Insurance - Builder's Risk 15
4.03 Indemnification 16
ARTICLE V PROJECT FINANCING 18
5.01 Sources of Funding 18
5.02 Developer Project Budget 18
5.03 Statutory and State Agreement Compliance 18
5.04 Documentation of Matching Funds Under State Agreement 18
5.05 Certification of Expenditures 19
5.06 Reimbursement from State Agreement Funds 19
5.07 Conditions to Reimbursement of State Agreement Funds 19
5.08 Repayment of State Agreement Funds 20
5.09 Project Fund 20
5.10 Developer to Purchase Bonds 20
ARTICLE VI 21
6.01 Taxes,Assessments, Encumbrances and Liens 21
ARTICLE VII DEFAULTS AND REMEDIES 21
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7.01 Default by City 21
7.02 Default by Developer 21
7.03 Legal Actions 22
7.04 Rights and Remedies Are Cumulative 22
7.05 Inaction Not a Waiver of Default 22
7.06 Enforced Delay; Extension of Times of Performance 22
ARTICLE VIII ASSIGNMENT;TRANSFER 22
8.01 Assignment and Transfer 22
8.02 Corporate Reorganization 23
8.03 Changes in Law 23
ARTICLE IX GENERAL PROVISIONS 23
9.01 Amendment 23
9.02 Additional Agreements 23
9.03 Right to Inspect 24
9.04 No Other Agreement 24
9.05 No Partnership or Joint Venture 24
9.06 Severability 24
9.07 Notice 24
9.08 Time of Essence 25
9.09 Survival 25
9.10 Agreement Controls 25
9.11 Required Disclosures 25
9.12 Tax Implications 25
9.13 Kansas Law 25
9.14 Counterparts 25
9.15 Recordation of Agreement 26
9.16 Consent or Approval 26
9.17 Non-liability 26
9.18 Cash Basis and Budget Laws 26
9.19 Incorporation of Exhibits 26
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Exhibit A —Legal Description and Depiction of the Property
Exhibit A-1—Legal Description and Depiction of the Phase One Property
Exhibit B —Concept Plan
Exhibit C —Certificate of Substantial Completion Form
Exhibit D —Certification of Expenditures Form
Exhibit E —Memorandum of Agreement
Exhibit F —Completion Guaranty
Exhibit G —Budget
Exhibit H —DSCR Operating Statement Formula
Exhibit I — Example of Rent Limit Calculation
Exhibit J Documentation of Matching Funds Form
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DEVELOPMENT AGREEMENT
(PHASE ONE PROJECT)
THIS DEVELOPMENT AGREEMENT(this"Agreement") is dated as of November 6, 2023
(the"Effective Date")by and between the CITY OF SALINA,KANSAS,a Kansas municipal corporation
(the"City"),and SALINA DESTINATION DEVELOPMENT,LLC,a Kansas limited liability company
(the"Developer").
RECITALS
A. The Developer owns or will acquire marketable fee title to certain real property comprising
approximately 40.44 acres of land generally located in the City of Salina, Saline County, Kansas, and
depicted and legally described on Exhibit A(the"Property").
B. The Board of Commissioners of the City(the"Governing Body")desires that a portion of
the Property comprising approximately 11.197 acres of land depicted and legally described on Exhibit A-1
(the "Phase One Property"), be developed for two hundred fifty (250) units and the Developer
Infrastructure Improvements(as defined below)as phase one(collectively the"Phase One Project")of a
multi-phase five hundred(500)unit development project(the "Project")which includes the Property and
may include other land.
C. Such Phase One Project is comprised of the Phase One Apartments(as defined below)to
be located on the Phase One Property and certain Developer Infrastructure Improvements upon the Phase
One Property.
D. The Parties now desire to enter into this Agreement to formalize their respective rights and
obligations in regard to the Phase One Project and certain provisions regarding the Future Phases(as defined
herein)that may be developed on the Future Phases Property(as defined herein)pursuant to a Future Phases
Development Agreement(as defined herein)
NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual
covenants and agreements herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged,the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
1.01 Definitions of Words and Terms. Capitalized words used in this Agreement shall have
the meanings set forth in the Recitals to this Agreement,the body of this Agreement,or they shall have the
following meanings:
"Affiliate"shall mean and refer to any person or entity that is under common ownership of at least
51%by one or more Principals of the Developer and that controls an entity,that is controlled by an entity,
or that is under common control with an entity.
"Agreement"shall have the meaning set forth in the introductory paragraph.
"Apartments"shall mean individual living Units within a multifamily or multi-unit building(each
shall count as one(1)Unit).
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"Applicable Laws" shall mean any applicable constitution, treaty, statute, rule, regulation,
ordinance, order, directive, code, interpretation,judgment, decree, injunction, writ, determination, award,
permit, license, authorization, design guidelines, directive, policies, requirement or decision of or
agreement with or by the City or other governmental bodies.
"Bonds"shall have the meaning set forth in Section 5.01.
"Budget"shall have the meaning set forth in Section 5.02..
"Business Day" shall mean any day other than a Saturday, Sunday, or legal holiday. As used
herein,the term "legal holiday"means any state or federal holiday for which financial institutions or post
offices are generally closed in the State of Kansas for observance thereof.
"CERCLA"shall have the meaning set forth in Section 4.03.A.
"Certification of Expenditures"shall have the meaning set forth in Section 5.05.
"Change of Control"shall mean any sale,transfer,assignment or other transaction relating to the
Property or the Developer which results in the Principals of Developer owning either directly or through an
Affiliate, less than 51% of Developer or not having the right to vote or otherwise control all decisions of
Developer.
"City"means the City of Salina,Kansas.
"City Indemnified Parties"shall have the meaning set forth in Section 4.03.A.
"City Infrastructure Improvements"shall have the meaning set forth in Section 3.04.
"City Representative" means the City Manager or his or her designee as evidenced by a written
certificate furnished to the Developer containing the specimen signature of such person or persons and
signed by the City Manager.
"Commencement Date"shall have the meaning set forth in Section 3.05(ix).
"Concept Plan"shall have the meaning set forth in Section 3.02.
"Construction Plans" means plans, drawings, specifications and related documents, and
construction schedules for the construction of the Phase One Project, together with all supplements,
amendments or corrections,submitted by the Developer and approved by the City in accordance with this
Agreement.
"Developer"shall have the meaning set forth in the introductory paragraph.
"Developer Indemnified Parties"shall have the meaning set forth in Section 4.03.B.
"Developer Infrastructure Improvements"shall have the meaning set forth in Section 3.04.
"Eligible Costs" means any Project Costs that are eligible for payment or reimbursement with
Incentive Funds,as set forth in the approved Budget.
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"Entitlement Application"shall mean any and all entitlements,annexations,plats,plans,permits,
or approvals the Developer may be required to obtain by the City for commencement or development of
any projects.
"Financial Advisor" shall mean the financial or municipal advisor retained by the City in
connection with the Project.
"Financing Documents"shall have the meaning set forth in Section 3.07.D.
"Force Majeure"means any delay,hindrance,or prevention from the performance of construction
or substantial completion of the same by reason of acts of God, global disease or pandemic, strikes,
lockouts, riots, insurrection, environmental restrictions or remediation required by the appropriate
government authorities, discovery of cultural, archeological or paleontological resources or endangered
species, any lawsuit seeking to restrain, enjoin, challenge or delay construction, failure of governmental
authorities of the City to timely approve plans and specifications when such plans and specifications are
timely submitted by Developer in accordance with such governmental authorities' standard policies and
procedures, war, terrorism, or other reason of a like nature not the fault of subject party,then substantial
completion shall be excused for the period of the delay, and the period for the performance of any part of
construction shall be extended for a period equivalent to the period of such delay.
"Future Phase or Phases"shall mean such phases of development and construction of the Project
necessary to complete the Project but excluding therefrom the Phase One Project.
"Future Phases Development Agreement"shall mean the one or more Development Agreements
between the City and the Developer related to or describing the development of a Future Phase.
"Future Phases Property"shall have the meaning set forth in Section 5.07.
"GMP"shall have the meaning set forth in Section 3.07.D.ii.
"Governing Body"shall have the meaning set forth in Recital B.
"Governmental Approvals"means all plat approvals,re-zoning or other zoning changes,site plan
approvals, conditional use permits,variances, building permits, architectural review or other subdivision,
zoning or similar approvals required for the implementation of the Phase One Project and consistent with
the Concept Plan and this Agreement.
"Incentive"shall have the meaning set forth in Section 5.01.
"Incentive Funds"shall have the meaning set forth in Section 5.01.
"Non-Affiliate"shall mean any person or entity that is not an Affiliate.
"Parties"means the City and the Developer(with each referred to individually as a"Party").
"Permitted Subsequent Approvals" shall mean the building permits and other Governmental
Approvals customarily obtained prior to construction which have not been obtained on the date that this
Agreement is executed or which the City has not yet approved.
"Permitted Transfer"shall have the meaning set forth in Section 8.01.
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"Phase One Apartments"shall mean Apartments,each single family unit of which shall constitute
one (1) Unit, which shall be of not less than five hundred and sixteen square feet(516 sq. ft.) for a one-
bedroom Unit or seven hundred sixty-two square feet(762 sq. ft.) for a two-bedroom Unit(for each Unit,
such square footage is determined according to the ANSIBOMA Z65.4-2010 Net Method measure
standard),mirror that of a modern and upscale apartment project,shall include cementitious siding,cultured
stone veneer, composite patio decking, aluminum railing, vinyl unit windows, thirty (30) year asphalt
singles,LVT flooring,carpeted bedrooms,solid surface countertops,woodbase,textured walls and ceilings,
solid wood cabinets, a wood framed overall structural composition, solid surface countertops, stainless-
steel appliance and composite exterior decking,and shall connect to internal sidewalk and trail connection
to existing off-site trail and sidewalk networks.
"Phase One Project"shall have the meaning set forth in Recital B.
"Phase One Property"shall have the meaning set forth in Recital B.
"Principals of Developer"shall mean David Muffin and Rick Worner,collectively.
"Project"shall have the meaning set forth in Recital B.
"Project Costs"shall have the meaning set forth in Section 5.01.
"Project Fund"shall have the meaning set forth in Section 5.09.
"Property"shall have the meaning set forth in Recital A.
"RCRA"shall have the meaning set forth in Section 4.03.
"Rem ediation Condition"shall have the meaning set forth in Section 3.03.
"Replacement Value"shall have the meaning set forth in Section 4.02.A.
"State" means the State of Kansas.
"State Agreement" shall mean that certain Kansas Department of Commerce American Rescue
Plan Act Economic Expansion Rural Housing Grant Agreement,by and among City and the State of Kansas
with respect to the Project.
"Substantial Completion" and"Substantially Complete"shall mean, with respect to the Phase
One Project, or a Unit, that the Developer or its permitted successor, assign, or tenant shall have been
granted a certificate of occupancy by the City building official and shall have completed all work as required
by this Agreement.
"Term"means the term of this Agreement commencing on the Effective Date and expiring on the
tenth(10t)anniversary of the date the Phase One Project is Substantially Complete.
"Unit"means an individual residential living unit within a multi-family unit building.
1.02 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 Section include the plural as well as the singular.
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B. All accounting terms not otherwise defined herein shall have the meanings
assigned to them, and all computations herein provided for shall 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.
D. All references in this instrument to designated "Sections"and other subdivisions
are to the designated 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 Section or other subdivision.
F. The Section headings herein are for convenience only and shall not affect the
construction hereof.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.01 Representations of 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. Assuming compliance by the parties hereto with
Applicable Laws, 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. 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.
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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.
2.02 Representations,Warranties and Covenants of the Developer. 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 and covenants,as follows:
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 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 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 corporate or organizational restriction or 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. No litigation, proceeding or investigation is pending or, to the
knowledge of the Developer, threatened against the Phase One Project, the Developer or any
officer, director 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. 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 Permitted Subsequent Approvals.
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 Developer
under this Agreement, or any other material agreement or material instrument to which the
Developer is a party or by which the Developer is or may be bound.
F. Financial Capability,Experience and Expertise. The Principals of the Developer
have the financial capability, expertise, and experience in the development industry, including in
mixed-use projects similar to the Phase One Project, to perform its obligations under this
Agreement.Within forty-five(45)days after the Effective Date,and from time to time but not more
often than once every calendar quarter prior to Substantial Completion,Developer shall obtain and
provide to the Financial Advisor evidence that Developer has the net worth and liquidity in at least
an amount lot less than(i) the amounts shown in the sources and uses budget provided to City
pursuant to Section 3.07.D.vii of this Agreement to Substantially Complete the Phase One Project
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and (ii)the amount of the then current potential Grant repayment liability under the terms of the
State Agreement. Upon request,from time to time,Developer will advise the City as to the identity
of the Members of the Developer and any transfers of interests among or by Members of the
Developer, except for transfers to Affiliates. For the ten (10) year period following Substantial
Completion of the Phase One Project, the Members of the Developer will not enter into any
transaction resulting in a Change in Control of Developer or any transfer, sale, assignment, or
conveyance of any interest in the Developer or the Phase One Property that is not a Permitted
Transfer.
ARTICLE III
DEVELOPMENT OF THE PHASE ONE PROJECT
3.01 Master Developer. During the Term of this Agreement, the Developer shall be deemed
"Master Developer"for the Phase One Project and the Property subject to the terms and conditions of this
Agreement. The City will reasonably cooperate with the Developer to facilitate construction of any
improvements to be undertaken by the Developer within the Phase One Project, including expeditiously
considering any rezoning,plans,plats or other items required to facilitate the Phase One Project(subject to
the discretion of any agency or body of the City that maintains legal authority over approval of any such
action).
3.02 Scope of the Phase One Project—Concept Plan. A concept plan(the"Concept Plan")
depicting the proposed development to occur for the Phase One Project with respect to any development
work in the Phase One Project, is attached as Exhibit B. The Concept Plan may be updated,amended, and
revised upon mutual written agreement of the Parties;provided,however,that the Concept Plan will include
a final determination, as required and approved by the City, of the location of: (i) an access driveway
providing access from the Phase One Property to the public right of way known as Magnolia Road and(ii)
an access driveway providing access from the Phase One Property to the public right of way known as
Virginia Drive. Subject to all Applicable Laws, the City shall diligently review and consider approval of
all planning, zoning, and platting approvals necessary to facilitate the Phase One Project, and the Phase
One Project shall be constructed in a manner consistent with any such approvals.
3.03 City Obligations. City shall perform or cause to be performed,at City's sole cost,the City
Infrastructure Improvements, and any remediation work that is required at the Property pursuant to that
certain Final Corrective Action Decision (CAD) issued by the Kansas Department of Health and
Environment(KDHE) for the Former Schilling Air Force Base Site— Salina, KS (the "Site") dated July
2019,and any other work reasonably related to the mitigation,response,removal or risk-based remediation
of trichloethylene(TCE)or other contamination that is the subject of remediation at the Site and specifically
identified in the CAD, or that the parties mutually agree is reasonably necessary to protect human health
and the environment,including but not limited to(collectively,the"Remediation Condition"):
A. The use of KDHE-approved engineering or institutional controls, where appropriate, to
disrupt exposure pathways and protect health and the environment;
B. Receipt of any encountered groundwater into the City's sanitary sewer system, unless
following testing by the Developer, it is determined that encountered groundwater exceeds the City's
discharge limits for contaminants identified in the CAD, in which case the City will store(as necessary),
treat,and discharge encountered groundwater once City requirements have been met;
C. Treatment and/or disposal of any soil that,following testing by the Developer,is shown to
exceed the numeric limits for contaminants identified in the CAD;
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D. Installation and construction of any vapor barriers,vapor mitigation systems or other vapor
remediation work that the parties mutually agree is necessary to protect the health and safety of construction
workers or occupants of the Project.
E. Cooperate with Developer's environmental consultants and make the City's environmental
consultants available at reasonable times to facilitate the exchange of information, sampling data,
investigation reports,groundwater flow maps and exposure pathways,and other documentation pertaining
to the investigation and remediation work previously conducted or planned for completion at and around
the Site;
F. Provide reasonable advance notice to Developer of the date,time and location of any access
to the Property to perform any of the investigation or remediation work described herein and conduct such
work in a manner and at times that will not unreasonably interfere with Developer's use of the Property;
G. Cooperate and coordinate with Developer concerning the locations of any monitoring
wells, injection wells, construction equipment or other equipment or infrastructure required for the City's
environmental investigation or remediation work described herein so as not to unreasonably interfere with
Developer's plans to design,construct or operate the Project;and
H. Any other work that the parties mutually agree is reasonably required to mitigate or
remediate TCE or other contamination and is approved by the City,to the extent required by KDHE or that
the parties mutually agree to be necessary to protect human health and the environment.
3.04 Scope of Project—Phased Development. This Development Agreement covers the work
undertaken for the development of the Phase One Project. Developer shall construct, and the Phase One
Project shall include,the items set forth in subsections(A-C)below.City,in its discretion,may pursue the
widening of Magnolia Road and roundabout installation(the "City Infrastructure Improvements"), at
City's cost.
A. Phase One Apartments: An apartment complex of no less than two hundred fifty (250)
Phase One Apartments on the Phase One Property, including the amenities below. The City understands
that Phase One Apartments will not be developed on the Phase One Property if the Phase One Property
does not receive City entitlements that permit development of multifamily residential Units thereon.
Notwithstanding any other provisions of this Agreement(including, without limitation, Section 7.02(B)),
the Phase One Property will only be developed for the Phase One Apartments unless the City, in its sole
and absolute discretion,approves use of the Phase One Property for another purpose.
i. Resident clubhouse, pickleball court, basketball court, children's
playground, barbecue cookout area, and dog park, access to which shall be permitted and
lawfully created of public record for the benefit of owners,tenants,licensees and permittees
of the Phase One Project and Future Phases that are developed on the Property
B. Developer Infrastructure Improvements: Horizontal and infrastructure improvements
including streets, paving, traffic signalization, curbs, sidewalks, water, sanitary sewer, storm sewer,
drainage improvements,and other utilities,to and within the Phase One Property and Property,to serve the
Phase One Project, excluding the City Infrastructure Improvements (the "Developer Infrastructure
Improvements").
C. Solar Car Ports.Developer shall use reasonable best efforts to apply for applicable federal
funding for Solar Car Ports for Phase One.
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K _.
3.05 Project Timing—Milestones. The milestones and requirements for the acquisition of the
Property and the development, construction, furnishing, equipping and opening of the Phase One
Apartments shall be as follows:
i. The Developer shall, within ten(10) days after the Effective Date of this
Agreement, acquire fee title to any portion of the Property not owned by Developer as of
the Effective Date. If Developer fails to timely make such acquisitions and continue
ownership thereof as required by this Agreement,City may,in its sole discretion,terminate
Developer's development rights under this Agreement with respect to any Phase of the
Phase One Project for which land as not been already acquired, subject to all applicable
cure periods as set forth in Section 7.02.A;
ii. The Developer must,on or before fifteen(15)days after the Effective Date
of this Agreement, submit an Entitlement Application to the City for annexation approval
by the City of the Property;
iii. The Developer must, on or before fifteen (15) days after the Effective
Date of this Agreement, submit to the City an Entitlement Application for a preliminary
plat approval for the Property;
iv. The Developer must, on or before thirty (30) days after approval by the
City of the preliminary plat for the Property, submit to the City an Entitlement Application
for approval of the Developer Infrastructure Improvements plan for the Property;
v. The Developer must, on or before forty-five (45)days after the Effective
Date of this Agreement, submit to the City Entitlement Applications for rezoning, and
development plan approval for the Property;
vi. The Developer must, on or before fifteen(15) days after approval of the
last of the Entitlement Applications required by this Section 3.05,submit to the City for its
review and approval an application for a building permit for the Phase One Project
("Building Permit"),which shall include construction plans for the first seventy-two(72)
units of the Phase One Apartments and Developer Infrastructure Improvements;
vii. The Developer must, on or before forty-five (45) days after approval of
the last of the Entitlement Applications required by this Section 3.05, submit to the City
for its review and approval construction plans for the last one hundred and seventy-eight
(178)units of the Phase One Apartments(together with the construction plans for the first
seventy-two (72) units of the Phase One Apartments and Developer Infrastructure
Improvements,the "Construction Plans");
viii. The City must,prior to the Commencement Date,satisfy all provisions of
the Remediation Condition(as defined in Section 3.03)which can be satisfied prior to such
Commencement Date(provided that the foregoing shall not relieve City of the obligation
to satisfy all continuing provisions of the Remediation Condition throughout the Term of
this Agreement);
ix. The Developer shall,not later than thirty(30)days after the City approval
of all Entitlement Applications and issuance of the Building Permit: (A)deliver to its
general contractor a notice to proceed under its principal construction contract; and (B)
cause the general contractor to fully mobilize to commence construction of the Phase One
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Project(the date of the occurrence of the last of items(A) and (B), the"Commencement
Date");
x. The Developer must on or before January 1, 2025 have(i)complied with
all provisions of Section 3.06.F(to the extent that any Units were so occupied during the
preceding year)and(ii)entered into a binding lease or operating agreement for the Phase
One Apartments with a qualified apartment operator or management company,reasonably
approved in advance by City,and not thereafter changed without City's reasonable consent
and approval prior to the tenth (10th) anniversary of the date the Phase One Project is
Substantially Complete, provided that all approvals and consents required under this
section shall not be unreasonably withheld,conditioned,or delayed,
xi. Developer, before commencement of construction of the Phase One
Project must have closed on all financing(debt and equity)required to develop and open
the Phase One Apartments;
xii. Developer must Substantially Complete construction of the first seventy-
two (72)Phase One Apartments on or before the date which is five hundred forty (540)
days after Commencement Date;
xiii. Developer must Substantially Complete construction of the last one
hundred and seventy-eight(178)Phase One Apartments on or before the date which is nine
hundred(900)days after the Commencement Date;and
xiv. The Phase One Apartments must be offered for occupancy by residential
tenants no later than nine hundred(900)days after the Commencement Date.
3.06 Rent Limits. The City and the Developer agree to establish rent restrictions for the Phase
One Apartments as of the Effective Date,subject to consumer price index adjustments for each subsequent
twelve (12) month period and ending four(4) years following Substantial Completion of the Phase One
Project.The Phase One Apartments will be subject to the following rent restrictions:
A. One(1)bedroom Units comprised of five hundred and sixteen square feet(516 sq.
ft.): not more than Eight Hundred Dollars per month ($800/mo.) commencing on the Effective
Date;and
B. Two(2)bedroom Units comprised of seven hundred sixty-two square feet(762 sq.
ft.): not more than Nine Hundred and Fifty Dollars per month ($950/mo.) commencing on the
Effective Date.
C. The rent restrictions listed in Sections 3.06.A and B above may be adjusted on each
anniversary of the Effective Date based on the Price Index(as hereafter defined) on the first(1St)
day of the month following such anniversary(each being an"Adjustment Date",collectively,the
"Adjustment Dates")as follows:
i. For the first Adjustment Date(based upon the one(1)year anniversary of
the Effective Date), the rent restrictions listed in Sections 3.06A and B above shall be
increased by the percentage change over the thirteen(13)month period between the Price
Index for the month which is one(1)month prior to the Effective Date and the Price Index
used for the month which is one(1)month prior to the first Adjustment Date.
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ii. For all subsequent Adjustment Dates, the rent restriction in effect
immediately prior to each such Adjustment Date shall be increased by the percentage
change over the twelve (12) month period between the Price Index used for the month
which was one (1) month prior to the immediately preceding Adjustment Date, and the
Price Index for the month which is one(1)month prior to the applicable Adjustment Date.
iii. "Price Index" means the Consumer Price Index as published by the
United States Department of Labor's Bureau of Labor Statistics or any successor agency
and identified as follows:
Series Id: CUUR0000SEHA
Series Title: Rent of primary residence in U.S. city average, all urban
consumers,not seasonally adjusted
Area: U.S.city average
Item: Rent of primary residence
Base Period: 1982-84=100
In the event that the Price Index ceases to be published,its successor index measuring cost
of living as published by the same governmental authority which published the Price Index
shall be substituted and any necessary reasonable adjustments shall be made by Developer
and City in order to carry out the intent of this Section. In the event there is no successor
index measuring cost of living, Developer and City shall mutually agree to a reasonable
alternative price index measuring cost of living that will constitute a reasonable substitute
for the Price Index.
For the avoidance of doubt, Exhibit I provides an example that illustrates the calculation and
application of the rent adjustment formula and process described above.
D. Notwithstanding any provision of this Agreement to the contrary,in the event that
the rent restrictions listed in Sections 3.06.A and B above would result in Developer maintaining a
debt service coverage ratio on its first mortgage of less than 1.25, Developer may further increase
rent at any time, in its sole discretion, in an amount required to maintain a 1.25 debt service
coverage ratio. In the event that the Developer elects to increase rent pursuant to Section 3.06.D,
the Developer shall deliver an operating statement for the Phase One Project to the City. Such
operating statement will cover the most recent twelve (12) month period of operations and will
demonstrate that revenue to debt coverage ratio, as calculated based upon the operating statement
formula attached hereto as Exhibit H or such other formula reasonably required by Developer's
lender,was less than 1.25.
E. The rent restrictions listed in Section 3.06.A and B above shall not apply to any
amounts, charges, or fees charged in connection with utilities and services supplied to the Phase
One Apartments, including but not limited to electricity, water, telephone, gas, pet rent, covered
parking, cable, interne, and any concierge services, but shall apply to services of trash, security,
parking,and maintenance.
F. For a period of four(4) years following the Substantial Completion of the Phase
Phase One Project, Developer shall provide to City quarterly reports detailing the rent and
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occupancy rates of all Units owned and managed by Developer in the Phase One Project for the
preceding year. Quarterly reports shall be delivered to the City within ninety(90)days of the end
of each quarter with respect to the information for such preceding quarter.
3.07 Financing Documents.
A. The Developer shall provide to the Financial Advisor copies of Financing
Documents which demonstrate to the City's satisfaction, in its sole discretion, the Developer has
debt and equity adequate to complete the Phase One Project. Upon receipt of all Financing
Documents, the City shall notify Developer within thirty (30) days whether the City is satisfied
with the Financing Documents.
B. The Parties acknowledge that the Commencement Date stated in Section 3.05 may
require modification based on causes beyond the control of the Developer(including but not limited
to City's satisfaction of the Remediation Condition's that can be satisfied prior to the
Commencement Date and City's review and approval of the Financing Documents);provided that,
the dates in Section 3.05 relative to the filing of Entitlement Applications and Substantial
Completion of Phase One Project are firm dates and requirements unless waived by the City in its
sole and absolute discretion.
C. The Developer shall:
i. Submit to the City Construction Plans for review and consideration for
approval pursuant to the City building codes. Construction Plans may be submitted in
phases or stages. All Construction Plans shall be in sufficient completeness and detail to
show that construction will be in conformance with the Project and this Agreement and as
required by Applicable Law;and
ii. Before commencement of construction of any portion of the Phase One
Project,the Developer and City shall,at Developer's expense,complete plan revisions and
consideration for approval such that permits required by the City, and any other
governmental agency having jurisdiction,to commence initial work on the component site
(e.g. grading, footings, foundations, etc.) can be issued to Developer (or its contractors).
Thereafter, all remaining permits and approvals shall be obtained by the Developer and
may be obtained for each the Phase One Project in phases corresponding to particular
stages of development. The City shall cooperate with and provide all usual assistance to
Developer in securing these permits and approvals for the Phase One Project, and shall
diligently process,review,and consider all such permits for approvals as may be required
by law.
D. Prior to the Commencement Date, Developer shall provide to the City or the
Financial Advisor evidence of the following(the "Financing Documents"):
i. A certificate of good standing for the Developer issued by the State,a true
and correct copy of Developer's operating agreement, and an officer's certification of the
members of Developer (if such members are not identified in Developer's operating
agreement)(collectively,"Developer's Organizational Documents");
ii. A guaranteed maximum price construction contract for(the "GMP")for
the Phase One Project;
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iii. A construction loan commitment letter that contains only customary and
reasonable closing conditions in form and content reasonably acceptable to the City (the
City's approval of which may be conditioned on the loan's closing),Developer equity,and
all other applicable sources of financing the provider of which is obligated to provide,each
in amounts that in the aggregate meet or exceed the GMP and satisfy the matching funds
requirements of the State Agreement. The provision to provide a construction loan
commitment shall not relieve the Developer of the requirement to provide the final
construction loan documents for review pursuant to Section 3.07.D.vi;
iv. A letter from an insurer in form and content reasonably acceptable to the
City committing to issue at closing policies for liability, casualty,workers compensation,
and other insurance in types and amounts required under Article IV hereto;
v. Developer will further advise the Financial Advisor as to the identity of
the Principals, members, partners, officers and principal executives or other key
personnel or investors of such Developer and any transfers of interests among such parties;
vi. Developer will cooperate with the City and its advisors on any requested
fmancial due diligence contemplated under this Section 3.07.D. and the City shall have
the right to have the Financial Advisor confidentially conduct full due diligence relating
to Developer for the purpose of reviewing the Financing Documents and ensuring that
Developer has sufficient equity and other applicable sources of financing to complete the
Phase One Project;provided such outside financial consultant executes a confidentiality
agreement in form and substance reasonably acceptable to Developer;
vii. Complete Budget for the Phase One Project and a sources and uses
allocation;
viii. Detailed construction and development schedule(provided that the same
is being provided for informational purposes only and shall not be construed as to modify
the performance milestones in Section 3.05 above or create any additional performance
milestones under this Agreement); and
ix. A completion guarantee by Developer in the form attached hereto as
Exhibit F for the benefit of the City for the Phase One Project.
E. Subject to any and all Force Majeure extensions, the Developer shall commence
construction of the Phase One Project on or before the Commencement Date in a good and
workmanlike manner in accordance with the terms of this Agreement.
F. Developer(i)upon request from the City but no more than once per calendar year,
and(ii)within thirty(30)days after any change in the membership of the Company, shall provide
City with the Developer's then current Organizational Documents.
3.08 Project Zoning,Planning,Platting,and Construction.
A. Conformance with Agreement. The Phase One Project shall be developed,and the
Phase One Project constructed,in accordance with this Agreement.
B. Zoning, Planning and Platting. The City and Developer agree to collaborate on
any zoning, planning, and platting applications submitted in accordance with Applicable Laws by
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the Developer in due course and good faith. Matters to be considered will be consistent and
compliant with design and construction standards set forth in any Covenants, Conditions, and
Restrictions of record ("CCRs")regarding the Property,provided such CCRs are of record as of
the Effective Date of this Agreement. The City shall cooperate with Developer so that all such
applications as to a specific portion of the Property may be considered,approved,and implemented.
C. Construction Plans. Developer shall submit Construction Plans for the Phase One
Project for review and approval pursuant to the City's building code. Construction Plans may be
submitted in phases or stages. All Construction Plans shall be in sufficient completeness and detail
to show that construction will be in conformance with the Phase One Project and this Agreement.
D. Construction Permits and Approvals. Before commencement of construction or
development of any buildings,structures or other work or improvements by Developer,Developer
shall, at its own expense, secure or cause to be secured any and all permits and approvals (at the
standard fees and expenses set forth in the City of Salina Comprehensive Fee Schedule)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. The City shall cooperate with and
provide all usual assistance to Developer in securing these permits and approvals, and shall
diligently process,review,and consider all such permits and approvals as may be required by law;
except provided that the City shall not be required to issue any such permits or approval for any
portion of the Phase One Project not in conformance with the Phase One Project or this Agreement
as Applicable Law.
E. 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 the City's Salina Code; any standard or model code or ordinance
incorporated by reference,as amended,pursuant to K.S.A. 12-3009;and applicable state law. The
Developer acknowledges that satisfaction of certain conditions contained in this Agreement may
require the reasonable exercise of the City's discretionary zoning authority by the City's Governing
Body in accordance with the City's zoning ordinance and Applicable Laws.
F. Periodic Review. The City and the City's engineer shall have the right to review
in a monthly project team meeting the design and construction of the Phase One Project to
determine that it is being designed, constructed and completed in accordance with this
Development Agreement, the Construction Plans, and all Applicable Laws. If the Phase One
Project is not being designed or constructed in accordance with this Development Agreement,the
the Construction Plans, or all Applicable Laws, after consulting with the Developer, the City's
engineer shall promptly deliver written notice to the Developer and the Developer shall promptly
correct such deficiencies.
G. Costs and Fees. Each party will bear their own legal and consulting expenses and
soft costs with respect to the Phase One Project.
3.09 Rights of Access. Representatives of the City shall have the right to access the Phase One
Project, without charges or fees, at normal construction hours during the period of construction, for the
purpose of ensuring compliance with this Agreement, including, but not limited to, the inspection of the
work being performed in constructing,renovating,improving,equipping,repairing and installing the Phase
One Project,and the right to order a work stoppage for any violation of this Agreement or Applicable Law,
so long as it complies with all safety rules. Except in case of emergency, prior to any such access, such
representatives of the City will check in with the on-site manager. Such representatives of the City shall
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carry proper identification,shall insure their own safety,assuming the risk of injury,and shall not interfere
with the construction activity,except pursuant to Applicable Law.
3.10 Certificates of Substantial Completion. Promptly after Substantial Completion of the
Phase One Project, or any Unit in accordance with the provisions of this Agreement, the Developer may
submit a Certificate of Substantial Completion to the City. Substantial Completion shall mean that the
Developer or its permitted successor or assignee,shall have been granted a certificate of occupancy by the
City building official and shall have completed all work as required by this Agreement with respect to the
Phase One Project or portion thereof The Certificate of Substantial Completion shall be in substantially
the form attached as Exhibit C. The City shall,within ten(10)days following delivery of the Certificate of
Substantial Completion, carry out such inspections as it deems necessary to verify to its reasonable
satisfaction the accuracy of the certifications contained in the Certificate of Substantial Completion. The
City's execution of the Certificate of Substantial Completion shall constitute evidence of the satisfaction of
the Developer's agreements and covenants to construct the Phase One Project or applicable Units thereof
If, within ten (10) days after the Developer or its permitted successor or assigns obtains a certificate of
occupancy for the Phase One Project or the City fails to carry out such inspections as the City deems
necessary to verify to its reasonable satisfaction the accuracy of the certifications set forth on Exhibit C and
to notify Developer of any objections to such certifications, a Certificate of Substantial Completion shall
have been deemed submitted and the Developer shall be deemed to have satisfied all of its agreements and
covenants under this Agreement to develop the Phase One Project on the Phase One Property.
ARTICLE IV
INSURANCE AND INDEMNIFICATION
4.01 Developer Insurance-Commercial General Liability. During the Term, Developer,at
the Developer's sole expense, shall carry and maintain or cause to be carried and maintained, and pay or
cause to be paid in a timely manner the premiums for, with respect to the Phase One Project, commercial
general liability insurance providing coverage for those liabilities which is equal or broader than that
currently covered by a CGL policy (a standard ISO CGL form),naming City as an additional insured and
including at least the following hazards: (a)premises and operations; and (b) products and completed
operations; such insurance(x)to be on an"occurrence"form with a combined limit of not less than Two
Million Dollars($2,000,000.00)in the aggregate and One Million Dollars($1,000,000.00)per occurrence.
Developer shall deliver to City a true and correct certificate of insurance evidencing such coverage prior to
the commencement of any work on the Phase One Project. Developer at Developer's sole expense shall
also carry and maintain or cause to be carried and maintained, and pay or cause to be paid in a timely
manner the premiums for, with respect to the Phase One Project, (aa) independent contractors; and
(bb)blanket contractual liability for all legal contracts, on an"occurrence" form with a combined limit of
not less than Two Million Dollars ($2,000,000.00) in the aggregate and One Million Dollars
($1,000,000.00) per occurrence. If Developer has caused to be developed the entirety of the Property or
Developer has otherwise waived in writing Developer's right to develop all remaining undeveloped portions
of the Property, and a certificate of occupancy has been issued for the Phase One Project that Developer
has caused to be developed on the Property,then Developer's obligations under this Section shall terminate.
4.02 Developer Insurance - Builder's Risk. Developer shall, obtain and maintain the
following:
A. As used in this Section, "Replacement Value" means an amount sufficient to
prevent the application of any co-insurance contribution on any loss but in no event less than 100%
of the actual replacement cost of the Phase One Project, including additional administrative or
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managerial costs that may be incurred to effect the repairs or reconstruction,but excluding costs of
excavation,foundation and footings.
B. The Developer shall comply with the insurance requirements set forth in Article
unless the Developer requests approval of substitute insurance requirements, based on insurance
required by one or more lenders to the Developer, and the City approves such request in writing.
The Developer shall keep the Phase One Project continuously insured against such risks and in
such amounts, with such deductible provisions as are customary in connection with the operation
of facilities of the type and size comparable to the Phase One Project. The Developer, at the
Developer's sole expense,shall carry and maintain or cause to be carried and maintained, and pay
or cause to be paid in a timely manner the premiums for at least the following insurance with respect
to the Phase One Project:
i. Builder's completed value risk insurance and, on and after the completion
date of the Phase One Project, property insurance, in each case (a) providing coverage
during the construction of the Phase One Project for financial losses of the Developer
relating to continuing expenses,caused by property damage during the construction of the
Phase One Project, (b) providing coverage (including increased costs from changes in
building laws, demolition costs and replacement cost coverage) for those risks which is
equal or broader than that currently covered by an all—risk policy covering all
improvements, fixtures and equipment in the Phase One Project,(c)containing an agreed
amount endorsement with a waiver of all co-insurance provisions, (d) providing for no
deductible in excess of One Hundred Thousand Dollars($100,000)(as increased each year
by the increase in the CPI,if any, for the preceding calendar year)for all such insurance
coverage, and (e) covering, without limitation, loss, including, but not limited to, the
following:
1. fire,
2. extended coverage perils,
3. vandalism and malicious mischief,
4. water damage,
5. debris removal,
6. collapse,and
7. comprehensive boiler and machinery insurance,
in each case on a replacement cost basis in an amount equal to the Phase One Project's
Replacement Value;and
ii. Developer shall deliver to City a true and correct certificate of insurance
evidencing such coverage prior to the commencement of any work on the Phase One
Project.
4.03 Indemnification.
A. Developer shall indemnify and hold the City,its employees(as defined under the
Kansas tort claims act,as amended),agents,independent contractors,and consultants(collectively,
the "City Indemnified Parties") harmless from and against any and all suits, claims, costs of
defense,damages, injuries, liabilities,judgments,costs and/or expenses, including court costs and
reasonable attorneys' fees, resulting from, arising out of, or in any way connected with, but
excluding any actions brought by the City against Developer (other than actions to enforce an
indemnification by Developer under this Agreement):
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i. The Developer's actions and undertaking in constructing and operating the
Phase One Project;
ii. The negligence or willful misconduct of the Developer, its employees,
agents or independent contractors and consultants in connection with the management,
design, development,redevelopment and construction of the Phase One Project;
iii. Any assertion and any claim by the State for payment or reimbursement
under the State Agreement; and
iv. Any delay or expense resulting from any litigation filed against the
Developer by any member or shareholder of the Developer, any prospective investor,
prospective partner or joint venture partner, lender, co-proposer, architect, contractor,
consultant or other vendor.
Developer shall indemnify and hold harmless the City Indemnified Parties from and against
any and all suits, claims, costs of defense, damages, injuries, liabilities,judgment, costs and/or
expenses including court costs and reasonable attorneys' fees resulting from arising out of, or in
any way connected with the construction, improvement or building of any improvements on
Property if such construction, improvement or building is performed by a contractor or
subcontractor engaged or instructed by the Developer to perform such work.
This Section shall not apply to willful misconduct or negligence of the City or its officers,
employees or agents. This Section includes,but is not limited to,any repair,cleanup,remediation,
detoxification, or preparation and implementation of any removal, remediation,response, closure
or other plan (regardless of whether undertaken due to governmental action) concerning any
hazardous substance or hazardous wastes including petroleum and its fractions as defined in(i)the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"; 42
U.S.C. Section 9601, et seq.), (ii) the Resource Conservation and Recovery Act ("RCRA"; 42
U.S.C. Section 6901, et seq.)and (iii)K.S.A. 65-3401 et seq. and all amendments thereto, at any
place where Developer owns or has control of real property pursuant to any of Developer's
activities under this Agreement. The foregoing indemnity is intended to operate as an agreement
pursuant to Section 107(e)of CERCLA to assure,protect,hold harmless and indemnify City from
liability.
B. The City shall indemnify and hold the Developer, its Principals, members,
employees, agents, independent contractors, and consultants (collectively, the "Developer
Indemnified Parties") harmless from and against any and all suits, claims, costs of defense,
damages, injuries, liabilities, judgments, costs and/or expenses, including court costs and
reasonable attorneys' fees, resulting from, arising out of, or in any way connected with, but
excluding any actions brought by the Developer against the City, the negligence or willful
misconduct of the City, its employees, agents or independent contractors and consultants in
connection with the Phase One Project.
This Section 4.03.B shall not apply to willful misconduct or negligence of
Developer or its officers,employees or agents. This Section 4.03.B includes,but is not limited to,
any repair,cleanup,remediation,detoxification,or preparation and implementation of any removal,
remediation,response,closure or other plan(regardless of whether undertaken due to governmental
action) concerning any hazardous substance or hazardous wastes including petroleum and its
fractions as defined in (i) CERCLA, (ii)RCRA, and (iii) K.S.A. 65-3401 et seq. and all
amendments thereto, at any place where the City owns or has control of real property pursuant to
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any of the City's activities under this Agreement. The foregoing indemnity is intended to operate
as an agreement pursuant to Section 107(e) of CERCLA to assure, protect, hold harmless and
indemnify Developer from liability.
ARTICLE V
PROJECT FINANCING
5.01 Sources of Funding. The Parties contemplate that a portion of the costs of the Phase One
Project (the "Project Costs which are eligible for reimbursement under the State Agreement and this
Agreement(the"Eligible Costs"),may be financed by a portion of certain revenues available for the Project
(collectively,the"Incentive Funds")from one or more economic development incentive programs(each
an"Incentive")including,but not limited to,the following:
A. State reimbursement of Thirteen Million Dollars($13,000,000) for the Phase One
Project(the"State Agreement Funds"),subject to and as provided in the State Agreement and as
set forth in Sections 5.04-5.09 hereof;and
B. Industrial Revenue Bonds by the City issued pursuant to K.S.A. 12-1741 et seq.
such that each residential housing Unit shall be eligible to receive (i) sales tax exemption on
construction materials and (ii)ten(10)year, One hundred percent(100%)property tax abatement
(the `Bonds"). In the event that the City Commission has not approved a resolution of intent to
issue Bonds for Phase One within forty-five(45)days after the Effective Date of this Agreement,
Developer shall have the right to terminate this Agreement,in which case the parties shall have no
further obligations to each other hereunder.
5.02 Developer Project Budget.
A. Attached hereto as Exhibit G is the budget(the"Budget")of the estimated Project
Costs including Eligible Costs, and identified under which Incentive reimbursement of each
Eligible Cost would be requested. Payment or reimbursement of Eligible Costs must be approved
by the City.
B. The City acknowledges that the items included in the Budget are estimates only
and Incentive Funds or proceeds of the Bonds may be used by the Developer to finance any Eligible
Cost. No third-party,other than the Developer or City, shall be entitled to use or direct the use of
the Incentive Funds.
5.03 Statutory and State Agreement Compliance. Developer and the City hereby agree that
they will comply with all reasonable requirements including any statutory and State Agreement
requirements,or as may be associated with the issuance,sale,purchase and delivery of the Bonds and shall
cooperate with one another to fully effectuate the terms,distributions,and repayments of the same.
5.04 Documentation of Matching Funds Under State Agreement. With respect to the
reimbursement of Eligible Costs from the State Agreement Funds, the City shall seek reimbursement of
eligible expenses as set forth in the State Agreement. In order to effectuate the release of State Agreement
Funds to the City,Developer shall submit to City, in the form attached hereto as Exhibit J(or such other
form required by the State), documentation reflecting that the required matching funds under the State
Agreement are fully committed and available for use (the "Matching Fund Documentation"). Once
received, City shall submit such Matching Fund Documentation to the State so that tranches of the State
Agreement Funds are available for reimbursement. The City shall establish a project account (the "State
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Grant Account") which shall be administered by the City or its designee. Upon receipt of any State
Agreement Funds, the City shall promptly deposit such State Agreement Funds into the State Grant
Account, which shall be utilized solely to disburse State Agreement Funds in accordance with Sections
5.05-5.07 of this Agreement in order to reimburse Developer for Eligible Costs.
5.05 Certification of Expenditures.Prior to and as a condition of the reimbursements of any
proceeds of any Incentive Funds,the Developer shall certify any costs for which it seeks reimbursement in
accordance with any requirements of the State with respect to the State Agreement and also in accordance
with the following:The Developer shall submit to the City a Certification of Expenditures in the form
attached hereto as Exhibit D setting forth the amount for which reimbursement is sought and an itemized
listing of Phase One Project Eligible Costs. Developer may submit Certification of Expenditures monthly
as costs are incurred.
A. Each Certification of Expenditures shall be accompanied by such bills, contracts,
invoices, and other evidence as the City shall reasonably request to evidence costs have been
actually incurred.
B. Developer may submit one or more Certification of Expenditures to be reimbursed
from Bond proceeds,Incentive Funds,or both,regardless of whether such reimbursement actually
occurs during the Term or after expiration thereof, subject to the requirements of the State
Agreement and all Applicable Laws.
5.06 Reimbursement from State Agreement Funds. The City shall have thirty(30)days after
receipt of any Certification of Expenditures to review and respond by written notice to the Developer. If
the submitted documentation demonstrates that: (i)the Certification of Expenditures shows payment or
pending payment by the Developer of the Eligible Costs; (ii)the expense was incurred; and (iii)
the Developer is not in material default under this Agreement,then the City shall approve the Certification
of Expenditures and the Developer shall be reimbursed pursuant to the terms of this Agreement. If the City
reasonably disapproves of the Certification of Expenditures,the City shall notify the Developer in writing
of the reason for such disapproval within such thirty(30)day period.If approved,City shall disburse State
Agreement Funds to Developer within ten(10)days of approval.
5.07 Conditions to Reimbursement of State Agreement Funds. State Agreement Funds will
and may only be used to reimburse Eligible Costs to the extent of: (i) a maximum of$1,000,000 for
Developer's land acquisition of the Phase One Property and Future Phase Property (but if environmental
contaminants prevent development of the Phase One Property,then such amount shall be adjusted to include
all acquisition costs of alternative sites for the Phase One Project as approved by the City, such approval
not to be unreasonably withheld or delayed), (ii) $4,000,000 for Developer Infrastructure Improvements
(but if environmental contaminants prevent development of the Phase One Project Site,then such amount
shall be adjusted to include all Developer Infrastructure Improvement costs of alternative sites as approved
by the City, such approval not to be unreasonably withheld or delayed), and (iii) per Unit maximum of
$32,000(as may be adjusted above if the Phase One Property is not developable)for each Unit. If the Phase
One Property is acquired, Developer shall not have the right to draw any portion of the $32,000 per Unit
(maximum)State Agreement Funds until Developer has completed all of:
(a) Acquisition of the Property and continuing ownership by
Developer of fee title to all of the Phase One Property;
(b) Subdivision,platting,or lot split of the Property which will not be
improved with the Phase One Project(the"Future Phases Property");
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(c) Construction and completion of all Developer Infrastructure
Improvements for the Phase One Project;and
(d) Conveyance to the City by special warranty deed of marketable
fee title to the Future Phases Property free and clear of all financial liens,
mechanic's and materialmen's liens, or other encumbrances not expressly
consented to by the City,which such title will be held by the City until conveyance
thereof pursuant to a development agreement with respect to the Future Phases
Property,if any such development agreement is hereafter entered into by City and
Developer by February 15,2024(such development agreement,a"Future Phases
Development Agreement"). In the event the Future Phases Property is not
reconveyed by the City pursuant to a Future Phases Development Agreement due
to the fact that no future development will be developed on the Future Phases
Property, then the City may utilize the Future Phases Property for such other
development or purposes as the City, in its sole and absolute discretion,
determines, which may include development or use by the City or a successor or
assign selected by the City.
5.08 Repayment of State Agreement Funds.In the event that the State requires reimbursement
or refund from the City to the State of State Agreement Funds with respect to any default or termination
under the State Agreement,or the failure of any condition or requirement of the State Agreement,as a result
of Developer's fraud or application of State Agreement funds for a use that is ineligible under the State
Agreement, Developer agrees that it will be liable to the City for any such reimbursement or refund paid
by the City to the State and pay such amounts to the City within fifteen(15) days following the date of
delivery to Developer of City's notice of demand for such reimbursement. Developer further agrees that it
will be liable to the City for any reimbursement or refund paid by the City to the State for failure to utilize
the matching funds in a manner consistent with the Grant Administration Plan and Budget (as defined in
the State Agreement)and which results in a requirement to repay an amount equal to the difference between
the amount of grant funds that were provided and the amount of matching funds utilized for the Phase One
Project, and pay such amounts to the City within fifteen (15) days following the date of delivery to
Developer of City's notice of demand for such reimbursement. Any misapplication by Developer of State
Agreement Funds to anything other than Eligible Costs permitted by the State Agreement will be deemed
a forfeiture by Developer to require, claim, or demand that City to make any disbursement of State
Agreement Funds under this Agreement.
5.09 Project Fund. Upon the issuance of any Bonds,a project fund(the"Project Fund")shall
be created and administered by the City or its designee. The Phase One Project Fund will be utilized solely
to disburse the Bond proceeds for Project Costs. The specifics of the issuance and repayment of the Bonds
shall be in accordance with the Bond issuance documents, to be approved by City ordinance, and in
accordance with this Agreement. Upon issuance of the Bonds, the Bond proceeds shall be disbursed in
accordance with this Agreement and the Bond issuance documents in order to pay the Project Costs.
5.10 Developer to Purchase Bonds.The Bonds shall be issued in accordance with K.S.A. 12-
1741 et seq.,shall be purchased by the Developer(and may not be sold or transferred by the Developer to
any person or entity other than to a permitted transferee of the Phase One Project contemporaneously with
the Phase One Project's transfer to such permitted transferee pursuant to Section 8.01 hereof, subject at all
times to the terms of the K.S.A. 12-1741 et seq. and the respective bond indenture). Any Bonds shall be
revenue bonds secured and repaid solely from rents payable by the Developer under the Lease executed in
connection with the issuance of the Bonds. Nothing herein shall prevent the Developer from pledging or
collaterally assigning the Bonds to a Project lender.
20
91435840.15
ARTICLE VI
6.01 Taxes, Assessments, Encumbrances and Liens. So long as the Developer owns any
portion of the Property, the Developer shall pay when due all real estate taxes and assessments related to
such property owned by the Developer, subject to any abatement due to issuance of the Bonds. Nothing
herein shall be deemed to prohibit the Developer from contesting the validity or amounts of any tax,
assessment, encumbrance or lien, nor to limit the remedies available to the Developer in respect thereto.
The Developer shall promptly notify the City in writing of a protest of real estate taxes or valuation of the
Developer's portion of the Property. Developer will not financially encumber all or any portion of the
Property which is acquired or improved using funds sourced from the State, including but not limited to
funds generated pursuant to the the State Agreement or any Bonds,until: (i)the Developer has completed
financing to construct Phase One; and(ii) is ready to commence construction of the Phase One Project as
required by this Agreement and proceed with due diligence to completion thereof in accordance with the
terms of this Agreement.
ARTICLE VII
DEFAULTS AND REMEDIES
7.01 Default by City.
A. City Default Defined. Subject to extensions of time due to Force Majeure, if the
City fails to perform any of its obligations within the time frames set forth herein or otherwise is in
default of this Agreement and does not cure such default within thirty(30)days after written notice
from Developer specifying the default(or if the default is not susceptible of cure within thirty(30)
days, does not commence and diligently proceed to cure such default during such 30-day period
and thereafter prosecute such cure to completion), then the City shall be in default (a "City
Default").
B. Developer Remedies upon City Default. Whenever any City Default shall have
occurred and be continuing, subject to applicable cure periods, the Developer may pursue any
remedy at law and in equity, including specific performance.
7.02 Default by Developer.
A. Developer Default Defined. Subject to extensions of time due to Force Majeure,
if the Developer fails during the Term to perform any of its obligations within the time frames set
forth herein or otherwise is in default of this Agreement or the Completion Guaranty during the
Term and does not cure such default within thirty (30) days after written notice from the City
specifying the default (or if the default is not susceptible of cure within thirty(30) days, does not
commence and diligently proceed to cure such default during such 30-day period and thereafter
prosecute such cure to completion),then the Developer shall be in default(a"Developer Default").
B. City Remedies upon Developer Default. Whenever any Developer Default shall
have occurred and be continuing, subject to applicable cure periods,the City may(1)pursue any
remedy at law and in equity including termination, specific performance, or enforcement of any
completion guaranties,except as provided below;(2)terminate this Development Agreement with
respect to the Phase One Project;and/or(3)with respect to the Phase One Project,refuse to consider
any further Certification of Expenditures and make any disbursements for the Phase One Project
until such Developer Default is cured; (4) pursue enforcement of the Completion Guaranty; (5)
with respect to any property acquired with State Agreement Funds for the Project for which no
21
91435840.15
construction loan has closed or construction has materially commenced by the deadline(s)therefor
under this Agreement, the City may demand and require, and the Developer shall, convey such
property to the City for consideration in the amount of One Hundred Dollars($100)free and clear
of any liens or encumbrances not previously approved by the City that were recorded after
Developer acquired such property and not reasonably required in connection with the Construction
Plans(but in any event free and clear of any third party monetary liens caused by Developer).
7.03 Legal Actions. Any legal actions related to or arising out of this Agreement must be
instituted in the Circuit Court of Saline County, Kansas or, if federal jurisdiction exists, in the Federal
District Court for the District of Kansas.
7.04 Rights and Remedies Are Cumulative. Except as otherwise expressly stated in this
Agreement, the rights and remedies of the Parties are cumulative, and the exercise by a Party of one or
more of such rights or remedies shall not preclude the exercise by it,at the same or different times, of any
other rights or remedies for the same default or any other default by the other Party.
7.05 Inaction Not a Waiver of Default. Any failures or delays by a Party in asserting any of
its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or
remedies,or deprive such Party of its right to institute and maintain any action or proceedings which it may
deem necessary to protect,assert or enforce any such rights or remedies.
7.06 Enforced Delay; Extension of Times of Performance.
A. In addition to specific provisions of this Agreement, performance by a Party
hereunder shall not be deemed to be in default, and all performance and other dates specified in
this Agreement shall be extended,where the Party seeking the extension has acted diligently and
delays or defaults are due to delay or default of the other Party or Force Majeure.
B. Times of performance under this Agreement may also be extended in writing by
the mutual agreement of the City and the Developer.
ARTICLE VIII
ASSIGNMENT;TRANSFER
8.01 Assignment and Transfer. The Developer, for a period of ten (10) years following
Substantial Completion of the Phase One Project, shall not sell, convey, assign or transfer all of its rights
or duties under this Agreement or ownership of fee title in the Phase One Property without the prior written
approval of the City which City may withhold or deny in its sole discretion except for (i)assignments,
transfers and conveyances of all or substantially all of Developer's rights and duties under this Agreement
or ownership of fee title of the Phase One Property to an Affiliate which does not result in a Change of
Control or(ii)a collateral assignment of all of its rights under this Agreement or the Phase One Property to
a financial institution as security for Project financing(each a"Permitted Transfer"). In the event of a
Permitted Transfer,the Developer shall nonetheless promptly provide advance written notice of the same
to the City. Notwithstanding the foregoing,no tenant or owner of a portion of the Phase One Property shall
be bound by any obligation of Developer or any other obligation hereunder solely by virtue of being a
tenant or owner of a portion of the Phase One Property;provided,however,that no transferee or owner of
the Phase One Property except Developer shall be entitled to any rights whatsoever or claim upon the
proceeds of the Bond proceeds,except as specifically authorized in writing by the Developer and consented
to in writing in advance by the City, which consent by the City shall not be unreasonably withheld,
conditioned,or delayed. Any Permitted Transfer or transfer consented to by the City shall be documented
22
91435840.15
by an assignment and assumption agreement duly executed by the transferor and transferee thereto and in
form and content approved in advance by the City.
8.02 Corporate Reorganization. Nothing herein shall prohibit (or require City approval to
allow)the Developer from forming additional development or ownership entities to replace or joint venture
with the Developer for the purpose of business and/or income tax planning; provided that such entity is an
Affiliate which is does not result in a Change of Control.
8.03 Changes in Law. In the event that during the period of ten(10)years after Substantial
Completion of Phase One the Developer notifies the City of changes in federal law or regulations(including
changes to the Internal Revenue Code) that negatively impact the profitability of the Developer's
investment in Phase One Project,the Developer may transfer Phase One to a Non-Affiliate subject to the
following restrictions:
A. In no event shall the Phase One Project or any portion thereof be transferred until
ninety percent(90%)occupancy of the rental Units has been achieved by the Developer;
B. The Non-Affiliate transferee shall meet the following minimum requirements:
1) Prior to the acquisition of the Phase One Project, the Non-Affiliate
transferee shall have a tangible net worth of at least$25,000,000;
2) Prior to the acquisition of the Phase One Project, the Non-Affiliate
transferee shall otherwise own at least 1,000 multifamily residential Units;
3) The Non-Affiliate transferee shall provide the City with clear and
convincing evidence of good character, good reputation for honesty and integrity,
experience and capability to operate a property of a similar character and size to the Phase
One Project and financial stability,all satisfactory to the City; and
C. Prior to any transfer to a Non-Affiliate,the City's consent,at its sole and absolute
discretion is required.
For any transfer of ownership,the Developer and the Non-Affiliate transferee shall cooperate in the City's
due diligence review prior to such transfer. Such review may be undertaken by the Financial Advisor.
ARTICLE IX
GENERAL PROVISIONS
9.01 Amendment. This Agreement,and any exhibits attached hereto,may be amended only by
the mutual written consent of the Parties,upon official action of the City's governing body approving said
amendment, and by the execution of said amendment by the Parties or their successors in interest. If any
provision, covenant, agreement or portion of this Agreement, or its application to any person, entity or
property, is held invalid, the Parties shall take such reasonable measures including, but not limited to,
reasonable amendment of this Agreement to cure such invalidity where the invalidity contradicts the clear
intent of the Parties in entering into this Agreement.
9.02 Additional Agreements. City and Developer agree to negotiate in good faith and execute
such further agreements as are reasonably necessary to effectuate the intent and covenants of this
Agreement, including but not limited to easements(permanent,temporary,and construction), agreements,
23
91435840.15
license agreements, recording memoranda, covenants and restrictions, joint usage agreements, and
agreements between Developer and the City.
9.03 Right to Inspect. The Developer agrees that the City,with reasonable advance notice and
during normal business hours, shall have the right and authority to review, inspect, audit, and copy, from
time to time, all of the Developer's books and records relating to reimbursement of Eligible Costs from
Incentive Funds.
9.04 No Other Agreement. Except as otherwise expressly provided herein, this Agreement
and all documents incorporated herein by reference supersede all prior agreements, negotiations and
discussions,both written and oral,relative to the Phase One Project and is a full integration of the agreement
of the Parties.
9.05 No Partnership or Joint Venture. The Parties are independent contracting parties and
nothing in this Agreement is intended to make either Party a joint venturer or partner of the other Party.
Without limiting the generality of the foregoing, no Party shall be liable for the obligations of the other
Party except as expressly set forth herein.
9.06 Severability. If any provision, covenant, agreement or portion of this Agreement, or its
application to any person, entity or property, is held invalid or unenforceable in whole or in part, this
Agreement shall be deemed amended to delete or modify, in whole or in part, if necessary,the invalid or
unenforceable provision or provisions, or portions thereof, and to alter the balance of this Agreement in
order to render the same valid and enforceable. In no such event shall the validity or enforceability of the
remaining valid portions hereof be affected.
9.07 Notice. All notices shall be in writing and sent either by certified mail, return receipt
requested, personal messenger, or overnight delivery via a national overnight service. Any notice sent by
(a)certified mail,return receipt requested shall be deemed delivered three(3)days after being deposited in
the United States mail; (b)personal messenger shall be deemed delivered when actually received; and(c)
an overnight delivery service shall be deemed delivered on the business day following the date the notice
is deposited with the overnight delivery service addressed as specified below:
To the Developer:
Salina Destination Development,LLC
Attn: Rick Worner
7400 W. 130th Street, Suite 305
Overland Park,KS 66213
Phone:(913)481-3420
Email: RickWorner@nationalrealtyadvisors.net
With a copy to:
Marcus G.Abbott
Polsinelli PC
900 West 48th Place,Suite 900
Kansas City,MO 64112
Phone:(816)572-4778
Email: mabbott@Polsinelli.com
24
91435840.15
To the City:
City of Salina,Kansas
Attn: City Manager
300 West Ash,Room 202
Salina,KS 67402-0736
Phone:785-309-5700
Email: mike.schrage@salina.org
With a copy to:
Bryan Cave Leighton Paisner LLP
Attn: Stephen S. Sparks
1200 Main Street,Suite 3800
Kansas City,MO 64105
Phone: 816-292-7882
Email: sssparks@bclplaw.com
or at such other addresses as the Parties may indicate in writing to the other.
9.08 Time of Essence. Time is of the essence of this Agreement. The Parties will make every
reasonable effort to expedite the subject matters hereof and acknowledge that the successful performance
of this Agreement requires their continued cooperation.
9.09 Survival. The terms and covenants contained in this Agreement shall not be deemed to
have merged at any closing, but will be deemed to survive any closing until this Agreement is properly
terminated in accordance with its terms.
9.10 Agreement Controls. This Agreement specifies the rights, duties and obligations of the
City and Developer with respect to constructing the Phase One Project,the payment of Eligible Costs and
all other methods of implementing the Phase One Project. Except as otherwise expressly provided herein,
this Agreement supersedes all prior agreements,negotiations and discussions relative to the subject matter
hereof and is a full integration of the agreement of the Parties.
9.11 Required Disclosures. The Developer shall immediately notify the City of the occurrence
of any material event which would cause any of the information furnished to the City by the Developer in
connection with the matters covered in this Agreement to contain any untrue statement of any material fact
or to 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.
9.12 Tax Implications. The Developer acknowledges and represent 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.
9.13 Kansas Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of Kansas.
9.14 Counterparts. This Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same agreement.
25
91435840.15
9.15 Recordation of Agreement. A memorandum of this Agreement in substantially the same
form as attached as Exhibit E shall be recorded in the real property records of Saline County,Kansas. The
Parties shall each pay half of such recording costs.
9.16 Consent or Approval. Except as otherwise provided in this Agreement,whenever consent
or approval of either Party is required, such consent or approval shall not be unreasonably withheld,
conditioned,or delayed.
9.17 Non-liability. No recourse shall be had for the reimbursement of the Eligible Costs or for
any claim based thereon or upon any representation, obligation, covenant or agreement contained in this
Agreement against any past, present or future official, officer, employee or agent of the City, under any
rule of law or equity,statute or constitution or by the enforcement of any assessment or penalty or otherwise,
and all such liability of any such officials,officers,employees or agents as such is hereby expressly waived
and released as a condition of and consideration for the execution of this Agreement. Additionally,
notwithstanding any other provision of this Agreement,in no event will the Developer or its Principals,the
City,its Board of Commissioners' members, officers, employees, agents, or independent contractors ever
be liable for any punitive, special, incidental,or consequential damages under this Agreement.
9.18 Cash Basis and Budget 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. 10-1101 et seq.and K.S.A.79-2935 et seq.
9.19 Incorporation of Exhibits. The Exhibits attached hereto and incorporated herein by
reference are a part of this Agreement to the same extent as if fully set forth herein.
[Signatures on Following Pages]
26
91435840.15
IN WITNESS WHEREOF,the City and the Developer have duly executed this Agreement pursuant
to all requisite authorizations as of the date first above written.
CITY OF SALINA,KANSAS,
a Kansas municipal corporation
H !Char'I 1_, 1-10 C , Mayor
[SEAL]
ATTEST:
i
,
I�1 I K�1 Gc)11'3 ,Ci °lerk
S-1
91435840 15
DEVELOPER:
SALINA DESTINATION DEVELOPMENT,LLC,
a Kansas limited liability company
By: LA, Li ---....—.--
Name: Rick Worner
Title: fl QMk(
S-2
91435840.17
EXHIBIT A
Legal Description and Depiction of the Property
PROPERTY OESCRPTION:
A pared of hind located in the Naihwest Quarter at Section 35, Township 14 Saul,, Range 3 West of the 8th Principal
Meridian, Saline County,Kansas,mane particularly described by Roger 13. Dill, Kansas PS-1408 an September 28, 2023,
2323 as%allows:
Begnning at the Southeast corner a1 the Northwest Quarter, thence 589"58'03'W along the South line of the Northwest
Quarter a distance of 422.03 feet;thence N09"47'271V a datance of 941.04 led;hence N23'271 TW a distance of 579.87
feet;thence N38'2007W a dstance of 389.41 feet;thence N04'4921'W a distance of 122.38 feet; hence N30"41` 8'E a
dstance of 311.00 feet; hence N21'5922'N a distance of 28065 feet, thence N48"21'391/ti a distance of 144.08 feet;
thence S7S'50.27'W a dstance of 376.32 feet; thence NO1'37'35'W a dstance of 230.35 feet to he North line of said
Northwest Quarter; thence S89"55'15E along said North line a distance at 951.44 feet to he Northerly extension of he
West line of Premier Addition to the City of Salina, Saline county, Kansas;thence SOU"34'31'E along he West line of said
addition a dstance of 417.57 feet;thence S89 55'28E eking the South Ina of sad addition a dstance of 513.25 feet to the
West line a1 Magndia Carnrnans Addition to tie City at Salina,Saline County,Kansas;thence S00''0528'E along said West
line a distance of 1279.13 Leet, hence N 89'52'28"E along the Sault line of said addtian a distance of 10.00 feet to the
East line o1 sad quarter; thence S0013526'E song sad East fie a distance of 930.28 feet to tie Paint of Banning.
Containing 1,758,410 square feet ar 40.387 acres.
91435840.15
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1 91435840.15
EXHIBIT A-1
Legal Description and Depiction of the Phase One Property
DRY CREEK SUBDIVISION FINAL PLAT DESCRIPTION
PROPERTY DESCRIPTION:
A parcel of land located in the Northwest Quarter of Section 35,Township 14 South; Range 3 West of
the 6th Principal Meridian, Saline County, Kansas,more particularly described by Roger B. Dill , Kansas
PS-1408 on September 28, 2023 as follows:
Beginning at the Southeast corner of Lot 1, PREMIER ADDITION a subdivision in the City of Salina,Saline
County, Kansas,as described in Rat Book A15, Page 18,recorded in the office of the Register of Deeds,
Saline County, Kansas;said point being on the West line of MAGNOLIA COMMONS ADDITION a
subdivision in said City of Salina, as described in Plat BookA15, page 16,recorded in the office of the
Register of Deeds, Saline County,Kansas;thence a3ong said West line,South 0{1'Q5'26"East a distance of
1076.46 feet;thence departing said West line,South 89'54'34"West a distance of 147.72 feet:thence
northerly,along a non-tangent curve to the left having a radius of 900.00 feet a chord bearing of North
22'27'45" West,and a chord length of 254.30 feet for a distance of 255.15 feet;thence North 30'35'04'
West a distance of 382.00 feet; thence northerly,along a tangent curve to the right having a radius of
556.00 feet a chord bearing of North 17'46'23' West,and a chord length of 245.58 feet fora distance of
248.64 feet;thence North 89"55'28"West a distance of 185.70 feet; thence North 00'00'00" East a
distance of 398.58 feet;thence Nortn 89'25'29" East a distance of 184.05 to a point on the West line of
said Lot 1, PREMIER ADDITION: thence South 00'34'31" East, along said West line, a distance of 121.98
feet to the Southwest corner thereof; thence South 89'55'28"East,along the South Line of said lot 1,a
distance of 513.25 feet to the Point of Beginning,containing 487,723 square feet,or 11.197 acres, more
or less.
91435840.15
Exhibit A
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91435840.15
EXHIBIT B
Concept Plan
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91435840.15
EXHIBIT C
Certificate of Substantial Completion Form
Pursuant to Section 3.10 of the Agreement, the City shall, within ten(10) days following delivery
of this Certificate, carry out such inspections as it deems necessary to verify to its reasonable satisfaction
the accuracy of the certifications contained in this Certificate.
CERTIFICATE OF SUBSTANTIAL COMPLETION
The undersigned,Salina Destination Development,LLC,a Kansas limited liability company(the
"Developer"),pursuant to that certain Development Agreement dated as of[--],2023,between the City of
Salina,Kansas(the"City")and the Developer(the"Agreement"),hereby certifies to the City as follows:
i. That as of , 20 , the construction, renovation, repairing, equipping and
constructing of the Phase One Project [or portion thereof ] has been
substantially completed in accordance with the Agreement.
ii. The Phase One Project [or portion thereof ] has been completed in a
workmanlike manner and in accordance with the Construction Plans.
iii. Lien waivers for applicable portions of the Phase One Project [or portion thereof
] have been obtained, or, to the extent that a good faith dispute exists with
respect to the payment of any construction cost with respect to the Phase One Project [or portion
thereof ].
iv. This Certificate of Substantial Completion is accompanied by (a) an architect's certificate of
substantial completion on AIA Form G-704TM-2017(or the substantial equivalent thereof),a copy
of which is attached hereto as Appendix A and by this reference incorporated herein), certifying
that the Phase One Project [or portion thereof ] has been substantially
completed in accordance with the Agreement; and (b) a copy of the certificate(s) of occupancy
issued by the City building official with respect to each building to be constructed within the Phase
One Project[or portion thereof ].
v. This Certificate of Substantial Completion is being issued by the Developer to the City in
accordance with the Agreement to evidence the Developer's satisfaction of all obligations and
covenants with respect to the Developer Project.
This Certificate is given without prejudice to any rights against third parties which exist as of the
date hereof or which may subsequently come into being.
Terms not otherwise defined herein shall have the meaning ascribed to such terms in the
Agreement.
IN WITNESS WHEREOF, the undersigned has hereunto set his/her hand this day of
,20 .
91435840.15
DEVELOPER:
SALINA DESTINATION DEVELOPMENT,
LLC,
a Kansas limited liability company
By:
Name:Rick Worner
Title:Manager
ACCEPTED:
CITY OF SALINA,KANSAS
By:
Name:
Title:
91435840.15
EXHIBIT D
Certification of Expenditures Form
Request No. Date:
Pursuant to the Development Agreement (the "Agreement") between the City of Salina, Kansas
and the undersigned (the "Developer"), the Developer requests reimbursement and hereby states and
certifies as follows:
i. The date and number of this request are as set forth above.
ii. All terms in this request shall have and are used with the meanings specified in the Agreement.
iii. The names of the persons, firms or corporations to whom the payments have been made and
reimbursement is hereby requested, the amounts to be reimbursed and the general classification
and description of the costs for which each obligation requested to be reimbursed hereby was
incurred are as set forth on Attachment I hereto.
iv. These costs have been incurred and are reasonable costs that are reimbursable under the Agreement.
v. Each item listed on Attachment I hereto has not been previously reimbursed from the Bonds or
State Agreement Funds and no part thereof has been included in any other Certification of
Expenditures or other disbursement request previously filed with the City.
Terms not otherwise defined herein shall have the meaning ascribed to such terms in the
Agreement.
SALINA DESTINATION DEVELOPMENT, LLC, a
Kansas limited liability company
By:
Name: Rick Worner
Title:Manager
Approved this day of _,20_
CITY OF SALINA,KANSAS
By:
City Representative
91435840.15
ATTACHMENT I
TO CERTIFICATION OF EXPENDITURES
REQUEST NO. DATED
SCHEDULE OF PAYMENTS REQUESTED
Person, firm
or corporation Amount to General classification and
to whom payment be reimbursed description of the costs
incurred
was made or is due
91435840.15
EXHIBIT E
Memorandum of Agreement
THIS MEMORANDUM OF DEVELOPMENT AGREEMENT ("Memorandum") is
executed this day of[--],2023 (the"Effective Date"),by SALINA DESTINATION DEVELOPMENT,
LLC,a Kansas limited liability company(the"Developer"),and CITY OF SALINA,KANSAS,a Kansas
municipal corporation(the"City").
RECITALS
A. On[--],2023,the governing body of the City approved Ordinance No. [--]which approved
that certain Development Agreement dated [--], 2023 between the City and Developer regarding a multi-
family project to be developed on the real property legally described and depicted on Exhibit A (the
"Project").
B. The parties desire to record this Memorandum to give notice of certain provisions
contained in the Agreement.
NOW THEREFORE, in consideration of the foregoing recitals, the mutual covenants herein
contained and other good and valuable consideration, the receipt, adequacy and sufficiency of which are
hereby acknowledged,the parties agree as follows:
1. Development Agreement. The Agreement sets forth,among other things,the conditions
and requirements under which the parties will develop the Phase One Project, and the obligations of each
party regarding the same.
2. Memorandum. This Memorandum is executed for the purposes of giving notice of the
existence of the Agreement. The Agreement is deemed to be a material part hereof as though set forth in
length herein. Whenever a conflict of provisions between this Memorandum and the Agreement shall
occur,the provisions of the Agreement shall govern.
3. Miscellaneous. Upon the expiration or earlier termination of the Agreement, this
Memorandum shall automatically terminate without further act of the parties hereto, and upon request by
any party hereto, the other party shall execute any documents reasonably required to evidence such
termination and to remove any exceptions to title resulting from the Agreement.
91435840.15
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IN WITNESS WHEREOF, the parties have caused this Memorandum to be executed as of the
Effective Date.
DEVELOPER:
SALINA DESTINATION
DEVELOPMENT,LLC,
a Kansas limited liability company
By:
Name: Rick Worner
Title:Manager
STATE OF )
)ss.
COUNTY OF )
On this day of , 20 , before me personally appeared Rick Worner, to me
known to be the person described in and who executed the foregoing instrument, who being by me duly
sworn, did say such person is the Manager of SALINA DESTINATION DEVELOPMENT, LLC, a
Kansas limited liability company,and acknowledged said instrument to be such person's free act and deed
and the free act and deed of said entity.
IN WITNESS WHEREOF,I have hereunto set my hand and affixed my notarial seal the day and
year last above written.
Print Name:
Notary Public in and for said County and State
My Commission Expires:
91435840.15
CITY:
CITY OF SALINA,KANSAS,
a Kansas municipal corporation
,Mayor
[SEAL]
ATTEST:
,City Clerk
STATE OF )
)ss.
COUNTY OF )
On this day of ,20 ,before me personally appeared
to me known to be the person described in and who executed the foregoing instrument, who being by me
duly sworn, did say such person is the of CITY OF SALINA, KANSAS, a Kansas
municipal corporation, and acknowledged said instrument to be such person's free act and deed and the
free act and deed of said entity.
IN WITNESS WHEREOF,I have hereunto set my hand and affixed my notarial seal the day and
year last above written.
Print Name:
Notary Public in and for said County and State
My Commission Expires:
91435840.15
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EXHIBIT A
Legal Description and Depiction
91435840.15
EXHIBIT F
Completion Guaranty
COMPLETION GUARANTY
This Completion Guaranty("Guaranty") is made effective as of the day of , 2023,by
Salina Destination Development, LLC, a Kansas limited liability company (the "Guarantor" or the
"Developer")in favor of The City of Salina,Kansas(the"City").
PRELIMINARY STATEMENTS
A. Guarantor and the City entered into that certain Development Agreement (Phase One
Project) dated , 2023 (as may be amended, the "Development Agreement"), regarding
Guarantor's development of the Phase One Project(as defined in the Development Agreement).
B. To ensure completion of the Phase One Project,the City requires that Guarantor execute
and deliver this Guaranty.
C. Capitalized words used in this Guaranty and not defined herein shall have the meanings set
forth in the Development Agreement.
D. NOW, THEREFORE, in consideration of the foregoing and in consideration of the
mutual covenants and agreements herein contained,and other good and valuable consideration,the receipt
and sufficiency of which are hereby acknowledged,the Parties hereby agree as follows:
GUARANTY
1.1 Guaranty of Performance. For good and valuable consideration,the receipt and adequacy
of which are hereby acknowledged, Guarantor guaranties the full performance of, and agrees to
Substantially Complete, the development and construction of the Phase One Project in accordance with
Development Agreement (the "Completion Obligation"). Guarantor's satisfaction of the Completion
Obligation shall occur when the City issues to Guarantor a fmal certificate of occupany for the Phase One
Project in substantial conformity with Guarantor's Construction Plans.
If the Completion Obligation is not complied with, in any respect whatsoever, and without the
necessity of any notice from City to Guarantor, Guarantor agrees to (i) notify the City of such non-
compliance in writing("Non-Compliance Notice");(ii)assume all responsibility for the completion of the
Phase One Project and satisfaction of the Completion Obligation; and(iii)cause the Phase One Project to
be fully completed in accordance with the Development Agreement; and (iv) pay all bills in connection
with the construction and Substantial Completion of the Phase One Project, provided however that
Developer shall have the right to(a)contest in good faith and pursue to resolution with reasonable diligence
the validity of any such bills, and(b) withhold payment until resolution of such contest.Notwithstanding
anything to the contrary provided in this Guaranty, although Guarantor's obligations hereunder exist as of
the date hereof,Guarantor shall not be required to complete construction of the Phase One Project pursuant
to the terms of this Guaranty until City provides Guarantor with written demand for such performance.
Guarantor shall commence satisfaction of such Substantial Completion of construction within thirty (30)
days after receipt of written demand for performance by City.
1.2 City's Remedies. During the existence of an Event of Default, City may bring any action
at law or in equity or both, or commence any arbitration proceeding to compel Guarantor to perform the
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91435840.15
Completion Obligation. Notwithstanding any other provision of this Guaranty,in no event will Guarantor
or its members, officers, employees, agents or independent contractors ever be liable for any punitive,
special,incidental,or consequential damages in connection with this Guaranty.For purposes of this section,
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 City. City from time to time may bring such an
action or commence such an arbitration proceeding, regardless of whether City has first required
performance by Guarantor.
1.3 Absolute Guaranty. Guarantor expressly agrees that until the Phase One Project is fully
completed in accordance with the Development Agreement and each and every term, covenant and
condition of this Guaranty is fully performed,Guarantor shall not be released by or because of:
(a) Any act or event which might otherwise discharge, reduce, limit or modify
Guarantor's obligations under this Guaranty;
(b) Any waiver, extension,modification, forbearance, delay or other act or omission
of City,or its failure to proceed promptly or otherwise as against Developer or Guarantor;and
(c) Any action, omission or circumstance which might increase the likelihood that
Guarantor may be called upon to perform under this Guaranty or which might affect the rights or remedies
of Guarantor as the Developer.
Guarantor hereby acknowledges that absent this Section 1.3,Guarantor might have a defense to the
enforcement of this Guaranty as a result of one or more of the foregoing acts, omissions, agreements,
waivers or matters. Guarantor hereby expressly waives and surrenders any defense to any liability under
this Guaranty based upon any of such acts, omissions, agreements, waivers or matters. It is the express
intent of Guarantor that Guarantor's obligations under this Guaranty are and shall be absolute,unconditional
and irrevocable.
1.4 Guarantor's Waivers. Excluding the Non-Compliance Notice(as defined in Section 1.1 of
this Guaranty),Guarantor waives:(a)notice of acceptance of this Guaranty;(b)demand of payment,notice
of nonperformance, notice of dishonor, presentation, protest, and indulgences and notices of any kind
whatsoever(other than notices required by the Development Agreement or applicable law);(c)all rights to
assert or plead any statute of limitations as to or relating to the Development Agreement (and Guarantor
agrees that any act which shall toll any statute of limitations applicable to the Developer's obligations under
the Development Agreement shall similarly operate to toll the statute of limitations applicable to
Guarantor's liability hereunder); (d)any right to require City to proceed against Developer or any other
person or entity liable to City;(e)any right to require City to pursue any other remedy City may have before
proceeding against Guarantor; (g) any defense that may arise by the reason of(i)the incapacity, lack of
authority, disability or other defense of Developer; (ii)the revocation or repudiation of this Guaranty by
Guarantor;(iii)failure of City to file or enforce a claim against the estate(either in bankruptcy or any other
proceeding) of Developer; (iv)City's election of any remedy against Guarantor hereunder or Developer
under the Development Agreement or both; (v)any action or omission by City that directly or indirectly
results in or aids the discharge of Guarantor as the Developer by operation of law; and(vi)any offset by
Guarantor against any obligation now or at any time owed to Guarantor as the Developer, it being the
intention of this Guaranty that Guarantor remain liable to the full extent set forth in this Guaranty until such
time as each building comprising the Phase One Project shall have received a final certificate of occupancy,
or its equivalent from the applicable governmental authority.
1.5 Subordination of Guaranty. This Guaranty shall be subject to and subordinate at all times
to the lien of any mortgage, deed of trust, and any and all liens and security interests securing any
2
91435840.15
indebtedness owed to any lender of the Phase One Project.This clause shall be self operative,and no further
instrument of subtordination shall be required to affect the subordination of this Guarantee. If required by
any lender of the Phase One Project,City shall execute and deliver to Guarantor any document reasonably
required by such lender to recognize such subordination.
1.6 No Waiver. No provision or waiver in this Guaranty shall be construed as limiting the
generality of any other provision or waiver contained in this Guaranty.
1.7 Revival and Restatement. If City is required to pay,return or restore to Developer or any
other person any amounts previously paid on the Completion Obligation because of any bankruptcy,
insolvency or other similar proceeding instituted by or against Developer, any stop notice or any other
reason,the obligations of Guarantor hereunder shall be reinstated and revived and the rights of City shall
continue with regard to such amounts,all as though they had never been paid.
1.8 Guarantor's Representations and Warranties. Guarantor represents and warrants that:
(a) There has been no material adverse change in Guarantor's financial condition since
the Effective Date of the Development Agreement;
(b) This Guaranty is duly authorized and valid, and is binding upon and enforceable
against Guarantor;
(c) Guarantor is not, and the execution, delivery and performance by Guarantor of
this Guaranty will not cause Guarantor to be, in violation of or in default with respect to any law or in
default(or at risk of acceleration of indebtedness) under any material agreement or restriction by which
Guarantor is bound or affected;
(d) There is no litigation pending or,to the knowledge of Guarantor,threatened before
or by any tribunal against or affecting Guarantor, which, if adversely determined, would have a material
adverse effect on the financial condition of Guarantor or would adversely impact the development of the
Project;
Guarantor's representations, warranties and covenants are a material inducement to City to enter into the
Development Agreement and shall survive the execution hereof and any bankruptcy, or other event
affecting Developer,Guarantor,or any other party.
1.9 Events of Default. City may declare Guarantor to be in default under this Guaranty upon
the occurrence of any of the following events(each an"Event of Default"):
(a) Guarantor fails to pay or perform any of its obligations under this Guaranty,as and
when due and payable or due to be performed hereunder,within thirty(30)days of receiving prior written
notice of such failure from City;or
(b) Guarantor revokes this Guaranty or this Guaranty becomes ineffective for any
reason(other than termination pursuant to the terms hereof or any other termination by City); or
(c) Any representation or warranty made or given by Guarantor to City proves to be
false or misleading in any material respect when made;or
3
91435840.15
(d) Guarantor becomes insolvent or the subject of any insolvency proceeding,
provided, however, if such insolvency proceeding is an involuntary proceeding filed against Guarantor,
Guarantor shall not be in default herewith if such proceedings is dismissed within 90 days of filing.
1.10 Governing Law;Forum; Consent to Jurisdiction. This Guaranty is an agreement executed
under seal. The validity,enforcement,and interpretation of this Guaranty,shall for all purposes be governed
by and construed in accordance with the laws of the State of Kansas and applicable United States federal
law, and is intended to be performed in accordance with, and only to the extent permitted by, such laws.
All obligations of Guarantor hereunder are performable at the place or places where the Completion
Obligation is performable. THE GUARANTOR AND CITY HEREBY IRREVOCABLY CONSENT
TO THE JURISDICTION OF THE STATE COURTS OF KANSAS AND THE FEDERAL COURT
IN KANSAS, AND AGREE THAT ANY ACTION OR PROCEEDING ARISING OUT OF OR
BROUGHT TO ENFORCE THE PROVISIONS OF THIS GUARANTY OR THE
DEVELOPMENT AGREEMENT SHALL BE BROUGHT IN THE STATE COURTS OF SALINE
COUNTY, KANSAS, OR THE FEDERAL COURT FOR KANSAS. Guarantor and City hereby
irrevocably waive,to the fullest extent permitted by law,any objection that Guarantor or City may now or
hereafter have to the laying of venue in any such court and any claim that any such court is an inconvenient
forum. Final judgment in any such suit,action or proceeding brought in any such court shall be conclusive
and binding upon Guarantor and City and may be enforced in any court in which Guarantor or City is
subject to jurisdiction.
1.11 Invalidity of Certain Provisions.If any provision of this Guaranty or the application thereof
to any person or circumstance shall, for any reason and to any extent, be declared to be invalid or
unenforceable, neither the remaining provisions of this Guaranty nor the application of such provision to
any other person or circumstance shall be affected thereby,and the remaining provisions of this Guaranty,
or the applicability of such provision to other persons or circumstances,as applicable,shall remain in effect
and be enforceable to the maximum extent permitted by applicable law.
1.12 Attorneys'Fees. In case a lawsuit shall be brought because of the breach or alleged breach
of any agreement or obligation contained in this Guaranty on the part of either party to be kept or performed,
the prevailing party shall be entitled to recover its reasonable attorneys' fees and expenses in connection
with such lawsuit.
1.13 Notices. All notices, requests, consents, demands and other communications required or
which any party desires to give hereunder shall be in writing and shall be deemed sufficiently given or
furnished if delivered in accordance with the notice provisions of the Development Agreement with respect
to Guarantor(as Developer thereunder) and with respect to the City (as the City party thereunder). Any
such notice or communication shall be deemed to have been given if given as notice is required under the
Development Agreement; provided that, service of a notice required by any applicable statute shall be
considered complete when the requirements of that statute are met. Notwithstanding the foregoing, no
notice of change of address shall be effective except upon actual receipt. This Section shall not be construed
in any way to affect or impair any waiver of notice or demand provided in this Guaranty or to require giving
of notice or demand to or upon any person in any situation or for any reason.
1.14 Cumulative Rights. The exercise by City of any right or remedy hereunder,or at law or in
equity, shall not preclude the concurrent or subsequent exercise of any other right or remedy. No waiver
of any default on the part of Guarantor or of any breach of any of the provisions of this Guaranty or of any
other document shall be considered a waiver of any other or subsequent default or breach,and no delay or
omission in exercising or enforcing the rights and powers granted herein or in any other document shall be
construed as a waiver of such rights and powers, and no exercise or enforcement of any rights or powers
hereunder or under any other document shall be held to exhaust such rights and powers, and every such
4
91435840.15
right and power may be exercised from time to time. The granting of any consent, approval or waiver by
City shall be limited to the specific instance and purpose therefor and shall not constitute consent or
approval in any other instance or for any other purpose. No notice to or demand on Guarantor in any case
shall of itself entitle Guarantor to any other or further notice or demand in similar or other circumstances.
No provision of this Guaranty or any right,remedy or recourse of City with respect hereto, or any default
or breach, can be waived, nor can this Guaranty or Guarantor be released or discharged in any way or to
any extent, except specifically in each case by a writing intended for that purpose (and which refers
specifically to this Guaranty)executed,and delivered to Guarantor,by City.
1.15 Time of Essence. Time shall be of the essence in this Guaranty with respect to all of
Guarantor's obligations hereunder.
1.16 Entire Agreement. This Guaranty embodies the entire agreement between City and
Guarantor with respect to the Completion Obligation,except as provided in the Development Agreement.
This Guaranty supersedes all prior agreements and understandings, if any, with respect to the guaranty by
Guarantor of the Completion Obligation. No condition or conditions precedent to the effectiveness of this
Guaranty exist. This Guaranty shall be effective upon execution by Guarantor and delivery to City. This
Guaranty may not be modified, amended or superseded except in a writing signed by City and Guarantor
referencing this Guaranty by its date and specifically identifying the portions hereof that are to be modified,
amended or superseded.
1.17 WAIVER OF JURY TRIAL. GUARANTOR AND CITY TO THE FULLEST
EXTENT PERMITTED UNDER APPLICABLE LAW, WAIVE TRIAL BY JURY IN RESPECT
OF ANY DISPUTE AND ANY ACTION ON ANY ACTION UNDER THIS GUARANTY THIS
WAIVER IS KNOWINGLY,WILLINGLY AND VOLUNTARILY MADE BY GUARANTOR AND
CITY,AND GUARANTOR AND CITY HEREBY REPRESENT THAT NO REPRESENTATIONS
OF FACT OR OPINION HAVE BEEN MADE BY ANY PERSON OR ENTITY TO INDUCE THIS
WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO
THE DEVELOPMENT AGREEMENT. GUARANTOR AND CITY ARE EACH HEREBY
AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS
CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY TRIAL. GUARANTOR FURTHER
REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF
THIS GUARANTY AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT
LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE
OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
1.18 Termination. This Guaranty shall terminate and the Completion Obligation shall be
extinguished without further action or notice of any party at such time as each building comprising the
Phase One Project shall have received a final certificate of occupancy or its equivalent from the applicable
governmental authority. The parties acknowledge that Guarantor is not guaranteeing the operational
performance of the Phase One Project.
1.19 No Personal Liability. No member, manager, official, officer or employee of Guarantor
shall be personally liable to City,or any successor in interest,in the event of any failure of performance or
default or breach by Guarantor or for any amount which may become due to the City or to its successor,or
for breach of any obligation of the terms of this Guaranty.
[REMAINDER OF THIS PAGE LEFT BLANK]
5
91435840.15
IN WITNESS WHEREOF,the Guarantor has executed, sealed and delivered this Guaranty as
of the date first above written.
GUARANTOR:
SALINA DESTINATION
DEVELOPMENT,LLC,
a Kansas limited liability company
By:
Name: Rick Worner
Title:Manager
STATE OF )
ss.
COUNTY OF )
On this day of , 20 , before me personally appeared Rick Worner, to me
known to be the person described in and who executed the foregoing instrument, who being by me duly
sworn, did say such person is the Manager of SALINA DESTINATION DEVELOPMENT, LLC, a
Kansas limited liability company,and acknowledged said instrument to be such person's free act and deed
and the free act and deed of said entity.
IN WITNESS WHEREOF,I have hereunto set my hand and affixed my notarial seal the day and
year last above written.
Print Name:
Notary Public in and for said County and State
My Commission Expires:
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91435840.15
EXHIBIT G
Budget
Construction
Task State Grant Funds Matching Funds Purpose
Phase 1 -
Construction Construction of Phase 1
Materials&Labor $ 8,000,000 $ 16,332,779 multifamily Units
Landscaping for Phase 1
Phase 1 -Landscaping $ -0- $ 330,653 multifamily Apartments
Phase 1 -Site Work
(Prep,ground-
moving, etc.) $ 4,000,000 $ -0- Site Work for Magnolia Site
Total Construction
Costs $ 12,000,000 $ 16,663,432
Non-Construction
Task State Grant Funds Matchin. Funds Pur a ose
Land Acquisition- Purchase land for Phases 1 &
Magnolia $ 1,000,000 $ -0- Future Phases
Builders Risk Insurance - Phase
Phase 1 -Insurance $ -0- $ 534,193 1
Phase 1 -Legal&
Easements $ -0- $ 500,000 Legal-Phase 1
Phase 1 -Permits $ -0- $ 250,000 Various City permits-Phase 1
Phase 1 -Contractor
Profit and Overhead $ -0- $ 1,149,681 Contractor Profit&Overhead
Phase 1 —
Development Fee $ -0- $ -0-
Phase 1 -Architecture Architecture and Engineering
and Engineering Fees $ -0- $ 450,000 Fees-Phase 1
Total Non-
Construction Costs $ 1,000,000 $ 2,883,874
Grand Total $ 13,000,000 $ 19,547,306
$8,000,000 Phase 1 Construction Funded by State Grant Funds
250 Phase 1 Units
Incentive Per Unit of
$32,000 Apartments
91435840.15
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EXHIBIT I
Example of Rent Limit Calculation
Series Id: CUUR0000SEHA
Series Title: Rent of primary residence in U.S.city average,all urban consumers,not seasonally adjusted
Area: U.S.city average
Item: Rent of primary residence
Base Period: 1982-84=100
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2023 388.372 391.141 392.910 394.898 396.726 398.593 400.21 402.247 404.487 408.532 412.617 416.743
2024 420.911 425.120 429.371 433.665 438.001 440.191 442.392 444.604 446.827 449.062 451.307 453.563
2025 458.099 462.680 467.307 471.980 476.700 479.083 481.479 483.886 486.305 488.737 491.181 493.637
2026 498.573 503.559 508.594 513.680 510.000 512.550 515.113 517.688 520.277 522.878 525.493 528.120
2027 513.401 518.535 523.721 528.958 534.247 536.919 539.603 542.301 545.013 547.738 550.476 553.229
2028 558.761 564.349 569.992 575.692 581.449 584.356 587.278 590.214 593.166 596.131 599.112 602.108
Values in grey are hypothetical future values to show calculation methodology
Assumptions:
11/6/2023= Effective Date
12/1/2024= 1st Adjustment Date
12/1/2025= 2nd Adjustment Date
8/1/2025= Substantial Completion
8/1/2026= 1 Year after Substantial Completion
12/1/2026= 3rd Adjustment Date
12/1/2027= 4th Adjustment Date
12/1/2028= 5th Adjustment Date
8/1/2029= 4 Years after Substantial Completion.No rent restrictions on or after this date
' 1. Calculation For 1st Adjustment Date:Dec 1,2024
Price Index 1 Price Index 2 %Change = 10.47%
Oct 2023 Nov 2024
408.532 451.307
' 2. Calculation For 2nd Adjustment Date: Dec 1, 2025
Price Index 1 Price Index 2 %Change = 8.84%
Nov 2024 Nov 2025
451.307 491.181
' 3. Calculation For 3rd Adjustment Date: Dec 1, 2026
Price Index 1 Price Index 2 %Change = 6.45%
Nov 2025 Nov 2026
491.181 522.878
' 4. Calculation For 4th Adjustment Date: Dec 1, 2027
Price Index 1 Price Index 2 %Change = 4.75%
Nov 2026 Nov 2027
522.878 547.738
' 5. Calculation For 5th Adjustment Date: Dec 1, 2028
Price Index 1 Price Index 2 %Change = 8.84%
Nov 2027 Nov 2028
547.738 596.131
91435840.15
EXHIBIT J
Certification of Matching Funds Form
Certificate No. Date:
Pursuant to the Development Agreement(the "Agreement") between the City of Salina, Kansas,
and the undersigned(the'Developer"),Developer,hereby states and certifies as follows:
i. The date and number of this certificate are as set forth above.
ii. All terms in this certification shall have and are used with the meanings specified in the Agreement
and that certain that certain Kansas Department of Commerce American Rescue Plan Act Economic
Expansion Rural Housing Grant Agreement, between the Kansas Department of Commerce (the
"State")and the City(the"State Agreement").
iii. The names of the persons,firms or corporations to whom the payments have been made,and which
qualify as matching funds under the State Agreement and the general classification and description
of the costs for which each obligation hereby was incurred are as set forth on Attachment I hereto.
iv. These amounts listed on Attachment I(i)have been incurred and are reasonable costs that qualify
as matching funds under the State Agreement,or(ii)in the case of loan proceeds not yet expended,
are"fully committed and available for use"pursuant to the State Agreement.
v. Each item listed on Attachment I has not been previously reimbursed from the Bonds or State
Agreement Funds and no part thereof has been included in any Certification of Expenditures,
Certification of Matching Funds,or other disbursement request previously filed with the City.
Terms not otherwise defined herein shall have the meaning ascribed to such terms in the Agreement
and the State Agreement.
SALINA DESTINATION DEVELOPMENT, LLC, a
Kansas limited liability company
By:
Name: Rick Worner
Title:Manager
Approved this day of ,20
CITY OF SALINA,KANSAS
By:
City Representative
91435840.15
t
ATTACHMENT I
TO CERTIFICATION OF EXPENDITURES
REQUEST NO. DATED
SCHEDULE OF PAYMENTS REQUESTED
Person,firm General classification and
or corporation Amount of matching description of the costs
to whom payment funds certified incurred
was made
91435840.15
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