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Agreement for Project at 1106, 1112 and 1120 West Broadway Missoula, Montana. Page 1 AGREEMENT BETWEEN MIKE AND JUDY GRUNOW, AND THE MISSOULA REDEVELOPMENT AGENCY FOR BUILDING DEMOLITION AND SITE RESTORATION PROJECT AT 1112 AND 1120 WEST BROADWAY, MISSOULA, MONTANA 59802 This Agreement is executed by and between Mike and Judy Grunow, 12565 Claimstake Court Lolo, Montana 59847 (the “Grunows”) and the CITY OF MISSOULA REDEVELOPMENT AGENCY, 140 West Pine Street, Missoula, Montana 59802 (the “MRA”), an agency of the City of Missoula, Montana (hereinafter “City”). 1. Preliminary Statement. Among the matters of mutual inducement which have resulted in the execution of this Agreement are the following: The Grunows, jointly or severally, own the property located at 1106, 1112 and 1120 West Broadway Missoula, Montana (the “Property”) and have submitted an Application of Tax Increment Financing (the “Application”) requesting Tax Increment Financing (TIF) funds from MRA to assist to the costs of asbestos removal and demolition of two vacant and rapidly deteriorating buildings at 1112 and 1120 West Broadway as well as and restoration of the demolition site to level ground within the 1112 and 1120 West Broadway portion of the Property (the “Project”). Pursuant to Resolution No. 3779, the City has created the MRA and has authorized it to exercise the City’s urban renewal powers under the provisions of the Urban Renewal Law (Montana Code Annotated, Title 7, Chapter 15, Parts 42 and 43, the “Act”). The Act authorizes tax increment revenues to be used to finance land acquisition, demolition…, allowable public improvements and costs incurred in connection with redevelopment or rehabilitation, as well as urban renewal projects and activities pursuant to Section 7-15-4233, M.C.A., including the demolition and removal of structures (7-15-4288(2), improvement of streets, roads, curbs, gutters and sidewalks, …alleys…sewers, sewer lines…waterlines… natural gas lines, electrical lines (7-15-4288(4), M.C.A) (“Eligible Tax Increment Improvements”). The Project is located within the boundary of Urban Renewal District II, also known as the URD II, established within the City of Missoula, Missoula County, Montana in 1991 pursuant to City Council Resolution Number 5210. Grunows have submitted for official review and approval by the MRA an application ---PAGE BREAK--- for Tax Increment assistance to effectuate specific Project elements. Approval for items identified in Provision 4(a) of this Agreement was granted by MRA at its meeting on September 15, 2010. In approving the application, MRA recognized that the Project reduces blight in the neighborhood and may provide incentive for private developers to purchase and redevelop the Property in a manner consistent with the use and design goals MRA has for West Broadway as described in the Downtown Master Plan and the earlier West Broadway Corridor Community Vision Plan. 2. Undertakings of Grunows. Subject to matters of mutual inducement above stated, Grunows represent and agree as follows: To be responsible for the selection and retention and payment of all architectural designers, engineers and contractors necessary to carry out the Project in accordance with the building and zoning codes of the State of Montana and City of Missoula. Further, to assure that all contractors and sub-contractors are licensed and bonded to do business in the City of Missoula and State of Montana. To undertake complying with all requirements of law and obtaining all permits, necessary consents and approvals, and the happening of all acts, conditions, and things required precedent to commencement of the Project. To submit to MRA copies of all contractor claims concerning the construction of Tax Increment Improvements, as well as to submit evidence of payment of those claims upon application for reimbursement by MRA for those improvements. In addition, prior to payments being made by MRA to Grunows, Grunows shall submit lien waivers to MRA from all contractors and subcontractors performing work on the project for those improvements for which reimbursement is described in Section 4(a) within this Agreement. That the representations, statements and other matters contained in the Application are true and complete in all material respects as of the date of filing that Application. To indemnify and hold MRA and the City of Missoula harmless from any and all legal liability, claims or actions resulting from any incident or occurrence arising out of, or related to, the Project including, but not limited to, personal injury, and hazardous materials contamination of the air, soil or groundwater. Hazardous materials shall include asbestos, petroleum products, and any other material or Agreement for Project at 1106,1112 and 1120 West Broadway Missoula, MT 59802. Page 2 ---PAGE BREAK--- chemical that has been found to be hazardous to humans, animals, or plants by the State of Montana or United States Environmental Protection Agency. To substantially complete construction of the Project no later than December 31, 2010, in accordance with the plans and materials approved by the City and the MRA. 3. Additional Conditions Grunows, at their sole cost, shall apply to the City of Missoula for vacation of a remnant parcel of right-of-way located within the Property. Grunows, at their sole cost, shall apply to the City of Missoula for vacation of that portion of Hawthorne Street along the eastern edge of the Property that has been used as parking for the businesses on the Property for many years. Grunows shall have the corner of the building located at 1106 West Broadway that currently impinges on West Broadway right-of-way removed and the site restored. Grunows shall also deed or provide a permanent right-of-way easement to the property presently underlying the the corner of the 1106 West Broadway building to the City of Missoula. MRA understands that it will reimburse Grunows for this action in an amount not to exceed $17,500, a cost submitted to MRA by Grunows and approved by the MRA Board. The MRA’s approval of this expenditure is made recognizing the benefit that accrues to the District and community by creating a regular West Broadway right-of-way boundary available to pedestrian traffic. The building corner is depicted in Exhibit B hereto. By executing this Agreement, Grunows understand that of the total amount listed as reimbursement in Section 4(a) herein, the $33,345 related to asbestos abatement and demolition of 1112 and 1120 West Broadway is considered a promissory note payable by Grunows with no financing interest charged from MRA to Grunows that is due and payable in its entirety upon sale of the Property or three years from the date of execution of this Agreement, whichever event occurs first. Further, if the 1112 and 1120 portions of the Property are redeveloped by Grunows or others within the aforementioned three years with a design acceptable to MRA, MRA will cancel the loan and it will be considered a grant. Design acceptance will be based on an approved site layout map, including treatment of vehicle parking, structure elevation drawings, and utilization of MRA approved exterior materials to be used on the structure(s) Agreement for Project at 1106,1112 and 1120 West Broadway Missoula, MT 59802. Page 3 ---PAGE BREAK--- 4. Use of Tax Increment. The MRA agrees to allocate Project Tax Increment monies for the approved Project in an amount not to exceed Fifty Thousand Eight Hundred Forty-five Dollars ($50,845) to fund approved work items in the Project in the amounts specified below: 1. Pre-Demolition Asbestos Removal 2. Demolition, Removal, Site Restoration Subtotal 3. Removal of Corner of 1106 West Broadway Building that is encroaching on West Broadway R-O-W and Restoration of Building TOTAL $50,845 The actual amount of reimbursement payment and note will be on the basis of copies of invoices submitted to Grunows by contractors and subcontractors of the items described in Section 4(a) above, along with evidence that such claims have been paid in full by the Grunows. Upon receiving written approval by MRA, which shall not be unreasonably withheld, portions of amounts specified for work categories above may be shifted from one category to the other. However, both parties acknowledge that they understand shifting between to or from Item #3 in Section 4(a) will change the amount of both reimbursement and the promissory note amount described in Section 3(d). 5. General Provisions. The following terms and conditions apply to the allocation of Tax Increment assistance for the Project: This Agreement may be amended if any of the conditions herein stated are altered, subject to the review and written approval of both parties. All firms doing business with any agency of the City of Missoula must be in compliance with both the City of Missoula's Affirmative Action Policy and Title 49, Montana Codes Annotated, or forfeit the right to continue such business dealings. The City's Affirmative Action Policy is included as Exhibit A, made part of this Agreement by reference. MRA shall have no civil liability whatsoever for any of Grunows's actions. It is Grunows's sole responsibility to ensure that Grunows and all of Grunows's contractors, sub-contractors, designers, architects, and engineers have adequate liability insurance, workers compensation insurance and property insurance for the Project and Grunows shall be responsible for fully paying all contractors and material/equipment suppliers. Agreement for Project at 1106,1112 and 1120 West Broadway Missoula, MT 59802. Page 4 ---PAGE BREAK--- IN WITNESS WHEREOF, the parties hereto have entered into this Agreement by their officers duly authorized as of the day of 2010. DEVELOPER (Grunows) MRA (Missoula Redevelopment Agency) By: Harold J. Fraser Its: Chairman APPROVED AS TO FORM FOR MRA Jim Nugent, Missoula City Attorney ATTEST FOR MRA Ellen Buchanan, Director Agreement for Project at 1106,1112 and 1120 West Broadway Missoula, MT 59802. Page 5 ---PAGE BREAK--- STATE OF MONTANA ) ) ss. County of Missoula ) On this day of 2010, before me the undersigned, a Notary Public for the State of Montana, personally appeared known to me personally (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial Seal, the day and year first above written. (Seal) (Signature) (Print Name) Notary Public for the State of Residing at My commission expires STATE OF MONTANA ) ) ss. County of Missoula ) On this day of 2010, before me the undersigned, a Notary Public for the State of Montana, personally appeared known to me personally (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial Seal, the day and year first above written. (Seal) (Signature) (Print Name) Notary Public for the State of Residing at My commission expires Agreement for Project at 1106,1112 and 1120 West Broadway Missoula, MT 59802. Page 6 ---PAGE BREAK--- Agreement for Project at 1106,1112 and 1120 West Broadway Missoula, MT 59802. Page 7 STATE OF MONTANA ) ) ss. County of Missoula ) On this day of 2010, before me the undersigned, a Notary Public for the State of Montana, personally appeared known to me personally (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial Seal, the day and year first above written. (Seal) (Signature) (Print Name) Notary Public for the State of Residing at My commission expires STATE OF MONTANA ) ) ss. County of Missoula ) On this day of 2010, before me the undersigned, a Notary Public for the State of Montana, personally appeared known to me personally (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial Seal, the day and year first above written. (Seal) (Signature) (Print Name) Notary Public for the State of Residing at My commission expires ---PAGE BREAK--- EXHIBIT A NON-DISCRIMINATION. All hiring shall be on the basis of merit and qualification and there shall be no discrimination in employment on the basis race, ancestry, color, physical or mental disability, religion, national origin, sex, age, marital or familial status, creed, ex- offender status, physical condition, political belief, public assistance status or sexual orientation, gender identity or expression, except where these criteria are reasonable bona fide occupational qualifications. AFFIRMATIVE ACTION POLICY. Contractors, subcontractors, sub grantees, and other firms doing business with the City of Missoula must be in compliance with the City of Missoula's Affirmative Action Plan, and Title 49 Montana Codes Annotated, entitled "Human Rights" or forfeit the right to continue such business dealings. The City's Affirmative Action Policy Statement is: The Mayor of the City of Missoula or the Mayor's designee may adopt an affirmative action plan to provide all persons equal opportunity for employment without regard to race, ancestry, color, handicap, religion, creed, national origin, sex, age, marital status. In keeping with this commitment, we are assigning to all department heads and their staff the responsibility to actively facilitate equal employment opportunity for all present employees, applicants, and trainees. This responsibility shall include assurance that employment decisions are based on furthering the principle of equal employment opportunity by imposing only valid requirements for employment and assuring that all human resource actions are administered on the basis of job necessity. Specific responsibility for developing, implementing, monitoring and reporting are assigned to the City Personnel staff under the supervision and direction of the Chief Administrative Officer and the Mayor. It is the policy of the City of Missoula to eliminate any practice or procedure that discriminates illegally or has an adverse impact on an "affected" class. Equal opportunity shall be provided for all City employees during their terms of employment. All applicants for City employment shall be employed on the basis of their qualifications and abilities. The City of Missoula, where practical, shall utilize minority owned enterprises and shall ensure that subcontractors and vendors comply with this policy. Failure of subcontractors and vendors to comply with this policy statement shall jeopardize initial, continued, or renewed funds. Our commitment is intended to promote equal opportunity in all employment practices and provide a positive program of affirmative action for the City of Missoula, its employees, program participants, trainees and applicants. ---PAGE BREAK--- EXHIBIT B (White arrow points to building corner impinging on R-O-W)